[Federal Register Volume 89, Number 236 (Monday, December 9, 2024)]
[Rules and Regulations]
[Pages 97710-99057]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-25382]



[[Page 97709]]

Vol. 89

Monday,

No. 236

December 9, 2024

Part II





Department of Health and Human Services





-----------------------------------------------------------------------





Centers for Medicare & Medicaid Services





-----------------------------------------------------------------------





42 CFR Parts 401, 405, 410, et al.





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; 
Final Rule

Federal Register / Vol. 89 , No. 236 / Monday, December 9, 2024 / 
Rules and Regulations

[[Page 97710]]


-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 401, 405, 410, 411, 414, 423, 424, 425, 427, 428, and 
491

[CMS-1807-F and CMS-4201-F5]
RIN 0938-AV33 and 0938-AU96


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

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

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This final rule addresses: changes to the physician fee 
schedule (PFS); other changes to Medicare Part B payment policies to 
ensure that payment systems are updated to reflect changes in medical 
practice, relative value of services, and changes in the statute; 
codification of establishment of new policies for, the Medicare 
Prescription Drug Inflation Rebate Program under the Inflation 
Reduction Act of 2022; updates to the Medicare Diabetes Prevention 
Program expanded model; payment for dental services inextricably linked 
to specific covered medical services; updates to drugs and biological 
products paid under Part B including immunosuppressive drugs and 
clotting factors; Medicare Shared Savings Program requirements; updates 
to the Quality Payment Program; Medicare coverage of opioid use 
disorder services furnished by opioid treatment programs; updates to 
policies for Rural Health Clinics and Federally Qualified Health 
Centers; electronic prescribing for controlled substances for a covered 
Part D drug under a prescription drug plan or a Medicare Advantage 
Prescription Drug (MA-PD) plan under the Substance Use-Disorder 
Prevention that Promotes Opioid Recovery and Treatment for Patients and 
Communities Act (SUPPORT Act); update to the Ambulance Fee Schedule 
regulations; codification of the Inflation Reduction Act and 
Consolidated Appropriations Act, 2023 provisions; updates to Clinical 
Laboratory Fee Schedule regulations; updates to the diabetes payment 
structure and PHE flexibilities; expansion of colorectal cancer 
screening and Hepatitis B vaccine coverage and payment; establishing 
payment for drugs covered as additional preventive services; Medicare 
Parts A and B Overpayment Provisions of the Affordable Care Act and 
Medicare Parts C and D Overpayment Provisions of the Affordable Care 
Act.

DATES: These regulations are effective on January 1, 2025.

FOR FURTHER INFORMATION CONTACT: 
[email protected], for any issues not identified 
below. Please indicate the specific issue in the subject line of the 
email.
    Michael Soracoe, (410) 786-6312, Morgan Kitzmiller, (410) 786-1623, 
or [email protected], for issues related to 
practice expense, work RVUs, conversion factor, and PFS specialty-
specific impacts.
    Hannah Ahn, (814) 769-0143, or 
[email protected], for issues related to 
potentially misvalued services under the PFS.
    Mikayla Murphy, (667) 414-0093, or 
[email protected], for issues related to direct 
supervision using two-way audio/video communication technology, 
telehealth, and other services involving communications technology.
    Tamika Brock, (312) 886-7904, or 
[email protected], for issues related to 
teaching physician billing for services involving residents in teaching 
settings.
    Sarah Leipnik, (410) 786-3933, Mikayla Murphy, (667) 414-0093, 
Regina Walker-Wren, (410) 786-9160, or 
[email protected], for issues related to payment 
for caregiver training services and addressing health-related social 
needs (community health integration, principal illness navigation, and 
social determinants of health risk assessment).
    Erick Carrera, (410) 786-8949, or 
[email protected], for issues related to office/
outpatient evaluation and management visit inherent complexity add-on.
    Sarah Irie, (410) 786-1348, Emily Parris (667) 414-0418, or 
[email protected], for issues related to payment 
for advanced primary care management service.
    Sarah Leipnik, (410) 786-3933, or 
[email protected], for issues related to global 
surgery payment accuracy.
    Pamela West, (410) 786-2302, for issues related to supervision of 
outpatient therapy services in private practices, certification of 
therapy plans of care, and KX modifier threshold.
    Lindsey Baldwin, (410) 786-1694, Regina Walker-Wren, (410) 786-
9160, Erick Carrera, (410) 786-8949, Mikayla Murphy, (667) 414-0093, or 
[email protected], for issues related to 
advancing access to behavioral health services.
    Michelle Cruse, (443) 478-6390, Erick Carrera, (410) 786-8949, 
Zehra Hussain, (214) 767-4463, or 
[email protected], for issues related to dental 
services inextricably linked to other covered medical services.
    Zehra Hussain, (214) 767-4463, or 
[email protected], for issues related to payment 
of skin substitutes.
    Laura Kennedy, (410) 786-3377, Adam Brooks, (202) 205-0671, Rachel 
Radzyner, (410) 786-8215, Rebecca Ray, (667) 414-0879, and Jae Ryu, 
(667) 414-0765 for issues related to Drugs and Biological Products Paid 
Under Medicare Part B.
    [email protected], for issues related to 
complex drug administration.
    Glenn McGuirk, (410) 786-5723, or [email protected] for 
issues related to Clinical Laboratory Fee Schedule.
    Lisa Parker, (410) 786-4949, or [email protected], for issues 
related to FQHC payments.
    Heidi Oumarou, (410) 786-7942, for issues related to the FQHC 
market basket.
    Michele Franklin, (410) 786-9226, or [email protected], for issues 
related to RHC payments.
    Kianna Banks (410) 786-3498 and Cara Meyer (667) 290-9856, for 
issues related to RHCs and FQHCs and Conditions for Certification or 
Coverage.
    Colleen Barbero (667) 290-8794, for issues related to Medicare 
Diabetes Prevention Program.
    Ariana Pitcher, (667) 290-8840, or [email protected], for 
issues related to Medicare coverage of opioid use disorder treatment 
services furnished by opioid treatment programs.
    Sabrina Ahmed, (410) 786-7499, or [email protected], 
for issues related to the Medicare Shared Savings Program (Shared 
Savings Program) Quality performance standard and quality reporting 
requirements.
    Janae James, (410) 786-0801, or [email protected], 
for issues related to Shared Savings Program beneficiary assignment and 
benchmarking methodology.

[[Page 97711]]

    Richard (Chase) Kendall, (410) 786-1000, or 
[email protected], for issues related to reopening ACO 
payment determinations, and mitigating the impact of significant, 
anomalous, and highly suspect billing activity on Shared Savings 
Program financial calculations.
    Lucy Bertocci, (410) 786-3776, or [email protected], 
for issues related to Shared Savings Program prepaid shared savings, 
advance investment payments, beneficiary notice and eligibility 
requirements.
    Rachel Radzyner, (410) 786-8215, for issues related to payment for 
preventative services, including preventive vaccine administration and 
drugs covered as additional preventive services.
    Elisabeth Daniel, (667) 290-8793, for issues related to the 
Medicare Prescription Drug Inflation Rebate Program.
    Genevieve Kehoe, [email protected], or 1-844-711-
2664 (Option 4) for issues related to the Request for Information: 
Building upon the MIPS Value Pathways (MVPs) Framework to Improve 
Ambulatory Specialty Care.
    Kimberly Long, (410) 786-5702, for issues related to expanding 
colorectal cancer screening.
    Rachel Katonak, (410) 786-8564, for issues related to expanding 
Hepatitis B vaccine coverage.
    Mei Zhang, (410) 786-7837, for issues related to requirement for 
electronic prescribing for controlled substances for a covered Part D 
drug under a prescription drug plan or an MA-PD plan (section 2003 of 
the SUPPORT Act).
    Katie Parker, (410) 786-0537, for issues related to Parts A and B 
overpayment provisions of the Affordable Care Act.
    Alissa Stoneking, (410)786-1120, for issues related to Parts C and 
D overpayment provisions of the Affordable Care Act.
    Amy Gruber, (410) 786-1542, for issues related to low titer O+ 
whole blood transfusion therapy during ground ambulance transport.
    Renee O'Neill, (410) 786-8821, for inquiries related to Merit-based 
Incentive Payment System (MIPS) track of the Quality Payment Program.
    Danielle Drayer, (516) 965-6630, for inquiries related to 
Alternative Payment Models (APMs).

SUPPLEMENTARY INFORMATION: 
    Addenda Available Only Through the internet on the CMS Website: The 
PFS Addenda along with other supporting documents and tables referenced 
in this final rule are available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html. Click on the link on the left side of the 
screen titled, ``PFS Federal Regulations Notices'' for a chronological 
list of PFS Federal Register and other related documents. For the CY 
2025 PFS final rule, refer to item CMS-1807-F. Readers with questions 
related to accessing any of the Addenda or other supporting documents 
referenced in this final rule and posted on the CMS website identified 
above should contact [email protected].
    CPT (Current Procedural Terminology) Copyright Notice: Throughout 
this final rule, we use CPT codes and descriptions to refer to a 
variety of services. We note that CPT codes and descriptions are 
copyright 2020 American Medical Association. All Rights Reserved. CPT 
is a registered trademark of the American Medical Association (AMA). 
Applicable Federal Acquisition Regulations (FAR) and Defense Federal 
Acquisition Regulations (DFAR) apply.

I. Executive Summary

A. Purpose

    This final rule revises payment policies under the Medicare PFS and 
makes other policy changes, including the implementation of certain 
provisions of the 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 final 
rule includes provisions regarding other Medicare payment policies 
described in sections III. and IV.
    This rulemaking also codifies policies previously established in 
guidance for the Medicare Prescription Drug Inflation Rebate Program at 
new parts 427 and 428, including clarifications to certain existing 
policies, consistent with sections 1847A(i) and 1860D-14B of the Social 
Security Act (the Act). This rulemaking establishes new policies for 
the Medicare Prescription Drug Inflation Rebate Program, including 
removal of units of drugs subject to discarded drug refunds from the 
Part B rebate amounts, the process for reconciliation of a Part B or 
Part D rebate amount to incorporate certain revised information, and 
procedures for imposing civil money penalties on manufacturers that do 
not pay Part B or Part D inflation rebate amounts within a specified 
period of time.
    This rulemaking updates the Rural Health Clinic (RHC) and Federally 
Qualified Health Clinic (FQHC) Conditions for Certification and 
Conditions for Coverage (CfCs), respectively, by clarifying the 
requirements and intent of the program regarding the provision of 
services. These changes also aim to ensure RHCs are provided 
flexibility in the services they offer, including specialty and 
laboratory services.
    This rulemaking also further advances Medicare's overall value-
based care strategy of growth, alignment, and equity through the 
Medicare Shared Savings Program (Shared Savings Program) and the 
Quality Payment Program. The structure of these programs enables us to 
develop a set of tools for measuring and encouraging improvements in 
care, which may support a shift to clinician payment over time into 
Advanced Alternative Payment Models (APMs) and accountable care 
arrangements which reduce care fragmentation and unnecessary costs for 
patients and the health system.
    This rulemaking amends our regulations regarding the standard for 
an ``identified overpayment'' under Medicare Parts A, B, C, and D to 
align the regulations with the statutory language in section 
1128J(d)(4)(A) of the Act, which provides that the terms ``knowing'' 
and ``knowingly'' have the meaning given to those terms in the Federal 
False Claims Act. 87 FR 79559. This rulemaking also finalizes proposals 
regarding timeframes for reporting and returning Parts A and B 
overpayments that we made in the CY 2025 PFS proposed rule.

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

[[Page 97712]]

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 final rule, we establish RVUs for CY 2025 for the PFS to 
ensure that our payment systems are updated to reflect changes in 
medical practice and the relative value of services, as well as changes 
in the statute. This final rule also includes discussions and 
provisions regarding several other Medicare Part B payment policies, 
Medicare and Medicaid provider and supplier enrollment policies, and 
other policies regarding programs administered by CMS.
    Specifically, this final 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.)
 Supervision of Outpatient Therapy Services in Private 
Practices, Certification of Therapy Plans of Care with a Physician or 
NPP Order, 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 Other Covered Services (section II.J.)
 Payment for Skin Substitutes (section II.K.)
 Strategies for Improving Global Surgery Payment Accuracy 
(section II.L.)
 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.)
 Rural Health Clinic (RHC) and Federally Qualified Health 
Center (FQHC) Conditions for Certification and Conditions for Coverage 
(CfCs) (section III.C.)
 Clinical Laboratory Fee Schedule: Revised Data Reporting 
Period and Phase-in of Payment Reductions (section III.D.)
 Medicare Diabetes Prevention Program (MDPP) (section III.E.)
 Modifications Related to Medicare Coverage for Opioid Use 
Disorder (OUD) Treatment Services Furnished by Opioid Treatment 
Programs (OTPs) (section III.F.)
 Medicare Shared Savings Program (section III.G.)
 Medicare Part B Payment for Preventive Services (Sec. Sec.  
410.10, 410.57, 410.64, 410.152) (section III.H.)
 Medicare Prescription Drug Inflation Rebate Program (section 
III.I.)
 Request for Information: Building upon the MIPS Value Pathways 
(MVPs) Framework to Improve Ambulatory Specialty Care (section III.J.)
 Modifications to Coverage of Colorectal Cancer Screening 
(section III.K.)
 Requirements for Electronic Prescribing for Controlled 
Substances for a Covered Part D Drug under a Prescription Drug Plan or 
an MA-PD Plan (section III.L.)
 Expand Hepatitis B Vaccine Coverage (section III.M.)
 Low Titer O+ Whole Blood Transfusion Therapy During Ground 
Ambulance Transport (section III.N.)
 Medicare Parts A and B Overpayment Provisions of the 
Affordable Care Act (section III.O.)
 Medicare Parts C and D Overpayment Provisions of the 
Affordable Care Act (section III.P.)
 Updates to the Quality Payment Program (section IV.)
 Collection of Information Requirements (section V.)
 Regulatory Impact Analysis (section VI.)

C. Summary of Costs and Benefits

    We have determined that this final rule is economically 
significant. We estimate the CY 2025 PFS conversion factor to be 
32.3465 which reflects a 0.02 percent positive budget neutrality 
adjustment required under section 1848(c)(2)(B)(ii)(II) of the Act, the 
0.00 percent update adjustment factor specified under section 
1848(d)(19) of the Act, and the removal of the temporary 2.93 percent 
payment increase for services furnished from March 9, 2024, through 
December 31, 2024, as provided in the CAA, 2024. For a detailed 
discussion of the economic impacts, see section VI., Regulatory Impact 
Analysis, of this final rule.

II. Provisions of the Final Rule for the PFS

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 final rule, unless otherwise noted, 
the term ``practitioner'' is used to describe both physicians and 
nonphysician practitioners (NPPs) who are permitted to bill Medicare 
under the PFS for the services they furnish to Medicare beneficiaries.

B. Determination of PE RVUs

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

[[Page 97713]]

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) Relative Value Scale Update Committee (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 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 are developed based entirely on 
the PPIS data, except as noted in this section.
    Section 1848(c)(2)(H)(i) of the Act requires us to use the medical 
oncology supplemental survey data submitted in 2003 for oncology drug 
administration services. Therefore, the PE/HR for medical oncology, 
hematology, and hematology/oncology reflects the continued use of these 
supplemental survey data.
    Supplemental survey data on independent labs from the College of 
American Pathologists were implemented for payments beginning in CY 
2005. Supplemental survey data from the National Coalition of Quality 
Diagnostic Imaging Services (NCQDIS), representing independent 
diagnostic testing facilities (IDTFs), were blended with supplementary 
survey data from the American College of Radiology (ACR) and 
implemented for payments beginning in CY 2007. Neither IDTFs nor 
independent labs participated in the PPIS. Therefore, we continue to 
use the PE/HR that was developed from their supplemental survey data.
    Consistent with our past practice, the previous indirect PE/HR 
values from the supplemental surveys for these specialties were updated 
to CY 2006 using the Medicare Economic Index (MEI) to put them on a 
comparable basis with the PPIS data.
    We also do not use the PPIS data for reproductive endocrinology and 
spine surgery since these specialties 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 2025 PFS final rule PE/HR'' on the 
CMS website under downloads for the CY 2025 PFS final rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    For CY 2025, we have incorporated the available utilization data 
for two new specialties, Marriage and Family Therapist (MFT) and Mental 
Health Counselor (MHC), which we recognized effective January 1, 2024, 
in accordance with section 4121 of the CAA, 2023. We proposed to use 
proxy PE/HR values for these new specialties, as there are no PPIS data 
for these specialties, by crosswalking the PE/HR as follows from 
specialties that furnish similar services in the Medicare claims data:

 Marriage and Family Therapist (MFT) from Licensed Clinical 
Social Workers; and
 Mental Health Counselor (MHC) from Licensed Clinical Social 
Workers

    These updates are reflected in the ``CY 2025 PFS final rule PE/HR'' 
file available on the CMS website under the supporting data files for 
the CY 2025 PFS final rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    Comment: One commenter stated that they supported the proposal to 
include utilization data for MFTs and MHCs in calculating practice 
expense Relative Value Units. The commenter stated that accurate RVUs 
ensure that MFTs and MHCs receive appropriate reimbursement, covering 
essential overhead costs and sustaining their practices, which supports 
the financial viability of mental health practices and also promotes 
equitable access to care for all patients, regardless of the complexity 
of their conditions.
    Response: We appreciate the support for our proposal from the 
commenter.
    After consideration of the comments, we are finalizing our proposed 
PE/HR crosswalks for the Marriage and Family Therapist and Mental 
Health Counselor specialties.
c. Allocation of PE to Services
    To establish PE RVUs for specific services, it is necessary to 
establish the direct and indirect PE associated with each service.
(1) Direct Costs
    The relative relationship between the direct cost portions of the 
PE RVUs for any two services is determined by the relative relationship 
between the sum of the direct cost resources (that is, the clinical 
staff, medical supplies, and medical equipment) typically involved with 
furnishing each of the services. The costs of these resources are 
calculated from the refined direct PE inputs in our PE database. For 
example, if one service has a direct cost sum of $400 from our PE 
database and another service has a direct cost sum of $200, the direct 
portion of the PE RVUs of the first service would be twice as much as 
the direct portion of the PE RVUs for the second service.
(2) Indirect Costs
    We allocate the indirect costs at the code level based on the 
direct costs specifically associated with a code and

[[Page 97714]]

the greater of either the clinical labor costs or the work RVUs. We 
also incorporate the survey data described earlier in the PE/HR 
discussion. The general approach to developing the indirect portion of 
the PE RVUs is as follows:
     For a given service, we use the direct portion of the PE 
RVUs calculated as previously described and the average percentage that 
direct costs represent of total costs (based on survey data) across the 
specialties that furnish the service to determine an initial indirect 
allocator. That is, the initial indirect allocator is calculated so 
that the direct costs equal the average percentage of direct costs of 
those specialties furnishing the service. For example, if the direct 
portion of the PE RVUs for a given service is 2.00 and direct costs, on 
average, represent 25 percent of total costs for the specialties that 
furnish the service, the initial indirect allocator would be calculated 
so that it equals 75 percent of the total PE RVUs. Thus, in this 
example, the initial indirect allocator would equal 6.00, resulting in 
a total PE RVU of 8.00 (2.00 is 25 percent of 8.00 and 6.00 is 75 
percent of 8.00).
     Next, we add the greater of the work RVUs or clinical 
labor portion of the direct portion of the PE RVUs to this initial 
indirect allocator. In our example, if this service had a work RVU of 
4.00 and the clinical labor portion of the direct PE RVU was 1.50, we 
would add 4.00 (since the 4.00 work RVUs are greater than the 1.50 
clinical labor portion) to the initial indirect allocator of 6.00 to 
get an indirect allocator of 10.00. In the absence of any further use 
of the survey data, the relative relationship between the indirect cost 
portions of the PE RVUs for any two services would be determined by the 
relative relationship between these indirect cost allocators. For 
example, if one service had an indirect cost allocator of 10.00 and 
another service had an indirect cost allocator of 5.00, the indirect 
portion of the PE RVUs of the first service would be twice as great as 
the indirect portion of the PE RVUs for the second service.
     Then, we incorporate the specialty specific indirect PE/HR 
data into the calculation. In our example, if, based on the survey 
data, the average indirect cost of the specialties furnishing the first 
service with an allocator of 10.00 was half of the average indirect 
cost of the specialties furnishing the second service with an indirect 
allocator of 5.00, the indirect portion of the PE RVUs of the first 
service would be equal to that of the second service.
(3) Facility and Nonfacility Costs
    For procedures that can be furnished in a physician's office, as 
well as in a facility setting, where Medicare makes a separate payment 
to the facility for its costs in furnishing a service, we establish two 
PE RVUs: facility and nonfacility. The methodology for calculating PE 
RVUs is the same for both the facility and nonfacility RVUs but is 
applied independently to yield two separate PE RVUs. In calculating the 
PE RVUs for services furnished in a facility, we do not include 
resources that would generally not be provided by physicians when 
furnishing the service. For this reason, the facility PE RVUs are 
generally lower than the nonfacility PE RVUs.
(4) Services With Technical Components and Professional Components
    Diagnostic services are generally comprised of two components: a 
professional component (PC); and a technical component (TC). The PC and 
TC may be furnished independently or by different 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 2025 PFS final 
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

[[Page 97715]]

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.
    We did not make any proposals associated with the list of expected 
specialty assignments for low volume services, however we received 
public comments on this topic from interested parties. The following is 
a summary of the comments we received and our responses.
    Comment: Several commenters stated that they had performed an 
analysis to identify all codes that meet the criteria to receive a 
specialty override under this CMS policy and drafted updated 
recommendations for codes that meet these criteria for CY 2024. 
Commenters stated that the purpose of assigning a specialty to these 
codes was to avoid the significant adverse impact on MP RVUs that 
results from errors in specialty utilization data magnified in 
representation (percentage) by small sample size. These commenters 
submitted a list of approximately 75 low volume HCPCS codes with 
recommended expected specialty assignments.
    Response: After reviewing the information provided by the 
commenters to determine whether the specialty assignments they 
recommended were appropriate for the services in question, based on 
determining if the recommended specialty matches the dominant specialty 
in the claims data, we are finalizing the additions to the list of 
expected specialty assignments for low volume services identified in 
Table 1. We agreed with the commenters that, based on claims data, CPT 
codes 33231 and 33240 should be crosswalked to the Cardiac 
Electrophysiology specialty and that CPT codes 33900-33904 and 93574-
93575 should be crosswalked to the Interventional Cardiology specialty. 
We also agree with commenters that CPT codes 56633 and 58240 should be 
crosswalked to the Gynecological Oncology specialty. However, we do not 
have PE/HR data for these specialties as they were not part of the PPIS 
when it was conducted in 2007; therefore, we are crosswalking these CPT 
codes to the closest available specialties (Cardiology and Obstetrics/
Gynecology, respectively), as listed on Table 1.
    We disagreed with the commenters on a series of additional 
suggested assigned specialties. In each case, there was another 
specialty which was reported more than twice as often in the claims 
data as the specialty suggested by commenters and in some cases 
reported as much as twenty times as often. Therefore, we are 
crosswalking CPT code 22505 to the Neurosurgery specialty, CPT code 
25670 to the Orthopedic Surgery specialty, CPT code 28116 to the 
Podiatry specialty, CPT code 35231 to the Otolaryngology specialty, CPT 
code 36585 to the General Surgery specialty, CPT code 36810 to the 
Pulmonary Disease specialty, and CPT code 60522 to the Thoracic Surgery 
specialty (which was additionally suggested by one commenter) as these 
were the dominant specialties in the claims data. These crosswalks are 
included in Table 1.
BILLING CODE 4120-01-P

[[Page 97716]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.000


[[Page 97717]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.001

BILLING CODE 4120-01-C
    After consideration of the public comments, we are finalizing the 
additions to the list of expected specialty assignments for low volume 
services as detailed in Table 1. The full list of expected specialty 
assignments is included in the CY 2025 public use files, which are 
available on the CMS website under downloads for the CY 2025 PFS final 
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).
    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

[[Page 97718]]

adding the product of the adjusted indirect PE allocator for each 
service and the utilization data for that service.
    Step 13: Using the specialty specific indirect PE/HR data, 
calculate specialty specific aggregate pools of indirect PE for all PFS 
services for that specialty by adding the product of the indirect PE/HR 
for the specialty, the work time for the service, and the specialty's 
utilization for the service across all services furnished by the 
specialty.
    Step 14: Using the results of Step 12 and Step 13, calculate the 
specialty specific indirect PE scaling factors.
    Step 15: Using the results of Step 14, calculate an indirect 
practice cost index at the specialty level by dividing each specialty 
specific indirect scaling factor by the average indirect scaling factor 
for the entire PFS.
    Step 16: Calculate the indirect practice cost index at the service 
level to ensure the capture of all indirect costs. Calculate a weighted 
average of the practice cost index values for the specialties that 
furnish the service. (Note: For services with TCs and PCs, we calculate 
the indirect practice cost index across the global service, PCs, and 
TCs. Under this method, the indirect practice cost index for a given 
service (for example, echocardiogram) does not vary by the PC, TC, and 
global service.)
    Step 17: Apply the service level indirect practice cost index 
calculated in Step 16 to the service level adjusted indirect allocators 
calculated in Step 11 to get the indirect PE RVUs.
(d) Calculate the Final PE RVUs
    Step 18: Add the direct PE RVUs from Step 5 to the indirect PE RVUs 
from Step 17 and apply the final PE budget neutrality (BN) adjustment. 
The final PE BN adjustment is calculated by comparing the sum of steps 
5 and 17 to the aggregate work RVUs scaled by the ratio of current 
aggregate PE and work RVUs. This adjustment ensures that all PE RVUs in 
the PFS account for the fact that certain specialties are excluded from 
the calculation of PE RVUs but included in maintaining overall PFS BN. 
(See ``Specialties excluded from ratesetting calculation'' later in 
this final rule.)
    Step 19: Apply the phase-in of significant RVU reductions and its 
associated adjustment. Section 1848(c)(7) of the Act specifies that for 
services that are not new or revised codes, if the total RVUs for a 
service for a year would otherwise be decreased by an estimated 20 
percent or more as compared to the total RVUs for the previous year, 
the applicable adjustments in work, PE, and MP RVUs shall be phased in 
over a 2-year period. In implementing the phase-in, we consider a 19 
percent reduction as the maximum 1-year reduction for any service not 
described by a new or revised code. This approach limits the year one 
reduction for the service to the maximum allowed amount (that is, 19 
percent), and then phases in the remainder of the reduction. To comply 
with section 1848(c)(7) of the Act, we adjust the PE RVUs to ensure 
that the total RVUs for all services that are not new or revised codes 
decrease by no more than 19 percent, and then apply a relativity 
adjustment to ensure that the total pool of aggregate PE RVUs remains 
relative to the pool of work and MP RVUs. For a more detailed 
description of the methodology for the phase-in of significant RVU 
changes, we referred 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 2.
BILLING CODE 4120-01-P

[[Page 97719]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.002

     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 
adjustments are applied as well. For time adjustments to surgical 
services,

[[Page 97720]]

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 3 details the manner in which the modifiers are 
applied.
[GRAPHIC] [TIFF OMITTED] TR09DE24.003

BILLING CODE 4120-01-C
    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 noted 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.
    We note that for CY 2025, we proposed mandatory use of the 54 and 
55 modifiers when practitioners furnishing global surgery procedures 
share in patient care and intend only to furnish preoperative/
intraoperative or postoperative portions of the total global procedure. 
If finalized, this proposal will likely increase the number of claims 
subject to the adjustment described in the discussion above. We discuss 
this proposal in section II.L. of this final rule.
    For anesthesia services, we do not apply adjustments to volume 
since we use the average allowed charge when simulating RVUs; 
therefore, the RVUs as calculated already reflect the payments as 
adjusted by modifiers, and no volume adjustments are necessary. 
However, a time adjustment of 33 percent is made only for medical 
direction of two to four cases since that is the only situation where a 
single practitioner is involved with multiple beneficiaries 
concurrently, so that counting each service without regard to the 
overlap with other services would overstate the amount of time spent by 
the practitioner furnishing these services.
     Work RVUs: The setup file contains the work RVUs from this 
final rule.
(6) Equipment Cost per Minute
    The equipment cost per minute is calculated as:

(1/(minutes per year * usage)) * price * ((interest rate/(1 (1/((1 + 
interest rate)[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.

[[Page 97721]]

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.
    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 4.
[GRAPHIC] [TIFF OMITTED] TR09DE24.004

    We did not propose any changes to the equipment interest rates for 
CY 2025.
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,

[[Page 97722]]

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 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 has 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 comment 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 comment 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 the CY 2025 PFS proposed rule, we stated that in light of the 
AMA's current data collection efforts and because the methodological 
and data source changes to the 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 continue to believe that delaying the 
implementation of the finalized 2017-based MEI cost share weights for 
the RVUs is 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. 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 urged us to 
pause consideration of other sources for the MEI until the AMA's 
efforts to collect practice cost data from physician practices have 
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 are 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 are not proposing to update the data underlying the 
MEI cost weights at this time. Given our previously described policy 
goal to balance PFS payment stability and predictability with 
incorporating new data through more routine updates to the MEI, we did 
not propose to incorporate the 2017-based MEI in PFS ratesetting for CY 
2025. We invited comments on this approach, as well as any information 
on the timing of the AMA's practice cost data collection efforts and 
other sources of data we could consider for updating the MEI. The 
following is a summary of the comments we received and our responses.
    Comment: Many commenters supported our continued delayed 
implementation of the 2017-based MEI in PFS ratesetting. Most of these 
commenters urged CMS to delay consideration of other sources for the 
MEI until the AMA's efforts to collect practice cost data from 
physician practices have concluded. The AMA RUC commented that they 
concluded survey efforts on August 31, 2024, and are working to analyze 
the data. Some commenters requested a more frequent update of the PPIS 
every three to five years given the dramatic redistributive impacts of 
implementing updated data after many years. Some commenters requested a 
separate MEI for behavioral health to adequately and appropriately 
value outpatient mental health and substance use services. Another 
commenter disagreed with more frequent PPIS efforts because they can be 
burdensome, particularly for small, independent practices in 
underserved areas where time must be taken away from direct patient 
care to complete the survey. The commenter stated that larger health 
systems and practices are more equipped to respond to these surveys 
which leads to biased and unreliable survey results. The commenter 
urged CMS to consider contingencies or alternatives to the PPIS to 
address the lack of data availability or response rates for some 
specialties. One commenter requested that CMS seek alternative, more 
current data sources to rebase and revise the MEI if the AMA PPIS data 
proves insufficient, stating that the 2017-based MEI derived 
predominantly from the 2017 US Census Bureau's Service Annual Survey 
(SAS) are outdated and should not be used for updates.
    A few commenters urged CMS to implement the 2017-based MEI for PFS 
ratesetting as soon as possible. One commenter stated that the SAS 
Census Bureau data should be used to determine the MEI in the future 
instead of the AMA's PPIS data because it is reliable, regularly 
updated, and objectively collected.
    Response: We appreciate commenters' feedback, specifically as it 
relates to updating PFS ratesetting, and will consider the commenters' 
feedback in future rulemaking.
    Comment: One commenter stated that CMS finalized the 2017-based MEI 
based primarily on a subset of data from the 2017 US Census Bureau's 
SAS. The commenter stated that assumptions made for the updated weights 
did not include physicians who are employed by hospitals and large 
health systems. The commenter stated that data from facility-based 
physicians should be included since MEI weights also cover physician 
compensation and professional liability insurance.
    Response: We refer the commenter to the discussion of methodologies 
and a response to this concern in the CY 2024 PFS final rule (88 FR 
78830 and 78831).
4. Changes to Direct PE Inputs for Specific Services
    This section focuses on specific PE inputs. The direct PE inputs 
are

[[Page 97723]]

included in the CY 2025 direct PE input public use files, which are 
available on the CMS website under downloads for the CY 2025 PFS final 
rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
a. Standardization of Clinical Labor Tasks
    As we noted in the CY 2015 PFS final rule with comment period (79 
FR 67640 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, 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 directed 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 directed 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

[[Page 97724]]

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 2025, 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 2025 PFS final 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 1300 supplies and 750 equipment items currently used as 
direct PE inputs. Given the potentially significant changes in payment 
that would occur, in the CY 2019 PFS final rule, we finalized a policy 
to phase in our use of the new direct PE input pricing over a 4-year 
period using a 25/75 percent (CY 2019), 50/50 percent (CY 2020), 75/25 
percent (CY 2021), and 100/0 percent (CY 2022) split between new and 
old pricing. We believed that implementing the proposed updated prices 
with a 4-year phase-in would improve payment accuracy while maintaining 
stability and allowing interested parties to address potential concerns 
about changes in payment for particular items. This 4-year transition 
period to update supply and equipment pricing concluded in CY 2022; for 
a more detailed discussion, we referred readers to the CY 2019 PFS 
final rule with comment period (83 FR 59473 through 59480).
    For CY 2025, we proposed to update the price of 17 supplies and one 
equipment item in response to the public submission of invoices 
following the publication of the CY 2024 PFS final rule. The 18 supply 
and equipment items with proposed updated prices are listed in the 
valuation of specific codes section of the preamble under Table 20, CY 
2025 Invoices Received for Existing Direct PE Inputs.
    Comment: Several commenters stated that they commended CMS for 
recognizing the importance and cost of Long-Term Electrocardiography 
Monitoring (LT-ECG) Services, reflected in the updated pricing for 
supply item SD339. The commenters stated that the updated pricing is 
critical for ensuring patient access to LT-ECG services under CPT codes 
93241, 93243, 93245, and 93247, while also providing essential payment 
stability for providers.
    Response: We appreciate the support from the commenters for our 
proposed SD339 supply pricing.
    Comment: A commenter stated that they supported the proposed 
pricing increases for the EP112 equipment and the SL474, SL478, SL479, 
SL480, SL482, and SL492 supplies. The commenter stated that they 
supported the proposed changes to the pricing for these items and urges 
CMS to finalize them as proposed. A separate commenter stated that they 
supported the proposed change to the pricing of the SL474 supply as 
they believe it improves the accuracy of pricing for practice expense 
items within the overall fee schedule.
    Response: We appreciate the support from the commenters for our 
proposed supply and equipment pricing.
    Comment: A commenter stated that they fully supported CMS's 
proposal to create three new supply codes in the PE database (SD370, 
SD371, and SD372) to facilitate appropriate pricing by the MACs for 
Temporary Female Intraurethral Valve-Pump services. The commenter 
stated that they agreed that short of establishing national pricing for 
CPT codes 0596T and 0597T, creating supply codes with accurate pricing 
for the devices should facilitate rate setting by the MACs that 
appropriately accounts for the device costs. The commenter urged CMS to 
finalize as proposed the creation of these supply codes and the 
proposed prices that correspond to each.
    Response: We appreciate the support from the commenter for our 
proposed supply pricing of the SD370-SD372 items.
    An interested party submitted 30 invoices to update pricing for the 
human amniotic membrane allograft mounted on a non-absorbable self-
retaining ring (SD248) supply. We previously updated the price of this 
supply in the CY 2024 final rule (88 FR 78901) based on averaging 
together the price of the Prokera Slim, Prokera Classic, and Prokera 
Plus devices. The interested party submitted new invoices for all three 
of these devices which averaged to a new price of $1149.00 which we 
proposed for the SD248 supply. We solicited additional comments from 
interested parties regarding the price of the SD248 supply as well as 
any information as far as whether one of these three devices (the 
Prokera Slim, Prokera Classic, and Prokera Plus) would be more typical 
than the other two for use as a supply in CPT code 65778.
    Comment: Many commenters stated that they supported the proposed 
payment increase for CPT 65778 based on the proposed pricing of the 
SD248 supply. Commenters described the clinical benefits of the SD248 
supply and how it has been instrumental in helping patients with 
medical conditions that would not respond to conventional medical 
treatment.
    Response: We appreciate the support from the commenters for our 
proposed pricing of the SD248 supply.
    In the case of the indocyanine green (25ml uou) (SL083) supply, we 
noticed that there was a clear bimodal distribution of prices on the 
eight submitted invoices, clustered around $91.00 and $141.67, 
respectively, with no pricing in between $100 and $140. We proposed the 
updated total average price of $125.11 based on the eight submitted 
invoices for the SL083 supply, however, we solicited comments on why 
there was such divergence in the pricing on the submitted invoices, as 
well as whether these may represent pricing for two different supplies.
    Comment: Several commenters thanked CMS for updating the price of 
the indocyanine green (25ml uou) (SL083) supply in the proposed rule 
and recommended that this price be finalized. Commenters stated that 
the differences in pricing for the SL084 supply contained on the 
submitted invoices demonstrated an increase that occurred during the 
second half of 2023 rather than a price differential between two 
distinct products; commenters stated that practices paid an average of

[[Page 97725]]

$87 earlier in 2023 and by 2024 the price had increased to $141, with 
some paying as much as $156.
    Response: We appreciate the support from the commenters for our 
proposed supply pricing of the SL083 supply, as well as the additional 
information regarding its pricing.
    Regarding the Reaction buffer 10X (Ventana 950-300) (SL478) supply, 
we proposed to update the price from $0.037 to $0.045, which is less 
than the $0.075 contained on the invoice submitted by interested 
parties. We were able to find this product readily available for 
purchase online at a quantity of 10 liters for $453 or a price of 
$0.045. We do not believe that it would be typical for providers to pay 
a higher price based on smaller unit quantities; therefore, we proposed 
to update the price of the SL478 supply but only to $0.045, which is 
the price to purchase this supply online, as stated above.
    Interested parties also alerted CMS to a technical correction for 
pricing the Atomizer tips (disposable) (SL464) supply. We previously 
finalized a price of $2.66 for the SL464 supply, which was included in 
the table of Invoices Received for Existing Direct PE Inputs in the CY 
2018 final rule (82 FR 53162). However, due to a technical error, the 
updated pricing for the SL464 supply was never implemented. We proposed 
to make this correction for CY 2025; the corrected price of $2.66 for 
the SL464 supply is included in Table 20.
    Comment: A commenter stated that the proposed payment rates for 
HCPCS codes G2082 and G2083 did not include the updated supply pricing 
for esketamine described by the SH109 and SH110 supply codes, based on 
wholesale acquisition cost (WAC) data submitted by the commenter to CMS 
on May 31, 2024. The commenter stated that lack of consistent WAC 
supply pricing updates has contributed to payment instability for these 
services and puts beneficiary access at risk. The commenter stated that 
their goal was to align on a clear process to ensure consistency and 
predictability in the approach to updating the annual payment amounts 
for the SH109 and SH110 supplies and urged CMS to incorporate the 
updated WAC pricing data for these supplies in the PFS final rule.
    Response: We did not propose to update the price of the SH109 and 
SH110 esketamine supplies in the proposed rule. However, as part of our 
process to act on public requests to update equipment and supply 
prices, we have reviewed the WAC pricing data submitted by the 
commenters. Based on this information, we are finalizing an increase in 
the pricing of the SH109 supply from $735.63 to $772.41 and an increase 
in the pricing of the SH110 supply from $1103.44 to $1158.62.
    With regards to the process for submitting annual pricing updates 
for these supply items, we remind the commenter that 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 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].
    We did not propose to update the price of another ten supplies, 
which were the subject of public submission of invoices. Our reasons 
for not proposing updates to these prices are detailed below, and we 
solicited additional information from interested parties for assistance 
in pricing these supplies:
     Liposorber supplies: Tubing set (SC083), Plasma LDL 
adsorption column (SD186), and Plasma separator (SD188): We received 
invoices for these three Liposorber supplies from an interested party. 
However, it was unclear from the invoice submissions what the unit 
quantity size is for each product. We require additional information 
regarding the unit size of each supply included on these invoices to 
establish updated pricing, and therefore, we did not propose updates to 
the prices for these supplies. We solicited additional comments 
regarding the pricing of these supplies and whether the pricing has 
increased so dramatically, as it seems unlikely that prices have 
tripled in the 5 years since we most recently updated the pricing for 
these supplies.
    Comment: A commenter stated that they continue to believe that CPT 
code 36516 suffers from a large reimbursement gap between the facility 
and non-facility/physician office setting because CMS is using outdated 
pricing data for essential liposorber supplies. The commenter therefore 
submitted additional paid invoices for three liposorber supply items: 
the tubing set (SC083), Plasma LDL adsorption column (SD186), and 
plasma separator (SD188). The commenter stated that these invoices 
clearly identified the unit quantity and provided a breakdown of the 
costs to show the individual (per-supply item price) as well as case 
price (6 items per case per different supply item).
    Response: We appreciate the additional invoice submissions from the 
commenter and the clarification on the supply quantities for the 
associated supply items. Based on this additional pricing data, we are 
finalizing price increases to $87.52 for the SC083 supply, to $1419.04 
to the SD186 supply, and to $149.70 for the SD188 supply, in each case 
based on an average of the six submitted invoices.
    Comment: A commenter stated that Liposorber supplies are unique in 
that they require special shipping, handling, storing, and insurance 
requirements. The commenter stated that, for instance, the Plasma LDL 
adsorption Column (SD186) and the Plasma Separator (SD188) are 
sensitive to atmospheric conditions and must be packaged, shipped, and 
stored at mandated temperatures, as well as avoid exposure to cold, 
direct sunlight, high humidity, or excessive vibrations. The commenter 
stated that the high cost and fragility of these supplies requires the 
practice to purchase additional insurance coverage, and these 
additional shipping and handling costs are not reflected in the 
invoiced purchase price but add considerable expense to the provision 
of apheresis services.
    Response: We remind the commenter that shipping and storage costs 
are not included in the price of supplies and equipment under our PE 
methodology. This is because these costs are covered under the indirect 
portion of the PE; it is not the case that these costs are not being 
paid, but rather that they are addressed under a different part of the 
PE methodology.
     Congo Red kits (SA110): We received three invoices from 
interested parties requesting an increase in the price of the SA110 
supply from $6.80 to $18.78. However, we were able to find Congo Red 
staining kits readily available online at a price of 100 for $410 or 
$4.10 per kit. The unit size of these kits was also unclear, which made 
price comparisons with the submitted invoices difficult. Based on the 
three invoices and the online price of 100 for $410 or $4.10 per kit, 
we do not believe there is enough pricing data to support an increase 
in the price of the SA110 supply from $6.80 to $18.78, and we did not 
propose an increase in the price of this supply.
     Gauze, non-sterile 4in x 4in (SG051): We received one 
invoice from interested parties requesting an increase

[[Page 97726]]

in the price of the SG051 supply from $0.03 to $0.04. However, the 
submitted invoice price appeared to be for surgical gauze, not non-
sterile gauze. We were able to find the 4x4 non-sterile gauze readily 
available online at less than the invoice price. Based on this 
information, we do not believe there is enough pricing data to support 
an increase in the price of the SG051 supply from $0.03 to $0.04, and 
we did not propose an increase in the price of this supply.
     Permanent marking pen (SL477): We received one invoice 
from interested parties requesting an increase in the price of the 
SL477 supply from $2.81 to $4.62. However, we found black marking pens, 
such as Sharpies, widely available at unit prices around $2.00 when 
purchased in larger quantities. Based on this information, we do not 
believe there is enough pricing data to support an increase in the 
price of the SL477 supply from $2.81 to $4.62, and we did not propose 
an increase in the price of this supply.
     Hematoxylin II (Ventana 790-2208) (SL483): We received 
four invoices from interested parties requesting an increase in the 
price of the SL483 supply from $0.780 to $2.722. However, we were able 
to find hematoxylin II stains readily available online at cheaper 
prices, such as $52.00 for 500 ml ($0.104 per ml). Based on this 
information, we do not believe there is enough pricing data to support 
an increase in the price of the SL483 supply from $0.780 to $2.722, and 
we did not propose an increase in the price of this supply.
     Bluing reagent (Ventana 760-2037) (SL484): We received 
three invoices from interested parties requesting an increase in the 
price of the SL484 supply from $4.247 to $6.130. While researching the 
pricing of the SL484 supply, we were unable to determine the unit 
quantity size on invoices, which made it difficult to evaluate if the 
requested price accurately reflected market pricing. As best we could 
tell, the requested price increase to $6.130 was more expensive than 
comparable online bluing reagents available for purchase. Based on this 
information, we do not believe there is enough pricing data to support 
an increase in the price of the SL484 supply from $4.247 to $6.130, and 
we did not propose an increase in the price of this supply.
     EZ Prep (10X) (Ventana 950-102) (SL481) and 250 Test Prep 
Kit # 78 (Ventana 786-3034) (SL486): In each of these cases, we 
received invoices from interested parties requesting substantial 
increases in the price of the associated supplies, from $0.034 to 
$0.509 for the SL481 supply and from $0.309 to $2.134 for the SL486 
supply. We do not believe that it is reasonable to expect that the 
typical market prices for these supplies have increased by 1400 percent 
and 600 percent, respectively, in the 5 years since we most recently 
updated the pricing for these supplies. The limited pricing information 
we could find online for each product also failed to support these 
drastic increases in pricing. Based on this information, we do not 
believe there is enough pricing data to support the requested increases 
for the SL481 and SL486 supplies, and we did not propose increases to 
the prices for these supplies.
(1) Invoice Submission
    We reminded 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 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].
    In recent years, we have noticed a growing number of invoice 
submissions for use in updating supply and equipment pricing. Although 
we continue to believe in the importance of using the most recent and 
accurate invoice data to reflect current market pricing, we do have 
some concerns that the increased use of these submissions may distort 
relativity across the fee schedule. Relying on voluntary invoice 
submissions to update pricing for a small subset of the total number of 
supply and equipment items in our database, while leaving the 
overwhelming majority of prices untouched, could be distorting pricing 
in favor of the most recent submissions. We believe that it may be more 
efficient, and more accurate, to update supply and equipment pricing in 
a more comprehensive fashion similar to the pricing update that took 
place from CY 2019 to CY 2022. For example, future updates to supply 
and equipment pricing could take place in tandem with updates to 
clinical labor pricing after the current clinical labor update 
concludes in CY 2025. We welcomed public comments on this general topic 
of more comprehensive updates to supply and equipment pricing, and we 
may consider comments we receive to inform future rulemaking.
    Comment: Many commenters supported the concept of more regular and 
comprehensive updates to supply and equipment pricing. Commenters 
stated their support for a deliberate, systematic approach to supply, 
equipment, and clinical labor updates and agreed that it would be 
prudent to update pricing consistently, such as every 5 years. Many 
commenters stated that such a process would provide transparency in the 
timing of these updates, give greater granularity into the data sources 
that serve as the basis of input pricing changes, and maintain the 
current process that allows stakeholders to submit invoices in advance 
of rulemaking. Several commenters requested the implementation of a 4-
year phase-in transition for any future pricing updates, as gradually 
phasing in cost changes helps to prevent abrupt and potentially harmful 
effects on specific providers or services. One commenter stated that 
establishing a cycle of updates every four years was not advisable, as 
updates that frequent could amplify the impact of short-term market 
fluctuations, in addition to increasing the administrative burden for 
both CMS and health care providers.
    Response: We appreciate the feedback from the commenters regarding 
potential future updates to supply and equipment pricing, which we will 
consider for use in potential future rulemaking.
(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.

[[Page 97727]]

    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 
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. 
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 are listed in the valuation 
of specific codes section of the preamble under Table 20, CY 2025 
Invoices Received for Existing Direct PE Inputs.
    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% (eg, 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 are listed in the valuation of 
specific codes section of the preamble under Table 21, CY 2025 New 
Invoices.
    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 16 in x 29 in (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 18 
in x 26 in (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 18 in x 26 in (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.
    Comment: Several commenters stated their appreciation that CMS 
proposed to implement the supply pack pricing update and associated 
revisions as recommended by the RUC's workgroup.
    Response: We appreciate the support for our proposal from the 
commenters.
    Comment: 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. One commenter requested that 
pricing reductions should be implemented over a 7- to 10-year period.
    Response: We appreciate the feedback from the commenters regarding 
the proposed changes in pricing for these supply packs, particularly 
the decrease in pricing for the urology cystoscopy visit pack (SA058). 
After considering the comments, we agree 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 are 
finalizing the use of a pricing transition for three supply packs:

[[Page 97728]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.005

    Following the same pattern as our previous supply/equipment and 
clinical labor pricing updates, we are finalizing 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 (86 FR 65025). 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. We are therefore finalizing 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.
    Comment: Several commenters 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.
    Response: We appreciate the additional information provided by the 
commenters regarding the pricing of these supply packs. We have 
compiled this information provided by the commenters for the 15 
affected supply packs into Table 6.
[GRAPHIC] [TIFF OMITTED] TR09DE24.006


[[Page 97729]]


    While we share the concerns of the commenters regarding the need 
for accuracy in the pricing of these supply packs, we have 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 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 
are 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 are not finalizing pricing updates for these 
additional 15 supply packs as requested by commenters. We anticipate 
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 anticipate 
that we may propose the same pricing transition described above due to 
the number of potentially affected HCPCS codes. We are finalizing all 
of the other supply pack pricing changes as proposed, with the 
exception of the 4-year pricing transition for three supply packs as 
described above.
    The RUC workgroup also reviewed the issue of skin adhesives and 
identified several generic alternatives to using the skin adhesive 
(Dermabond) (SG007) supply. The workgroup stated that there are 
multiple skin adhesive products, at different price points, available 
that work similarly to Dermabond and requested that generic 
alternatives be used overall in place of brand names in the CMS direct 
PE database. The workgroup made a series of suggestions for CMS to 
create new medical supply item codes to encompass the generic 
formulations of cyanoacrylate skin adhesive in multidose form and 
single use sterile application.
    We appreciated the recommendations from the RUC workgroup and 
concur that generic alternatives should be used in place of brand 
names, where appropriate, in the CMS direct PE database. However, we 
had no pricing information or submitted invoices for the 4 generic 
formulations of cyanoacrylate skin adhesive requested by the RUC 
workgroup (2-Octyl-cyanoacrylate, n-Butyl-2-cyanoacrylate, Combined n-
Butyl and 2-Octylcyanoacrylate, and Ethyl-2-cyanoacrylate). Since these 
4 potential new supplies had no pricing information and are not 
currently included as direct PE inputs for any HCPCS codes, we did not 
add them to our direct PE database for the CY 2025 proposed rule due to 
lack of available information.
    Comment: Several commenters, including the RUC, stated that they 
solicited invoices for Dermabond and its generic alternatives. The 
commenters stated that they were able to find and submit invoices for 
the Dermabond (SG007) supply but were unable to find invoices for the 
generic skin adhesives. Commenters stated that they continued to 
believe that generic versions overall are a better alternative than the 
use of brand names in the CMS direct PE database and encouraged CMS to 
explore other sources of information regarding generic skin adhesives.
    Response: We appreciate the feedback from commenters regarding 
these skin adhesives and the submission of invoices associated with the 
SG007 supply. We agree with the commenters that the use of generic 
alternatives is preferred in place of brand names when naming new 
supply and equipment items for use in the CMS direct PE database. 
However, many of the supply and equipment items such as the SG007 
supply have existed in the CMS files for decades at this point. We 
believe that it would be more disruptive and potentially confusing to 
attempt to rename items like the SG007 supply given how the current 
Dermabond name has been in common use for PFS ratesetting for at least 
20 years. We are not finalizing a change to the name of this supply, 
and since we received no pricing information or submitted invoices for 
the four generic formulations of cyanoacrylate skin adhesive, we are 
not finalizing any changes to their status as well.
    With regards to the submitted invoices for the SG007 supply, the 
six invoices refer to different Dermabond products and their unit 
quantity size is unclear. The current SG007 supply simply has the unit 
size of ``item'' and we were unable to determine how the submitted 
invoices relate in terms of pricing to the current supply. We are 
therefore not finalizing an update to the price of the SG007 supply at 
this time.
c. Clinical Labor Pricing Update
    Section 220(a) of the PAMA provides that the Secretary may collect 
or obtain information from any eligible professional or any other 
source on the resources directly or indirectly related to furnishing 
services for which payment is made under the PFS and that such 
information may be used in the determination of relative values for 
services under the PFS. Such information may include the time involved 
in furnishing services; the amounts, types, and prices of PE inputs; 
overhead and accounting information for practices of physicians and 
other suppliers, and any other elements that would improve the 
valuation of services under the PFS.
    Beginning in CY 2019, we updated the supply and equipment prices 
used for PE as part of a market-based pricing transition; CY 2022 was 
the final year of this 4-year transition. We initiated a market 
research contract with StrategyGen to conduct an in-depth and robust 
market research study to update the supply and equipment pricing for CY 
2019, and we finalized a policy in CY 2019 to phase in the new pricing 
over a period of 4 years. However, we did not propose to update the 
clinical labor pricing, and the pricing for clinical labor has remained 
unchanged during this pricing transition. Clinical labor rates were 
last updated for CY 2002 using Bureau of Labor Statistics (BLS) data 
and other supplementary sources where BLS data were not available; we 
refer readers to the full discussion in the CY 2002 PFS final rule for 
additional details (66 FR 55257 through 55262).
    Interested parties raised concerns that the long delay since 
clinical labor pricing was last updated created a significant disparity 
between CMS' clinical wage data and the market average for clinical 
labor. In recent years, several interested parties suggested that 
certain wage rates were inadequate because they did not reflect current 
labor rate information. Some interested parties also stated that 
updating the supply and equipment pricing without updating the clinical 
labor pricing could create distortions in the allocation of direct PE. 
They argued that since the pool of aggregated direct PE inputs is 
budget neutral, if these rates are not routinely updated, clinical 
labor may become undervalued over time relative to equipment and 
supplies, especially since the supply and equipment prices are in the 
process of being updated. There was considerable interest among 
interested parties in updating the clinical labor rates, and

[[Page 97730]]

when we solicited comment on this topic in past rules, such as in the 
CY 2019 PFS final rule (83 FR 59480), interested parties supported the 
idea.
    Therefore, we proposed to update the clinical labor pricing for CY 
2022, in conjunction with the final year of the supply and equipment 
pricing update (86 FR 39118 through 39123). We believed updating the 
clinical labor pricing was important to maintain relativity with the 
recent supply and equipment pricing updates. We proposed to use the 
methodology outlined in the CY 2002 PFS final rule (66 FR 55257), which 
draws primarily from BLS wage data, to calculate updated clinical labor 
pricing. As we stated in the CY 2002 PFS final rule, the BLS' 
reputation for publishing valid estimates that are nationally 
representative led to the choice to use the BLS data as the main 
source. We believe that the BLS wage data continues to be the most 
accurate source to use as a basis for clinical labor pricing and this 
data will appropriately reflect changes in clinical labor resource 
inputs for setting PE RVUs under the PFS. We used the most current BLS 
survey data (2019) as the main source of wage data for our CY 2022 
clinical labor proposal.
    We recognized that the BLS survey of wage data does not cover all 
the staff types contained in our direct PE database. Therefore, we 
crosswalked or extrapolated the wages for several staff types using 
supplementary data sources for verification whenever possible. In 
situations where the price wages of clinical labor types were not 
referenced in the BLS data, we used the national salary data from the 
Salary Expert, an online project of the Economic Research Institute 
that surveys national and local salary ranges and averages for 
thousands of job titles using mainly government sources. (A detailed 
explanation of the methodology used by Salary Expert to estimate 
specific job salaries can be found at www.salaryexpert.com.) We 
previously used Salary Expert information as the primary backup source 
of wage data during the last update of clinical labor pricing in CY 
2002. If we did not have direct BLS wage data available for a clinical 
labor type, we used the wage data from Salary Expert as a reference for 
pricing, then crosswalked these clinical labor types to a proxy BLS 
labor category rate that most closely matched the reference wage data, 
similar to the crosswalks used in our PE/HR allocation. For example, 
there is no direct BLS wage data for the Mammography Technologist 
(L043) clinical labor type; we used the wage data from Salary Expert as 
a reference and identified the BLS wage data for Respiratory Therapists 
as the best proxy category. We calculated rates for the ``blend'' 
clinical labor categories by combining the rates for each labor type in 
the blend and then dividing by the total number of labor types in the 
blend.
    As in the CY 2002 clinical labor pricing update, the proposed cost 
per minute for each clinical staff type was derived by dividing the 
average hourly wage rate by 60 to arrive at the per minute cost. In 
cases where an hourly wage rate was not available for a clinical staff 
type, the proposed cost per minute for the clinical staff type was 
derived by dividing the annual salary (converted to 2021 dollars using 
the Medicare Economic Index) by 2080 (the number of hours in a typical 
work year) to arrive at the hourly wage rate and then again by 60 to 
arrive at the per minute cost. We ultimately finalized the use of 
median BLS wage data instead of mean BLS wage data in response to 
comments in the CY 2022 PFS final rule. To account for the employers' 
cost of providing fringe benefits, such as sick leave, we finalized a 
benefits multiplier of 1.296 based on a BLS release from June 17, 2021 
(USDL-21-1094). As an example of this process, for the Physical Therapy 
Aide (L023A) clinical labor type, the BLS data reflected a median 
hourly wage rate of $12.98, which we multiplied by the 1.296 benefits 
modifier and then divided by 60 minutes to arrive at the finalized per-
minute rate of $0.28.
    After considering the comments on our CY 2022 proposals, we agreed 
with commenters that the use of a multi-year transition would help 
smooth out the changes in payment resulting from the clinical labor 
pricing update, avoiding potentially disruptive changes in payment for 
affected interested parties, and promoting payment stability from year-
to-year. We believed it would be appropriate to use a 4-year 
transition, as we have for several other broad-based updates or 
methodological changes. While we recognized that using a 4-year 
transition to implement the update means that we will continue to rely 
in part on outdated data for clinical labor pricing until the change is 
fully completed in CY 2025, we agreed with the commenters that these 
significant updates to PE valuation should be implemented in the same 
way, and for the same reasons, as for other major updates to pricing 
such as the recent supply and equipment update. Therefore, we finalized 
the clinical labor pricing update implementation over 4 years to 
transition from current prices to the final updated prices in CY 2025. 
We finalized the implementation of this pricing transition over 4 
years, such that one-quarter of the difference between the current 
price and the fully phased-in price is implemented for CY 2022, one-
third of the difference between the CY 2022 price and the final price 
is implemented for CY 2023, and one-half of the difference between the 
CY 2023 price and the final price is implemented for CY 2024, with the 
new direct PE prices fully implemented for CY 2025. (86 FR 65025) An 
example of the transition from the current to the fully-implemented new 
pricing that we finalized in the CY 2022 PFS final rule is provided in 
Table 7.
[GRAPHIC] [TIFF OMITTED] TR09DE24.007


[[Page 97731]]


(1) CY 2023 Clinical Labor Pricing Updates
    For CY 2023, we received information from one interested party 
regarding the pricing of the Histotechnologist (L037B) clinical labor 
type. The interested party provided data from the 2019 Wage Survey of 
Medical Laboratories which supported an increase in the per-minute rate 
from the $0.55 finalized in the CY 2022 PFS final rule to $0.64. This 
rate of $0.64 for the L037B clinical labor type is a close match to the 
online salary data that we had for the Histotechnologist and matches 
the $0.64 rate that we initially proposed for L037B in the CY 2022 PFS 
proposed rule. Based on the wage data provided by the commenter, we 
proposed this $0.64 rate for the L037B clinical labor type for CY 2023; 
we also proposed a slight increase in the pricing for the Lab Tech/
Histotechnologist (L035A) clinical labor type from $0.55 to $0.60 as it 
is a blend of the wage rate for the Lab Technician (L033A) and 
Histotechnologist clinical labor types. We also proposed the same 
increase to $0.60 for the Angio Technician (L041A) clinical labor type, 
as we previously established a policy in the CY 2022 PFS final rule 
that the pricing for the L041A clinical labor type would match the rate 
for the L035A clinical labor type (86 FR 65032).
    Based on comments received on the CY 2023 proposed rule, we 
finalized a change in the descriptive text of the L041A clinical labor 
type from ``Angio Technician'' to ``Vascular Interventional 
Technologist''. We also finalized an update in the pricing of three 
clinical labor types: from $0.60 to $0.84 for the Vascular 
Interventional Technologist (L041A), from $0.63 to $0.79 for the 
Mammography Technologist (L043A), and from $0.76 to $0.78 for the CT 
Technologist (L046A) based on submitted wage data from the 2022 
Radiologic Technologist Wage and Salary Survey (87 FR 69422 through 
69425).
(2) CY 2024 Clinical Labor Pricing Updates
    We did not receive new wage data or other additional information 
for use in clinical labor pricing from interested parties prior to the 
publication of the CY 2024 PFS proposed rule. Therefore, our proposed 
clinical labor pricing for CY 2024 was based on the clinical labor 
pricing that we finalized in the CY 2023 PFS final rule, incremented an 
additional step for Year 3 of the update. Based on comments received on 
the CY 2024 proposed rule, we finalized an update in the clinical labor 
pricing of the cytotechnologist (L045A) clinical labor type from $0.76 
to $0.85 based on submitted data from the 2021 American Society of 
Clinical Pathologists (ASCP) Wage Survey of Medical Laboratories (88 FR 
78838).
(3) CY 2025 Clinical Labor Pricing Update Proposals
    We did not receive new wage data or other additional information 
for use in clinical labor pricing from interested parties prior to the 
publication of the CY 2025 PFS proposed rule. Therefore, our proposed 
clinical labor pricing for CY 2025 in Table 8 is based on the clinical 
labor pricing that we finalized in the CY 2024 PFS final rule, 
incremented an additional step for the final Year 4 of the update:

[[Page 97732]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.008


[[Page 97733]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.009

    As was the case for the market-based supply and equipment pricing 
update, the clinical labor rates remained open for public comment 
during the 60-day comment period for the CY 2025 PFS proposed rule. We 
stated that we expect to set the updated clinical labor rates for CY 
2025 in this final rule. We updated the pricing of some clinical labor 
types in the CY 2022, CY 2023, and CY 2024 PFS final rules in response 
to information provided by commenters. For the full discussion of the 
clinical labor pricing update, we directed readers to the CY 2022 PFS 
final rule (86 FR 65020 through 65037).
    Comment: Several commenters urged CMS to freeze the final year of 
implementation of the clinical labor policy in CY 2025 to avoid further 
redistributions and instability in the PFS. Commenters asked CMS to 
hold harmless the specialties that were most affected by the clinical 
labor pricing update and not move forward with the final year of the 
phase-in. One commenter disagreed with the finalized BLS 2021 benefit 
multiplier of 1.296 and stated that CMS should use the originally 
proposed 1.366 benefits multiplier instead.
    Response: We finalized the use of a 4-year transition in the CY 
2022 PFS final rule to help smooth out the changes in payment resulting 
from the clinical labor pricing update, avoiding potentially disruptive 
changes in payment for affected stakeholders, and promoting payment 
stability from year-to-year. As we stated in the CY 2022 PFS final 
rule, under section 1848 of the Act, we are required to base payment 
for services under the PFS on relative resource costs. To accomplish 
that, it is necessary periodically to update the information on which 
we base relative values. We believe, and commenters overwhelmingly 
agreed, that the BLS wage data is the best source to use for clinical 
labor pricing, and commenters did not identify alternative sources of 
data that could be used to update pricing. Although we recognize that 
payment for some services will be reduced as a result of the pricing 
update due to the BN requirements of the PFS, we do not believe that 
this is a reason to refrain from updating clinical labor pricing to 
reflect changes in resource costs over time as suggested by some 
commenters. The PFS is a resource-based relative value payment system 
that necessarily relies on accuracy in the pricing of resource inputs; 
continuing to use clinical labor cost data that are nearly two decades 
old would maintain distortions in relativity that undervalue many 
services which involve a higher proportion of clinical labor. As noted 
above, we also finalized the implementation of the pricing update 
through a 4-year transition to help address the concerns of the 
commenters about stabilizing RVUs and reducing large fluctuations in 
year-to-year payments. We direct readers to this prior discussion in 
the CY 2022 PFS final rule at 86 FR 65025.
    Comment: Several commenters stated that the ongoing clinical labor 
pricing update was having the effect of driving patient care from the 
non-facility to the facility setting. The commenters stated that access 
to care for beneficiaries is increasingly constrained for many 
essential services and listed a series of procedures most impacted, 
such as hemorrhagic and ischemic strokes, maternal health, PAD, 
dialysis access, limb salvage services, and CPT code 93229 (External 
mobile cardiovascular telemetry with electrocardiographic recording, 
concurrent computerized real time data analysis and greater than 24 
hours of accessible ECG data storage (retrievable with query) with ECG 
triggered and patient selected events transmitted to a remote attended 
surveillance center for up to 30 days; technical support for connection 
and patient instructions for use, attended surveillance, analysis and 
transmission of daily and emergent data reports as prescribed by a 
physician or other qualified health care professional).
    Response: We previously addressed these concerns about site of 
service and patient access to care when we finalized the clinical labor 
pricing update; we direct readers to this prior discussion in the CY 
2022 PFS final rule at 86 FR 65025.
    Comment: A commenter stated that, to promote predictability and 
stability in physician payments and mitigate the financial impacts of 
significant fluctuations in physician payments that might accompany the 
clinical labor pricing update, CMS should consider using a threshold to 
limit the level of reductions in payments for specific services that 
would occur in a single year. The commenter stated that CMS consider 
implementing a cap on payment cuts to individual codes in a single 
year.
    Response: We agree with the commenter on the importance of avoiding 
potentially disruptive changes in payment for affected interested 
parties and the need to promote payment stability from year-to-year. 
This is why we finalized the use of a multi-year transition for the 
clinical labor update in the CY 2022 PFS final rule to help smooth out 
the changes in payment resulting from the updated data (86 FR 65024). 
We also note for the commenter that section 1848(c)(7) of the Act, as 
added by section 220(e) of the PAMA, specifies that for services that 
are not new or revised codes, if the total RVUs for a service for a 
year would otherwise be decreased by an estimated 20 percent or more as 
compared to the total RVUs for the previous year, the applicable 
adjustments in work, PE, and MP RVUs shall be phased-in over a 2-year 
period. For additional information regarding the phase-in of 
significant RVU reductions, we direct readers to the CY 2016 PFS final 
rule with comment period (80 FR 70927 through 70929).
    Comment: A commenter thanked CMS for raising the clinical labor 
rate paid to nurses, however the commenter stated that this was only 
one step and nurses are consistently undervalued across all settings. 
The commenter stated that nursing care should be valued more highly 
than it is today and that nursing care is still undervalued in today's 
healthcare system. The commenter stated that RNs are mentioned in ten 
separate rows on the clinical labor pricing table, with the rate per 
minute for nurses varying from $0.52 per minute to $0.81 per minute, 
which brings uncertainty to the fee schedule as the value of the nurse 
fluctuates depending on the situation.
    Response: We note for the commenter that the proposed CY 2025 
clinical labor rate for the RN (L051A) type is $0.76,

[[Page 97734]]

which is based upon Bureau of Labor Statistics wage data as outlined in 
our methodology above. We believe that the BLS wage data continues to 
be the most accurate source to use as a basis for clinical labor 
pricing, and we did not receive any alternate wage data from commenters 
to suggest alternate RN pricing. With regards to the multiple listing 
of RNs on the table, there are a number of ``blended'' clinical labor 
types which often include RNs as one of the staffing types being 
averaged together. Blended clinical labor types have been a historical 
part of PFS services since we adopted the current PE methodology. We 
have done our best to identify which staffing types, including RNs, are 
included in these blends along with how they are averaged together to 
arrive at the final clinical labor pricing. We also note for the 
commenter that the pricing for the RN (L051A) clinical labor type is 
drawn directly from BLS wage data and the inclusion of RNs in other 
``blended'' clinical labor types has no effect on the pricing of the 
L051A category itself.
    Comment: A commenter stated that CMS must reevaluate the pricing 
for the Behavioral Health Care Manager (L057B) clinical labor type. The 
commenter noted that CMS maintained the current clinical labor pricing 
for the Behavioral Health Care Manager clinical labor type rather than 
update it in the CY 2022 PFS final rule because, although the BLS data 
reflected a decreased clinical labor rate for the Behavioral Health 
Care Manager labor type, CMS did not believe that the typical wages had 
decreased for this clinical labor type given that every other clinical 
labor type had increased (86 FR 65022). The commenter stated that 
growth for Behavioral Health Care Managers has increased on a similar 
trajectory as other clinical labor types and has in fact outpaced wage 
growth for other types of behavioral health providers. The commenter 
stated that BLS data indicates that salaries for clinicians who work as 
Behavioral Health Care Managers have increased at a rate of 
approximately 5 percent per year between 2021 and 2023, outpacing the 
wage increases for other types of related practitioners, such as 
psychiatrists, nurse practitioners, and physician assistants, which 
increased at rates below 4 percent per year. The commenter stated that 
Behavioral Health Care Manager wages increased at a pace that is 
consistent with the increase in wages for other clinical labor types 
(such as registered nurses, licensed practical nurses, and medical 
assistants), increasing by 27.2 percent from 2017 to 2023, compared 
with a 30.2 percent increase among other clinical labor types during 
the same period. The commenter requested that rather than holding the 
clinical labor rate for Behavioral Health Care Managers steady, the 
rate should be increased at a rate similar to the costs associated with 
other clinical labor types.
    Response: We appreciate the additional information provided by the 
commenter with regards to the Behavioral Health Care Manager (L057B) 
clinical labor type. However, we continue to believe that the proposed 
pricing for this clinical labor type remains accurate, as it was based 
directly on BLS wage data (BLS category 21-1018: Substance Abuse, 
Behavioral Disorder, and Mental Health Counselors) rather than relying 
on a crosswalk or third party information. Although we understand that 
it appears unfair that the L057B clinical labor type maintained the 
same pricing while all of the other clinical labor types increased in 
valuation, this was due to the fact that the L057B type had been valued 
much more recently than the other clinical labor types. The L057B 
clinical labor type was added to the PFS for the CY 2017 final rule and 
therefore was priced at $0.57 per minute based on then-current rates 
for genetic counselors (81 FR 80350). Almost all of the other clinical 
labor types were last valued based on 2002 wage data, which caused the 
L057B clinical labor type to be artificially inflated in pricing 
relative to the other clinical labor types. For example, before the 
current clinical labor pricing update, Behavioral Health Care Managers 
were priced at $0.57 per minute, higher than the $0.51 per minute 
valuation of the Registered Nurse (L051A) clinical labor type, which 
clearly did not reflect market-based salaries. The commenter included a 
table in their submission indicating that salaries for Registered 
Nurses are approximately 40 higher than salaries for Behavioral Health 
Care Managers, which matches our current proposed pricing for these 
clinical labor types ($0.76 and $0.57 respectively). We believe that 
the current clinical labor pricing update has brought valuation of the 
L057B clinical labor type into relativity with the other clinical labor 
types by virtue of valuing all of them at the same time.
    After consideration of the comments, we did not receive any new 
wage data for use in clinical labor pricing. Therefore, we are 
finalizing the clinical labor prices as proposed in Table 8 without 
refinement.
d. Technical Corrections to Direct PE Input Database and Supporting 
Files
    We received the following comments on technical corrections to the 
direct PE input database and supporting files:
    Comment: Several commenters, including the RUC, requested that CMS 
separately identify and pay for high-cost disposable supplies. 
Commenters highlighted the outsized impact that high-cost disposable 
supplies have within the current practice expense RVU methodology, 
which not only accounts for a large amount of direct practice expense 
for these supplies but also allocates a large amount of indirect 
practice expense into the PE RVU for the procedure codes that include 
these supplies. Commenters stated that if high-cost supplies were paid 
separately with appropriate HCPCS codes, the disproportionate indirect 
expense would no longer be associated with that service, with the 
result that indirect PE RVUs would be redistributed throughout the 
specialty practice expense pool and the practice expense for all other 
services. Commenters requested that CMS separately identify and pay for 
high-cost disposable supplies priced more than $500 using appropriate 
Healthcare Common Procedure Coding System (HCPCS) codes. Commenters 
provided several examples from the proposed rule where they stated this 
policy would be appropriate, including new HCPCS code GMEM1, the 
potential for a new add-on service based on tympanostomy CPT code 
69433, and the price of the SD248 supply (human amniotic membrane 
allograft mounted on a non-absorbable self-retaining ring). In each 
case, commenters stated that these issues would be better addressed 
through the creation of standalone Q codes separately paid from the PFS 
so those prices could be monitored and, when appropriate, updated 
annually.
    Response: We have received a number of prior requests from 
interested parties, including the RUC, to implement these separately 
billable alpha-numeric Level II HCPCS codes to allow practitioners to 
be paid the cost of high cost disposable supplies per patient encounter 
instead of per CPT code. We stated at the time, and we continue to 
believe, that this option presents a series of potential problems that 
we have addressed previously in the context of the broader challenges 
regarding our ability to price high cost disposable supply items. We 
are therefore not finalizing the implementation of standalone Level II 
HCPCS codes for high cost disposable supplies at this time. For further 
discussion of this issue, we direct the

[[Page 97735]]

reader to our discussion in the CY 2011 PFS final rule with comment 
period (75 FR 73251).
    We are aware of the issues with the current PE methodology caused 
by very expensive supply and equipment items, and this is a subject 
that we may consider for future rulemaking alongside other updates to 
the PE methodology. We appreciate the continued feedback from 
commenters as we consider potential approaches to this complicated 
topic.
    Comment: A commenter echoed the request from other interested 
parties that CMS separately identify and pay for high-cost disposable 
supplies priced more than $500. This commenter stated that they 
believed these services should be paid outside of the PFS, since PFS 
budget neutrality rules compound the challenge of appropriately valuing 
high-cost technology inputs without underpaying for physician 
professional services. The commenter recommended that CMS designate 
such services as office based procedures under a new place of service 
designation and establish payment under the outpatient prospective 
payment system (OPPS)/ambulatory surgical center rulemaking instead of 
the PFS.
    Response: We appreciate the feedback from the commenter on 
potential methods for implementing separate payment for high-cost 
disposable supplies. Although we have no current plans for such a 
policy, we will take under consideration for potential future 
rulemaking.
    Comment: Several commenters asked for clarification regarding the 
proposed PE RVUs for HCPCS code G2251. Commenters stated that the 
proposed non-facility and facility PE RVUs for HCPCS code G2251 showed 
a significant reduction from 0.15 to 0.00 despite no mention of a 
policy proposal for this service. Commenters stated that they wanted to 
bring this valuation to the attention of CMS and sought clarification 
on whether this was a data entry error or an intentional change related 
to the proposed Advanced Primary Care Management (APCM) codes.
    Response: We appreciate the commenters for bringing this issue to 
our attention, and we clarify that the published 0.00 PE RVUs for HCPCS 
code G2251 was an unintended technical error. When we investigated this 
issue, we found that it was due to a previously finalized crosswalk: we 
finalized a policy in the CY 2021 PFS final rule to value HCPCS code 
G2251 identically to HCPCS code G2012 (85 FR 84532). However, we also 
proposed to delete HCPCS code G2012 for CY 2025 which inadvertently 
resulted in HCPCS code G2251 crosswalking over a zero value for its PE 
RVUs. Since HCPCS code G2012 will no longer exist in CY 2025, we are 
finalizing the removal of this crosswalk for HCPCS code G2251 which 
should correct this error and restore its PE RVUs.
    Comment: A commenter requested that CMS consider changing the 
assistant at surgery payment policy indicator to ``2'' for CPT codes 
37211, 37212, 37242, and 37197 to allow for the use of assistant 
surgeons. The commenter stated that these transcatheter procedures 
involve the infusion of thrombolytic therapy, precise embolization of 
arteries, and foreign body retrieval, which have the potential to be 
extremely technical in nature and may require a highly functional team, 
including an assistant surgeon in select cases. The commenter stated 
that select cases that are particularly challenging may necessitate the 
skills of two operators to perform distinct parts of the navigation and 
procedure for the precise and safe delivery of thrombolytic therapy and 
vascular embolization devices, as well as the safe and effective 
retrieval of foreign bodies. The commenter stated that changes to these 
payment policy indicators will ensure patient procedural safety and 
bring policy alignment to these complex transcatheter procedures.
    Response: The four CPT codes identified by the commenter each 
currently have an assistant at surgery payment policy of ``1'' under 
which an assistant at surgery may not be paid. After reviewing the four 
CPT codes identified by the commenter, we agree that an assistant at 
surgery may be medically necessary in some particularly challenging 
cases. However, we believe that it would be more accurate to finalize 
an assistant as surgery payment policy of ``0'' rather than the 
requested ``2'', which establishes that the payment restriction for an 
assistant at surgery applies to this procedure only if supporting 
documentation is submitted to establish medical necessity. We believe 
that this will ensure that an assistant at surgery will only be 
employed in the particularly challenging and medically necessary cases 
described by the commenter. Therefore we are finalizing an assistant at 
surgery payment policy indicator of ``0'' for CPT codes 37211, 37212, 
37242, and 37197.
    Comment: A commenter stated that the direct PE inputs for CPT code 
65426 do not contain a supply item for human amniotic membrane 
allograft product (the SD247 supply). The commenter stated that as a 
result, the practice expense valuation does not account for the 
significant cost of this item when it is purchased and used. The 
commenter stated that while they are working with stakeholders to 
submit a potentially misvalued CPT code request for review in future 
rulemaking, they also wanted to note this issue and concern within the 
public comment period for this CY 2025 PFS rule.
    Response: We appreciate the feedback from the commenter on this 
topic, and we would encourage them to continue pursuing the potentially 
misvalued code process if they believe that CPT code 65426 does not 
properly capture its typical direct PE inputs. We note the commenter 
did not present data indicating that the use of the expensive $835 
SD247 supply is typical in CPT code 65426. We are not finalizing any 
changes to the code at this time.
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

[[Page 97736]]

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 referred 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 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 referred 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 might affect or factor into PE calculations. We 
reminded readers that we have worked with interested parties and CMS 
contractors for years to study the landscape and identify possible 
strategies to reshape the PE portion of physician payments. The 
fundamental issues are clear but thought leaders and subject matter 
experts have advocated for more than one tenable approach to updating 
our PE methodology.
    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 relies on AMA PPIS data, which may represent the 
best aggregated available source of information at this time. However, 
we acknowledge the limitations and challenges interested parties have 
raised about using the current data for indirect PE allocations, which 
we have also examined in related ongoing research. 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. Preparation for Incorporating 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 provider 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 last year's RFI, most commenters stated that CMS 
should

[[Page 97737]]

defer significant changes until the AMA PPIS results become available. 
For further background, refer to 88 FR 78841 to 78843. In responding to 
our RFI, the AMA RUC provided a set of responses, which many other 
commenters repeated in their separate, individual 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 expects analysis, reporting, and documentation to 
complete by the end of CY 2024, and the AMA would share data with CMS 
when results become available.
    As we stated in the proposed rule, 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 have started new work 
under 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 would include analysis of updated PPIS 
data, as part of our ongoing work. In the meantime, we 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 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 on possible mechanisms to establish 
a balance whereby our methodology would account for inflation and 
deflation in supply and equipment costs. 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. 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.
    Comment: Numerous commenters expressed concerns regarding CMS's 
current PE methodology, particularly highlighting its inadequacies in 
accommodating modern medical technologies and services, such as 
Software as a Medical Device (SaMD) 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 ongoing Physician Practice Information 
Survey (PPIS) 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.
    Response: We thank commenters for their feedback and may consider 
this information for future rulemaking.

C. Potentially Misvalued Services Under the PFS

1. Background
    Section 1848(c)(2)(B) of the Act directs the Secretary to conduct a 
periodic review, not less often than every 5 years, of the relative 
value units (RVUs) established under the PFS. Section 1848(c)(2)(K) of 
the Act requires the Secretary to periodically identify potentially 
misvalued services using certain criteria and to review and make 
appropriate adjustments to the relative values for those services. 
Section 1848(c)(2)(L) of the Act also requires the Secretary to develop 
a process to validate the RVUs of certain potentially misvalued codes 
under the PFS, using the same criteria used to identify potentially 
misvalued codes, and to make appropriate adjustments.
    As outlined in section II.E. of this final 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) Resource-Based Relative Value Scale (RBRVS) 
Update Committee (RUC), MedPAC, and other interested parties. For many 
years, the RUC has provided us with recommendations on the appropriate 
relative values for new, revised, and potentially misvalued PFS 
services. We review these recommendations on a code-by-code basis and 
consider these recommendations in conjunction with analyses of other 
data, such as claims data, to inform the decision-making process as 
authorized by statute. We may also consider analyses of work time, work 
RVUs, or direct 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

[[Page 97738]]

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' services, 
noting that misvalued services can distort the market for physicians' 
services, as well as for other health care services that physicians 
order, such as hospital services. In that same report, MedPAC 
postulated that physicians' services under the PFS can become misvalued 
over time. MedPAC stated, ``When a new service is added to the 
physician fee schedule, it may be assigned a relatively high value 
because of the time, technical skill, and psychological stress that are 
often required to furnish that service. Over time, the work required 
for certain services would be expected to decline as physicians become 
more familiar with the service and more efficient in furnishing it.'' 
We believe services can also become overvalued when PE costs decline. 
This can happen when the costs of equipment and supplies fall, or when 
equipment is used more frequently than is estimated in the PE 
methodology, reducing its cost per use. Likewise, services can become 
undervalued when physician work increases, or PE costs rise.
    As MedPAC noted in its March 2009 Report to Congress (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 potentially misvalued codes as specified in section 
1848(c)(2)(K)(ii) of the Act, and we intend to continue our work 
examining potentially misvalued codes in these areas over the upcoming 
years. As part of our current process, we identify potentially 
misvalued codes for review, and request recommendations from the RUC 
and other public commenters on revised work RVUs and direct PE inputs 
for those codes. The RUC, through its own processes, also identifies 
potentially misvalued codes for review. Through our public nomination 
process for potentially misvalued codes established in the CY 2012 PFS 
final rule with comment period (76 FR 73026, 73058 through 73059), 
other individuals and groups submit nominations for review of 
potentially misvalued codes as well. Individuals and groups may submit 
codes for review under the potentially misvalued codes initiative to 
CMS in one of two ways. Nominations may be submitted to CMS via email 
or through postal mail. Email submissions should be sent to the CMS 
emailbox at [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 potentially misvalued 
code review and Five-Year Review process, we have reviewed over 1,700 
potentially misvalued codes to refine work RVUs and direct PE inputs. 
We have assigned appropriate work RVUs and direct PE inputs for these 
services as a result of these reviews. A more detailed discussion of 
the extensive prior reviews of potentially misvalued codes is included 
in the CY 2012 PFS final rule with comment period (76 FR 73052 through 
73055). In the same CY 2012 PFS final rule with comment period, we 
finalized our policy to consolidate the review of physician work and PE 
at the same time and established a process for the annual public 
nomination of potentially misvalued services.
    In the CY 2013 PFS final rule with comment period (77 FR 68892, 
68896 through 68897), we built upon the work

[[Page 97739]]

we began in CY 2009 to review potentially misvalued codes that have not 
been reviewed since the implementation of the PFS (so-called ``Harvard-
valued codes'' \1\). In the CY 2019 PFS proposed rule (73 FR 38589), we 
requested recommendations from the RUC to aid in our review of Harvard-
valued codes that had not yet been reviewed, focusing first on high-
volume, low intensity codes. In the fourth Five-Year Review of Work 
RVUs proposed rule (76 FR 32410, 32419), we requested recommendations 
from the RUC to aid in our review of Harvard-valued codes with annual 
utilization of greater than 30,000 services. In the CY 2013 PFS final 
rule with comment period, we identified specific Harvard-valued 
services with annual allowed charges that total at least $10,000,000 as 
potentially misvalued. In addition to the Harvard-valued codes, in the 
CY 2013 PFS final rule with comment period we finalized for review a 
list of potentially misvalued codes that have stand-alone PE (codes 
with physician work and no listed work time and codes with no physician 
work that have listed work time). We continue each year to consider and 
finalize a list of potentially misvalued codes that have or will be 
reviewed and revised as appropriate in future rulemaking.
---------------------------------------------------------------------------

    \1\ 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 2025 Identification and Review of Potentially Misvalued Services
    In the CY 2012 PFS final rule with comment period (76 FR 73058), we 
finalized a process for the public to nominate potentially misvalued 
codes. In the CY 2015 PFS final rule with comment period (79 FR 67548, 
67606 through 67608), we modified this process whereby the public and 
interested parties may nominate potentially misvalued codes for review 
by submitting the code with supporting documentation by February 10th 
of each year. Supporting documentation for codes nominated for the 
annual review of potentially misvalued codes may include the following:
     Documentation in peer reviewed medical literature or other 
reliable data that demonstrate changes in physician work due to one or 
more of the following: technique, knowledge and technology, patient 
population, site-of-service, length of hospital stay, and work time.
     An anomalous relationship between the code being proposed 
for review and other codes.
     Evidence that technology has changed physician work.
     Analysis of other data on time and effort measures, such 
as operating room logs or national and other representative databases.
     Evidence that incorrect assumptions were made in the 
previous valuation of the service, such as a misleading vignette, 
survey, or flawed crosswalk assumptions in a previous evaluation.
     Prices for certain high cost supplies or other direct PE 
inputs that are used to determine PE RVUs are inaccurate and do not 
reflect current information.
     Analyses of work time, work RVU, or direct PE inputs using 
other data sources (for example, VA, NSQIP, the STS National Database, 
and the MIPS data).
     National surveys of work time and intensity from 
professional and management societies and organizations, such as 
hospital associations.
    We evaluate the supporting documentation submitted with the 
nominated codes and assess whether the nominated codes appear to be 
potentially misvalued codes appropriate for review under the annual 
process. In the following year's PFS proposed rule, we publish the list 
of nominated codes and indicate for each nominated code whether we 
agree with its inclusion as a potentially misvalued code. The public 
has the opportunity to comment on these and all other proposed 
potentially misvalued codes. In each year's final rule, we finalize our 
list of potentially misvalued codes.
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 potentially 
misvalued codes by February 10th and we display these nominations on 
our public website, 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 potentially misvalued 
code initiative. For CY 2025, we received 5 nominations concerning 
various codes. The nominations are as follows:
(1) CPT Codes 22210, 22212, 22214, 22216
    An interested party nominated CPT codes 22210 (Osteotomy of spine, 
posterior or posterolateral approach, 1 vertebral segment; cervical) 
(090 day global code), 22212 (Osteotomy of spine, posterior or 
posterolateral approach, 1 vertebral segment; thoracic) (090 day global 
code), 22214 (Osteotomy of spine, posterior or posterolateral approach, 
1 vertebral segment; lumbar) (090 day global code), and 22216 
(Osteotomy of spine, posterior or posterolateral approach, 1 vertebral 
segment; each additional vertebral segment (List separately in addition 
to primary procedure) (add-on ZZZ) as potentially misvalued for six 
reasons: (1) incorrect global period; (2) incorrect inpatient days; (3) 
incorrect intraservice work description; (4) overvalued intraservice 
times; (5) changed surgical practice; and (6) incorrect use of 
posterior osteotomy codes. The posterior osteotomy codes were last 
valued by the RUC in 1995. Currently, CPT code 22210 has a work RVU of 
25.38, CPT code 22212 has a work RVU of 20.99, CPT code 22214 has a 
work RVU of 21.02, and CPT code 22216 has a work RVU of 6.03. CPT codes 
22210, 22212, and 22214 have 7 inpatient days each, while CPT code 
22216 has 0 inpatient days, and it is an add-on code.
    First, the nominator stated that these posterior osteotomies are 
always performed as an optional addition to a spinal fusion and should 
be valued as add-on services and not as 90-day global services. We 
noted in the proposed rule that no references were provided to support 
the statement that the service is always performed as an optional 
addition to a spinal fusion. Second, the nominator explained that the 
average hospital stay for scoliosis fusion with osteotomy is 4 to 5 
days according to the current literature,2 3 4 in contrast 
with the currently included 7 inpatient days. We noted in the proposed 
rule that the

[[Page 97740]]

majority of the medical literature submitted by the nominator presented 
outcome information on adolescent patients, which may be different from 
the Medicare population. Furthermore, the nominator stated that the 
intraservice work description for CPT code 22216 describes removal of 
the pedicle, which is not a typical part of a Ponte/Schwab II 
osteotomy. Among the posterior osteotomy codes, only CPT code 22216 had 
vignettes and we do not have information to decide whether the code 
descriptor is correct. We stated that we believed this issue would 
benefit from further review by the medical community and welcomed 
comments and considerations, including from the AMA CPT.
---------------------------------------------------------------------------

    \2\ Halanski, Matthew Aaron, and Jeffrey A Cassidy. ``Do 
multilevel Ponte osteotomies in thoracic idiopathic scoliosis 
surgery improve curve correction and restore thoracic kyphosis?'' 
Journal of spinal disorders & techniques vol. 26,5 (2013): 252-5. 
doi:10.1097/BSD.0b013e318241e3cf.
    \3\ Floccari, Lorena V et al. ``Ponte osteotomies in a matched 
series of large AIS curves increase surgical risk without improving 
outcomes.'' Spine deformity vol. 9,5 (2021): 1411-1418. doi:10.1007/
s43390-021-00339-x.
    \4\ Buckland, Aaron J et al. ``Ponte Osteotomies Increase the 
Risk of Neuromonitoring Alerts in Adolescent Idiopathic Scoliosis 
Correction Surgery.'' Spine vol. 44,3 (2019): E175-E180. 
doi:10.1097/BRS.0000000000002784.
---------------------------------------------------------------------------

    The nominator also asserted that intraservice times were too high, 
particularly for these osteotomy services furnished with scoliosis 
fusion procedures. The nominator explained that a typical scoliosis 
fusion would be billed with an intraservice time of up to 840 minutes 
for pediatric scoliosis fusion and 915 minutes for adult cases. 
However, referencing current literature, they observed that a typical 
scoliosis fusion in a child requires approximately 278 minutes (243-296 
minutes),5 6 7 which contrasts significantly with the 
durations indicated for the current codes. The nominator provided no 
studies to support a typical scoliosis fusion time in adults. Drawing 
from the literature, the nominators assert that intraservice times are 
overvalued for these services and propose that these times should be 
adjusted to align more closely with average and/or typical surgery 
times.
---------------------------------------------------------------------------

    \5\ Samdani, Amer F et al. ``Do Ponte Osteotomies Enhance 
Correction in Adolescent Idiopathic Scoliosis? An Analysis of 191 
Lenke 1A and 1B Curves.'' Spine deformity vol. 3,5 (2015): 483-488. 
doi:10.1016/j.jspd.2015.03.002.
    \6\ Pizones, Javier et al. ``Ponte osteotomies to treat major 
thoracic adolescent idiopathic scoliosis curves allow more effective 
corrective maneuvers.'' European spine journal:official publication 
of the European Spine Society, the European Spinal Deformity 
Society, and the European Section of the Cervical Spine Research 
Society vol. 24,7 (2015): 1540-6. doi:10.1007/s00586-014-3749-1.
    \7\ Feng, Jing et al. ``Clinical and radiological outcomes of 
the multilevel Ponte osteotomy with posterior selective segmental 
pedicle screw constructs to treat adolescent thoracic idiopathic 
scoliosis.'' Journal of orthopaedic surgery and research vol. 13,1 
305. 29 Nov. 2018, doi:10.1186/s13018-018-1001-0.
---------------------------------------------------------------------------

    The nominator further asserted that this code family is potentially 
misvalued because surgical practice for these procedures has evolved 
since 1995. Approximately 30 years ago, osteotomies were infrequently 
performed and usually reserved for addressing completely ankylosed or 
fused spinal segments.\8\ However, according to the nominator, 
contemporary surgical techniques often involve posterior osteotomies to 
release multiple stiff vertebral segments, thereby enhancing coronal 
correction and reducing thoracic hypokyphosis. In addition to changes 
in surgical techniques over time, there are notable shifts in the 
trends regarding the utilization of osteotomies. For instance, between 
2007 and 2015, the use of posterior osteotomies in scoliosis cases 
nearly doubled, increasing from 17 percent to 35 percent.\9\ 
Additionally, 73 percent of patients undergoing scoliosis surgery 
received posterior osteotomies.\4\ This information supports the 
nominator's assertion that there have been notable changes in the 
surgical practice for these codes over time.
---------------------------------------------------------------------------

    \8\ Ponte, Alberto et al. ``The True Ponte Osteotomy: By the One 
Who Developed It.'' Spine deformity vol. 6,1 (2018): 2-11. 
doi:10.1016/j.jspd.2017.06.006.
    \9\ Shaheen, Mohammed et al. ``Complication risks and costs 
associated with Ponte osteotomies in surgical treatment of 
adolescent idiopathic scoliosis: insights from a national 
database.'' Spine deformity vol. 10,6 (2022): 1339-1348. 
doi:10.1007/s43390-022-00534-4.
---------------------------------------------------------------------------

    Lastly, the nominator highlighted what they believe is incorrect 
usage of posterior osteotomy codes. They noted instances where facet/
soft tissue releases, such as Schwab type I osteotomies, are 
inaccurately reported with these codes. According to the nominator, 
isolated partial facetectomy and soft tissue release are already 
included in spinal fusion procedures and should not be separately 
billed with an osteotomy code. Additionally, CMS in reviewing data for 
these services identified potential bundling of services within this 
code family. For instance, CPT code 22210 is frequently billed 
alongside CPT code 22600 (Arthrodesis, posterior or posterolateral 
technique, single interspace; cervical below C2 segment) (090-day 
global code), approximately 83 percent of the time. This indicates a 
common billing pattern, suggesting potential for coding revisions, 
including the consideration of consolidating individual services into 
bundled codes.
    Overall, based on the six reasons provided by the nominator, along 
with the fact that these codes were last valued almost 30 years ago, 
and given the identified billing practices, we stated in the proposed 
rule that we concurred that CPT codes 22210, 22212, 22214, and 22216 
were potentially misvalued. The nominator suggested two options to 
address this concern: (1) developing add-on codes to differentiate 
between the number of vertebral segments involved in the osteotomy 
procedure and whether it occurs in the cervical, thoracic, or lumbar 
regions; and (2) removing the current posterior osteotomy codes and 
incorporating osteotomies into new deformity fusion codes, both with 
and without osteotomy. We proposed to consider this code family as 
potentially misvalued and expressed appreciation for the detailed 
information submitted by the nominator with sufficient supporting 
evidence. We stated that we believed that this code family would 
benefit from a comprehensive review by the RUC, and we welcomed 
comments on a broader understanding of these codes. Additionally, we 
sought input on current standard billing practices. For example, 
information on whether the standard of practice has evolved over time, 
and if so, how it has evolved, could aid in identifying potential 
coding issues related to this matter.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters, including the AMA RUC, supported our 
proposal. The RUC stated that, since the osteotomy of the spine codes 
(CPT codes 22210, 22212, 22214, and 22216) were last reviewed in 1995, 
these codes may benefit from updated descriptions and consideration of 
bundling with related procedures. They suggested options such as 
developing add-on codes for segment-specific osteotomies or integrating 
these into new deformity fusion codes. They further stated they will 
place the nominated osteotomy codes (CPT codes 22210, 22212, 22214, and 
22216) on the next Level of Interest (LOI) list for review at the 
January 2025 RUC meeting.
    Response: We thank the commenters for their feedback.
    Comment: A few commenters disagreed that the osteotomy of spine 
codes are potentially misvalued. The commenters stated that the 
procedures are primary interventions, not add-ons, and that the current 
global periods, inpatient days, and intraservice work descriptions 
accurately reflect the complexity of adult deformity surgery. They 
further stated that surgical techniques have not changed significantly 
and they believe that the codes are accurately valued and that altering 
them could disrupt coding practices and negatively impact patient care.
    Response: While we acknowledge the comments asserting that CPT 
codes 22210, 22212, 22214 and 22216 are appropriately valued, we agree 
with the RUC that services such as those

[[Page 97741]]

described by the nominator would benefit from review by the AMA RUC. 
Therefore, we are finalizing our proposal to finalize CPT codes 22210, 
22212, 22214 and 22216 as potentially misvalued.
(2) CPT Code 27279
    CPT code 27279 (Arthrodesis, sacroiliac joint, percutaneous or 
minimally invasive (indirect visualization), with image guidance, 
includes obtaining bone graft when performed, and placement of 
transfixing device) (090 day global code) has been re-nominated as 
potentially misvalued based on the absence of separate direct PE inputs 
for this 090 day global code in the nonfacility setting. Currently, CPT 
code 27279 is only priced under the PFS in the facility setting, but 
the nominator requested that we establish separate direct PE inputs for 
this service to value the service when performed in the nonfacility/
office setting (for example, in an office-based lab). The nominator 
stated that establishing payment for direct PE inputs in the 
nonfacility/office setting would increase access to this service for 
Medicare patients.
    We did not nominate CPT code 27279 as potentially misvalued in the 
CY 2024 PFS final rule, mainly due to a lack of consensus in the 
medical community on whether these services may be safely and 
effectively furnished in the nonfacility/office setting. In this year's 
submission, the nominator provided three post-market surveillance 
publications and two independent reviews of minimally invasive 
sacroiliac (SI) joint fusion procedures to support their assertion that 
this 90-day surgical service could be safely and effectively furnished 
in the nonfacility/office setting. Based on the studies, the nominator 
stated that the current medical literature provides evidence supporting 
the conclusion that percutaneous or minimally invasive SI joint 
arthrodesis (CPT code 27279) carries a complication rate that is 
acceptably low, comparable to other spinal procedures commonly 
performed in the office-based lab (OBL). For instance, the risk of 
major complications during lateral trans iliac (LTI) SI joint fusion 
(CPT code 27279) is lower than the risks associated with other OBL 
procedures. These include the risk of iliac perforation during 
angioplasty, the risk of death, myocardial infarction (MI), and stroke 
during diagnostic cardiac catheterization. The nominator did not 
reference literature regarding the rates of major complications for 
other OBL procedures in their submission.
    Based on the information submitted, we recognized the possibility 
that CPT code 27279 may be potentially misvalued, given the nominator's 
assertion that its complication rate is acceptably low based on the 
five studies they submitted. The results of the studies may suggest 
that CPT code 27279 can be safely performed in the office-based lab 
setting, as asserted by the nominator, with a relatively low 
complication rate. However, upon reviewing the submitted information, 
we also noted that these studies collectively report heterogeneous 
safety outcomes. The large variabilities in safety outcomes reported in 
the studies, coupled with several unreported outcomes, may indicate 
that we have little knowledge about the effect of the service on safety 
outcomes, prompting the need for further investigation. Therefore, we 
did not propose to consider this code as potentially misvalued, and we 
instead sought comments and additional studies from the broader medical 
community regarding whether this code should be priced under the PFS 
for the nonfacility/office setting.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters stated that they opposed creating a 
nonfacility/office payment rate for CPT code 27279 due to patient 
safety concerns regarding this service being performed in the office 
setting. These commenters agreed with CMS on the lack of sufficient 
safety evidence for CPT code 27279 in nonfacility settings and 
recommended to maintain the current policy with respect to CPT code 
27279 and not extend its use to nonfacility settings. They expressed 
that they were unaware that the service described by CPT code 27279 was 
being performed in nonfacility settings and stated their belief that it 
would be challenging for a medical practice to consistently meet the 
sanitary requirements necessary to safely perform this procedure on an 
ongoing basis. In addition, one commenter indicated that although this 
service is performed in hospital outpatient departments (HOPDs) and 
ambulatory surgical centers (ASCs), both of those settings have 
rigorous conditions of participation that hold them to higher safety 
standards than physician offices. Regarding patient safety 
specifically, commenters shared CMS's concerns regarding the safety of 
delivering sacroiliac joint procedures in the office setting. The 
majority of the commenters recommended that CMS maintain its current 
policy and refrain from valuing CPT code 27279 in the non-facility 
setting and not adopt nonfacility PE values for CY 2025.
    Response: We thank commenters for their feedback.
    Comment: A few commenters supported establishing payment in the 
nonfacility/office setting for CPT code 27279. Commenters stated that 
the procedure described by CPT code 27279 can be safely performed in an 
office or nonfacility setting by referencing studies showing a low 
complication rate in OBL. They indicated that establishing direct PE 
inputs for the nonfacility setting would improve patient access to this 
service and supported obtaining direct PE inputs to increase patient 
access to care.
    Response: We appreciate the comments and the additional information 
to support the establishment of nonfacility/office valuation for CPT 
code 27279. However, after review, the studies submitted by the 
nominator were not found to be persuasive. While we are seeking further 
information, commenters stated that they were not aware of any studies 
demonstrating the quality or safety of this procedure in a nonfacility 
setting. Based on Medicare claims data, CPT code 27279 is not regularly 
furnished in the nonfacility/office setting; the majority of 
utilization has occurred in the facility setting, with less than 1.0% 
in the nonfacility setting over the past 7 years. As with last year, 
the majority of commenters recommended that CMS maintain its current 
policy regarding CPT code 27279 and not extend its use to nonfacility 
settings. Since this service is not routinely furnished in a 
nonfacility setting, we believe that this procedure should only be paid 
in the facility settings at this time. Therefore, for CY 2025, we are 
finalizing our proposal not to nominate CPT code 27279 as potentially 
misvalued.
    We continue to welcome the submission of new information regarding 
these services that was not part of our CY 2024 review of CPT code 
27279. We would appreciate receiving any additional information, 
particularly published studies with sound methodology (for example, a 
systematic review or meta-analysis covering at least three databases) 
or new data.
(3) CPT Code 95800
    An interested party re-nominated CPT code 95800 (Sleep study, 
unattended, simultaneous recording; heart rate, oxygen saturation, 
respiratory analysis (e.g., by airflow or peripheral arterial tone), 
and sleep time) to update PEs that were last reviewed in 2017. This 
code was nominated as potentially misvalued

[[Page 97742]]

in the CY 2024 PFS proposed rule (88 FR 52283). For the CY 2024 final 
rule, we stated that we were unable to properly assess whether CPT code 
95800 is potentially misvalued based on the evidence submitted with the 
original nominations and subsequent comments that CMS received (88 FR 
78849 and 78850). This year, an interested party re-nominated CPT code 
59800 noting two significant changes: (1) in the technologies available 
to perform home sleep apnea testing (HSAT) services; and (2) in 
clinical practice that leads to the typical procedure reported with the 
CPT code 95800. According to the nominator, the current practice 
utilizes disposable HSAT technology, such as the WatchPat One device, 
more often than the reusable equipment currently included in the 
procedure's direct PE inputs.
    To account for these changes, the nominator requested the deletion 
of three direct PE input codes: (1) equipment code EQ335 (WatchPAT 200 
Unit with strap, cables, charger, booklet, and patient video); (2) 
equipment code EQ336 (Oximetry and Airflow Device); and (3) supply code 
SD263 (WatchPAT pneumo-opt sleep probes), which are WatchPAT probes 
used with the reusable WatchPAT unit. Instead, the nominator requested 
the addition of a supply code SD362 (the WatchPAT ONE device), a 
disposable HSAT technology, as a replacement. According to our PE 
supply list, the combined price of the items that the nominator 
requested to delete (EQ335, EQ336, and SD263) is $4.71 + $4.55 + $73.32 
= $82.58, which is $15.62 less than the price of the item that the 
nominator requested to add (SD362), priced at $98.20. The price of 
$98.20 was mentioned in the nomination letter without an accompanying 
specific invoice. Last year, the nominator submitted invoices, showing 
a price of $99.00 each (a case of 12 totaling $1,188.00) for the 
WatchPat One Device (SD362) (see Table 9).
[GRAPHIC] [TIFF OMITTED] TR09DE24.010

    The nominator asserted that testing trends have shifted away from 
traditional airflow-based tests, with a noticeable rise in peripheral 
arterial tone (PAT)-based (non-airflow) tests. The traditional airflow-
based tests use the reusable supplies and equipment, whereas the PAT-
based non-airflow tests use the disposable HSAT device. While 
describing these changes in trends, the nominator did not provide us 
with their internal data, thus we are unable to verify its validity. 
The nominator also stated that disposable HSAT devices were used for 
nearly 50 percent of CPT code 95800 services in 2023 and attributed the 
increased use of disposable devices to the COVID-19 public health 
emergency (PHE). Furthermore, the nominator projected that over 50 
percent of CPT code 95800 services will be furnished using disposable 
devices in 2024 and 2025. Explaining the patterns and predictions, the 
nominator concluded that the pandemic significantly altered the 
delivery of HSAT services, with many sleep physicians transitioning to 
single-use, disposable sleep tests as an alternative to the reusable 
testing equipment that is shipped from patient-to-patient after post-
use cleaning. The nominator believes that, going forward, the typical 
procedure described by CPT code 95800 in CY 2024 and beyond will be 
furnished using disposable HSAT devices rather than reusable equipment.
    Since the COVID-19 PHE ended in 2023, we are still unclear as to 
whether the typical procedure reported with CPT code 95800 involves the 
use of a reusable or disposable HSAT device. Given that we only have 
access to the nominator's summary of their internal data to observe 
changes in usage trends, which may not be generalizable, we proposed to 
maintain the current direct PE supply and equipment inputs for CPT code 
95800. While we did not propose to review CPT code 95800 as potentially 
misvalued for CY 2025, we sought public comments on this nomination. In 
particular, we sought comments on whether the typical procedure 
described by CPT code 95800 now involves the use of a disposable HSAT 
device rather than reusable equipment.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Several commenters supported our proposal to not nominate 
CPT code 95800 as potentially misvalued and advised us to continue 
monitoring this issue. The commenters reported a mix of disposable and 
reusable HSAT devices in use, noting that disposable devices have 
become more common since the COVID-19 PHE. The American Academy of 
Sleep Medicine (AASM) stated that HSAT data from AASM accredited sleep 
facilities indicated that, while there is an observed increase in the 
use of disposable HSAT devices, this does not suggest that members have 
converted to using them at this time. According to AASM, their survey 
data in 2022 indicated that the majority were still

[[Page 97743]]

using reusable HSAT devices. They generally believed there is 
insufficient information to determine whether disposable devices are 
more typical than reusable ones at this time, and therefore, they did 
not support the nomination of CPT code 95800 as potentially misvalued. 
They stated that further data collection would be needed to confirm 
whether the typical practice is now using disposable devices and 
suggested continued monitoring. Additionally, they opposed the removal 
of the Oximetry and Airflow device (EQ336), as it remains necessary for 
certain procedures.
    Response: We thank commenters for their feedback.
    Comment: The manufacturer and distributor of the WatchPAT 
disposable HSAT devices stated that a disposable HSAT offers the same 
accuracy and reliability as other WatchPAT products, but allows for 
quicker access to sleep data, particularly benefiting those in rural 
areas, enables physicians to better extend care, and reduces 
reinfection risks. Using their internal data, the device manufacturer 
stated that in 2023, 48 percent of WatchPAT tests used the disposable 
WatchPAT One device, reflecting a 4--8 percent annual increase since 
2020; by the first half of 2024, this trend continued, with 53 percent 
of WatchPAT tests in the U.S. using the disposable HSAT device. Based 
on their utilization data and projections, the device manufacturer 
believed that there is strong evidence that the typical procedure in 
2024 will involve the use of disposable rather than reusable HSAT 
equipment. The device manufacturer indicated that they do not have data 
on the number of Medicare patients using the disposable HSAT device, 
though they do not believe there is a significant difference in the use 
of reusable versus disposable equipment among Medicare or home sleep 
testing populations.
    Response: We thank commenters for their summary of internal data 
and their feedback.
    We acknowledge that the practice of medicine is evolving, and in 
clinically appropriate and effective circumstances, there may be 
support for transitioning from reusable to disposable HSAT equipment. 
We also recognize that the PE inputs for such services should be 
accurately determined to reflect typical clinical practice. However, 
after reviewing the public comments, we believe there is insufficient 
information at this time to demonstrate whether disposable or reusable 
HSAT devices are more commonly used than reusable HSAT equipment. 
Therefore, we are finalizing our proposal not to nominate CPT code 
95800 as potentially misvalued.
    However, we look forward to considering any additional information 
in the future as to whether disposable or reusable HSAT devices are 
more common. As suggested by the commenters, we believe more 
information is needed to confirm whether disposable devices are now the 
typical practice.
(4) CPT Codes 10021, 10004, 10005, 10006
    An interested party nominated the CPT code 10021 (Fine needle 
aspiration biopsy, without imaging guidance; first lesion), CPT code 
10004 (Fine needle aspiration biopsy, without imaging guidance; each 
additional lesion), CPT code 10005 (Fine needle aspiration biopsy, 
including ultrasound guidance; first lesion) and CPT code 10006 (Fine 
needle aspiration biopsy, including ultrasound guidance; each 
additional lesion) as potentially misvalued. We noted in the proposed 
rule that this code family has been nominated several times in recent 
years. We discussed our review of these codes and our rationale for 
finalizing the current values extensively in the CY 2019 PFS final rule 
(83 FR 59517) and CY 2021 PFS final rule (85 FR 84602). Furthermore, 
this code family was nominated as potentially misvalued and discussed 
in the CY 2020 PFS final rule (84 FR 62625). For more information, we 
encourage the interested parties to refer to these prior PFS final 
rules.
    The nominator specifically requested that we revisit our work RVU 
decisions for these codes, stating that the underpinnings of the 
reduction in work RVUs from the RUC-recommended values were flawed. The 
nominator suggested that CMS should adopt the RUC-recommended work 
RVUs. For CPT code 10021, the RUC recommended a work RVU of 1.20, but 
we adopted a lower value of 1.03. Similarly, for CPT code 10005, the 
RUC recommended a work RVU of 1.63, but we adopted 1.46. The nominator 
disagreed with these reductions from the RUC-recommended values by CMS, 
raising particular concerns about our choice for the RVU crosswalk for 
CPT code 36440 (Push blood transfusion, patient 2 years or younger). 
According to the nominator, the CPT code we chose is not comparable to 
fine needle aspiration (FNA) in any respect other than service time. 
The nominator raised several points, including that CPT code 36440 is 
rarely utilized and is almost never billed to Medicare because it 
pertains to a pediatric procedure conducted on neonates, while CPT code 
10021 is never performed on neonates. They further asserted that the 
training and experience levels required to properly perform these 
procedures differ significantly; neonatal transfusions can be conducted 
by less experienced personnel, while performing a thyroid FNA demands 
more experience. Specifically, they argued that there is a notable 
difference in the work intensity between the two procedures. The 
thyroid is closely positioned to vital structures such as the carotid 
artery, jugular vein, lymphatic vessels, nerves, trachea, and 
esophagus. When sampling thyroid nodules, they are often in proximity 
to the carotid artery, jugular vein, or both. According to the 
nominator, even a slight deviation of 1-2 millimeters during the 
sampling procedure can result in accidental puncture of these critical 
blood vessels or other nearby structures. Factors such as respiratory 
movements, patient swallowing, or anxiety may cause the thyroid to 
move, further increasing the risk during the procedure. In contrast, 
neonatal phlebotomy does not require such measures. Also, the CPT code 
36440 is designated as facility-only, meaning it does not include any 
clinical staff pre-service time and has no associated PE inputs. 
According to the nominator, FNA is a very complex and high-risk 
procedure that may require significant physician work and a higher 
level of clinical expertise to furnish the service, which is very 
different from CPT code 36440. We appreciated the survey (N=74) results 
that the nominator submitted to support their statements. The 
nominator-conducted survey, and their survey questions aimed to gather 
information on the practitioners' experiences, opinions, and practices 
related to FNA procedures. However, no other references such as peer 
reviewed medical literature or other nationally representative survey 
data were provided to reinforce their argument.
    The nominator further stated that thyroid FNA should exclusively be 
performed as an outpatient procedure and does not require 
hospitalization. The nominator emphasized that the reduction in payment 
for the code family due to the reduction in work RVUs from the RUC-
recommended values has led endocrinologists in office-based practices, 
those who are not affiliated with facilities, to discontinue furnishing 
this service. According to the nominator, as a consequence of this 
payment decrease, patients are now being referred to hospital-based 
radiology practices, despite the fact that thyroid FNA should ideally 
be conducted exclusively in nonfacility

[[Page 97744]]

outpatient settings. The nominator asserted that radiologists in 
hospital settings are often unfamiliar with the patient's medical 
history and risk factors for suspected thyroid cancer. The nominator 
further stated that radiologists' training in thyroid cancer primarily 
emphasizes imaging and procedures, rather than considering the 
patient's overall health perspective. This result may further lead to 
an increase in medically unnecessary procedures. Additionally, the 
nominator believes that the payment reduction for this code family has 
the potential to diminish the specialist workforce trained to perform 
these procedures, thereby presenting future challenges in patient care 
and access to specialized services.
    Overall, we appreciate the comprehensive information and level of 
detail provided by the nominator. The nominator disagreed with the 
choice of crosswalk CPT code 36440 made by CMS, emphasizing the 
differences in provider training, procedure risk, and patient 
population. They stated the rarity of Medicare billing for this code. 
Additionally, they emphasized the importance of outpatient thyroid FNA 
being performed by endocrinologists. The shift to facility settings, 
prompted by reduced work RVUs, could raise Medicare costs. This, along 
with a potential decline in specialist workforce, may hinder patient 
access. However, in discussing this group of codes, we noted in the 
proposed rule that these codes have been recently reviewed multiple 
times through the annual PFS rulemaking process. We clarified once 
again that we disagree with the nominator that this code family is 
potentially misvalued. We acknowledged the possibility that there could 
be significant changes in the practice of delivering services described 
by these codes that were not fully reflected in the current work RVU. 
In such cases, it would be appropriate to refer the codes to the RUC to 
conduct a new survey to capture these changes accurately. However, we 
noted that these codes underwent thorough RUC survey and review 
processes during the October 2017 and January 2018 RUC meetings. Based 
on these considerations, we stated that we disagreed with the assertion 
that this code family is potentially misvalued. Nevertheless, we 
welcomed comments on whether these codes should be re-reviewed in light 
of the arguments made by the nominator.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Several commenters supported our proposal not to nominate 
CPT codes 10005, 10009, and 10021 as potentially misvalued and did not 
support a resurvey of the codes at this time, stating that these sets 
of codes have undergone several reviews in recent years.
    Response: We thank the commenters for this feedback
    Comment: The AMA RUC stated that these codes do not necessarily 
need to be re-evaluated and urged CMS to correct the mathematical error 
underlying the current work RVUs for CPT codes 10005, 10009, and 10021, 
and to accept the previous RUC-recommended work RVUs of 1.63 for CPT 
code 10005, 2.43 for CPT code 10009, and 1.20 for CPT code 10021. The 
RUC stated that the mathematical error occurred when CMS mistakenly 
double-counted the utilization of new codes that included bundled image 
guidance. The RUC believes that CMS misinterpreted the AMA's 
utilization crosswalk recommendations, emphasizing that the figures in 
the source utilization and utilization destination columns in Table 12 
from the CY 2019 PFS final rule should be identical. Additionally, they 
stated that they provided the actual claims data from CY 2019 to 
evaluate the accuracy of CMS's RVU pool estimates during the CY 2019 
rulemaking process. Lastly, a few commenters stated that they are not 
suggesting the entire code family is misvalued, but rather that only a 
subset of nominated FNA procedures is in question.
    Response: The RUC continues to state that it believes there was an 
error in the utilization crosswalk for this code family during the CY 
2019 review. In the CY 2019 PFS final rule, we refined the work RVUs of 
CPT codes 10021, 10005, and 10009 based on changes in surveyed work 
time and the relationships among the codes. For example, for CPT code 
10021, we adjusted the work RVU from the RUC-recommended value of 1.20 
to a finalized value of 1.03. This decision was driven by a decrease in 
the recommended intraservice time from 17 minutes to 15 minutes (a 12 
percent reduction) and a decrease in total time from 48 minutes to 33 
minutes (a 32 percent reduction). In contrast, the RUC-recommended work 
RVU only decreased from 1.27 to 1.20, representing a reduction of just 
over 5 percent. To better reflect these decreases in surveyed work 
time, we determined a work RVU of 1.03 was more accurate, using a 
crosswalk to CPT code 36440. It is important to note that the primary 
rationale for refining the work RVU did not reference the utilization 
crosswalk. Additionally, based on our previously explained rationale, 
we also note that the two columns--source utilization and utilization 
destination--do not need to be identical. Our review of these codes and 
our rationale for finalizing the current values are discussed in the CY 
2019 PFS final rule (83 FR 59517 through 59521) and the CY 2021 PFS 
final rule (85 FR 84602 through 84604).
    In continuing to repeat the same positions regarding the 
utilization crosswalk, however, the RUC has not provided any new 
information that was not already presented for the previous CMS reviews 
of these codes. In the event that there is a new RUC review of these 
services, as opposed to a restatement of the RUC's previous review, we 
would look forward to receiving any additional information or new data. 
We continue to welcome the submission of new information regarding 
these services that was not part of the previous CY 2019 and CY 2021 
reviews of the code family.
    Comment: Several commenters expressed concerns about the RVU 
reduction for the FNA codes, noting that since 2018, reduced 
reimbursement has led to an 18 percent decline in FNA procedures. They 
highlighted that this decrease disrupts continuity of care, causing 
delays in diagnosis and treatment, especially affecting patients in 
rural and low-income areas. Furthermore, they stated that the shift of 
FNA procedures from the office to facility setting has resulted in a 
524 percent increase in Medicare costs and a rise in hospital-based 
services. Commenters also pointed out that Medicare claims from 
calendar year 2022 also indicate a shift in the type of clinician 
performing the procedure, with 52.3 percent of FNAs being performed by 
radiologists and only 17.6 percent by endocrinologists. They stated 
that radiologists often lack the capacity for the comprehensive follow-
up care that would be provided by endocrinologists. Overall, they 
stated that the RVU reduction for the FNA codes would result in an 
increase in hospital-based facility fees and longer wait times for 
patients, would burden the healthcare system, and limit training 
opportunities for endocrinology fellows, potentially compromising 
future care quality and access.
    Response: We appreciate the information provided by commenters 
regarding the impact of the current valuation on the setting of care 
where these services are provided. We welcome additional information on 
this issue; however, we continue to believe, as we have stated in past 
rulemaking,

[[Page 97745]]

that the FNA codes are accurately valued.
    After consideration of the public comments, we continue to believe 
that the current valuation accurately reflects the typical work and 
direct PE inputs involved in furnishing FNA services. Therefore, for CY 
2025, we are finalizing our proposal not to nominate CPT codes 10021, 
10004, 10005, and 10006 as potentially misvalued.
(5) Tympanostomy Codes
    CMS routinely interacts with interested parties, and in our most 
recent review, we have observed several new devices that could be 
beneficial for populations but are not currently included in our coding 
system. While there are variations in the described devices, they 
commonly share the following descriptions. This device uses an 
innovative surgical technology that combines the separate functions of 
creating a myringotomy (incision in the eardrum), and positioning and 
placing a ventilation tube across the tympanic membrane. The new device 
is intended to deliver a tympanostomy tube (also referred to as a 
ventilation tube) through the tympanic membrane of the patient and is 
indicated to be used in office settings for pediatric patients 6 months 
and older. This device allows the tympanostomy service to be furnished 
to patients without general anesthesia and the service could therefore 
be performed in the office setting.
    Regarding the delivery of this service using innovative surgical 
technology, CMS stated in the proposed rule that we recognized that CPT 
code 69433 (Tympanostomy (requiring insertion of ventilating tube), 
local or topical anesthesia) (010-day global code) may serve as a 
sufficient base code, adequately describing the majority of the 
surgeon's work and facility resources. However, a practitioner may 
incur additional resources, due to the higher expected intraservice 
work driven by both time and intensity factors, especially when 
furnishing a service to a child, and the cost of the device when using 
these devices as part of the performed procedure. While the existing 
CPT code 69433 is not age-specific, both the vignette and the RVU 
associated with this procedure are established for adult patients who 
can respond to surgeon direction, and do not have risk of movement 
during the procedure. We stated that we believed that potentially 
establishing additional coding and payment for tympanostomy services 
may enable the provision of these services utilizing new technologies 
to a broader patient population who may benefit from innovative 
surgical technology. To improve the accuracy of the payment for these 
services, we solicited comments on several alternatives that we were 
considering for adoption in the CY 2025 PFS final rule or future 
rulemaking. First, we solicited comment on whether to establish a new G 
code that accounts for the work and PE for a procedure involving the 
positioning and placement of a ventilation tube across the tympanic 
membrane using an innovative surgical technology that combines the 
separate functions of creating a myringotomy (incision in the eardrum). 
We stated that we could assign contractor pricing to this potential G 
code for generalizable innovative tympanostomy tube delivery devices 
and/or systems falling under emerging technology and services 
categories. Alternatively, we solicited comment on whether we should 
establish an add-on payment for the service using inputs from CPT code 
69433 as a crosswalk reference, plus direct costs from invoices for the 
surgical devices referenced above. We solicited comments regarding 
these potential approaches, particularly on whether there is additional 
information we should consider if we were to establish additional 
coding and payment for these services.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: We received several comments, including from the RUC, 
stating that rather than developing new codes to describe tympanostomy 
tube delivery devices and/or systems, CMS should establish national 
pricing for Category III CPT code 0583T (Tympanostomy (requiring 
insertion of ventilating tube), using an automated tube delivery system 
and iontophoresis local anesthesia). This code, implemented in 2020, 
includes a vignette describing its use for a child (the patient sitting 
on the parent or guardian's lap) and does not include general 
anesthesia. Commenters stated that national pricing for CPT code 0583T 
would allow procedures to be furnished without general anesthesia, 
saving families from taking time off work and avoiding the costs and 
risks associated with general anesthesia. One commenter stated that CPT 
code 31295 (Nasal/sinus endoscopy, surgical, with dilation (eg, balloon 
dilation); maxillary sinus ostium, transnasal or via canine fossa) is 
similar to the Category III CPT code 0583T procedure with respect to 
the intensity and invasiveness of the procedure, preparation time for 
the procedure, or total time to complete the procedure which is around 
35-40 mins. Therefore, the commenter stated CMS can consider CPT code 
31295 as the appropriate crosswalk reference. The RUC stated that it 
believes that this CPT code may be used to report this service as 
described and suggested that CMS should not create duplicate ways to 
report the same procedure.
    Response: We thank comments for their feedback. We believe that CPT 
code 0583T does not adequately reflect the work and PEs for a procedure 
that uses innovative tympanostomy tube delivery devices and/or systems 
falling under emerging technology and services categories. 
Additionally, CPT code 0583T represents only one type of technology 
used for this service, whereas it is our understanding that there are 
multiple types of tympanostomy tube delivery devices and/or systems, 
and we do not want to limit payment for only one device. Therefore, we 
are not establishing a national price for Category III CPT code 0583T 
at this time. We appreciate the comments and feedback regarding the 
need for an appropriate rate for Category III CPT code 0583T and the 
potential for a crosswalk reference, however as discussed previously we 
will not be finalizing national pricing for CPT code 0583T.
    Comment: Many commenters collectively supported the creation of 
additional coding to describe the resources associated with innovative 
tympanostomy tube delivery devices and/or systems. Commenters generally 
preferred that CMS establish a new G code, specifically an add-on G 
code with inputs based on CPT code 69433, for tympanostomy procedures, 
particularly using innovative surgical technology for patients at risk 
of movement during the procedure, such as pediatric patients. These 
commenters referenced the benefits of these minimally invasive, in-
office procedures, which eliminate the risks associated with general 
anesthesia and offer quicker recovery, fewer infections, and improved 
access to care. They also stated that this innovative technology can be 
cost-effective, particularly for vulnerable and underserved populations 
with multiple health conditions. Additionally, the commenters stated 
that the ability to perform these procedures in an office setting, 
without the need for general anesthesia, significantly reduces 
associated risks and recovery time. Commenters stated that minimizing 
the use of general anesthesia is especially beneficial for pediatric 
patients, who are at a higher risk for anesthesia-related 
complications. However, while supporting the establishment of an add-

[[Page 97746]]

on G-code, a few commenters indicated that the current CPT code 69433 
was designed for cooperative adults using standard instruments and 
therefore does not adequately reflect the resources and expertise 
involved.
    Response: We appreciate the feedback from commenters and thank them 
for highlighting that these innovative tympanostomy procedures can be 
particularly beneficial for patients with additional health conditions, 
some of which may require multiple procedures and that CPT code 69433 
may not fully account for the resources and expertise involved, or the 
tube delivery devices and/or systems.
    We agree with commenters that these minimally invasive, in-office 
procedures can offer significant benefits, including reduced risks 
associated with general anesthesia, quicker recovery, fewer infections, 
and improved access to care. We also agree with commenters that the 
current coding is inadequate to reflect the different kinds of 
technologies used to conduct tympanostomies on children in the office 
setting, particularly those that do not require general anesthesia. 
Therefore, for CY 2025, we are finalizing the creation of a new add on 
G code, 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 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 are 
finalizing contractor pricing for CY 2025.
    Lastly, we received several comments regarding CPT codes 21076-
21089 which describe maxillofacial prosthodontic procedures (see Table 
10). This code family was not discussed in the CY 2025 PFS proposed 
rule. Therefore, these comments are outside the scope of proposals 
included in the proposed rule, and we would not ordinarily summarize 
and respond to them in this final rule. However, we note that the 
commenters are welcome to submit these codes by February 10 of the 
coming year for consideration as potentially misvalued for the CY 2026 
PFS proposed rule. See above for more information on how to submit a 
nomination for a potentially misvalued code.
[GRAPHIC] [TIFF OMITTED] TR09DE24.011

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. For a discussion of 
Telemedicine Evaluation and Management (E/M) Services, we refer readers 
to section II.E.4.18 of this final rule.
1. Payment for Medicare Telehealth Services Under Section 1834(m) of 
the Act
a. Changes to the Medicare Telehealth Services List
    In the CY 2003 PFS final rule with comment period (67 FR 79988), we 
established a regulatory process for adding services to or deleting 
services from the Medicare Telehealth Services List in accordance with 
section 1834(m)(4)(F)(ii) of the Act. This process provides the public 
with an ongoing opportunity to submit requests for adding services, 
which are then reviewed by us and assigned to categories established 
through notice and comment rulemaking. Under the process we established 
beginning in CY 2003, we evaluated whether a service meets the 
following criteria:
     Category 1: Services similar to professional 
consultations, office visits, and office psychiatry services currently 
on the Medicare Telehealth Services List. In reviewing these requests, 
we looked for similarities between the requested and existing 
telehealth services for the roles of, and interactions among, the 
beneficiary, the physician (or other practitioner) at the distant site, 
and, if necessary, the telepresenter, a practitioner who was present 
with the beneficiary in the originating site. We also looked for 
similarities in the telecommunications system used to deliver the 
service, for example, the use of interactive audio and video equipment.
     Category 2: Services that are not similar to those on the 
current Medicare Telehealth Services List. Our review of these requests 
included assessing

[[Page 97747]]

whether the service was accurately described by the corresponding code 
when furnished via telehealth and whether using a telecommunications 
system to furnish the service produces demonstrated clinical benefit to 
the patient. Submitted evidence should have included both a description 
of relevant clinical studies that demonstrated the service furnished by 
telehealth to a Medicare beneficiary improves the diagnosis or 
treatment of an illness or injury or improves the functioning of a 
malformed body part, including dates and findings, and a list and 
copies of published peer-reviewed articles relevant to the service when 
furnished via telehealth. Our evidentiary standard of clinical benefit 
did not include minor or incidental benefits. Some examples of other 
clinical benefits that we considered include the following:
     Ability to diagnose a medical condition in a patient 
population without access to clinically appropriate in-person 
diagnostic services.
     Treatment option for a patient population without access 
to clinically appropriate in-person treatment options.
     Reduced rate of complications.
     Decreased rate of subsequent diagnostic or therapeutic 
interventions (for example, due to reduced rate of recurrence of the 
disease process).
     Decreased number of future hospitalizations or physician 
visits.
     More rapid beneficial resolution of the disease process 
treatment.
     Decreased pain, bleeding, or other quantifiable signs or 
symptoms.
     Reduced recovery time.
    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 in order 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. Rather than categorizing a service 
as ``Category 1'' or ``Category 2,'' each service is now assigned a 
``permanent'' or ``provisional'' status. As described further below, a 
service is assigned a ``provisional'' status if there is not enough 
evidence to demonstrate that the service is of clinical benefit, but 
there is enough evidence to suggest that further study may demonstrate 
such benefit. The 5-step process review criteria are set forth in the 
CY 2024 PFS final rule (88 FR 78861 through 78866), listed at https://www.cms.gov/medicare/coverage/telehealth/criteria-request, and 
summarized below. 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 2025, requests to add services to the Medicare Telehealth 
Services List must have been submitted to and received by CMS by 
February 10, 2024. Each request to add a service to the Medicare 
Telehealth Services List must have included any supporting 
documentation the requester wishes us to consider as we review the 
request. Because we use the annual PFS rulemaking process 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.
    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 
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 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 
service 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-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

[[Page 97748]]

and 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.
    Step 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.
    The purpose of Step 4 is to simplify and reduce the administrative 
burden of submission and review. For Step 4, we review whether the 
service elements of a code that we are considering for addition to, or 
removal from, the Medicare Telehealth Services List map to the service 
elements of a service that is already on the list and is assigned 
permanent status. Any code that satisfies this criterion would require 
no further analysis. If the service elements of a code maps to the 
service elements of a code that is already included on the Medicare 
Telehealth Services List and is assigned permanent basis, we will add 
the code to the Medicare Telehealth Services List and assign it 
permanent status. While we have not previously found that the service 
elements of a code we are considering for addition to the list map to 
the elements of a service that was previously added to the list and 
assigned permanent basis, we believe that it is appropriate to apply 
this step 4 analysis to compare the candidate service with any 
permanent code that is on the list on a permanent basis. When Step 4 is 
met, further evidence review is not necessary. We continue to Step 5 if 
Step 4 is not met.
    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.
    Similar to Steps 3, 4, and 5 above, the purpose of step 5 is to 
simplify and reduce the administrative burden. Under Step 5, we review 
the evidence provided with a submission to determine the clinical 
benefit of a service. We then compare the clinical benefit of that 
service, when provided via telehealth, to the clinical benefit of the 
service if it were to be furnished in person. If there is enough 
evidence to suggest that further study may demonstrate that the 
service, when provided via telehealth, is of clinical benefit, CMS will 
assign the code a ``provisional'' status on the Medicare Telehealth 
Services List. Where the clinical benefit of a service, when provided 
via telehealth, is clearly analogous to the clinical benefit of the 
service when provided in person, CMS will assign the code ``permanent'' 
status on the Medicare Telehealth Services List, even if the code's 
service elements do not map to the service elements of a service that 
already has permanent status. We reminded readers that our evidentiary 
standard of demonstrated clinical benefit does not include minor or 
incidental benefits (81 FR 80194). We review the evidence submitted by 
interested parties, and other evidence that CMS has on hand. The 
evidence should indicate that the service can be safely delivered using 
two-way interactive audio-video communications technology. Clinical 
practice guidelines, peer-reviewed literature, and similar materials, 
should illustrate specifically how the methods and findings within the 
material establish a foundation of support that each element of the 
defined, individual service described by the existing face-to-face 
service code has been studied in the typical setting of care, typical 
population of beneficiaries, and typical clinical scenarios that 
practitioners would encounter when furnishing the service using only 
interactive, two-way audio-video communications technology to complete 
the visit or encounter with Medicare beneficiaries. General evidence 
may also answer the question of whether a certain beneficiary 
population requiring care for a specific illness or injury may benefit 
from receiving a service via telehealth versus receiving no service at 
all, but must establish that the service is a substitute for an 
equivalent in-person service. Evidence should demonstrate how all 
elements described by the individual service code can be met when two-
way, interactive audio-video communications technology is used as a 
complete substitute for any face-to-face interaction required between 
the patient and practitioner that are described in the individual code 
descriptor. We further remind readers that submissions reflecting 
practitioner services furnished to Medicare beneficiaries are helpful 
in our considerations.
b. Requests To Add Services to the Medicare Telehealth Services List 
for CY 2025
    We received several requests to permanently add various services to 
the Medicare Telehealth Services List, effective for CY 2025. The 
requested services are listed in Table 11.

[[Page 97749]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.012


[[Page 97750]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.013

    Many of the services listed above were added to the Medicare 
Telehealth Services List on a temporary basis during the PHE for COVID-
19, as discussed in the March 31st COVID-19 interim final rule with 
comment period (IFC) (85 FR 19235 through 19237) for the PHE for Covid-
19, and we subsequently retained these services on a provisional basis. 
All of the submissions received this calendar year were requests to add 
services, including several of which are assigned provisional status on 
Medicare Telehealth Services List, to the Medicare Telehealth Services 
List on a permanent basis. For services currently assigned provisional 
status on the Medicare Telehealth Services List, we believe that, 
rather than selectively adjudicating only those services for which we 
received requests for potential permanent status, 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. Therefore, we are not 
making determinations on whether to recategorize provisional codes as 
permanent until such time as CMS can complete a comprehensive analysis 
of all such provisional codes which we expect to address in future 
rulemaking.
    The following is a discussion of the requests received for addition 
of services to the Medicare Telehealth Services List:
(1) Continuous Glucose Monitoring
    We received a request to add CPT code 95251 (Ambulatory continuous 
glucose monitoring of interstitial tissue fluid via a subcutaneous 
sensor for a minimum of 72 hours; analysis, interpretation and report) 
to the Medicare Telehealth Services List and assign it permanent 
status. This code is not on the Medicare Telehealth Services List, nor 
had it been previously added and removed. The requester stated that the 
ability of the practitioner to interpret continuous glucose monitoring 
data and communicate changes in the diabetes care plan to their 
patients is enhanced by the availability of video visits, and the code 
should therefore be added to the Medicare Telehealth Services List.
    This service does not meet the criteria described by Step 2 of the 
5-step process: determination of whether the service is subject to the 
provisions of section 1834(m) of the Act. Under section 1834(m)(2)(A) 
of the Act, Medicare pays the same amount for a telehealth service as 
if the service is furnished in person (88 FR 78862). A service is 
subject to the provisions of section 1834(m) of the Act when at least 
some elements of the service, when delivered via telehealth, are a 
substitute for an in-person, face-to-face encounter, and all of those 
face-to-face elements of the service are furnished using an interactive 
telecommunications system as defined in Sec.  [thinsp]410.78(a)(3) (88 
FR 78863). In other words, as stated above, for a service to be 
considered a Medicare telehealth service subject to and payable under 
section 1834(m) of the Act, the service must be so analogous to in-
person care such that the telehealth service, as defined in Sec.  
410.78, is essentially a substitute for a face-to-face encounter. We do 
not consider this service a Medicare telehealth service because it is 
not an inherently face-to-face service; the patient does not need to be 
present for the service to be furnished in its entirety. CPT code 95251 
describes sensor placement and monitoring over a 72-hour period. We do 
not consider CPT code 95251 a telehealth service under section 1834(m) 
of the Act or our regulation at Sec.  410.78. Therefore, we proposed to 
not add this service to the Medicare Telehealth Services List.
    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: We received some comments requesting that we remove the 
criterion we use in Step 2 of our 5-step process to consider whether a 
services is analogous to an in-person service. The commenters stated 
that this service may be performed virtually alongside an E/M service 
furnished via Medicare telehealth. The commenters stated that a 
practitioner can provide this service in conjunction with a separately 
reportable telehealth service on the same day, and expressed concern 
that unless this code is added to the Medicare Telehealth Services 
List, there could be claims processing errors if the continuous glucose 
monitoring service is reported with Medicare telehealth POS codes.
    Response: We believe that Step 2 of our 5-step process plays a 
critical role in ensuring that any service being considered to be added 
on the Medicare Telehealth Services List is sufficiently analogous to 
an in-person service in terms of both the clinical benefit provided and 
the way it is furnished. This criterion ensures that services delivered 
virtually offer the same, if not similar diagnostic and treatment value 
as in-person visits. Removing Step 2 would undermine this goal.

[[Page 97751]]

Furthermore, Section 1834(m) of the Act requires the Secretary to pay 
to a physician or practitioner located at a distant site that furnishes 
a telehealth service to an eligible telehealth individual an amount 
equal to the amount that such physician or practitioner would have been 
paid had such service been furnished without the use of a 
telecommunications system. As discussed in CY 2025 PFS proposed rule 
and this CY 2025 PFS final rule, this limits payment for Medicare 
telehealth services to those services that are, in whole or in part, 
inherently a face-to-face service.
    We thank commenters for the additional information and concerns. We 
continue to believe that this service does not meet the requirements to 
be added to the Medicare Telehealth Services List because the service 
does not ordinarily involve the presence of, or interaction with, the 
patient.
    After consideration of public comments, we are finalizing as 
proposed to not add this service on the Medicare Telehealth Services 
List.
(2) Cardiovascular and Pulmonary Rehabilitation
    We received requests to permanently add cardiovascular 
rehabilitation services (CPT codes 93797 and 93798) and pulmonary 
rehabilitation services (CPT codes 94625 and 94626) to the Medicare 
Telehealth Services List. A requester cited studies that they say 
demonstrate that the availability of these services via telehealth 
enhances access and patient equity. Another requester cited evidence of 
improved outcomes for patients that had access to these services via 
telehealth.
    These services are currently on the Medicare Telehealth Services 
List and are assigned provisional status. In the CY 2022 PFS final rule 
(86 FR 65054 through 65055), we explained that some services were added 
temporarily to the Medicare Telehealth Services List on an emergency 
basis to allow practitioners and beneficiaries to have access to 
medically necessary care while avoiding both risk for infection and 
further burdening healthcare settings during the PHE for COVID-19. As 
explained in the CY 2025 PFS proposed rule, rather than selectively 
adjudicating only those services for which we receive requests for 
potential permanent status, we intend to first complete a comprehensive 
analysis of all provisional codes currently on the Medicare Telehealth 
Services List before determining which codes should be made permanent. 
We therefore stated in the proposed rule that while we would consider 
the requestors' input in future rulemaking, we were not proposing to 
assign CPT codes 93797 and 93798 or CPT codes 94625 and 94626 permanent 
status on the Medicare Telehealth Services List and would instead 
maintain the services on the Medicare Telehealth Services List on a 
provisional basis for CY 2025.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters supported these services remaining on the 
Medicare Telehealth Services List, along with additional requests to 
revise their status of from provisional to permanent. In addition, we 
also received a resubmission of the original request to revise the 
status of these codes from provisional to permanent with no changes in 
the information provided.
    Response: As we stated in the proposed rule, we are not considering 
whether to recategorize provisional codes as permanent in this 
rulemaking for CY 2025 because we intend to conduct a comprehensive 
analysis of all such provisional codes, which we expect to address in 
future rulemaking.
    After consideration of public comments, we are finalizing as 
proposed to maintain these services on the Medicare Telehealth Services 
List on a provisional basis.
(3) Health and Well Being-Coaching
    We received a request to add Health and Well-Being Coaching (CPT 
codes 0591T--0593T) to the Medicare Telehealth Services List with 
permanent status. These services are currently on the Medicare 
Telehealth Services List and are assigned a provisional status. We 
originally added these codes on a provisional basis in the CY 2024 PFS 
final rule (88 FR 78859 and 78860). One requester stated that health 
and well-being coaching, including content education, delivered in a 
telehealth modality is an evidence-based, cost-effective, sustainable, 
and common sense approach to facilitating lifestyle/behavioral 
intervention and treating the Medicare population with or at heightened 
risk for chronic diseases. As explained previously, we did not propose 
to revise the status of codes from provisional to permanent in the 
proposed rule because we intend to conduct a comprehensive review. 
Therefore, we did not propose to assign them to the Medicare Telehealth 
Services List with permanent status.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters supported these services remaining on the 
Medicare Telehealth Services List, along with additional requests to 
revise the status of codes from provisional to permanent. Some 
commenters recommended that we maintain the designation of these codes 
as provisional on the Medicare Telehealth Services List to allow for 
additional data and support to be collected for future requests to 
revise the status of codes from provisional to permanent.
    Response: As we stated in the proposed rule, we are not considering 
in rulemaking for CY 2025 whether to recategorize provisional codes as 
permanent because we intend to conduct a comprehensive analysis of all 
such provisional codes, which we expect to address in future 
rulemaking.
    After consideration of public comments, we are finalizing as 
proposed to maintain these services on the Medicare Telehealth Services 
List on a provisional basis.
(4) Psychological Testing and Developmental Testing
    We received a request to add Psychological Testing and 
Developmental Testing (CPT codes 96112, 96113, 96130, 96136, and 96137) 
to the Medicare Telehealth Services List on a permanent basis. These 
services are currently on the Medicare Telehealth Services List and are 
assigned provisional status. In the March 31, 2020 interim final rule 
with comment period (IFC-1) (85 FR 19239), we originally added CPT 
codes 96130, 96136, and 96137 to the Medicare Telehealth Services List 
for the duration of the PHE for COVID-19, and in the CY 2021 PFS final 
rule (85 FR 85003), we stated we were retaining them on the list on a 
category 3 basis. In the CY 2023 PFS final rule (87 FR 69460), we added 
CPT codes 96112 and 96113 on a temporary basis.
    As explained previously, we did not propose to revise the status of 
codes from provisional to permanent in the proposed rule because we 
intend to conduct a comprehensive review. Therefore, we did not propose 
to either remove these services from or to assign them permanent status 
on the Medicare Telehealth Services List.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters supported these services remaining on the 
Medicare Telehealth Services List, along with additional requests to 
revise the status of codes from provisional to permanent.

[[Page 97752]]

    Response: We are not considering in this rulemaking for CY 2025 
whether to recategorize provisional codes as permanent because we 
intend to conduct a comprehensive analysis of all such provisional 
codes, which we expect to address in future rulemaking.
    After consideration of public comments, we are finalizing as 
proposed to maintain these services on the Medicare Telehealth Services 
List on a provisional basis.
(5) Therapy/Audiology/Speech Language Pathology
    We received multiple requests to add the Therapy services described 
by CPT codes 97110, 97112, 97116, 97161 through 97164, 97530 and 97535, 
97165 through 97168, and Audiology and Speech Language Pathology 
services CPT codes 92507, 92508, 92521 through 92524, 92526, 92607 
through 92610, 96105 92626, 92627, 96125, 97129, 97130, 92607 through 
92609 92550 through 92557, 92563, 92565 92567, 92568, 92570, 92587, 
92588, 92601 through 92604, 92625 through 92627, and 92651 and 92652 to 
the Medicare Telehealth Services List on a permanent basis, stating 
that continuing telehealth flexibilities for these services could lead 
to reduced health care expenditures, increased patient access, and 
improved management of chronic disease and quality of life. These 
services are currently available on the Medicare Telehealth Services 
List and are assigned provisional status, and we refer readers to 
section II.D.1. for further discussion of these services. In the CY 
2023 PFS final rule (87 FR 69451), we originally added CPT codes 90901, 
97150, 97530, 97537, 97542, 97763, and 98960-98962 to the Medicare 
Telehealth Services List on a Category 3 basis. As explained 
previously, we did not propose to revise the status of codes from 
provisional to permanent in the proposed rule because we intend to 
conduct a comprehensive analysis of all such provisional codes, which 
we expect to address in future rulemaking. Therefore, we did not 
propose to assign them permanent status on the Medicare Telehealth 
Services List.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters requested that these services be added to 
the Medicare Telehealth Services List on a permanent basis, citing 
concerns that, due to expiring PHE flexibilities, they believe the 
codes are scheduled to be removed from Medicare Telehealth Services 
List on December 31, 2024.
    Response: As we stated in the proposed rule, we are not considering 
in this rulemaking for CY 2025 whether to recategorize provisional 
codes as permanent because we intend to conduct a comprehensive 
analysis of all such provisional codes, which we expect to address in 
future rulemaking. We clarify that we will retain these Therapy/
Audiology/Speech Language Pathology codes on the Medicare Telehealth 
Services List with a provisional status after the expiration on 
December 31, 2024, of current statutory PHE-related telehealth policies 
that have expanded the scope of practitioners that could furnish and be 
paid for telehealth services.
    After consideration of public comments, we are finalizing as 
proposed to maintain these services as provisional on the Medicare 
Telehealth Services List.
(6) Care Management
    We received a request to permanently add General Behavioral Health 
Integration (CPT code 99484) and Principal Care Management (CPT codes 
99424--99427) to the Medicare Telehealth Services List. These services 
are not on the Medicare Telehealth Services List, nor have they been 
previously added and removed. These services do not meet the criteria 
described by Step 2 of the 5-step process: determination of whether the 
service is subject to the provisions of section 1834(m) of the Act. As 
stated previously in this CY 2025 PFS final rule, section 1834(m) of 
the Act requires the Secretary to pay to a physician or practitioner 
located at a distant site that furnishes a telehealth service to an 
eligible telehealth individual an amount equal to the amount that such 
physician or practitioner would have been paid had such service been 
furnished without the use of a telecommunications system. As discussed 
in the CY 2025 PFS proposed rule and this CY 2025 PFS final rule, this 
limits payment for Medicare telehealth services to those services that 
are, in whole or in part, inherently a face-to-face service. Because 
these services are not inherently face-to-face services, and the 
patient need not be present for the services to be furnished in its 
entirety, we do not consider CPT codes 99484 and 99424--99427 to be 
telehealth services under section 1834(m) of the Act or our regulation 
at Sec.  410.78. Therefore, we proposed to not add these services to 
the Medicare Telehealth Services List.
    We did not receive public comments on this proposal and are 
finalizing as proposed.
(7) Posterior Tibial Nerve Stimulation for Voiding Dysfunction
    We received a request to permanently add Posterior tibial 
neurostimulation (CPT code 64566) to the Medicare Telehealth Services 
List. This code is not on the Medicare Telehealth Services List, nor 
had it been previously added and removed. This service does not meet 
the criteria for addition described by Step 3 of the 5-step process, 
namely the review of the elements of the service as described by the 
HCPCS code and determining whether each of them is capable of being 
furnished using an interactive telecommunications system as defined in 
Sec.  410.78(a)(3). The requestor describes the services underlying CPT 
code 64566 as the continual or recurring treatments over a period of 
time consisting of the remote monitoring of device utilization and 
bladder diary for the generation of reports for review by the care 
provider. Based on our review, this description does not align with the 
elements of the service as described by CPT code 64566. CPT code 64566 
describes a single treatment provided by a clinician who has direct 
contact with the patient and inserts an electrode into the skin 
overlying the posterior tibial nerve. Upon conclusion of the treatment, 
the clinician removes the electrode and examines and dresses the 
puncture wound. Providing these services would require in-person 
interaction. Therefore, we proposed to not add the service to the 
Medicare Telehealth Services List because we did not believe the 
service elements can be could in full using two-way audio-video 
telecommunications technology.
    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: One commenter recommended that we add this service to the 
Medicare Telehealth Services List on a permanent basis. This commenter 
provided similar information that was provided in the initial 
submission about a patch containing a microneedle array that the 
patient can apply themselves in support of their argument that the 
service can be furnished in full using two-way, audio/video 
telecommunications technology.
    Response: We thank the commenter for the additional information. We 
continue to believe that this service does not meet the requirements to 
be added to the Medicare Telehealth Services List because the service 
elements cannot be met in full using two-way audio-video 
telecommunications technology. While

[[Page 97753]]

we appreciate the additional information regarding the patch, based on 
information provided by the RUC as to the typical resource costs 
associated with furnishing this procedure and input from our clinical 
advisors, there is not sufficient evidence to demonstrate, if the 
service was furnished using two-way audio-video telecommunications 
technology, that the clinician actions and patient interaction would be 
of similar content as an in-person visit. We will continue to evaluate 
whether Posterior Tibial Nerve Stimulation for Voiding Dysfunction, if 
using the patch discussed by the commenter, is capable of being 
delivered via an interactive telecommunication system and encourage 
interested parties to continue to engage with us regarding payment for 
this service. After consideration of public comments, we are finalizing 
as proposed to not add CPT code 64566 to the Medicare Telehealth 
Services List.
(8) Radiation Treatment Management
    We received requests to permanently add Radiation Treatment 
Management (CPT code 77427) to the Medicare Telehealth Services List. 
The code is currently on the Medicare Telehealth Services List with 
provisional status. In the March 31, 2020 IFC (85 FR 9240), we 
originally added CPT code 77427 on the Medicare Telehealth Services 
List for the duration of the PHE for Covid-19. A requester stated that 
data collected during the PHE demonstrates that the telehealth option 
is as safe as the in-person equivalent. We also received a request that 
we remove this code from the Medicare Telehealth Services List, citing 
the importance of in-person physical examination to ensure quality of 
care and stating that a telehealth modality presents patient safety 
concerns such as those related to the ability of the practitioner to 
address side effects of radiation therapy. Given the safety concerns 
raised by members of the practitioner community, we believe this 
service may not be safely and effectively furnished, and therefore 
believe that such concerns merit removing this item from the telehealth 
list. Therefore, we proposed to remove this code from the Medicare 
Telehealth Services List, and we solicited comment on these quality of 
care concerns.
    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters supported our proposal to remove Radiation 
Treatment Management from the Medicare Telehealth Services List. These 
commenters cited that the in-person visit portion of this code is 
important for high-quality care and patient safety. In addition, they 
provided information about the side effects of radiation treatment that 
can be impacted by comorbidities or other therapies or treatments.
    Many commenters did not support our proposal to remove Radiation 
Treatment Management from the Medicare Telehealth Services List. These 
commenters stated that there have been no published safety incidents 
since this service has been able to be furnished via Medicare 
telehealth and that most of the side effects associated with radiation 
treatment delivery are minor dermatological issues that can be treated 
via audio-video technology. The commenters who did not support our 
proposal also provided information about the medical decision-making 
that is used when determining if a patient's side effects are 
appropriate to be resolved via a telehealth encounter or if an in-
person visit would be more appropriate. Because the in-person visit 
portion of this code is conducted weekly, this decision can change 
based on whether the patient is experiencing side effects and other 
clinical considerations.
    Response: We thank commenters for the extensive information 
provided both in support of and counter to our proposal for this 
service. After reviewing this information, we are compelled by the 
points raised by commenters regarding the lack of evidence of adverse 
patient safety outcomes and the importance of allowing clinical 
judgement in determining whether a patient can be seen via Medicare 
telehealth or whether the patient needs to be seen in-person. However, 
we recognize the ongoing patient safety concerns and welcome 
information regarding any adverse outcomes as it becomes available.
    After consideration of public comments, we are not finalizing as 
proposed. Instead, we will retain Radiation Treatment Management (CPT 
code 77427) on the Medicare Telehealth Services List on a provisional 
basis.
(9) Home International Normalized Ratio (INR) Monitoring
    We received a request to permanently add Home INR Monitoring (HCPCS 
code G0248) to the Medicare Telehealth Services List. This service is 
not on the Medicare Telehealth Services List, nor had it been 
previously added and removed. We proposed to add HCPCS code G0248 to 
the Medicare Telehealth Services List with provisional status because 
our clinical analyses of these services indicate that they can be 
furnished in full using two-way, audio and video technology, and 
information provided by requesters indicates that there may be clinical 
benefit; however, there is not yet sufficient evidence available to 
consider the services for permanent status. This service as described 
by the HCPCS code is a face-to-face demonstration of use and care of 
the INR monitor, obtaining at least one blood sample, provision of 
instructions for reporting home INR test results, and documentation of 
patient's ability to perform testing and report results, and we believe 
each of these service elements the elements is capable of being 
furnished using an interactive telecommunications system. Adding this 
service on a provisional basis will allow additional time for the 
development of evidence of clinical benefit when this service is 
furnished via telehealth for CMS to consider when evaluating this 
service for potential permanent addition to the Medicare Telehealth 
Services List.
    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters supported adding these services to the 
Medicare Telehealth Services List on a provisional basis, and several 
recommended that we add these services to the Medicare Telehealth 
Services List on a permanent basis. Many commenters suggested that, as 
home INR services are primarily furnished by IDTFs, we should clarify 
that these suppliers are also able bill for Medicare Telehealth 
services. As these commenters explained in detail, the interaction with 
the patient described by this service is generally delivered by 
individuals considered to be clinical staff and not practitioners under 
the PFS and that studies have indicated positive outcomes when this 
clinical staff-provided service is delivered virtually, as it commonly 
has been since the first part of 2020.
    Response: We thank commenters for their input. After reviewing the 
comments information provided by commenters regarding the entities who 
commonly bill for these services and the how they are currently 
delivered, we believe we need additional time to consider whether these 
services should be added to the formal list of Medicare telehealth 
services. Therefore, we are not finalizing addition to the Medicare 
telehealth list for CY 2025 and welcome input from interested parties 
which we may consider for future rulemaking. We note that we believe 
continued access to this service is important and not adding this 
service to the telehealth list at this

[[Page 97754]]

time does not mean that suppliers should change their current 
practices.
    After consideration of public comments, we are not finalizing as 
proposed to add Home INR Monitoring (HCPCS code G0248) to the Medicare 
Telehealth Services List on a provisional basis.
(10) Caregiver Training
    We received a request to permanently add Caregiver Training 
services, as described by CPT codes 97550 (Caregiver training in 
strategies and techniques to facilitate the patient's functional 
performance in the home or community (eg, activities of daily living 
[ADLs], instrumental ADLs [iADLs], transfers, mobility, communication, 
swallowing, feeding, problem solving, safety practices) (without the 
patient present), face to face; initial 30 minutes) and CPT code 97551 
(Caregiver training in strategies and techniques to facilitate the 
patient's functional performance in the home or community (eg, 
activities of daily living [ADLs], instrumental ADLs [iADLs], 
transfers, mobility, communication, swallowing, feeding, problem 
solving, safety practices) (without the patient present), face to face; 
each additional 15 minutes (List separately in addition to code for 
primary service)) to the Medicare Telehealth Services List. These codes 
do not currently appear on the Medicare Telehealth Services List nor 
had they previously been added or removed. We proposed to add these 
services to the Medicare Telehealth List with provisional status for CY 
2025, in addition to the other currently payable caregiver training 
service codes (CPT codes 97550, 97551, 97552, 96202, 96203). . These 
codes describe new services that were added to the PFS beginning in 
2024. Contingent upon finalizing the service code descriptions that we 
proposed in section II.E. of this final rule, we also proposed that 
HCPCS codes G0541-G0543 (GCTD1-3) and G0539-G0540 (GCTB1-2) be added to 
the Medicare Telehealth Services list for CY 2025 on a provisional 
basis. We believe that these codes are similar to other services 
already available on the Medicare Telehealth Services List, including 
education and training for patient self-management (CPT codes 98960-
98962), self-care/home management training (CPT codes 97535), and 
caregiver-focused health risk assessment (CPT code 96161). Further, it 
appears that all elements of these services may be furnished when using 
two-way, audio-video interactive communications technology. Given the 
limited utilization of those codes for 2024, there are not studies 
supporting these codes' ability to be furnished remotely. Adding these 
services on a provisional basis will allow additional time for the 
development of evidence of clinical benefit when this service is 
furnished via telehealth for CMS to consider when evaluating these 
services for potential permanent addition to the Medicare Telehealth 
Services List.
    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters supported adding these services to the 
Medicare Telehealth Services List on a provisional basis. Some 
commenters recommended that we add these services to the Medicare 
Telehealth Services List on a permanent basis.
    Response: We thank commenters for their support and may consider 
designating these services with permanent status on the Medicare 
Telehealth Services List in the future after additional data is 
provided in support of these services being furnished via telehealth.
    After consideration of public comments, we are finalizing as 
proposed to add caregiver training services (CPT codes 97550, 97551, 
97552, 96202, 96203 and HCPCS codes G0541-G0543 (GCTD1-3) and G0539-
G0540 (GCTB1-2)) to the Medicare Telehealth Services list for CY 2025 
on a provisional basis.
c. Other Services Proposed for Addition to the Medicare Telehealth 
Services List
(1) Preexposure Prophylaxis (PrEP) of Human Immunodeficiency Virus 
(HIV)
    As outlined in Section II.E. of this final rule, we proposed 
national rates for HCPCS codes G0011 (Individual counseling for pre-
exposure prophylaxis (PrEP) by physician or QHP to prevent human 
immunodeficiency virus (HIV), includes: HIV risk assessment (initial or 
continued assessment of risk), HIV risk reduction and medication 
adherence, 15-30 minutes) and G0013 (Individual counseling for pre-
exposure prophylaxis (PrEP) by clinical staff to prevent human 
immunodeficiency virus (HIV), includes: HIV risk assessment (initial or 
continued assessment of risk), HIV risk reduction and medication 
adherence) pending the future finalization of the NCD for Pre-Exposure 
Prophylaxis (PrEP) for Human Immunodeficiency Virus (HIV) Infection. We 
believe these services are similar to services currently on the 
Medicare Telehealth Services list, specifically HCPCS codes G0445 (High 
intensity behavioral counseling to prevent sexually transmitted 
infection; face-to-face, individual, includes: education, skills 
training and guidance on how to change sexual behavior; performed semi-
annually, 30 minutes) and CPT code 99211 (Office or other outpatient 
visit for the evaluation and management of an established patient that 
may not require the presence of a physician or other qualified health 
care professional) as these codes are the codes from which HCPCS codes 
G0011 and G0013 were unbundled, respectively. As similarity to services 
currently on the Medicare Telehealth Services List is one of our 
criteria for permanent addition, we proposed to add HCPCS codes G0011 
and G0013 to the Medicare Telehealth Services List with a permanent 
status.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters supported this proposal, and we did not 
receive any comments that were not in support of our proposal.
    Response: We thank commenters for their input. After consideration 
of public comments, we are finalizing as proposed to add HCPCS codes 
G0011 and G0013 to the Medicare Telehealth Services List with a 
permanent status on the Medicare Telehealth Services List, beginning in 
CY 2025.
(2) Other Consideration for Medicare Telehealth Services List
    Comment: Many commenters requested that we add services to the 
Medicare Telehealth Services List for which we did not receive requests 
through the annual submissions for consideration for the CY 2025 
rulemaking cycle and that we did not discuss in the CY 2025 PFS 
proposed rule.
    Response: We consider requests to add or remove services from the 
Medicare Telehealth Services List through the process we established as 
required under section 1834(m)(4)(F)(ii). Requests can be submitted to 
the CMS Telehealth Review Process mailbox 
([email protected]) no later than February 10, 
2025, to be considered for the CY 2026 cycle of annual notice and 
comment rulemaking. For more information on requesting additions to the 
Medicare Telehealth Services List, please see https://www.cms.gov/medicare/coverage/telehealth/request-addition.
    Comment: Some commenters requested clarification that the services 
designated as ``provisional'' on the Medicare Telehealth Services List 
will remain on the list for CY 2025.
    Response: As explained previously, we are not considering in this

[[Page 97755]]

rulemaking for CY 2025 whether to recategorize provisional codes as 
permanent because we intend to conduct a comprehensive analysis of all 
such provisional codes, which we expect to address in future 
rulemaking. Except as specifically stated otherwise in this section, 
services included on the Medicare Telehealth Services List with 
provisional status will remain on the list for CY 2025.
    The services that we are adding to the Medicare Telehealth Services 
List are listed in Table 12.
BILLING CODE 4120-01-P

[[Page 97756]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.014


[[Page 97757]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.015


[[Page 97758]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.016

BILLING CODE 4120-01-C
    We also point commenters to section II.I. of this final rule where 
we address requests from commenters to add HCPCS code G0560 to the 
Medicare Telehealth Services List. We are finalizing addition of HCPCS 
code G0560 to the Medicare Telehealth Services List.
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 practitioners may furnish the service via Medicare 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 FR73318),

[[Page 97759]]

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 the potential acuity and 
complexity of these patients.
    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, 
2023 (upon expiration of the PHE), through enforcement discretion 
during the remainder of CY 2023 and notice-and-comment rulemaking for 
CY 2024, Medicare telehealth frequency limitations have been suspended 
for CY 2024 (88 FR 78876 through 78878) 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.)
    In the CY 2024 PFS final rule (88 FR 78877), we solicited comments 
from interested parties on how 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 that final rule, 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 practitioners should be 
allowed to use their clinical 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. Many commenters urged us to 
permanently remove them. That said, some commenters did not support 
removing these frequency limitations citing patient acuity and safety, 
some commenters cited the importance of in-person care for patients in 
acute care settings. Some commenters stated that telehealth patient 
assessments and evaluations are never the same as in-person, hands on 
visits and should not be considered a viable replacement with no 
limitations for in-person care. We are continuing to consider what 
changes we should be making to how telehealth services are paid under 
Medicare in light of the way practice patterns may have changed 
following the PHE for COVID-19. Taking into account the information 
received from commenters in the CY 2024 PFS final rule, we believe it 
is reasonable to continue to pause certain pre-pandemic restrictions, 
such as the frequency limitations for the abovementioned codes for CY 
2025. Removing such restrictions for CY 2025 would allow us to gather 
an additional year of data to determine how practice patterns are 
evolving and what changes, if any, to frequency limitations should be 
made on a permanent basis.
    We do not believe pausing such frequency limitations for another 
year presents a level of safety risk requiring us to immediately 
reinstate the limitations. Our analysis of claims data 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 2020-2023 suggest 
that less than five percent received one or more of these services as a 
telehealth service. Therefore, while claims data does not suggest that 
lifting these limitations during the PHE has led to an increase in 
utilization, we continue to be interested in information from 
interested parties on our concerns regarding the potential acuity and 
complexity of these patients and how such acuity and complexity should 
complexity should influence our implementation of frequency 
limitations.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters supported our proposals to continue to 
suspend application of telehealth frequency limits on subsequent

[[Page 97760]]

inpatient and nursing facility visits and critical care consultations 
through 2025. Commenters stated that they appreciated the continued 
flexibility while also acknowledging the concerns we expressed 
regarding the necessity of in-person care for patients in higher-acuity 
settings of care. Several commenters did suggest that we should 
permanently lift these restrictions, stating that this flexibility is 
helpful in addressing staffing shortages and that we should defer to 
individual clinical judgement when it comes to how frequently a patient 
requires in-person, non-telehealth care. A few commenters cautioned 
that we should not remove frequency limitations permanently, stating 
in-person care is essential to quality of life and care due to the 
complex nature and acuity of patients in these settings.
    Response: We thank commenters for their input. We believe that 
continuing to suspend these frequency limitations on a temporary basis 
for CY 2025 will allow us more time to evaluate patient safety while 
preserving access in a way that is not disruptive to practice patterns 
that were established during and after the PHE. We appreciate the 
information regarding both patient safety concerns and concerns 
regarding supporting healthcare access. We expect to address these 
concerns in future rulemaking.
    After consideration of public comments, we are finalizing as 
proposed to continue suspension of the telehealth frequency limits on 
subsequent inpatient and nursing facility visits and critical care 
consultations through CY 2025.
e. Audio-Only Communication Technology To Meet the Definition of 
``Telecommunications System''
    In our regulation at Sec.  410.78(a)(3), we define ``interactive 
telecommunications system'' as multimedia communications equipment that 
includes, at a minimum, audio and video equipment permitting two-way, 
real-time interactive communication between the patient and distant 
site physician or practitioner. Through emergency regulations and 
waiver authority under section 1135(b)(8) of the Act, in response to 
the PHE for COVID-19, we allowed the use of audio-only communications 
technology to furnish services described by the codes for audio-only 
telephone evaluation and management services and behavioral health 
counseling and educational services. Section 4113 of the CAA, 2023, 
extended the availability of telehealth services that can be furnished 
using audio-only technology and provided for the extension of other 
PHE-related flexibilities including removal of the geographic and 
location limitations under section 1834(m) of the Act through December 
31, 2024.
    In the CY 2022 PFS final rule (86 FR 65060), in part to recognize 
the changes made by section 123 of the CAA, 2021 that removed the 
geographic restrictions for Medicare telehealth services for the 
diagnosis, evaluation, or treatment of a mental health disorder and the 
addition of the patient's home as a permissible originating site for 
these services, we revisited our regulatory definition of ``interactive 
telecommunications system'' beyond the circumstances of the PHE. 
Specifically, we finalized a policy to allow for audio-only services 
under certain circumstances and revised the regulation at Sec.  
410.78(a)(3) to permit the use of audio-only equipment for telehealth 
services furnished to established patients in their homes for purposes 
of diagnosis, evaluation, or treatment of a mental health disorder 
(including substance use disorders) if the distant site physician or 
practitioner is technically capable of using an interactive 
telecommunications system as defined previously, but the patient is not 
capable of, or does not consent to, the use of video technology. We 
also established this policy in part because mental health services are 
different from most other services on the Medicare telehealth services 
list in that many of the services primarily involve verbal conversation 
where visualization between the patient and furnishing physician or 
practitioner may be less critical to the provision of the service.
    However, with the successive statutory extensions of the telehealth 
flexibilities implemented in response to the PHE for COVID-19, most 
recently by the CAA, 2023, and our adoption of other extensions where 
we have had authority to do so, we have come to believe that it would 
be appropriate to allow interactive audio-only telecommunications 
technology when any telehealth service is furnished to a beneficiary in 
their home (when the patient's home is a permissible originating site) 
and when the distant site physician or practitioner is technically 
capable of using an interactive telecommunications system as defined 
previously, but the patient is not capable of, or does not consent to, 
the use of video technology. While practitioners should always use 
their clinical judgment as to whether the use of interactive audio-only 
technology is sufficient to furnish a Medicare telehealth service, we 
recognize that there is variable broadband access in patients' homes, 
and that even when technologically feasible, patients simply may not 
always wish to engage with their practitioner in their home using 
interactive audio and video. Under current statute, with the expiration 
of the PHE-related telehealth flexibilities on December 31, 2024, the 
patient's home is a permissible originating site only for services for 
the diagnosis, evaluation, or treatment of a mental health or substance 
use disorder, and for the monthly ESRD-related clinical assessments 
described in section 1881(b)(3)(B) of the Act.
    We proposed in the CY 2025 PFS proposed rule to revise the 
regulation at Sec.  410.78(a)(3) to state that an interactive 
telecommunications system may also include two-way, real-time audio-
only communication technology for any telehealth service furnished to a 
beneficiary in their home if the distant site physician or practitioner 
is technically capable of using an interactive telecommunications 
system as defined as multimedia communications equipment that includes, 
at a minimum, audio and video equipment permitting two-way, real-time 
interactive communication, but the patient is not capable of, or does 
not consent to, the use of video technology. Additionally, a modifier 
designated by CMS must be appended to the claim for services described 
in this paragraph to verify that these conditions have been met. These 
are CPT modifier ``93'' and, for RHCs and FQHCs, Medicare modifier 
``FQ'' (Medicare telehealth service was furnished using audio-only 
communication technology). Practitioners have the option to use the 
``FQ'' or the ``93'' modifiers or both where appropriate and true, 
since they are identical in meaning.
    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters supported our proposal, stating that 
allowing audio-only communications technology to meet the definition of 
telecommunications system when a beneficiary is in their home and does 
not have access to, or does not wish to use, two-way, audio/video would 
improve access to care, particularly for rural and underserved 
populations.
    Response: We thank commenters for their support.

[[Page 97761]]

    Comment: A few commenters requested the removal of the requirement 
that the distant site practitioner be able to furnish Medicare 
telehealth services via two-way, audio/video technology. Commenters 
pointed out that there are circumstances where the practitioner might 
also be in a rural area or area without sufficient broadband 
infrastructure that might inhibit their capacity to furnish two-way, 
audio-video interactions. Other commenters recommended that we remove 
the requirement that audio-only only meet the definition of 
telecommunications system when the beneficiary is in their home, 
instead requesting that this flexibility be extended to all originating 
sites. We also received a few comments expressing reservation with the 
use of audio-only communication technology in furnishing Medicare 
telehealth services, stating that audio-only services are not analogous 
to in-person care and should not be a substitute for face-to-face 
encounters.
    Response: We appreciate the commenters' views and concerns. As 
explained previously, Medicare telehealth services serve as a 
substitute for a service that is typically delivered through an in-
person, face-to-face visit with the patient and practitioner. Medicare 
telehealth services are generally analogous to, and must include the 
elements of, the in-person service. We continue to believe that the use 
of two-way, real-time audio/video communications technology to furnish 
Medicare telehealth services is the closest approximation to an in-
person service, and is an appropriate general expectation when 
furnishing a Medicare telehealth service. Therefore, we are maintaining 
the general definition of interactive telecommunications system in 
Sec.  410.78(a)(3) for purposes of Medicare telehealth services to mean 
multimedia communications equipment that includes, at minimum, audio 
and video equipment permitting two-way, real-time interactive 
communication between the patient and the distant site physician or 
practitioner. We are also maintaining the requirement that distant site 
physicians and practitioners must have the technical capability to use 
an interactive telecommunications system that includes two-way, real-
time, interactive audio and video communications at the time that an 
audio-only telehealth service is furnished.
    We proposed in the CY 2025 PFS proposed rule to revise our 
definition of interactive telecommunications system in Sec.  
410.78(a)(3) to include two-way, real-time audio-only communication 
technology under certain circumstances for any telehealth service 
furnished to a beneficiary in their home (when the home is a 
permissible originating site for the telehealth service). We limited 
our proposal to permit Medicare telehealth services to be furnished 
using real-time audio-only technology only in the narrow circumstances 
that the service is furnished to a patient in their home, and the 
patient is either not capable or does not consent to use video 
technology. The purpose of our proposal was to recognize that, while 
real-time interactive audio-video remains the generally applicable 
standard, including for distant site practitioners who wish to furnish 
these services, there are special considerations for patients when a 
Medicare telehealth service is delivered in their home. For example, a 
patient may not have sufficient (or any) access to broadband to support 
the use of real-time video technology, may not have the technical 
proficiency or support in place to use video technology, or may have 
privacy concerns about using video technology for Medicare telehealth 
services in their home.
    Patients may not wish to use video in their homes because they do 
not want the practitioner to view their private, personal living space. 
If the patient perceives the use of real-time video technology as 
intrusive, the requirement to use video technology without exception 
could discourage patients from accessing appropriate health care 
services through telehealth. We also recognize that a policy to address 
these special considerations can facilitate access to care that would 
be unlikely to otherwise occur, given the patient's technological 
limitations, abilities, or personal preferences. To reflect this 
limited exception to address the unique considerations of patients who 
may receive Medicare telehealth services in their homes, as stated in 
the CY 2025 PFS proposed rule, we proposed a policy that would permit a 
patient-driven choice to use audio-only technology to receive a 
Medicare telehealth service based on their technological capabilities 
and limitations, and their comfort level with the use of video 
technology in their home.
    Separately, based on our review of the comments and our own 
independent analysis, we do not believe it would be appropriate at this 
time to permit two-way, real-time audio-only communication technology 
for telehealth services furnished at originating sites other than the 
patient's home. As we stated in the CY 2025 PFS proposed rule, all 
other originating sites are medical facilities that would generally 
have the infrastructure and broadband capacity to support two-way, 
audio/video communication technology. Additionally, patients would not 
have the same heightened expectation of privacy when video is used for 
a Medicare telehealth service in a medical facility as they would in 
their home.
    We also note that 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.
    After consideration of public comments, we are finalizing as 
proposed to revise our regulations at Sec.  410.78(a)(3) to permanently 
change the regulatory definition of an interactive telecommunications 
system to include two-way, real-time audio-only communication 
technology for any telehealth services furnished to beneficiaries in 
their homes if the distant site physician or practitioner is 
technically capable of using an interactive telecommunications system 
that includes, at a minimum, audio and video equipment permitting two-
way, real-time interactive communication between the patient and 
distant site physician or practitioner, but the patient is not capable 
of, or does not consent to, the use of video technology. We clarify 
that no additional documentation, except for the appropriate modifier 
as mentioned above, are needed.
f. Distant Site Requirements
    In the CY 2024 PFS final rule (88 FR 78873 through 78874) we 
discussed that many commenters expressed concerns regarding the 
expiring flexibility for telehealth practitioners to bill from their 
currently enrolled location instead of their home address when 
providing telehealth services from their home. CMS issued an FAQ, 
available at https://www.cms.gov/files/document/physicians-and-other-clinicians-cms-flexibilities-fight-covid-19.pdf, which extended the 
flexibility for telehealth practitioners to bill from their currently 
enrolled location instead of their home address when providing 
telehealth services from their home through December 31, 2023. 
Interested parties suggested that the expiration of this flexibility 
poses a potential and imminent threat to the safety and privacy of 
health professionals who work from home and furnish telehealth 
services. Commenters cited recent examples of workplace violence in 
health care facilities, where direct harm to nurses and other medical 
staff occurred. In addition to safety and privacy concerns, interested 
parties

[[Page 97762]]

explained that a significant number of practitioners would need to 
change their billing practices or add their home address to the 
Medicare enrollment file, coordinating with the appropriate Medicare 
Administrative Contractor in their jurisdiction, and this would present 
administrative burden. To address these concerns, commenters requested 
that CMS take steps to protect telehealth practitioners by adjusting 
enrollment requirements so that individual practitioners do not have to 
list their home addresses on enrollment forms.
    In response, CMS finalized, through CY 2024, that we would continue 
to permit a distant site practitioner to use their currently enrolled 
practice location instead of their home address when providing 
telehealth services from their home.
    We have continued to hear from interested parties who have stressed 
the importance of continuing this flexibility for the safety and 
privacy of health care professionals. Given the shift in practice 
patterns toward models of care that include the practitioner's home as 
the distant site, we believe it would be appropriate to continue this 
flexibility as CMS considers various proposals that may better protect 
the safety and privacy of practitioners. Therefore, we proposed in the 
CY 2025 PFS proposed rule that through CY 2025 we would continue to 
permit the distant site practitioner to use their currently enrolled 
practice location instead of their home address when providing 
telehealth services from their home.
    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters supported our proposal to continue to 
permit the distant site practitioner to use their currently enrolled 
practice location instead of their home address when providing 
telehealth services from their home through CY 2025. We also received 
comments requesting that we make this extension or a similar policy 
permanent. These commenters highlighted the need for a permanent 
solution for practitioners who do not have an in-person practice 
location. Other commenters requested clarification regarding whether 
the practitioner's home address could be across a state line from the 
location of the beneficiary provided that the practitioner is licensed 
in both states.
    Response: We thank commenters for their input and may continue to 
consider the issues raised in future rulemaking. We remind interested 
parties that we defer to state law regarding licensure requirements for 
distant site Medicare telehealth practitioners. In addition, we note 
that a separate Medicare enrollment is required for each state in which 
the practitioner furnishes and intends to bill for covered Medicare 
services.
    After consideration of public comments, we are finalizing as 
proposed that, through CY 2025, we continue to permit the distant site 
practitioner to use their currently enrolled practice location instead 
of their home address when providing Medicare telehealth services from 
their home.
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 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, direct supervision 
requires 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 
does not 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, we have established this ``immediate availability'' 
requirement to mean in-person, physical, not virtual, availability 
(please see the April 6, 2020 IFC (85 FR 19245) and the CY 2022 PFS 
final rule (86 FR 65062)).
    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) and the CY 2024 PFS final rule (88 FR 78878) 
subsequently extended these policies through December 31, 2024. As 
stated in the CY 2024 PFS final rule, we extended this definition of 
direct supervision through December 31, 2024, in order to align the 
timeframe of the policy with other PHE-related telehealth policies that 
were extended most recently under the provisions of the CAA, 2023.
    We note that in the CY 2021 PFS final rule (85 FR 84539) we 
clarified that, to the extent our policy allows direct supervision 
through virtual presence using audio/video real-time communications 
technology, the requirement could be met by the supervising physician 
(or other practitioner) being immediately available to engage via 
audio/video technology (excluding audio-only), and would not require 
real-time presence or observation of the service via interactive audio 
and video technology throughout the performance of the service. We 
noted that this was the case during the PHE and would continue to be 
the case following the PHE. While flexibility to provide direct 
supervision through audio/video real-time communications technology was 
adopted to be responsive to critical needs during the PHE for COVID-19 
to ensure beneficiary access to care, reduce exposure risk and to 
increase the capacity of practitioners and physicians to respond to 
COVID-19, we expressed concern that direct supervision through virtual 
presence may not be sufficient to support PFS payment on a permanent 
basis, beyond

[[Page 97763]]

the PHE for COVID-19, due to issues of patient safety. For instance, in 
complex, high-risk, surgical, interventional, or endoscopic procedures, 
or anesthesia procedures, a patient's clinical status can quickly 
change; in-person supervision would be necessary for such services to 
allow for rapid on-site decision-making in the event of an adverse 
clinical situation. In addition to soliciting comment in the CY 2021 
PFS proposed rule on whether there should be any additional 
``guardrails'' or limitations to ensure patient safety/clinical 
appropriateness, beyond typical clinical standards, as well as 
restrictions to prevent fraud or inappropriate use, we solicited 
comment in the CY 2024 PFS proposed rule on whether we should consider 
extending the definition of direct supervision to permit virtual 
presence beyond December 31, 2024. Specifically, we stated that we were 
interested in input from interested parties on potential patient safety 
or quality concerns when direct supervision occurs virtually; for 
instance, if direct supervision of certain types of services with 
virtual presence of the supervising practitioner 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 were 
also interested in potential program integrity concerns that interested 
parties may have regarding this policy, such as overutilization or 
fraud and abuse.
(1) Proposal To Extend Definition of ``Direct Supervision'' To Include 
Audio-Video Communications Technology Through 2025
    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 are 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 
acknowledge the utilization of this flexibility and recognize that many 
practitioners have stressed the importance of maintaining it, however 
we seek additional information regarding potential patient safety and 
quality of care concerns. This flexibility has been available and 
widely utilized since the beginning of the PHE, and we recognize that 
may enhance patient access. However, 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 
believe 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 proposed in the CY 2025 PFS proposed rule to extend this flexibility 
for all services on a temporary basis only. Specifically, we proposed 
to revise the regulations at Sec.  410.32(b)(3)(ii) to state that 
through December 31, 2025, the presence of the physician (or other 
practitioner) includes virtual presence through audio/video real-time 
communications technology (excluding audio-only).
    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: The majority of commenters supported extending this 
flexibility on a temporary basis for an additional year, although most 
requested that we make this flexibility permanent. A few commenters 
informed us of potential patient safety concerns and barriers to 
billing that we should consider before further extending or making this 
flexibility permanent. Some commenters opposed making this flexibility 
permanent due to concerns about increasing the amount of physician 
``incident to'' billing for services provided by physician assistants 
and nurse practitioners, which would obscure the extent to which 
physician assistants and nurse practitioners are actually performing 
the services.
    Response: We appreciate the support of commenters and look forward 
to reviewing the information provided as we consider the most 
appropriate way to balance patient safety concerns with the interest of 
supporting access that we may address in future rulemaking. After 
consideration of public comments, we are finalizing as proposed, to 
continue to define direct supervision to permit the presence and 
``immediate availability'' of the supervising practitioner through 
real-time audio and visual interactive telecommunications through 
December 31, 2025, and finalizing corresponding revisions to our 
regulations at Sec.  410.32(b)(3)(ii).
(2) Proposal to Permanently Define ``Direct Supervision'' To Include 
Audio-Video Communications Technology for a Subset of Services
    In the CY 2024 PFS proposed rule, we solicited comment on extending 
or permanently establishing the virtual presence flexibility for 
certain services valued under the PFS that are typically are performed 
in their entirety by auxiliary personnel as defined at Sec.  
410.26(a)(1). We stated such services would include incident-to 
services wholly furnished by auxiliary personnel or Level I office or 
other outpatient E/M visits for established patients. We also mentioned 
Level I Emergency Department (ED) visits in this list but have since 
concluded that ED services would not be wholly furnished by auxiliary 
personnel and, for that reason, have excluded them from the discussion 
in this final rule. Based on our review, these specific services 
present less of a patient safety concern than services for which there 
may be a need for immediate intervention of the supervising 
practitioner. As noted in the CY 2024 PFS proposed rule, allowing 
virtual presence for direct supervision of these services could balance 
patient safety concerns with the interest of supporting access and 
preserving workforce capacity for medical professionals while 
considering potential quality and program integrity concerns. After 
reviewing the various comments in response to this solicitation, 
additional feedback provided by interested parties, and conducting our 
own independent review, we believe these services are low risk by their 
nature, do not often demand in-person supervision, are typically 
furnished entirely by the supervised personnel, and allowing virtual 
presence for direct supervision of these services would balance patient 
safety concerns with the interest of supporting access and preserving 
workforce capacity.
    We proposed in the CY 2025 PFS proposed rule 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), but only for the following subset of 
incident-to services described under Sec.  410.26: (1) services 
furnished incident to a physician or other practitioner's service when 
provided by auxiliary

[[Page 97764]]

personnel employed by the billing practitioner and working under their 
direct supervision, and for which the underlying HCPCS code has been 
assigned a PC/TC indicator of `5'; \10\ and (2) services described by 
CPT code 99211 (Office or other outpatient visit for the evaluation and 
management of an established patient that may not require the presence 
of a physician or other qualified health care professional). As 
provided in the code descriptor for CPT code 99211, an office or other 
outpatient visit for the evaluation and management of an established 
patient does not require the presence of a physician or other 
practitioner and may be furnished incident to a physicians' service by 
a nonphysician employee of the physician under direct supervision. The 
service described by CPT code 99211 and the services that are 
identified with a PC/TC indicator of `5' as listed in the PFS Relative 
Value Files are services that are nearly always performed in entirety 
by auxiliary personnel. The vignette for CPT code 99211 describes the 
provision of supervision and guidance to the clinical staff as 
necessary. The code descriptor for this service specifies an E/M 
service that may not require the presence of a physician or other 
professional; and the current valuation, which is relatively low 
compared to other office and outpatient E/M services, suggests that 
this service would primarily be provided by auxiliary personnel.
---------------------------------------------------------------------------

    \10\ For a full list of all PFS payment status indicators and 
descriptions, see the Medicare Claims Processing Manual (IOM Pub. 
100-04, chapter 23, sections 30.2.2). For a full list of all PFS 
payment status indicators and descriptions, see the Medicare Claims 
Processing Manual (IOM Pub. 100-04, chapter 23, sections 30.2.2 and 
50.6). Specific indicators by service are listed in the PFS Relative 
Value files at https://www.cms.gov/medicare/payment/fee-schedules/physician/pfs-relative-value-files).
---------------------------------------------------------------------------

    We proposed an incremental approach whereby we would adopt without 
any time limitation the definition of direct supervision permitting 
virtual presence for services that are inherently lower risk: that is, 
services that do not ordinarily require the presence of the billing 
practitioner, do not require direction by the supervising practitioner 
to the same degree as other services furnished under direct 
supervision, and are not services typically performed directly by the 
supervising practitioner.
    For all other services required to be furnished under the direct 
supervision of the supervising physician or other practitioner, we 
proposed, as described previously, to continue to define ``immediate 
availability'' to include real-time audio and visual interactive 
telecommunications technology only through December 31, 2025.
    We proposed to revise 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).
    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters generally supported this policy and supported 
an incremental approach to making permanent the services that this 
definition applies to. Commenters provided additional services for us 
to consider adopting permanently as inherently low risk for purposes of 
the policy permitting direct supervision through virtual presence, such 
as diagnostic tests and behavioral health, dermatology, therapy, 
registered dietitian nutritionists, cardiac rehabilitation, and 
pulmonary rehabilitation services.
    Response: We will consider adding to the services for which direct 
supervision can include virtual presence in future rulemaking.
    After consideration of public comments, we are finalizing as 
proposed and revising our regulations 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 office and other 
outpatient visits for the evaluation and management of an established 
patient that may not require the presence of a physician or other 
qualified health care professional. We note that, in instances where a 
service on the Medicare telehealth list, is available to beneficiaries 
in their homes, and also has the requirement of direct supervision, 
that under the applicable definition of direct supervision, the 
physician/practitioner is required to be available using both and audio 
and video. We note that does not necessarily mean that any interaction 
between the patient and the physician/practitioner supervising the 
service would require a video component.
(3) Teaching Physician Billing for Services Involving Residents With 
Virtual Presence
    In the CY 2021 PFS final rule (85 FR 84577 through 84584), we 
established a policy that, after the end of the PHE for COVID-19, 
teaching physicians may meet the requirements 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 an Office of Management and Budget (OMB)-defined 
metropolitan statistical area (MSA). We made this location distinction 
consistent with our longstanding interest in increasing beneficiary 
access to Medicare-covered services in rural areas. We noted 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 referred 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

[[Page 97765]]

personally provided by residents in order to be paid for the service 
under the PFS, in locations that were within a MSA. This policy applied 
to all services, regardless of whether the patient was co-located with 
the resident or only present 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 review of the public comments, we finalized a policy that 
allowed the teaching physician to have a virtual presence in all 
teaching settings, 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.
    As stated in the CY 2024 PFS final rule (88 FR 78880), we are 
concerned that an abrupt transition to our pre-PHE policy may present a 
barrier to access to many services. We also understand that teaching 
physicians have 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 comment 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 2024 PFS final rule (88 FR 78881 through 
78882), 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 proposed in 
the CY 2025 PFS proposed rule to continue 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). This would 
permit teaching physicians to have a virtual presence during the key 
portion of the Medicare telehealth service for which payment is sought 
in any residency training location through December 31, 2025. The 
teaching physician's virtual presence would continue to require real-
time observation (not mere availability) and excludes audio-only 
technology. The documentation in the medical record would need to 
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.
    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: The majority of commenters supported extending the policy 
described in this proposal through CY 2025. However, several commenters 
continued to encourage us to establish this policy permanently for in-
person and telehealth services, within or outside of an MSA. Commenters 
also reiterated 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, noting that the Accreditation Council for Graduate Medical 
Education (ACGME) rules allow teaching physicians to concurrently 
monitor patient care through appropriate telecommunication technology 
when the teaching physician and/or patient is not physically present 
with the resident, in all geographic locations.
    Response: We thank commenters for the additional information 
provided. We will consider the clinical instances when PFS payment is 
appropriate for teaching physicians furnishing services that involve 
residents, to ensure the teaching physician has personal oversight and 
involvement over the management of the portion of the case for which 
the payment is sought in future rulemaking.
    After consideration of the public comments, we are finalizing the 
policy as proposed, to continue to allow teaching physicians to have a 
virtual presence in all teaching settings, but only for services 
furnished as a Medicare telehealth service. This will continue to 
permit teaching physicians to have a virtual presence during the key 
portion of the Medicare telehealth service for which payment is sought, 
through audio/video real-time communications technology, for all 
residency training locations through December 31, 2025.
(a) Request for Information for Teaching Physician Services Furnished 
Under the Primary Care Exception
    The so-called primary care exception set forth at Sec.  415.174 
permits the teaching physician to bill for certain lower and mid-level 
complexity physicians' services furnished by residents in certain types 
of residency training settings even when the teaching physician is not 
present with the resident during the services as long as certain 
conditions are met, including that the services are furnished by 
residents with more than six months of training in the approved 
residency program; and that the teaching physician directs the care of 
no more than four residents at a time, remains immediately available 
and has no other responsibilities while directing the care, assumes 
management responsibility for beneficiaries seen by the residents, 
ensures that the services furnished are appropriate, and reviews 
certain elements of the services with each resident during or 
immediately after each visit. For a more detailed description of the 
list of services currently allowed under the primary care exception 
policy, we refer readers

[[Page 97766]]

to the CY 2021 PFS final rule (85 FR 84585 through 84590).
    We have received feedback from interested parties requesting that 
we permanently expand the list of services that can be furnished under 
the primary care exception to include all levels of E/M services and 
additional preventive services. These interested parties have stated 
that the fact that high-value primary care and preventive services are 
not included in the scope of the primary care exception discourages 
their integration in residency training in these primary care settings, 
which has a negative impact on physician training, patient access, and 
longer-term outcomes. Additionally, these interested parties have 
suggested that including all levels of E/M services under the primary 
care exception could support primary care workforce development and 
improve patient continuity of care without compromising patient safety; 
furthermore, including additional preventive services within the 
primary care exception would increase the utilization of high-value 
services.
    We believe the primary care exception was intended to broaden 
opportunities for teaching physicians to involve residents in 
furnishing services under circumstances that preserve the direction of 
the care by the teaching physician and promote safe, high-quality 
patient care. As such, we requested information to help us consider 
whether and how best to expand the array of services included under the 
primary care exception in future rulemaking. We were interested in 
hearing more about the types of services that could be allowed under 
the primary care exception, specifically preventive services, and 
whether the currently required six months of training in an approved 
program is sufficient for residents to furnish these types of services 
without the presence of a teaching physician. We sought comment to help 
us consider whether adding certain preventive services or higher level 
E/M services to the primary care exception will hinder the teaching 
physician from maintaining sufficient personal involvement in the care 
to warrant PFS payment for the services being furnished by up to four 
residents at any given time. Similarly, we requested information on 
whether the inclusion in the primary care exception of specific higher-
level or preventive services will impede the teaching physician's 
ability to remain immediately available for up to four residents at any 
given time, while directing and managing the care furnished by these 
residents.
    We received public comments in response to this request for 
information. The following is a summary of the comments we received and 
our response.
    Comment: Many commenters stated they support permanently expanding 
the array of services included under the primary care exception, 
specifically to include certain preventive and/or higher level E/M 
services. Commenters continued to suggest that this expansion would 
support the primary care workforce development, improve patient 
continuity of care without compromising patient safety, and increase 
the utilization of some high-value services. Some commenters suggested 
that additional services should also be considered for inclusion under 
the primary care exception, specifically services that are related to 
patient continuity and integration of care, such as transitional care 
management, advance care planning, and chronic care management 
services. Other commenters requested that we consider expanding the 
primary care exception and definition of a ``teaching setting'' to 
include Rural Health Clinics (RHCs), Federally Qualified Health Centers 
(FQHCs) and Teaching Health Centers (THCs) that are reimbursed under 
Section 340H of the Public Health Service Act. Currently, the primary 
care exception does not apply to these centers, and commenters believe 
their inclusion would offer more training opportunities for residents 
and align payments for services provided at these centers with those 
furnished by residents under Medicare graduate medical education 
funding.
    Response: We will consider the information provided for future 
rulemaking.
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 MEI increase for CY 2025 was 3.6 percent and was 
based on the expected historical percentage increase of the 2017-based 
MEI. For the final rule, we proposed to update the MEI increase for CY 
2025 based on historical data through the second quarter of 2024. The 
final CY 2025 MEI update is 3.5 percent. Therefore, for CY 2025, the 
payment amount for HCPCS code Q3014 (Telehealth originating site 
facility fee) is $31.01. Table 13 shows the Medicare telehealth 
originating site facility fee and the corresponding MEI percentage 
increase for each applicable time period.
    We did not receive public comments on this provision, and 
therefore, we are finalizing as proposed.
4. Telehealth Place of Service Code
    Comment: While not specifically addressing the proposed policies 
set forth in the CY 2025 PFS proposed rule, many commenters asked if 
claims for telehealth services billed with POS 10 (telehealth provided 
in patient's home) will be paid at the non-facility PFS rate for 2025.
    Response: In the CY 2024 PFS final rule (88 FR 78874), we finalized 
that beginning in CY 2024, claims for telehealth services billed with 
POS 10 (telehealth provided in patient's home) will be paid at the non-
facility PFS rate. This policy, as finalized, was not limited to CY 
2024. Claims for telehealth services billed with POS 10 (telehealth 
provided in patient's home) will continue to be paid at the non-
facility PFS rate for CY 2025 and beyond.

[[Page 97767]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.017

5. Payment for Outpatient Therapy Services, Diabetes Self-Management 
Training, and Medical Nutrition Therapy When Furnished by Institutional 
Staff to Beneficiaries in Their Homes Through Communication Technology
    For information related to outpatient physical therapy, 
occupational therapy, speech-language pathology, diabetes self-
management training (DSMT) and medical nutritional therapy (MNT) 
services furnished by institutional staff in hospitals and other 
institutional settings to beneficiaries in their homes through 
communication technology, please refer to the CY 2025 Hospital 
Outpatient Prospective Payment System (OPPS) final rule.

E. Valuation of Specific Codes

1. Background: Process for Valuing New, Revised, and Potentially 
Misvalued Codes
    Establishing valuations for newly created and revised CPT codes is 
a routine part of maintaining the PFS. Since the inception of the PFS, 
it has also been a priority to revalue services regularly to make sure 
that the payment rates reflect the changing trends in the practice of 
medicine and current prices for inputs used in the PE calculations. 
Initially, this was accomplished primarily through the 5-year review 
process, which resulted in revised work RVUs for CY 1997, CY 2002, CY 
2007, and CY 2012, and revised PE RVUs in CY 2001, CY 2006, and CY 
2011, and revised MP RVUs in CY 2010, CY 2015, and CY 2020. Under the 
5-year review process, revisions in RVUs were proposed and finalized 
via rulemaking. In addition to the 5-year reviews, beginning with CY 
2009, CMS and the RUC identified a number of potentially misvalued 
codes each year using various identification screens, as outlined in 
section II.C. of this final rule, Potentially Misvalued Services under 
the PFS. Historically, when we received RUC recommendations, our 
process had been to establish interim final RVUs for the potentially 
misvalued codes, new codes, and any other codes for which there were 
coding changes in the final rule with comment period for a year. Then, 
during the 60-day period following the publication of the final rule 
with comment period, we accepted public comment about those valuations. 
For services furnished during the calendar year following the 
publication of interim final rates, we paid for services based upon the 
interim final values established in the final rule. In the final rule 
with comment period for the subsequent year, we considered and 
responded to public comments received on the interim final values, and 
typically made any appropriate adjustments and finalized those values.
    In the CY 2015 PFS final rule with comment period (79 FR 67547), we 
finalized a new process for establishing values for new, revised and 
potentially misvalued codes. Under the new process, we include proposed 
values for these services in the proposed rule, rather than 
establishing them as interim final in the final rule with comment 
period. Beginning with the CY 2017 PFS proposed rule (81 FR 46162), the 
new process was applicable to all codes, except for new codes that 
describe truly new services. For CY 2017, we proposed new values in the 
CY 2017 PFS proposed rule for the vast majority of new, revised, and 
potentially misvalued codes for which we received complete RUC 
recommendations by February 10, 2016. To complete the transition to 
this new process, for codes for which we

[[Page 97768]]

established interim final values in the CY 2016 PFS final rule with 
comment period (81 FR 80170), we reviewed the comments received during 
the 60-day public comment period following release of the CY 2016 PFS 
final rule with comment period (80 FR 70886), and re-proposed values 
for those codes in the CY 2017 PFS proposed rule. We considered public 
comments received during the 60-day public comment period for the 
proposed rule before establishing final values in the CY 2017 PFS final 
rule. As part of our established process, we will adopt interim final 
values only in the case of wholly new services for which there are no 
predecessor codes or values and for which we do not receive 
recommendations in time to propose values.
    As part of our obligation to establish RVUs for the PFS, we 
thoroughly review and consider available information including 
recommendations and supporting information from the RUC, the Health 
Care Professionals Advisory Committee (HCPAC), public commenters, 
medical literature, Medicare claims data, comparative databases, 
comparison with other codes within the PFS, as well as consultation 
with other physicians and healthcare professionals within CMS and the 
Federal Government as part of our process for establishing valuations. 
Where we concur that the RUC's recommendations, or recommendations from 
other commenters, are reasonable and appropriate and are consistent 
with the time and intensity paradigm of physician work, we proposed 
those values as recommended. Additionally, we continually engage with 
interested parties, including the RUC, with regard to our approach for 
accurately valuing codes, and as we prioritize our obligation to value 
new, revised, and potentially misvalued codes. We continue to welcome 
feedback from all interested parties regarding valuation of services 
for consideration through our rulemaking process.
2. Methodology for Establishing Work RVUs
    For each code identified in this section, we conduct a review that 
includes the current work RVU (if any), RUC-recommended work RVU, 
intensity, time to furnish the preservice, intraservice, and 
postservice activities, as well as other components of the service that 
contribute to the value. Our reviews of recommended work RVUs and time 
inputs generally include, but have not been limited to, a review of 
information provided by the RUC, the HCPAC, and other public 
commenters, medical literature, and comparative databases, as well as a 
comparison with other codes within the PFS, consultation with other 
physicians and health care professionals within CMS and the Federal 
Government, as well as Medicare claims data. We also assess the 
methodology and data used to develop the recommendations submitted to 
us by the RUC and other public commenters and the rationale for the 
recommendations. In the CY 2011 PFS final rule with comment period (75 
FR 73328 through 73329), we discussed a variety of methodologies and 
approaches used to develop work RVUs, including survey data, building 
blocks, crosswalks to key reference or similar codes, and magnitude 
estimation (see the CY 2011 PFS final rule with comment period (75 FR 
73328 through 73329) for more information). When referring to a survey, 
unless otherwise noted, we mean the surveys conducted by specialty 
societies as part of the formal RUC process.
    Components that we use in the building block approach may include 
preservice, intraservice, or postservice time and post-procedure 
visits. When referring to a bundled CPT code, the building block 
components could include the CPT codes that make up the bundled code 
and the inputs associated with those codes. We use the building block 
methodology to construct, or deconstruct, the work RVU for a CPT code 
based on component pieces of the code. Magnitude estimation refers to a 
methodology for valuing work that determines the appropriate work RVU 
for a service by gauging the total amount of work for that service 
relative to the work for a similar service across the PFS without 
explicitly valuing the components of that work. In addition to these 
methodologies, we frequently utilize an incremental methodology in 
which we value a code based upon its incremental difference between 
another code and another family of codes. Section 1848(c)(1)(A) of the 
Act specifically defines the work component as the resources that 
reflect time and intensity in furnishing the service. Also, the 
published literature on valuing work has recognized the key role of 
time in overall work. For particular codes, we refine the work RVUs in 
direct proportion to the changes in the best information regarding the 
time resources involved in furnishing particular services, either 
considering the total time or the intraservice time.
    Several years ago, to aid in the development of preservice time 
recommendations for new and revised CPT codes, the RUC created 
standardized preservice time packages. The packages include preservice 
evaluation time, preservice positioning time, and preservice scrub, 
dress and wait time. Currently, there are preservice time packages for 
services typically furnished in the facility setting (for example, 
preservice time packages reflecting the different combinations of 
straightforward or difficult procedure, and straightforward or 
difficult patient). Currently, there are three preservice time packages 
for services typically furnished in the nonfacility setting.
    We developed several standard building block methodologies to value 
services appropriately when they have common billing patterns. In cases 
where a service is typically furnished to a beneficiary on the same day 
as an E/M service, we believe that there is overlap between the two 
services in some of the activities furnished during the preservice 
evaluation and postservice time. Our longstanding adjustments have 
reflected a broad assumption that at least one-third of the work time 
in both the preservice evaluation and postservice period is duplicative 
of work furnished during the E/M visit.
    Accordingly, in cases where we believe that the RUC has not 
adequately accounted for the overlapping activities in the recommended 
work RVU and/or times, we adjust the work RVU and/or times to account 
for the overlap. The work RVU for a service is the product of the time 
involved in furnishing the service multiplied by the intensity of the 
work. Preservice evaluation time and postservice time both have a long-
established intensity of work per unit of time (IWPUT) of 0.0224, which 
means that 1 minute of preservice evaluation or postservice time 
equates to 0.0224 of a work RVU.
    Therefore, in many cases when we remove 2 minutes of preservice 
time and 2 minutes of postservice time from a procedure to account for 
the overlap with the same day E/M service, we also remove a work RVU of 
0.09 (4 minutes 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

[[Page 97769]]

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 
consider both time and intensity in establishing work RVUs for PFS 
services. As explained in the CY 2016 PFS final rule with comment 
period (80 FR 70933), we recognize that adjusting work RVUs for changes 
in time is not always a straightforward process, so we have applied 
various methodologies to identify several potential work values for 
individual codes.
    We have observed that for many codes reviewed by the RUC, 
recommended work RVUs have appeared to be incongruous with recommended 
assumptions regarding the resource costs in time. This has been the 
case for a significant portion of codes for which we recently 
established or proposed work RVUs that are based on refinements to the 
RUC-recommended values. When we have adjusted work RVUs to account for 
significant changes in time, we have started by looking at the change 
in the time in the context of the RUC-recommended work RVU. When the 
recommended work RVUs do not appear to account for significant changes 
in time, we have employed the different approaches to identify 
potential values that reconcile the recommended work RVUs with the 
recommended time values. Many of these methodologies, such as survey 
data, building block, crosswalks to key reference or similar codes, and 
magnitude estimation have long been used in developing work RVUs under 
the PFS. In addition to these, we sometimes use the relationship 
between the old time values and the new time values for particular 
services to identify alternative work RVUs based on changes in time 
components.
    In so doing, rather than ignoring the RUC-recommended value, we 
have used the recommended values as a starting reference and then 
applied one of these several methodologies to account for the 
reductions in time that we believe were not otherwise reflected in the 
RUC-recommended value. If we believe that such changes in time are 
already accounted for in the RUC's recommendation, then we do not make 
such adjustments. Likewise, we do not arbitrarily apply time ratios to 
current work RVUs to calculate proposed work RVUs. We use the ratios to 
identify potential work RVUs and consider these work RVUs as potential 
options relative to the values developed through other options.
    We do not imply that the decrease in time as reflected in survey 
values should always equate to a one-to-one or linear decrease in newly 
valued work RVUs. Instead, we believe that, since the two components of 
work are time and intensity, absent an obvious or explicitly stated 
rationale for why the relative intensity of a given procedure has 
increased, significant decreases in time should be reflected in 
decreases to work RVUs. If the RUC's recommendation has appeared to 
disregard or dismiss the changes in time, without a persuasive 
explanation of why such a change should not be accounted for in the 
overall work of the service, then we have generally used one of the 
aforementioned methodologies to identify potential work RVUs, including 
the methodologies intended to account for the changes in the resources 
involved in furnishing the procedure.
    Several 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 have 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.
    We received several comments regarding our methodologies for work 
valuation in response to the CY 2025 PFS proposed rule and those 
comments are summarized below.
    Comment: Several commenters disagreed with CMS' reference to older 
work time sources and stated that their use led to the proposal of work 
RVUs based on flawed assumptions. Commenters stated that codes with 
``CMS/Other'' or ``Harvard'' work time sources, used in the original 
valuation of certain older services, were not surveyed, and therefore, 
were not resource-based. Commenters also stated that it was invalid to 
draw comparisons between the current work times and work RVUs of these 
services to the newly surveyed work time and work RVUs as recommended 
by the RUC.
    Response: We agree that it is important to use the recent data 
available regarding work times and note that when many years have 
passed since work time has been measured, significant discrepancies can 
occur. However, we also believe that our operating assumption regarding 
the validity of the existing values as a point of comparison is 
critical to the integrity of the relative value system as currently 
constructed. The work times currently associated with codes play a very 
important role in PFS ratesetting, both as points of comparison in 
establishing work RVUs and in the allocation of indirect PE RVUs by 
specialty. If we were to operate under the assumption that previously 
recommended work times had been routinely overestimated, this would 
undermine the relativity of the work RVUs on the PFS in general, in 
light of the fact that codes are often valued based on comparisons to 
other codes with similar work times. Such an assumption would also 
undermine the validity of the allocation of indirect PE RVUs to 
physician specialties across the PFS.
    Instead, we believe that it is crucial that the code valuation 
process take place with the understanding that the existing work times 
that have been used in PFS ratesetting are accurate. We recognize that 
adjusting work RVUs for changes in time is not always a straightforward 
process and that the intensity associated with changes in time is not 
necessarily always linear, which is why we apply various methodologies 
to identify several potential work values for individual codes. 
However, we reiterate that we believe it would be irresponsible to 
ignore changes in time based on the best data available, and that we 
are statutorily obligated to consider both time and intensity in 
establishing work RVUs for PFS services. For additional information 
regarding the use of old work time values that were established many 
years ago and have not since been reviewed in our methodology, we refer 
readers to our discussion of the subject in the CY 2017 PFS final rule 
(81 FR 80273 through 80274).

[[Page 97770]]

    Comment: Several commenters disagreed with the use of time ratio 
methodologies for work valuation. Commenters stated that this use of 
time ratios is not a valid methodology for valuation of physician 
services. Commenters stated that treating all components of physician 
time (preservice, intraservice, postservice and post-operative visits) 
as having identical intensity is incorrect, and inconsistently applying 
it to only certain services under review creates inherent payment 
disparities in a payment system, which is based on relative valuation. 
Commenters stated that in many scenarios, CMS selects an arbitrary 
combination of inputs to apply rather than seeking a valid clinically 
relevant relationship that would preserve relativity. Commenters 
suggested that CMS determine the work valuation for each code based not 
only on surveyed work times, but also the intensity and complexity of 
the service and relativity to other similar services, rather than 
basing the work value entirely on time. Commenters recommended that CMS 
embrace the clinical input from practicing physicians when valid 
surveys were conducted and provide a clinical rationale when proposing 
crosswalks for valuation of services.
    Response: We disagree and continue to believe that the use of time 
ratios is one of several appropriate methods for identifying potential 
work RVUs for particular PFS services, particularly when the 
alternative values recommended by the RUC and other commenters do not 
account for survey information that suggests the amount of time 
involved in furnishing the service has changed significantly. We 
reiterate that, consistent with the statute, we are required to value 
the work RVU based on the relative resources involved in furnishing the 
service, which include time and intensity. In accordance with the 
statute, we believe that changes in time and intensity must be 
accounted for when developing work RVUs. When our review of recommended 
values reveals that changes in time are not accounted for in a RUC-
recommended work RVU, the obligation to account for that change when 
establishing proposed and final work RVUs remains.
    We recognize that it would not be appropriate to develop work RVUs 
solely based on time, given that intensity is also an element of work, 
but in applying the time ratios, we are using derived intensity 
measures based on current work RVUs for individual procedures. We 
clarify again that we do not treat all components of physician time as 
having identical intensity. If we were to disregard intensity 
altogether, the work RVUs for all services would be developed based 
solely on time values and that is not the case, as indicated by the 
many services that share the same time values but have different work 
RVUs. For example, among the codes reviewed in this CY 2025 PFS final 
rule, the following all share the same total work time of 30 minutes: 
CPT/HCPCS codes 76019 (MR safety implant positioning and/or 
immobilization under supervision of physician or other qualified health 
care professional, including application of physical protections to 
secure implanted medical device from MR-induced translational or 
vibrational forces, magnetically induced functional changes, and/or 
prevention of radiofrequency burns from inadvertent tissue contact 
while in the MR room, with written report), 98005 (Synchronous audio-
video visit for the evaluation and management of an established 
patient, which requires a medically appropriate history and/or 
examination and low medical decision making. When using total time on 
the date of the encounter for code selection, 20 minutes must be met or 
exceeded), 98013 (Synchronous audio-only visit for the evaluation and 
management of an established patient, which requires a medically 
appropriate history and/or examination, low medical decision making, 
and more than 10 minutes of medical discussion. When using total time 
on the date of the encounter for code selection, 20 minutes must be met 
or exceeded), G0445 (High intensity behavioral counseling to prevent 
sexually transmitted infection; face-to-face, individual, includes: 
education, skills training and guidance on how to change sexual 
behavior; performed semi-annually, 30 minutes), and G0545 (Visit 
complexity inherent to hospital inpatient or observation care 
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). However, these codes had very different 
proposed work RVUs of 0.60, 1.30 (ProcStat ``I''), 1.20 (ProcStat 
``I''), 0.45, and 0.89, respectively. These examples demonstrate that 
we do not value services purely based on work time; instead, we 
incorporate time as one of multiple different factors in our review 
process. Furthermore, we reiterate that we use time ratios to identify 
potentially appropriate work RVUs, and then use other methods 
(including estimates of work from CMS medical personnel and crosswalks 
to key references or similar codes) to validate these RVUs. For more 
details on our methodology for developing work RVUs, we direct readers 
to the discussion CY 2017 PFS final rule (81 FR 80272 through 80277).
    We also clarify for the commenters that our review process is not 
arbitrary in nature. Our reviews of recommended work RVUs and time 
inputs generally include, but have not been limited to, a review of 
information provided by the RUC, the HCPAC, and other public 
commenters, medical literature, and comparative databases, as well as a 
comparison with other codes within the PFS, consultation with other 
physicians and health care professionals within CMS and the Federal 
Government, as well as Medicare claims data. We also assess the 
methodology and data used to develop the recommendations submitted to 
us by the RUC and other public commenters and the rationale for the 
recommendations. In the CY 2011 PFS final rule with comment period (75 
FR 73328 through 73329), we discussed a variety of methodologies and 
approaches used to develop work RVUs, including survey data, building 
blocks, crosswalks to key reference or similar codes, and magnitude 
estimation (see the CY 2011 PFS final rule with comment period (75 FR 
73328 through 73329) for more information).
    With regard to the commenter's concerns regarding clinically 
relevant relationships, we emphasize that we continue to believe that 
the nature of the PFS relative value system is such that all services 
are appropriately subject to comparisons to one another. Although codes 
that describe clinically similar services are sometimes stronger 
comparator codes, we do not agree that codes must share the same site 
of service, patient population, or utilization level to serve as an 
appropriate crosswalk.
    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

[[Page 97771]]

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 17 contains a list of codes and 
descriptors for which we proposed work RVUs for CY 2025; this includes 
all codes for which we received RUC recommendations by February 10, 
2024. The proposed work RVUs, work time and other payment information 
for all CY 2025 payable codes are available on the CMS website under 
downloads for the CY 2025 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html).
3. Methodology for the Direct PE Inputs To Develop PE RVUs
a. Background
    On an annual basis, the RUC provides us with recommendations 
regarding PE inputs for new, revised, and potentially misvalued codes. 
We review the RUC-recommended direct PE inputs on a code-by-code basis. 
Like our review of recommended work RVUs, our review of recommended 
direct PE inputs generally includes, but is not limited to, a review of 
information provided by the RUC, HCPAC, and other public commenters, 
medical literature, and comparative databases, as well as a comparison 
with other codes within the PFS, and consultation with physicians and 
health care professionals within CMS and the Federal Government, as 
well as Medicare claims data. We also assess the methodology and data 
used to develop the recommendations submitted to us by the RUC and 
other public commenters and the rationale for the recommendations. When 
we determine that the RUC's recommendations appropriately estimate the 
direct PE inputs (clinical labor, disposable supplies, and medical 
equipment) required for the typical service, are consistent with the 
principles of relativity, and reflect our payment policies, we use 
those direct PE inputs to value a service. If not, we refine the 
recommended PE inputs to better reflect our estimate of the PE 
resources required for the service. We also confirm whether CPT codes 
should have facility and/or nonfacility direct PE inputs and refine the 
inputs accordingly.
    Our review and refinement of the RUC-recommended direct PE inputs 
includes many refinements that are common across codes, as well as 
refinements that are specific to particular services. Table 18 details 
our refinements of the RUC's direct PE recommendations at the code-
specific level. In section II.B. of this final rule, Determination of 
Practice Expense Relative Value Units (PE RVUs), we address certain 
refinements that will be common across codes. Refinements to particular 
codes are addressed in the portions of that section that are dedicated 
to particular codes. We 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 final rule, we also note that many of the 
refinements listed in Table 18 result in changes under the $0.35 
threshold and will be unlikely to result in a change to the RVUs.
    We note that the direct PE inputs for CY 2025 are displayed in the 
CY 2025 direct PE input files, available on the CMS website under the 
downloads for the CY 2025 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 2025 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

[[Page 97772]]

any items in the room in question will be available if the room is not 
being occupied by a particular patient. For additional information, we 
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 final rule, Determination 
of Practice Expense Relative Value Units (PE RVUs), for more 
information regarding the collaborative work of CMS and the RUC in 
improvements in standardizing clinical labor tasks.
(4) Recommended Items That Are Not Direct PE Inputs
    In some cases, the PE worksheets included with the RUC's 
recommendations include items that are not clinical labor, disposable 
supplies, or medical equipment or that cannot be allocated to 
individual services or patients. We addressed these kinds of 
recommendations in previous rulemaking (78 FR 74242), and we do not use 
items included in these recommendations as direct PE inputs in the 
calculation of PE RVUs.
(5) New Supply and Equipment Items
    The RUC generally recommends the use of supply and equipment items 
that already exist in the direct PE input database for new, revised, 
and potentially misvalued codes. However, some recommendations include 
supply or equipment items that are not currently in the direct PE input 
database. In these cases, the RUC has historically recommended that a 
new item be created and has facilitated our pricing of that item by 
working with the specialty societies to provide us copies of sales 
invoices. For CY 2025 we received invoices for several new supply and 
equipment items. Tables A-E8 and A-E9 detail the invoices received for 
new and existing items in the direct PE database. As discussed in 
section II.B. of this final rule, Determination of Practice Expense 
Relative Value Units, we encourage interested parties to review the 
prices associated with these new and existing items to determine 
whether these prices appear to be accurate. Where prices appear 
inaccurate, we encourage interested parties to submit invoices or other 
information to improve the accuracy of pricing for these items in the 
direct PE database by February 10th of the following year for 
consideration in future rulemaking, similar to our process for 
consideration of RUC recommendations.
    We remind interested parties that due to the relativity inherent in 
the development of RVUs, reductions in existing prices for any items in 
the direct PE database increase the pool of direct PE RVUs available to 
all other PFS services. Tables A-E8 and A-E9 also include the number of 
invoices received and the number of nonfacility allowed services for 
procedures that use these equipment items. We provide the nonfacility 
allowed services so that interested parties will note the impact the 
particular price might have on PE relativity, as well as to identify 
items that are used frequently, since we believe that interested 
parties are more likely to have better pricing information for items 
used more frequently. A single invoice may not be reflective of typical 
costs, and we encourage interested parties to provide additional 
invoices so that we might identify and use accurate prices in the 
development of PE RVUs.
    In some cases, we do not use the price listed on the invoice that 
accompanies the recommendation because we identify publicly available 
alternative prices or information that suggests a different price is 
more accurate. In these cases, we include this in the discussion of 
these codes. In other cases, we cannot adequately price a newly 
recommended item due to inadequate information. Sometimes, no 
supporting information regarding the price of the item has been 
included in the recommendation. In other cases, the supporting 
information does not demonstrate that the item has been purchased at 
the listed price (for example, vendor price quotes instead of paid 
invoices). In cases where the information provided on the item allows 
us to identify clinically appropriate 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 
2025 are available on the CMS website under downloads for the CY 2025 
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 (Pub. L. 109-171) (DRA) amended section 
1848(b)(4) of the Act to require that, for imaging services, if--(i) 
The TC (including the TC portion of a global fee) of the service 
established for a year under the fee schedule without

[[Page 97773]]

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), 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 2025, 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 2025, we proposed to include the following services on the list 
of codes to which the OPPS cap applies: CPT codes 0868T (High-
resolution gastric electrophysiology mapping with simultaneous patient-
symptom profiling, with interpretation and report), 0876T (Duplex scan 
of hemodialysis fistula, computer-aided, limited (volume flow, 
diameter, and depth, including only body of fistula)), 74263 (Computed 
tomographic (ct) colonography, screening, including image 
postprocessing), 92137 (Computerized ophthalmic diagnostic imaging (eg, 
optical coherence tomography [OCT]), posterior segment, with 
interpretation and report, unilateral or bilateral; retina including 
OCT angiography), 93896 (Vasoreactivity study performed with 
transcranial Doppler study of intracranial arteries, complete (List 
separately in addition to code for primary procedure)), 93897 (Emboli 
detection without intravenous microbubble injection performed with 
transcranial Doppler study of intracranial arteries, complete (List 
separately in addition to code for primary procedure)), and 93898 
(Venous-arterial shunt detection with intravenous microbubble injection 
performed with transcranial Doppler study of intracranial arteries, 
complete (List separately in addition to 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.
    In the CY 2024 PFS final rule (88 FR 78894), we noted that in 
response to the CY 2024 PFS proposed rule, commenters requested that 
CMS remove CPT code 92229 (Imaging of retina for detection or 
monitoring of disease; point-of-care autonomous analysis and report, 
unilateral or bilateral) from the OPPS cap list because it does not 
include an associated PC or physician interpretation and it is 
primarily utilized in the physician office setting. We solicited 
comment on the appropriateness of applying the OPPS cap to services 
such as this for which the interpretation component is not captured by 
work RVUs, and the service is not split into technical and professional 
components. We are more broadly evaluating how services involving 
assistive technologies are most accurately valued. We note that the 
OPPS rate for this service is currently higher than what would be paid 
in a physician office setting, and therefore the OPPS cap does not 
currently apply to CPT code 92229 as of 2024.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Some commenters requested that CMS remove CPT code 92229 
from the OPPS cap list because it does not include an associated 
professional component (PC) or physician interpretation, and it is 
primarily utilized in the physician office setting. Despite CPT codes 
92227 (Imaging of retina for detection or monitoring of disease; with 
remote clinical staff review and report, unilateral or bilateral), 
92228 (Imaging of retina for detection or monitoring of disease; with 
remote physician or other qualified health care professional 
interpretation and report, unilateral or bilateral), and 92229 all 
being in the same family of codes and representing the same imaging 
service, only differentiated by the modality of review and 
interpretation, commenters stated that CPT code 92229 falls outside the 
scope of the definition of ``imaging services'' under the DRA because 
it does not include a PC and TC split similar to the imaging 
technologies governed by section 5102(b) of the DRA. Commenters stated 
that ``the DRA is intended to apply to services typically performed in 
the hospitals, but CPT code 92229 is primarily done in the physician 
office setting,'' and therefore, commenters asserted that the code 
``falls outside the intent of the law'' since CPT code 92229 is almost 
exclusively performed in physician office or clinic settings, not in 
hospital settings.
    Response: We appreciate the commenters' feedback regarding CPT code 
92229 and may consider the input for future rulemaking. We are always 
looking for ways to improve the accuracy of valuation and payment for 
services across settings. We note that the analogous CPT codes 92227 
and 92228 are also typically performed in the physician office setting, 
at 92.1 percent and 81.5 percent, respectively, according to the RUC 
Database, similar to nearly every other ophthalmic code on the OPPS cap 
list. In response to the commenters' assertion about the DRA's 
application, we note that the amendments made to section 1848(b)(4) of 
the Act by section 5102(b)(1) of the DRA do not limit application of 
the OPPS cap to services typically performed in hospitals.
    Comment: Some commenters expressed concern with the application of 
the OPPS cap to CPT code 74263 and stated that it would be a 
significant barrier to imaging centers providing this service because 
of the payment difference between the PFS payment amount and the OPPS 
payment amount, which has an estimated payment of $106.30. Commenters 
stated that if it were paid under the PFS without the cap, the 
technical component payment is estimated to be $566.22, and that the 
cap would likely diminish the benefit of our proposed expanded coverage 
for computed tomography colonography (CTC).
    Some commenters requested that CMS exempt screening services such 
as CTC from the OPPS cap. Commenters stated that the DRA exempts 
screening and diagnostic mammography from the OPPS cap and that 
exemption likely demonstrates a concern specifically about the impact 
of the OPPS cap on screening and diagnostic services. Commenters stated 
that, given the prevalence of colon cancer and the

[[Page 97774]]

relatively new availability of colon cancer screening with CTC, it 
seems plausible and likely that if the OPPS cap were to be enacted 
today, Congress would have exempted additional screening services. 
Commenters also stated that, if an exemption is not statutorily 
allowed, CMS should assign a higher paying Ambulatory Payment 
Classification (APC), specifically APC 5524 Level 4 Imaging without 
Contrast that has a proposed 2025 OPPS payment amount of $544.85, which 
the commenters state is far more comparable to the resource-based 2024 
PFS payment of $566.22.
    Response: We appreciate the commenters' feedback regarding the 
application of the OPPS cap for CPT code 74263. We note that section 
1848(b)(4)(B) of the Act specifically excludes diagnostic and screening 
mammography from the description of imaging services that are subject 
to the OPPS cap, and we do not have the statutory authority to exclude 
other services that are within the scope of the description of imaging 
services. We refer readers to the CY 2025 Hospital Outpatient 
Prospective Payment System (OPPS) Final Rule that is expected to be 
published in the Federal Register for more information regarding the 
APC assignment for this code.
    We did not receive public comments on the other proposed additions 
to the OPPS cap list for CY 2025. After consideration of public 
comments, we are finalizing the addition of the services listed above 
to the list of codes to which the OPPS cap applies, as proposed.
4. Valuation of Specific Codes for CY 2025
(1) Skin Cell Suspension Autograft (CPT Codes 15011, 15012, 15013, 
15014, 15015, 15016, 15017, and 15018)
    In September 2023, the CPT Editorial Panel approved the creation of 
eight new CPT codes to describe skin cell suspension autograft (SCSA) 
procedures. The code set includes a 000-day global base code (CPT code 
15011 (Harvest of skin for skin cell suspension autograft; first 25 sq 
cm or less)) and an add-on code (CPT code 15012 (Harvest of skin for 
skin cell suspension autograft; each additional 25 sq cm or part 
thereof (List separately in addition to code for primary procedure))) 
describing the harvesting component of the procedure, an XXX global 
base code (CPT code 15013 (Preparation of skin cell suspension 
autograft, requiring enzymatic processing, manual mechanical 
disaggregation of skin cells, and filtration; first 25 sq cm or less of 
harvested skin) and an add-on code (CPT code 15014 (Preparation of skin 
cell suspension autograft, requiring enzymatic processing, manual 
mechanical disaggregation of skin cells, and filtration; each 
additional 25 sq cm of harvested skin or part thereof (List separately 
in addition to code for primary procedure))) describing the preparation 
component of the procedure, and two 090-day global base codes and two 
add-on codes for the application component to distinguish between body 
areas: trunk, arms, and legs with CPT codes 15015 (Application of skin 
cell suspension autograft to wound and donor sites, including 
application of primary dressing, trunk, arms, legs; first 480 sq cm or 
less) and 15016 (Application of skin cell suspension autograft to wound 
and donor sites, including application of primary dressing, trunk, 
arms, legs; each additional 480 sq cm or part thereof (List separately 
in addition to code for primary procedure)); and face, scalp, eyelids, 
mouth, neck, ears, orbits, genitalia, hands, feet, or multiple digits 
with CPT codes 15017 (Application of skin cell suspension autograft to 
wound and donor sites, including application of primary dressing, face, 
scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, feet, and/
or multiple digits; first 480 sq cm or less) and 15018 (Application of 
skin cell suspension autograft to wound and donor sites, including 
application of primary dressing, face, scalp, eyelids, mouth, neck, 
ears, orbits, genitalia, hands, feet, and/or multiple digits; each 
additional 480 sq cm or part thereof (List separately in addition to 
code for primary procedure)).
    We disagreed with the RUC-recommended work RVUs of 3.00, 2.00, 
2.51, 2.00, 10.97, 2.50, 12.50, and 3.00 for CPT codes 15011 through 
15018, respectively, and proposed contractor-pricing for these CPT 
codes due to concerns with the coding structure of the code family and 
the total physician time that results when these codes are billed 
multiple times on the same date of service for the typical patient.
    We noted that our concerns with these CPT codes are expansive. 
Firstly, we noted that these CPT codes represent a segmentation of a 
single service that is performed sequentially on the same date of 
service. We solicited comment on whether the segmentation of the 
harvest, preparation, and application is necessary when these are 
sequential service parts of one episode of care and could be simplified 
by having just two codes that encompass all three service parts 
(harvest, preparation, and application), to differentiate the two 
different application areas. We also solicited comment on the base and 
add-on codes' incremental square centimeters, considering that the 
typical size treatment area described in the vignettes could result in 
the add-on codes being billed multiple times, particularly for the base 
application CPT code 15015 and add-on CPT code 15016. Based on the 
meeting notes from the September 2023 CPT Editorial Panel meeting, the 
specialty society initially structured their coding request to 
``bundle'' the service components into fewer codes, but it is unclear 
to us why these codes were further segmented. We believed that the very 
large range of intraservice times from the 33 burn surgeons may have 
been exacerbated by the harvest, preparation, and application 
components of the service being segmented in this manner. Most notably, 
CPT code 15011, which describes the first 25 sq cm of harvest, base 
code, had an intraservice survey time range of 5 to 480 minutes, and 
CPT code 15017, which describes the first 480 sq cm of application to 
the face, scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, 
feet, and/or multiple digits, had an intraservice survey time range of 
10 to 360 minutes.
    We noted that the survey median intraservice times for CPT codes 
15011 through 15018 contradict numerous publicly available sources that 
describe much lower times for this service or specific service parts. 
Most notably, the manufacturer of the RECELL Autologous Cell Harvesting 
Device (RECELL[supreg] System) used in this service, indicates that a 
suspension of Spray-On SkinTM Cells using a small sample of 
the patient's own skin for the treatment of thermal burn wounds and 
full-thickness skin defects is ``prepared and applied at the point of 
care in as little as 30 minutes.'' \11\ Additionally, Temple University 
Hospital published a news article on December 20, 2019, just 11 months 
after the U.S. Food and Drug Administration (FDA) approval of the 
RECELL[supreg] System for the treatment of acute thermal second and 
third-degree burns in adult patients in January 2019, stating that the 
entire process of skin sample collection, enzyme solution preparation, 
and suspension spraying/application ``can take as little as 30 
minutes'' and ``treat a wound up to 80 times the size of the donor skin 
sample.'' \12\ Additionally, an article

[[Page 97775]]

published in Europe PubMed Central states that the procedure takes 
approximately 30 minutes and is performed by a burn surgeon trained in 
how to use RECELL[supreg] System, and does not require specialized 
laboratory staff.\13\ Additionally, a 2007 study aimed at comparing the 
results from the RECELL[supreg] System and the classic skin grafting 
for epidermal replacement in deep partial thickness burns showed a 
total procedure time of 594 minutes for the RECELL[supreg] 
System group.\14\
---------------------------------------------------------------------------

    \11\ https://avitamedical.com/.
    \12\ Temple Burn Center Using Spray-On SkinTM Cells Technology 
to Offer Patients a New, Less Invasive Option for the Treatment of 
Severe Burns. (2019, December 20). https://medicine.temple.edu/news/temple-burn-center-using-spray-skin-cells-technology-offer-patients-new-less-invasive-option.
    \13\ Cooper-Jones B, Visintini S. A Noncultured Autologous Skin 
Cell Spray Graft for the Treatment of Burns. In: CADTH Issues in 
Emerging Health Technologies. Canadian Agency for Drugs and 
Technologies in Health, Ottawa (ON); 2016. PMID: 30855772.
    \14\ G. Gravante, M.C. Di Fede, A. Araco, M. Grimaldi, B. De 
Angelis, A. Arpino, V. Cervelli, A. Montone, A randomized trial 
comparing ReCell[supreg] system of epidermal cells delivery versus 
classic skin grafts for the treatment of deep partial thickness 
burns, Burns, Volume 33, Issue 8, 2007, Pages 966-972, ISSN 0305-
4179, https://doi.org/10.1016/j.burns.2007.04.011.
---------------------------------------------------------------------------

    More granularly, the FDA's Instructions for Use of the 
RECELL[supreg] Autologous Cell Harvesting Device state that ``if a skin 
sample is harvested and processed according to these instructions, it 
should require between 15 and 30 minutes of contact with the 
Enzyme''.\15\ Additionally, the National Institute for Health and Care 
Excellence (NICE) produced guidance on using the RECELL[supreg] System 
based on the consideration of evidence submitted and the views of 
expert advisers, and stated that the harvested skin is added to the 
proprietary enzyme solution in a processing unit and heated for 15 to 
30 minutes to disaggregate the cells. The skin is then removed and 
scraped with a scalpel to develop a plume of cells. These cells are 
added to a buffer solution, aspirated and filtered to create a cell 
suspension that contains keratinocytes, melanocytes, fibroblasts and 
Langerhans cells.\16\ We stated in the proposed rule that this 
correlates to the preparation component of the service described by CPT 
codes 15013 and 15014, for which the RUC recommended the survey median 
time of 33 and 28 minutes, respectively.
---------------------------------------------------------------------------

    \15\ https://www.fda.gov/media/169630/download.
    \16\ National Institute for Health and Care Excellence. The 
ReCell Spray-On Skin system for treating skin loss, scarring and 
depigmentation after burn injury. Medical technologies guidance 
[MTG21] [internet]. 2014. [Accessed 16 Nov 2017]. https://www.nice.org.uk/guidance/mtg21/documents/the-recell-sprayon-skin-system-for-treating-skin-loss-scarring-and-depigmentation-after-burn-injury-medical-technology-consultation-document.
---------------------------------------------------------------------------

    We stated in the proposed rule that we believe that the publicly 
available sources that make representations about the total service and 
preparation times contradict the RUC-recommended median times based on 
the survey of 33 burn surgeons. Moreover, when we considered how the 
add-on CPT codes 15012, 15014, 15016, and 15018 would be billed based 
on the typical patient described in the vignettes, we stated in the 
proposed rule that we believe the survey times are inflated compared to 
the publicly available sources, likely due to how the survey 
respondents considered the service given the segmentation of the code 
set. For example, the vignette for CPT code 15015 describing the 
application to the trunk, arms, and legs says ``A 35-year-old male 
sustained partial-thickness thermal burns on his trunk and arms 
measuring 3,600 sq cm. A skin cell suspension autograft is applied to 
480 sq cm of the wound bed.'' Of the 33 burn surgeons surveyed, 96 
percent found this vignette to be typical. Given the typical sq cm 
application area of 3,600 sq cm and the expansion ratio of harvested 
and prepared skin to treatment skin for application of 1:80, the 
typical episode of care would constitute 1 unit of both CPT codes 15011 
and 15012 for harvesting, 1 unit of both CPT codes 15013 and 15014 for 
preparation, 1 unit of CPT code 15015 for the first 480 sq cm of 
application, and 7 units of CPT code 15016 for the remaining 3,120 sq 
cm of application area. When the RUC-recommended intraservice and total 
times (not including the post-operative visit time for CPT code 15015) 
for all the units billed on the same date of service as sequential 
service parts are summed, the intraservice time totals to 399 minutes 
and total time (not including the post-operative visit time included in 
the global period for CPT code 15015) totals to 529 minutes. The 
intraservice time total alone is nearly 6 and \2/3\ hours.
    We noted the RUC recommended that CPT codes 15011 through 15018 be 
placed on the New Technology list to be re-reviewed by the RUC for both 
work and PE for the September 2026 or January 2027 RUC meeting when 
2025 Medicare utilization data is available, and at that time, the RUC 
would consider if other specialties were performing the service and if 
the service was performed in the non-facility setting. We look forward 
to re-reviewing these CPT codes when recommendations are re-submitted 
with more robust and inclusive survey data. In the meantime, we 
encourage the reconsideration of the family's coding structure by the 
CPT Editorial Panel given the challenging aspects of this service, 
including the fact that the current coding structure represents a 
severely segmented single episode of care with troublesome billing 
patterns for the typical patient, particularly for the add-on CPT code 
15016 describing the additional 480 sq cm increments of application on 
the trunk, arms, and legs. This code is particularly concerning because 
the coding structure of the family requires 7 units of add-on CPT code 
15016 to be billed for the typical patient. Similarly, the typical 
patient described in the vignettes for this family of codes would 
require 3 units of add-on CPT code 15018 due to the coding structure.
    We also sought feedback on the recommended global period for CPT 
code 15013. The RUC recommended an XXX global period, which indicates 
that the global concept does not apply, but we believe a 000-day global 
period, indicating an endoscopic or minor procedure with related 
preoperative and postoperative relative values on the day of the 
procedure only in the fee schedule payment amount, may be more 
appropriate given the nature of the service (which is intertwined with 
the other codes in the series) and that the entire service cannot be 
completed without 15013. This would allow the entire service to run 
within a surgical global period.
    We noted that we believe contractor-pricing is appropriate for CPT 
codes 15011 through 15018 until reconsideration of the coding structure 
and re-survey is complete, given the concerning aspects of the CPT 
codes. We noted that this service is currently billed for using 
contractor-priced CPT code 17999 (Unlisted procedure, skin, mucous 
membrane and subcutaneous tissue) and the eight new codes are expected 
to be a very low utilization.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Most commenters supported our proposal to contractor price 
these codes until reconsideration of the coding structure and re-survey 
is complete. In their comment letter, the AMA RUC confirmed that these 
codes will be re-reviewed in 2027. One commenter provided additional 
information regarding CMS' concerns with the coding structure and 
encouraged CMS to finalize the AMA RUC's recommendations instead of 
contractor pricing for these codes as interim values, citing the 
uncertainty and payment variability that is possible with contractor 
pricing. The commenter stated that the manufacturer's information 
mentions the minimum amount of time (that is, ``as little as''),

[[Page 97776]]

and a maximum amount of time, potentially up to 60 minutes, to process 
a sample. The commenter stated that the time depends on skin thickness 
and how long it takes the enzyme to break it down and, depending on 
patient circumstances, the potential maximum amount of time to process 
a sample is no less relevant than the potential minimum amount of time.
    Response: We thank commenters for the additional information they 
provided. However, we continue to have concerns about the coding 
structure and the valuations for the work and PE of these codes as 
described in the proposed rule. We recognize the commenter's citation 
of the manufacturer's information regarding minimum and maximum 
processing times but reiterate that this just one publicly available 
source of information and there are additional sources available. We 
also note that we value services based on the typical time for a 
service, not the minimum or maximum.
    Based on the manufacturer's most recently updated Instructions for 
Use for a newly approved FDA device, RECELL GO[supreg], processing 
typically takes ``around 35 minutes,'' \17\ and we note that the new 
device will likely be considered by CPT and the AMA RUC during the 
codes' re-review. Additionally, another study published in the Annals 
of Surgery in September 2024 to determine the utility of Autologous 
Skin Cell Suspension (ASCS) in closing full-thickness (FT) defects from 
injury and infection showed mean size of ASCS application of 636 cm\2\ 
with a range of 45 to 2212 cm\2\, a mean surface area of the wounds 
grafted of 435 cm\2\ with a range of 30 to 1608 cm\2\, and a mean area 
of the donor site of 212 cm\2\ with a range of 15 to 804 cm\2\. The 
study also showed a mean surgical time of 71 minutes and total 
operating room time of 124 minutes using the RECELL[supreg] System.\18\ 
Additionally, an interview of a physician about their clinical 
experience using RECELL[supreg] was recently published in the Wound 
Care Learning Network \19\ that supports our concerns about the survey 
times. We note that this is only three additional sources that have 
become available since the proposed rule was published, therefore we 
continue to have concerns about the service times, segmentation of the 
coding, and billing patterns of the add-on codes based on the 
vignettes. After consideration of public comments, we are finalizing 
contractor pricing as proposed and look forward to reviewing these 
codes again after reconsideration of the coding structure and re-survey 
is complete. We encourage the consideration of the many publicly 
available sources of information when considering the base and add-on 
code structure of this family, and the time it takes to perform these 
services.
---------------------------------------------------------------------------

    \17\ https://avitamedical.com/instructions-for-use/.
    \18\ Hultman, C. Scott MD, MBA*; Adams, Ursula C. MD, 
MBA[dagger]; Rogers, Corianne D. MD*; Pillai, Minakshi MS[dagger]; 
Brown, Samantha T. PA-C*; McGroarty, Carrie Ann PA-C*; McMoon, 
Michelle PA-C, Ph.D.*; Uberti, M. Georgina MD[Dagger]. Benefits of 
Aerosolized, Point-of-care, Autologous Skin Cell Suspension (ASCS) 
for the Closure of Full-thickness Wounds From Thermal and Nonthermal 
Causes: Learning Curves From the First 50 Consecutive Cases at an 
Urban, Level 1 Trauma Center. Annals of Surgery 280(3):p 452-462, 
September 2024. [verbar] DOI: 10.1097/SLA.0000000000006387.
    \19\ https://www.hmpgloballearningnetwork.com/site/woundcare/videos/recellr-spray-ontm-skin-cells-innovation-closure-full-thickness-wounds.
---------------------------------------------------------------------------

(2) Hand, Wrist, & Forearm Repair & Recon (CPT Codes 25310, 25447, 
25448, and 26480)
    In September 2022, the RUC referred CPT codes 26480 and 25447 to 
the CPT Editorial Panel for a code bundling solution. In May 2023, the 
CPT Editorial Panel approved a new bundled code (CPT code 25448) to 
report intercarpal or carpometacarpal joint suspension arthroplasty, 
including transfer or transplant of tendon, with interposition when 
performed while CPT code 25447 was revised to clarify that the code 
only included interposition of a tendon and not suspension. This family 
of codes was surveyed for the September 2023 RUC meeting.
    We disagreed with the RUC-recommended work RVU of 9.50 for CPT code 
25310 (Tendon transplantation or transfer, flexor or extensor, forearm 
and/or wrist, single; each tendon) and we instead proposed a work RVU 
of 9.00 based on the survey 25th percentile result. In reviewing CPT 
code 25310, we noted that the recommended intraservice time was 
unchanged at 60 minutes in the new survey; however, the RUC-recommended 
work RVU is increasing from the current 8.08 to 9.50. Although we did 
not imply 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 stated that we believed that since the two components of work are 
time and intensity, increases in the recommended work RVU should 
typically be reflected in increases in the surveyed work time. We 
recognized that the total time for CPT code 25310 was increasing from 
235 minutes to 263 minutes (an increase of 12 percent) due to changes 
in the code's post-operative office visits which will now take place at 
a higher level. However, this again does not match the increase in the 
recommended work RVU, which is increasing from 8.08 to 9.50 
(approximately 18 percent). We stated that it would be more accurate to 
propose the survey 25th percentile work RVU of 9.00 for CPT code 25310 
which matches this increase in the total work time. We also noted that 
the intensity of CPT code 25310 was decreasing, not increasing, as 
recommended by the RUC which further suggested that a work RVU of 9.50 
would not be appropriate for this code given the surveyed work times.
    We disagreed with the RUC-recommended work RVU of 11.14 for CPT 
code 25447 (Arthroplasty, intercarpal or carpometacarpal joints; 
interposition (eg, tendon)) and we instead proposed a work RVU of 10.50 
based on the survey 25th percentile result. In reviewing CPT code 
25447, we noted that the recommended intraservice time was decreasing 
from 100 minutes to 75 minutes in the new survey; however, the RUC 
recommended maintaining the current work RVU of 11.14. Although we do 
not imply 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 recognize that the total 
time for CPT code 25447 is slightly increasing from 278 minutes to 281 
minutes (an increase of about 1 percent) due to changes in the code's 
post-operative office visits which will now take place at a higher 
level. However, we believe that the sizable decrease in surveyed 
intraservice work time (a reduction of approximately 33 percent) better 
supports proposing the survey 25th percentile work RVU of 10.50 instead 
of maintaining the current work RVU of 11.14. We also disagreed with 
the RUC that the intensity of CPT code 25447 is unchanged due to 
increases in the post-operative work; we believe that the sizable 
decrease in surveyed intraservice work time indicates a modest decrease 
in intensity. We noted again that the intensity of CPT code 25310 is 
decreasing, not increasing, as recommended by the RUC which suggests 
that a similar pattern is likely taking place with clinically similar 
procedures elsewhere in the same code family.
    We disagreed with the RUC-recommended work RVU of 13.90 for CPT 
code 25448 (Arthroplasty, intercarpal or carpometacarpal joints; 
suspension, including transfer or transplant of tendon, with 
interposition, when performed) and we instead proposed a work RVU of 
11.85 based on the survey 25th percentile result. We

[[Page 97777]]

noted that the RUC typically values new codes such as CPT code 25448 
using this survey 25th percentile work RVU as opposed to the survey 
median work RVU that it recommended. The RUC's recommendations stated 
that CPT code 25448 should be valued higher than CPT code 25447 due to 
having higher intensity, a relationship which is preserved at our 
proposed work RVUs of 11.85 and 10.50 respectively. The RUC also stated 
in its recommendations that CPT code 25448 should be valued higher than 
reference CPT code 29828 (Arthroscopy, shoulder, surgical; biceps 
tenodesis) because it has more intraservice time and total work time. 
However, the RUC also stated elsewhere in its recommendations that the 
arthroscopy described by CPT code 29828 is more intense than the 
arthroplasty procedures described by this family of codes, which we 
believe supports CPT code 29828 having a higher work RVU despite its 
lower work times. Based on this information, we believe that proposing 
the survey 25th percentile work RVU of 11.85 is the most accurate 
valuation for CPT code 25448.
    We disagreed with the RUC-recommended work RVU of 9.50 for CPT code 
26480 (Transfer or transplant of tendon, carpometacarpal area or dorsum 
of hand; without free graft, each tendon) and we instead proposed a 
work RVU of 9.00 based on the survey 25th percentile result. In 
reviewing CPT code 26480, we noted that the recommended intraservice 
time was unchanged at 60 minutes in the new survey; however, the RUC-
recommended work RVU is increasing from the current 6.90 to 9.50. 
Although we do not imply 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, increases in the recommended work RVU 
should typically be reflected in increases in the surveyed work time. 
We recognize that the total time for CPT code 26480 is increasing from 
227 minutes to 263 minutes (an increase of 16 percent) due to changes 
in the code's post-operative office visits which will now take place at 
a higher level. However, this again does not match the increase in the 
recommended work RVU, which is increasing from 6.90 to 9.50 
(approximately 38 percent). We believe that it would be more accurate 
to propose the survey 25th percentile work RVU of 9.00 for CPT code 
26480 which more closely matches this increase in the total work time. 
We also noted that CPT codes 25310 and 26480 were surveyed as having 
identical work times and identical survey 25th percentile and survey 
median work RVUs. We concur with the RUC that these two codes should be 
valued at the same work RVU; however, we continue to believe that the 
survey 25th percentile work RVU of 9.00 is a more accurate choice in 
both cases.
    We proposed the RUC-recommended direct PE inputs for all four codes 
in the family without refinement.
    Comment: Several commenters disagreed with the CMS proposed work 
RVU of 9.00 for CPT code 25310 and stated that CMS should instead 
finalize the RUC-recommended work RVU of 9.50. Commenters stated that 
the RUC's recommendation of the survey median work RVU of 9.50 more 
accurately described the physician work involved in furnishing this 
service. Commenters stated that the decrease in intensity of CPT code 
25310 could be inferred from referencing the intraservice work per unit 
of time (IWPUT) formula, however commenters stated that the change 
could be attributed to an artifact of adding 38 minutes of 
postoperative visit time and increasing the level of the postoperative 
visits to the IWPUT formula, not due to an actual change in the 
intensity of performing the procedure itself. Commenters stated that 
the RUC provided compelling evidence that changes in time and 
technology during the postoperative period have increased the physician 
work of CPT code 25310 and that the change in total work for CPT code 
25310 is driven by a change in the intensity of the postoperative work. 
Commenters emphasized that the increase in postoperative work for CPT 
code 25310 adds significantly to the current work RVU of this service. 
Commenters compared CPT code 25310 to reference CPT codes 26356 (Repair 
or advancement, flexor tendon, in zone 2 digital flexor tendon sheath 
(eg, no man's land); primary, without free graft, each tendon) and 
66184 (Revision of aqueous shunt to extraocular equatorial plate 
reservoir; without graft), and stated that these reference codes 
supported the RUC's recommended work RVU of 9.50. Commenters also 
stated that the proposed work RVU of 9.00 for CPT code 25310 does not 
consider the intensity relativity of the RUC recommended work RVU of 
9.50 to many other codes on the PFS and that finalizing this work RVU 
would create a rank order anomaly in terms of intensity. The commenters 
urged CMS to finalize the RUC's recommended work RVU of 9.50 for CPT 
code 25310.
    Response: We disagree with the commenters and continue to believe 
that the proposed work RVU of 9.00 is a more accurate choice for CPT 
code 25310. We disagree with the statement from the commenters that the 
decrease in intensity for CPT code 25310 at the RUC's recommended work 
RVU of 9.50 is merely an ``artifact'' of adding 38 minutes of 
postoperative visit time and increasing the level of the postoperative 
visits. We have frequently been informed by the RUC and other 
interested parties that services with 10 and 90 day global periods must 
be evaluated in their entirety as part of magnitude estimation, and 
that it would be inappropriate to consider the postoperative visits as 
distinct from the rest of the procedure. We do not agree that the RUC's 
recommendation of increased postoperative visits for CPT code 25310 can 
be ignored when discussing the intensity of the procedure; as we stated 
in the proposed rule, the RUC recommended a decrease in intensity for 
this code which we believe better supports our proposed work RVU of 
9.00. We do concur with the commenters that that changes in time and 
technology of the postoperative period have increased the physician 
work of CPT code 25310, which is why we proposed a work RVU of 9.00 as 
compared with the current work RVU of 8.08. The recommended work time 
in the service period for CPT code 25310 is decreasing relative to the 
current work time, which would not justify the work RVU increase that 
we proposed; we believe that the proposed work RVU increase from 8.08 
to 9.00 accounts for this increase in the work carried out during the 
postoperative period.
    We disagree with the commenters that reference CPT code 26356's 
work RVU of 9.56 justifies the recommended work RVU of 9.50 for CPT 
code 25310. While the two codes have similar work time values, CPT code 
26356 has additional preservice and immediate postservice work time as 
compared with CPT code 25310. The RUC's recommendations also previously 
stated that CPT code 26356 is a more intensive service than CPT code 
25310 which we believe supports proposing a lower work RVU for CPT code 
25310. We also disagree with the commenters that the proposed work RVU 
of 9.00 for CPT code 25310 creates a rank order anomaly in terms of 
intensity. While it is true that the intensity for this code sits 
towards the lower end of the spectrum amongst 90 day global procedures 
with similar work time values, there are other CPT codes in this range 
with lower intensity values

[[Page 97778]]

such as CPT code 25116 (Radical excision of bursa, synovia of wrist, or 
forearm tendon sheaths (eg, tenosynovitis, fungus, Tbc, or other 
granulomas, rheumatoid arthritis); extensors, with or without 
transposition of dorsal retinaculum) and 28485 (e). As such, CPT code 
25310 would not create a rank order anomaly in terms of intensity. 
Furthermore, our proposed work RVU of 9.00 falls very much within the 
middle range of comparative work RVUs amongst 90 day global procedures 
with similar work time values. We note as well that commenters did not 
address our analysis of work time changes for CPT code 25310 discussed 
in the proposed rule: that the total time is increasing from 235 
minutes to 263 minutes (an increase of 12 percent) which does not match 
the increase in the recommended work RVU, which is increasing from 8.08 
to 9.50 (approximately 18 percent). We continue to believe that our 
proposal of the survey 25th percentile work RVU of 9.00 for CPT code 
25310 is more accurate, which matches this increase in the total work 
time.
    Comment: Several commenters disagreed with the CMS proposed work 
RVU of 10.50 for CPT code 25447 and stated that CMS should instead 
finalize the RUC-recommended work RVU of 11.14, which is the current 
work RVU for the service. Commenters stated that CPT code 25447 was 
last surveyed in 2005, and the specialties attested that the technique 
is the same, but physicians are now more familiar with the procedure 
and thus it may be performed in less work time. Commenters stated that 
the changes to the work and time of the postoperative care for CPT code 
25447, along with higher surveyed preservice and immediate postservice 
time not recognized in 2005, offset the decrease in surveyed 
intraservice time. Commenters disagreed that there was a reduction in 
intensity for this code and stated that CMS' assumption of decreased 
intensity was mistaken; commenters stated that by maintaining the 
current work RVU of 11.14, the total global work and intraoperative 
intensity for CPT code 25447 would not change. Commenters referred to 
the top reference codes from the RUC survey and urged CMS to finalize 
the RUC's recommended work RVU of 11.14 for CPT code 25447.
    Response: We disagree with the commenters and continue to believe 
that the proposed work RVU of 10.50 is more accurate for CPT code 
25447. We disagree in particular with the commenters that by 
maintaining the current work RVU of 11.14, the intensity of CPT code 
25447 does not change. The RUC survey found that the intraservice work 
time required to perform the procedure has decreased significantly, 
from 100 minutes previously to 75 minutes under the recent survey. The 
total time of the procedure remained essentially unchanged in the 
survey, previously 278 minutes and now slightly higher at 281 minutes. 
However, work time that was previously allocated to the intraservice 
period has now shifted to the preservice period and postoperative 
office visits. We do not agree that this represents ``no change'' in 
intensity, as additional time spent on preservice evaluation and 
postservice E/M visits take place at a lower intensity level than the 
intraservice performance of the arthroplasty itself. As we noted in the 
proposed rule, there is a sizable decrease in surveyed intraservice 
work time (a reduction of approximately 33 percent) for CPT code 25447, 
and since the statute requires that valuation should be based on time 
and intensity, we believe that this supports the proposed reduction to 
a work RVU of 10.50. We do not agree with the commenters that 
additional preservice work time and postoperative office visits are 
sufficient to offset this large decrease in the surveyed work time of 
the intraservice portion of the procedure. We continue to believe that 
our proposal of the survey 25th percentile work RVU of 10.50 for CPT 
code 25447 is the most accurate value.
    Comment: Several commenters disagreed with the CMS proposed work 
RVU of 11.85 for CPT code 25448 and stated that CMS should instead 
finalize the RUC-recommended work RVU of 13.90. Commenters appreciated 
CMS recognizing the survey results but emphasized that the survey 
median work RVU of 13.90 was deemed more appropriate by the RUC to 
accurately describe the physician work involved in this new service. 
Commenters stated that the survey median work RVU of 13.90 supports 
relativity within the family and was warranted by the clinical 
complexity of the code. Commenters then described the clinical 
complexity of CPT code 25448, stating that this code encompasses the 
physician work of CPT code 25447 and the additional complex work of 
drilling and creating a hole through the base of the first metacarpal 
for passage of the radial half of the flexor carpi radialis from the 
second metacarpal to the first metacarpal. Commenters stated that this 
additional work beyond the work of CPT code 25447 is much more intense, 
resulting in a higher recommended value for surveyed code 25448 when 
compared with the other codes in the family. Commenters referred to the 
top reference codes from the RUC survey, such as CPT code 29298, and 
stated that the intensity of CPT code 25448 is not 50 percent of the 
intensity of CPT code 29828 as suggested by the CMS proposal. 
Commenters urged CMS to finalize the RUC's recommended work RVU of 
13.90 for CPT code 25448.
    Response: We disagree with the commenters and continue to believe 
that the proposed work RVU of 11.85 is more accurate for CPT code 
25448. We would like to clarify for the commenters that we understand 
the RUC does not always recommend the survey 25th percentile work RVU 
for new codes. We noted in the proposed rule that the RUC ``typically'' 
values new codes such as CPT code 25448 using this survey 25th 
percentile work RVU to indicate that the use of the survey median in 
this case was unusually higher than most other recommendations for new 
codes. We concur with the commenters that CPT code 25448 requires 
additional work and has higher complexity than CPT code 25447. This is 
why we proposed a work RVU for CPT code 25448 which is 1.35 units 
higher than the work RVU for CPT code 25447, 11.85 as compared with 
10.50, as well as why we proposed an intensity for CPT code 25448 which 
was higher than anything else in this code family. We believe that our 
proposed work RVU appropriate captures the increased work and intensity 
of CPT code 25448 relative to the other codes in this family.
    We also disagree that the work and intensity of reference CPT code 
29298 support the RUC's recommendation of a work RVU of 13.90 for CPT 
code 25448. As we wrote in the proposed rule, the RUC stated its 
recommendations that the arthroscopy described by CPT code 29828 is 
more intense than the arthroplasty procedures described by this family 
of codes, which we believe supports CPT code 29828 having a higher work 
RVU despite its lower work times. We also question whether CPT code 
29298 is the best choice of comparator code in terms of work time with 
CPT code 25448; these two codes differ by about 15 percent in terms of 
both intraservice work time (90 minutes against 75 minutes) and total 
time (296 minutes against (252 minutes). This difference in surveyed 
work time makes direct comparisons on work and intensity more 
difficult; we believe that CPT code 25448 is more accurately compared 
to other 90 day globals with the same 90 minutes of intraservice time 
and similar total time. Our proposed work RVU of 11.85 falls very much 
in the middle of this group of related

[[Page 97779]]

services, and there are numerous other CPT codes with lower work RVUs 
and lower intensities than what we proposed (such as CPT codes 25608, 
27339, and 28725). We continue to believe that our proposal of the 
survey 25th percentile work RVU of 11.85 for CPT code 25448 is the most 
accurate value.
    Comment: Several commenters disagreed with the CMS proposed work 
RVU of 9.00 for CPT code 26480 and stated that CMS should instead 
finalize the RUC-recommended work RVU of 9.50. Commenters appreciated 
CMS recognizing the survey results but stated that the survey median 
work RVU of 9.50 was deemed more appropriate by the RUC to accurately 
describe the physician work involved in this service. Commenters echoed 
the earlier discussion of CPT code 25310, stating that global codes are 
made up of distinct packages of work and time and that the preservice 
and immediate postservice intensities have never been updated to match 
the increases over the years for E/M services. Commenters stated that 
the overall work per unit of time (WPUT) may be representative of time 
for services on a single date of service, but this same measure cannot 
be applied to varied services (evaluation, positioning, scrub/dress/
wait, operation, recovery, ICU/hospital/office services) over a 90-day 
global period. Commenters stated that the level of visits has changed 
as supported by both medical decision-making and total time on the date 
of the encounter of CPT code 26480, and that the change in total work 
for CPT code 26480 is driven by a change in the intensity of the 
postoperative work. Commenters emphasized that the increase in 
postoperative work for CPT code 26480 adds significantly to the current 
work RVU of this service. Commenters also stated that the proposed work 
RVU of 9.00 for CPT code 26480 does not consider the intensity 
relativity of the RUC recommended work RVU of 9.50 to many other codes 
on the PFS and that finalizing this work RVU would create a rank order 
anomaly in terms of intensity. Commenters referred to the top reference 
codes from the RUC survey and urged CMS to finalize the RUC's 
recommended work RVU of 9.50 for CPT code 26480.
    Response: We disagree with the commenters and continue to believe 
that the proposed work RVU of 9.00 is more accurate for CPT code 26480. 
As we noted in the proposed rule, CPT codes 25310 and 26480 were 
surveyed as having identical work times and identical survey 25th 
percentile and survey median work RVUs. We concur with the RUC that 
these two codes should be valued at the same work RVU; however, we 
continue to believe that the survey 25th percentile work RVU of 9.00 is 
more accurate in both cases. As such, many of the same comment 
responses provided earlier for CPT code 25310 equally apply to CPT code 
26480.
    We concur with the commenters that the postoperative visits have 
changed for CPT code 26480, however we disagree that intensity measures 
cannot be applied to varied services over a 90 day period. As we noted 
for CPT code 25310 above, we have frequently been informed by the RUC 
and other interested parties that services with 10 and 90 day global 
periods must be evaluated in their entirety as part of magnitude 
estimation, and that it would be inappropriate to consider the 
postoperative visits as distinct from the rest of the procedure. We do 
concur with the commenters that changes in time and technology of the 
postoperative period have increased the physician work of CPT code 
26480, which is why we proposed a work RVU of 9.00 as compared with the 
current work RVU of 6.90. The recommended work time in the service 
period for CPT code 26480 is essentially unchanged relative to the 
current work time, which would not justify the work RVU increase that 
we proposed; we believe that the proposed work RVU increase from 6.90 
to 9.00 accounts for this increase in the work carried out during the 
postoperative period.
    We also disagree with the commenters that the proposed work RVU of 
9.00 for CPT code 26480 creates a rank order anomaly in terms of 
intensity. Again, since CPT codes 25310 and 26480 were proposed at the 
identical work times and work RVUs, the comparisons with other codes 
across the wider PFS are exactly the same. While it is true that the 
intensity for these codes sits towards the lower end of the spectrum 
amongst 90 day global procedures with similar work time values, there 
are other CPT codes in this range with lower intensity values such as 
CPT code 25116 (Radical excision of bursa, synovia of wrist, or forearm 
tendon sheaths (eg, tenosynovitis, fungus, Tbc, or other granulomas, 
rheumatoid arthritis); extensors, with or without transposition of 
dorsal retinaculum) and 28485 (Open treatment of metatarsal fracture, 
includes internal fixation, when performed, each). As such, CPT code 
26480 would not create a rank order anomaly in terms of intensity. 
Furthermore, our proposed work RVU of 9.00 falls very much within the 
middle range of comparative work RVUs amongst 90 day global procedures 
with similar work time values, not anomalously low. We note as well 
that commenters did not address our analysis of work time changes for 
CPT code 26480 discussed in the proposed rule: that the total time is 
increasing from 227 minutes to 263 minutes (an increase of 16 percent) 
which does not match the increase in the recommended work RVU, which is 
increasing from 6.90 to 9.50 (approximately 38 percent). We continue to 
believe that our proposal of the survey 25th percentile work RVU of 
9.00 for CPT code 26480 is more accurate, which more closely matches 
this increase in the total work time.
    After consideration of the comments, we are finalizing the work 
RVUs for all four codes in the Hand, Wrist, & Forearm Repair & Recon 
family as proposed. We did not receive any comments on the direct PE 
inputs and we are also finalizing them as proposed.
(3) CAR-T Therapy Services (CPT Codes 38225, 38226, 38227, and 38228)
    In September 2023, the CPT Editorial Panel deleted four category 
III codes (0537T-0540T) and approved the addition of four new codes 
(38225-38228) that describe only steps of the complex CAR-T Therapy 
process performed and supervised by physicians. The RUC recommended 
four different work RVUs for codes 38225, 38226, 38227, and 38228 and 
only recommended direct PE values for code 38228.
    For 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) the RUC 
recommended a work RVU of 1.94. For CPT code 38226 (Chimeric antigen 
receptor T-cell (CAR-T) therapy; preparation of blood-derived T 
lymphocytes for transportation (eg, cryopreservation, storage)) the RUC 
recommended a work RVU of 0.79. For CPT code 38228 (Chimeric antigen 
receptor T-cell (CAR-T) therapy; CAR-T cell administration, autologous) 
the RUC recommended a work RVU of 3.00. For CPT code 38227 (Chimeric 
antigen receptor T-cell (CAR-T) therapy; receipt and preparation of 
CAR-T cells for administration) the RUC recommended a work RVU of 0.80 
and for CPT code 38227, we proposed the RUC-recommended work RVU of 
0.80. We proposed the RUC-recommended work RVUs for CPT codes 38225, 
38226, and 38228 respectively.
    As mentioned previously, the RUC recommended direct PE values for 
only one code, CPT code 38228, and the RUC recommended that the non-
facility PE

[[Page 97780]]

RVU for CPT codes 38225-38227 should be contractor-priced. However, 
contractor pricing can only be applied at the whole code level, not to 
a single component of the valuation. Therefore, for CPT codes 38225-
38227 we treated these codes as having no recommended direct PE values 
and sought comment on direct PE values for these codes. We proposed the 
RUC-recommended direct PE inputs for CPT code 38228.
    Comment: The majority of commenters supported our proposal to pay 
separately for these services under the PFS. However, some commenters 
also highlighted that the existing CAR-T codes, CPT codes 0537T-0539T, 
are currently not payable under the OPPS and recommended that CMS 
should assign active payment for CAR-T services under the OPPS as well. 
Additionally, a few commenters mentioned that currently these services 
are not payable under the PFS, and a commenter highlighted the ``N/A'' 
that is currently listed for non-facility PE RVUs for the current CAR-T 
codes (CPT codes 0537T-0539T) under the PFS.
    Response: We thank the commenters for their support for our 
proposal and recommendation for the OPPS. As the commenters pointed 
out, the predecessor codes for CAR-T services (CPT codes 0537T-0539T) 
are not separately payable under the OPPS, and we note that these same 
codes similarly have a bundled status under the PFS (meaning they are 
subsumed within other codes and separate payment is not made for the 
services they describe). In the CY 2019 OPPS final rule, we stated that 
``the procedures described by CPT codes 0537T, 0538T, and 0539T 
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'' (83 FR 58905). In 
consideration of our current policies under both the PFS and the OPPS 
to not pay separately for the predecessor codes (CPT codes 0537T-
0539T), we are not finalizing our proposal and will instead continue to 
bundle payment under the PFS for CAR-T services described under CPT 
codes 38225, 38226, and 38227. We believe that bundled status is 
appropriate for these codes in order to remain in alignment with OPPS 
to not pay separately for each step used to manufacture a drug or 
biological. We will display the RUC-recommended work RVUs for these 
three services, as we do for a number of other bundled services on the 
PFS, however they will remain non-payable. CPT code 38228 is the 
replacement code for Category III CPT code 0540T, which does not have 
bundled status, and therefore, we are finalizing active pricing for CPT 
code 38228 at the proposed work RVU of 3.00 and with the proposed 
direct PE inputs.
(4) Therapeutic Apheresis and Photopheresis (CPT Codes 36514, 36516, 
and 36522)
    In the CY 2024 PFS final rule, we finalized CPT codes 36514 
(Therapeutic apheresis; for plasma pheresis), 36516 (Therapeutic 
apheresis; with extracorporeal immunoadsorption, selective adsorption 
or selective filtration and plasma reinfusion), and 36522 
(Photopheresis, extracorporeal) as potentially misvalued, as we 
believed there may have been a possible disparity with the clinical 
labor type (88 FR 78848). As a result, the PE clinical labor type was 
reviewed for these three codes at the January 2024 RUC meeting, with no 
work review. The PE Subcommittee and the RUC agreed that clinical staff 
code L042A (RN/LPN) did not appropriately represent the work of an 
Apheresis Nurse Specialist. There is not a clinical staff code for an 
Apheresis Nurse Specialist; however, the RUC agreed with the specialty 
societies' recommendation that the training and experience of an 
oncology nurse (clinical staff code L056A, RN/OCN) would more 
accurately reflect the work of an apheresis nurse for these CPT codes. 
The RUC submitted new PE recommendations for these three codes based on 
the use of the L056A clinical labor type.
    We proposed the RUC-recommended direct PE inputs for CPT codes 
36514, 36516, and 36522 without refinement. The RUC did not make 
recommendations and we did not propose any changes to the work RVU for 
CPT codes 36514, 36516, and 36522.
    Comment: Commenters agreed with CMS' proposed direct PE inputs for 
the Therapeutic Apheresis and Photopheresis code family.
    Response: We thank commenters for their support. After 
consideration of the public comments, we are finalizing the direct PE 
inputs as proposed.
(5) Intra-Abdominal Tumor Excision or Destruction (CPT Codes 49186, 
49187, 49188, 49189, and 49190)
    In May 2023, the CPT Editorial Panel created five new codes to 
describe the sum of the maximum length of intra-abdominal (that is, 
peritoneal, mesenteric, retroperitoneal), primary or secondary tumor(s) 
or cyst(s) excised or destroyed: CPT code 49186 (Excision or 
destruction, open, intra-abdominal (i.e., peritoneal, mesenteric, 
retroperitoneal), primary or secondary tumor(s) or cyst(s), sum of the 
maximum length of tumor(s) or cyst(s); 5 cm or less), CPT code 49187 
(Excision or destruction, open, intra-abdominal (i.e., peritoneal, 
mesenteric, retroperitoneal), primary or secondary tumor(s) or cyst(s), 
sum of the maximum length of tumor(s) or cyst(s); 5.1 to 10 cm), CPT 
code 49188 (Excision or destruction, open, intra-abdominal (i.e., 
peritoneal, mesenteric, retroperitoneal), primary or secondary tumor(s) 
or cyst(s), sum of the maximum length of tumor(s) or cyst(s); 10.1 to 
20 cm), CPT code 49189 (Excision or destruction, open, intra-abdominal 
(i.e., peritoneal, mesenteric, retroperitoneal), primary or secondary 
tumor(s) or cyst(s), sum of the maximum length of tumor(s) or cyst(s); 
20.1 to 30 cm), and CPT code 49190 (Excision or destruction, open, 
intra-abdominal (i.e., peritoneal, mesenteric, retroperitoneal), 
primary or secondary tumor(s) or cyst(s), sum of the maximum length of 
tumor(s) or cyst(s); greater than 30 cm). These new CPT codes will 
replace existing CPT codes 49203 (Excision or destruction, open, intra-
abdominal tumors, cysts or endometriomas, 1 or more peritoneal, 
mesenteric, or retroperitoneal primary or secondary tumors; largest 
tumor 5 cm diameter or less), 49204 (Excision or destruction, open, 
intra-abdominal tumors, cysts or endometriomas, 1 or more peritoneal, 
mesenteric, or retroperitoneal primary or secondary tumors; largest 
tumor 5.1-10.0 cm diameter), and 49205 (Excision or destruction, open, 
intra-abdominal tumors, cysts or endometriomas, 1 or more peritoneal, 
mesenteric, or retroperitoneal primary or secondary tumors; largest 
tumor greater than 10.0 cm diameter) that described tumor excision or 
destruction based on the size of the single largest tumor, cyst, or 
endometrioma removed, no matter the number of tumors. For CY 2025, the 
RUC recommended a work RVU of 22.00 for CPT code 49186, a work RVU of 
28.65 for CPT code 49187, a work RVU of 34.00 for CPT code 49188, a 
work RVU of 45.00 for CPT code 49189, and a work RVU of 55.00 for CPT 
code 49190.
    We proposed the RUC-recommended work RVUs of 22.00 for CPT code 
49186, 28.65 for CPT code 49187, and 34.00 for CPT code 49188.
    We disagreed with the RUC-recommended work RVU of 45.00 for CPT 
code 49189 and we proposed a work RVU of 40.00 based on the survey 25th 
percentile. Compared to the predecessor CPT code 49205, the intra-
service time ratio for CPT code 49189 suggested a work RVU of 41.51 and 
the total time ratio suggested a work RVU of 38.02. These changes in 
surveyed work time as compared with predecessor CPT

[[Page 97781]]

code 49205 suggested that the recommended work RVU of 45.00 was 
inappropriately high. We also noted that the RUC recommended the survey 
25th percentile work RVU for CPT codes 49186, 49187, and 49188. 
Therefore, we believed that proposing a work RVU of 40.00 for CPT code 
49189 kept the valuation consistent with the other CPT codes in this 
family. Our proposed work RVU of 40.00 for CPT code 49189 was supported 
by the following reference CPT codes with similar intra-service time 
(310 minutes) and similar total time (814 minutes): reference CPT code 
69970 (Removal of tumor, temporal bone) with a work RVU of 32.41 with 
330 minutes intra-service time and 793 minutes of total time, and 
reference CPT code 33864 (Ascending aorta graft, with cardiopulmonary 
bypass with valve suspension, with coronary reconstruction and valve-
sparing aortic root remodeling (e.g., David Procedure, Yacoub 
Procedure)) with a work RVU of 60.80 with 300 minutes of intra-service 
time and 838 minutes of total time. We believed the proposed work RVU 
of 40.00 was a more appropriate value overall than 45.00 when compared 
to the range of codes with similar intra-service time and similar total 
time.
    We disagreed with the RUC-recommended work RVU of 55.00 for CPT 
code 49190 and we proposed a work RVU of 50.00 based on the survey 25th 
percentile. Compared to the predecessor CPT code 49205, the intra-
service time ratio for CPT code 49190 suggested a work RVU of 48.21 and 
the total time ratio suggested a work RVU of 48.86. These changes in 
surveyed work time as compared with predecessor CPT code 49205 
suggested that the recommended work RVU of 55.00 was inappropriately 
high. We also note again that the RUC recommended the survey 25th 
percentile work RVU for CPT codes 49186, 49187, and 49188. Therefore, 
we believed that proposing a work RVU of 50.00 for CPT code 49190 kept 
the valuation consistent with the other CPT codes in this family. Our 
proposed work RVU of 50.00 for CPT code 49190 was supported by the 
following reference CPT codes with similar intra-service time (360 
minutes) and similar total time (1,046 minutes): reference CPT code 
61598 (Transpetrosal approach to posterior cranial fossa, clivus or 
foramen magnum, including ligation of superior petrosal sinus and/or 
sigmoid sinus) with a work RVU of 36.53 with 377.7 minutes intra-
service time and 1,048.1 minutes of total time, and reference CPT code 
47140 (Donor hepatectomy (including cold preservation), from living 
donor; left lateral segment only (segments II and III)) with a work RVU 
of 59.40 with 355 minutes of intra-service time and 1,073 minutes of 
total time. We believed the proposed RVU of 50.00 was a more 
appropriate value overall than 55.00 when compared to the range of 
codes with similar intra-service time and similar total time.
    We also noted that the RUC's recommendations for the first three 
codes in the family (CPT codes 49186-49188) maintained the same amount 
of intensity as their respective predecessor codes, and in fact 
slightly decreased in intensity in the case of CPT codes 49186 and 
49187. However, the RUC recommended a notable increase in intensity for 
CPT codes 49189 and 49190 over predecessor code 49205 due to its 
selection of the survey median work RVU in both cases. We did not 
believe that this increase in intensity for CPT codes 49189 and 49190 
was warranted due to their clinical similarities to the previous coding 
in the family, especially given that CPT code 49205 had the lowest 
intensity in the family. We believed that this intensity argument 
further supported our choice to propose the survey 25th percentile work 
RVU for these two codes, matching the RUC recommendations for CPT code 
49186-49188.
    We proposed the RUC-recommended direct PE inputs for CPT codes 
49186, 49187, 49188, 49189, and 49190 without refinement.
    The following is a summary of the comments we received and our 
responses.
    Comment: The commenters overwhelmingly supported our proposal to 
accept the RUC recommended work RVUs for CPT codes 49186, 49187, and 
49188.
    Response: We thank the commenters for their support.
    Comment: A few commenters disagreed with the proposed work RVUs of 
40.00 for CPT code 49189 and 50.00 for CPT code 49190. The commenters 
stated that we failed to recognize the increased burden, intensity, and 
complexity of removing not just a single tumor, but for multiple tumors 
as represented by CPT codes 49189 and 49190. The commenters also stated 
that per the RUC's compelling evidence statements it is important to 
note that the technical difficulty increases as the tumor size 
increases.
    Response: We disagree with the commenters and note that by using 
the survey 25th percentile for CPT codes 49189 and 49190, we did 
propose values with a higher intensity than their predecessor code, CPT 
code 49205. Although we agree that the intensity of CPT codes 49189 and 
49190 has increased as compared with predecessor CPT code 49205, the 
intensity of these new codes is not high enough to support using the 
survey median for either of them. The changes in surveyed work time as 
compared with predecessor CPT code 49205 suggested that the survey 
median work RVUs of 45.00 for CPT code 49189 and 55.00 for CPT code 
49190 recommended by the RUC were both inappropriately high. For 
example, in reviewing CPT code 49189 we noted that the recommended 
intraservice time as compared with predecessor CPT code 49205 was 
increasing from 225 minutes to 310 minutes (38 percent), and the 
recommended total time was increasing from 645 minutes to 814 minutes 
(26 percent); however, the RUC-recommended work RVU was increasing from 
30.13 to 45.00, which is an increase of nearly 50 percent. We believe 
that since the two components of work are time and intensity, changes 
in the work time should be reflected in similar changes to the work 
RVU. Our proposal of a work RVU of 40.00 for CPT code 49189, an 
increase of approximately 33 percent, better matches these changes in 
surveyed work time relative to the predecessor code.
    We also noted that the RUC recommended the survey 25th percentile 
work RVU for CPT codes 49186, 49187, and 49188 and we believe it would 
better support relativity to utilize the same survey 25th percentile 
work RVU for the final two codes in the family. Therefore, we continue 
to believe that a work RVU of 40.00 for CPT code 49189, and a work RVU 
of 50.00 for CPT code 49190, is more appropriate.
    Comment: We received comments regarding the reference codes we used 
in our proposal for CPT codes 49189 and 49190. The reference codes we 
used to support the proposed work RVU of 40.00 for CPT code 49189 were 
CPT codes 69970 and 33864, and the reference codes we used in support 
of the proposed work RVU of 50.00 for CPT code 49190 were CPT codes 
61598 and 47140. For CPT code 49189, the commenters agreed that CPT 
code 33864 was an appropriate reference code but disagreed with our use 
of CPT code 69970 as the other reference code in support of the 
proposed work RVU of 40.00 because it was valued nearly 30 years ago 
and it is not clear how the value for this service was established at 
that time. Likewise, for CPT code 49190, the commenters agreed that CPT 
code 47140 was an appropriate reference code but disagreed with our use 
of CPT code 61598 as the other reference code that supported the 
proposed work RVU

[[Page 97782]]

of 50.00 because it was valued 30 years ago.
    Response: We disagree with the commenters and continue to believe 
that the work RVUs of 40.00 for CPT code 49189, and 50.00 for CPT code 
49190, both based on the survey 25th percentile for each code, are 
appropriate. We note that the reference codes we chose were only used 
to show support for using the surveyed 25th percentile values from the 
RUC for CPT codes 49189 and 49190, and that we did not propose to 
crosswalk the RVUs from any reference codes to CPT code 49189 or CPT 
code 49190. Furthermore, we note that the commenters supported our use 
of CPT code 47140 as a reference code, even though it was last valued 
21 years ago.
    After consideration of the public comments, we are finalizing the 
work RVU values for the Intra-Abdominal Tumor Excision or Destruction 
code family (CPT codes 49186, 49187, 49188, 49189, and 49190) as 
proposed. We are also finalizing the direct PE inputs for CPT codes 
49186, 49187, 49188, 49189, and 49190 as proposed.
(6) Bladder Neck and Prostate Procedures (CPT Codes 53865 and 53866)
    In September 2023, the CPT Editorial Panel created two Category I 
CPT codes to describe the insertion or removal of a temporary device to 
remodel the bladder neck and prostate using pressure to create necrosis 
and relieve lower urinary tract symptoms (LUTS) secondary to benign 
prostate hyperplasia (BPH). These two new 000-day global Category I 
codes were surveyed and reviewed for the January 2024 RUC meeting.
    At the January 2024 RUC meeting, the specialty society indicated 
that CPT code 53865's survey 25th percentile work RVU of 3.91 was too 
high for this procedure compared to other services in the physician fee 
schedule with similar intra-service time. The specialty society 
recommended, and the RUC agreed that the recommended work RVU for CPT 
code 53865 should be crosswalked to CPT code 52284 (Cystourethroscopy, 
with mechanical urethral dilation and urethral therapeutic drug 
delivery by drug-coated balloon catheter for urethral stricture or 
stenosis, male, including fluoroscopy, when performed). Because these 
procedures are similar in intensity and both require precise placement 
of an intraurethral device, we concur with the RUC and we are proposing 
the RUC recommended work RVU of 3.10 for CPT code 53865.
    At the January 2024 RUC meeting, the specialty society indicated 
that CPT code 53866's survey 25th percentile work RVU of 2.00 was too 
high for this procedure compared to other services in the physician fee 
schedule with similar intra-service time. The specialty society 
recommended, and the RUC agreed, that CPT code 53866 should have a 
direct work RVU crosswalk to CPT code 27096 (Injection procedure for 
sacroiliac joint, anesthetic/steroid, with image guidance (fluoroscopy 
or CT) including arthrography when performed). We are proposing the RUC 
recommended work RVU of 1.48 for CPT code 53866.
    We also proposed the RUC-recommended direct PE inputs for CPT codes 
53865 and 53866 without refinement. However, we noted possible 
duplications in two of the supply items within CPT code 53865. 
Specifically, supply item SB027 (gown, staff, impervious) is already 
included in supply item SA042 (pack, cleaning and disinfecting, 
endoscope), and supply item SB024 (gloves, sterile) is included in 
supply items SA058 (pack, urology cystoscopy visit). We sought comments 
on whether a total of three SB027 impervious staff gowns and two SB024 
pairs of sterile gloves would be typical and necessary when providing 
this procedure.
    Comment: A commenter stated that they had completed over 150 sales 
of the iTind device (SD366), which is included as a direct PE input for 
CPT codes 53865 and 53866 at an ASP of $3,150, $3,350, or $3,420. The 
commenter requested that CMS increase the supply price for SD366 to its 
current sales price of $3,350 and submitted two invoices for use in 
updating supply pricing.
    Response: We appreciate the submission of these additional invoices 
for assistance in pricing the SD366 supply item. After reviewing the 
invoices, we are finalizing an increase in the pricing of the SD366 
supply from the proposed $2695 to $2972.50. This updated pricing is 
based on averaging together the price from all four invoices, two 
submitted by the RUC and two submitted by the commenter. We note that 
the difference in pricing for the SD366 supply on these invoices 
appears to be correlated with the quantity ordered, with a price of 
$3350 for the purchase of a single device as opposed to $2695 for 
ordering four devices together. We believe that averaging together 
these invoices will smooth out these quantity disparities and more 
closely reflect the typical market pricing.
(7) MRI-Monitored Transurethral Ultrasound Ablation of Prostate (CPT 
Codes 51721, 55881, and 55882)
    At the April 2023 CPT Editorial Panel meeting, three new CPT codes 
were approved for MRI-monitored transurethral ultrasound ablation 
(TULSA). These codes were surveyed for the September 2023 RUC meeting 
and recommendations submitted to CMS for inclusion in the CY 2025 PFS 
proposed rule.
    For CY 2025, we proposed the RUC-recommended work RVUs for all 
three CPT codes. However, we note that interested parties may have 
concerns regarding the experience of the survey respondents and the 
intra-service times provided in the survey data. We welcomed commenters 
to provide additional data that we could consider in the valuation of 
the work and direct PE inputs for these CPT codes. We proposed a work 
RVU of 4.05 for CPT code 51721 (Insertion of transurethral ablation 
transducers for delivery of thermal ultrasound for prostate tissue 
ablation, including suprapubic tube placement during the same session 
and placement of an endorectal cooling device, when performed), a work 
RVU of 9.80 for CPT code 55881 (Ablation of prostate tissue, 
transurethral, using thermal ultrasound, including magnetic resonance 
imaging guidance for, and monitoring of, tissue ablation), and a work 
RVU of 11.50 for CPT code 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 the 
thermal ultrasound, including suprapubic tube placement and placement 
of an endorectal cooling device, when performed). We also proposed the 
RUC-recommended direct PE inputs for CPT codes 51721, 55881, and 55882 
without refinement.
    Comment: Some commenters disagreed with the proposed work RVUs for 
all three CPT codes in this family. These commenters reiterated 
concerns regarding the experience of the RUC survey respondents, 
stating that the intra-service times provided in the RUC survey data 
were too low and did not reflect the actual time needed to perform 
these very complex and critical procedures. Commenters recommended 
intra-service times based on their experience and internal tracking 
data. For CPT code 51721, the suggested intra-service times varied from 
40 to 101 minutes, as opposed to the RUC-recommended 29 minutes. For 
CPT code 55881, the suggested intra-service

[[Page 97783]]

times varied from 140 to 279 minutes, as opposed to the RUC-recommended 
120 minutes. For CPT code 55882, the suggested intra-service times 
varied from 170 to 317 minutes, as opposed to the RUC-recommended 125 
minutes. Due to these increased intra-service times, the commenters 
also recommended a revised work RVU of 6.75 for CPT code 51721, 13.13 
for CPT code 55881, and 16.20 for CPT code 55882.
    Response: We thank commenters for their feedback and the additional 
data provided; however, we do not agree with the intra-service times or 
work RVUs that commenters recommended for this code family. The values 
that commenters provided were mixed, but mostly significantly higher 
than the proposed values. We believe that the RUC survey respondents 
were familiar with the technology and since these CPT codes were 
recently converted from Category III to Category I, the survey results 
will be more robust as utilization increases over time. We continue to 
believe that the RUC-recommended intra-service times and work RVUs 
accurately reflects the time and intensity involved with these 
services, as supported by the survey results and reference codes. We 
look forward to re-reviewing these CPT codes when they are re-submitted 
on the RUC's New Technology list.
    Comment: Many commenters were supportive of the proposed work RVUs 
and direct PE inputs for this code family. These commenters also 
acknowledged concerns from interested parties regarding the survey 
respondents' experience and intra-service times, specifically noting 
that the RUC process relies upon the clinical expertise of its 
multidisciplinary physician representatives and that its members are 
impartial and free from the external influences of interested parties. 
Additionally, commenters highlighted that they anticipate an initial 
low utilization of these services that will increase over time, and 
since these codes are on the RUC's New Technology list, they will be 
re-reviewed in 3 years.
    Response: We thank commenters for their support and additional 
information provided.
    After consideration of the public comments, we are finalizing the 
work RVUs and direct PE inputs for all three codes in the MRI-Monitored 
Transurethral Ultrasound Ablation of Prostate family as proposed.
(8) Insertion of Cervical Dilator (CPT Code 59200)
    In the CY 2024 PFS final rule, we finalized CPT Code 59200 
(Insertion of cervical dilator (e.g., laminaria, prostaglandin) 
(separate procedure)) as potentially misvalued. The code is to be used 
to report the total duration of time spent on a patient history and 
physical, reviewing lab resulting, discussing risk and benefits of the 
procedure, obtaining consent, performing the procedure, and assessing 
the patient post-procedure. The RUC reviewed the work RVU and PE inputs 
for CPT code 59200 at their January 2024 meeting. We proposed the RUC-
recommended work RVU of 1.20 for CPT code 59200. We also proposed the 
RUC-recommended direct PE inputs for CPT code 59200 without 
refinements.
    Comment: Commenters agreed with CMS' proposed work RVU and direct 
PE inputs for this code family.
    Response: We thank commenters for their support. After 
consideration of the public comments, we are finalizing the work RVU 
and direct PE inputs as proposed.
(9) 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 intracranial ablation for treatment of a severe central 
tremor that is recalcitrant to other medical treatments. This service 
is typically performed by a neurosurgeon without the involvement of a 
separate radiologist. This new code replaces the existing Category III 
code 0398T.
    We did not propose the RUC-recommended work RVU of 18.95 for CPT 
code 61715 and instead proposed a work RVU of 16.60 based on a 
crosswalk to CPT code 61626 (Transcatheter permanent occlusion or 
embolization (eg, for tumor destruction, to achieve hemostasis, to 
occlude a vascular malformation), percutaneous, any method; non-central 
nervous system, head or neck (extracranial, brachiocephalic branch)), 
which describes a similar tumor destruction service that has similar 
time and intensity values to this service, and we support this value by 
referencing CPT code 33889 (Open subclavian to carotid artery 
transposition performed in conjunction with endovascular repair of 
descending thoracic aorta, by neck incision, unilateral) and 33894 
(Endovascular stent repair of coarctation of the ascending, transverse, 
or descending thoracic or abdominal aorta, involving stent placement; 
across major side branches). We do not believe that this service is 
significantly more intense than the key reference codes, CPT codes 
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 
61737 (Laser interstitial thermal therapy (LITT) of lesion, 
intracranial, including burr hole(s), with magnetic resonance imaging 
guidance, when performed; multiple trajectories for multiple or complex 
lesion(s)), as the RUC-recommended work value implies. Our proposed 
work RVU of 16.60 for CPT code 61715 largely matches the intensity of 
CPT code 61736 which we believe is a more accurate valuation for this 
service, as opposed to the RUC recommendation which would have 
significantly more intensity.
    We proposed the RUC-recommended direct PE inputs for CPT code 61715 
without refinement.
    Comment: Many commenters disagreed with the CMS proposal of a work 
RVU of 16.60 for CPT code 61715. Commenters described the clinical 
benefits of CPT code 61715 as a non-invasive, real-time monitored and 
controlled acoustic surgery procedure that offers a treatment option 
for essential tremor in patients that are not candidates for, or do not 
want to undergo, open brain surgery. Commenters stated that this code 
is a complex procedure which requires a great deal of training and 
experience to develop expertise, and that it can be a lengthy and 
intense procedure taking a great deal of time to perform. Commenters 
objected to the CMS use of CPT code 61626 as a crosswalk for valuation, 
stating that this code was deemed ``Do Not Use to Validate for 
Physician Work'' in the RUC database and that the work time in this 
code was developed to be used for practice expense purposes only and 
has not been validated by the RUC. Commenters also stated that CPT code 
61626 has been revised by the CPT Editorial Panel and surveyed by the 
RUC for the CPT 2026 cycle and should not be used as crosswalk during 
the re-review process.
    Commenters disagreed with the other CMS reference codes by stating 
that they were less intense/complex to perform compared to CPT code 
61715 despite having similar work time values. Commenters maintained 
that the two key reference codes from the survey, CPT codes 61736 and 
61737, were appropriate comparators and that CPT code 61715 was more 
intensive that these survey references, both as indicated by the survey 
respondents and due to clinical reasons (due to the need for repeated 
neurologic assessments of the awake patients during treatment planning 
and delivery and because the

[[Page 97784]]

reference codes involve time for opening/closing that is of lower 
intensity than the treatment and not required as part of the work for 
the CPT code 61715). Commenters stated that a decline in reimbursement 
could adversely affect their ability to provide this vital treatment to 
Medicare patients and urged CMS to finalize the RUC's recommended work 
RVU of 18.95.
    Response: We appreciate the additional discussion of the clinical 
nature of CPT code 61715 from the commenters and its intensity relative 
to the various reference codes discussed above. After consideration of 
the comments, we agree that CPT code 61715 is more accurately valued at 
the survey 25th percentile work RVU of 18.95 as recommended by the RUC 
based on their description of the complexity inherent to the procedure. 
We are finalizing this work RVU of 18.95 along with the proposed direct 
PE inputs for CPT code 61715.
(10) Percutaneous Radiofrequency Ablation of Thyroid (CPT Codes 60660 
and 60661)
    In January 2024, the RUC surveyed codes 60660 (Ablation of 1 or 
more thyroid nodule(s), one lobe or the isthmus, percutaneous, 
including imaging guidance, radiofrequency) and its respective add-on 
code 60661 (Ablation of 1 or more thyroid nodule(s), additional lobe, 
percutaneous, with imaging guidance, radiofrequency (List separately in 
addition to code for primary service) and recommended both work RVUs 
and PE values for this code family.
    For CPT code 60660, the RUC recommended a work RVU of 5.75 and we 
proposed the RUC-recommended work RVU of 5.75.
    For add-on code CPT 60661, the RUC recommended a work RVU of 4.25 
and we proposed the RUC-recommended work RVU for this code. We also 
proposed the RUC-recommended direct PE values for both codes 60660 and 
60661.
    Comment: Many commenters supported the CMS proposal of the RUC-
recommended work RVUs for CPT codes 60660 and 60661. These commenters 
urged CMS to finalize the values as proposed.
    Response: We appreciate the support for our proposed work RVUs from 
the commenters.
    Comment: Several commenters stated that they supported the proposed 
work RVUs for CPT codes 60660 and 60661, however the commenters 
expressed significant concerns regarding the reimbursement challenges 
faced by endocrinologists in private non-facility-based practices for 
the Radiofrequency Ablation (RFA) of thyroid nodules. The commenters 
stated that there are critical issues that need to be addressed to 
ensure continued access to this important procedure for patients in 
need. These issues included the high cost of the RF electrode which 
poses a significant financial burden on practices, a reimbursement gap 
for endocrinologists in non-facility-based practices, the upfront costs 
of RFA equipment and consumables which threaten to impact patient 
access to these services, and that there are sustainability concerns 
regarding the current reimbursement model for RFA procedures. The 
commenters urged CMS to reconsider the reimbursement framework for RFA 
procedures, taking into account the full range of practice expenses, 
including essential consumables like the RF electrode.
    Response: We appreciate the additional information submitted by the 
commenters regarding the issues involving reimbursement for these 
radiofrequency ablation services. Although this discussion is beyond 
the scope of this particular code family, if the commenters believe 
that the valuation of the RF electrode (SD368) supply at $1995.00 does 
not reflect current market pricing, we would encourage them to submit 
invoices via email to the [email protected] inbox as 
described in the PE section of this final rule.
    After consideration of the comments, we are finalizing the work 
RVUs and direct PE inputs for the codes in the Percutaneous 
Radiofrequency Ablation of Thyroid family as proposed.
(11) Fascial Plane Blocks (CPT Codes 64466, 64467, 64468, 64469, 64473, 
64474, 64486, 64487, 64488, and 64489)
    In September 2023, the CPT Editorial Panel created six new Category 
I CPT codes, CPT code 64466 (Thoracic fascial plane block, unilateral; 
by injection(s), including imaging guidance, when performed), 64467 
(Thoracic fascial plane block, unilateral; by continuous infusion(s), 
including imaging guidance, when performed), 64468 (Thoracic fascial 
plane block, bilateral; by injection(s), including imaging guidance, 
when performed), 64469 (Thoracic fascial plane block, bilateral; by 
continuous infusion(s), including imaging guidance, when performed), 
64473 (Lower extremity fascial plane block, unilateral; by 
injection(s), including imaging guidance, when performed), and 64474 
(Lower extremity fascial plane block, unilateral; by continuous 
infusion(s), including imaging guidance, when performed) to report 
thoracic or lower extremity fascial plane blocks, typically used for 
post-operative pain management. Four existing CPT codes describing 
transversus abdominis plane (TAP) blocks, 64486 (Transversus abdominis 
plane (TAP) block (abdominal plane block, rectus sheath block) 
unilateral; by injection(s) (includes imaging guidance, when 
performed)), 64487 (Transversus abdominis plane (TAP) block (abdominal 
plane block, rectus sheath block) unilateral; by continuous infusion(s) 
(includes imaging guidance, when performed)), 64488 (Transversus 
abdominis plane (TAP) block (abdominal plane block, rectus sheath 
block) bilateral; by injections (includes imaging guidance, when 
performed)) 64489 (Transversus abdominis plane (TAP) block (abdominal 
plane block, rectus sheath block) bilateral; by continuous infusions 
(includes imaging guidance, when performed)), were included as part of 
this code family for RUC review in January 2024.
    We proposed the RUC-recommended work RVU for all ten codes in this 
family. We proposed a work RVU of 1.50 for CPT code 64466, 1.74 for CPT 
code 64467, 1.67 for CPT code 64468, 1.83 for CPT code 64469, 1.34 for 
CPT code 64473, 1.67 for CPT code 64474, 1.20 for CPT code 64486, 1.39 
for CPT code 64487, 1.40 for CPT code 64488, and 1.75 for CPT code 
64489.
    We also proposed the RUC recommended direct PE inputs for CPT codes 
64467, 64468, 64469, 64474, 64487, 64488, and 64489. We disagreed with 
one of the RUC recommended direct PE inputs for CPT codes 64466, 64473, 
and 64486. The RUC stated they believe that there is a rounding error 
in the CA019 clinical labor time, ``Assist physician or other qualified 
healthcare professional--directly related to physician work time 
(67%)'', for these three codes. We disagreed with the RUC that there 
are rounding errors in these codes and we proposed to maintain the 
current 7 minutes of CA019 clinical labor time for CPT codes 64466, 
64473, and 64486. We noted that this matches the pattern of CA019 
clinical labor time for the rest of the codes in the family, which 
remained the same or slightly decreased in each case. This refinement 
to the CA019 clinical labor time also means that we proposed a decrease 
of 0.5 minutes to the equipment time for the stretcher (EF018) and 3-
channel ECG (EQ011) which decreases from 25.5 to 25 minutes for these 
three codes. We proposed all of the other RUC-recommended direct PE 
inputs for CPT codes 64466, 64473, and 64486 without refinement.

[[Page 97785]]

    Comment: Commenters agreed with CMS' proposed work RVU and direct 
PE inputs for this code family.
    Response: We thank commenters for their support. After 
consideration of the public comments, we are finalizing the work RVU 
and direct PE inputs as proposed.
(12) Skin Adhesives (CPT Codes 64590 and 64595 and HCPCS Codes G0168, 
G0516, G0517, and G0518)
    In April 2022, the RUC approved the use of SG007 (adhesive, skin 
(Dermabond)) for CPT code 64590 (insertion or replacement of 
peripheral, sacral, or gastric neurostimulator pulse generator or 
receiver, requiring pocket creation and connection between electrode 
array and pulse generator or receiver) and 64595 (revision or removal 
of peripheral, sacral, or gastric neurostimulator pulse generator or 
receiver, with detachable connection to electrode array). In April 
2023, the PE Subcommittee reviewed the following six codes on the 
Medicare Physician Fee Schedule 64590, 64595, G0168, G0516, G0517, 
G0518 that utilize Dermabond (supply code S6007) in order to identify 
justification for its use versus the generic version and present its 
findings to the RUC for approval. The RUC reviewed all six codes for PE 
only and did not submit work recommendations.
    For CPT codes 64590 and 64595 and HCPCS code G0168 (Wound closure 
utilizing tissue adhesive(s) only), the RUC recommended that CMS remove 
the supply input SG007 adhesive, skin (Dermabond) and add one unit of 
SH076 adhesive, cyanoacrylate (2ml uou). We proposed the RUC-
recommended direct PE inputs for CPT codes 64590 and 64595 and HCPCS 
code G0168. Similarly, for HCPCS codes G0516 (Insertion of non-
biodegradable drug delivery implants, 4 or more (services for subdermal 
rod implant), G0517 (Removal of non-biodegradable drug delivery 
implants, 4 or more (services for subdermal implants), and G0518 
(Removal with reinsertion, non-biodegradable drug delivery implants, 4 
or more (services for subdermal implants), the RUC recommended that CMS 
remove the supply input SG007 adhesive, skin (Dermabond) and add one 
unit of SH076 adhesive, cyanoacrylate (2ml uou). We proposed the RUC-
recommended direct PE inputs for HCPCS codes G0516-G0518.
    Comment: Commenters agreed with CMS' proposed direct PE inputs for 
this code family.
    Response: We thank commenters for their support. After 
consideration of the public comments, we are finalizing the direct PE 
inputs as proposed. We did not propose and are not finalizing any 
changes to the work RVUs.
(13) Iris Procedures (CPT Codes 66680, 66682, and 66683)
    In April 2023, the CPT Editorial Panel deleted three related 
Category III CPT codes, CPT code 0616T (Insertion of iris prosthesis, 
including suture fixation and repair or removal of iris, when 
performed; without removal of crystalline lens or intraocular lens, 
without insertion of intraocular lens), CPT code 0617T (with removal of 
crystalline lens and insertion of intraocular lens), and CPT code 0618T 
(with secondary intraocular lens placement or intraocular lens 
exchange). At the same time, CPT created a new Category I code 66683 
(Implantation of iris prosthesis, including suture fixation and repair 
or removal of iris, when performed) which describes insertion of an 
artificial iris into an eye with a partial or complete iris defect due 
to a congenital defect or surgical or non-surgical trauma. The new 
Category I CPT code 66683 replaced the three Category III codes to 
simplify reporting. Concurrent with these updates, the RUC surveyed the 
two other 90-day global iris repair codes, CPT code 66680 (Repair of 
iris, ciliary body (as for iridodialysis)) and CPT code 66682 (Suture 
of iris, ciliary body (separate procedure) with retrieval of suture 
through small incision (eg, McCannel suture)).
    We disagreed with the RUC-recommended work RVU of 10.25 for CPT 
code 66680. We proposed a work RVU of 7.97 for CPT code 66680 based on 
a crosswalk to CPT code 67904 (Repair of blepharoptosis; (tarso) 
levator resection or advancement, external approach). When we reviewed 
CPT code 66680, 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 45 minutes and similar total time around 182 
minutes. The total time ratio between the current time of 159 minutes 
and the recommended time established by the RUC survey of 182 minutes 
equals 1.145 percent. This ratio, 1.145 percent, when applied to the 
current work RVU of 6.39 would suggest a work RVU of 7.31 which is far 
below the RUC's recommended work RVU of 10.25. Based on this total time 
ratio, we believe a more appropriate work valuation for CPT code 66680 
is 7.97 based on a crosswalk to CPT code 67904.
    We disagreed with the RUC-recommended work RVU of 10.87 for CPT 
code 66682. We proposed a work RVU of 8.74 based on the total time 
ratio between the current time of 169.5 minutes and the recommended 
time established by the RUC survey of 202 minutes. This ratio equals 
1.192 percent, and 1.192 percent of the current work RVU of 7.33 
suggests a work RVU of 8.74 for CPT code 66682. When we reviewed CPT 
code 66682, we found that the recommended work RVU was higher than 
nearly all of the other 90-day global codes with similar time values. 
The RUC's recommended work RVU does not maintain relativity with other 
90-day global period codes with the same intraservice time value of 45 
minutes and similar total time of 202. We found that work RVU 
crosswalks to CPT codes of similar intraservice and total time were too 
low, such as CPT code 45171 with a work RVU of 8.13. A more appropriate 
work RVU for CPT code 66682 is 8.74 based on the total time ratio.
    The RUC recommended a work RVU of 12.80 for CPT code 66683, the RUC 
survey 25th percentile result, with an intraservice time of 60 minutes 
and a total time of 224 minutes. We disagreed with the RUC-recommended 
work RVU of 12.80 for CPT code 66683. Although we disagreed with the 
RUC-recommended work RVU, we concurred that the relative difference in 
work between CPT codes 66682 and 66683 is equivalent to the recommended 
interval of 1.93 RVUs. Therefore, we proposed a work RVU of 10.67 for 
CPT code 66683, based on the recommended interval of 1.93 additional 
RVUs above our proposed work RVU of 8.74 for CPT code 66682. This work 
RVU of 10.67 falls between the work RVU values of existing codes with 
similar intraservice and total time values. For example, CPT code 65850 
(60 minutes of intraservice time and 233 minutes of total time) has a 
work RVU of 11.39 and CPT code 24164 with the same intraservice time 
and 228 minutes of total time has a work RVU of 10.00. We believe that 
the work valuation of these CPT codes, which bracket our work RVU of 
10.67, provide additional support for our valuation.
    We also disagreed with the RUC's recommended work RVUs for the 
codes in this family because they suggest that there has been a 
tremendous increase in intensity as compared to how these services have 
historically been valued. CPT code 66680 is more than doubling in 
intensity at the RUC's recommended work RVU of 10.25, which we do not 
believe to be the case given that the code descriptor remains unchanged 
and the surveyed intraservice work time is unchanged at 45 minutes. 
This same pattern holds true for CPT code 66682, which would be 
increasing in intensity

[[Page 97786]]

by more than 50 percent at the RUC's recommended work RVU of 10.87, and 
which similarly has no change in its code descriptor and a modest 
increase in its surveyed work time. We concur that the intensity of 
these services has likely gone up over time, which is why we proposed 
modest intensity increases for both codes; however, we continue to 
disagree that the very substantial intensity increases recommended by 
the RUC would be accurate for this code family. We believe that our 
work RVUs are more in line with how these services have historically 
been valued and better maintain relativity with the rest of the fee 
schedule.
    We proposed the direct PE inputs as recommended by the RUC for all 
three codes in the family without refinement.
    Comment: We received a few comments opposed to our proposal. Of 
these commenters, most asserted that CMS should finalize the RUC-
recommended work RVU values for CPT codes 66680 and 66682. Commenters 
asserted that the direct work RVU crosswalk that CMS proposed for CPT 
code 66680 was inappropriate because assigning a work RVU of 7.97 based 
on a crosswalk to CPT code 67904 does not maintain relativity with 
other 90-day global intraocular procedures with which CPT code 66680 
should be compared. Commenters stated that the procedure described by 
CPT code 66680 has a much higher risk and requires greater intensity 
than extraocular procedures. They criticized the CMS methodology as 
relying too heavily on time and not enough on the overall intensity, 
which is higher on account of greater expectations for restoring normal 
anatomical relationships. These commenters also stated that the 
proposed work RVU of 8.74 for CPT code 66682 does not adequately 
account for the increase in intensity and complexity which has occurred 
since its prior valuation in 1992. In their public comment, the RUC 
objected to the proposed methodology for assigning a work RVU to CPT 
code 66682, stating that any mathematical or computational methodology 
other than magnitude estimation used to value physician work is 
inappropriate, and inconsistent with RBRVS principles.
    All commenters urged CMS to finalize the RUC recommended work RVU 
value of 12.80 for CPT code 66683. One commenter stated that they 
agreed that the relative difference in work between CPT codes 66682 and 
66683 is equivalent to the recommended interval of 1.93 RVUs between 
CPT codes 66682 and 66683. They felt this interval should be applied to 
the RUC-recommended work RVU for CPT code 66682. Another commenter 
disagreed, saying that the relative complexity of CPT code 66683 as 
compared to CPT code 66682 is significantly greater than the 1.93 work 
RVU difference as noted by the RUC and in the proposed work RVUs for 
CPT codes 66682 and 66683.
    Response: We thank the commenters for their feedback. However, we 
disagree with the commenters and are finalizing the work RVUs for CPT 
codes 66680, 66682 and 66683 as proposed. We continue to believe that 
the use of time ratios is one of several appropriate methods for 
identifying potential work RVUs for particular PFS services. We 
reiterate that, consistent with the statute, we are required to value 
the work RVU based on the relative resources involved in furnishing the 
service, which include time and intensity. In accordance with the 
statute, we believe that changes in time and intensity must be 
accounted for when developing work RVUs. We recognize that it would not 
be appropriate to develop work RVUs solely based on time given that 
intensity is also an element of work, but in applying the time ratios, 
we are using derived intensity measures based on current work RVUs for 
individual procedures. When our review of recommended values reveals 
that changes in time are not accounted for in a RUC-recommended work 
RVU, the obligation to account for that change when establishing 
proposed and final work RVUs remains. We reiterate that we use time 
ratios to identify potentially appropriate work RVUs, and then use 
other methods (including estimates of work from CMS medical personnel 
and crosswalks to key reference or similar codes) to validate these 
RVUs. For more details on our methodology for developing work RVUs, we 
direct readers to the discussion in the CY 2017 PFS final rule (81 FR 
80272 through 80277).
    We continue to disagree with the RUC and with commenters that the 
intensity for CPT code 66680 has more than doubled, given that the code 
descriptor remains unchanged and the surveyed intraservice work time is 
unchanged at 45 minutes. We also disagree with the RUC and with 
commenters that the intensity for CPT code 66682 has increased by more 
than 50 percent, given that CPT code 66682 has no change in its code 
descriptor and a modest increase in its surveyed work time. We noted in 
the proposed rule that we did not believe these substantial increases 
in intensity would be typical for these codes, and we did not receive 
new information from commenters that supported finalizing work RVUs 
that would warrant these intensity increases. We continue to believe 
that our proposed valuations, based on a crosswalk for CPT code 66680 
and the use of a time ratio for CPT code 66682, more accurately value 
these codes since they do not result in the sizable increases in 
intensity as recommended by the RUC. We note again for commenters that 
the work RVU and the intensity are increasing for both CPT codes 66680 
and 66682 at the values we proposed, as we recognize that these 
services now require additional work and intensity as compared with the 
time of their prior review.
    For CPT code 66683, we agreed with commenters and the RUC that this 
code has greater intensity than CPT code 66682. Commenters agreed with 
our proposal that the relative difference in work between CPT codes 
66682 and 66683 is equivalent to the recommended interval of 1.93 RVUs, 
only disagreeing on the work RVU of CPT code 66682 itself. We believe 
the use of an incremental difference between codes is a valid 
methodology for setting values, especially in valuing services within a 
family of revised codes where it is important to maintain appropriate 
intra-family relativity. Historically, we have frequently utilized an 
incremental methodology in which we value a code based upon its 
incremental difference between another code or another family of codes. 
We note that the RUC has also used the same incremental methodology on 
occasion when it was unable to produce valid survey data for a service. 
We continue to believe that our proposed work RVU of 10.67 for CPT code 
66683 is the most accurate valuation for this code.
    With regard to the commenters' concerns regarding clinically 
relevant relationships, we emphasize that we continue to believe that 
the nature of the PFS relative value system is such that all services 
are appropriately subject to comparisons to one another. Although codes 
that describe clinically similar services are sometimes stronger 
comparator codes, we do not agree that codes must share the same site 
of service, patient population, or utilization level to serve as an 
appropriate crosswalk. For more details on our methodology for 
developing work RVUs, we again direct readers to the discussion in the 
CY 2017 PFS final rule (81 FR 80272 through 80277).
    After consideration of the comments and as stated above, we are 
finalizing the work RVUs for CPT codes 66680, 66682 and 66683 as 
proposed. We are also finalizing the direct PE inputs as proposed for 
all three codes in the family without refinement.

[[Page 97787]]

(14) Magnetic Resonance Examination Safety Procedures (CPT Codes 76014, 
76015, 76016, 76017, 76018, and 76019)
    In September 2023, the CPT Editorial Panel created a new code 
family to describe magnetic resonance (MR) examination safety 
procedures and capture the physician work involving patients with 
implanted medical devices that require access to MR diagnostic 
procedures: CPT code 76014 (MR safety implant and/or foreign body 
assessment by trained clinical staff, including identification and 
verification of implant components from appropriate sources (e.g., 
surgical reports, imaging reports, medical device databases, device 
vendors, review of prior imaging), analyzing current MR conditional 
status of individual components and systems, and consulting published 
professional guidance with written report; initial 15 minutes), CPT 
code 76015 (MR safety implant and/or foreign body assessment by trained 
clinical staff, including identification and verification of implant 
components from appropriate sources (e.g., surgical reports, imaging 
reports, medical device databases, device vendors, review of prior 
imaging), analyzing current MR conditional status of individual 
components and systems, and consulting published professional guidance 
with written report; each additional 30 minutes (List separately in 
addition to code for primary procedure)), CPT code 76016 (MR safety 
determination by a physician or other qualified health care 
professional responsible for the safety of the MR procedure, including 
review of implant MR conditions for indicated MR exam, analysis of risk 
versus clinical benefit of performing MR exam, and determination of MR 
equipment, accessory equipment, and expertise required to perform 
examination with written report), CPT code 76017 (MR safety medical 
physics examination customization, planning and performance monitoring 
by medical physicist or MR safety expert, with review and analysis by 
physician or qualified health care professional to prioritize and 
select views and imaging sequences, to tailor MR acquisition specific 
to restrictive requirements or artifacts associated with MR conditional 
implants or to mitigate risk of non-conditional implants or foreign 
bodies with written report), CPT code 76018 (MR safety implant 
electronics preparation under supervision of physician or other 
qualified health care professional, including MR-specific programming 
of pulse generator and/or transmitter to verify device integrity, 
protection of device internal circuitry from MR electromagnetic fields, 
and protection of patient from risks of unintended stimulation or 
heating while in the MR room with written report), and CPT code 76019 
(MR safety implant positioning and/or immobilization under supervision 
of physician or qualified health care professional, including 
application of physical protections to secure implanted medical device 
from MR-induced translational or vibrational forces, magnetically 
induced functional changes, and/or prevention of radiofrequency burns 
from inadvertent tissue contact while in the MR room with written 
report). For CY 2025, new CPT codes 76014 and 76015 are PE only 
services that represent the preparatory research and review completed 
by clinical staff (that is, MRI technologist and/or a medical 
physicist) that will be utilized by the physician or qualified health 
professional for the other four services (CPT codes 76016, 76017, 
76018, and 76019) in this code family.
    We proposed the RUC-recommended work RVU of 0.60 for CPT code 
76016, the work RVU of 0.76 for CPT code 76017, the work RVU of 0.75 
for CPT code 76018, and the work RVU of 0.60 for CPT code 76019.
    We proposed the following refinements to the direct PE inputs. For 
CPT codes 76014, 76015, 76016, 76018, and 76019, we proposed to refine 
the clinical labor for the CA034 activity (Document procedure (nonPACS) 
(e.g. mandated reporting, registry logs, EEG file, etc.)) performed by 
the MRI Technologist from 2 minutes to 1 minute. We note that the 
clinical labor for the CA032 activity (Scan exam documents into PACS. 
Complete exam in RIS system to populate images into work queue.) 
included in the direct PE inputs for reference CPT code 70543 (Magnetic 
resonance (e.g., proton) imaging, orbit, face, and/or neck; without 
contrast material(s), followed by contrast material(s) and further 
sequences) was a similar clinical labor activity and had 1 minute of 
time. We also noted that the Medical Physicist had 1 minute of 
recommended clinical labor time for the CA034 activity for CPT code 
76017. Therefore, we believed that the MRI Technologist should have the 
same time (1 minute) for the CA034 activity for the remaining codes in 
the family to maintain consistency across these services.
    For CPT code 76015, we proposed to refine the clinical labor for 
the CA021 activity (Perform procedure/service--NOT directly related to 
physician work time) from 27 minutes to 14 minutes. We believed this 
clinical labor time should be double the 7 minutes assigned to the 
CA021 activity for CPT code 76014. The description for CPT code 76014 
is for the ``initial 15 minutes'' and CPT code 76015 is for ``each 
additional 30 minutes,'' that is, double the time of CPT code 76014. We 
believed that the clinical labor associated with the CA021 activity 
should match this pattern in which CPT code 76015 contains double the 
time of CPT code 76014. This proposed refinement to the CA021 clinical 
labor also resulted in a proposed decrease to the equipment time for 
the Technologist PACS workstation (ED050) from 45 minutes to 32 
minutes.
    For CPT code 76017, the RUC recommended 13 minutes of equipment 
time for the Professional PACS Workstation (ED053) listed as a Facility 
PE input. We believed this was an unintended technical error and we 
proposed to remove this time from the direct PE inputs for CPT code 
76017.
    For CPT codes 76018 and 76019, we proposed to refine the clinical 
labor time for the CA024 activity (Clean room/equipment by clinical 
staff) from 2 minutes to 1 minute. According to the PE recommendations, 
only the new equipment code EQ412 (Vitals monitoring system (MR 
Conditional)) was being cleaned and not the entire room. We believed 
that 1 minute of clinical labor time would be typical for cleaning the 
EQ412 equipment. Our proposed clinical labor refinement also resulted 
in a proposed decrease to the equipment time for EL008 (room, MR) and 
EQ412 by 1 minute for these two codes.
    For CPT code 76019, we proposed to remove supply item SL082 
(impression material, dental putty (per bite block)). We believed this 
was an error since the PE recommendations did not list SL082 as one of 
the included supplies for CPT code 76019 and it did not appear as a 
supply input for any of the other codes in the family.
    The following is a summary of the comments we received and our 
responses.
    Comment: The commenters overwhelmingly supported our proposal of 
the RUC recommended work RVUs for CPT codes 76016, 76017, 76018, and 
76019.
    Response: We thank the commenters for their support.
    Comment: The commenters agreed with the proposed PE refinement to 
remove equipment time for the Professional PACS Workstation (ED053) for 
CPT code 76017 in the facility setting and agreed this was an 
unintended technical error.

[[Page 97788]]

    Response: We thank the commenters for their support.
    Comment: For CPT codes 76018 and 76019, the commenters agreed with 
the proposed PE refinement to remove 1 minute of clinical labor time 
from the Clean room/equipment by clinical staff (CA024) task, as well 
as the resulting decrease in equipment time for equipment codes EL008 
and EQ412.
    Response: We thank the commenters for their support.
    Comment: We received several comments that disagreed with our 
proposal to remove 1 minute of clinical labor time from the Document 
procedure (nonPACS) (CA034) task for CPT codes 76014, 76015, 76016, 
76018, and 76019. The commenters stated that the RUC recommendation of 
2 minutes was necessary by describing the various requirements the MRI 
technologist must perform and detailing the evaluation and written 
report that is part of the documentation process (for example, evaluate 
implant components, special positioning requirements, include clinical 
staff records, and implant status post procedure).
    Response: We appreciate the submission of this additional 
information from the commenters regarding the tasks performed by the 
MRI technologist. We agree with the commenters that 2 minutes is 
necessary given the technologist must write a detailed report to 
include evaluated implant components, MR conditions for the requested 
exam, implant programming requirements, special positioning 
requirements, acceptable radiofrequency coils, and necessary personnel 
for the exam. Also, CPT code 76017 only requires 1 minute for CA034 
because the medical physicist typically documents the procedure in 
tandem with the performance of the MR procedure and needs less time to 
complete documentation upon completion of the procedure. Therefore, we 
are finalizing the RUC recommendation of 2 minutes for clinical labor 
activity CA034 for CPT codes 76014, 76015, 76016, 76018, and 76019.
    Comment: Several commenters disagreed with our proposal to reduce 
the clinical labor time for the Perform procedure/service--NOT directly 
related to physician work time (CA021) task from 27 to 14 minutes for 
CPT code 76015. The commenters stated that there is significantly more 
work for the MRI technologist with CPT 76015 compared to parent CPT 
code 76014 because the MRI technologist typically has to call the 
patient's primary care physician's office to obtain additional 
information and detailed history related to the implant, assess an 
implant where there may be no implant information readily available in 
the medical chart (or the patient does not have any implant 
information), and if there have been subsequent revision surgeries to 
the original implant.
    Response: After reviewing the comments for clinical labor activity 
CA021 for CPT code 76015, we believe a 7-minute increase from the 
proposed 14 minutes to 21 minutes would be appropriate. We believe that 
there may be some duplicative work from parent CPT code 76014 and that 
a more appropriate time to accomplish the additional tasks would be 3 
times the 7-minute value for CA021 assigned to parent CPT code 76014, 
instead of the full 27 minutes recommended by the RUC. Our finalized 
clinical labor time of 21 minutes for the CA021 activity for CPT code 
76015 also results in an increase in equipment time from the proposed 
32 minutes to 39 minutes for equipment code ED050.
    Comment: The commenters disagreed with our proposal to remove 
supply item SL082 from the direct PE inputs for CPT code 76019 and 
stated that a typo occurred in the PE Summary of Recommendation (SOR) 
which did not correctly list this supply code as a direct PE input.
    Response: We agree with the commenters that supply item SL082 
should have been included in the PE SOR. Therefore, we are finalizing 
the inclusion of the RUC recommended PE input of supply item SL082 for 
CPT code 76019.
    After consideration of the public comments for the Magnetic 
Resonance Examination Safety Procedures code family (CPT codes 76014, 
76015, 76016, 76017, 76018, and 76019), we are finalizing the work RVU 
values for CPT codes 76016, 76017, 76018, and 76019 as proposed. For CY 
2025, CPT codes 76014 and 76015 are PE only services and have no work 
RVUs. We are finalizing the RUC recommended direct PE input of 2 
minutes for clinical labor activity CA034 for CPT codes 76014, 76015, 
76016, 76018, and 76019. For CPT code 76015, we are finalizing 21 
minutes for clinical labor activity CA021 and 39 minutes for equipment 
code ED050. For CPT code 76019, we are finalizing the inclusion of the 
RUC recommended PE input for supply item SL082. All remaining direct PE 
inputs for CPT codes 76014, 76015, 76016, 76017, 76018, and 76019 are 
finalized as proposed.
(15) Screening Virtual Colonoscopy (CPT Code 74263)
    As outlined in section III.K. of this final rule, we proposed to 
exercise our authority at section 1861(pp)(1)(D) of the Act to update 
and expand coverage for colorectal cancer screening and adding coverage 
for the computed tomography colonography procedure. Accordingly, we 
assigned an active payment status for CPT code 74263 (Computed 
tomographic (ct) colonography, screening, including image 
postprocessing). We noted that, as proposed previously, the OPPS cap 
would apply to this code, and payment for the TC of this service would 
be capped at the OPPS payment rate.
    Comment: Many commenters supported our proposal to assign active 
payment status to align with the expanded coverage proposal for CPT 
code 74263 although many also expressed concern with the application of 
the OPPS cap, and stated that it would be a significant barrier to 
imaging centers providing this service because of the payment 
difference between the PFS payment amount and the OPPS payment amount, 
which has an estimated payment of $106.30.
    Response: We appreciate the commenters' support of the proposal to 
assign active payment status to align with the expanded coverage 
proposal for CPT code 74263. We direct readers to section III.K. of 
this final rule for more information regarding the proposal, including 
a summary of comments received, and section II.E.3.b.
7. Procedures Subject to the Multiple Procedure Payment Reduction 
(MPPR) and the OPPS Cap of This Final Rule for More Information About 
the OPPS Cap
    After consideration of the public comments, we are finalizing the 
proposal to assign active payment status for CPT code 74263.
(16) Ultrasound Elastography (CPT Codes 76981, 76982, and 76983)
    This code family was flagged for re-review at the April 2023 RUC 
meeting by the new technology/new services screen. Due to increased 
utilization of CPT code 76981 (Ultrasound, elastography; parenchyma 
(eg, organ)), the entire code family was resurveyed for the September 
2023 RUC meeting. We proposed the RUC-recommended work RVUs of 0.59, 
0.59, and 0.47 for CPT codes 76981, 76982 (Ultrasound, elastography; 
first target lesion), and 76983 (Ultrasound, elastography; each 
additional target lesion (List separately in addition to code for 
primary procedure)), respectively. We proposed

[[Page 97789]]

the RUC-recommended direct PE inputs for CPT codes 76981, 76982, and 
76983 without refinement.
    Comment: Commenters were supportive of our proposed RUC-recommended 
work RVUs and direct PE inputs for CPT codes 76981, 76982, and 76983.
    Response: We appreciate the commenters' support and are finalizing 
the RUC-recommended work RVUs and direct PE inputs for CPT codes 76981, 
76982, and 76983 as proposed.
(17) CT Guidance Needle Placement (CPT Code 77012)
    CPT code 77012 (Computed tomography guidance for needle placement 
(eg, biopsy, aspiration, injection, localization device), radiological 
supervision and interpretation) was reviewed at the September 2023 RUC 
meeting to account for deferred updates to the vignette to reflect the 
typical patient until updated utilization data was available to reflect 
coding changes that occurred in 2019. We proposed the RUC-recommended 
work RVU of 1.50 for CPT code 77012.
    We proposed to refine the equipment time for the CT room (EL007) to 
maintain the current time of 9 minutes. CPT code 77012 is a 
radiological supervision and interpretation (RS&I) procedure and there 
has been a longstanding convention in the direct PE inputs, shared by 
38 other codes, to assign an equipment time of 9 minutes for the 
equipment room in these procedures. We made the same refinement in the 
CY 2019 PFS final rule (83 FR 59553 through 59554) and continue to 
believe that it would not serve the interests of relativity to increase 
the equipment time for the CT room in CPT code 77012 without also 
addressing the equipment room time for the other radiological 
supervision and interpretation procedures. In response to the CY 2019 
proposal, several commenters stated that they agreed with CMS that 
other RS&I codes use the 9 minutes for room time as a precedent, but 
that it is specific to angiographic rooms. We agreed with the 
commenters that at least some portion of the procedure is performed in 
the CT room, but we continue to believe that it would not serve the 
interests of relativity to increase the equipment time for the CT room 
in CPT code 77012 without also addressing the equipment room time for 
the other radiological supervision and interpretation procedures in a 
more comprehensive fashion. We also disagreed with the commenters that 
this policy is specific to angiography rooms, as CPT codes 75989 
(Radiological guidance (ie, fluoroscopy, ultrasound, or computed 
tomography), for percutaneous drainage (eg, abscess, specimen 
collection), with placement of catheter, radiological supervision and 
interpretation) and 77012 both employ CT rooms and currently utilize 
the standardized 9 minutes of equipment time, and CPT code 76080 
(Radiologic examination, abscess, fistula or sinus tract study, 
radiological supervision and interpretation) employs a radiographic-
fluoroscopic room with the 9 minute standard equipment time. We 
continue to believe that 9 minutes for EL007 is appropriate for this 
RS&I code; therefore, we are proposing to maintain the current 
equipment room time of 9 minutes for EL007 until this group of 
procedures can be subject to a more comprehensive review. We proposed 
all other RUC-recommended direct PE inputs for CPT code 77012.
    Comment: Some commenters disagreed with our proposal to refine the 
equipment room time for the CT room (EL007) to maintain the current 9 
minutes. Commenters reiterated that they believe the 9-minute 
convention only applies to RS&I codes in angiographic rooms, whereas 
this service is performed in a CT room. Commenters stated that 35 of 
the 38 RS&I codes are performed in the angiographic room, so the 9 
minutes allocated is appropriate, and one code, CPT code 76080, is 
performed in the fluoroscopy room but is typically billed with CPT code 
49424 (Contrast injection for assessment of abscess or cyst via 
previously placed drainage catheter or tube (separate procedure)) that 
also includes fluoroscopy room time. Commenters stated that the 
remaining two codes, CPT codes 77012 and 75989, are performed in the CT 
room and should have more than 9 minutes of room time.
    Response: We continue to believe that it would not serve the 
interests of relativity to increase the equipment time for the CT room 
in CPT code 77012 without also addressing the equipment room time for 
the other radiological supervision and interpretation procedures in a 
more comprehensive fashion, especially considering commenters raised 
concerns about the equipment time for both CPT codes 77012 and 75989. 
Therefore, at this time, we continue to believe that 9 minutes for 
EL007 is appropriate for this RS&I code until this group of procedures 
can be subject to a more comprehensive review and are finalizing to 
maintain the current equipment room time of 9 minutes for EL007 as 
proposed. We are also finalizing the RUC-recommended work RVU of 1.50 
as proposed.
(18) Telemedicine Evaluation and Management (E/M) Services (CPT Codes 
98000, 98001, 98002, 98003, 98004, 98005, 98006, 98007, 98008, 98009, 
98010, 98011, 98012, 98013, 98014, 98015, and 98016)
    In February 2023, the CPT Editorial Panel added a new Evaluation 
and Management (E/M) subsection to the draft CPT codebook for 
Telemedicine Services. The Panel added 17 codes for reporting 
telemedicine E/M services: CPT code 98000 (Synchronous audio-video 
visit for the evaluation and management of a new 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, 15 minutes must be met or 
exceeded.); CPT code 98001 (Synchronous audio-video visit for the 
evaluation and management of a new patient, which requires a medically 
appropriate history and/or examination and low medical decision making. 
When using total time on the date of the encounter for code selection, 
30 minutes must be met or exceeded.); CPT code 98002 (Synchronous 
audio-video visit for the evaluation and management of a new patient, 
which requires a medically appropriate history and/or examination and 
moderate medical decision making. When using total time on the date of 
the encounter for code selection, 45 minutes must be met or exceeded.); 
CPT code 98003 (Synchronous audio-video visit for the evaluation and 
management of a new patient, which requires a medically appropriate 
history and/or examination and high medical decision making. When using 
total time on the date of the encounter for code selection, 60 minutes 
must be met or exceeded. (For services 75 minutes or longer, use 
prolonged services code 99417)); CPT code 98004 (Synchronous audio-
video visit for the evaluation and management of an established 
patient, which requires a medically appropriate history and/or 
examination and straightforward medical decision making. When using 
total time on the date of the encounter for code selection, 10 minutes 
must be met or exceeded.); CPT code 98005 (Synchronous audio-video 
visit for the evaluation and management of an established patient, 
which requires a medically appropriate history and/or examination and 
low medical decision making. When using total time on the date of the 
encounter for code selection, 20 minutes must be met or exceeded.); CPT 
code 98006 (Synchronous audio-

[[Page 97790]]

video visit for the evaluation and management of an established 
patient, which requires a medically appropriate history and/or 
examination and moderate medical decision making. When using total time 
on the date of the encounter for code selection, 30 minutes must be met 
or exceeded.); CPT code 98007 (Synchronous audio-video visit for the 
evaluation and management of an established patient, which requires a 
medically appropriate history and/or examination and high medical 
decision making. When using total time on the date of the encounter for 
code selection, 40 minutes must be met or exceeded.); CPT code 98008 
(Synchronous audio-only visit for the evaluation and management of a 
new patient, which requires a medically appropriate history and/or 
examination, straightforward medical decision making, and more than 10 
minutes of medical discussion. When using total time on the date of the 
encounter for code selection, 15 minutes must be met or exceeded.)); 
CPT code 98009 (Synchronous audio-only visit for the evaluation and 
management of a new patient, which requires a medically appropriate 
history and/or examination, low medical decision making, and more than 
10 minutes of medical discussion. When using total time on the date of 
the encounter for code selection, 30 minutes must be met or 
exceeded.)); CPT code 98010 (Synchronous audio-only visit for the 
evaluation and management of a new patient, which requires a medically 
appropriate history and/or examination, moderate medical decision 
making, and more than 10 minutes of medical discussion. When using 
total time on the date of the encounter for code selection, 45 minutes 
must be met or exceeded.); CPT code 98011 (Synchronous audio-only visit 
for the evaluation and management of a new patient, which requires a 
medically appropriate history and/or examination, high medical decision 
making, and more than 10 minutes of medical discussion. When using 
total time on the date of the encounter for code selection, 60 minutes 
must be met or exceeded. (For services 75 minutes or longer, use 
prolonged services code 99417)); CPT code 98012 (Synchronous audio-only 
visit for the evaluation and management of an established patient, 
which requires a medically appropriate history and/or examination, 
straightforward medical decision making, and more than 10 minutes of 
medical discussion. When using total time on the date of the encounter 
for code selection, 10 minutes must be exceeded.)); CPT code 98013 
(Synchronous audio-only visit for the evaluation and management of an 
established patient, which requires a medically appropriate history 
and/or examination, low medical decision making, and more than 10 
minutes of medical discussion. When using total time on the date of the 
encounter for code selection, 20 minutes must be met or exceeded.)); 
CPT code 98014 (Synchronous audio-only visit for the evaluation and 
management of an established patient, which requires a medically 
appropriate history and/or examination, moderate medical decision 
making, and more than 10 minutes of medical discussion. When using 
total time on the date of the encounter for code selection, 30 minutes 
must be met or exceeded.)); CPT code 98015 (Synchronous audio-only 
visit for the evaluation and management of an established patient, 
which requires a medically appropriate history and/or examination, high 
medical decision making, and more than 10 minutes of medical 
discussion. When using total time on the date of the encounter for code 
selection, 40 minutes must be met or exceeded. (For services 55 minutes 
or longer, use prolonged services code 99417)); CPT code 98016 (Brief 
communication technology-based service (e.g., virtual check-in) by a 
physician or other qualified health care professional who can report 
evaluation and management services, provided to an established patient, 
not originating from a related 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, 5-10 minutes of medical discussion)).
    In April 2023, the AMA-RUC noted that the survey instrument they 
used to develop valuation recommendations for the telemedicine E/M 
codes did not include the time (when time is used for code selection) 
in the new telemedicine E/M services descriptors, or the E/M services 
displayed on the reference service list. The AMA-RUC made interim 
valuation recommendations and conducted a new survey for September 
2023, which included the minimum required times in the code 
descriptors, and those minimum times were the same as appear in 
existing O/O E/M services code descriptors (CPT codes 99202-99205, 
99212-99215); the new survey in September 2023 included code 
descriptors and times approved by the CPT Editorial Panel in May 2023. 
Also, additional specialties who perform E/M services participated in 
the second round of this survey. For CY 2025, the RUC recommended the 
following work RVUs: a work RVU of 0.93 for CPT code 98000, a work RVU 
of 1.6 for CPT code 98001, a work RVU of 2.6 for CPT code 98002, a work 
RVU of 3.50 for CPT code 98003, a work RVU of 0.70 for CPT code 98004, 
a work RVU of 1.30 for CPT code 98005, a work RVU of 1.92 for CPT code 
98006, a work RVU of 2.60 for CPT code 98007, a work RVU of 0.90 for 
CPT code 98008, a work RVU of 1.60 for CPT code 98009, a work RVU of 
2.42 for CPT code 98010, a work RVU of 3.20 for CPT code 98011, a work 
RVU of 0.65 for CPT code 98012, a work RVU of 1.20 for CPT code 98013.
    In April 2023, the AMA-RUC Practice Expense Subcommittee approved 
the direct practice expense inputs as recommended by the specialty 
societies without modification, and CMS received these inputs as 
recommendations from the RUC. The specialty societies detailed their 
methodology for making some changes to specific clinical activity codes 
to adapt those clinical activity codes for telemedicine. The AMA edited 
both CA009 and CA013. The AMA revision to CA009 deletes, ``greet 
patient, provide gowning''; the AMA revision to CA013 deletes, 
``Prepare room, equipment and supplies''. CA009 now reads, ``Ensure 
appropriate medical records are available'' and CA013 now reads, 
``Prepare patient for the visit (i.e. check audio and/or visual''. The 
RUC, using the Practice Expense subcommittee recommendations, also 
recommended to CMS that a camera and microphone ``should be considered 
typical in the computer contained in the indirect overhead expense.'' 
This determination is consistent with CMS' longstanding position that 
items that are not specifically attributable to the individual services 
should not be included for valuation of specific codes.
    The AMA-RUC recommended the direct practice expense inputs as 
submitted by the AMA-member specialty societies, and as affirmed by the 
AMA-RUC Practice Expense Subcommittee. All supply and equipment costs 
were zeroed out from the reference services, and as a result, the new 
telemedicine E/M codes did not include any supply or equipment costs in 
the recommended direct practice expense inputs that the AMA submitted 
to CMS. The direct PE inputs removed from the reference services to 
create the new telemedicine E/M codes are: CA010 (obtain vital signs), 
CA024 (clean room/equipment by clinical staff), SA047 (pack, EM visit), 
SM022 sanitizing cloth-wipe (surface, instruments, equipment), EQ189 
(otoscope-ophthalmoscope [wall unit]), EF048 (Portable stand-on scale), 
and EF023 (table, exam).

[[Page 97791]]

    Sixteen of the telemedicine E/M codes describe use of either audio-
video or audio-only telecommunications technology to furnish the 
individual service. The CPT Editorial Panel finalized eight codes for 
synchronous audio-video services (CPT codes 98000 to 98007), and eight 
codes for synchronous audio-only services (CPT codes 98008 to 98014), 
and one code for an asynchronous service (CPT code 98016). The audio-
video and audio-only code family subsets have parallel codes for new 
patients and established patients. Like other E/M codes, these codes 
may be reported based on the level of medical decision making (MDM) or 
total time on the date of the encounter. For each set of four codes, 
there is a code that may be reported for a straightforward, low, 
moderate and high level of MDM.
    The CPT Editorial Panel also 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). The code 
descriptor for CPT code 98016 mirrors existing HCPCS code G2012 (Brief 
communication technology-based service, e.g. virtual check-in, by a 
physician or other qualified health care professional who can report 
evaluation and management services, provided to an established patient, 
not originating from a related e/m service provided within the previous 
7 days nor leading to an e/m service or procedure within the next 24 
hours or soonest available appointment; 5-10 minutes of medical 
discussion) and, per the CPT Editorial Panel materials, is intended to 
replace that code. As described in CPT Editorial Panel final edits, CPT 
code 98016 does not require the use of audio or video technology and is 
expected to be patient-initiated. Furnishing the complete service 
described by CPT code 98016 must involve 5-10 minutes of medical 
discussion (and the code descriptor does not include MDM as means of 
code selection). CPT code 98016 should not be reported if it originates 
from a related E/M service furnished within the previous 7 days, or, if 
the clinical interaction leads to another E/M or procedure within the 
next 24 hours or the soonest available appointment. The final CPT 
Editorial Panel draft language explains that if the virtual check-in 
described by CPT 98016 leads to an E/M visit in the next 24 hours, and 
if that E/M is reported based on time, then the time from the virtual 
check-in may be added to the time of the resulting E/M visit to 
determine the total time on the date of encounter for the resulting E/
M. The RUC recommended a work RVU of 0.30 for 98016.
    The CPT Editorial Panel also deleted three codes (99441-99443) for 
reporting telephone E/M services. We note that CPT codes 99441, 99442, 
and 99443, each are assigned provisional status on the Medicare 
telehealth services list and would return to bundled status when the 
telehealth flexibilities expire on December 31, 2024. For further 
background, we referred readers to our discussions in previous 
rulemaking, where CMS explains the rationale for this policy (88 FR 
78871-78878).
    CMS has a longstanding interpretation of section 1834(m) of the Act 
as specifying the circumstances under which Medicare makes payment for 
services that would otherwise be furnished in person but are instead 
furnished via telecommunications technology. Specifically, section 
1834(m)(2)(A) of the Act expressly requires payment to the distant site 
physician or practitioner of an amount equal to the amount that such 
physician or practitioner would have been paid had such service been 
furnished without the use of a telecommunications system. This means 
that we must pay an equal amount for a service furnished using a 
``telecommunications system'' as for a service furnished in person 
(without the use of a telecommunications system). In the CY 2019 PFS 
final rule, we stated that ``[w]e have come to believe that section 
1834(m) of the Act does not apply to all kinds of physicians' services 
whereby a medical professional interacts with a patient via remote 
communication technology. Instead, we believe that section 1834(m) of 
the Act applies to a discrete set of physicians' services that 
ordinarily involve, and are defined, coded, and paid for as if they 
were furnished during an in-person encounter between a patient and a 
health care professional'' (83 FR 59483). Under this interpretation, 
services that are coded and valued based on the understanding that they 
are not ordinarily furnished in person, such as remote monitoring 
services and communication technology-based services, are not 
considered Medicare telehealth services under section 1834(m) of the 
Act, and thus, not subject to the geographic, site of service, and 
practitioner restrictions included therein.
    Information provided to CMS from the RUC indicates that CPT codes 
98000-98015 describe services that would otherwise be furnished in 
person, and as such the services described by these codes are subject 
to section 1834(m) of the Act. In the summary of the coding changes, 
the AMA states that these services are ``patterned after the in-person 
office visit codes.'' The draft CPT prefatory language states that 
``[t]elemedicine services are used in lieu of an in-person service when 
medically appropriate to address the care of the patient and when the 
patient and/or family/caregiver agree to this format of care.'' The 
draft CPT prefatory language likewise states that when a telemedicine 
E/M is billed on the same day as another E/M service ``the elements and 
time of these services are summed and reported in aggregate, ensuring 
that any overlapping time is only counted once,'' which indicates that 
the work of the telemedicine E/M service is identical to the work 
associated with an in-person, non-telehealth E/M. The code descriptors 
and requirements for billing the codes generally mirror the existing 
office/outpatient E/M codes with the exception of the technological 
modality used to furnish the service. The audio-video telemedicine E/M 
codes have nearly identical recommended work RVUs to parallel office/
outpatient E/M codes. In general, the audio-only telemedicine E/M codes 
have lower recommended work RVUs than parallel office/outpatient E/M 
codes. The RUC stated that this is because, when surveyed, specialty 
societies indicated that ``the audio-video and in-person office visits 
require more physician work than the audio-only office visits.''
    Table 14 describes the similarities between 16 of 17 telemedicine 
E/M codes and the parallel office/outpatient E/M codes. The table shows 
that except for the element of ``modality'' (that is, audio-video or 
audio-only), the service elements of the new telemedicine E/M code 
family are no different than the O/O E/M codes (for each enumerated row 
1 through 16 the columns display the analogous elements). When 
comparing code descriptors, as described at the start of this section,, 
the only difference (as represented in Table 14 when comparing the 
elements of E/M services represented by columns C, D, E, and F) is that 
these new telemedicine E/M code descriptors lead with the phrase 
``synchronous audio-video'' or ``synchronous audio only'' before 
describing the visit in full exactly as the existing office/outpatient 
E/M visit codes describe a visit in the long descriptor of the 
analogous service.

[[Page 97792]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.018

    There are services already describing audio-video and audio-only 
telemedicine E/M codes on the Medicare telehealth services list--the 
office/outpatient E/M code set--that can be furnished via synchronous 
two-way, audio/video communication technology generally and via audio-
only communication technology under certain circumstances to furnish 
Medicare telehealth services in the patient's home for the purpose of 
diagnosis and treatment of a mental health disorder or SUD. 
Additionally, as stated above, section 1834(m)(2)(A) of the Act 
requires us to pay an equal amount for a service furnished using a 
``telecommunications system'' as for a service furnished in person 
(without the use of a telecommunications system). Were we to accept the 
AMA's recommendations and add the telemedicine E/M codes to the 
Medicare telehealth services list, we would need to establish RVUs for 
the telemedicine E/M codes to equal the corresponding non-telehealth 
services to satisfy the requirements for payment under section 
1834(m)(2)(A) of the Act.
    We do not believe that there is a programmatic need to recognize 
the audio/video and audio-only telemedicine E/M codes for payment under 
Medicare. We proposed to assign CPT codes 98000-98015 a Procedure 
Status indicator of ``I'', meaning that there is a more specific code 
that should be used for purposes of Medicare, which in this case would 
be the existing office/outpatient E/M codes currently on the Medicare 
telehealth services list when billed with the appropriate POS code to 
identify the location of the beneficiary and, when applicable, the 
appropriate modifier to identify the service as being furnished via 
audio-only communication technology.
    Section 4113 of the Consolidated Appropriations Act (CAA), 2023 
extended the availability of Medicare telehealth services to 
beneficiaries regardless of geographic location or site of service by 
temporarily removing such statutory restrictions under section 1834(m) 
of the Act until the end of 2024. Under the current statute, the 
geographic location and site of service restrictions on Medicare 
telehealth services will once again take effect for services furnished 
beginning January 1, 2025. Although there are some important 
exceptions, including for behavioral health services and ESRD-related 
clinical assessments, most Medicare telehealth services will once 
again, in general, be available only to

[[Page 97793]]

beneficiaries in rural areas and only when the patient is located in 
certain types of medical settings. As previously discussed, the 
introduction of new CPT coding to describe telemedicine E/M services 
does not change our authority to pay for visits furnished through 
interactive communications technology in accordance with section 
1834(m) of the Act. We recognize that there are significant concerns 
about maintaining access to care through the use of Medicare telehealth 
services with the expiration of the statutory flexibilities that were 
successively extended by legislation following the PHE for COVID-19. We 
understand that millions of Medicare beneficiaries have utilized 
interactive communications technology for visits with practitioners for 
a broad range of health care needs for almost 5 years. We sought 
comment from interested parties on our understanding of the 
applicability of section 1834(m) of the Act to the new telemedicine E/M 
codes, and how we might potentially mitigate negative impact from the 
expiring telehealth flexibilities, preserve some access, and assess the 
magnitude of potential reductions in access and utilization. On the 
latter point, we noted that we have developed PFS payment rates for CY 
2025, including the statutory budget neutrality adjustment, based on 
the presumption that changes in telehealth utilization will not affect 
overall service utilization. We also noted that historically we have 
not considered changes in the Medicare telehealth policies to result in 
significant impact on utilization such that a budget neutrality 
adjustment will be warranted. However, we are unsure of the continuing 
validity of that premise under the current circumstances where patients 
have grown accustomed over several years to broad access to services 
via telehealth. We sought comment on what impact, if any, the 
expiration of the current flexibilities will be expected to have on 
overall service utilization for CY 2025. We referred readers to section 
e. of this final rule for our discussion of budget neutrality 
adjustments.
    Given the similarity between CPT code 98016 and HCPCS code G2012, 
we proposed to accept the RUC-recommended values for CPT code 98016, 
and we proposed to delete HCPCS code G2012. For CPT code 98016, we 
proposed to accept the RUC- recommended work RVU of 0.30, and proposed 
the RUC-recommended direct PE inputs. We noted that our proposal does 
maintain the same direct PE inputs, which the RUC recommendations leave 
unchanged from the current G2012 in total amount, and allocate the same 
3 minutes of time to the same level of staff (Clinical Staff code 
L037D, RN/LPN/MTA). We believe that the coding and payment 
recommendations for CPT code 98016, submitted to CMS by the AMA RUC, 
accurately reflect the resources associated with this service and 
believe that maintaining separate coding for purposes of Medicare 
payment could create confusion. We noted that, similar to our current 
policy for payment of HCPCS code G2012, CPT code 98016 will be 
considered a communication technology-based service that is not subject 
to the requirements in section 1834(m) of the Act applicable to 
Medicare telehealth services.
    Comment: Many commenters, including specialty societies 
representing primary care and behavioral health practitioners, 
supported our proposal and stated that they agreed with CMS' 
interpretation of section 1834(m) of the Act. Given the limitations of 
the statute, these commenters stated that the office/outpatient E/M 
codes currently on the Medicare telehealth services list are sufficient 
to describe visits furnished to beneficiaries through 
telecommunications technology and that adopting the new telemedicine E/
M codes would create confusion with the existing office/outpatient E/M 
codes already on the Medicare telehealth services list.
    Other commenters, including the AMA, disagreed with our 
interpretation of Medicare telehealth services under section 1834(m) of 
the Act and stated that, as these codes describe a service that is 
definitionally not furnished in person, they would not be subject to 
the statutory restrictions. The AMA provided a detailed rebuttal of our 
proposal stating that the valuation of the telemedicine E/M codes 
reflects the use of telecommunications technology and as a result they 
are not ``coded and paid'' as though the service occurred in person. 
Furthermore, these commenters stressed that CMS should use every tool 
at its disposal to maintain access to Medicare telehealth services in 
the face of the expiration of the statutory flexibilities, and that by 
recognizing and making payment for the telemedicine E/M codes, CMS 
would preserve access to care for many beneficiaries.
    Other commenters encouraged CMS, even if we do not pay separately 
for the telemedicine E/M codes, to publish values in our payment files 
in case private payors wish to recognize the codes. Lastly, a few 
commenters also suggested that it would be helpful to have educational 
materials to better inform interested parties on how to bill telehealth 
services appropriately.
    Response: We thank commenters for their support for our proposal.
    We do not find the comments put forth by the AMA and other 
commenters who opposed our proposal to be persuasive. They do not 
adequately address how or why the services described by the sixteen new 
telemedicine E/M codes are distinct from E/M services ordinarily 
furnished in person such that they are outside the scope of section 
1834(m) of the Act. Except for the service delivery modality, the new 
telemedicine E/M codes appear to describe the same services that are 
provided in person and billed under the existing office/outpatient E/M 
codes (99202-99215) and expressly referenced in section 
1834(m)(4)(F)(i) of the Act as telehealth services. Although commenters 
suggest that the services described by the two code sets are different 
because there are different resources (PE and work) involved in 
furnishing them, those differences merely reflect delivery of the 
services through different modalities (in person or as telehealth 
services). Moreover, under section 1834(m)(2)(A) of the Act, CMS is 
required to make payment for Medicare telehealth services, regardless 
of the resources involved in furnishing the telehealth service, at ``an 
amount equal to the amount that such physician or practitioner would 
have been paid under this title had such service been furnished without 
the use of a telecommunications system.'' As such, we do not believe 
that the differences in the resources involved in furnishing the same 
service in-person or via telehealth are a relevant consideration for 
purposes of payment for Medicare telehealth services. We are concerned 
that were we to accept the position that the new telemedicine E/M codes 
are not subject to section 1834(m) of the Act because the codes 
describe services that are ``inherently'' not a substitute for an in-
person service, we would circumvent the express requirements of section 
1834(m) of the Act simply by creating new parallel codes that describe 
the same services when furnished remotely using telecommunications 
technology.
    We note in response to the comments requesting that CMS display 
RVUs for these services, the RVU values for these services are 
displayed in Addendum B of the PFS, which is available for download at 
https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices. We will also consider issuing additional guidance 
and educational materials regarding appropriate billing for

[[Page 97794]]

Medicare telehealth services in the future.
    Comment: Commenters were universally supportive of our proposal to 
replace HCPCS code G2012 with CPT code 98016.
    Response: We thank commenters for their support.
    After consideration of the comments, we are finalizing our proposal 
to not pay separately for CPT codes 98000, 98001, 98002, 98003, 98004, 
98005, 98006, 98007, 98008, 98009, 98010, 98011, 98012, 98013, 98014, 
98015, and to pay separately for CPT code 98016 in lieu of HCPCS G2012.
(19) Genetic Counseling Services (CPT Code 96041)
    In September 2023, the CPT Editorial Panel deleted CPT code 96040 
(Medical genetics and genetic counseling services, each 30 minutes 
face-to-face with patient/family) and created CPT code 96041 (Medical 
genetics and genetic counseling services, each 30 minutes of total time 
provided by the genetic counselor on the date of the encounter) for 
medical genetics and genetic counseling services to be provided by the 
genetic counselor. Prior to its deletion, CPT code 96040 will only be 
reported by genetic counselors for genetic counseling services, though 
genetic counselors are not among the practitioners who can bill 
Medicare directly for their professional services. As we stated in the 
CY 2012 PFS final rule (76 FR 73096 through 73097), physicians and NPPs 
who may independently bill Medicare for their services and who are 
counseling individuals will generally report office or other outpatient 
E/M CPT codes for office visits that involve significant counseling, 
including genetic counseling; therefore, CPT code 96040 was considered 
bundled into O/O E/M visits.
    For CPT code 96041, we proposed the RUC-recommended direct PE 
inputs. We note that the code descriptor now specifies that the service 
is provided by a genetic counselor; therefore, we considered assigning 
Procedure Status ``X'' to CPT code 96041. Because the PE RVUs will not 
display for the code with that assignment and that may impact access to 
the service with other payors, we instead proposed bundled status 
(Procedure Status ``B'') for CPT code 96041 to maintain the status of 
predecessor CPT code 96040, and we sought feedback from interested 
parties regarding the appropriate procedure status for this code. CPT 
guidelines for CPT code 96041 state that a physician or other qualified 
healthcare professional (QHP) who may report evaluation and management 
services will not be able to report CPT code 96041. Instead, these 
physicians and QHPs will use the appropriate evaluation and management 
code.
    Comment: A few commenters expressed disappointment that CMS did not 
propose to reintegrate the cost of the pedigree software subscription. 
As part of their revaluation of this service, the AMA RUC recommended 
the removal of the software as equipment based on their interpretation 
of CMS guidelines regarding what constitutes as direct versus indirect 
PE. Commenters stated that the software is a critical part of genetic 
counseling as it both creates the genetic family history and calculates 
risk based on validated models. The commenters also stated that cost of 
pedigree is very specialized and used exclusively for patient and 
family evaluations specific to genetic services and recommended that 
CMS consider re-including the cost of pedigree software that was 
included in the predecessor code.
    Response: We disagree with the commenters that the costs associated 
with the pedigree system should be included as a direct PE input. We 
continue to believe that both the cloud-based pedigree subscription and 
the pedigree software previously included as a direct PE input for CPT 
code 96040 constitute forms of indirect PE. We note that there have 
been occasions in the past where we have finalized the inclusion of 
software as a direct PE expense if it met our criteria as typical and 
medically necessary for the service in question and could be 
individually allocable to a particular patient for a particular 
service, but we believe that the annual licensing requirements and 
costs for the cloud-based pedigree subscription are administrative 
costs that are not unique to individual procedures. Direct expense 
categories include clinical labor, medical supplies, and medical 
equipment. Indirect expenses include administrative labor, office 
expense, and all other expenses not directly allocable to an individual 
service.
    Comment: In their comment letter, the AMA RUC reiterated their 
request for the establishment of a new clinical labor type for genetic 
counseling assistants (GCAs) but supported the crosswalk to Physical 
Therapy Assistant (L039B) and agreed that it is an appropriate proxy 
for the clinical labor rate per minute. The AMA RUC also supported our 
proposal to maintain the Procedure Status ``B'' of its predecessor CPT 
code 96040, and thanked CMS for publishing the values for other payors 
to be able to utilize. Numerous other commenters also supported the 
proposal to assign Procedure Status ``B'' to CPT code 96041.
    Response: We appreciate the commenters' support and are finalizing 
the RUC-recommended direct PE inputs and Procedure Status ``B'' for CPT 
code 96041 as proposed.
(20) COVID Immunization Administration (CPT Code 90480)
    On August 14, 2023, new CPT codes were created to consolidate over 
50 previously implemented codes and streamline the reporting of 
immunizations for the novel coronavirus (SARS-CoV-2, also known as 
COVID-19). The CPT Editorial Panel approved the addition of a single 
administration code (CPT code 90480) for administration of new and 
existing COVID-19 vaccine products. The RUC reviewed the specialty 
societies' recommendations for this code at the September 2023 RUC 
meeting.
    We proposed the RUC-recommended work RVU of 0.25 for CPT code 90480 
(Immunization administration by intramuscular injection of severe acute 
respiratory syndrome coronavirus 2 (SARS-CoV-2) (coronavirus disease 
[COVID-19]) vaccine, single dose). We also proposed the RUC-recommended 
direct PE inputs for CPT code 90480 without refinement.
    Comment: Several commenters stated their support for the proposed 
work RVU and thanked CMS for proposing the RUC recommendations.
    Response: We appreciate the support from the commenters for our 
proposals.
    Comment: Several commenters requested that CMS consider a longer 
phase-in period to implement the RUC-recommended work RVUs for COVID-19 
vaccine administration to allow ample time for provider education and 
preparation for potential payment reductions. The commenters stated 
although CMS is proposing to maintain the $40 administration fee 
through the year in which Food and Drug Administration (FDA) rescinds 
the Emergency Use Authorization (EUA) Declaration, the commenters 
believe that, if it is adopted into the PFS, COVID-19 vaccine 
administration reimbursement rates would likely decline for providers 
serving patients with Medicaid and commercial insurance coverage. The 
commenters requested that CMS not list the RVUs for CPT code 90480 in 
the Physician Fee Schedule final rule until the EUA declaration is 
rescinded as the policy is counter to population health initiatives and 
could result in stakeholder confusion regarding the payment rate

[[Page 97795]]

for this code within the Medicare program versus other markets.
    Response: We appreciate the feedback from the commenters and 
clarify that payment for CPT code 90480 is already addressed under 
previously finalized policies associated with the EUA declaration (see 
for example the vaccine pricing section of the CMS website at https://www.cms.gov/medicare/payment/part-b-drugs/vaccine-pricing). We agree 
with the commenters that it would avoid potential confusion if we do 
not display the RVUs for CPT code 90480 as payment will not be made 
using this valuation under the PFS. The proposal to assign separate 
pricing under the PFS for CPT code 90480 was an unintended error; we 
did not intend any confusion that may have been caused by the 
publication of these RVUs in the proposed rule.
    After consideration of the comments, we are not finalizing the RUC-
recommended work RVU and direct PE inputs for CPT code 90480 at this 
time. We refer readers to our current policies for paying for the 
service described by CPT code 90480, available at https://www.cms.gov/medicare/payment/part-b-drugs/vaccine-pricing as well as the discussion 
in section III.B of this final rule.
(21) Optical Coherence Tomography (CPT Codes 92132, 92133, 92134, and 
92137)
    At the February 2023 CPT Editorial Panel meeting, CPT code 92137 
(Computerized ophthalmic diagnostic imaging (eg, optical coherence 
tomography [OCT]), posterior segment, with interpretation and report, 
unilateral or bilateral; retina including OCT angiography) was created 
in response to new technology that allows imaging of the retina using 
optical coherence tomography (OCT) with and without non-dye OCT 
angiography (OCT-A). This code family also includes CPT code 92132 
(Computerized ophthalmic diagnostic imaging (eg, optical coherence 
tomography [OCT]), anterior segment, with interpretation and report, 
unilateral or bilateral), CPT code 92133 (Computerized ophthalmic 
diagnostic imaging (eg, optical coherence tomography [OCT]), posterior 
segment, with interpretation and report, unilateral or bilateral; optic 
nerve), and CPT code 92134 (Computerized ophthalmic diagnostic imaging 
(eg, optical coherence tomography [OCT]), posterior segment, with 
interpretation and report, unilateral or bilateral; retina). These 
codes were reviewed at the April 2023 RUC meeting. The RUC determined 
the survey results were inaccurate due to underestimation of time, so 
the entire code family was re-surveyed and reviewed at the September 
2023 RUC meeting.
    We proposed the RUC-recommended work RVUs for all codes within the 
Optical Coherence Tomography code family. We proposed a work RVU of 
0.29 for CPT code 92132, a work RVU of 0.31 for CPT code 92133, a work 
RVU of 0.32 for CPT code 92134, and a work RVU of 0.64 for CPT code 
92137. We also proposed the RUC-recommended direct PE inputs for all 
four codes in the family.
    Comment: Commenters generally agreed with CMS' proposed work RVU 
and direct PE inputs. One commenter disagreed with CMS' proposed work 
RVUs for CPT codes 92132, 92133, and 92134 and urged CMS to maintain 
the current work RVUs for those codes and adopt the RUC-recommended 
work RVU for CPT code 92137.
    Response: We thank commenters for their support. We also 
acknowledge the commenter's request to maintain the current work RVUs 
for CPT codes 92132, 92133, and 92134. We disagree with the commenter 
and continue to believe that the RUC-recommended work RVUs for these 3 
codes, that are cross-walked from other codes with similar intensity 
and that align with the surveyed reduction of intraservice times, 
appropriately account for the physician work required to perform this 
service. After consideration of all comments, we are finalizing the 
work RVUs and direct PE inputs as proposed.
(22) Transcranial Doppler Studies (CPT Codes 93886, 93888, 93892, 
93893, 93896, 93897, 93898, and 93890)
    The RUC's Relativity Assessment Workgroup (RAW) requested action 
plans in September 2022 to determine if specific code bundling 
solutions should occur for CPT codes 93890/93886, 93890/93892, 93892/
93886, and 93892/93890. The RAW referred this issue to the CPT 
Editorial Panel which created three new add-on codes to report when 
additional studies are performed on the same date of services as a 
complete transcranial Doppler study. The RUC reviewed these three new 
add-on codes, as well as CPT codes 93886, 93888, 93892 and 93893 for 
the September 2023 RUC meeting.
    We proposed the RUC-recommended work RVU for all seven codes in the 
Transcranial Doppler Studies code family. We proposed a work RVU of 
0.90 for CPT code 93886 (Transcranial Doppler study of the intracranial 
arteries; complete study), a work RVU of 0.73 for CPT code 93888 
(Transcranial Doppler study of the intracranial arteries; limited 
study), a work RVU of 1.15 for CPT code 93892 (Transcranial Doppler 
study of the intracranial arteries; emboli detection without 
intravenous microbubble injection), a work RVU of 1.15 for CPT code 
93893 (Transcranial Doppler study of the intracranial arteries; venous-
arterial shunt detection with intravenous microbubble injection), a 
work RVU of 0.81 for CPT code 93896 (Vasoreactivity study performed 
with transcranial Doppler study of intracranial arteries, complete), a 
work RVU of 0.73 for CPT code 93897 (Emboli detection without 
intravenous microbubble injection performed with transcranial Doppler 
study of intracranial arteries, complete), and a work RVU of 0.85 for 
CPT code 93898 (Venous-arterial shunt detection with intravenous 
microbubble injection performed with transcranial Doppler study of 
intracranial arteries, complete). We also proposed the direct PE inputs 
as recommended by the RUC for all seven codes in this family.
    We note that the billing instructions for this code family specify 
that the three new add-on codes should be used in conjunction with CPT 
code 93886, and that CPT code 93888 should not be used in conjunction 
with CPT codes 93886, 93892, 93893, 93896, 93897, and 93898. However, 
we believe that it would be beneficial for the CPT Editorial Panel to 
state more explicitly that CPT code 93897 should not be used in 
conjunction with CPT code 93892 and that CPT code 93898 should not be 
used in conjunction with CPT code 93893. The work performed in the add-
on codes would be duplicative of the base codes in these situations and 
result in unnecessary overbilling of services.
    Comment: Several commenters stated their support for the CMS 
proposal of the RUC's recommended work RVUs and direct PE inputs for 
these seven codes. Commenters also acknowledged the CMS recommendation 
to the AMA CPT Editorial Panel to more explicitly state that CPT code 
93897 should not be used in conjunction with CPT code 93892 and CPT 
code 93898 should not be used in conjunction with 93893. Commenters 
stated that they were committed to providing education to their members 
on the appropriate use of the revised code set for 2025.
    Response: We appreciate the support from the commenters for our 
proposals, as well as their recognition on the need for clarification 
on the billing of certain add-on codes.
    Comment: Several commenters disagreed with the proposal of the 
RUC's recommended direct PE inputs, specifically the equipment times 
for the vascular ultrasound room (EL016) and

[[Page 97796]]

the technologist PACS workstation (ED050). Commenters stated that the 
RUC based its recommendations for the technical component of these 
codes on a small sample size survey distributed to selected members of 
three societies that are not representative of all transcranial doppler 
(TCD) practices. Commenters stated that they conducted a survey of 
their TCD-focused membership which found that the RUC--and now CMS--
systematically overcounted time for the PACS workstation and 
undercounted time in the ultrasound room. Commenters stated that PAC 
workstation and ultrasound exam times can vary widely depending on the 
patient and results needing to be reviewed; staffing time and 
scheduling are a constant challenge due to these variables. Commenters 
urged CMS not to finalize the proposed changes to the TCD base codes 
and, at the least, CMS should conduct additional study before making 
any changes in light of the commenters' data from practitioners that 
frequently perform TCD.
    Response: We understand the difficulty of determining accurate 
equipment times due to the variation that can take place depending on 
the patient and results needing review. For this reason, our PE 
methodology bases valuation on the typical case, understanding that 
some cases will involve fewer time/resources and other cases will be 
more complex and difficult. This is also why we typically use 
standardized formulas to calculate equipment times; we believe that the 
use of these standardized equipment time formulas allows for greater 
transparency and consistency in the assignment of equipment minutes 
based on clinical labor times across the wider PFS.
    For the specific case of the codes in the TCD Studies family, the 
RUC recommended and we proposed equipment times based on these standard 
equipment time formulas. We specifically proposed equipment time for 
the vascular ultrasound room (EL016) based on the standard for highly 
technical equipment. As we have addressed in past rulemaking, we 
believe that certain highly technical pieces of equipment and equipment 
rooms are less likely to be used during all of the pre-service or post-
service tasks performed by clinical labor on the day of the procedure 
(the clinical labor service period) and are typically available for 
other patients even when one member of clinical staff may be occupied 
with a pre-service or post-service task related to the procedure. Since 
the direct PE input database should reflect the typical resource costs 
of medical equipment, we believe that the reduced minutes and increased 
utilization rate for these highly technical equipment items are 
complementary, not contradictory (77 FR 69028).
    The surveyed equipment times for the vascular ultrasound room 
(EL016) submitted by the commenter are all higher than our proposed 
equipment times based on the use of this standard for highly technical 
equipment. For example, the survey submitted by the commenter lists 61-
65 minutes of equipment time for CPT code 93886 as opposed to our 
proposed 57 minutes. However, the total intraservice clinical labor 
time for CPT code 93886 is only 70 minutes which would mean that the 
vascular ultrasound room would be in use for nearly the entirety of 
this period if we were to use the commenter's equipment time 
suggestions. As we discussed above, we believe that many of the 
preservice and post-service clinical labor tasks typically take place 
outside of resource-intensive equipment rooms to maximize use of 
capital-intensive resources since monopolizing the room for fewer 
minutes per patient maximizes the availability of the machines. We do 
not believe that it would be typical to perform tasks such as Greeting/
gowning the patient (CA009), Obtain vital signs (CA010), or Provide 
education/obtain consent (CA011) in the vascular ultrasound room, some 
or all of which would need to take if the survey times submitted by the 
commenter were to be true. Therefore, we continue to believe that the 
RUC's recommended equipment times, based on the use of standardized 
equipment time formulas, best reflect the typical case for these 
Transcranial Doppler Studies codes.
    After consideration of the comments, we are finalizing the work RVU 
and direct PE inputs for the CPT codes in the Transcranial Doppler 
Studies family as proposed.
(23) RSV Monoclonal Antibody Administration (CPT Codes 96380 and 96381)
    At the September 2023 CPT meeting, the CPT Editorial Panel created 
two codes to report passive administration of respiratory syncytial 
virus, monoclonal antibody, seasonal dose, with and without counseling. 
CPT codes 96380 and 96381 were reviewed the following week at the 
September 2023 RUC meeting and the RUC submitted recommendations to 
CMS.
    We proposed the RUC-recommended work RVU of 0.24 for CPT code 96380 
(Administration of respiratory syncytial virus, monoclonal antibody, 
seasonal dose by intramuscular injection, with counseling by physician 
or other qualified health care professional) and the RUC-recommended 
work RVU of 0.17 for CPT code 96381 (Administration of respiratory 
syncytial virus, monoclonal antibody, seasonal dose by intramuscular 
injection). We understand that these are interim work recommendations 
from the RUC, and that the RUC intends to conduct a more complete 
review at a future RUC meeting which we will then consider in future 
rulemaking. We also proposed the direct PE inputs as recommended by the 
RUC for both codes.
    Comment: A commenter stated that they supported these changes but 
recommended that the RUC conduct a more complete review for these 
codes.
    Response: We appreciate the support for our proposed valuations 
from the commenter.
    After consideration of the comments, we are finalizing the work RVU 
and direct PE inputs for the CPT codes in the RSV Monoclonal Antibody 
Administration family as proposed.
(24) Hyperthermic Intraperitoneal Chemotherapy (CPT Codes 96547 and 
96548)
    In September 2022, the CPT Editorial Panel created two time-based 
add-on Category I codes, CPT code 96547 (Intraoperative hyperthermic 
intraperitoneal chemotherapy (HIPEC) procedure, including separate 
incision(s) and closure, when performed; first 60 minutes (List 
separately in addition to code for primary procedure)) and CPT code 
96548 (Intraoperative hyperthermic intraperitoneal chemotherapy (HIPEC) 
procedure, including separate incision(s) and closure, when performed; 
each additional 30 minutes (List separately in addition to code for 
primary procedure)), to report HIPEC procedures for 2024. At the 
January 2023 RUC meeting, the RUC reached the conclusion that the 
survey data was flawed due to a lack of work definition and guidelines, 
and the RUC recommended contractor pricing for CPT codes 96547 and 
96548 for CY 2024 with further clarification from the CPT editorial 
panel. CMS proposed and finalized contractor pricing for CPT codes 
96547 and 96548 for 2024. At the May 2023 CPT Editorial Panel meeting, 
new guidelines and descriptions of work activities were approved and 
the codes were resurveyed for the September 2023 RUC meeting with 
recommendations for national pricing.
    We proposed the RUC-recommended work RVU of 6.53 for CPT code 96547

[[Page 97797]]

and the RUC-recommended work RVU of 3.00 for CPT code 96548. The RUC 
did not recommend, and we did not propose, any direct PE inputs for the 
Hyperthermic Intraperitoneal Chemotherapy codes (CPT codes 96547 and 
96548).
    Comment: Commenters agreed with CMS' proposed work RVU and direct 
PE inputs for this code family.
    Response: We thank commenters for their support. After 
consideration of the public comments, we are finalizing the work RVU 
and direct PE inputs as proposed.
(25) Laser Treatment--Skin (CPT Codes 96920, 96921, and 96922)
    In April 2022, the RUC referred 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) 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, which could result in changed 
physician work based on the expanded indications. The coding change 
application was subsequently withdrawn from the September 2023 CPT 
Editorial 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 disagreed with the RUC-recommended work RVUs for CPT codes 
96920, 96921, and 96922 of 1.00, 1.07, and 1.32, respectively. 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 96920 and 96922 with the 
largest treatment area, the total times have not changed since first 
implemented more than 20 years ago. While we understand that the 
physician times have fluctuated over the course of several years and 
several reviews, yet the work RVUs have remained mostly constant as 
shown in Table 15, this was not addressed in the 2012 recommendations, 
and we believe that our operating assumption regarding the validity of 
the existing values as a point of comparison is critical to the 
integrity of the relative value system as currently constructed. The 
work times currently associated with codes play a very important role 
in PFS ratesetting, both as points of comparison in establishing work 
RVUs and in the allocation of indirect PE RVUs by specialty. If we were 
to operate under the assumption that previously recommended work times 
had been routinely over or underestimated, this would undermine the 
relativity of the work RVUs on the PFS in general, in light of the fact 
that codes are often valued based on comparisons to other codes with 
similar work times. We also 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.
[GRAPHIC] [TIFF OMITTED] TR09DE24.019

    For CPT code 96920, we proposed a work RVU of 0.83 based on a 
crosswalk to CPT code 11104 (Punch biopsy of skin (including simple 
closure, when performed); single lesion), which has the same 10 minutes 
of intraservice time and 23 minutes of total time as CPT code 96920. We 
noted that of the 15 other 000-day global codes with a total time of 20 
to 25 minutes, only four codes fall above the RUC-recommended work RVU 
of 1.00. While we understand that commenters will dispute the validity 
of the current time values, we note that the 2002 intraservice time was 
17 minutes, which yields an intraservice time ratio between the 2002 
intraservice time and the recommended intraservice time of 10 minutes 
of 0.68 work RVUs ((10 minutes/17 minutes) * 1.15). We noted our work 
RVU of 0.83 maintains the intensity associated with the 2002 review of 
CPT code 96920, which we believe to be more appropriate than the 
significant increase in intensity that results from the RUC-recommended 
work RVU of 1.00 which nearly doubles the current intensity of the 
code. We have no evidence to indicate that the intensity of CPT code 
96920 is increasing to this degree given how the surveyed work time is 
substantially decreasing.
    For CPT code 96921, we proposed a work RVU of 0.90 based on a total 
time ratio to CPT code 96920 ((25/23)*0.83) and a crosswalk to CPT code 
11301 (Shaving of epidermal or dermal lesion, single lesion, trunk, 
arms or legs; lesion diameter 0.6 to 1.0 cm), which has 3 additional 
minutes of intraservice time and 1 additional minute of total time 
compared to CPT code 96921. We also noted that our work RVU of 0.90 for 
CPT code 96921 maintains the RUC-

[[Page 97798]]

recommended incremental difference between CPT codes 96920 and 96921 of 
0.07 work RVUs. Like CPT code 96920, we understand that commenters will 
dispute the validity of the current time values, but we note that the 
2002 intraservice time was 20 minutes, which yields an intraservice 
time ratio between the 2002 intraservice time and the recommended 
intraservice time of 12 minutes of 0.70 work RVUs ((12 minutes/20 
minutes) * 1.17). Like CPT code 96920, we noted that work RVU of 0.90 
for CPT code 96921 maintains the intensity associated with the 2002 
review of CPT code 96921, which we believe is more appropriate than the 
intensity increase that results from the RUC-recommended work RVU of 
1.07 which again nearly doubles the current intensity of the code.
    For CPT code 96922, we proposed a work RVU of 1.15 based on the 
RUC-recommended incremental difference between CPT codes 96921 and 
96922 of 0.25 work RVUs. Like CPT code 96920 and 96921, we understand 
that commenters will dispute the validity of the current time values, 
but we noted that the 2002 intraservice time was 30 minutes, which 
yields an intraservice time ratio between the 2002 intraservice time 
and the recommended intraservice time of 18 minutes of 1.26 work RVUs 
((18 minutes/30 minutes) * 2.10). We note that the RUC recommended CPT 
code 96922 as having the lowest intensity of the three codes in this 
family and that our work RVU of 1.15 maintains in relationship to the 
other codes.
    For the direct PE inputs, we proposed to refine the clinical staff 
time for the CA024 activity ``Clean room/equipment by clinical staff'' 
to the standard of 3 minutes for CPT codes 96920, 96921, and 96922. We 
noted that 3 minutes is the current CA024 time for these three CPT 
codes. A rationale for extending clinical staff beyond the standard 3 
minutes for the CA024 activity was absent from the PE Summary of 
Recommendations; therefore, we believe the current and standard 3 
minutes is more appropriate than the RUC-recommended 5 minutes. We also 
proposed equipment times of 36, 38, and 44 minutes for the power table 
(EF031) and exam light (EQ168) equipment for CPT codes 96920, 96921, 
and 96922, respectively, to account for the refinement for CA024 to the 
standard 3 minutes.
    We also disagreed with the RUC-recommended creation of new supply 
items for the excimer laser and proposed to re-include the equipment 
time for the excimer laser (EQ161) using the current methodology where 
its cost is accounted for in the equipment of these CPT codes' direct 
PE. The RUC submitted recommendations to change this equipment item to 
new supply items to account for the per-use cost to rent the equipment, 
stating that the business model has changed from the standard equipment 
ownership that CMS recognizes using standardized equipment formulas to 
a per-use rental or subscription model. While we understand that there 
may have been a change in business model, we do not believe a rental, 
subscription, or per-use fee of an equipment item that is still 
available to be purchased and is already accounted for with our 
equipment methodology is appropriate, especially given its implications 
for direct PE costs for these CPT codes. Therefore, we proposed 
reincorporating equipment times of 36, 38, and 44 minutes for the EQ161 
equipment for CPT codes 96920, 96921, and 96922, respectively, based on 
the refined service period clinical labor times. We proposed to remove 
the three pay-per-use excimer lasers listed as supplies and recommended 
by the RUC for these three codes.
    We have repeatedly stated in past rulemaking that rental and 
licensing fees are typically considered forms of indirect PE under our 
methodology. In the CY 2020 PFS final rule, we omitted the inclusion of 
several invoices for the monthly rental price of a PET infusion cart 
(ER109), and only accounted for the four purchase invoices for the 
equipment. We noted as well for future reference that although we 
appreciated the submission of the rental invoices, we were unable to 
use invoices for a monthly rental fee to determine the typical purchase 
price for equipment. We believe that invoices for a monthly rental fee 
would not be representative of the purchase price for equipment, in the 
same fashion that the rental fee for a car differs from its purchase 
price (84 FR 62771). Similarly, while we appreciate the submission of 
per-use, rental, and partnership invoices for the excimer laser, we 
believe that the excimer laser is appropriately and adequately 
accounted for in the equipment formula and note that EQ161 has a very 
high cost per minute of $0.5895/minute. Compared to the nearly 700 
other equipment items in our database, only 55 equipment items have 
higher costs per minute (based on our standardized formula which 
accounts for years of useful life, utilization rate, purchase price, 
and minutes per year of use, outlined in detail in section II.B. of 
this final rule, Determination of PE RVUs) and only 53 equipment items 
have higher purchase prices than the excimer laser at $151,200. We do 
not believe that CPT codes 96920 through 96922 should be valued based 
on a significantly more expensive pay-per-use rental version of the 
excimer laser when the same treatment is cheaper and available as a 
purchasable form of equipment.
    Therefore, we sought comment on the difference in direct PE costs 
between the purchase and per-use rental of the laser. We noted that 
using the equipment cost per minute formula, outlined in detail in 
section II.B. of this final rule, Determination of PE RVUs, yields 
direct PE costs of about $21.22, $22.40, and $25.94 for CPT codes 
96920, 96921, 96922, respectively. Alternatively, the new supply items 
for the per-use fee of the laser yielded direct PE costs of $80, $83, 
and $100 for CPT codes 96920, 96921, 96922, respectively. These direct 
PE disparities represent a 277 percent, 270.5 percent, and 285.5 
percent increase for CPT codes 96920, 96921, 96922, respectively. Given 
this, we are interested in feedback from interested parties on the 
payment disparity between this equipment as a per-use or rental versus 
how we currently account for the purchase of equipment using the 
standard equipment formula, as we understand that both manufacturers 
and physicians may be inclined to shift to a per-use or rental business 
models to limit overhead for purchase and maintenance of expensive 
equipment.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Some commenters disagreed with the proposed work RVUs of 
0.83, 0.90, and 1.15 for CPT codes 96920, 96921, and 96922, 
respectively, and encouraged CMS to finalize the RUC-recommended work 
RVUs of 1.00, 1.07, and 1.32, respectively. Some commenters disagreed 
with the crosswalks of CPT code 11104 to CPT code 96920, and CPT code 
11301 to CPT code 96921, because the intensity of CPT codes 96920 and 
96921 is greater than CPT codes 11104 and 11301 as excimer laser 
treatment requires a high amount of skill and precision to ensure that 
healthy tissues are not damaged and the procedure causes significant 
pain requiring patients to have numbing agents applied to their 
lesions. The commenters also stated that the excimer laser treatment 
occurs over a large body surface area and is associated with risks, 
including burns, swelling, and increased skin sensitivity to light.
    Commenters also disagreed with our application of total time ratios 
to both the current times and original 2002 intraservice times, the 
latter of which the AMA RUC and commenters reiterate

[[Page 97799]]

that the current valuations are based on. Commenters disagreed with the 
use of total time ratios to account for changes in time as the 
physician times were increased in 2012 without a commensurate work RVU 
increase, untethering the current assigned times and work RVUs. In 
their comment letter, the AMA RUC stated that RUC recommended 
crosswalks already reflected significant decreases from the current 
valuations of these codes to reflect the differences in work in 
treating different body surface areas for this condition. Further, the 
RUC stated in its rationale that there have been multiple reviews of 
this code set, and the valuation of the codes is currently based on the 
original valuation over two decades ago in 2002, where the time was 
lower than the current times, therefore the current work RVUs are based 
on the lower 2002 times, not the current times. The AMA RUC reiterated 
their support of their recommended work RVU crosswalk of CPT code 96920 
to CPT code 20606 with a work RVU of 1.00. For CPT code 96921, the AMA 
RUC reiterated their support of an incremental 0.07 work RVU difference 
between CPT codes 96920 and 96921 but disagreed with a starting point 
of 1.00 work RVUs for CPT code 96920.
    Response: We agree that it is important to use the recent data 
available regarding work times, and we note that when many years have 
passed since work time has been measured, significant discrepancies can 
occur. However, we also believe that our operating assumption regarding 
the validity of the existing values as a point of comparison is 
critical to the integrity of the relative value system as currently 
constructed. The work times currently associated with codes play a very 
important role in PFS ratesetting, both as points of comparison in 
establishing work RVUs and in the allocation of indirect PE RVUs by 
specialty. If we were to operate under the assumption that previously 
recommended work times had been routinely overestimated, this would 
undermine the relativity of the work RVUs on the PFS in general, in 
light of the fact that codes are often valued based on comparisons to 
other codes with similar work times. Such an assumption would also 
undermine the validity of the allocation of indirect PE RVUs to 
physician specialties across the PFS.
    Instead, we believe that it is crucial that the code valuation 
process take place with the understanding that the existing work times 
that have been used in PFS ratesetting are accurate. We recognize that 
adjusting work RVUs for changes in time is not always a straightforward 
process and that the intensity associated with changes in time is not 
necessarily always linear, so we apply various methodologies to 
identify several potential work values for individual codes. However, 
we reiterate that we believe it would be irresponsible to ignore 
changes in time based on the best data available and that we are 
statutorily obligated to consider both time and intensity in 
establishing work RVUs for PFS services. For additional information 
regarding the use of old work time values that were established many 
years ago and have not since been reviewed in our methodology, we refer 
readers to our discussion of the subject in the CY 2017 PFS final rule 
(81 FR 80273 through 80274).
    We also continue to believe that the use of time ratios is one of 
several appropriate methods for identifying potential work RVUs for 
particular PFS services, particularly when the alternative values 
recommended by the RUC and other commenters do not account for survey 
information that suggests the amount of time involved in furnishing the 
service has changed significantly. Consistent with the statute, we are 
required to value the work RVU based on the relative resources involved 
in furnishing the service, which include time and intensity. In 
accordance with the statute, we believe that changes in time and 
intensity must be accounted for when developing work RVUs. When our 
review of recommended values reveals that changes in time are not 
accounted for in a RUC-recommended work RVU, the obligation to account 
for that change when establishing proposed and final work RVUs remains.
    With regards to the current work RVUs and physician time becoming 
untethered, we refer readers back to our intraservice time ratios 
between the 2002 times and the RUC-recommended times, which result in 
lower work RVUs than our proposed work RVUs. We also reiterate that our 
proposed work RVUs maintains the intensity associated with the 2002 
review of CPT codes 96920, which commenters and the AMA RUC assert that 
the work RVUs are tethered to the 2002 physician times.
    With regards to the relativity of intensity and complexity of CPT 
codes 96920 compared to CPT code 11104, we continue to believe that the 
intensity of the two services are similar. Commenters stated that 
excimer laser treatment requires a high amount of skill and precision 
to perform to ensure that healthy tissues are not damaged, and the 
procedure causes significant pain that requires patients to have 
numbing agents applied to their lesions. Similarly, according to CPT 
code 11104's vignette and pre-service activities, deeply invasive basal 
or squamous cell carcinoma may be involved, therefore requiring similar 
skill and precision to perform, and CPT code 11104 involves the 
injection of the appropriate local anesthetic at the procedure site.
    Similarly, we continue to believe that the intensity of CPT codes 
96921 and 11301 are similar because CPT code 11301 requires significant 
skill and precision to perform based on the intraservice activities 
described and it also involves the injection of anesthetic into both 
subcutaneous and dermal compartments to facilitate the appropriate 
dermal depth removal.
    We have no evidence to indicate that the intensity of CPT codes 
96920 and 96921 is increasing to the degree that the AMA RUC 
recommended, given how the surveyed work time is substantially 
decreasing from both current and 2002 physician times. We also believe 
maintaining the intensities associated with the 2002 review for these 
codes is more appropriate than the significant intensity increases that 
results from the RUC-recommended work RVUs, particularly given the 
excimer laser manufacturer's comment stating that there has been no 
device or procedural change that would increase the intensity or 
decrease the physician times, as the RUC recommended.
    Comment: One commenter stated that, although the April 2023 
surveyed changes in physician time to perform the procedures resulted 
in reduced work RVU recommendations, the way the procedures are 
performed today are essentially unchanged from the earlier time study 
so reductions in physician time would not be expected, particularly in 
the amounts suggested by the surveys. The commenter believes the survey 
should be redone, with a population that reflects actual users of the 
device because there has been no device or procedural change that 
warrants such dramatic changes in treatment time.
    Response: We acknowledge the commenter's concerns regarding the 
surveyed physician time decreases for CPT codes 96920 through 96922 and 
encourage the commenter to coordinate with the RUC to facilitate a 
reconsideration of the physician work times if the commenter believes 
the physician times reported by the surveys are incorrect.
    Comment: The AMA RUC disagreed with our proposal to refine the 
clinical staff time for the CA024 activity ``Clean room/equipment by 
clinical staff'' to the

[[Page 97800]]

standard and current time of 3 minutes for CPT codes 96920, 96921, and 
96922 because a rationale for increasing clinical staff time beyond the 
standard 3 minutes for the CA024 activity was absent from the PE 
Summary of Recommendations. The AMA RUC stated that, during the laser 
treatment, each treatment site is covered with mineral oil to aid in 
the transmission of ultraviolet laser light through psoriatic plaques 
and the patient is repeatedly repositioned which results in the mineral 
oil getting all over the treatment table and often on the floor. The 
commenter stated that, after treatment, multiple greasy topical 
medications are applied to the treated sites and the standard time for 
room and equipment cleaning of 3 minutes is inadequate to properly 
clean greasy surfaces. The commenter requested that we refine CA024 for 
the three codes to provide an additional 2 minutes that is required for 
this vital staff function.
    Response: We appreciate the AMA RUC's clarification on the 
additional 2 minutes beyond the 3-minute standard for CA024. We note 
that we proposed to refine this activity to the standard because a 
rationale for increasing clinical staff time beyond the standard 3 
minutes for the CA024 activity was absent from the PE Summary of 
Recommendations. We agree with the commenter that 5 minutes would be 
more appropriate to properly clean multiple greasy surfaces and are 
finalizing the RUC-recommended 5 minutes for CA024 for CPT codes 96920, 
96921, and 96922. We note that, as a result of changing CA024, we are 
finalizing the equipment times of 38, 40, and 46 minutes for the power 
table (EF031) and exam light (EQ168) equipment for CPT codes 96920, 
96921, and 96922, respectively, to account for the finalized refinement 
for CA024 to the RUC-recommended 5 minutes.
    Comment: An excimer laser vendor commented that a dermatology 
office would need to perform at least 1,150 excimer laser procedures a 
year to breakeven on the purchase cost of an excimer laser. The 
commenter stated that the breakeven volume is approximately 3.5 times 
higher than the actual volume, with typical utilization of 344 
treatments per excimer laser per year. The commenter stated that the PE 
cost for one excimer treatment should be no less than $90.45 to achieve 
breakeven on the purchase of an excimer laser.
    The commenter also stated that, when the AMA RUC reviewed the cost 
of the excimer laser, it made changes to the cost elements that are not 
reflective of the actual sales cost of the excimer laser, or its cost 
of maintenance. The commenter suggested that the sales price has gone 
up, along with the increased costs associated with service, inflation, 
training. The excimer laser vendor also confirmed in their comment 
letter that although they sell the excimer laser to private dermatology 
practices and hospital facilities, it is not common. The commenter 
stated that about 900 devices of the 1,200 excimer lasers operating in 
the Unites States are based on the subscription model.
    Another commenter supported our proposal to maintain the equipment 
time for EQ161 and remove the three pay-per-use excimer laser 
subscriptions from the list of supplies and stated that the equipment 
associated with these services can be purchased rather than leased, and 
a ``change in business model'' for some practices does not warrant a 
drastic shift in how the Agency reimburses for equipment costs borne by 
practices. Additionally, the commenter expressed concern that such a 
policy could alter market dynamics, pushing more vendors to compel 
physician practices into subscription models. The commenter stated that 
these models often lead to higher long-term costs, and diminished 
flexibility, as ongoing fees and usage restrictions can directly impact 
patient care. The commenter also stated that the dependency on vendors' 
subscription agreements can erode practices' control over essential 
equipment, resulting in unfavorable terms and potential price hikes 
over time. The commenter stated that subscription models may worsen 
disparities in access to advanced medical technologies, impede the 
adoption of innovative treatments, raise significant concerns about 
data security and privacy, and increase the risk of market 
monopolization, where a few vendors could dominate, driving up costs 
and limiting choices for practices. Lastly, the commenter stated that 
if CMS were to use vendor subscription charges as the basis for 
practice expense payments, there would be no market discipline and 
encourage vendors to increase subscription costs, knowing that the 
increased cost would be borne by CMS.
    Response: We appreciate the commenter's support and input relating 
to our request for additional information regarding the difference in 
direct PE costs between the purchase and per-use rental of the laser 
and the payment disparity between this equipment as a per-use or rental 
versus how we currently account for the purchase of equipment using the 
standard equipment formula. We understand that both manufacturers and 
physicians may be inclined to shift to a per-use or rental business 
models to limit overhead for purchase and maintenance of expensive 
equipment. We also understand that as the PE data age, these issues 
involving subscriptions and other forms of digital tools become more 
complex. We look forward to continuing to seek out new data sources to 
help in updating the PE methodology.
    We also acknowledge the excimer laser vendor's concern that the 
purchase price for the excimer laser has increased and the receipt of 
invoices related to the parts and labor for the maintenance of a 
purchased laser. However, we did not receive invoices that would be 
useful to update the purchase price, and that the maintenance of 
equipment is accounted for in our price per minute equation for 
equipment. We welcome additional information and invoices to 
substantiate the claim that the purchase price has increased. 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. 
We remind the commenter that we implemented a new methodology for 
calculating PE RVUs for CY 2007 where we utilize a ``bottom-up'' 
approach to calculate the direct costs instead of using the ``top-
down'' approach to calculate the direct PE RVUs, under which the 
aggregate direct and indirect costs for each specialty are allocated to 
each individual service. Under the ``bottom up'' approach, we determine 
the direct PE by adding the costs of the resources (that is, the 
clinical staff, equipment, and supplies) typically required to provide 
each service. The resource costs are calculated using the refined 
direct PE inputs assigned to each CPT code in our PE database, which 
are based on our review of recommendations received from the AMA RUC. 
Therefore, we disagree with the commenter's suggestion to implement the 
``breakeven cost'' of the excimer laser in the equipment formula.
    While we understand that there may have been a change in business 
model, we do not believe a rental, subscription, or per-use fee of an 
equipment item that is still available to be purchased, as confirmed by 
the excimer laser vendor, and is already accounted for with our 
equipment methodology is appropriate, especially given its implications 
for direct PE costs for these CPT codes. We continue to believe that 
the excimer laser is appropriately and adequately accounted for in the 
equipment formula, which accounts for years of useful life, utilization 
rate, purchase price, interest rate, maintenance, and minutes per year

[[Page 97801]]

of use, discussed in detail in section II.B. of this final rule, 
Determination of PE RVUs, and note that EQ161 has a very high cost per 
minute of $0.5895/minute.
    Comment: Most commenters disagreed with the CPT Editorial Panel's 
decisions regarding the codes' indications, which are currently limited 
to psoriasis only, stating that the changes have already had far 
reaching consequences. Commenters stated that the CPT Editorial Panel's 
decisions have negatively impacted a sizable portion of the patient 
population with inflammatory skin diseases, particularly for people 
with skin of color who are more susceptible to vitiligo. One commenter 
requested that CMS create a G code that is based on the 2022 CPT codes 
for the excimer laser to substitute for the 2024 revisions.
    Response: We appreciate and acknowledge commenters' concerns 
regarding the CPT coding. However, based on our understanding, the 
coding change application was withdrawn from the September 2023 CPT 
Editorial Panel meeting when it was determined that existing literature 
was insufficient and did not support expanded indications at that time, 
and the codes were resurveyed at the April 2023 RUC meeting without any 
revisions to the code descriptors. Therefore, we disagree with the 
commenter that there is a programmatic need for a G code. We also note 
that concerns related to the CPT changes are considered out of scope 
for our proposal and we encourage the commenter to coordinate with the 
CPT Editorial Panel to address their concerns regarding the expanded 
indications for other inflammatory skin disorders such as vitiligo, 
atopic dermatitis, and alopecia areata. After consideration of public 
comments, we are finalizing the work RVUs and direct PE inputs for CPT 
codes 96920, 96921, 96922 as proposed with the exception of the 
finalized refinements of clinical staff time for the CA024 to 5 minutes 
and equipment times of 38, 40, and 46 minutes for the power table 
(EF031) and exam light (EQ168) equipment for CPT codes 96920, 96921, 
and 96922, respectively, to conform to the increased clinical staff 
time for CA024.
(26) Physical Medicine and Rehabilitation (CPT Codes 97012, 97014, 
97016, 97018, 97022, 97032, 97033, 97034, 97035, 97110, 97112, 97113, 
97116, 97140, 97530, 97533, 97535, 97537, and 97542 and HCPCS Code 
G0283)
    The RUC's Health Care Professionals Advisory Committee (HCPAC) 
previously reviewed 19 physical medicine and rehabilitation codes in 
February 2017. In the CY 2024 PFS proposed rule, CMS received public 
nominations on these same 19 therapy codes as potentially misvalued (88 
FR 78851 and 78852). An interested party asserted that the direct PE 
clinical labor minutes reflected inappropriate multiple procedure 
payment reductions (MPPR), which were duplicative of the CMS MPPR 
policy implemented in CMS' claims processing systems. CMS reviewed the 
clinical labor time entries for these 19 therapy codes and concluded 
that a payment reduction should not have been applied in some instances 
to the 19 nominated therapy codes' clinical labor time entries since 
the payment valuation reduction would be duplicative of the MPPR 
applied during claims processing. CMS indicated that the valuation of 
these services would benefit from additional review through the RUC's 
HCPAC valuation process; they were therefore reviewed by the HCPAC for 
PE only, with no work review, at the January 2024 RUC meeting for 
inclusion in the CY 2025 PFS proposed rule.
    The HCPAC's direct PE recommendations were based on the typical 
number of services reported per session, which was 3.5 units according 
to CMS data, to ensure that there was no duplication in the standard 
inputs for preservice and postservice time. To account for the MPPR, 
the HCPAC determined that 3.5 codes are billed per session, with the 
first paid at 100% and the second and subsequent units paid at half and 
so forth for PE (for example, 1.00 + 0.5 + 0.5 + 0.25 = 2.25). This 
resulted in the HCPAC recommending that many of the standard clinical 
labor times be divided by 2.25 to account for the MPPR, such as taking 
the standard 3 minutes for greeting and gowning the patient and 
dividing it by 2.25 to arrive at the recommended time of 1.33 minutes 
(1.33 + 0.67 + 0.67 + 0.34 = 3 minutes). In most cases, the HCPAC 
recommended using the standard equipment time formula aside from a few 
exceptions such as the use of the whirlpool in CPT code 97022 which 
would require additional time for the cleaning of the equipment.
    Following the January 2024 RUC meeting, representatives from the 
American Physical Therapy Association (APTA) and the American 
Occupational Therapy Association (AOTA) met with CMS to express concern 
with the HCPAC's recommended direct PE inputs for this family of codes. 
Representatives from these trade associations stated that the HCPAC had 
inappropriately recommended too few equipment minutes for these 
procedures. These interested parties requested utilizing an alternate 
equipment time formula for the 19 reviewed therapy codes based on 
adding together the intraservice work time together with the clinical 
labor for the preservice and postservice portion of the service period. 
For 17 of the 19 reviewed therapy codes, this alternate equipment time 
formula would result in an increase over the HCPAC's equipment time 
recommendations. Table 16 lists the direct PE costs of each HCPCS code 
under their current pricing, under the HCPAC recommendations, and the 
alternate APTA and AOTA recommendations:

[[Page 97802]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.020

    After consideration of these recommendations, we proposed the 
direct PE inputs as recommended by the HCPAC for all 19 codes in the 
Physical Medicine and Rehabilitation code family. We believe that the 
HCPAC's equipment time recommendations better maintain relativity with 
the rest of the fee schedule through primarily using standard equipment 
time formulas, along with limited exceptions for additional equipment 
time in cases where more time for equipment cleaning or patient 
positioning would be typical. We also believe that the alternate 
equipment time formula recommended by APTA and AOTA leads to 
inconsistent equipment times for many of these procedures, such as 
recommending 23.98 equipment minutes for CPT code 97110 which is a 
timed code billed in 15-minute increments. Although we agreed that some 
additional equipment time beyond the timed 15 minutes will be typical 
for setup and cleaning, 9 additional minutes for each billing of CPT 
code 97110 did not appear to reflect typical equipment usage.
    Given the complexity of determining appropriate direct PE inputs 
across multiple billings of these therapy codes, and the need to factor 
in the MPPR, we believe that this code family may benefit from 
additional review, specifically review focused on the subject of 
appropriate equipment minutes. The HCPAC review of these codes was 
primarily focused on the clinical labor portion of the PE inputs and 
the equipment times did not receive the same degree of scrutiny as the 
clinical labor. We believe that the HCPAC's recommended direct PE 
inputs are the most accurate values based on the current information 
that we have available, however this is a topic that may warrant 
additional review to ensure that this family of codes is properly 
valued.
    Comment: A commenter stated that although there remains some 
uncertainty about the appropriate equipment minutes for this code set, 
the commenter applauded CMS and stated that they looked forward to 
final resolution on the subject of appropriate equipment minutes.
    Response: We appreciate the support from the commenter.
    Comment: Several commenters disagreed with the CMS proposal of the 
HCPAC's recommended direct PE inputs. Commenters questioned why it was 
appropriate to apply the MPPR first through the valuation of the direct 
PE inputs and then again during claims processing. Commenters stated 
that they remained confused as to whether considering the MPPR, and how 
it will reduce clinical labor times for the whole session across the 
provided codes, was appropriate for valuing each individual code. 
Commenters disagreed with the proposal of 1.33 minutes of clinical 
labor time for most of the tasks included in the reviewed therapy 
codes, stating that for the second and third services, there is only 40 
seconds allotted to tasks such as positioning the patient, cleaning the 
separate equipment, or developing post-treatment recommendations. One 
commenter stated that spending one and a third minutes is inadequate 
for most, if not all, procedures and spending only 40 seconds is not a 
realistic allocation of time to ensure that a patient is appropriately 
and safely positioned. Commenters suggested that the clinical labor 
time for many of the labor tasks assigned 1.33 minutes should in fact 
be the full 3 minutes that other non-therapy procedures are allotted 
for similar clinical labor tasks. Commenters agreed that a more 
thorough discussion of these codes will be required at a future date, 
however the commenters did not wish to take these 19 codes back to the 
HCPAC until such time as it was clearer how clinical labor and 
equipment time should be calculated.
    Response: Determining the proper valuation of the clinical labor, 
supply, and equipment inputs for these therapy services has been a 
difficult task due to multiple billings being typical for the same 
patient on the same day. We have a longstanding policy such that in 
cases where multiple services are typically furnished to a beneficiary 
on the same day, we believe that there is overlap between the two 
services in some of the activities furnished during the preservice 
evaluation and postservice time. For example, in cases where a service 
is typically furnished to a beneficiary on the same day as an E/M

[[Page 97803]]

service, we believe that there is overlap between the two services in 
some of the activities furnished during the preservice evaluation and 
postservice time. As such, we disagree with the commenters that it 
would be appropriate to allocate the full standard 3 minutes of 
clinical labor time for tasks such as greeting and gowning the patient 
(CA009), which would only take place one time. For therapy services 
which are typically billed in 3.5 sessions, this would result in 10.5 
minutes of clinical labor time for the CA009 activity, which would be 
too high and not maintain relativity with other PFS services. At the 
same time, if we were to discount the clinical labor times too heavily 
by overapplying the MPPR, we run the risk of under-allocating 
sufficient clinical labor to cover the typical case, which could result 
in the safety issues identified by the commenters.
    With this context in mind, we continue to believe that the direct 
PE inputs as recommended by the HCPAC are the most accurate values 
based on the current information that we have available. As we noted in 
the proposed rule, this is a topic that may warrant additional review 
to ensure that this family of codes is properly valued, both in terms 
of the equipment minutes discussed in the proposed rule and the 
clinical labor times raised by commenters. We agree with the 
observation from the commenters that discussing nineteen codes at the 
same time appears to have been significantly burdensome on the HCPAC, 
and we believe a more robust discussion might take place by reviewing 
fewer codes at a time. We remain open to further discussion of this 
subject with interested parties of how to most accurately capture the 
typical and medically necessary direct PE inputs for these therapy 
services in light of the challenges that they pose for valuation.
    We wish to clarify for the commenters that we do not believe 
patient positioning and similar activities would typically take place 
in 40 seconds. We consistently proposed 1.33 minutes of clinical labor 
time for the ``Prepare, set-up and start IV, initial positioning and 
monitoring of patient'' (CA016) clinical labor task for these therapy 
codes based on the HCPAC's recommendation. As detailed in the proposed 
rule, this was based on dividing the standard clinical labor times by 
2.25 to account for the MPPR, such as taking the standard 3 minutes and 
dividing it by 2.25 to arrive at the proposed time of 1.33 minutes 
(1.33 + 0.67 + 0.67 + 0.34 = 3 minutes). In other words, we believe 
that the standard 3 minutes of positioning time would typically take 
place over the course of a therapy session lasting roughly 45-60 
minutes, as billed across the typical 3.5 services. We did not propose 
that patient positioning or room cleaning would typically take place in 
40 seconds as several of the commenters suggested.
    Comment: A few commenters asked CMS to use its authority to 
temporarily suspend, reduce, or defer the budget neutrality requirement 
for RVU adjustments to prevent further payment cuts to therapy 
services. One commenter stated that CMS should use its enforcement 
discretion and suspend the 50 percent PE reduction due to MPPR from the 
19 therapy codes until the therapy codes have been properly valued.
    Response: We remind the commenters that CMS does not have authority 
under section 1848 of the Act to suspend the budget neutrality 
requirement under section 1848(c)(2)(B)(ii)(II) of the Act.
    After consideration of the comments, we are finalizing the direct 
PE inputs for the 19 CPT codes in the Physical Medicine and 
Rehabilitation family as proposed.
(27) Acupuncture--Electroacupuncture (CPT Codes 97810, 97811, 97813, 
and 97814)
    In September 2022, the RUC's Relativity Assessment Workgroup 
identified the acupuncture codes with 2020 Medicare utilization over 
10,000 where the service was surveyed by one specialty but is now 
performed by a different specialty. CPT codes 97810-97814 were selected 
and surveyed for the April 2023 RUC meeting.
    For CY 2025, we proposed the RUC-recommended work RVUs for all four 
CPT codes. We proposed a work RVU of 0.61 for CPT code 97810 
(Acupuncture, 1 or more needles; without electrical stimulation, 
initial 15 minutes of personal one-on-one contact with the patient), a 
work RVU of 0.46 for CPT code 97811 (Acupuncture, 1 or more needles; 
without electrical stimulation, each additional 15 minutes of personal 
one-on-one contact with the patient, with re-insertion of needle(s) 
(List separately in addition to code for primary procedure)), a work 
RVU of 0.74 for CPT Code 97813 (Acupuncture, 1 or more needles; with 
electrical stimulation, initial 15 minutes of personal one-on-one 
contact with the patient), and a work RVU of 0.47 for CPT code 97814 
(Acupuncture, 1 or more needles; with electrical stimulation, each 
additional 15 minutes of personal one-on-one contact with the patient, 
with re-insertion of needle(s) (List separately in addition to code for 
primary procedure)). We also proposed the RUC-recommended direct PE 
inputs for CPT codes 97810, 97811, 97813 and 97814 without refinement.
    Comment: Commenters agreed with the CMS proposed work RVUs and 
direct PE inputs for CPT codes 97810 and 97813.
    Response: We thank commenters for their support.
    Comment: Commenters disagreed with the proposed work RVUs for CPT 
codes 97811 and 97814, stating that reduction of the work RVUs could 
potentially discourage the delivery of acupuncture and limit the 
availability of this beneficial service to the elderly population. 
These commenters encouraged CMS to maintain the current work RVUs of 
0.50 for CPT code 97811 and 0.55 for CPT code 97814.
    Response: We appreciate the feedback but note that the RUC's 
Summary of Recommendations (SOR) for CPT codes 97811 and 97814, 
contained two key reference codes that appropriately support the 
proposed valuation for each code. Without additional data provided by 
the commenters, we continue to believe that the RUC-reviewed survey 
25th percentile work RVU of 0.46 for CPT code 97811 and 0.47 for CPT 
97814 accurately reflects the intra-service and total times for these 
codes.
    After consideration of the public comments, we are finalizing the 
work RVUs and direct PE inputs for all four codes in the Acupuncture--
Electroacupuncture family as proposed.
(28) Insertion, and Removal and Insertion of New 365-Day Implantable 
Interstitial Glucose Sensor System (HCPCS Codes G0564 and G0565)
    In the CY 2023 PFS final rule (87 FR 6923), we revised national 
pricing for two Category III CPT codes that describe continuous glucose 
monitoring for a 180-day period. Category III CPT codes 0446T (Creation 
of subcutaneous pocket with insertion of implantable interstitial 
glucose sensor, including system activation and patient training) and 
0448T (removal of implantable interstitial glucose sensor with creation 
of subcutaneous pocket at different anatomic site and insertion of new 
implantable sensor, including system activation) describe the services 
related to the insertion, and removal and insertion of an implantable 
180-day interstitial glucose sensor from a subcutaneous pocket. The 
implantable interstitial glucose sensors are part of systems that can 
allow real-time glucose monitoring, provide glucose trend information, 
and signal alerts for detection and prediction of episodes of

[[Page 97804]]

low blood glucose (hypoglycemia) and high blood glucose 
(hyperglycemia).
    Interested parties submitted a public comment in response to the CY 
2025 PFS proposed rule that asked CMS to establish coding and payment 
similar to CPT codes 0446T and 0448T for services related to a newly 
FDA approved implantable 365-day continuous glucose monitoring system. 
The commenter stated that creating new coding will allow for continuity 
of this service during the manufacturer's transition from the 180-day 
monitoring service as described by the current codes, to the new 365-
day monitoring service.
    We agree with the commenters request and are establishing two new 
HCPCS codes to describe services related to the new 365-day monitoring 
service. Specifically, we are establishing HCPCS code G0564 (Creation 
of subcutaneous pocket with insertion of 365-day implantable 
interstitial glucose sensor, including system activation and patient 
training) and G0565 (removal of implantable interstitial glucose sensor 
with creation of subcutaneous pocket at different anatomic site and 
insertion of new 365-day implantable sensor, including system 
activation). We believe it is important for beneficiaries to have 
continued access to this valuable service during the transition from a 
180 to 365-day monitoring period. HCPCS codes G0564 and G0565 are 
contractor priced and effective January 1, 2025. CPT codes 0446T and 
0448T should continue to be used to bill for the 180-day continuous 
glucose monitoring service.
(29) Annual Alcohol Screening (HCPCS Codes G0442 and G0443)
    In April 2022, the Relativity Assessment Workgroup identified 
services with Medicare utilization of 10,000 or more that have 
increased by at least 100 percent from 2015 through 2020, including 
HCPCS codes G0442 (Annual alcohol misuse screening, 5 to 15 minutes) 
and G0443 (Brief face-to-face behavioral counseling for alcohol misuse, 
15 minutes). In September 2022, the RUC recommended that these services 
be surveyed for April 2023 after CMS published the revised code 
descriptor for HCPCS code G0442 in the CY 2023 PFS final rule (87 FR 
69523).
    We proposed the RUC-recommended work RVU of 0.18 for HCPCS code 
G0442 (Annual alcohol misuse screening, 5 to 15 minutes). We also 
proposed the RUC-recommended work RVU of 0.60 for HCPCS code G0443 
(Brief face-to-face behavioral counseling for alcohol misuse, 15 
minutes).
    The RUC recommended an increase in the work RVU for HCPCS code 
G0443 from 0.45 to 0.60 which we believe is warranted based on time and 
intensity of the service in preventing alcohol misuse. In valuing this 
code, the time and work valuation is for separate and distinct services 
from same-day E/M services since HCPCS codes G0442 and G0443 are 
typically billed with an annual wellness visit (AWV) or office visit. 
We believe that the codes in the adjacent Behavioral Counseling & 
Therapy family, which includes HCPCS codes G0445 (High intensity 
behavioral counseling to prevent sexually transmitted infection; face-
to-face, individual, includes: education, skills training and guidance 
on how to change sexual behavior; performed semi-annually, 30 minutes), 
G0446 (Annual, face-to-face intensive behavioral therapy for 
cardiovascular disease, individual, 15 minutes), and G0447 (Face-to-
face behavioral counseling for obesity, 15 minutes), may be undervalued 
as their respective intensities may be lower than what is warranted for 
these services. We believe that the intensity for these G-codes may be 
more in line with the intensity of HCPCS code G0443 which we noted had 
an increase in intensity as recommended by the RUC. As such, we believe 
that the Behavioral Counseling & Therapy codes may benefit from 
additional review in the future to recognize the intensity of these 
services.
    We proposed to maintain the current 15 minutes of clinical labor 
time for the CA021 ``Perform procedure/service--NOT directly related to 
physician work time'' activity for HCPCS code G0442. This clinical 
labor activity is specifically noted as not corresponding to the 
surveyed work time of 5 minutes, and we do not believe that it would be 
typical for the clinical staff to administer the questionnaire, clarify 
questions as needed, and record the answers in the patient's electronic 
medical record in the RUC-recommended 5 minutes. We believe that the 
current 15 minutes of clinical labor time would be more typical to 
ensure the accuracy of this screening procedure. We also proposed to 
maintain 15 minutes of corresponding equipment time for the EF023 exam 
table as a result of our proposed clinical labor time refinement. We 
proposed the RUC-recommended direct PE inputs for HCPCS code G0443 
without refinement.
    We thank the RUC for their review of this code family and for 
highlighting an important consideration specifically for services that 
fall under the Medicare preventive services benefit. We are now 
considering how best to implement and maintain payment for preventive 
services and may develop new payment policies in future rulemaking to 
address this issue more comprehensively to ensure consistent access to 
these services. We considered the recommended PE inputs for this code 
family, as well as for the Annual Depression Screening (HCPCS code 
G0444) and Behavioral Counseling & Therapy services (HCPCS codes G0445, 
G0446, and G0447) within this context, as noted below.
    We received comments on this proposal. Below is a summary of the 
comments received.
    Comment: Commenters generally supported the CMS proposal of the 
RUC's work RVU recommendations for HCPCS codes G0442 and G0443. 
Commenters noted the importance of improving rates in connection to 
strengthening access to care. Several commenters asked CMS to include 
other settings where these services can be furnished such as Certified 
Community Behavioral Health Clinics (CCBHCs) and Community Mental 
Health Centers (CMHCs) as they would anticipate this screening would be 
just as effective in a community setting and there may be cases where 
the entity may have an eligible practitioner on staff who is seeing an 
individual and recognizes that the annual screening and brief 
counseling is clinically appropriate for an individual in need. Another 
commenter asked CMS to continue to monitor research on alcohol 
screening, counseling, and treatment and incorporate research findings 
into the valuation and payment of these services.
    Commenters also expressed overwhelming support regarding the 
proposed PE refinements, noting that it would not be typical for the 
clinical staff to administer the questionnaire, clarify questions as 
needed, and record the answers in the patient's electronic medical 
record in the 5 minutes recommended by the RUC. One commenter disagreed 
with the proposed PE refinements stating that this work was duplicative 
with the E/M visit that is being billed on the same day.
    Response: We appreciate the support from commenters regarding the 
proposed work RVUs for HCPCS codes G0442 and G0443. We appreciate the 
commenters' suggestion of including CCBHCs and CMHCs as settings where 
these services can be performed. We note that practitioners who 
practice in these settings and who are enrolled in Medicare and able to 
bill directly for their services may be able to bill for HCPCS codes 
G0442 and G0443 under the PFS.
    After consideration of public comments, we are finalizing the work 
RVUs for HCPCS codes G0442 and G0443 as proposed.

[[Page 97805]]

    For the direct PE inputs, we agree with commenters that it would 
not be typical for the clinical staff to administer the questionnaire, 
clarify questions as needed, and record the answers in the patient's 
electronic medical record in the 5 minutes recommended by the RUC. 
Given the overwhelming support from commenters and the fact that these 
are preventative services, we are finalizing as proposed to maintain 
the current 15 minutes of clinical labor time for the CA021 ``Perform 
procedure/service--NOT directly related to physician work time'' 
activity for HCPCS code G0442. We are also finalizing to maintain 15 
minutes of corresponding equipment time for the EF023 exam table 
because of our proposed clinical labor time refinement. We are 
finalizing the RUC-recommended direct PE inputs for HCPCS code G0443 
without refinement.
(30) Annual Depression Screening (HCPCS Code G0444)
    In 2012, HCPCS code G0444 (Annual depression screening, 5 to 15 
minutes) was added to the PFS (77 FR 68955 and 68956) to report annual 
depression screening for adults in primary care settings that have 
staff-assisted depression care supports in place to assure accurate 
diagnosis, treatment and follow up. In April 2022, the Relativity 
Assessment Workgroup identified this service with Medicare utilization 
of 10,000 or more that have increased by at least 100 percent from 2015 
through 2020. In September 2022, the RUC recommended that this service 
be surveyed for April 2023 after CMS published the revised code 
descriptor in the CY 2023 PFS final rule (87 FR 69523).
    We proposed the RUC-recommended work RVU of 0.18 for HCPCS code 
G0444.
    We proposed to maintain the current 15 minutes of clinical labor 
time for the CA021 ``Perform procedure/service--NOT directly related to 
physician work time'' activity for HCPCS code G0444. This clinical 
labor activity is specifically noted as not corresponding to the 
surveyed work time of 5 minutes, and we do not believe that it would be 
typical for the clinical staff to administer the questionnaire, clarify 
questions as needed, and record the answers in the patient's electronic 
medical record in the RUC-recommended 5 minutes. We believe that the 
current 15 minutes of clinical labor time would be more typical to 
ensure the accuracy of this screening procedure. We also proposed to 
maintain 15 minutes of corresponding equipment time for the EF023 exam 
table as a result of our clinical labor time refinement.
    We received comments on our proposals. Below is a summary of the 
comments received.
    Comment: Commenters generally supported the CMS proposal of the 
RUC's recommended work RVU for G0444. Several commenters asked CMS to 
include other settings where these services can be furnished such as 
Certified Community Behavioral Health Clinics (CCBHCs), Community 
Mental Health Centers (CMHCs), as well as substance use treatment 
settings, as they would anticipate this screening would be just as 
effective in a community setting and there may exist cases where the 
entity may have an eligible provider on staff who is seeing an 
individual and recognizes that the annual screening and brief 
counseling is clinically appropriate for an individual in need. A few 
commenters encouraged CMS to use the most recent data available to 
determine the appropriate payment for Mental Health (MH) and Substance 
Use Disorder (SUD) services to address workforce shortages. Commenters 
overwhelmingly agreed with CMS regarding the clinical labor time and 
stated that the current 15 minutes of clinical labor time would be more 
typical to ensure the accuracy of this screening procedure. One 
commenter disagreed with CMS' proposed refinements to the PE inputs 
stating this work was duplicative with the E/M that is being billed on 
the same day.
    Response: We thank the commenters for their support of this 
proposal. We appreciate the commenters' suggestion of including CCBHCs 
and CMHCs as settings where these services can be performed. We note 
that practitioners who practice in these settings and who are enrolled 
in Medicare and able to bill directly for their services may be able to 
bill for these codes under the PFS.
    After consideration of public comments, we are finalizing the work 
RVU for HCPCS code G0444 as proposed.
    For the direct PE inputs, we thank the commenters for their support 
and agree with commenters that it would not be typical for the clinical 
staff to administer the questionnaire, clarify questions as needed, and 
record the answers in the patient's electronic medical record in the 5 
minutes recommended by the RUC. Given the overwhelming support from 
commenters and the fact that this is a preventative service, we are 
finalizing as proposed to maintain the current 15 minutes of clinical 
labor time for the CA021 ``Perform procedure/service--NOT directly 
related to physician work time'' activity for HCPCS code G0444. We are 
also finalizing as proposed to maintain the 15 minutes of corresponding 
equipment time for the EF023 exam table because of our proposed 
clinical labor time refinement.
(31) Behavioral Counseling & Therapy (HCPCS Codes G0445, G0446, and 
G0447)
    CMS created HCPCS codes G0445 (High intensity behavioral counseling 
to prevent sexually transmitted infection; face-to-face, individual, 
includes education, skills training and guidance on how to change 
sexual behavior; performed semi-annually, 30 minutes), G0446 (Annual, 
face-to-face intensive behavioral therapy for cardiovascular disease, 
individual, 15 minutes), and G0447 (Face-to-face behavioral counseling 
for obesity, 15 minutes) effective with the 2012 Medicare PFS (77 FR 
68892). HCPCS codes G0445-G0447 were identified to be reviewed at the 
April 2023 RUC meeting because they were services with Medicare 
utilization of 10,000 or more that had increased by at least 100% from 
2015 through 2020.
    The specialty societies surveyed HCPCS codes G0445-G0447 for the 
April 2023 RUC meeting but did not obtain the required number of survey 
responses. After the resurvey, which occurred after the April 2023 RUC 
meeting, the specialty societies were again unable to achieve the 
required minimum number of survey responses for any of the codes in 
this family for the September 2023 RUC meeting. The RUC reviewed HCPCS 
codes G0445-G0447 at the September 2023 RUC meeting. Given the 
insufficient number of survey responses and considering that these are 
CMS-created time-based codes, the RUC determined it would be most 
appropriate to maintain the current work values and flagged these codes 
for review in 3 years. We proposed the RUC-recommended work RVU of 0.45 
for each of these three HCPCS codes, G0445-G0447.
    We did not propose the RUC-recommended direct PE inputs for these 
codes because of the insufficient number of survey responses, and 
further, we did not agree with some of the RUC's refinements to the 
direct PE inputs for this service. We did not propose the RUC-
recommended direct PE inputs for G0445, G0446, and G0447, which include 
the SK062 patient education booklet being eliminated in favor of the 
SK057 paper, laser printing (each sheet) in the amount of 10 sheets and 
the equipment minutes being modified to equal the sum of clinical staff 
time plus the physician/QHP time

[[Page 97806]]

as reflected by the survey median. We do not agree that these changes 
are substantiated given the insufficient number of survey responses and 
we proposed to maintain the current values for each of these direct PE 
inputs.
    We proposed the RUC recommended refinements to clinical staff time 
for HCPCS code G0445. We proposed to move two minutes from CA021 
Perform procedure/service--NOT directly related to physician work time 
to CA035 Review home care instructions, coordinate visits/
prescriptions. We agree with the RUC that this more accurately reflects 
the clinical work involved in arranging follow-up and/or referrals with 
clinical and community resources and providing educational materials. 
Currently, for HCPCS code G0445, PE includes a whip mixer (EP086) and 
biohazard hood (EP016) among the equipment assigned to the code. We 
also proposed the RUC recommendations to eliminate both of these pieces 
of equipment from the PE for HCPCS code G0445.
    We noted that the Behavioral Counseling & Therapy code family 
(HCPCS codes G0445-G0447) should be reviewed in the future by the RUC 
and we anticipate the recommendations that will come from the review 
for this family.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters generally expressed support regarding the 
proposed PE refinements although one commenter disagreed with the 
proposed PE refinements, stating that this work was duplicative with 
the E/M visit that is being billed on the same day. Commenters 
recommended an increase in the work RVUs for HCPCS codes G0445-G0447 in 
alignment with HCPCS code G0443 (Brief face-to-face behavioral 
counseling for alcohol misuse, 15 minutes) to reflect the intensity of 
the services, stimulate additional access to these services, and 
maintain relativity across these codes. Commenters also noted the 
importance of improving the accuracy of the rates in order to 
strengthening access to care.
    Response: We thank commenters for their support of our PE 
refinements. We disagree that the PE of the counseling service is 
duplicative of the E/M visit that is being billed on the same day, as 
the counseling service requires additional time and practice expense 
not originally accounted for in the valuation of the E/M visit that is 
billed on the same day. We appreciate the information that commenters 
provided regarding the proposed work RVU for HCPCS codes G0445-G0447. 
We were persuaded by commenters that these services should all be 
valued consistently to reflect the intensity of the service and to 
maintain relativity across these codes. We are finalizing 0.60 work 
RVUs for HCPCS code G0443 (Brief face-to-face behavioral counseling for 
alcohol misuse, 15 minutes).
    After consideration of public comments, we are finalizing the work 
RVU of 0.60 for HCPCS codes G0445-G0447 and finalizing our PE and 
clinical staff time refinements as proposed.
(32) Autologous Platelet Rich Plasma (HCPCS Code G0465)
    HCPCS code G0465 (Autologous platelet rich plasma (prp) or other 
blood-derived product for diabetic chronic wounds/ulcers, using an fda-
cleared device for this indication, (includes as applicable 
administration, dressings, phlebotomy, centrifugation or mixing, and 
all other preparatory procedures, per treatment)) was created for CY 
2022 (retroactively dated back to the effective date of the policy, 
April 13, 2021) and assigned contractor pricing (NCD 270.3, CR 12403).
    Following the publication of the CY 2023 PFS proposed rule, we 
received two comments on the pricing of HCPCS code G0465, and the 3C 
patch system supply which is topically applied for the management of 
exuding cutaneous wounds, such as leg ulcers, pressure ulcers, and 
diabetic ulcers and mechanically or surgically debrided wounds (87 FR 
69420). One commenter submitted invoices associated with the pricing of 
the 3C patch system (SD343) supply for which we established a price of 
$625.00 in the CY 2021 PFS final rule (85 FR 84498). The commenter 
requested that CMS update its supply database based on invoices 
submitted for SD343 to reflect an updated price of $750.00 per unit. 
The commenter also requested national pricing for HCPCS code G0465, 
expressing concern that insufficient payment disproportionately impacts 
vulnerable populations. The commenter requested a payment rate of 
$1,408.90 for HCPCS code G0465 in the office setting, stating that this 
rate would appropriately account for the purchase of the 3C patch, as 
well as the other related costs and supply inputs required for point of 
care creation and administration.
    In response, we stated in the CY 2023 PFS final rule that we did 
not have enough information to establish national pricing at this time 
for HCPCS code G0465 (87 FR 69420). We stated that we would consider 
the commenters' feedback for future rulemaking while maintaining 
contractor pricing for CY 2023, which would allow for more flexibility 
for contractors to establish appropriate pricing using available 
information. We appreciated the invoice submission with additional 
pricing information for the SD343 supply and we updated our supply 
database for supply code SD343 at a price of $678.57 based on an 
average of the submitted invoices.
    Since the publication of the CY 2023 PFS final rule, interested 
parties have continued to request national pricing for HCPCS code G0465 
due to their perception of inconsistent and insufficient payment for 
this service by the MACs. CMS has asked the interested parties to 
engage with the MACs to establish adequate payment for HCPCS code 
G0465. The interested parties have continued to state that most MACs 
have not established consistent payment rates and the rates are 
heterogeneous; some are significantly below the cost of performing this 
service, leading to an unpredictable process and inadequate rates, 
creating barriers to access this service.
    Due to these concerns, we proposed to establish national pricing 
for HCPCS code G0465 for CY 2025. We proposed to value HCPCS code G0465 
using a crosswalk to CPT code 15271 (Application of skin substitute 
graft to trunk, arms, legs, total wound surface area up to 100 sq cm; 
first 25 sq cm or less wound surface area), drawing from a selection of 
relevant studies.\20\ \21\ \22\ \23\ We proposed a work RVU of 1.50 for 
HCPCS code G0465 based on the crosswalk to CPT code 15271 because wound 
surface area sizes in current literature appear to be less than 100 sq 
cm for patients with diabetes and/or chronic ulcers. We also proposed 
to use the direct PE inputs included with CPT code 15271 for valuing 
HCPCS code G0465, with the additional inclusion of the 3C patch system 
(SD343) supply that we priced in CY 2023. We noted that the

[[Page 97807]]

payment includes debridement, which may involve a wound reaching the 
bone. Therefore, debridement may not be billed separately. In addition, 
we currently sought comments on other available crosswalks from the 
broader medical community. For example, CPT code 15277 (Application of 
skin substitute graft to face, scalp, eyelids, mouth, neck, ears, 
orbits, genitalia, hands, feet, and/or multiple digits, total wound 
surface area greater than or equal to 100 sq cm; first 100 sq cm wound 
surface area, or 1% of body area of infants and children) with a work 
RVU of 4.00 and CPT code 15273 (Application of skin substitute graft to 
trunk, arms, legs, total wound surface area greater than or equal to 
100 sq cm; first 100 sq cm wound surface area, or 1% of body area of 
infants and children) with a work RVU of 3.50 could also be viable 
crosswalk options. We solicited comments regarding our selection of CPT 
code 15271 as a crosswalk code, as well as general comments and 
available studies regarding the appropriate valuation of HCPCS code 
G0465.
---------------------------------------------------------------------------

    \20\ Gethin, G et al. ``The profile of patients with venous leg 
ulcers: A systematic review and global perspective.'' Journal of 
tissue viability vol. 30,1 (2021): 78-88. doi:10.1016/
j.jtv.2020.08.003.
    \21\ Sheehan, Peter et al. ``Percent change in wound area of 
diabetic foot ulcers over a 4-week period is a robust predictor of 
complete healing in a 12-week prospective trial.'' Plastic and 
reconstructive surgery vol. 117,7 Suppl (2006): 239S-244S. 
doi:10.1097/01.prs.0000222891.74489.33.
    \22\ Oyibo, S O et al. ``The effects of ulcer size and site, 
patient's age, sex and type and duration of diabetes on the outcome 
of diabetic foot ulcers.'' Diabetic medicine: a journal of the 
British Diabetic Association vol. 18,2 (2001): 133-8. doi:10.1046/
j.1464-5491.2001.00422.x.
    \23\ Patry, J[eacute]r[ocirc]me et al. ``Outcomes and prognosis 
of diabetic foot ulcers treated by an interdisciplinary team in 
Canada.'' International wound journal vol. 18,2 (2021): 134-146. 
doi:10.1111/iwj.13505.
---------------------------------------------------------------------------

    Comment: While many commenters supported establishing national 
pricing for HCPCS code G0465 for CY 2025, they disagreed with the 
proposed crosswalk to CPT codes 15271, 15273, and 15277. Commenters 
asserted that these codes do not accurately reflect the work RVUs and 
non-facility PE RVUs required for providing this treatment in a 
physician office setting. Commenters stated that autologous blood-
derived products are not skin substitutes, and therefore, the proposed 
skin substitute crosswalk codes do not adequately account for all the 
steps involved in preparing and delivering this wound care treatment. 
They highlighted that platelet-rich plasma (PRP) requires significant 
point-of-care preparation, unlike skin substitutes. According to the 
commenters, the physician work for G0465 includes multiple steps, such 
as drawing blood, preparing the blood-derived gel, and applying it to 
complex wounds--procedures that are more involved than applying a skin 
substitute. The commenters emphasized that the proposed work RVUs based 
on the crosswalks are too low and do not account for the substantial 
physician effort required. Several commenters instead suggested 
alternative crosswalks to CPT codes related to epidermal or dermal 
autografts, such as CPT codes 15110 (Epidermal autograft, trunk, arms, 
legs; first 100 sq cm or less, or 1% of body area of infants and 
children), 15115 (Epidermal autograft, face, scalp, eyelids, mouth, 
neck, ears, orbits, genitalia, hands, feet, and/or multiple digits; 
first 100 sq cm or less, or 1% of body area of infants and children), 
15120 (Split-thickness autograft, face, scalp, eyelids, mouth, neck, 
ears, orbits, genitalia, hands, feet, and/or multiple digits; first 100 
sq cm or less, or 1% of body area of infants and children (except 
15050)), which they believe better align with the actual work involved.
    Several commenters also stated that debridement is a crucial part 
of the physician's work when performing the service described by HCPCS 
code G0465, particularly for complex wounds that may involve tunneling 
or contact with bone. They emphasized that debridement, which is 
essential before each application of an autologous blood-derived 
product, should be factored into the RVU calculation for HCPCS code 
G0465. Commenters recommended considering relevant debridement codes, 
such as CPT codes 11042 (Debridement, subcutaneous tissue (includes 
epidermis and dermis, if performed); first 20 sq cm or less), 11043 
(Debridement, muscle and/or fascia (includes epidermis, dermis, and 
subcutaneous tissue, if performed); first 20 sq cm or less), 11044 
(Debridement, bone (includes epidermis, dermis, subcutaneous tissue, 
muscle and/or fascia, if performed); first 20 sq cm or less), and 97597 
(Debridement (e.g., high pressure waterjet with/without suction, sharp 
selective debridement with scissors, scalpel and forceps), open wound, 
(e.g., fibrin, devitalized epidermis and/or dermis, exudate, debris, 
biofilm), including topical application(s), wound assessment, use of a 
whirlpool, when performed and instruction(s) for ongoing care, per 
session, total wound(s) surface area; first 20 sq cm or less). Assuming 
debridement is not separately payable, a few commenters suggested 
increasing the work RVUs for HCPCS code G0465 by incorporating values 
from these debridement codes.
    In addition, some commenters stated that the proposed pricing for 
supply code SD343, the 3C patch system, is outdated and inaccurate. 
They stated that the SD343 supply does not reflect the typical supply 
costs for PRP services because certain necessary components for PRP 
preparation and application are not included in the 3C patch system. 
Commenters also asserted that only products with FDA-cleared 
indications for wound care should be included in the national pricing 
for HCPCS code G0465, and products that do not meet these requirements 
should be excluded. Commenters stated that there may be other products 
in the market that do not meet the NCD requirements and cautioned that 
these other products likely have vastly different costs than products 
that do meet the NCD requirements. Commenters stated that the FDA-
cleared manufacturers sell their proprietary ingredients and supplies 
as a complete package, which are necessary for use in each 
manufacturer's process for creating the autologous blood-derived 
products, and they are not interchangeable between manufacturers. 
Commenters submitted a series of invoices and requested that CMS use 
them to update the pricing of the SD343 supply.
    Response: We thank commenters for their feedback. We were persuaded 
by commenters that the higher work valuation would provide a more 
accurate crosswalk for HCPCS code G0465, as PRP may require more work 
and complexity in using these products. To ensure adequate valuation of 
both physician work and practice expense, we are modifying our original 
proposal and instead finalizing national pricing for HCPCS code G0465 
for CY 2025 using a crosswalk to CPT code 15275 (Application of skin 
substitute graft to face, scalp, eyelids, mouth, neck, ears, orbits, 
genitalia, hands, feet, and/or multiple digits, total wound surface 
area up to 100 sq cm; first 25 sq cm or less wound surface area) 
instead of CPT code 15271 because we believe this code more accurately 
reflects the work involved in furnishing the service described by HCPCS 
code G0465.
    After reviewing the invoices submitted by commenters, we agree that 
the pricing data indicates an increase in the typical price of the 
SD343 supply over time. Therefore, we are finalizing an increase in the 
supply price from $678.57 to $770.83, based on twelve submitted 
invoices. Where prices appear inaccurate, and direct inputs do not 
reflect the full range of available PRP products, we encourage 
interested parties to submit invoices or other relevant information by 
February 10th of the following year to improve pricing accuracy in the 
direct PE database, following a process similar to our consideration of 
RUC recommendations.
    Lastly, while we acknowledge that the service provided under HCPCS 
code G0465 may differ from skin substitutes, we consider the work to be 
comparable, which is why we are using CPT code 15275 as the crosswalk. 
Because the code descriptor for HCPCS code G0465 includes description 
of all other preparatory procedures, we do not agree that the 
additional work described in the debridement codes referenced by 
commenters is not accounted for in the valuation of HCPCS code G0465. 
Therefore, we are finalizing a work RVU of 1.83 for HCPCS code G0465, 
which

[[Page 97808]]

is higher than the work RVU for CPT code 15271 as proposed, based on a 
crosswalk to CPT code 15275. Additionally, we are finalizing an 
increase in the supply price to $770.83, based on twelve submitted 
invoices.
(33) Temporary Female Intraurethral Valve-Pump (CPT Codes 0596T and 
0597T)
    In the CY 2024 PFS proposed rule, an interested party nominated two 
Category III CPT codes, CPT codes 0596T (Initial insertion of temporary 
valve-pump in female urethra) and 0597T (Replacement of temporary 
valve-pump in female urethra), as potentially misvalued. The nominator 
expressed concern about variability in MAC pricing for the contractor-
priced service. Additionally, the nominator highlighted that the 
payment amounts determined by MACs were inadequately low and did not 
account for the time and effort required to furnish the services. In 
their submission, the nominator discussed their anticipated inputs for 
both codes. For CPT code 0596T, the nominator stated that a physician 
typically spends 60 minutes inserting the Vesiflo inFlow System. The 
nominator stated that CPT code 0596T included various supplies, 
equipment, and clinical labor time totaling $1,902.76, with the inflow 
supply items making up about 99 percent of the total cost of supplies. 
For CPT code 0597T, the nominator stated that a physician spends 25 
minutes replacing the Vesiflo inFlow System and PE items were similar, 
with supplies, equipment and clinical labor time costing $505.30, with 
the inflow supply items making up about 98 percent of the total cost of 
supplies. We direct interested parties to the CY 2024 PFS final rule 
(88 FR 78850) for more detailed submission information regarding CPT 
codes 0596T and 0597T. After reviewing, we concluded that these codes 
were not potentially misvalued because they are Category III codes 
describing relatively new and low-volume services. Category III codes 
are contractor priced under the PFS, meaning that each MAC can 
establish pricing for the code within its jurisdiction, resulting in 
variability in payments.
    This year, the nominator newly informed CMS that their analysis of 
national payment rates showed that in most CMS jurisdictions, not only 
are these codes misvalued, but in most cases, they are not valued at 
all, with fee schedule amounts in most CMS jurisdictions at or near 
zero dollars. The nominator further emphasized that three physician 
experts, all employed in major university medical centers, have 
highlighted the challenges posed by the combination of high supply 
costs and inadequate fee schedule payments, which have hindered their 
ability to provide services covered by these codes over several years. 
According to the nominator, these selected physicians also expressed 
frustration with the reluctance of MACs to address or discuss this 
issue. Moreover, the nominator highlighted high access barriers as a 
significant concern. These barriers primarily affect Medicare's most 
vulnerable beneficiaries, particularly women experiencing permanent 
urinary retention (PUR), although we note that no quantifiable evidence 
was provided to support these statements. We acknowledge and appreciate 
the nominator's efforts in reaching out to experts in the field and 
patients who rely on these services to elucidate their significant 
needs.
    Since these two Category III CPT codes were not identified as 
potentially misvalued and were consequently priced by contractors, each 
MAC can set pricing for the code within its jurisdiction. This could 
result in inevitable variability in MAC pricings until they receive a 
higher number of claims, as stated by the nominator. Through our 
engagement with MACs, we found that claims for the two Category III CPT 
codes are reviewed on a case-by-case basis for medical necessity. If 
the claim is payable, the price will be determined at that time by the 
MAC. Additionally, these codes were a topic of discussion within the 
MAC pricing workgroup, and we observed that there was not a significant 
difference among the MACs in terms of allowances based on the proposed 
pricing methodologies. However, there is variance in how MACs load 
pricing for Category III codes. For instance, some MACs publish the 
price for the service before they receive any claims, while others set 
the price only after they receive claims that help determine the 
appropriate pricing. If a MAC does not load a price for a code before 
receiving any claims, the service can still be paid, but the allowance 
has not been published.
    We continue to hear concerns about these payment inconsistencies 
for CPT codes 0596T and 0597T. As a result, we recommended that the 
MACs establish more consistency in pricing, enabling the appropriate 
inclusion of the Vesiflo system in the code's PE valuation. Therefore, 
for CY 2025, we encouraged interested parties to provide more accurate 
and appropriate cost data, along with additional information regarding 
work RVU, work time, indicators, and utilization estimates for the 
MACs. This should complement the information provided by the nominator 
in the CY 2024 final rule (88 FR 78850) and will facilitate the 
process. To aid in this process, we are adding three new supplies to 
our direct PE database based on invoices submitted by interested 
parties: the inFlow Measuring Device at a price of $140 (SD370), the 
inFlow Valve-Pump Device at a price of $495 (SD371), and the inFlow 
Activator Kit at a price of $1,250 (SD372). Although we did not propose 
national pricing for these two Category III codes, we did note for the 
benefit of the MACs that CPT code 0596T will typically include one of 
each of these supplies, whereas CPT code 0597T will typically include 
only one of the supplies (SD371).
    We encouraged the MACs to continue to engage with interested 
parties by providing information on how they price these services. We 
welcomed additional comments from the broader medical community 
regarding the usage of this service, particularly concerning its safety 
and effectiveness, as well as potential factors contributing to its low 
utilization.
    Comment: Commenters supported the establishment of new supply codes 
(SD370, SD371, and SD372) for the inFlowTM female voiding 
prosthesis system (the inFlow System), which addresses the needs of 
women with permanent urinary retention (PUR). According to the 
commenters, the inFlow System offers a critical alternative to 
traditional intermittent catheterization, providing significant 
improvements in both health outcomes and quality of life for women with 
neurological conditions that limit their ability to self-catheterize. 
They stated that creating three new supply codes would standardize and 
improve payment rates by Medicare Administrative Contractors (MACs), 
thereby reducing access barriers and increasing the utilization of the 
inFlow system. They emphasized that finalizing appropriate pricing for 
these device-intensive procedures, as proposed, is essential to 
ensuring that Medicare beneficiaries have access to this important, 
life-enhancing technology.
    Response: We thank commenters for their overwhelming support for 
our proposal. After consideration of public comments, we are finalizing 
creation of three new supply codes in the PE database to facilitate 
appropriate pricing by the MACs: the inFlow Measuring Device at a price 
of $140 (SD370), the inFlow Valve-Pump Device at a price of $495 
(SD371), and the inFlow Activator Kit at a price of $1,250 (SD372) as 
proposed.

[[Page 97809]]

(34) PE-Only Replacement Code for Heart Failure System
    Interested parties have expressed concern about the lack of coding 
and a billing mechanism when practitioners incur costs replacing 
identified components of the CardioMEMSTM Heart Failure 
System used in the physician service described by CPT code 33289 
(Transcatheter implantation of wireless pulmonary artery pressure 
sensor for long-term hemodynamic monitoring, including deployment and 
calibration of the sensor, right heart catheterization, selective 
pulmonary catheterization, radiological supervision and interpretation, 
and pulmonary artery angiography, when performed).
    The CardioMEMSTM Heart Failure System furnished during 
this service allows practitioners treating heart failure patients to 
wirelessly monitor and measure pulmonary artery pressure and heart rate 
in patients with heart failure and transmit the information to the 
physician to inform the treatment plan for the patient. The system 
includes two critical components: first, a miniaturized, wireless 
monitor, which is implanted into a patient's pulmonary artery, and 
second, a smart pillow (the CardioMEMSTM Patient Electronics 
System), which captures and transmits readings via safe radio frequency 
from the patient's implanted CardioMEMSTM Heart Failure 
System. Overall, the CardioMEMSTM Heart Failure System 
enables patients to transmit critical heart failure status information 
to clinicians regularly, potentially eliminating the need for frequent 
clinic or hospital visits.
    Interested parties have highlighted the critical importance of the 
device for heart failure patients who require close monitoring of 
weight and blood pressure to prevent fluid buildup around the heart and 
have requested that CMS establish coding to describe when practitioners 
incur costs during clinical scenarios when crucial components of the 
system require replacement. Given that these components are crucial for 
system functionality and there is no existing coding framework to 
address their replacement, we believe that establishing appropriate 
coding and payment mechanisms can facilitate the provision of these 
services more effectively in the office and hospital settings. Given 
provided information, we proposed assigning contractor pricing to this 
PE-only code for CY 2025. We proposed a new code, HCPCS code G0555 
(Provision of replacement patient electronics system (for example, 
system pillow) for home pulmonary artery pressure monitoring including 
provision of materials for use in the home and reporting of test 
results to physician or qualified health care professional). We sought 
feedback from interested parties on our contractor pricing approach 
with the aim of establishing national pricing through future rulemaking 
that can be billed under the OPPS and PFS specifying an ongoing care 
visit for the CardioMEMSTM Heart Failure System along with 
the provision of the replacement part. We are specifically looking for 
information from the broader medical community regarding direct costs 
from invoices for the replacement component referenced above, 
utilization estimates, and potential indicators. Additionally, we 
solicited comments on additional direct PE inputs that we should 
consider.
    Comment: Many commenters disagreed with our proposed new code, 
HCPCS code G0555 (Provision of replacement patient electronics system 
(for example, system pillow) for home pulmonary artery pressure 
monitoring including provision of materials for use in the home and 
reporting of test results to physician or qualified health care 
professional). Many commenters stated that the proposed HCPCS code 
G0555 does not align with the current distribution and billing 
framework because it conflates two distinct functions: replacement of 
the patient electronics system (PES), often furnished by durable 
medical equipment (DME) suppliers, and reporting test results to the 
physician, usually performed by outpatient hospital departments (OPDs) 
and independent diagnostic testing facilities (IDTFs). Due to these 
separate functions handled by different parties, some commenters 
recommended splitting HCPCS code G0555 into two distinct codes--one for 
PES replacement and another for reporting test results. They agreed 
that contractor pricing the proposed new code would be appropriate for 
the replacement PES.
    Additionally, commenters raised concerns regarding the removal of 
the previous monitoring code (G2066) for CardioMEMS monitoring. Some 
commenters stated that CMS's decision to delete HCPCS code G2066, which 
was used for reporting the technical component of remote monitoring, 
has created a billing gap for IDTFs and OPDs. Commenters recommended 
creating a new code to allow these facilities to report the technical 
aspects of monitoring; they specifically asked for the establishment of 
coding that enables IDTFs and OPDs to bill for these services, with 
contractor pricing as an interim solution.
    Response: First, we note that the replacement of the PES does not 
meet the criteria of DME as outlined in section 1861(n) of the Act. For 
more information, please refer to the DMEPOS Public Meeting on 6/1/
2016, Application #16.019--Request to establish a new Level II HCPCS 
code to identify the replacement Patient Electronic System at https://www.cms.gov/Medicare/Coding/MedHCPCSGenInfo/Downloads/2016-06-01-HCPCS-Application-Summary.pdf. Secondly, we clarify that the last part of the 
proposed code descriptor (reporting of test results to physician or 
qualified health care professional) refers to the capability of the 
equipment, not the act of reporting. In other words, the code is not 
describing two distinct services; therefore, separate coding is 
unnecessary. We also believe that establishing additional coding for 
reporting the technical component of remote monitoring is unnecessary. 
Following CMS's decision to delete HCPCS code G2066, the services 
previously reported using HCPCS code G2066 will now be reported using 
the technical component of CPT codes 93297 and 93298. Our rationale for 
finalizing these values was discussed extensively in the CY 2024 PFS 
final rule (88 FR 78913 through 78914).
    After considering the public comments, we are finalizing the 
proposed descriptor with modifications. The final descriptor for HCPCS 
code G0555 is Provision of replacement patient electronics system 
(e.g., system pillow, handheld reader) for home pulmonary artery 
pressure monitoring. We believe these revisions will allow flexibility 
in coding and provide greater access for patients. We are finalizing 
contractor pricing as proposed.
(35) Portable X-Ray (HCPCS Codes R0070-R0075)
    Several Portable X-Ray (PXR) suppliers and trade organizations 
continue to express longstanding concerns with how payment is 
established for transportation related to these services (HCPCS codes 
R0070-R0075). CMS has worked with interested parties over the past 
several years to understand the costs of these services while taking 
into consideration the MACs perspective on pricing of these costs. 
Through recent ongoing discussions with interested parties, we learned 
that interested parties are concerned with the recognition of costs 
incurred from PXR services and are wanting more consistency in the 
pricing

[[Page 97810]]

of these services, including the application of an inflation factor.
    We acknowledged the interested parties' concerns and clarified that 
interested parties may best engage with the MACs through appropriate 
reporting of cost data in the MAC requested format. This information 
provided by interested parties can help MACs establish payment rates 
that are more reflective of costs incurred. MACs are then able to 
consider this cost information and apply an inflation factor to update 
changes in costs year over year.
    However, CMS recognizes that we should maintain consistency in 
pricing these services that are more indicative of changes in costs 
that occur yearly. While still preserving MAC discretion, CMS 
highlights the usage of an ambulance inflation factor (AIF) that is 
typically used to adjust ambulance services, which include 
transportation costs. The AIF is updated annually, and we believe MACs 
may consider using the AIF to price PXR services when establishing 
payment rates that are more consistent and reflective of costs 
incurred.
    Additionally, interested parties highlighted inconsistency with 
language found in our manual and program memoranda policies related to 
transportation costs. Therefore, to remain consistent and transparent 
in the pricing of PXR services, we proposed to revise language in our 
Medicare Claims Processing manual (Chapter 13, 90.3 and Chapter 23, 
30.5) to reflect any updates to our guidance for these services.
    We received public comments on our proposal. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters supported CMS' proposal to revise language 
in the Medicare Claims Processing Manual (MPCM) and believe this will 
help assure that MACs apply appropriate inflation factor and other 
required updates to PXR services.
    Response: We thank commenters for their support of our proposal.
    Comment: Commenters also mentioned a few additional policy 
refinements for PXR services including requiring transparency from MACs 
regarding the annual update as well as with the PFS ratesetting process 
for direct and indirect costs, establishing guidelines for a timelier 
periodic review process, and specifically consolidating two sections of 
the MCPM related to PXR transportation (Ch. 13, 90.3 and Ch. 23, 30.5) 
to ensure a single guidance document for both MACs and PXR suppliers.
    Response: We thank commenters for these suggestions and may take 
them into consideration for future rulemaking.
    After consideration of the comments received, we are finalizing our 
proposal to revise language in our Medicare Claims Processing manual 
(Chapter 13, 90.3 and Chapter 23, 30.5) to reflect updates to our 
guidance for these services. The Medicare Claims Processing manual is 
available at https://www.cms.gov/regulations-and-guidance/guidance/manuals/internet-only-manuals-ioms-items/cms018912.
(36) Non-Chemotherapy Administration
    CMS received inquiries from several external parties with concerns 
that MACs have developed local coverage determinations (LCDs) and local 
coverage articles (LCAs) that down code or restrict payment for complex 
and non-chemotherapeutic drug administration for CPT code series 96401-
96549, when used for the administration of several biologic and 
infusion drugs, including drugs furnished to treat, for example, 
rheumatology related conditions.
    CMS requested information in the CY 2024 PFS proposed rule (88 FR 
52837) seeking public feedback regarding the concerns of down coding or 
denials for the administration of non-chemotherapeutic infusion drugs. 
We received comments that asked for additional clarification from CMS 
regarding the payment guidelines for the complex non-chemotherapeutic 
administration code series and updates to the IOM. Commenters urged CMS 
to provide additional guidance clarifying the conditions under which 
these complex infusion drugs should be payable.
    In response to the comments received, and in response to continuing 
inquiries on downcoding and or restrictions on payment for non-
chemotherapy complex infusion services, we proposed an updated policy 
based largely on the IOM Medicare Claims Processing Manual, Chapter 12, 
section 30.5, to include language currently consistent with CPT code 
definitions for the complex non-chemotherapy infusion code series 
stating that the administration of infusion for particular kinds of 
drugs and biologics can be considered complex and may be appropriately 
reported using the chemotherapy administration CPT codes 96401-96549. 
We noted that CPT guidance describes requirements for these non-
chemotherapy complex drugs or biologic agents to include the need for 
staff with advanced practice training and competency, such as, a 
physician or other qualified health care professional to monitor the 
patient during these infusions due to the incidence of severe adverse 
reactions. There are also special considerations for preparation, 
dosage, or disposal for these infusion drugs. These services do involve 
serious patient risk which requires frequent consults with a physician 
or other qualified healthcare professional. Based on these facts and 
comments, we proposed to update our subregulatory guidance accordingly.
    This will also provide complex clinical characteristics for the 
MACs to consider as criteria when determining payment of claims for 
these services. The current IOM language does not include the unique 
characteristics of the administration of these drugs that could provide 
additional context to the MACs when they are determining appropriate 
payment. Updating the IOM with the increased detail of these codes 
would be responsive to the concerns and requests of external parties 
and will ensure the IOM is consistent with published guidance.
    Therefore, we solicited and welcomed comments on our proposal to 
revise the IOM to better reflect how complex non-chemotherapeutic drug 
administration infusion services are furnished and billed.
    Comment: Commenters were generally very supportive of CMS' proposal 
to update the IOM with additional detail and considerations of 
complexity for the administration of complex non-chemotherapeutic 
drugs. Commenters also stated they were pleased that MACs have retired 
the LCAs related to this service and that CMS has issued previous 
instructions to the MACs regarding down coding. A few commenters 
suggested additional clarifications and revisions beyond the proposed 
language in the IOM, such as a clarification that stem cell transplant 
and CAR-T services should not be billed using the chemotherapy 
administration code series. Another commenter requested that CMS remove 
``chemotherapy'' terminology and replace it with ``immunomodulatory'' 
and that CMS extend additional IOM guidance to subcutaneous injections. 
One commenter also requested that CMS refer the entire code series to 
the CPT Editorial Panel for review.
    Response: We appreciate commenters support for our proposed 
revisions to the IOM for these services and we acknowledge commenters 
additional suggestions to clarify the guidance. Currently, we believe 
that additions beyond our proposed changes to the IOM and revisions to 
terms beyond the scope of general coding guidance are not

[[Page 97811]]

required. We continue to believe that the proposed increased detail in 
alignment with current CPT coding definitions will provide clear 
guidance and considerations when MACs are determining appropriate 
payment for these services. Additionally, CMS is an active participant 
in the CPT Editorial Panel review process and encourages interested 
parties to pursue coding change requests by CPT as necessary.
    Comment: Several commenters requested that CMS take additional 
steps to prevent future down coding of these services. Commenters 
stated that CMS should establish documentation requirements in the 
patient medical record to demonstrate that the reported complex drug 
administration code meets IOM guidance. Commenters also requested that 
CMS release a Medicare Learning Network (MLN) article to educate MACs 
and physicians on the finalized guidance. Commenters also urged CMS to 
prohibit audits and recoupments for these services until the effective 
date of the finalized IOM revisions.
    Response: We thank commenters for their suggested additional steps 
to prevent future down coding of these services. Currently, we believe 
that the proposed increased detail and considerations of complexity to 
the IOM will sufficiently assist MACs with their determination of 
proper payment for these services. We are encouraged by the positive 
feedback from commenters regarding the retired LCAs and the previous 
instructions issued to the MACs via TDL and CR. We will continue to 
monitor all feedback from external parties and will pursue additional 
steps to ensure proper payment for these services as necessary.
    After consideration of all public comments, we are finalizing 
revisions to the IOM to update guidance on complex non-chemotherapeutic 
drug administration as proposed.
(37) Hospital Inpatient or Observation (I/O) Evaluation and Management 
(E/M) Add-On for Infectious Diseases (HCPCS Code G0545)
    Interested parties have continued to engage with CMS and provide 
recommendations to recognize the increased work associated with 
diagnosis, management, and treatment of infectious diseases that may 
not be adequately accounted for in current hospital inpatient or 
observation E/M codes. Infectious diseases are unique in that they 
present infection control risks for the patient and close contacts, 
including healthcare staff, that require attention to safely care for 
the patient. They present unique challenges in diagnosis in that any 
previous healthcare interaction could affect the individual resistance 
patterns of pathogens infecting the individual patient and require 
close contact with public health agencies since resistance patterns are 
constantly changing, so a much more extensive medical review is 
required. Additionally, individual decisions regarding treatment are 
unique in that use in one patient affects resistance patterns of the 
entire population, which requires additional expertise to inform 
antimicrobial selection and management.
    We believe that the timing is appropriate for establishing a 
payment rate for infectious disease physician services since the COVID-
19 PHE has ignited a hypervigilance for infectious diseases. Therefore, 
for CY 2025, we proposed a new HCPCS code to describe intensity and 
complexity inherent to hospital inpatient or observation care 
associated with a confirmed or suspected infectious disease performed 
by a physician with specialized training in infectious diseases. The 
full descriptor for the hospital I/O E/M visit complexity add-on code 
is HCPCS code G0545 (Visit complexity inherent to hospital inpatient or 
observation care 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). We anticipate that HCPCS 
code G0545 would be reported by physicians with specialized infectious 
disease training.
    We stated in the proposed rule that we do not believe we should 
limit the scope of codes with which this add-on HCPCS code could be 
billed based on visit level; or initial, same day discharge, or 
subsequent hospital inpatient or observation codes. We proposed HCPCS 
code G0545 as an add-on code (ZZZ global period) separately reportable 
in addition to CPT codes 99221 (Initial hospital inpatient or 
observation care, per day, for the evaluation and management of a 
patient, which requires a medically appropriate history and/or 
examination and straightforward or low level medical decision making. 
When using total time on the date of the encounter for code selection, 
40 minutes must be met or exceeded.), 99222 (Initial hospital inpatient 
or observation care, per day, for the evaluation and management of a 
patient, which requires a medically appropriate history and/or 
examination and moderate level of medical decision making. When using 
total time on the date of the encounter for code selection, 55 minutes 
must be met or exceeded.), 99223 (Initial hospital inpatient or 
observation care, per day, for the evaluation and management of a 
patient, which requires a medically appropriate history and/or 
examination and high level of medical decision making. When using total 
time on the date of the encounter for code selection, 75 minutes must 
be met or exceeded.), 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.), 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.), 99234 (Hospital inpatient or observation care, 
for the evaluation and management of a patient including admission and 
discharge on the same date, which requires a medically appropriate 
history and/or examination and straightforward or low level of medical 
decision making. When using total time on the date of the encounter for 
code selection, 45 minutes must be met or exceeded.), 99235 (Hospital 
inpatient or observation care, for the evaluation and management of a 
patient including admission and discharge on the same date, which 
requires a medically appropriate history and/or examination and 
moderate level of medical decision making. When using total time on the 
date of the encounter for code selection, 70 minutes must be met or 
exceeded.), and 99236 (Hospital inpatient or observation care, for the 
evaluation and management of a patient including admission and 
discharge on the same date, which requires a

[[Page 97812]]

medically appropriate history and/or examination and high level of 
medical decision making. When using total time on the date of the 
encounter for code selection, 85 minutes must be met or exceeded.). 
Based on feedback from commenters on the CY 2022 PFS proposed rule 
comment solicitation regarding infectious diseases (86 FR 65125 through 
65126) and feedback from interested parties, HCPCS code G0545 would 
include the following proposed service elements:
1. Disease Transmission Risk Assessment and Mitigation
     Developing, following, and supervising specialized, 
individualized infection control protocols for an individual patient 
based on their diagnosis and risks in order to reduce risk of disease 
transmission.
     Coordinating with human resources regarding infection 
prevention and control measures to enable healthcare facility staff to 
safely care for patient.
     Counseling patients, family members and caregivers 
regarding infection prevention.
     Managing infection prevention and treatment protocols 
associated with transitions of care for complex patients.
2. Public Health Investigation, Analysis, and Testing
     In-depth patient chart review that entails going back 
farther in time and assessing the complete breadth of all health care 
interactions, with higher-level synthesis for complex diagnoses.
     Communicating with the clinical microbiology lab and 
directly reviewing specimens.
     Coordinating specialized diagnostic evaluations (for 
example, identifying and facilitating diagnostic laboratory tests only 
available at specialized laboratories, the state health department, 
and/or the Centers for Disease Control & Prevention).
     Coordinating with Federal, State and local public health 
agencies and laboratories to assist with contact tracing, obtaining 
specimens for specialized testing, and/or identifying prior testing and 
treatment for communicable diseases in other jurisdictions.
3. Complex Antimicrobial Therapy Counseling & Treatment
     Counseling patients, family members, and caregivers 
regarding antimicrobial stewardship and resistance for the patient.
     Engaging in complex medical decision-making associated 
with antimicrobial prescribing including considerations such as 
antimicrobial resistance patterns, emergence of new variants/strains, 
recent antibiotic exposure, interactions/complications from 
comorbidities including concurrent infections, public health 
considerations to minimize development of antimicrobial resistance, and 
emerging and re-emerging infections.
    For HCPCS code G0545, we proposed a work RVU of 0.89 based on the 
work RVU for 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)), which is 0.33, multiplied by a 
ratio of the work RVUs for CPT codes 99223 and 99213 (Office or other 
outpatient visit for the evaluation and management of an established 
patient, which requires a medically appropriate history and/or 
examination and low level of medical decision making. When using total 
time on the date of the encounter for code selection, 20 minutes must 
be met or exceeded.), 3.50 and 1.30, respectively. (This ratio is the 
work RVU of CPT code 99223 divided by the work RVU of CPT code 99213, 
3.50 divided by 1.30, which equals 2.69. Multiplying the 0.33 work RVU 
of HCPCS code G2211 times 2.69 results in our work RVU of 0.89.) We 
stated in the proposed rule that we believe the relationship between 
the complexity add-on HCPCS code G2211 and a common base code for the 
add-on code, CPT code 99213, would strike the correct balance to 
estimate the time and complexity associated with the proposed new HCPCS 
code G0545, compared to what we believe would be a common base code for 
this new add-on code, CPT code 99223. HCPCS code G2211 has a total time 
of 11 minutes; therefore, we proposed a total time of 30 minutes for 
HCPCS code G0545 based on the same ratio (11 minutes times the same 
2.69 ratio equals 30 minutes). HCPCS code G2211 has no direct PE 
inputs, and we proposed the same for HCPCS code G0545.
    We stated that we believe that the work RVU appropriately falls 
between the following bracket add-on codes: HCPCS code G0316 (Prolonged 
hospital inpatient or observation care evaluation and management 
service(s) beyond the total time for the primary service (when the 
primary service has been selected using time on the date of the primary 
service); each additional 15 minutes by the physician or qualified 
healthcare professional, with or without direct patient contact (list 
separately in addition to CPT codes 99223, 99233, and 99236 for 
hospital inpatient or observation care evaluation and management 
services). (do not report g0316 on the same date of service as other 
prolonged services for evaluation and management 99358, 99359, 99418, 
99415, 99416). (do not report g0316 for any time unit less than 15 
minutes)) with a work RVU of 0.61 and the professional principal care 
management, chronic care management, and complex chronic care 
management CPT codes 99425 (Principal care management services, for a 
single high-risk disease, with the following required elements: one 
complex chronic condition expected to last at least 3 months, and that 
places the patient at significant risk of hospitalization, acute 
exacerbation/decompensation, functional decline, or death, the 
condition requires development, monitoring, or revision of disease-
specific care plan, the condition requires frequent adjustments in the 
medication regimen and/or the management of the condition is unusually 
complex due to comorbidities, ongoing communication and care 
coordination between relevant practitioners furnishing care; each 
additional 30 minutes provided personally by a physician or other 
qualified health care professional, per calendar month (List separately 
in addition to code for primary procedure)), 99437 (Chronic care 
management services with the following required elements: multiple (two 
or more) chronic conditions expected to last at least 12 months, or 
until the death of the patient, chronic conditions that place the 
patient at significant risk of death, acute exacerbation/
decompensation, or functional decline, comprehensive care plan 
established, implemented, revised, or monitored; each additional 30 
minutes by a physician or other qualified health care professional, per 
calendar month (List separately in addition to code for primary 
procedure)), and 99489 (Complex chronic care management services with 
the following required elements: multiple (two or more) chronic 
conditions expected to last at least 12 months, or until the death of 
the patient, chronic conditions that place the patient at significant 
risk of death, acute exacerbation/decompensation, or functional 
decline, comprehensive care plan established, implemented, revised, or 
monitored, moderate or high complexity medical decision making; each 
additional 30

[[Page 97813]]

minutes of clinical staff time directed by a physician or other 
qualified health care professional, per calendar month (List separately 
in addition to code for primary procedure)) with work RVUs of 1.00.
    To help inform whether our proposed descriptor is appropriate and 
reflects the typical service, we sought comment on the typical amount 
of time infectious disease physicians spend on the service elements and 
the relative intensity compared to similar service elements of other 
CPT codes. We noted that the valuation of HCPCS code G0545 is meant to 
capture the visit complexity inherent to hospital inpatient or 
observation care associated with a confirmed or suspected infectious 
disease by an infectious diseases consultant that is not accounted for 
in the appropriate hospital inpatient or observation E/M base code 
billed by the infectious disease physician.
    Interested parties have stated that consultations are a common E/M 
service performed by infectious disease clinicians, particularly in the 
inpatient setting, but stated that these services are no longer 
recognized by Medicare. Interested parties have also stated that this 
has resulted in a significant reduction in reporting and payment for 
infectious disease physician services. We noted that we addressed this 
in the CMS Claims Processing Manual, Chapter 12, section 30.6.9 F, 
stating that ``Physicians may bill initial hospital care service codes 
(99221-99223), for services that were reported with CPT consultation 
codes (99241-99255) prior to January 1, 2010, when the furnished 
service and documentation meet the minimum key component work and/or 
medical necessity requirements. Physicians may report a subsequent 
hospital care CPT code for services that were reported as CPT 
consultation codes (99241-99255) prior to January 1, 2010, where the 
medical record appropriately demonstrates that the work and medical 
necessity requirements are met for reporting a subsequent hospital care 
code (under the level selected), even though the reported code is for 
the provider's first E/M service to the inpatient during the hospital 
stay.'' Accordingly, we sought comment on any potential barriers for 
infectious disease physicians to use the initial and subsequent day 
hospital inpatient or observation codes, CPT codes 99221 through 99223 
and 99231 through 99233, for consultations if they meet the coding 
requirements for time and/or medical decision making (MDM). We noted 
that understanding the barriers to utilizing these codes is important, 
as these codes would serve as the base codes for the proposed HCPCS 
code G0545 and would be billed by the infectious disease physician 
prior to billing HCPCS code G0545.
    Finally, we recognized that historically, the CPT Editorial Panel 
has frequently created CPT codes describing services that we originally 
established using G codes and adopted them through the CPT Editorial 
Panel process. We noted that we would consider using any newly 
available CPT coding to describe services similar to those described 
here in future rulemaking.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters supported our proposal to create a new 
HCPCS code to describe intensity and complexity inherent to hospital 
inpatient or observation care associated with a confirmed or suspected 
infectious disease. Specifically, commenters supported the code's 
creation, the proposed work RVU, code descriptor, code structure to be 
an add-on code to certain I/O E/M codes, and the three proposed service 
elements of the codes.
    Some commenters requested clarification on certain aspects of the 
code. Specifically, some commenters requested clarification that 
performing one, or any combination, of the three proposed service 
elements would be sufficient to bill for the code because it would not 
be feasible to require all three in a single instance. One commenter 
asked for clarification regarding the intention to recognize the 
inherent complexity for all infectious diseases (for example, bacterial 
infections, MRSA, C. diff, COVID-19) or primarily emerging viral/
microbial infections with epidemic potential. The commenter also 
requested clarification on the exclusion of the I/O E/M discharge CPT 
codes 99238 (Hospital inpatient or observation discharge day 
management; 30 minutes or less on the date of the encounter) and 99239 
(Hospital inpatient or observation discharge day management; more than 
30 minutes on the date of the encounter), on the specified list of 
applicable base codes for HCPCS code G0545, and the inclusion of CPT 
code 99213 (low MDM) in the work RVU analysis. The commenter stated 
that diagnosing and managing suspected, known, or emerging infectious 
diseases typically involves high medical decision making, therefore, 
CPT code 99215 (Office or other outpatient visit for the evaluation and 
management of an established patient, which requires a medically 
appropriate history and/or examination and low level of medical 
decision making. When using total time on the date of the encounter for 
code selection, 20 minutes must be met or exceeded.) would be more 
appropriate for potential work RVU comparisons. Lastly, the commenter 
requested clarification on the proposed total time of 30 minutes. The 
commenter asked if the proposed total time of 30 minutes is used to 
determine the quantity of reportable units of HCPCS code G0545, or if 
only one unit of HCPCS code G0545 is reportable per encounter.
    Some commenters requested clarification that that no additional 
documentation requirements were being established, similar to HCPCS 
code G2211, and suggested that the infectious disease specialist's 
medical record should sufficiently demonstrate inherent complexity.
    Response: We appreciate the overwhelming support from commenters 
regarding all elements of the proposed HCPCS code G0545. Regarding the 
clarifications requested about the three proposed service elements, we 
confirm that HCPCS code G0545 is intended to be used for one, or any 
combination, of the three proposed service elements. We recognize that 
each service element may not be medically appropriate for every patient 
with an infectious disease. Furthermore, we are clarifying that HCPCS 
code G0545 is intended to recognize the inherent complexity for all 
infectious diseases, and not just emerging infectious diseases with 
epidemic potential. Clostridium Difficile infection, for example, can 
complicate antibiotic selection and can spread from patient to patient 
in an inpatient setting without proper infection prevention strategies 
put in place, requiring several of the code descriptor elements be 
performed by the treating clinician. As stated in the proposed rule, we 
continue to believe the relationship between HCPCS code G2211 and a 
common base code for the add-on code, CPT code 99213, would strike the 
correct balance to estimate the time and complexity associated with 
HCPCS code G0545, compared to what we believe would be a common base 
code for this new add-on code, CPT code 99223. This assumption is 
supported by 2022 Medicare utilization data for the infectious disease 
specialty, available on the CMS website under downloads for the CY 2025 
PFS final rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html. If we take the 
commenter's suggestion and use CPT code 99215 in our analysis to 
represent the high MDM O/O E/M visit, this would decrease the work RVU 
for

[[Page 97814]]

HCPCS G0545 (that is, the work RVU of CPT code 99223 divided by the 
work RVU of CPT code 99215, 3.50 divided by 2.80, which equals 1.25. 
Multiplying the 0.33 work RVU of HCPCS code G2211 times 1.25 would 
result in a work RVU of 0.41.). We acknowledge that this was likely not 
the commenter's intention, and that CPT code 99223, used in the 
proposed work RVU analysis, represents the most common initial I/O E/M 
visit billed by the infectious disease specialty in 2022 Medicare 
utilization data, and represents high MDM. Additionally, CPT code 99232 
is the most common I/O E/M visit billed by the infectious disease 
specialty, which represents the subsequent I/O E/M visit with moderate 
MDM, but using this code in the work RVU analysis would also decrease 
the work RVU calculation for HCPCS code G0545 (that is, the work RVU of 
CPT code 99232 divided by the work RVU of CPT code 99213, 1.59 divided 
by 1.30, which equals 1.22. Multiplying the 0.33 work RVU of HCPCS code 
G2211 times 1.22 would result in a work RVU of 0.40.). We note that the 
work RVU analysis for HCPCS code G0545 was not intended to indicate an 
assumption about the level of medical decision making associated with 
diagnosing and managing suspected, known, or emerging infectious 
diseases, and we continue to believe that the comparison of HCPCS code 
G2211 and CPT code 99213, compared to CPT code 99223 strikes the 
correct balance to estimate the typical time and complexity associated 
with HCPCS code G0545, therefore we are finalizing our proposed work 
RVU of 0.89 for HCPCS code G0545. Additionally, we agree with the 
commenter that the I/O E/M discharge day management CPT codes are 
applicable base codes for HCPCS code G0545, as they were inadvertently 
omitted from the list of applicable base codes in the CY 2025 PFS 
proposed rule, therefore we are finalizing the inclusion of CPT codes 
99238 and 99239 to the list of base codes.
    We note that, while we proposed a total time of 30 minutes for 
HCPCS code G0545, similar to HCPCS code G2211, HCPCS code G0545 is not 
intended to be a time-based code. The proposed total time adheres to a 
longstanding practice of establishing times for a new code to represent 
the anticipated typical time of a service and should not be used to 
determine reportable units of the code. We acknowledge that I/O E/M 
visit levels and prolonged service codes are intended to account for 
additional minutes of time for individual patients, whereas HCPCS code 
G0545 is intended to account for the visit complexity inherent to 
hospital inpatient or observation care associated with a confirmed or 
suspected infectious disease. For time-based reporting of additional 
incremental time, we refer the commenter to the prolonged hospital I/O 
E/M code, HCPCS code G0316 (Prolonged hospital inpatient or observation 
care evaluation and management service(s) beyond the total time for the 
primary service (when the primary service has been selected using time 
on the date of the primary service); each additional 15 minutes by the 
physician or qualified healthcare professional, with or without direct 
patient contact (list separately in addition to cpt codes 99223, 99233, 
and 99236 for hospital inpatient or observation care evaluation and 
management services). (do not report g0316 on the same date of service 
as other prolonged services for evaluation and management 99358, 99359, 
99418, 99415, 99416). (do not report g0316 for any time unit less than 
15 minutes)).
    Like HCPCS code G2211, we did not specify any additional medical 
record documentation requirements for reporting the HCPCS code G0545 
add-on code. Our medical reviewers may use the medical record 
documentation to confirm the medical necessity of the visit and the 
confirmed or suspected infectious disease as appropriate. We would 
expect that information included in the medical record or in the claims 
history for a patient/practitioner combination, such as diagnoses, the 
practitioner's assessment and medical plan of care, and/or other codes 
reported could serve as supporting documentation for billing HCPCS code 
G0545. Practitioners should consult their Medicare Administrative 
Contractor (MAC) regarding documentation requirements related to the 
underlying I/O E/M visit.
    Comment: Some commenters requested the code to be modified to a 
stand-alone code rather than an add-on code because the work described 
by this code may be done with or without the medical necessity of a 
face-to-face visit. Commenters stated that there are barriers for 
infectious disease specialists in reporting the inpatient daily care 
codes that are proposed as base codes for HCPCS code G0545 because the 
medical decision-making is based on review of significant amounts of 
data in medical records and can be done without a face-to-face visit 
with the patient. Therefore, commenters requested that HCPCS code G0545 
be a stand-alone code rather than an add-on code to the proposed 
hospital I/O E/M codes.
    Response: We appreciate the commenters' suggestion of modifying 
HCPCS code G0545 to be a stand-alone code given the possible barriers 
to reporting the proposed base codes. However, at this time, we are 
finalizing HCPCS code G0545 as an add-on code as proposed because we 
did not receive any commenter input on appropriate definition or 
valuation for the code as a stand-alone code such as a code descriptor, 
service elements, physician time, work RVU, and what codes would be 
inappropriate to bill alongside a stand-alone infectious disease code 
to avoid duplicative payment for these services.
    We also note that there are interprofessional consultation codes, 
CPT codes 99451 (Interprofessional telephone/internet/electronic health 
record assessment and management service provided by a consultative 
physician or other qualified health care professional, including a 
written report to the patient's treating/requesting physician or other 
qualified health care professional, 5 minutes or more of medical 
consultative time), 99452 (Interprofessional telephone/internet/
electronic health record referral service(s) provided by a treating/
requesting physician or other qualified health care professional, 30 
minutes), and 99446 (Interprofessional telephone/internet/electronic 
health record assessment and management service provided by a 
consultative physician or other qualified health care professional, 
including a verbal and written report to the patient's treating/
requesting physician or other qualified health care professional; 5-10 
minutes of medical consultative discussion and review) through 99449 
(Interprofessional telephone/internet/electronic health record 
assessment and management service provided by a consultative physician 
or other qualified health care professional, including a verbal and 
written report to the patient's treating/requesting physician or other 
qualified health care professional; 31 minutes or more of medical 
consultative discussion and review), that could be used to report non-
face-to-face consults furnished by infectious disease specialists. 
These six codes describe assessment and management services conducted 
through telephone, internet, or electronic health record consultations 
furnished when a patient's treating physician or other qualified 
healthcare professional requests the opinion and/or treatment advice of 
a consulting physician or qualified healthcare professional with 
specific specialty expertise to assist with the diagnosis

[[Page 97815]]

and/or management of the patient's problem without the need for the 
patient's face-to-face contact with the consulting physician or 
qualified healthcare professional (83 FR 59489).
    Comment: One commenter requested clarification about reporting both 
HCPCS codes G2211 and G0545 because infectious disease specialists are 
likely to report their visits with the office/outpatient (O/O) E/M 
codes, since they are rarely the physician ordering and providing the 
observation service who will report the hospital I/O E/M codes.
    Response: We appreciate the commenter's input regarding the use of 
the new HCPCS code G0545. However, HCPCS codes G2211 and G0545 have 
differing base codes and therefore, cannot be reported together. We 
acknowledge that some commenters raised concerns about barriers to 
reporting the proposed base codes for HCPCS code G0545, but no other 
commenters raised that they typically use the O/O E/M codes. We also 
note that 2022 Medicare utilization data, available on the CMS website 
under downloads for the CY 2025 PFS final rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html 
does not support the assertion that infectious disease specialists are 
likely to report their visits with the office/outpatient (O/O) E/M 
codes, therefore, we continue to believe that the proposed base codes 
for HCPCS code G0545 are appropriate. We are open to feedback from 
interested parties and may consider additional information for future 
rulemaking.
    Comment: Some commenters requested that we allow a broader scope of 
qualifying practitioners to be able to bill for HCPCS code G0545 in 
order to ensure nurses and other qualified practitioners can bill for 
the expert care they provide in treating infectious diseases.
    Response: We appreciate the commenters' suggestion to broaden the 
scope of practitioners who may bill for HCPCS code G0545. We agree with 
commenters that it is possible that practitioners other than physicians 
could provide vital care in treating infectious diseases. Therefore, we 
are finalizing a modified code descriptor for HCPCS code G0545 that 
refers to ``an infectious diseases specialist'' to enable all 
practitioners with specialized training in infectious diseases who can 
independently bill Medicare for E/M visits to report the HCPCS code 
G0545 add-on code to the following I/O E/M base codes: CPT codes 99221 
through 99223, 99231 through 99233, 99234 through 99235, and 99238 
through 99239. The finalized full descriptor for the hospital I/O E/M 
visit complexity add-on code is HCPCS code G0545 (Visit complexity 
inherent to hospital inpatient or observation care associated with a 
confirmed or suspected infectious disease by an infectious diseases 
specialist, including disease transmission risk assessment and 
mitigation, public health investigation, analysis, and testing, and/or 
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, 
subsequent or discharge). We maintain the expectation that HCPCS code 
G0545 will be reported by practitioners who have the requisite 
specialized infectious disease training, including but not limited to 
physicians, nurse practitioners, physician assistants, and certified 
nurse specialists.
    Comment: A few commenters did not support the creation of HCPCS 
code G0545, stating that they do not support specialty-specific codes 
because these codes favor the expertise of one specialty more than 
others. The commenters stated that CPT codes are not meant to be 
specialty specific, and this proposal goes against long-standing 
convention and can cause additional imbalances. Instead, the commenters 
requested a generalized G code for complex inpatient non-procedural 
care that all specialties could use, like HCPCS code G2211. Commenters 
stated that there is no clear reason to solely enhance payment for 
infectious disease specialists via an add-on code when there are 
various other specialties that frequently provide vital E/M services in 
inpatient settings whose professional services are undervalued under 
the current fee schedule. Commenters stated that this represents a 
broader issue with undervaluation of E/M services, and that they are 
willing continue to work with CMS, as well as legislators and other 
stakeholders, on strengthening physician payment to meet broader 
workforce needs.
    Response: We appreciate the commenters' input regarding specialty-
specific codes. We continue to believe that the increased work and 
unique complexity associated with diagnosis, management, and treatment 
of infectious diseases are not adequately accounted for in the current 
hospital I/O E/M codes. We reiterate our belief that infectious 
diseases are unique in that they present infection control risks for 
the patient and close contacts, including healthcare staff, that 
require attention to safely care for the patient, healthcare staff, and 
other patients in the facility. They present unique challenges in 
diagnosis in that any previous healthcare interaction could affect the 
individual resistance patterns of pathogens infecting the individual 
patient and require close contact with public health agencies since 
resistance patterns are constantly changing, so a much more extensive 
medical review is required. Additionally, individual decisions 
regarding treatment are unique in that use in one patient affects 
resistance patterns of the entire population, which requires additional 
expertise to inform antimicrobial selection and management to achieve 
broader public health goals.
    After consideration of public comments, we are finalizing the 
creation of HCPCS code G0545 as proposed with modifications to the 
HCPCS code descriptor. We reiterate that we would consider using any 
newly available CPT coding to describe infectious disease services in 
future rulemaking.
(38) Preexposure Prophylaxis (PrEP) of Human Immunodeficiency Virus 
(HIV)
    To facilitate prompt beneficiary access to PrEP for CY 2024, we 
established 3 HCPCS G codes that describe the service of counseling and 
administration of Human Immunodeficiency Virus (HIV) pre-exposure 
prophylaxis drugs. Specifically, HCPCS codes G0011 (Individual 
counseling for pre-exposure prophylaxis (PrEP) by physician or QHP to 
prevent human immunodeficiency virus (HIV), includes: HIV risk 
assessment (initial or continued assessment of risk), HIV risk 
reduction and medication adherence, 15-30 minutes) and G0013 
(Individual counseling for pre-exposure prophylaxis (PrEP) by clinical 
staff to prevent human immunodeficiency virus (HIV), includes: HIV risk 
assessment (initial or continued assessment of risk), HIV risk 
reduction and medication adherence) describe the counseling portion of 
the service, and G0012 (Injection of pre-exposure prophylaxis (PrEP) 
drug for HIV prevention, under skin or into muscle) describes the 
injection of the medication.
    CMS released a Proposed NCD for Pre-Exposure Prophylaxis (PrEP) for 
Human Immunodeficiency Virus (HIV) Infection Prevention on July 12, 
2023. This proposed NCD announced CMS' intent to cover and pay for 
those drugs under the section 1861(ddd) additional preventive services 
authority, and a final NCD was published on September 30, 2024. For CY 
2025, we proposed national rates for these HCPCS codes that reflect the 
relative resource costs associated with the counseling and drug 
administration portions of the service,

[[Page 97816]]

pending finalization of the NCD. For HCPCS code G0011, we proposed a 
work RVU of 0.45 based off work and direct PE inputs crosswalked from 
HCPCS code G0445 (High intensity behavioral counseling to prevent 
sexually transmitted infection; face-to-face, individual, includes: 
education, skills training and guidance on how to change sexual 
behavior; performed semi-annually, 30 minutes). For HCPCS code G0012, 
we proposed a work RVU of 0.17 based on the work and direct PE 
crosswalked from CPT code 96372 (Therapeutic, prophylactic, or 
diagnostic injection (specify substance or drug); subcutaneous or 
intramuscular), and for HCPCS code G0013 we proposed a work RVU of 0.18 
based on the work and direct PE inputs crosswalked from CPT code 99211 
(Office or other outpatient visit for the evaluation and management of 
an established patient that may not require the presence of a physician 
or other qualified health care professional). We appreciate having this 
opportunity for interested parties to provide feedback on the most 
accurate way to value these services.
    Comment: We received several comments regarding CMS' proposed 
national payment rates for HCPCS codes G0011, G0012, and G0013. Some 
commenters agreed with CMS' proposed work RVU and direct PE inputs for 
this code family while one commenter disagreed with the crosswalk code, 
CPT code 99211, for HCPCS code G0013. This commenter suggested that CMS 
crosswalk this code to CPT code 99213 to better account for time and 
complexity.
    Response: We appreciate commenters' support for the proposed 
national payment rates for this service. We disagree with commenters 
and continue to believe that CPT code 99211 is the appropriate 
crosswalk for HCPCS code G0013 because CPT code 99211 describes a 
counseling service conducted by clinical staff as opposed to a 
physician or QHP. This aligns with the code descriptor for G0013 
(Individual counseling for pre-exposure prophylaxis (PrEP) by clinical 
staff to prevent human immunodeficiency virus (HIV), includes: HIV risk 
assessment (initial or continued assessment of risk), HIV risk 
reduction and medication adherence) which also describes the work of 
clinical staff.
    Comment: We received several comments expressing a variety of 
concerns related to the coverage policy for this service as described 
in the proposed NCD. Many comments included a request for better 
inclusion of pharmacists. Some comments would like CMS to partner with 
pharmacies to allow pharmacists to order HIV PrEP medications, as well 
as provide the counseling portion of the service. Commenters also asked 
CMS to clarify that pharmacists are considered clinical staff and/or 
streamline billing processes to enable pharmacists to bill for PrEP 
services under their own National Provider Identifier (NPI).
    Response: We appreciate and acknowledge commenters' concerns 
regarding the coverage policy in our proposed NCD. However, concerns 
related to the coverage policy of HIV PrEP are considered out of scope 
for our proposal regarding the national payment rates for this service.
    After consideration of the public comments, we are finalizing the 
work RVU and direct PE inputs for HIV PrEP as proposed.
(39) Opfolda
    For CY 2024, to facilitate beneficiary access to treatment of late-
onset Pompe disease with miglustat in combination with cipaglucosidae 
alfa-atga, we created a new HCPCS code, G0138, describing the service 
of administration of cipaglucosidase alfa-atga (Pombiliti), which 
includes the intravenous administration of cipaglucosidase alfa-atga, 
the provider or supplier's acquisition cost of miglustat, clinical 
supervision, and oral administration of miglustat. HCPCS code G0138 
(Intravenous infusion of cipaglucosidase alfaatga, including provider/
supplier acquisition and clinical supervision of oral administration of 
miglustat in preparation of receipt of cipaglucosidase alfa-atga) was 
added to the PFS effective April 1, 2024, as a contractor priced 
service. More information regarding the creation of HCPCS code G0138 
can be found at https://www.cms.gov/files/document/2023-hcpcs-application-summary-quarter-4-2023-drugs-and-biologicals-updated-1/30/2024.pdf.
    For CY 2025, we proposed national pricing for this service that 
reflects the relative resource costs associated with the infusion 
administration of Cipaglucosidae alfa-atga and clinical supervision and 
provision of Miglustat oral with acquisition costs. We proposed a work 
RVU of 0.21 for HCPCS code G0138 based on a crosswalk from CPT code 
96365 (Intravenous infusion, for therapy, prophylaxis, or diagnosis 
(specify substance or drug); initial, up to 1 hour). This includes a 
crosswalked total time of 9 minutes and an intraservice time of 5 
minutes. We also proposed to crosswalk the direct PE inputs from CPT 
code 96365 for use in valuing HCPCS code G0138. However, we are adding 
1 minute of L056A clinical staff time during the preservice portion of 
the service period to capture the RN/OCN observation of the patient 
during administration of the Opfolda pill. In addition, to account for 
the cost of the provision of the self-administered Opfolda as a direct 
PE input, we are incorporating the wholesale acquisition cost (WAC) 
data from the most recent available quarter. We proposed a price of 
$32.50 for the supply input that describes a 65mg capsule of Opfolda 
(supply code SH111). We sought feedback from interested parties on our 
proposal of national pricing, as well as our work RVU and direct PE 
inputs for HCPCS code G0138 to ensure proper payment for this service.
    Comment: Regarding the proper payment for this service, one 
commenter stated that the correct WAC for supply code SH111 (65mg 
Opfolda pill) is $33.00 per pill and that the typical dosage of SH111 
is 3 to 4 pills per patient, which would mean the total acquisition 
cost would be $132. The commenter also stated that they believe the 
infusion time for Cipaglucosidae alfa-atga incorporated in G0138 should 
be 4 to 5 hours instead of 1 hour and that the CPT crosswalk code 96365 
does not adequately account for that time. Finally, the commenter 
requested that CMS incorporate the overhead and clinical staff expenses 
incurred after the administration of Opfolda and while the patient is 
observed.
    Response: We thank the commenter for providing information to 
update the national payment for this service. We agree with the 
commenter that the prescribing information indicates that the typical 
dosage of Opfolda is 260mg for patients weighing >=50 kg. We also agree 
with the commenter that the typical infusion time for Cipaglucosidae 
alfa-atga is 4 hours. However, we disagree with the commenter and 
continue to believe that CPT code 96365 is the appropriate crosswalk 
code for the infusion portion of the service. The overall increase in 
infusion time can be added to the direct PE equipment input to account 
for the extra 3 hours. We also believe that the 1 minute of L056A 
clinical staff time during the preservice portion of the service period 
adequately captures the RN/OCN observation of the patient during self-
administration of the Opfolda pill. After consideration of the public 
comments, we are increasing the quantity of supply code SH111 in HCPCS 
code G0138 to 3.5 pills based on an average patient weight at a WAC of 
$33.00 per pill. We are also increasing the direct PE equipment time 
for EQ032 IV infusion pump and EF009 medical recliner chair from 60 
minutes to 240

[[Page 97817]]

minutes. The work RVU and other direct PE inputs will be finalized as 
proposed.
(40) Payment for Caregiver Training Services
a. Background
    In the CY 2017 PFS final rule (81 FR 80330 through 80331), we 
finalized payment for new CPT code(s) describing administration of a 
patient-focused health risk assessment instrument as well as 
administration of a caregiver-focused health risk assessment 
instrument. In the CY 2024 PFS final rule (88 FR 78914), we finalized 
the assignment of a payable status for caregiver training services 
(CTS) for therapy and behavior management/modification services 
(without the patient present) and finalized the RUC-recommended 
valuations for these services to better recognize the role that 
caregivers play in reasonable and necessary care for Medicare 
beneficiaries. These codes allow treating practitioners to report the 
training furnished to a caregiver, in tandem with the diagnostic and 
treatment services furnished directly to the patient, in strategies and 
specific activities to assist the patient in carrying out the treatment 
plan.
    We finalized in the CY 2024 PFS final rule that payment may be made 
for CTS when the treating practitioner identifies a need to involve and 
train one or more caregivers to assist the patient in carrying out a 
patient-centered treatment plan. We also finalized that because CTS are 
furnished outside the patient's presence, the treating practitioner 
must obtain the patient's (or representative's) consent for the 
caregiver to receive the CTS. Additionally, we finalized that the 
identified need for CTS and the patient's (or representative's) consent 
for one or more specific caregivers to receive CTS must be documented 
in the patient's medical record. These finalized policies apply to 
current CTS coding and we also proposed for them to apply to the newly 
proposed CTS coding that follows. We continue to receive questions and 
requests from interested parties about how we can refine payment for 
these services.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters requested clarification that caregiver training 
services (described by CPT codes 97550, 97551, 97552, 96202, and 96203, 
as well as any caregiver training services HCPCS codes finalized in 
this year's rule, and any subsequently created caregiver training 
service codes) may be provided by auxiliary personnel incident to the 
services of a billing practitioner.
    Response: Payment for CTS may be made to physicians, nurse 
practitioners (NPs), clinical nurse specialists (CNSs), certified 
nurse-midwives (CNMs), physician assistants (PAs) and clinical 
psychologists (CPs) under the PFS when they bill for CTS personally 
performed by them or by other practitioners or auxiliary personnel as 
an incident to their professional services.
    Comment: Commenters requested that we clarify whether practitioners 
who are limited by statute to performing services for the diagnosis and 
treatment of mental illness (such as clinical psychologists, clinical 
social workers, marriage and family therapists, or mental health 
counselors) can furnish caregiver training services.
    Response: Clinical social workers, marriage and family therapists, 
and mental health counselors can bill Medicare directly for caregiver 
training services they personally perform for the diagnosis or 
treatment of mental illness, so long as all other billing requirements 
are met. However, clinical social workers, marriage and family 
therapists, and mental health counselors cannot directly bill Medicare 
for caregiver training 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.
    Comment: Commenters requested clarification of the minimum amount 
of time of caregiving training that must be furnished to report the 
code.
    Response: Caregiver training services are treated the same as most 
other timed services, and the full-time listed in the code descriptor 
is required.
    Comment: Commenters recommended that CMS avoid creating duplicative 
caregiver training HCPCS codes and instead work with the AMA to 
consider revisions to CPT coding. Other commenters suggested we work 
with CPT to create simpler caregiver training codes or re-create 
current coding to be more inclusive of different types of caregiver 
training services.
    Response: We understand the desire from commenters for simpler 
coding for caregiver training. However, we also understand the 
immediate needs of beneficiaries for varying types of caregiver 
training services that are not currently represented by CPT coding. CMS 
is available to meet with the CPT Editorial Panel and the AMA to 
provide input and feedback regarding caregiver training CPT coding for 
future code creation or editing. Until then, we believe that it is 
paramount for patients to have appropriate access to these types of 
services through the creation of HCPCS G codes.
b. Caregiver Assessment
    In response to interested parties' requests for assessment of a 
caregiver's knowledge to be included in caregiver training, we 
clarified that when reasonable and necessary, assessing the caregiver's 
skills and knowledge for the purposes of caregiver training services 
could be included in the service described by CPT code 96161 
(Administration of caregiver-focused health risk assessment instrument 
(e.g., depression inventory) for the benefit of the patient, with 
scoring and documentation, per standardized instrument) to determine if 
caregiver training services are needed. We also note that CPT code 
96161 is currently on the Medicare Telehealth list.
    We note that, as specified in the CY 2017 PFS final rule (81 FR 
80330), in particular cases, caregiver-focused health risk assessments 
can be necessary components of services furnished to Medicare 
beneficiaries. Examples where this service may be reasonable and 
necessary may include assessment of maternal depression in the active 
care of infants, assessment of parental mental health as part of 
evaluating a child's functioning, assessment of caretaker conditions as 
indicated where atypical parent/child interactions are observed during 
care, and assessment of caregivers as part of care management for 
adults whose physical or cognitive status renders them incapable of 
independent living and dependent on another adult caregiver. Commenters 
cited that some examples of such individuals might include 
intellectually disabled adults, seriously disabled military veterans, 
and adults with significant musculoskeletal or central nervous system 
impairments (81 FR 80331).
    We proposed that because the caregiver-focused health risk 
assessment may be furnished outside the patient's presence, the 
treating practitioner must obtain the patient's (or representative's) 
consent for the caregiver to receive the assessment. We also proposed 
that the definition of ``caregiver'' specified in the CY 2024 PFS final 
rule (88 FR 78917) will be the same for caregiver training services and 
the caregiver-focused health risk assessment.
    We sought comment on these proposals and clarifications.
    We received public comments on these proposals. The following is a

[[Page 97818]]

summary of the comments we received and our responses.
    Comment: Some commenters supported our clarifications that CPT code 
96161 can be used to determine if caregiver training services are 
needed. Commenters were also supportive of our proposed consent 
requirements and proposed adoption of the definition of ``caregiver''.
    Response: We thank commenters for their input. We clarify that a 
caregiver is not required to have a caregiver-focused health risk 
assessment to participate in caregiver training services.
    After consideration of public comments, we are finalizing as 
proposed.
c. Proposals and New Coding
(A) Proposed Direct Care Caregiver Training Services
i. Coding
    We proposed to establish new coding and payment for caregiver 
training for direct care services and supports. The topics of training 
could include, but would not be limited to, techniques to prevent 
decubitus ulcer formation, wound dressing changes, and infection 
control. Unlike other caregiver training codes that are currently paid 
under the PFS, the caregiver training codes for direct care services 
and support focus on specific clinical skills aimed at the caregiver 
effectuating hands-on treatment, reducing complications, and monitoring 
the patient. For example, in the direct care CTS codes, a caregiver 
could be taught how to properly change wound dressings to promote 
healing and prevent infection. This skill, among other direct care 
services, would not fall into the categories of CTS codes that 
currently exist (behavior management/modification or strategies and 
techniques to facilitate the patient's functional performance in the 
home or community) but is integral in effectuating the patient's 
treatment plan. Like other codes describing caregiver training 
services, these proposed new codes would reflect the training furnished 
to a caregiver, in tandem with the diagnostic and treatment services 
furnished directly to the patient, in strategies and specific 
activities to assist the patient to carry out the treatment plan. We 
believe that CTS may be reasonable and necessary when they are integral 
to a patient's overall treatment and furnished after the treatment plan 
is established. The CTS themselves need to be congruent with the 
treatment plan and designed to effectuate the desired patient outcomes. 
We believe this is especially the case in medical treatment scenarios 
where assistance by the caregiver receiving the CTS is necessary to 
ensure a successful treatment outcome for the patient--for example, 
when the patient cannot follow through with the treatment plan for 
themselves.
    We proposed three new HCPCS codes: G0541 (Caregiver training in 
direct care strategies and techniques to support care for patients with 
an ongoing condition or illness and to reduce complications (including, 
but not limited to, techniques to prevent decubitus ulcer formation, 
wound dressing changes, and infection control) (without the patient 
present), face-to-face; initial 30 minutes), G0542 (Caregiver training 
in direct care strategies and techniques to support care for patients 
with an ongoing condition or illness and to reduce complications 
(including, but not limited to, techniques to prevent decubitus ulcer 
formation, wound dressing changes, and infection control) (without the 
patient present), face-to-face; each additional 15 minutes (List 
separately in addition to code for primary service) (Use G0542 in 
conjunction with G0541)), and G0543 (Group caregiver training in direct 
care strategies and techniques to support care for patients with an 
ongoing condition or illness and to reduce complications (including, 
but not limited to, techniques to prevent decubitus ulcer formation, 
wound dressing changes, and infection control) (without the patient 
present), face-to-face with multiple sets of caregivers)).
    We continue to believe that CTS may be reasonable and necessary 
when they are integral to a patient's overall treatment and furnished 
after the treatment plan is established. The medical or direct care CTS 
themselves need to be congruent with the treatment plan and designed to 
effectuate the desired patient outcomes. We believe this is especially 
the case in medical treatment scenarios where assistance by the 
caregiver receiving the CTS is necessary to ensure a successful 
treatment outcome for the patient--for example when the patient cannot 
follow through with the treatment plan for themselves. Direct care 
training for caregivers of Medicare beneficiaries should be directly 
relevant to the person-centered treatment plan for the patient in order 
for the services to be considered reasonable and necessary under the 
Medicare program. Each training activity should be clearly identified 
and documented in the treatment plan. Additionally, this would not be 
billable for caregiver training that is already being separately billed 
for patients under home health plan of care, receiving at-home therapy, 
or receiving DME services for involved medical equipment and supplies.
    We sought additional information from commenters about potential 
service overlaps and potential examples of direct care services to 
receive caregiver training to inform our final policy. We solicited 
public comment on each of our proposals for direct care CTS.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters were generally supportive of the creation of 
these codes.
    Response: We thank commenters for their support.
    Comment: One commenter requested to use the term ``pressure 
injury'' as opposed to ``decubitus ulcer'' in these code descriptors.
    Response: We thank commenters for their input and would like to 
note that the term ``decubitus ulcer'' is included in the code 
descriptor only as an example, and caregiver training for the broader 
term ``pressure injuries'' would be permitted when reasonable and 
necessary, as CMS uses both terms.
    Comment: One commenter requested that we specify that these direct 
care caregiver training services are ``not billable for patients 
receiving durable medical equipment (DME) services for medical 
equipment and supplies,'' although surgical dressings are part of 
DMEPOS equipment and related supplies. The commenter also requested 
that we clarify the definition of DME services and how wound dressings 
are involved in those services.
    Response: We seek to avoid potentially duplicative payment for 
services that are already paid for as part of another Medicare benefit 
such as the Medicare Part B benefit for durable medical equipment (DME) 
or the Medicare Part B benefit for surgical dressings. Payment to 
suppliers of DME items such as drug infusion pumps includes payment for 
supplies associated with use of the pump, such as wound dressings at 
the catheter site. DME suppliers are required to train the beneficiary 
or caregiver on use of supplies necessary for the effective use of the 
infusion pump, such as the dressings at the catheter site. Likewise, 
payment to suppliers of dressings covered under the Part B benefit for 
surgical dressings includes payment related to training the beneficiary 
or caregiver on how to use the dressings, including how to change them 
correctly.
    However, we would also like to clarify that the goal of paying for 
the

[[Page 97819]]

direct care CTS for beneficiaries with wounds includes training related 
to all aspects of wound care, such as how to properly change dressings, 
use of different ointments, turning the patient to prevent pressure. 
Therefore, we are revising the direct care CTS code descriptors to 
replace the words ``wound dressing changes'' with ``wound care.'' We 
are finalizing the direct care CTS code descriptors to read:
     G0541 (Caregiver training in direct care strategies and 
techniques to support care for patients with an ongoing condition or 
illness and to reduce complications (including, but not limited to, 
techniques to prevent decubitus ulcer formation, wound care, and 
infection control) (without the patient present), face-to-face; initial 
30 minutes);
     G0542 (Caregiver training in direct care strategies and 
techniques to support care for patients with an ongoing condition or 
illness and to reduce complications (including, but not limited to, 
techniques to prevent decubitus ulcer formation, wound care, and 
infection control) (without the patient present), face-to-face; each 
additional 15 minutes (List separately in addition to code for primary 
service) (Use G0542 in conjunction with G0541)); and
     G0543 (Group caregiver training in direct care strategies 
and techniques to support care for patients with an ongoing condition 
or illness and to reduce complications (including, but not limited to, 
techniques to prevent decubitus ulcer formation, wound care, and 
infection control) (without the patient present), face-to-face with 
multiple sets of caregivers)).
    Comment: Some commenters requested that we remove the restriction 
for patients under home health plans of care, receiving at-home 
therapy, or receiving DME services for unrelated conditions.
    Response: We agree with commenters that caregiver training may be 
appropriate for circumstances where a beneficiary's caregiver needs 
training, but the patient is under a home health plan of care, 
receiving at-home therapy, or receiving DME services for unrelated 
conditions. CTS would not be billable for caregiver training that is 
already being separately billed for patients under a home health plan 
of care, receiving at-home therapy, or receiving DME services for 
involved medical equipment and supplies. We seek to avoid potentially 
duplicative payment. We would not expect the caregiver population 
receiving these services on behalf of the patient to also receive CTS 
on behalf of the patient under another Medicare benefit category or 
Federal program.
    Comment: Some commenters requested that we recognize that RDNs may 
provide CTS for special diet preparation.
    Response: Registered dieticians (RDs) and nutrition professionals 
may only furnish direct care CTS when they identify a need to involve 
and train one or more caregivers to assist the patient in carrying out 
a patient-centered care plan for medical nutrition therapy (MNT) 
services. Medical nutrition therapy services are defined in section 
1861(vv) of the Act as nutritional diagnostic, therapy, and counseling 
services for the purpose of disease management which are furnished by a 
RD or nutrition professional pursuant to a physician's referral. Under 
sections 1861(s)(2)(V) and 1861(vv) of the Act, RDs and nutrition 
professionals are limited to billing for MNT services they furnish to 
individuals with diabetes or a renal disease who meet certain specified 
criteria. This limitation would also apply to direct care CTS. In 
addition, because CTS are furnished outside the patient's presence, the 
RD or nutrition professional must obtain the patient's (or 
representative's) consent for the caregiver to receive the direct care 
CTS. Like other CTS, the identified need for CTS and the patient's (or 
representative's) consent for one or more specific caregivers to 
receive CTS must be documented in the patient's medical record.
    Comment: Some commenters requested that these services would be 
designated as ``sometimes therapy'' services.
    Response: We are designating direct care CTS as ``sometimes 
therapy'' services to facilitate payment for CTS under the PFS for 
outpatient physical therapy, occupational therapy, and speech-language 
pathology services when personally furnished by PTs and OTs, including 
those provided by their supervised assistants as appropriate, as well 
as the CTS personally furnished by SLPs. This means, as we stated in 
the CY 2024 PFS final rule (88 FR 78920) for the other CTS codes, that 
the services described by these codes are always furnished under a 
therapy plan of care when provided by PTs, OTs, and SLPs; but, in cases 
where they are appropriately furnished by physicians and NPPs outside a 
therapy plan of care, that is, where the services are not integral to a 
therapy plan of care, they can be furnished under a treatment plan by 
physicians and NPPs.
    Comment: Many commenters requested that we add examples, such as 
caregiver training for home dialysis and rare disease treatments, 
describing other types of direct care to these code descriptors. 
Commenters also recommended working with interested parties to develop 
further examples.
    Response: The examples of health conditions for which direct care 
CTS might be appropriate were not intended to be exhaustive. We 
acknowledge that there are many circumstances under which direct care 
CTS may be reasonable and necessary to train a caregiver who assists in 
carrying out a treatment plan.
    After consideration of public comments, we are finalizing the 
following code descriptors: G0541 (Caregiver training in direct care 
strategies and techniques to support care for patients with an ongoing 
condition or illness and to reduce complications (including, but not 
limited to, techniques to prevent decubitus ulcer formation, wound 
care, and infection control) (without the patient present), face-to-
face; initial 30 minutes), G0542 (Caregiver training in direct care 
strategies and techniques to support care for patients with an ongoing 
condition or illness and to reduce complications (including, but not 
limited to, techniques to prevent decubitus ulcer formation, wound 
care, and infection control) (without the patient present), face-to-
face; each additional 15 minutes (List separately in addition to code 
for primary service) (Use G0542 in conjunction with G0541)), and G0543 
(Group caregiver training in direct care strategies and techniques to 
support care for patients with an ongoing condition or illness and to 
reduce complications (including, but not limited to, techniques to 
prevent decubitus ulcer formation, wound care, and infection control) 
(without the patient present), face-to-face with multiple sets of 
caregivers)). We are also finalizing that caregiver training may be 
appropriate for circumstances where a beneficiary's caregiver needs 
training, but the patient is under a home health plan of care, 
receiving at-home therapy, or receiving DME services for unrelated 
conditions. In addition, we are finalizing that G0541, G0542, and G0543 
are designated as ``sometimes therapy'' services. All other details for 
these codes are being finalized as proposed.
ii. Valuation
    For G0541, we proposed a direct crosswalk to CPT Code 97550 
(Caregiver training in strategies and techniques to facilitate the 
patient's functional performance in the home or community (e.g., 
activities of daily living [ADLs], instrumental ADLs [iADLs], 
transfers, mobility, communication, swallowing,

[[Page 97820]]

feeding, problem-solving, safety practices) (without the patient 
present), face to face; initial 30 minutes), with a work RVU of 1.00 as 
we believe this service reflects the resource costs associated when the 
billing practitioner performs HCPCS code G0541. CPT code 97550 has an 
intraservice time of 30 minutes, and the physician work is of similar 
intensity to our proposed HCPCS code G0541. Therefore, we proposed a 
work time of 30 minutes intraservice time (40 minutes of total time) 
for HCPCS code G0541 based on this same crosswalk to CPT 97550. We also 
proposed to use this crosswalk to establish the direct PE inputs for 
HCPCS code G0541.
    For G0542, we proposed a direct crosswalk to CPT Code 97551 
(Caregiver training in strategies and techniques to facilitate the 
patient's functional performance in the home or community (e.g., 
activities of daily living [ADLs], instrumental ADLs [iADLs], 
transfers, mobility, communication, swallowing, feeding, problem 
solving, safety practices) (without the patient present), face to face; 
each additional 15 minutes (List separately in addition to code for 
primary service)), with a work RVU of 0.54 as we believe this service 
reflects the resource costs associated when the billing practitioner 
performs HCPCS code G0542. CPT code 97551 has an intraservice time of 
17 minutes, and the physician work is of similar intensity to our 
proposed HCPCS code G0542. Therefore, we proposed a work time of 17 
minutes for HCPCS code G0542 based on this same crosswalk to CPT 97551. 
We also proposed to use this crosswalk to establish the direct PE 
inputs for HCPCS code G0542.
    For G0543, we proposed a direct crosswalk to CPT Code 97552 (Group 
caregiver training in strategies and techniques to facilitate the 
patient's functional performance in the home or community (eg, 
activities of daily living [ADLs], instrumental ADLs [iADLs], 
transfers, mobility, communication, swallowing, feeding, problem 
solving, safety practices) (without the patient present), face to face 
with multiple sets of caregivers), with a work RVU of 0.23 as we 
believe this service reflects the resource costs associated when the 
billing practitioner performs HCPCS code G0543. CPT code 97552 has an 
intraservice time of 9 minutes, and the physician work is of similar 
intensity to our proposed HCPCS code G0541. Therefore, we proposed a 
work time of 9 minutes intraservice time (14 minutes total time) for 
HCPCS code G0543 based on this same crosswalk to CPT 97552. We also 
proposed to use this crosswalk to establish the direct PE inputs for 
HCPCS code G0543.
    We sought comment on supplies/equipment that would be typical for 
the newly created direct care strategies and techniques CTS codes.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters pointed out that the proposed rule 
inadvertently referred to HCPCS codes GCTD1-3 in this section as GCTM1-
3.
    Response: We would like to thank commenters for pointing out this 
inadvertent drafting error. These codes are corrected above with the 
code descriptors for HCPCS codes G0541-G0543.
    After consideration of public comments, we are finalizing the code 
descriptors for direct care caregiver training services, as described 
by HCPCS codes G0541-G0543.
    Comment: Some commenters supported our valuation for HCPCS codes 
G0541-G0543. We did not receive comments discussing specific supplies 
and equipment that would be typical for these codes.
    Response: We thank commenters for their input on the valuation of 
HCPCS codes G0541-G0543.
    After consideration of public comments, we are finalizing as 
proposed.
    We believe these services would largely involve contact between the 
billing practitioner and the caregiver through in-person interactions, 
which could be conducted via telecommunications, as appropriate. 
Therefore, we proposed to add these codes to the Medicare Telehealth 
Services List to accommodate a scenario in which the practitioner 
completes the caregiver training service via telehealth. Please see 
section II.D. for more information on Medicare Telehealth Services.
    We sought comments on these proposals.
    We received public comments on these proposals. Please refer to 
section II.D. for a summary of the comments we received and our 
responses.
(B) Individual Behavior Management/Modification Caregiver Training 
Services
i. Coding
    We proposed to establish new coding and payment for caregiver 
behavior management and modification training that could be furnished 
to the caregiver(s) of an individual patient. Current CPT coding (CPT 
96202 and 96203) allows for ``multiple-family group behavior 
management/modification training services,'' meaning that this 
caregiver training service can only be furnished in a group setting 
with multiple sets of caregivers of multiple beneficiaries (please 
reference 88 FR 78818 for discussion of CPT 96202 and 96203). We 
proposed two new HCPCS codes: G0539 (Caregiver training in behavior 
management/modification for caregiver(s) of a patient with a mental or 
physical health diagnosis, administered by physician or other qualified 
health care professional (without the patient present), face-to-face; 
initial 30 minutes) and G0540 (Caregiver training in behavior 
management/modification for caregiver(s) of a patient with a mental or 
physical health diagnosis, administered by physician or other qualified 
health care professional (without the patient present), face-to-face; 
each additional 15 minutes (List separately in addition to code for 
primary service) (Use G0540 in conjunction with G0539)).
    We continue to believe that CTS may be reasonable and necessary 
when they are integral to a patient's overall treatment and furnished 
after the treatment plan is established. The behavior management/
modification CTS themselves need to be congruent with the treatment 
plan and designed to effectuate the desired patient outcomes. We 
believe this is especially the case in medical treatment scenarios 
where assistance by the caregiver receiving the CTS is necessary to 
ensure a successful treatment outcome for the patient--for example when 
the patient cannot follow through with the treatment plan for 
themselves. Behavior management/modification training for caregivers of 
Medicare beneficiaries should be directly relevant to the person-
centered treatment plan for the patient in order for the services to be 
considered reasonable and necessary under the Medicare program. Each 
training activity should be clearly identified and documented in the 
treatment plan. All other policies and procedures surrounding CPT 96202 
and 96203 will also apply to these services (88 FR 78914-78920).
    We sought comment on these proposals.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters generally supported our proposals to establish 
HCPCS codes G0539 and G0540. We received some comments requesting the

[[Page 97821]]

creation of broader caregiver training codes in the future.
    Response: We thank commenters for their input, and we may consider 
commenters' recommendations for future rulemaking.
    After consideration of public comments, we are finalizing HCPCS 
codes G0539 and G0540 as proposed.
ii. Valuation
    For HCPCS code G0539, we proposed a direct crosswalk to CPT Code 
97550 (Caregiver training in strategies and techniques to facilitate 
the patient's functional performance in the home or community (e.g., 
activities of daily living [ADLs], instrumental ADLs [iADLs], 
transfers, mobility, communication, swallowing, feeding, problem 
solving, safety practices) (without the patient present), face to face; 
initial 30 minutes), with a work RVU of 1.00 as we believe this service 
reflects the resource costs associated when the billing practitioner 
performs HCPCS code G0539. CPT code 97550 has an intraservice time of 
30 minutes, and the physician work is of similar intensity to our 
proposed HCPCS code G0539. Therefore, we proposed a work time of 30 
minutes intraservice time (40 minutes of total time) for HCPCS code 
G0539 based on this same crosswalk to CPT 97550. We also proposed to 
use this crosswalk to establish the direct PE inputs for HCPCS code 
G0539. We sought comment on supplies/equipment that would be typical 
for the newly created individual behavior management/modification CTS 
codes.
    For HCPCS code G0540, we proposed a direct crosswalk to CPT Code 
97551 (Caregiver training in strategies and techniques to facilitate 
the patient's functional performance in the home or community (e.g., 
activities of daily living [ADLs], instrumental ADLs [iADLs], 
transfers, mobility, communication, swallowing, feeding, problem 
solving, safety practices) (without the patient present), face to face; 
each additional 15 minutes (List separately in addition to code for 
primary service)), with a work RVU of 0.54 as we believe this service 
reflects the resource costs associated when the billing practitioner 
performs HCPCS code G0540. CPT code 97551 has an intraservice time of 
17 minutes, and the physician work is of similar intensity to our 
proposed HCPCS code G0540. Therefore, we proposed a work time of 17 
minutes for HCPCS code G0540 based on this same crosswalk to CPT 97551. 
We also proposed to use this crosswalk to establish the direct PE 
inputs for HCPCS code G0540.
    We sought comment on supplies/equipment that will be typical for 
the newly created individual behavior management/modification CTS 
codes.
    We believe these services will largely involve contact between the 
billing practitioner and the caregiver through in-person interactions, 
which could be conducted via telecommunications as appropriate. 
Therefore, we proposed to add these codes to the Medicare Telehealth 
Services List to accommodate a scenario in which the practitioner 
completes the caregiver training service via telehealth. Please see 
section II.D. for more information on Medicare Telehealth Services.
    We sought comments on these proposals.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Some commenters supported our valuation for HCPCS codes 
G0539 and G0540. In addition, a few commenters supported a crosswalk to 
CPT code 90832 (Psychotherapy, 30 minutes with patient), as commenters 
stated this was a more analogous code. We did not receive comments 
discussing specific supplies and equipment that would be typical for 
these codes.
    Response: We continue to believe that a crosswalk to CPT codes 
97550 and 97551 are most appropriate for valuation of HCPCS codes G0539 
and G0540, as these codes match closely in time and intensity. In an 
effort to maintain relativity within the caregiver training code 
family, we believe this crosswalk is appropriate.
    After consideration of public comments, we are finalizing as 
proposed.
(C) Patient Consent
    In the CY 2024 PFS final rule (88 FR 78916), we finalized a 
requirement that the treating practitioner must obtain the patient's 
(or representative's) consent for the caregiver to receive the CTS and 
that the identified need for CTS and the patient's (or 
representative's) consent for one or more specific caregivers to 
receive CTS be documented in the patient's medical record.
    We proposed that consent for CTS can be provided verbally by the 
patient (or representative). This will align consent requirements with 
other services paid under the PFS that may be furnished without the 
patient present, such as certain care management services. This 
proposal will apply to CPT codes 97550, 97551, 97552, 96202, and 96203, 
as well as any caregiver training services HCPCS codes finalized in 
this year's rule, and any subsequently created caregiver training 
service codes. We sought comment on this proposal.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters were supportive of our proposal to allow verbal 
consent for caregiver training services.
    Response: We appreciate commenters' input.
    After consideration of public comments, we are finalizing as 
proposed.
(D) Addition to Telehealth List
    Please see section II.D. of this final rule, Payment for Medicare 
Telehealth Services, for the outline related to proposals to add CTS to 
the Medicare Telehealth list.
(41) Request for Information for Services Addressing Health-Related 
Social Needs (Community Health Integration (G0019, G0022), Principal 
Illness Navigation (G0023, G0024), Principal Illness Navigation-Peer 
Support (G0140, G0146), and Social Determinants of Health Risk 
Assessment (G0136))
a. Background
    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), 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), which may include a community health worker (CHW), incident to 
the professional services and under the general supervision of the 
billing practitioner. We finalized a new stand-alone G code describing 
a SDOH Risk Assessment, G0136 (Administration of a standardized, 
evidence-based Social Determinants of Health Risk Assessment, 5-15 
minutes, not more often than every 6 months). SDOH risk assessment 
refers to a review of the individual's SDOH or identified social risk 
factors that influence the diagnosis and treatment of medical 
conditions. We also finalized PIN services, described by HCPCS code 
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

[[Page 97822]]

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), to 
better recognize through coding and payment policies when certified or 
trained auxiliary personnel under the direction of a billing 
practitioner, which may include a patient navigator or certified peer 
support specialist, are involved in the patient's health care 
navigation as part of the treatment plan for a serious, high-risk 
disease expected to last at least 3 months, that places the patient at 
significant risk of hospitalization or nursing home placement, acute 
exacerbation/decompensation, functional decline, or death.
b. Request for Information on Services Addressing Health-Related Social 
Needs
    For CY 2025 we issued a broad request for information (RFI) on the 
newly implemented Community Health Integration (CHI) (HPCCS codes 
G0019, G0022), Principal Illness Navigation (PIN) (HCPCS codes G0023, 
G0024), Principal Illness Navigation- Peer Support (PIN-PS) (HCPCS 
codes G0140, G0146), and Social Determinants of Health Risk Assessment 
(SDOH RA) (HCPCS code G0136) services to engage interested parties on 
additional policy refinements for CMS to consider in future rulemaking.
    We are interested in better addressing the social needs of 
beneficiaries and requesting information on the codes we created and 
finalized beginning in CY 2024 to fully encompass what interested 
parties and commenters believe should be included in the coding and 
payment we recently established. We sought comment on any related 
services that may not be described by the current coding that we 
finalized in the CY 2024 PFS final rule and that are medically 
reasonable and necessary ``for the diagnosis or treatment of illness or 
injury'' under section 1862(a)(1)(A) of the Act. We believe we can work 
within the current coding framework and explore additional 
opportunities to create codes that describe reasonable and necessary 
services furnished by billing practitioners and the auxiliary personnel 
under their general supervision. We are interested in feedback 
regarding any barriers to furnishing the services addressing health-
related social needs, and if the service described by the codes we 
established are allowing practitioners to better address unmet social 
needs that interfere with the practitioners' ability to diagnose and 
treat the patient. This could include barriers specific to certain 
populations, including rural and tribal communities, residents of the 
U.S. Territories, individuals with disabilities, individuals with 
limited English proficiency, or other populations who experience 
specific unmet social needs.
    In response to the CY 2024 PFS proposed rule, we heard from 
commenters that CSWs often connect individuals with community-based 
resources to address unmet social needs that affect the diagnosis and 
treatment of medical problems. CSWs can bill Medicare directly for 
services they personally perform for the diagnosis or treatment of 
mental illness but are not authorized by statute to bill for services 
that are provided by auxiliary personnel incident to their professional 
services. Since CHI and PIN codes are typically provided by auxiliary 
personnel supervised by the billing practitioner, CSWs could serve as 
the auxiliary personnel. CSWs could not directly bill Medicare 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. We believe the current CHI and PIN coding 
accurately captures the services CSWs currently provide, including the 
work involved in connecting beneficiaries with community-based 
resources for unmet social needs that affect the diagnosis or treatment 
of medical problems. 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 
auxiliary personnel at Sec.  410.26(a)(1).'' We proposed to clarify 
that when we refer to ``certified or trained auxiliary personnel'' in 
the following codes: G0019, G0022, G0023, G0024, G0140, G0146, this 
also includes CSWs.
    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters overwhelmingly supported of this clarification.
    Response: We thank commenters for their input.
    We are finalizing our clarification as proposed.
    We requested information if there are other types of auxiliary 
personnel, other certifications, and/or training requirements that are 
not adequately captured in current coding and payment for these 
services. We are also interested in hearing more about what types of 
auxiliary personnel are typically furnishing these services, including 
the certifications and/or licensure that they have. We are also 
interested in whether there are nuances or considerations that CMS 
should understand related to auxiliary personnel and training, 
certifications or licensure barriers or requirements that are 
specifically experienced by practitioners serving underserved 
communities. This could include settings such as community mental 
health centers, community health clinics including FQHCs and RHCs, 
tribal health centers, migrant farmworker clinics, or facilities 
located in and serving rural and geographically isolated communities 
including the U.S. Territories.
    As noted in the CY 2023 PFS final rule (87 FR 69790) and explained 
in the CY 2023 PFS proposed rule (87 FR 46102), when we refer to 
community-based organizations, we mean public or private not-for-profit 
entities that provide specific services to the community or targeted 
populations in the community to address the health and social needs of 
those populations. They may include community-action agencies, housing 
agencies, area agencies on aging, centers for independent living, aging 
and disability resource centers or other non-profits that apply for 
grants or contract with healthcare entities to perform social services. 
They may receive grants from other agencies in the U.S. Department of 
Health and Human Services, including Federal grants administered by the 
Administration for Children and Families (ACF), Administration for 
Community Living (ACL), the Centers for Disease Control and Prevention 
(CDC), the Substance Abuse and Mental Health Services Administration 
(SAMHSA), or State-funded grants to provide social services. We stated 
that, generally, we believe such organizations know the populations and 
communities they serve and may have the infrastructure or systems in 
place to assist practitioners to provide CHI and PIN services. We 
stated that we understood that many community-based organizations 
(CBOs) provide social services and do other work that is beyond the 
scope of CHI and PIN

[[Page 97823]]

services, but we believed they are well-positioned to develop 
relationships with practitioners for providing reasonable and necessary 
CHI and PIN services.
    We are interested in hearing more about CBOs and their 
collaborative relationships with billing practitioners. The new codes 
for CHI and PIN services recognized CBOs and their role in providing 
auxiliary personnel under the general supervision of the billing 
practitioners. We sought comment regarding the extent to which 
practitioners are contracting with CBOs (including current or planned 
contracting arrangements) for auxiliary personnel purposes, and if 
there is anything else CMS should do to clarify services where 
auxiliary personnel can be employed by the CBO, so long as they are 
under the general supervision of the billing practitioner. Given that 
the CHI and PIN services may be provided incident to the billing 
practitioner's professional services, we are also seeking comment on 
whether the incident to billing construct is appropriate for CBOs to 
supplement pre-existing staffing arrangements and the CBO/provider 
interface. We also sought comment on CBOs' roles, the extent to which 
practitioners are contracting with CBOs, incident to billing, and 
auxiliary personnel employed by CBOs under general supervision of 
practitioners serving and located in rural, tribal and geographically 
isolated communities, including the U.S. Territories.
    We also solicited comments from interested parties across provider 
types and from practitioners in geographically isolated communities 
(for example, rural, tribal, and island communities) and otherwise 
underserved communities about coding Z codes on claims associated with 
billing for CHI, PIN, and SDOH risk assessment codes. We recognized 
that when screening for social needs, such needs may be identified and 
are interested in learning whether practitioners are also capturing 
unmet social needs on claims using Z codes for social risk factors or 
in some other way, and any barriers or opportunities to increase coding 
of Z codes when social risk factors screen positive.
    Over the past several years, we have worked to develop payment 
mechanisms under the PFS to improve the accuracy of valuation and 
payment for the services furnished by physicians and other health care 
professionals, especially in the context of evolving models of care and 
addressing unmet social needs that affect the diagnosis and treatment 
of medical problems. Given the Agency's broader policy goals of 
increasing access to care, we are requesting information from 
interested parties and commenters on anything else that we should 
consider in the context of these codes and what else we could consider 
to be included in this newly established code set.
    We sought comments on ways to identify specific services and to 
recognize possible barriers to improved access to these kinds of high-
value, potentially underutilized services by Medicare beneficiaries.
    We sought public comment to understand more clearly how often 
evidence-based care for persons with fractures, for example, is not 
provided and the reasons for this, and how recent or new PFS codes, or 
their revaluation, might help resolve specific barriers to its 
provision. The PFS currently includes many codes that pay for various 
components of care to manage patients with fractures over a course of 
treatment, such as transitional care management (TCM) and other care 
management services, evaluation and management visits (including the 
inherent complexity add-on for office/outpatient visits), principal 
illness navigation services, community health integration services, and 
the social determinants of health risk assessment. We referred readers 
to our recent guidance on these services on the CMS website at https://www.cms.gov/files/document/health-related-social-needs-faq.pdf. 
Medicare also pays for bone mass measurement/density tests (MLN006559--
https://www.cms.gov/medicare/prevention/prevntiongeninfo/medicare-preventive-services/mps-quickreferencechart-1.html#BONE_MASS, and for 
outpatient osteoporosis medication under Part D and, in some cases, 
Part B (https://www.medicare.gov/coverage/osteoporosis-drugs). These 
services can be billed on their own, or in combination, where 
applicable. We note that in the CY 2020 PFS final rule (84 FR 62685) 
and CY 2021 PFS final rule (85 FR 84547), CMS indicated that TCM may be 
billed concurrently with other care management codes when relevant, 
medically necessary, and not duplicative.
    We proposed new coding in other sections of this CY 2025 final rule 
that might be used to bill for managing fractures under a treatment 
plan, including the global post-operative add-on code, HCPCS code 
GPOC1, in section II.L. of this final rule and the advanced primary 
care management codes in section II.G.2 of this final rule. Interested 
parties have indicated that orthopedic surgeons, skilled nursing 
facilities (SNFs), and other practitioners and providers may not be 
providing comprehensive patient centered fracture management care for 
quality, payment, or administrative reasons, and that there is 
inadequate ``hand-off'' when post-discharge fracture care is 
transferred to practitioners in the community. They indicate a systemic 
disconnect on which provider and/or specialty is responsible for 
osteoporosis diagnosis and treatment, and that global surgical periods 
focus on acute fracture recovery rather than addressing osteoporosis. 
We are interested in hearing if the global postop add-on code could 
help resolve these issues.
    We received public comments on this RFI. The following is a summary 
of the comments we received and our responses.
    Comment: A few commenters responded to our RFI for fracture-related 
care. Overall, commenters agreed that care is commonly fragmented in 
osteoporosis and post-fracture care. Some commenters stated that 
services like APCM, GPOC1 (G0559), CHI, or PIN do not accurately 
describe fracture liaison services. Other commenters said that the 
initiating visits for CHI and PIN may be a barrier to care. Similar to 
general feedback we received for CHI and PIN, commenters requested that 
initiating visits be furnished retroactively, meaning that during care 
transitions, CHI or PIN services could begin, as long as the initiating 
visit occurs within 30 days of discharge.
    Response: We thank commenters for their feedback and may consider 
these recommendations and requests for future rulemaking. We clarify 
that for billing PIN services, there are circumstances in which 
osteoporosis may be considered a serious, high-risk disease expected to 
last at least 3 months, that places the patient at significant risk of 
hospitalization or nursing home placement, acute exacerbation/
decompensation, functional decline, or death.
    Comment: Commenters provided many examples of services and service 
elements that may not be described in current coding, as well as 
information about how CBOs are currently working with practitioners to 
furnish these services.
    Response: We thank commenters for providing further information 
about how CHI, PIN, and SDOH risk assessment services are currently 
being used and how these services could be improved in the future. We 
will consider this information for future rulemaking.

[[Page 97824]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.021


[[Page 97825]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.022


[[Page 97826]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.023


[[Page 97827]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.024


[[Page 97828]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.025


[[Page 97829]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.026


[[Page 97830]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.027


[[Page 97831]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.028


[[Page 97832]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.029


[[Page 97833]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.030


[[Page 97834]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.031


[[Page 97835]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.032


[[Page 97836]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.033


[[Page 97837]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.034


[[Page 97838]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.035


[[Page 97839]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.036


[[Page 97840]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.037


[[Page 97841]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.038


[[Page 97842]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.039


[[Page 97843]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.040


[[Page 97844]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.041


[[Page 97845]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.042


[[Page 97846]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.043


[[Page 97847]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.044


[[Page 97848]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.045


[[Page 97849]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.046


[[Page 97850]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.047


[[Page 97851]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.048


[[Page 97852]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.049


[[Page 97853]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.050


[[Page 97854]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.051


[[Page 97855]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.052


[[Page 97856]]



F. Evaluation and Management (E/M) Visits

1. Office/Outpatient (O/O) 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 O/O E/M visit complexity add-on 
code. The full descriptor for the O/O E/M visit complexity add-on code, 
HCPCS code G2211, is (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)).
    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).
    We responded to concerns raised by commenters about potential 
duplicative payment and potential misreporting of the code, noting that 
when procedures or other services are reported on the same day by the 
same billing practitioner as a significant, separately identifiable O/O 
E/M visit (the base codes that the visit complexity add-on code can be 
billed with), we believed that the services involve resources that are 
sufficiently distinct from the costs associated with furnishing stand-
alone O/O E/M visits to warrant a different payment policy (88 FR 
78971). We finalized our proposal that the O/O E/M visit complexity 
add-on code is not payable when the O/O E/M visit is reported with CPT 
Modifier -25, which denotes a significant, separately identifiable O/O 
E/M visit by the same physician or other qualified health care 
professional on the same day as a procedure or other service (88 FR 
78974).
    Some commenters expressed concern about our proposal to exclude 
payment for the visit complexity add-on code when the O/O E/M base code 
is reported with Modifier -25 because some preventive services such as 
the annual wellness visit (AWV) or a preventive vaccine are often 
provided on the same day as a separately identifiable O/O E/M visit, 
appropriately billed with Modifier -25. The commenters were concerned 
that practitioners might avoid the policy by not providing a preventive 
service on the same day as another O/O E/M service. We acknowledged 
that immunizations and AWVs were sometimes furnished on the same day as 
an O/O E/M visit and that our policy would prevent payment of the add-
on code with such office visits billed with Modifier -25 and indicated 
that we would monitor utilization of the visit complexity add-on code 
and continue engagement with interested parties as the policy is 
implemented (88 FR 78975).
    We have begun to monitor utilization of HCPCS code G2211 and are 
continuing to engage with interested parties. We continue to hear from 
some practitioners that our non-payment of the O/O E/M visit complexity 
add-on code when the O/O E/M base code is reported on the same day as a 
preventive immunization or other Medicare preventive service is 
disruptive to the way such care is usually furnished and contrary to 
our policy objective for establishing the add-on payment. An early 
analysis of practitioner claims from the first few months of 2024 shows 
relatively few Medicare preventive services being billed on the day 
preceding or following an O/O E/M visit. We cannot conclude from this 
analysis that our policy to deny payment of the O/O E/M visit 
complexity add-on code when the O/O E/M base code is reported on the 
same day as a preventive immunization or other Medicare preventive 
service is disruptive to the way such care is usually furnished. 
However, we do agree with practitioners expressing concerns that the 
current policy is not well-aligned with our policy objective for 
establishing the add-on payment.
    In response to these concerns, we proposed to refine our current 
policy for services furnished beginning in CY 2025. We proposed to 
allow payment of the O/O E/M visit complexity add-on code when the O/O 
E/M base code is reported by the same practitioner on the same day as 
an AWV, vaccine administration, or any Medicare Part B preventive 
service furnished in the office or outpatient setting. Allowing payment 
for the O/O E/M visit complexity add-on code in this scenario as 
proposed would support our policy aims, which include paying for 
previously unaccounted resources inherent in the complexity of all 
longitudinal primary care office visits. In part, the O/O E/M visit 
complexity add-on code recognizes the inherent costs of building trust 
in the practitioner-patient relationship. We believe that trust-
building in the longitudinal relationship is more significant than ever 
in making decisions about the administration of immunizations and other 
Medicare Part B preventive services. We welcomed comments on this 
proposal.
    We received many public comments on this proposal. The following is 
a summary of the comments we received and our responses.
    Comment: Many commenters supported our proposal and encouraged CMS 
to finalize as proposed. They stated that there are inherent costs of 
building trust in the practitioner-patient relationship, which is 
particularly important when making decisions about administering 
immunizations and other Medicare Part B preventive services, and that 
these inherent costs are reflected in the valuation of the O/O E/M 
visit complexity add-on code.
    Response: We agree and thank commenters for their support of this 
proposal.
    Comment: A few commenters opposed our proposal and questioned

[[Page 97857]]

the need for the O/O E/M visit complexity add-on code based on 
arguments similar to those made in prior years. Those in opposition 
stated that our proposed policy would result in unnecessary payments if 
finalized because the O/O E/M visit complexity add-on code itself is 
ill defined and the O/O E/M visit code set is appropriately valued.
    Response: We refer the commenters to the CY 2024 PFS final rule (88 
FR 78972) where we discussed similar concerns regarding duplicative 
payment when the O/O E/M visit complexity add-on code (HCPCS code 
G2211) is billed with an O/O E/M visit. We continue to believe that the 
values we established for the revised O/O E/M CPT codes in the CY 2021 
PFS final rule did not fully account for the resource costs associated 
with primary care and certain types of specialty visits (85 FR 84569). 
However, those values were finalized in concert with separate payment 
for HCPCS code G2211 which accounted for the resource costs associated 
with those types of visits (87 FR 69588).
    Comment: A few commenters recommended that CMS allow the O/O E/M 
visit complexity add-on code (HCPCS code G2211) to be reported 
alongside other CPT codes, such as those describing other E/M visits 
furnished to beneficiaries in other settings of care including nursing 
facilities, assisted living facilities and the patient's home. 
Commenters 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.
    Response: We appreciate that practitioners who provide home-based 
primary care services may furnish E/M visits in an individual's home or 
residence that contribute to the development of longitudinal 
relationships with those patients. Commenters focused on how 
practitioners who furnish E/M visits to patients in homes or 
residences, nursing facilities, and assisted living facilities develop 
longitudinal relationships with their patients just as practitioners do 
in the office or outpatient setting. Whereas 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), 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 final rule. Nevertheless, we may 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.
    Comment: Many commenters recommended that in addition to the AWV, 
immunizations and preventive services, we finalize that payment for the 
O/O E/M visit complexity add-on code (HCPCS code G2211) can be made 
when the following services are reported by the same billing 
practitioner on the same day as HCPCS code G2211: an echocardiogram or 
other cardiovascular imaging procedure, occipital nerve block via 
injection, nebulizer treatment, ambulatory continuous glucose 
monitoring (CGM), Transitional Care Management (TCM), and spirometry or 
inhalation device education. These commenters stated that as these 
services are part of long-term, longitudinal relationships with 
patients who are often extremely complex and require extensive 
evaluation, HCPCS code G2211 captures the additional work of treating 
these patients. Other commenters stated that certain specialists, such 
as endocrinologists, typically see sicker patients than primary care 
practitioners and to the extent that other services (beyond O/O E/M 
visits and preventive services) are furnished to these patients they 
should also be billable alongside HCPCS code G2211.
    Other commenters stated that we should continue to explore the 
appropriateness of restricting billing of HCPCS code G2211 to O/O E/M 
visits not billed with the payment modifier -25. These commenters 
stated that even if the visit is being reported in conjunction with 
another service, there still may be resource costs associated with 
longitudinal care that are not reflected in the payment for the O/O E/M 
visit or the other service.
    Other commenters recommended that, rather than refine our billing 
policies to allow HCPCS code G2211 to be billable alongside O/O E/M 
visits with modifier -25, that we prohibit concurrent billing with 
codes in the surgical section of the CPT Codebook (CPT codes 10000-
69999), or allow billing of HCPCS code G2211 with O/O E/M visits 
reported with modifier -25 during a global period if the global period 
has >0% designated to pre or post operative care.
    Many commenters also requested clarification as to whether HCPCS 
code G0402 (Initial Preventive Physical Exam (IPPE)) was included as a 
preventive service billable alongside HCPCS code G2211.
    Response: We note 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 inherent costs of building trust in the practitioner-
patient relationship that are not reflected in the valuation of the O/O 
E/M code set. As we discussed in the proposed rule, building trust as 
part of a longitudinal practitioner-patient relationship may be 
particularly significant in the context of preventive services, and for 
this reason, we believe it is appropriate to limit billing of HCPCS 
code G2211 to preventive services at this time. However, we do 
acknowledge the points raised by commenters about other similar 
services and may consider broadening the applicability of HCPCS code 
G2211 through future rulemaking.
    Regarding reporting HCPCS code G2211 alongside O/O E/M visits with 
modifier -25, we continue to believe as we stated in the CY 2024 PFS 
final rule, that separately identifiable O/O E/M visits occurring on 
the same day as minor procedures (such as zero-day global procedures) 
have resources that are sufficiently distinct from the costs associated 
with furnishing stand-alone O/O E/M visits to warrant a different 
payment policy, and as such, we finalized that the O/O E/M visit 
complexity add-on code, HCPCS code G2211, is not payable when the O/O 
E/M visit is reported with payment modifier -25 (88 FR 78971). We may 
consider additional changes to this policy for future rulemaking. We 
responded to comments that suggested alternative policies and that 
suggested exemptions for specific codes, including codes that would 
fall within the range of CPT codes 10000-69999 referenced by one of the 
commenters on the CY 2025 PFS proposed rule. We believed the 
alternatives offered by commenters could increase administrative burden 
with minimal benefit gained and unnecessarily delay reactivation of the 
complexity add-on code and payment (88 FR 78974-78975). We would need 
more time to evaluate the potential policy implications and systems 
changes associated with a prohibition on concurrently billing HCPCS 
code G2211 with codes in the surgical section of the CPT Codebook (CPT 
codes 10000-69999) or allow billing of HCPCS code G2211 with O/O E/M 
visits

[[Page 97858]]

reported with modifier -25 during a global period if the global period 
has >0% designated to pre or post operative care.
    We appreciate commenters' recommendations for additional services 
to be included in the refined policy for the O/O E/M visit complexity 
add-on code that we proposed to apply for the AWV, vaccine 
administration, and Part B preventive services furnished in the office 
or outpatient setting. While we did not propose and are not adding 
other services to our refined policy for the O/O E/M visit complexity 
add-on code in this final rule, we are confirming that the IPPE, also 
known as the ``Welcome to Medicare'' preventive visit is included in 
our proposed policy because it is a Part B preventive service furnished 
in the office or outpatient setting.
    Comment: Several commenters requested that we provide detailed 
medical necessity requirements and documentation guidelines related to 
reporting HCPCS code G2211.
    Response: In response to interested party feedback requesting 
guidance about medical necessity and documentation requirements, we 
posted frequently asked questions at https://www.cms.gov/files/document/hcpcs-g2211-faq.pdf. As we stated in this document, we have 
not specified any additional medical record documentation requirements 
for reporting HCPCS code G2211. Our medical reviewers may use the 
medical record documentation to confirm the medical necessity of the 
visit and the patient care relationship as appropriate. We would expect 
that information included in the medical record or in the claims 
history for a patient/practitioner combination, such as diagnoses, the 
practitioner's assessment and medical plan of care, and/or other codes 
reported could serve as supporting documentation for billing HCPCS code 
G2211. Practitioners should consult their Medicare Administrative 
Contractor (MAC) regarding documentation requirements related to the 
underlying O/O E/M visit.
    After consideration of public comments, we are finalizing as 
proposed to allow payment of the O/O E/M visit complexity add-on code 
(HCPCS code G2211) when the O/O E/M base code (CPT 99202-99205, 99211-
99215) is reported by the same practitioner on the same day as an AWV, 
vaccine administration, or any Medicare Part B preventive service.

G. Enhanced Care Management

1. Background
    As described in the CY 2025 Medicare Physician Fee Schedule (PFS) 
proposed rule, the CMS Center for Medicare and Medicaid Innovation (CMS 
Innovation Center) tests innovative payment and service delivery models 
to reduce program expenditures while preserving or enhancing quality of 
care. CMS Innovation Center models are assessed for their impact on 
quality of care and expenditures under Medicare, Medicaid, and the 
Children's Health Insurance Program (CHIP) and the scope and duration 
of the model test may be expanded through rulemaking if expected to 
either reduce spending without compromising quality of care or enhance 
quality of care without increasing spending (section 1115A of the Act). 
After more than a decade of testing over 50 innovative payment and 
service delivery models, the CMS Innovation Center has enabled broad 
transformative changes to service delivery and payment in the Medicare, 
Medicaid, and CHIP programs which inspire additional transformation 
throughout the health care delivery system. Participants in CMS 
Innovation Center models have demonstrated improvements in care 
delivery and patient experience. The CMS Innovation Center undertook a 
retrospective review and synthesis of select model evaluations where 
care delivery changes have been observed, and the review indicated 
demonstrable evidence of enhanced care delivery in several areas, such 
as care coordination, team-based care, and leveraging data to risk-
stratify patients.\24\
---------------------------------------------------------------------------

    \24\ Fowler, Ph.D., JD, E., Rudolph, MPH, N., Davidson, LCSW, 
MSW, K., Finke, MD, B., Flood, S., Bernheim, MD, Ph.D., S. M., & 
Rawal, Ph.D., P. (2023). Accelerating Care Delivery Transformation--
The CMS Innovation Center's Role in the Next Decade. New England 
Journal of Medicine, 4(11). https://doi.org/10.1056/cat.23.0228. 
CMS. Synthesis of Evaluation Results across 21 Medicare Models, 
2012-2020. Fowler, Ph.D. 2022. https://www.cms.gov/priorities/innovation/data-and-reports/2022/wp-eval-synthesis-21models.
---------------------------------------------------------------------------

    Under the PFS statute at section 1848 of the Act, we establish 
payment amounts for covered physicians' services, and update our 
payment policies to address changes, including changes in medical 
practice. In the CY 2025 PFS proposed rule, we proposed to incorporate 
key payment and service delivery elements from CMS Innovation Center 
models tested and evaluated over the prior decade into permanent coding 
and payment under the PFS (89 FR 61596). Specifically, we proposed to 
recognize a primary care practice delivery model trend which we will 
refer to as ``advanced primary care'' and which we propose to define 
using the 2021 National Academies of Sciences, Engineering, and 
Medicine (NASEM) report on Implementing High-Quality Care as: ``whole-
person, integrated, accessible, and equitable health care by 
interprofessional teams that are accountable for addressing the 
majority of an individual's health and wellness needs across settings 
and through sustained relationships with patients, families, and 
communities.'' \25\ Using this definition, we proposed to recognize the 
resources involved in furnishing services using an ``advanced primary 
care'' approach to care under the PFS \26\ (89 FR 61596). Under this 
approach, the delivery of care is supported by a team-based care 
structure and involves a restructuring of the primary care team, which 
includes the billing practitioner and the auxiliary personnel under 
their general supervision, within practices. This restructuring creates 
several advantages for patients, and provides more broad accessibility 
and alternative methods for patients to communicate with their care 
team/practitioner about their care outside of in-person visits (for 
example, virtual, asynchronous interactions, such as online chat), 
which can lead to more timely and efficient identification of, and 
responses to, health care needs (for example, practitioners can route 
patients to the optimal clinician and setting--to a synchronous visit, 
an asynchronous chat, or a direct referral to the optimal site of 
care).\27\ Practitioners using an advanced primary care delivery model 
can more easily collaborate across clinical disciplines through remote 
interprofessional consultations with specialists as well as standardize 
condition management into evidence-based clinical workflows, which 
allow for closed-loop follow-up and more real-time management for

[[Page 97859]]

patients with acute or evolving complex issues. Practitioners can then 
use synchronous interactions to build rapport with patients and 
families, partner on complex decisions, and personalize their patients' 
care plans.
---------------------------------------------------------------------------

    \25\ National Academies of Sciences, Engineering, and Medicine. 
2021. Implementing high-quality primary care: Rebuilding the 
foundation of health care. Washington, DC: The National Academies 
Press. https://doi.org/10.17226/25983.
    \26\ Team-based approaches to care can achieve improved provider 
and care team satisfaction, improved team communication, improved 
patient safety, and improved patient and family engagement in care. 
Coleman, M. Dexter. D., & Nankivill, N. (2015, August). Factors 
affecting physician satisfaction and Wisconsin Medical Society 
strategies to drive change. Wisconsin Medical Journal. 114(4), 135-
142. Retrieved from https://www.wisconsinmedicalsociety.org/professional/wmj/archives/volume-114-issue-4-august-2015/.
    \27\ Ellner, A., Basu, N. & Phillips, R.S. From Revolution to 
Evolution: Early Experience with Virtual-First, Outcomes-Based 
Primary Care. J GEN INTERN MED 38, 1975-1979 (2023). https://doi.org/10.1007/s11606-023-08151-1.
---------------------------------------------------------------------------

    Specifically, we proposed to adopt coding and payment policies to 
recognize advanced primary care management (APCM) services for use by 
practitioners who are providing services under this specific model of 
advanced primary care, when the practitioner is the continuing focal 
point for all needed health care services and responsible for all 
primary care services for a patient. This new coding and payment makes 
use of lessons learned from the CMS Innovation Center's testing of a 
series of advanced primary care models, such as Comprehensive Primary 
Care (CPC),\28\ Comprehensive Primary Care Plus (CPC+),\29\ and Primary 
Care First (PCF) 30 31 to inform the elements upon which the 
delivery of APCM services under an advanced primary care delivery model 
depend. As detailed in this final rule, this coding and payment will 
incorporate elements of several specific, existing care management and 
communication technology-based services (CTBS) into a bundle of 
services, that reflects the essential elements of the delivery of 
advanced primary care, for payment under the PFS starting in 2025.
---------------------------------------------------------------------------

    \28\ https://www.cms.gov/priorities/innovation/innovation-models/comprehensive-primary-care-initiative.
    \29\ https://www.cms.gov/priorities/innovation/innovation-models/comprehensive-primary-care-plus.
    \30\ https://www.cms.gov/priorities/innovation/innovation-models/primary-care-first-model-options.
    \31\ Finke, Bruce, et al. ``Addressing Challenges in Primary 
Care--Lessons to Guide Innovation.'' JAMA Health Forum, vol. 3, no. 
8, 19 Aug. 2022, p. e222690, https://doi.org/10.1001/jamahealthforum.2022.2690.
---------------------------------------------------------------------------

    In the context of the proposal, we were also interested in feedback 
on other related policies for our consideration in future rulemaking. 
To gather information from interested parties to inform potential 
future proposals, we included an Advanced Primary Care Hybrid Payment 
Request for Information (RFI) (Advanced Primary Care RFI) in the 
proposed rule. The Advanced Primary Care RFI sought feedback on whether 
and how we should consider additional payment policies that reflect our 
efforts to recognize the delivery of advanced primary care, including 
bundling of additional individual services, which may currently be 
furnished together as primary care services but paid separately. This 
focused approach to seeking feedback on advanced primary care payment 
policies is an important step in our ongoing efforts to emphasize 
accountable care and supports our goal of having 100 percent of 
Traditional Medicare beneficiaries in accountable care relationships by 
2030.\32\
---------------------------------------------------------------------------

    \32\ CMS White Paper on CMS Innovation Center's Strategy: 
Driving Health System Transformation--A Strategy for the CMS 
Innovation Center's Second Decade (https://www.cms.gov/priorities/innovation/strategic-direction-whitepaper).
---------------------------------------------------------------------------

    In addition to recognizing advanced primary care, this final rule 
also recognizes physician and practitioner work that draws from 
evidence generated by the CMS Innovation Center's Million 
Hearts[supreg] model.\33\ The Million Hearts[supreg] model found that 
quantitative assessment of patients' atherosclerotic cardiovascular 
disease (ASCVD) risk and providing high-risk beneficiaries with 
cardiovascular-focused care management services improved quality of 
care, including mortality.\34\ We proposed to establish coding and PFS 
payment for these services based in part on the evidence generated by 
the Million Hearts[supreg] model.
---------------------------------------------------------------------------

    \33\ https://www.cms.gov/priorities/innovation/innovation-models/million-hearts-cvdrrm.
    \34\ Peterson G, Steiner A, Powell R, et al. Evaluation of the 
Million Hearts[supreg] Cardiovascular Disease Risk Reduction Model: 
Fourth Annual Report. Mathematica. February 2022. https://www.cms.gov/priorities/innovation/data-and-reports/2022/mhcvdrrm-fourthannevalrpt.
---------------------------------------------------------------------------

2. Advanced Primary Care Management (APCM) Services (HCPCS Codes G0556, 
G0557, and G0558)
a. Background
    We described in the CY 2025 PFS proposed rule that we have been 
analyzing opportunities to strengthen and invest in primary care in 
alignment with the goals of the U.S. Department of Health and Human 
Services (HHS) Initiative to Strengthen Primary Care.\35\ Research has 
demonstrated that greater primary care physician supply is associated 
with improved population-level mortality and reduced disparities,\36\ 
and also, that establishing a long-term relationship with a primary 
care provider leads to reduced emergency department (ED) visits,\37\ 
improved care coordination, and increased patient satisfaction.\38\ HHS 
recognizes that effective primary care is essential for improving 
access to healthcare, for the health and wellbeing of individuals, 
families, and communities, and for achieving health equity. The first 
coordinated set of HHS-wide actions to strengthen primary care, as part 
of the Initiative, is in primary care payment; for example, adjusting 
payment to ensure it supports delivery of advanced primary care. CMS 
Innovation Center models, described in section II.G.2.a.(1) in this 
final rule, reflect the ongoing work within HHS and the unified, 
comprehensive approach to HHS primary care activities that we are 
accomplishing through our current statutory authorities and funding.
---------------------------------------------------------------------------

    \35\ U.S. Department of Health and Human Services. (2023). 
Primary Care: Our First Line of Defense. https://www.hhs.gov/sites/default/files/primary-care-issue-brief.pdf.
    \36\ Basu S, Berkowitz SA, Phillips RL, Bitton A, Landon BE, 
Phillips RS. Association of Primary Care Physician Supply With 
Population Mortality in the United States, 2005-2015. JAMA Intern 
Med. 2019;179(4):506-514. doi:10.1001/jamainternmed.2018.7624. 
https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2724393.
    \37\ Willemijn L.A. Sch[auml]fer et al, ``Are People's Health 
Care Needs Better Met When Primary Care Is Strong? A Synthesis of 
the Results of the QUALICOPC Study in 34 Countries,'' Primary Health 
Care Research and Development 20 (2019): e104. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6609545/.
    \38\ Michael J. van den Berg, Tessa van Loenen, and Gert P 
Westert, ``Accessible and Continuous Primary Care May Help Reduce 
Rates of Emergency Department Use: An International Survey in 34 
Countries,'' Family Practice 33, no. 1 (Feb. 2016): 42-50. https://academic.oup.com/fampra/article/33/1/42/2450446.
---------------------------------------------------------------------------

    Over the last decade, we have updated PFS 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 part 
of the CY 2014 PFS final rule, we reaffirmed our support of primary 
care and recognized care management as one of the critical components 
of primary care that contributes to better health outcomes for 
individuals and reduced expenditure growth, and explained our 
prioritization of the development and implementation of several 
initiatives (such as those discussed in section II.G.2.a.(1) in this 
final rule) (77 FR 68978). Since then, we have implemented coding and 
payment for many care management services to better recognize the 
resources involved in furnishing medically necessary care management 
activities that generally are performed outside the context of a face-
to-face, in-person visit--most often by the billing practitioner's 
clinical staff on behalf of patients with complex health care needs, 
including transitional care management in the CY 2013 PFS final rule 
(77 FR 68979); non-complex and complex chronic care management (CCM) in 
the CY 2015, 2017, and 2019

[[Page 97860]]

PFS final rules (78 FR 74414, 83 FR 58577, and 81 FR 80244); and 
principal care management (PCM) in the CY 2020 PFS final rule (84 FR 
62962). The CCM and PCM code families now include 5 sets of codes which 
are reported monthly on a timed basis, each set with a base code of 20 
to 60 minutes and an add-on code for each additional 30 minutes. The 
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.
    Additionally, we have established coding and payment for certain 
services where a medical professional evaluates a patient's medical 
information remotely using communication technology. As discussed in 
the CY 2019 PFS final rule, this set of services is defined by and 
inherently involves the use of communications technology, and includes 
certain remote patient monitoring services, virtual check-in services, 
remote evaluation of pre-recorded patient information, remote 
interpretations of diagnostic imaging tests, and interprofessional 
consultations. We recognize that technological advances have changed 
and continue to change the practitioner-patient care delivery 
interaction. We have recognized these technology-enabled interactions 
through separately billable CTBS over the last several years. However, 
we acknowledge, as we learn more about how advanced primary care 
services are furnished to patients, that in some clinical care delivery 
scenarios, practitioners furnishing the type of care highlighted in 
this discussion may furnish certain aspects of the CTBS services in 
complement to care management services (for example, by allowing 
interprofessional care teams to answer patient questions, refer 
patients to higher levels of care, view and interpret patient images, 
order needed treatments, and offer reassurance or advice), in an effort 
to more efficiently manage the quantity and quality of medical 
information that is necessary to support effective patient-centered 
treatment plans.
    Despite these important steps to pay separately for these care 
management services, there has been limited uptake of care management 
services and Medicare still overwhelmingly pays for primary care 
through traditional office/outpatient (O/O) Evaluation and Management 
(E/M) visit codes, which describe a broad range of physicians' services 
but do not fully distinguish and account for the resources associated 
with primary care and other longitudinal care. As we stated in the CY 
2024 PFS final rule, because E/M visit codes are intended to be used 
very broadly, the complexity of services required to provide this type 
of care is not fully incorporated as part of the valuation of the work 
RVUs when the E/M code itself is used as the primary way to report the 
work of the professional (88 FR 78972). In the CY 2024 PFS final rule, 
we took steps to better recognize the inherent complexity of visits 
associated with primary and longitudinal care of patients by finalizing 
a new 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) for 
use by practitioners furnishing services as the continuing focal point 
for all the patient's needed health care services, such as a primary 
care practitioner (88 FR 78969). When furnishing primary and 
longitudinal care, practitioners must be attuned to the factors that 
develop and maintain trusting practitioner-patient relationships that 
enable effective diagnosis, management, and treatment on an ongoing 
basis. In finalizing the O/O E/M visit complexity add-on code, we 
recognized the feedback from interested parties indicating that the 
care management codes alone may not have mitigated the deficiencies in 
the ability of existing E/M codes to reflect the time and resources 
involved in furnishing visits in the context of longitudinal care--of 
which, advanced primary care is one model. Many commenters responded, 
as reflected in the CY 2024 PFS final rule, that they did not view the 
coding and payment currently available under the PFS as capable of 
recognizing the broad range of elements that define primary care (88 FR 
52326). Other commenters responded that they did not believe that the 
existing E/M service codes alone reflect the work and resources 
involved in furnishing non-procedural care to Medicare beneficiaries 
(88 FR 78976).
    Over the years, interested parties have focused attention on the 
ongoing need to improve how practitioners are paid, in and outside of 
payment bundles, including but not limited to the possibility of E/M 
codes designed specifically to be billed in conjunction with care 
management codes and the elimination of multiple disparities between 
the payment for E/M services in global periods and those furnished 
individually. Based on feedback from the physician and practitioner 
community, we understand that advanced primary care encompasses the 
work of interprofessional teams who are accountable for addressing the 
majority of an individual's health and wellness needs across settings 
and through sustained relationships, which necessarily involves time 
spent by primary care practitioners and their clinical staff outside of 
individual E/M visits.
    As with many services paid under the PFS, we balance making payment 
that recognizes and supports technological developments in healthcare 
and the resources involved in evolving medical practice to allow for 
appropriate and expanded access to innovative technologies and newer 
services with promoting stability and efficiency in coding and billing 
rules for practitioners and institutions. We recognize the important 
role of gathering input and information from the CMS Innovation Center 
models (described in more detail in section II.G.2.a.(1) in this final 
rule), comment solicitations, research from other public and private 
entities, the work of all parties involved in furnishing primary care, 
and from the public at large. As previously noted, interested parties 
have given ample feedback over the years to inform our recognition of 
care management services; for example, as part of the CY 2022 PFS 
rulemaking, interested parties specifically requested our consideration 
of a ``30-day global period bundling care management services'' and we 
responded that we would consider this suggestion for future rulemaking 
(86 FR 65118). We have continued to incorporate feedback into our 
rulemaking and strengthen our care management code sets with the goal 
of better recognizing the elements of advanced primary care as part of 
a multi-year strategy. Based on this feedback, we proposed to establish 
a set of codes to better describe advanced primary care management 
services broadly, to provide more stability in payment and coding for 
practitioners in the context of continued evolution in advanced primary 
care, as well as to provide us with a mechanism for continued and 
intentional improvements to advanced primary care payment.
(1) Key Care Delivery Methods in Select CMS Innovation Center Models
    We described in the CY 2025 PFS proposed rule that we have 
prioritized

[[Page 97861]]

the implementation or testing of a series of initiatives designed to 
improve payment for, and encourage long-term investment in, primary 
care and care management services. By supporting enhanced care 
management and coordination, these initiatives contributed to the 
growing practice of advanced primary care and have also provided 
valuable lessons learned that we have incorporated into our policies.
    Several CMS Innovation Center models address payment for care 
management services and CTBS. The CPC initiative,\39\ the CPC+ 
model,\40\ and the PCF model \41\ all included payments for care 
management services that closely aligned with the care management 
services included in the PFS. In these initiatives and models, primary 
care practices received risk-adjusted, per beneficiary per month (PBPM) 
payments for care management services furnished to Medicare FFS 
beneficiaries attributed to their practices. These model payments were 
designed to offer practices a stable, predictable revenue stream that 
supported required infrastructure and appropriately compensated 
practices for the enhanced services they would provide. Practices 
participating in the CPC+ consistently cited these payments as the most 
useful type of model payment support they received; these stable, 
prospectively paid payments typically served as the main funding source 
for compensating care managers, behavioral health providers, and other 
staff hired to improve care delivery.\42\ Because these payments were 
paid prospectively and could be used to support a range of care 
management and coordination activities, they provided participants with 
greater financial stability and flexibility to develop and expand 
capabilities to meet patients' care needs.\43\ Table 23 identifies a 
number of CMS Innovation Center models and key care delivery methods 
from each.\44\
---------------------------------------------------------------------------

    \39\ https://downloads.cms.gov/files/cmmi/CPC-initiative-fourth-annual-report.pdf.
    \40\ https://www.cms.gov/priorities/innovation/data-and-reports/2023/cpc-plus-fifth-annual-eval-report.
    \41\ Evaluation of the Primary Care First Model. February 2024. 
https://www.cms.gov/priorities/innovation/data-and-reports/2024/pcf-second-eval-rpt.
    \42\ O'Malley A, Singh P, Fu N, et al. Independent Evaluation of 
the Comprehensive Primary Care Plus (CPC+): Final Report. 
Mathematica. December 2023. https://www.cms.gov/priorities/innovation/data-and-reports/2023/cpc-plus-fifth-annual-eval-report.
    \43\ O'Malley A, Singh P, Fu N, et al. Independent Evaluation of 
the Comprehensive Primary Care Plus (CPC+): Final Report. 
Mathematica. December 2023. https://www.cms.gov/priorities/innovation/data-and-reports/2023/cpc-plus-fifth-annual-eval-report.
    \44\ For more information on how the Innovation Center is 
supporting primary care, https://www.cms.gov/files/document/primary-care-infographic.pdf.

---------------------------------------------------------------------------

[[Page 97862]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.053


[[Page 97863]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.054

    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters overwhelmingly supported the proposed coding 
and payment policies to recognize APCM services under this specific 
model of advanced primary care, making use of lessons learned from the 
CMS Innovation Center's testing of advanced primary care models. Most 
commenters expressed gratitude that separate payment could be available 
for services they had already been furnishing, and many commenters 
appreciated our goal to address the perceived gap in payment for care 
management and coordination for patients without multiple chronic 
conditions. Many commenters appreciated the proposed shift away from 
time-based payment and thanked us for acknowledging that primary care 
needs often change month to month. Several commenters supported our 
proposals' emphasis on technology integration and commitment to the 
evolving healthcare landscape, highlighting the importance of virtual 
interactions for better patient-centered care. A few commenters were 
concerned that our proposed APCM coding and payment would duplicate 
work described by the existing CCM and PCM codes, potentially creating 
confusion and administrative burden. One commenter suggested we 
collaborate with the AMA's CPT Editorial Panel on coding or revise 
existing CCM and PCM codes to reduce burden and simplify requirements.
    Many commenters recommended that cost sharing be eliminated for the 
proposed APCM services, indicating that any amount of cost sharing 
could be prohibitive to receiving beneficiary consent, ultimately 
limiting the uptake of and billing for APCM services. A few commenters 
suggested that APCM services are preventive services that should be 
exempt from beneficiary cost sharing. Several commenters indicated that 
cost sharing had limited their ability to bill for other care 
management services, resulting in their underutilization. A few 
commenters stressed that it can be difficult to educate beneficiaries 
on the value of care management services and the associated cost 
sharing because the patient is not ordinarily present when APCM 
services are performed. Finally, one commenter believed that the 
application of cost sharing could exacerbate existing health 
inequities.
    Response: We thank the commenters for their support and feedback. 
We anticipate that these services will fill a need in primary care and 
care management, and result in more accurate payment for advanced 
primary care under the PFS. While we recognize concerns about potential 
confusion with CCM and PCM, APCM codes are essential for improving 
payment accuracy and enabling practitioners to spend more time with 
patients. We look forward to reviewing and considering, including 
through potential future rulemaking, any recommendations from the AMA's 
CPT Editorial Panel and RUC if they consider developing CPT codes and 
recommending valuations for these or similar services.
    In response to the comments regarding elimination of beneficiary 
cost sharing for APCM services, most services covered under Medicare 
Part B carry cost sharing obligations (deductible and co-payment) 
unless the statute specifies that they do not apply. As for considering 
APCM services to be ``preventive services'' to which cost sharing does 
not apply, we do not see how APCM services would fit within any of the 
benefit categories for preventive services under the Act at this time. 
In particular, the Secretary has the authority to add ``additional 
preventive services'' that, among other things, have been assigned an 
``A'' or ``B'' rating by the United States Preventive Services Task 
Force. But APCM services have not earned such a rating at this time. 
Since APCM services do not currently meet the criteria for ``additional 
preventive services,'' we cannot designate them as such under section 
1861(s)(2)(BB) of the Act or remove coinsurance obligations on that 
basis at this time. Further, we do not have other statutory authority 
that would allow us to remove or waive the applicable cost sharing for 
APCM services.
b. Proposed HCPCS G-Codes for Advanced Primary Care Management (APCM)
    We proposed in the CY 2025 PFS proposed rule to establish coding 
and make payment under the PFS for a newly defined set of APCM services 
described and defined by three new

[[Page 97864]]

HCPCS G-codes. To recognize the resource costs associated with 
furnishing APCM services to Medicare beneficiaries, we proposed to 
establish and pay for three new G-codes that describe a set of care 
management services and CTBS furnished under a broader application of 
advanced primary care. This new coding and payment would reflect the 
recognized effectiveness and growing adoption of the advanced primary 
care approach to care.\45\ It will also encompass a broader range of 
services and simplify the billing and documentation requirements, as 
compared to existing care management and CTBS codes, for clinicians who 
care for their patients using an advanced primary care model. We 
recognize that there are primary care physicians, practitioners, and 
practices beyond those that have participated in CMS Innovation Center 
primary care models (such as those outlined in section II.G.2.a.(1) in 
this final rule), that may incur resource costs associated with their 
treatment of patients based on the advanced primary care delivery 
model. Providing care using an advanced primary care delivery model 
involves resource costs associated with maintaining certain practice 
capabilities and continuous readiness and monitoring activities to 
support a team-based approach to care, where significant resources are 
used on virtual, asynchronous patient interactions, collaboration 
across clinical disciplines, and real-time management of patients with 
acute and complex concerns, that are not fully recognized or paid for 
by the existing care management codes. We have observed medical 
practice trends in primary care for several years. We note that in 
prior rulemaking, for example, in the CY 2013 PFS final rule, we 
stated, ``we further consider[ed] how advanced primary care practices 
can fit within a fee-for-service model'' (77 FR 68987), and in the CY 
2015 PFS final rule, we stated our commitment ``to supporting advanced 
primary care, including the recognition of care management as one of 
the critical components of primary care that contributes to better 
health for individuals and reduced expenditure growth'' (79 FR 67715). 
In the CY 2017 PFS final rule, we discussed changes to retain elements 
of the CCM service that are ``most characteristic of the changes in 
medical practice toward advanced primary care'' (81 FR 80251). As the 
delivery of primary care has evolved to embrace advanced primary care 
more fully, it is prudent to now adopt specific coding and payment 
policy to better recognize the resources involved in care management 
under an advanced primary care delivery model.
---------------------------------------------------------------------------

    \45\ National Academies of Sciences, Engineering, and Medicine 
(NASEM). 2021. Implementing high-quality primary care: Rebuilding 
the foundation of health care. Washington, DC: The National 
Academies Press. https://doi.org/10.17226/25983; Maeng DD et al. 
Reducing long-term cost by transforming primary care: evidence from 
Geisinger's medical home model. Am J Manag Care. 2012 Mar;18(3):149-
55. PMID: 22435908. Available here: https://pubmed.ncbi.nlm.nih.gov/22435908/; Jones C et al. Vermont's Community-Oriented All-Payer 
Medical Home Model Reduces Expenditures and Utilization While 
Delivering High-Quality Care. Popul Health Manag. 2016;19(3):196-
205. Available here: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4913508/.
---------------------------------------------------------------------------

    In the CY 2025 PFS proposed rule, we explained the proposed new 
codes and their descriptors (89 FR 61596), we proposed to define the 
elements of the scope of service for APCM that will be required for a 
practitioner to bill Medicare for the APCM service, and we explained 
the standards for practices that furnish APCM services to ensure that 
the physicians and practitioners who bill for these services have the 
capability to fully furnish advanced primary care, including APCM 
services (see section II.G.2.c. of this final rule). We proposed to 
identify specific care management and CTBS services that are a part of 
advanced primary care delivery and would be bundled into the PFS 
payment for the APCM services. As such, we identified the services that 
we proposed will overlap substantially with the new codes and which 
will not be separately billable with the APCM codes under our proposal 
(see section II.G.2.d. of this final rule). Finally, we proposed to 
establish relative values for these codes for purposes of payment under 
the PFS (see section II.G.2.e. of this final rule).
    We proposed the following G-codes and descriptors for APCM 
services, and as explained in section II.G.2.d. of this final rule, due 
to the similar scope of APCM and other care management and CTBS 
services, we proposed to include some of the same language from the CCM 
and PCM service elements in the APCM code descriptors, as well as 
emphasized that certain practice capabilities and requirements are 
inherent in these elements and must be met in order to bill for APCM 
services:
    HCPCS code G0556 (Advanced primary care management services 
provided by clinical staff and directed by a physician or other 
qualified health care professional who is responsible for all primary 
care and serves as the continuing focal point for all needed health 
care services, per calendar month, with the following elements, as 
appropriate:
     Consent;
    ++ Inform the patient of the availability of the service; that only 
one practitioner can furnish and be paid for the service during a 
calendar month; of the right to stop the services at any time 
(effective at the end of the calendar month); and that cost sharing may 
apply.
    ++ Document in patient's medical record that consent was obtained.
     Initiation during a qualifying visit for new patients or 
patients not seen within 3 years;
     Provide 24/7 access for urgent needs to care team/
practitioner, including providing patients/caregivers with a way to 
contact health care professionals in the practice to discuss urgent 
needs regardless of the time of day or day of week;
     Continuity of care with a designated member of the care 
team with whom the patient is able to schedule successive routine 
appointments;
     Deliver care in alternative ways to traditional office 
visits to best meet the patient's needs, such as home visits and/or 
expanded hours;
     Overall comprehensive care management;
    ++ Systematic needs assessment (medical and psychosocial).
    ++ System-based approaches to ensure receipt of preventive 
services.
    ++ Medication reconciliation, management and oversight of self-
management.
     Development, implementation, revision, and maintenance of 
an electronic patient-centered comprehensive care plan;
    ++ Care plan is available timely within and outside the billing 
practice as appropriate to individuals involved in the beneficiary's 
care, can be routinely accessed and updated by care team/practitioner, 
and copy of care plan to patient/caregiver;
     Coordination of care transitions between and among health 
care providers and settings, including referrals to other clinicians 
and follow-up after an emergency department visit and discharges from 
hospitals, skilled nursing facilities or other health care facilities 
as applicable;
    ++ Ensure timely exchange of electronic health information with 
other practitioners and providers to support continuity of care.
    ++ Ensure timely follow-up communication (direct contact, 
telephone, electronic) with the patient and/or caregiver after an 
emergency department visit and discharges from hospitals, skilled 
nursing facilities, or other health care facilities, within 7 calendar 
days of discharge, as clinically indicated.

[[Page 97865]]

     Ongoing communication and coordinating receipt of needed 
services from practitioners, home- and community-based service 
providers, community-based social service providers, hospitals, and 
skilled nursing facilities (or other health care facilities), and 
document communication regarding the patient's psychosocial strengths 
and needs, functional deficits, goals, preferences, and desired 
outcomes, including cultural and linguistic factors, in the patient's 
medical record;
     Enhanced opportunities for the beneficiary and any 
caregiver to communicate with the care team/practitioner regarding the 
beneficiary's care through the use of asynchronous non-face-to-face 
consultation methods other than telephone, such as secure messaging, 
email, internet, or patient portal, and other communication-technology 
based services, including remote evaluation of pre-recorded patient 
information and interprofessional telephone/internet/EHR referral 
service(s), to maintain ongoing communication with patients, as 
appropriate;
    ++ Ensure access to patient-initiated digital communications that 
require a clinical decision, such as virtual check-ins and digital 
online assessment and management and E/M visits (or e-visits).
     Analyze patient population data to identify gaps in care 
and offer additional interventions, as appropriate;
     Risk stratify the practice population based on defined 
diagnoses, claims, or other electronic data to identify and target 
services to patients;
     Be assessed through performance measurement of primary 
care quality, total cost of care, and meaningful use of Certified EHR 
Technology).
    HCPCS code G0557 (Advanced primary care management services for a 
patient with multiple (two or more) chronic conditions expected to last 
at least 12 months, or until the death of the patient, which place the 
patient at significant risk of death, acute exacerbation/
decompensation, or functional decline, provided by clinical staff and 
directed by a physician or other qualified health care professional who 
is responsible for all primary care and serves as the continuing focal 
point for all needed health care services, per calendar month, with the 
elements included in G0556, as appropriate) and HCPCS code G0557 
(Advanced primary care management services for a patient that is a 
Qualified Medicare Beneficiary with multiple (two or more) chronic 
conditions expected to last at least 12 months, or until the death of 
the patient, which place the patient at significant risk of death, 
acute exacerbation/decompensation, or functional decline, provided by 
clinical staff and directed by a physician or other qualified health 
care professional who is responsible for all primary care and serves as 
the continuing focal point for all needed health care services, per 
calendar month, with the elements included in G0556, as appropriate).
    We proposed that HCPCS codes G0556 through G0558 would describe 
APCM services furnished per calendar month, following the initial 
qualifying visit (see section II.G.2.c.(1) for more on the initiating 
visit). Physicians and NPPs, including nurse practitioners (NPs), 
physician assistants (PAs), certified nurse midwives (CNMs) and 
clinical nurse specialists (CNSs), could bill for APCM services. As we 
describe in more detail in section II.G.2.c., within the code 
descriptors for HCPCS codes G0556, G0557, and G0558, we proposed to 
include the elements of the scope of service for APCM as well as the 
practice capabilities and requirements that are inherent to care 
delivery by the care team/practitioner who is billing under a practice 
using an advanced primary care delivery model, and necessary to fully 
furnish and, therefore, bill for APCM services.
    As described in more detail in section II.G.2.e.(1) of this final 
rule, within the code descriptors for HCPCS codes G0556, G0557, and 
G0558, we proposed that the practitioner who bills for APCM services 
intends to be responsible for the patient's primary care and serves as 
the continuing focal point for all needed health care services. We 
anticipated that most practitioners furnishing APCM services will be 
managing all the patient's health care services over the month and have 
either already been providing ongoing care for the beneficiary or have 
the intention of being responsible for the patient's primary care and 
serving as the continuing focal point for all the patient's health care 
services. We anticipate that these codes will mostly be used by the 
primary care specialties, such as general medicine, geriatric medicine, 
family medicine, internal medicine, and pediatrics, but we are also 
aware that, in some instances, certain specialists function as primary 
care practitioners--for example, an OB/GYN or a cardiologist. In 
contrast to situations where the patient's overall, ongoing care is 
being managed, monitored, and/or observed by a practitioner, there are 
situations when care is provided by a practitioner who would not serve 
as ``the continuing focal point for all needed health care services.'' 
Similarly, there are some time- or condition-limited practitioner-
patient relationships that are clearly not indicative of the ongoing 
care that we anticipate practitioners would be responsible for when 
furnishing APCM services. As we stated in the CY 2021 PFS proposed rule 
and CY 2024 PFS final rule in the context of our policies for the O/O 
E/M visit complexity add-on code (HCPCS code G2211), a practitioner 
whose ``relationship with the patient is of a discrete, routine, or 
time-limited nature; such as, but not limited to, a mole removal or 
referral to a physician for removal of a mole; for treatment of a 
simple virus, for counseling related to seasonal allergies, initial 
onset of gastroesophageal reflux disease; treatment for a fracture; and 
where comorbidities are either not present or not addressed, and/or 
when the billing practitioner has not taken responsibility for ongoing 
medical care for that particular patient with consistency and 
continuity over time, or does not plan to take responsibility for 
subsequent, ongoing medical care for that particular patient with 
consistency and continuity over time'' (85 FR 84570 and 84571, 88 FR 
78971). For example, a patient who spends one month of the year in 
another location could require physicians' services in that location if 
they experience exacerbation of one of their chronic conditions, but 
the practitioner who treats them would not intend to manage or monitor 
that patient's overall, ongoing care. Finally, HCPCS code G2211 can 
also be billed when medical services are ``part of ongoing care related 
to a patient's single, serious condition or complex condition,'' but 
this is different from the APCM requirement. A practitioner's 
management of one or more serious conditions (as is often the case with 
specialty care), without more, does not mean that the practitioner is 
also responsible for all primary care services and the focal point for 
all needed care (the requirement for APCM), and thus would not 
necessarily mean that the practitioner could bill for APCM.
    As is our current policy for other care management services, and 
consistent with both CPT guidance and Medicare rules for CPT codes 
99487, 99489, 99490, we proposed that HCPCS codes G0556, G0557, and 
G0558 may only be reported once per service period (calendar month) and 
only by the single practitioner who assumes the care management role 
with a particular beneficiary for the service period (89 FR 61596). 
That is, based on a patient's status, a physician or practitioner would 
identify the patient to receive Level 1, Level 2, or Level 3 APCM 
services

[[Page 97866]]

during a given service period (calendar month), and we would make 
payment for only one claim for APCM services for that service period. 
At this time, we do not see the need or value of implementing 
restrictions or complex operational mechanisms to identify a single 
physician or NPP who may bill for APCM services for a specific 
beneficiary. However, we recognize that other initiatives, such as the 
Medicare Shared Savings Program, have operational mechanisms in place 
to attribute patients to certain ACOs (Sec.  425.400). While a similar 
approach could be used to attribute patients for APCM services, we are 
reluctant to introduce unnecessary complexity for these services. As we 
continue to develop our policies in this area, we sought feedback from 
interested parties on methodologies that could allow for identification 
of the beneficiary's primary care practitioner. We also sought comment 
on whether there should be additional requirements to prevent potential 
care fragmentation or service duplication.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: We received a few comments regarding the types of 
practitioners that can furnish and be paid for APCM services. These 
interested parties thanked us for including advanced practice nurses 
such as nurse practitioners, certified nurse midwives, and clinical 
nurse specialists. Several commenters encouraged us to add additional 
types of health care professionals to those who can furnish APCM, such 
as registered nurses and pharmacists.
    Response: We thank the commenters for their feedback. We appreciate 
the value of interdisciplinary teams, which can include registered 
nurses and pharmacists. As discussed later in this rule, APCM services 
can be furnished by the types of Medicare-enrolled practitioners that 
are authorized under the statute to furnish and be paid for services 
performed by auxiliary personnel (which can include registered nurses 
and pharmacists) incident to their own professional services. We 
proposed to add APCM services as designated care management services 
under Sec.  410.26(b)(5), which means that these services can be 
performed by auxiliary personnel under the general supervision of the 
billing physician or other practitioner. As defined under Sec.  
410.26(a)(3), general supervision means the service is furnished under 
the physician's (or other practitioner's) overall direction and 
control, but the physician's (or other practitioner's) presence is not 
required during the performance of the service, whereas direct 
supervision in the office setting means the physician (or other 
supervising practitioner) must be present in the office suite and 
immediately available to furnish assistance and direction throughout 
the performance of the service.
    Comment: A few commenters asked how to identify the practitioner 
responsible for the patient's primary care, giving an example of a 
patient who has a primary care practitioner and a geriatrician. Other 
commenters supported our proposed definition of primary care 
practitioner as the individual responsible for the patient's primary 
care and who serves as the continuing focal point for all needed health 
care services, with one stating that such a practitioner would 
understand the history and context of each patient. Another commenter 
agreed with our proposed approach to identifying the appropriate 
practitioner for purposes of billing for APCM services, as it is 
tailored toward those practitioners who provide consistent, 
longitudinal care rather than those who provide more time-limited, 
discrete services. We did not receive any comments about patient-
practitioner relationships not indicative of a primary care 
relationship.
    Response: We appreciate the commenters' support for our proposed 
approach to identifying the primary care practitioner responsible for 
the patient's care. We recognize that a patient may regularly see 
multiple practitioners, and that more than one of them may be in a 
specialty that is generally considered to furnish primary care, as in 
the example provided by the commenter of a patient who sees their 
primary care practitioner and a geriatrician. While more than one 
practitioner may have an ongoing relationship with the patient, there 
ordinarily would be only one of them who serves as the continuing focal 
point for all needed health care services. We proposed that the patient 
must be informed as part of the required beneficiary consent before 
receiving APCM services that only one practitioner can furnish and be 
paid for these services during a calendar month. We believe that any 
lack of clarity as to which practitioner serves as the continuing focal 
point for all care can be resolved through the beneficiary consent 
process and with clear and comprehensive patient education.
    Comment: A few commenters indicated it may be useful to use a 
beneficiary's attestation of their main health care practitioner on 
Medicare.gov to identify who could bill for APCM services. 
Additionally, some commenters suggested that we should develop a 
claims-based attribution method similar to that used by the Shared 
Savings Program or CMS Innovation Center models to determine the 
responsible primary care practitioner.
    Response: We thank the commenter for this suggestion. We 
acknowledge that an attribution method that uses historical claims data 
and/or beneficiary attestations made through Medicare.gov could be 
useful to reduce the administrative burden on practitioners in 
determining whether they are the appropriate primary care practitioner 
for purposes of APCM services. Given that these are new services, we 
believe it would be more appropriate to refrain from implementing 
additional requirements so that we may consider feedback from 
interested parties as they gain experience billing for these services. 
We may consider additional guardrails to prevent the submission of APCM 
claims from more than one practitioner through possible future 
rulemaking. Finally, as we discussed in the CY 2021 final rule related 
to monitoring appropriate use of the E/M visit complexity add-on code 
(HCPCS code G2211), we believe that information included in the 
patient's medical record or claims history could serve as supporting 
documentation to help us determine whether the billing physician or 
practitioner is the appropriate primary care practitioner for purposes 
of APCM services (85 FR 84571). We would like to remind commenters that 
only one practitioner can bill for APCM services per month, which 
should be discussed when obtaining the patient's consent for these 
services.
    Comment: We received many comments about the specialties of the 
practitioners we would expect to furnish and bill for APCM services. A 
few commenters were split on whether specialists should be permitted to 
bill for the APCM codes, with some commenters recommending that 
specialists who might tend to serve in the role of primary care 
practitioner, such as cardiologists, endocrinologists, and 
pulmonologists should be allowed to bill for APCM services. Other 
commenters stated that even specialists who have long-term 
relationships with patients are unlikely to provide advanced primary 
care services as envisioned in our proposed APCM codes, and expressed 
concern that allowing them to bill for APCM services could lead to 
fragmented care.

[[Page 97867]]

    Response: We understand the commenters' concerns about fragmented 
care, especially across specialists and primary care practitioners. Our 
aim in developing proposals to identify the appropriate practitioner to 
furnish and bill for APCM services was to retain flexibility to allow 
for the specific circumstances of individual practitioners and 
beneficiaries. We reiterate as described before that a specialist who 
manages one or more of a patient's serious conditions is not 
necessarily the practitioner who is responsible for all of the 
patient's primary care and the focal point for all needed health care, 
which is specified in the code descriptors as the basis for a 
practitioner to furnish and bill for APCM services. In the event that a 
specialist and a primary care practitioner both intend to be 
responsible for all primary care services and serve as the focal point 
of all needed care for the same patient, we note that we proposed to 
make payment to only one practitioner for APCM services in any single 
month. Further, we proposed that the patient must be informed of this 
as part of the required patient consent before receiving APCM services. 
We believe that the question of which practitioner should furnish and 
bill for APCM services for a patient can be resolved through clear and 
comprehensive patient education, as well as communication between 
practitioners if needed.
    Comment: Several commenters agreed with our proposed coding 
structure of monthly billing for APCM. A few other commenters agreed 
that a monthly billing cycle strikes a balance between the number of 
times these services are furnished annually and monthly payment.
    Response: We thank commenters for their support. We continue to 
believe that billing APCM each calendar month is the most appropriate 
billing cadence.
    After consideration of public comments, we are finalizing our 
proposals without modification to create three G-codes to describe APCM 
services effective January 1, 2025, which can be billed monthly 
following the initiating qualifying visit (see section II.G.2.c.(1) for 
more on the initiating visit) by the physician or practitioner (nurse 
practitioner, physician assistant, certified nurse midwife, or clinical 
nurse specialist) who intends to be responsible for the patient's 
primary care and serve as the continuing focal point for all needed 
health care services. We are not limiting APCM services to 
practitioners in specific specialties, but we remain open to feedback 
about these policies from interested parties.
    We anticipate that APCM services would ordinarily be provided by 
clinical staff incident to the professional services of the billing 
practitioner in accordance with our regulation at Sec.  410.26. We 
proposed that APCM services will 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.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters were overwhelmingly supportive of our proposal 
to include APCM as a designated care management service, including 
support for our proposal to allow general supervision of auxiliary 
personnel for these services.
    Response: We thank commenters for their support.
    After consideration of public comments, we are finalizing our 
proposal to add APCM services as a ``designated care management 
service'' under Sec.  410.26(b)(5) and, as such, these services can be 
provided by auxiliary personnel under the general supervision of the 
billing practitioner.
    Unlike the other coding to describe care management services, we 
further proposed that the code descriptors for HCPCS codes G0556, 
G0557, and G0558 would not be time-based (89 FR 61596). Based on 
feedback from the physician and practitioner community, we understand 
that ongoing care management and coordination services are standard 
parts of advanced primary care, even in months when documented clinical 
staff or billing professional minutes may not reach the required 
thresholds for billing or the patient's condition does not meet the 
clinical conditions for care management services under the existing 
code set. In consideration of the extensive feedback from interested 
parties, we have learned that practitioners who currently furnish 
monthly care management services may already be providing APCM services 
in a variety of clinical circumstances, documenting all necessary 
aspects of the patient-centered care furnished monthly to the patient 
without meeting the requirements to bill for care management services, 
such as satisfying the administrative requirement to count clinical 
staff minutes to reach specific time-based thresholds. As we stated in 
the CY 2024 PFS final rule in the context of the O/O E/M visit 
complexity add-on code (HCPCS code G2211), physicians and practitioners 
may diagnose and treat a condition in an O/O E/M visit that is not 
expected to last as long as three months or would not reasonably be 
expected to result in a risk of hospitalization, and the practitioner's 
clinical staff may provide significant care management and coordination 
services relating to that condition. For example, COVID-19 cases are 
clinical circumstances that generally do not last three months but may 
require significant acute management, care coordination, and follow-up 
within a given month, particularly for patients with comorbidities (88 
FR 78973). Practitioners may also provide care management and 
coordination services to a patient whose condition meets the criteria 
in one or more care management codes, but the documented minutes of 
service may not reach the minimum time threshold to bill for a care 
management service. For example, the practitioner might provide care 
coordination for a month that includes 20 minutes of consulting with 
the patient's other healthcare providers and modifying medications to 
address an acute exacerbation of hypertension but will not meet the 
requirements for billing the PCM service. We also noted that, unlike 
the current coding to describe certain CTBS services, we proposed that 
the code descriptors for HCPCS codes G0556, G0557, and G0558 will not 
include the timeframe restrictions for billing certain CTBS (for 
example, the restriction for virtual check-in services that there is 
not a related E/M service provided within the previous 7 days or an E/M 
service or procedure within the next 24 hours or the soonest available 
appointment). As addressed in the CY 2019 PFS final rule, we have heard 
from interested parties that the timeframe restrictions for billing 
certain CTBS are administratively burdensome (83 FR 59686).
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Most commenters were overwhelmingly supportive of our 
proposal to not require the counting of clinical staff minutes spent 
furnishing APCM services to reach specific time-based thresholds for 
billing the proposed APCM codes, noting that doing so is both 
administratively burdensome and often results in practitioners 
providing services that they are unable to bill and be paid for because 
they do not reach the required minimum time threshold to bill for a 
service. One commenter applauded this proposal and asserted that, in 
time-based billing scenarios, the need to

[[Page 97868]]

maintain a certain rate of billable units across the patient population 
to keep the program financially tenable may directly or indirectly 
incentivize care managers to prioritize activities that fulfill billing 
requirements and deprioritize needed activities for patients who may 
need intervention but have already fulfilled the billing requirements 
or are unlikely to fulfill the billing requirements. A few commenters 
expressed concern that removing the time-based thresholds may 
inadvertently incentivize over-billing of the proposed APCM codes, in 
which a practitioner bills the APCM codes for beneficiaries whether or 
not they are performing any of the APCM service elements, such as care 
coordination.
    Response: We agree with the commenters who suggested that 
practitioners delivering care using an advanced primary care approach 
are providing ongoing care management and coordination services for 
their patients. While these activities should be documented in the 
patient's medical record, we agree that the need to document clinical 
staff minutes spent providing these services is unnecessarily 
administratively burdensome in the context of advanced primary care, 
and that the requirement to meet time-based thresholds is not necessary 
to bill the APCM codes (HCPCS codes G0556, G0557, and G0558) as we 
proposed to define them. While we appreciate the concern about over-
billing, we believe that practitioners that meet all of the other 
requirements to bill HCPCS codes G0556, G0557, and G0558, and are 
documenting the care management and coordination services they are 
furnishing to patients in the medical record without recording the 
clinical staff minutes spent on each activity, are providing medically 
necessary advanced primary care management services. We reiterate that, 
while only one physician or practitioner may furnish and be paid for 
APCM services for a patient in a single month, a patient's other health 
care providers can furnish and bill for other care management services, 
such as TCM, CCM, PCM, CHI, PIN, and certain CTBS, when medically 
necessary. Additionally, we recognize that there may be some 
practitioners who do not furnish care using the advanced primary care 
model or prefer to bill using other care management codes rather than 
the new APCM codes. We note that, like all other physicians' services 
billed under the PFS, each of these services must be medically 
reasonable and necessary to be paid by Medicare.
    Comment: Most commenters were supportive of not including the same 
time-based restrictions on billing other services that apply for CTBS 
in the code descriptors for HCPCS codes G0556, G0557, and G0558. 
Commenters also suggested that it is not always possible to adhere to 
the current restrictions on billing for certain CTBS services, 
including for virtual check-in services that there is not a related E/M 
service provided within the previous 7 days or an E/M service or 
procedure within the next 24 hours or the soonest available 
appointment, despite a practitioner's best efforts to do so.
    Response: We agree that the time-related billing restrictions that 
apply for certain CTBS services (for example, virtual check-in 
services) are not necessary for HCPCS codes G0556, G0557, and G0558. We 
adopted the limitations on when certain CTBS can be billed with other 
codes to avoid duplicative payment. For example, in the case of virtual 
check-in services, which are a brief exchange with a practitioner to 
determine whether the patient needs to be seen or the problem can be 
addressed in a different way, payment for a contemporaneous E/M service 
would already reflect the resources involved in furnishing the virtual 
check-in service. However, in the case of virtual check-ins provided as 
part of APCM services, there is no need for such limitations because 
the APCM codes describe a broad set of advanced primary care services--
not all of which will be provided in any particular month.
    After consideration of public comments, we are finalizing our 
proposal without modification to establish APCM codes and descriptors 
that reflect all elements of service furnished during a month without 
specifying the amount of time that must be spent furnishing the 
services during the month; and without including time-related billing 
restrictions for the elements of the services.
    We also proposed that not all elements included in the code 
descriptors for APCM services must be furnished during any given 
calendar month for which the service is billed (89 FR 61596). APCM 
services are largely designed to be person-centered and focused on the 
individual patient, such that the elements that are provided depend on 
medical necessity and individual patient need. Therefore, we anticipate 
that all the APCM scope of service elements (for example, comprehensive 
care management and care coordination) will be routinely provided, as 
deemed appropriate for each patient, acknowledging that not all 
elements may be necessary for every patient during each month (for 
example, the beneficiary may have no hospital admissions that month, so 
there is no management of a care transition after hospital discharge). 
We also anticipate that there may be some months where it may be 
appropriate for some service elements to be performed more than once 
for the patient. For example, in one month a patient with heart failure 
and chronic kidney disease receiving APCM Level 2 services (G0557) may 
be on a stable medication regimen, receive communication about their 
care plan, but no virtual check-ins. The next month, the patient may 
experience a heart failure exacerbation requiring inpatient admission, 
and then receive as part of their APCM service timely communication and 
follow-up with new labs ordered, multiple virtual check-ins ensuring 
that the patient understands their new medications, a phone call to 
help the patient understand the lab results, and an interprofessional 
consultation with the patient's cardiologist to help decide if the 
patient's diuretic dosage should be changed.
    However, even if not all elements of the APCM service are furnished 
each month for which APCM is billed, we proposed that billing 
practitioners and auxiliary personnel must have the ability to furnish 
every service element and furnish these elements as is appropriate for 
any individual patient during any calendar month. As described in more 
detail in the CY 2025 PFS proposed rule (89 FR 61707), maintaining 
certain advanced primary care practice capabilities and requirements is 
inherent in these elements and must be met to fully furnish and bill 
APCM. For example, using our previous example of the patient with heart 
failure and chronic kidney disease receiving Level 2 APCM services, if 
the patient experiences swollen legs, the patient should be able to 
submit a photo or video to the practitioner via a secure communications 
system, and the practitioner must be able to interpret and communicate 
remotely with the patient about those images.
    While we proposed that specific minutes spent furnishing APCM 
services for purposes of billing HCPCS codes G0556-G0558 need not be 
documented in the patient's medical record, we will expect that any 
actions or communications that fall within the APCM elements of service 
will be described in the medical record and, as appropriate, their 
relationship to the clinical problem(s) they are intended to resolve 
and the treatment plan, just as

[[Page 97869]]

all clinical care is documented in the medical record.
    We sought feedback on these service descriptions as part of the CY 
2025 PFS proposed rule, on whether there are elements of other care 
management services that should be removed or altered for purposes of 
APCM services. We have summarized comments on our proposed service 
descriptions on section II.G.2.c. for Level 1, Level 2, and Level 3 
APCM. Finally, while the service descriptors above are consistent 
across all three APCM levels because the scope of service elements are 
consistent across all levels of APCM and the elements that are provided 
depend on medical necessity and individual patient need, we proposed 
that the APCM codes will be stratified into three levels based on 
certain patient characteristics that are broadly indicative of patient 
complexity and the consequent resource intensity involved in the 
provision of these services in the context of advanced primary care. We 
proposed that the new APCM coding schema will be stratified based on 
APCM services being furnished using the advanced primary care model to 
patients with one or fewer chronic conditions (``Level 1''); patients 
with two or more chronic conditions (``Level 2''); and Qualified 
Medicare Beneficiaries (QMBs) \46\ with two or more chronic conditions 
(``Level 3'') (see Table 24 for the three APCM code levels). This 
stratification of APCM into three levels allows us to distinguish among 
different levels of patient complexity and more accurately reflect the 
resources required to furnish APCM services for certain categories of 
beneficiaries. We anticipate that a practitioner using the advanced 
primary care model will bill for APCM services for all or nearly all 
the patients for whom they intend to assume responsibility for primary 
care.
---------------------------------------------------------------------------

    \46\ See 42 CFR 435.123. The proposal includes both individuals 
in the QMB eligibility group who also have full scope Medicaid 
coverage (``QMB-plus'') and individuals in the QMB eligibility group 
who do not have Medicaid eligibility under any other Medicaid 
coverage group (``QMB-only''). However, this proposal would not 
include those QMBs who are in the Medicare Part B Immunosuppressive 
Drug benefit, which provides coverage of immunosuppressive drugs 
based on eligibility requirements described in Sec.  407.55, because 
such individuals would not qualify for Medicare coverage of the 
services described in this rulemaking. See 42 CFR 435.123(c)(2).
---------------------------------------------------------------------------

    Furthermore, we recognized the ways in which this new APCM coding 
intersects with current care management codes around number of chronic 
conditions (89 FR 61596). We note that the current care management 
codes are generally stratified in a similar, though more granular way, 
by the degree of complexity of care based on the presence of chronic 
conditions and complexity of medical decision making, who directly 
performs the service, and the time spent furnishing the service. In 
establishing separate payment for CCM services in the CY 2014 PFS final 
rule, we recognized that the resources involved in furnishing 
comprehensive, coordinated care management services to patients with 
multiple (two or more) chronic conditions were greater than those 
included in a typical non-face-to-face care management service, which 
we continued to consider as bundled into the payment for face-to-face 
E/M visits (78 FR 43337). In the CY 2017 PFS final rule, based on 
robust feedback from interested parties indicating that the new CCM 
codes did not fully capture the service time required to furnish care 
to beneficiaries with more complex conditions, we finalized new codes 
for patients with complex care management needs. In the CY 2016 PFS 
final rule, in considering how to improve the accuracy of our payments 
for care coordination, particularly for patients requiring more 
extensive care management, we stated that the care coordination and 
management for Medicare beneficiaries with multiple chronic conditions, 
a particularly complicated disease or acute condition, or certain 
behavioral health conditions often requires extensive discussion, 
information-sharing, and planning between a primary care physician and 
a specialist (for example, with a neurologist for a patient with 
Alzheimer's disease plus other chronic diseases) (80 FR 70919).
[GRAPHIC] [TIFF OMITTED] TR09DE24.055

    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: We received many public comments on our proposed APCM 
service code levels, some of which we have summarized in section 
II.G.2.e(1) where we discuss Level 1, Level 2, and Level 3 APCM 
services. In general, the majority of commenters appreciated our 
efforts to stratify the APCM codes based on patient complexity and 
resource intensity, recognizing the importance of addressing the needs 
of patients with varying levels of chronic conditions. Furthermore, 
many commenters were supportive of the proposal not to require all 
elements of the APCM services to be furnished each month in which APCM 
is billed, expressing appreciation for our acknowledgment that 
beneficiaries' needs will vary from month to month.
    However, several commenters generally believed the proposed 
stratification may not fully account for the severity of individual 
conditions or appropriately account for the resource costs for 
beneficiaries with multiple complex conditions and recommended various 
alternatives for stratification. Several commenters suggested that our 
proposed APCM levels are inappropriately weighted towards 
uncomplicated, lower-risk patients and were concerned that the proposed 
stratification does not reflect the additive impact of multiple chronic 
conditions, or the increased resources associated with furnishing APCM 
services to higher-risk patients with complex illness. Some of these 
commenters suggested that there are a significant number of Medicare 
beneficiaries with more than two chronic conditions and, as the number 
of chronic condition increases, the types of support and time needed to 
manage these patients increases. Specifically, several commenters 
encouraged us to add an additional level to the APCM service codes to 
account for patients with significant clinical complexity and 
healthcare needs that do not meet QMB criteria, but who still require 
intensive resource utilization. A few commenters suggested that six 
chronic conditions would be an appropriate threshold. Other commenters 
recommended that a fourth tier be added to the APCM

[[Page 97870]]

service code levels based on the high needs beneficiary criteria from 
the High Needs track of the ACO REACH Model to account for the 
resources needed to support patients with complex illness. These 
commenters suggested that this criterion has been effective at 
identifying high-cost, high-needs patients and would allow us to 
incorporate another successful element of value-based care into 
traditional Medicare payment policy.
    Response: We thank all commenters for their careful consideration 
of the proposed approach to stratify the APCM codes, and we appreciate 
commenters' suggestions for specific types of beneficiaries who may 
require intensive care management resource utilization and warrant an 
additional APCM code level, including beneficiaries with complex 
illness. We appreciate commenters' suggestion to consider the high 
needs beneficiary criteria from the High Needs track of the ACO REACH 
model. The model's eligibility criteria for alignment to a High Needs 
Population ACO includes beneficiaries with one or more conditions that 
impair mobility or neurological condition, significant chronic or other 
serious illness reflected by risk score and unplanned hospital 
admissions, or signs of frailty (who may also be dually eligible or at 
risk of becoming dually eligible).\47\ We also acknowledge commenters' 
concerns that patients with two chronic conditions may require 
additional time and more complex care than a patient with two chronic 
conditions and QMB status. However, we believe that beneficiaries who 
are QMBs face unique challenges outside chronic condition management 
that may impact their care, requiring additional care management 
resources. We believe that our proposed APCM code stratification 
recognizes that individual beneficiaries have unique and varying 
resource needs, and strikes a balance between being overly specific in 
the creation of many categories, which could increase confusion and 
administrative burden, and being overly simplistic, which could 
inadequately differentiate between variations in the resources involved 
in furnishing APCM services. We believe that our proposal does this in 
an appropriate way and, as such, are finalizing the code stratification 
as proposed. However, we continue to welcome feedback to help us 
consider possible future changes to our policy and will take 
commenters' suggestions into consideration as we consider the 
development of proposals for future rulemaking.
---------------------------------------------------------------------------

    \47\ For PY2025, CMS expanded these criteria to include 
beneficiaries that have at least 90 Medicare-covered days of Home 
Health services utilization or at least 45 Medicare-covered days in 
a Skilled Nursing Facility within the previous 12 months. The 
revised eligibility criteria were expected to more effectively 
identify beneficiaries with complex needs that would benefit from 
participation in a High Needs Population ACO. More information 
available at https://www.cms.gov/priorities/innovation/media/document/aco-reach-rfa and https://www.cms.gov/priorities/
innovation/innovation-models/reach-py24-model-
perf#:~:text=The%20model's%20eligibility%20criteria%20for,admissions%
2C%20or%20signs%20of%20frailty.
---------------------------------------------------------------------------

    Comment: A few commenters recommended that we review the AMA RUC 
Medical Home Workgroup's valuation recommendations from 2008 where they 
described services defined in the Medicare Medical Home demonstration 
project.\48\ For context, in 2008, pursuant to the Tax Relief and 
Health Care Act of 2006 (Pub. L. 109-432), we conducted a three-year 
demonstration project to evaluate the medical home model of patient 
care. We drafted a three-tiered system to categorize medical homes 
based on the capabilities of the physician practices serving in that 
capacity for purposes of conducting the demonstration project. We asked 
the RUC for their assistance in creating possible valuations for these 
three tiers, including costs associated with physician work, direct 
practice expense, and professional liability insurance. These 
requirements ranged from entry-level practices to fully integrated, 
complex health systems, and which took into consideration varying 
practice-level capabilities, such as electronic prescribing 
capabilities, documentation of referral histories, and maintenance/
service contract for hardware, internet, etc. These commenters 
suggested that we adopt the RUC's 2008 valuation recommendations as a 
framework for APCM services and establish APCM levels based on these 
medical home practice tiers.
---------------------------------------------------------------------------

    \48\ American Medical Association. (n.d.). Medical home model of 
care: Recommendations (Publication No. 0). AMA. https://www.ama-assn.org/sites/ama-assn.org/files/corp/media-browser/public/rbrvs/medicalhomerecommend_0.pdf.
---------------------------------------------------------------------------

    Response: We have reviewed the RUC's 2008 recommendations for code 
descriptors, physician work, direct practice expense inputs, and 
professional liability insurance crosswalks for each of the three tiers 
of medical homes and found that the recommended tier system and payment 
based on practice-level capabilities would not fully capture the policy 
goals of the proposed APCM coding and payment. The proposed APCM codes 
were built on a presumed set of practice capabilities that reflect the 
use of an advanced primary care model of care delivery, which has been 
increasingly common in medical practice, and valued to more accurately 
account for the resources involved in furnishing care using an advanced 
primary care model. While we have never addressed in rulemaking the AMA 
RUC's findings and recommendations for the medical home practice tiers 
and associated valuations, we acknowledge that several practice-level 
capabilities described by the RUC are similar to the proposed APCM 
service elements, including but not limited to obtaining consent, care 
planning, acting as the primary focal point of care, and 24/7 access. 
However, our proposal to adopt coding for APCM was to recognize the 
shift in medical practice toward care delivery using an advanced 
primary care model and improve payment for care management services 
delivered by practitioners who have adopted an advanced primary care 
approach, which involves a specific set of practice-level capabilities. 
Stratifying coding for APCM services based on practice-level 
capabilities would not be helpful to that purpose. And there is other 
available coding that recognizes the resources involved in care 
management services furnished by practitioners outside of an advanced 
primary care model. We are also concerned that stratifying levels of 
payment for APCM services based on practice-level capabilities, rather 
than patient-level characteristics, could further exacerbate inequities 
in health systems, including smaller or rural practices who may furnish 
care to equally complex patients as compared to larger, more 
established health systems and clinics.
    Finally, we do not believe the valuation proposed in the RUC's 
recommendation can be appropriately applied to the proposed APCM code 
levels. The RUC suggested a work RVU per patient per month of 0.35 for 
Tier 3 in the medical home model, which was intended for ``very sick'' 
patients. The recommended 0.35 RVU is lower than the highest valuation 
for APCM. If we had adopted the RUC's recommended RVUs for the three 
tiers, we would have reduced our proposed values for the APCM codes, 
which would not have appropriately reflected the resources involved in 
furnishing these services.
    After consideration of public comments, we are finalizing as 
proposed the APCM service code levels.
(1) Level 1 APCM
    We proposed the Level 1 APCM code for patients with one or fewer 
chronic conditions because of the increased import and use of non-face-
to-face

[[Page 97871]]

interactions in advanced primary care even for patients with relatively 
fewer health needs, which has increased over time for several 
observable reasons, including broad evolution in information and 
communication technology in everyday life, diffusion of practices first 
adopted for higher-acuity patients, and continuing practices widely 
adopted during the COVID-19 pandemic that reduce reliance on in-person 
interactions (89 FR 61596). APCM services for a patient diagnosed with 
one or fewer chronic conditions will require significantly less time 
and resources than one with two or more chronic conditions since, in 
general, there would be fewer ongoing health needs and other health 
care resources to coordinate, a lower risk of drug interactions, and 
less complicated physiology. Based on CY 2010 Medicare claims data, the 
difference in annual expenditures per beneficiary between patients with 
one or fewer chronic conditions and those with two or three chronic 
conditions was $3,673.\49\ Our current care management coding similarly 
delineates patient complexity between patients with a single serious 
chronic condition (PCM codes) and those with two or more serious 
chronic conditions (CCM codes). We anticipate that practitioners who 
would furnish APCM services may have already had experience with care 
management services coding and payment for much of this population. The 
Level 1 APCM code would also address the current gap in coding and 
payment for care management services furnished using an advanced 
primary care model for patients without multiple chronic conditions.
---------------------------------------------------------------------------

    \49\ Centers for Medicare and Medicaid Services. Chronic 
Conditions among Medicare Beneficiaries, Chartbook, 2012 Edition. 
Baltimore, MD. 2012. https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/chronic-conditions/downloads/2012chartbook.pdf.
---------------------------------------------------------------------------

    We received many public comments on our proposed APCM service code 
levels. The following is a summary of the comments we received and our 
responses.
    Comment: Most of the commenters recommended that we adopt 
additional codes to provide differential payment for more and less 
complex beneficiaries. Many commenters were concerned that the proposed 
stratification is heavily weighted towards uncomplicated, lower-risk 
patients. A few commenters pointed out that some patients with a 
single, but very serious condition, may require significantly more 
resources than patients with multiple chronic conditions that are 
stable or less severe. By focusing solely on the number of chronic 
conditions, commenters suggested that this stratification could 
overlook the nuanced differences in resource needs based on condition 
severity and complexity. Many commenters recommended that we further 
evaluate and refine the stratification scheme to more accurately 
reflect the resource intensity required for effective advanced primary 
care delivery by incorporating additional factors, such as the severity 
of individual conditions, social risk factors beyond QMB status, and 
other indicators of medical complexity. Several commenters recommended 
that we create an add-on code for QMBs that could be reported with any 
of the APCM levels, including Level 1. These commenters stated that it 
is likely that there are many beneficiaries with two or fewer chronic 
conditions that have social risk factors that may impact their care. 
These commenters provided the example of an otherwise healthy 
beneficiary who has found themselves newly homeless, leaving them at 
greater risk for contracting infections and illnesses, which impacts 
their overall care.
    Response: We believe that all beneficiaries, even with a small 
number of chronic conditions, can benefit from care coordination and 
access to advanced primary care services. We also recognize that a 
patient's health conditions may change rapidly, and having established 
ongoing care can mitigate and reduce negative health outcomes. We 
appreciate that the number of chronic conditions a beneficiary has may 
not correlate perfectly to the severity or complexity of illness. 
However, as noted earlier in this discussion, we are aiming to strike a 
balance between coding specificity and administrative simplicity to 
appropriately stratify APCM services based on how chronic medical 
conditions interact with increased risk associated with social 
determinants of health (SDOH) factors. We understand that there will 
always be beneficiaries within a particular APCM code level whose needs 
for APCM services are greater or less than other beneficiaries. We 
expect the adoption of coding and payment policies for APCM services to 
be an iterative process, informed by ongoing feedback from interested 
parties that we will take into consideration for future rulemaking.
    Comment: One commenter stated that the code descriptor for HCPCS 
code G0556 does not mention the presence of a chronic condition, while 
the risk stratification for billing the code states ``patients with one 
or fewer chronic conditions.'' This commenter therefore requested that 
we include ``patients with one or fewer chronic conditions'' in the 
code descriptor for enhanced clarity. Another commenter asked us to 
clarify what constitutes a ``chronic condition'' for purposes of APCM 
service level selection, and whether we would use an approach similar 
to CCM in which we do not enumerate an exhaustive list of conditions 
that qualify for CCM payment, instead defining a qualifying condition 
as one that is ``expected to last at least 12 months or until the 
patient's death and or that place them at significant risk of death, 
acute exacerbation and or decompensation, or functional decline.''
    Response: We agreed with the commenters that we should add 
clarifying language to the code descriptor for Level 1 APCM services. 
We are finalizing modifications to our proposed code descriptor for 
Level 1 APCM services to indicate the presence of one or fewer chronic 
conditions that are ``expected to last at least 12 months or until the 
patient's death and or that place them at significant risk of death, 
acute exacerbation and or decompensation, or functional decline.'' We 
point out to commenters that we had already included this definition of 
``chronic condition'' for Level 2 and Level 3 APCM services.
    After consideration of public comments, we are finalizing the code 
descriptor for HCPCS code G0556 as: HCPCS code G0556 (Advanced primary 
care management services for a patient with one chronic condition 
[expected to last at least 12 months, or until the death of the 
patient, which place the patient at significant risk of death, acute 
exacerbation/decompensation, or functional decline], or fewer, provided 
by clinical staff and directed by a physician or other qualified health 
care professional who is responsible for all primary care and serves as 
the continuing focal point for all needed health care services, per 
calendar month, with the following elements, as appropriate:
     Consent;
    ++ Inform the patient of the availability of the service; that only 
one practitioner can furnish and be paid for the service during a 
calendar month; of the right to stop the services at any time 
(effective at the end of the calendar month); and that cost sharing may 
apply.
    ++ Document in patient's medical record that consent was obtained.
     Initiation during a qualifying visit for new patients or 
patients not seen within 3 years;
     Provide 24/7 access for urgent needs to care team/
practitioner,

[[Page 97872]]

including providing patients/caregivers with a way to contact health 
care professionals in the practice to discuss urgent needs regardless 
of the time of day or day of week;
     Continuity of care with a designated member of the care 
team with whom the patient is able to schedule successive routine 
appointments;
     Deliver care in alternative ways to traditional office 
visits to best meet the patient's needs, such as home visits and/or 
expanded hours;
     Overall comprehensive care management;
    ++ Systematic needs assessment (medical and psychosocial).
    ++ System-based approaches to ensure receipt of preventive 
services.
    ++ Medication reconciliation, management and oversight of self-
management.
     Development, implementation, revision, and maintenance of 
an electronic patient-centered comprehensive care plan with typical 
care plan elements when clinically relevant;
    ++ Care plan is available timely within and outside the billing 
practice as appropriate to individuals involved in the beneficiary's 
care, can be routinely accessed and updated by care team/practitioner, 
and copy of care plan to patient/caregiver;
     Coordination of care transitions between and among health 
care providers and settings, including referrals to other clinicians 
and follow-up after an emergency department visit and discharges from 
hospitals, skilled nursing facilities or other health care facilities 
as applicable;
    ++ Ensure timely exchange of electronic health information with 
other practitioners and providers to support continuity of care.
    ++ Ensure timely follow-up communication (direct contact, 
telephone, electronic) with the patient and/or caregiver after an 
emergency department visit and discharges from hospitals, skilled 
nursing facilities, or other health care facilities, within 7 calendar 
days of discharge, as clinically indicated.
     Ongoing communication and coordinating receipt of needed 
services from practitioners, home- and community-based service 
providers, community-based social service providers, hospitals, and 
skilled nursing facilities (or other health care facilities), and 
document communication regarding the patient's psychosocial strengths 
and needs, functional deficits, goals, preferences, and desired 
outcomes, including cultural and linguistic factors, in the patient's 
medical record;
     Enhanced opportunities for the beneficiary and any 
caregiver to communicate with the care team/practitioner regarding the 
beneficiary's care through the use of asynchronous non-face-to-face 
consultation methods other than telephone, such as secure messaging, 
email, internet, or patient portal, and other communication-technology 
based services, including remote evaluation of pre-recorded patient 
information and interprofessional telephone/internet/EHR referral 
service(s), to maintain ongoing communication with patients, as 
appropriate;
    ++ Ensure access to patient-initiated digital communications that 
require a clinical decision, such as virtual check-ins and digital 
online assessment and management and E/M visits (or e-visits).
     Analyze patient population data to identify gaps in care 
and offer additional interventions, as appropriate;
     Risk stratify the practice population based on defined 
diagnoses, claims, or other electronic data to identify and target 
services to patients;
     Be assessed through performance measurement of primary 
care quality, total cost of care, and meaningful use of Certified EHR 
Technology.).
(2) Level 2 APCM
    We proposed the Level 2 APCM code for patients with two or more 
chronic conditions because of the frequency of chronic conditions in 
the Medicare population. In fact, nearly four in five Medicare 
beneficiaries have two or more chronic conditions.\50\ Furthermore, as 
noted previously, our current care management coding delineates patient 
complexity for the CCM codes for patients with two or more serious 
chronic conditions, and we anticipate that practitioners who will 
furnish APCM services may have already had experience with care 
management services coding and payment for much of this population.
---------------------------------------------------------------------------

    \50\ Lochner, K., Goodman, R., Posner, S., & Parekh, A. (n.d.). 
Multiple Chronic Conditions Among Medicare Beneficiaries. CMS. 
https://www.cms.gov/mmrr/Downloads/MMRR2013_003_03_b02.pdf.
---------------------------------------------------------------------------

    For example, someone with chronic kidney disease and heart failure 
requires regular check-ins, coordination with specialty care, follow-up 
after hospital admissions for heart failure exacerbations, regular 
modifications of the care plan, and more. These services are typically 
described by the existing CCM services. The patient may also typically 
need to reach out more often to their primary care practitioner with 
questions or new symptoms via the patient portal. For instance, the 
person sends a message through the patient portal to ask whether or not 
they should come into the primary care office after gaining ten pounds 
in the last week--which could be a sign of increased fluid retention 
and the need for increased diuretic dosages to avoid pleural edema (an 
accumulation of fluid in the lungs). The primary care team books the 
patient for a same-day urgent care appointment to assess for signs of 
swelling and pleural edema. Again, this on-demand access to their 
primary care team can help treat the patient's chronic conditions in a 
patient-centered way and avoid unnecessary complications.
    Comment: One commenter recommended that we add a modifier to be 
reported with the Level 2 APCM code to reflect social complexity and/or 
additional medical complexity for non-QMB beneficiaries.
    Response: We thank commenters for their consideration of the 
proposed Level 2 APCM service, and we appreciate the commenter's 
suggestion for potential ways to recognize that non-QMB beneficiaries 
may also have increased needs associated with social and/or medical 
complexity and therefore require more resources regardless of their QMB 
status. However, we believe that our proposed coding approach 
appropriately balances coding specificity with administrative 
simplicity. We continue to welcome feedback to help us evaluate the 
appropriateness of the APCM service levels, coding structure, and our 
social risk adjustment methodology, and we will consider possible 
changes to our policy in future rulemaking.
    After consideration of public comments, we are finalizing as 
proposed the code descriptor for HCPCS code G0557:
    HCPCS code G0557 (Advanced primary care management services for a 
patient with multiple (two or more) chronic conditions expected to last 
at least 12 months, or until the death of the patient, which place the 
patient at significant risk of death, acute exacerbation/
decompensation, or functional decline, provided by clinical staff and 
directed by a physician or other qualified health care professional who 
is responsible for all primary care and serves as the continuing focal 
point for all needed health care services, per calendar month, with the 
following elements, as appropriate:
     Consent;
    ++ Inform the patient of the availability of the service; that only 
one practitioner can furnish and be paid for the service during a 
calendar month; of

[[Page 97873]]

the right to stop the services at any time (effective at the end of the 
calendar month); and that cost sharing may apply.
    ++ Document in patient's medical record that consent was obtained.
     Initiation during a qualifying visit for new patients or 
patients not seen within 3 years;
     Provide 24/7 access for urgent needs to care team/
practitioner, including providing patients/caregivers with a way to 
contact health care professionals in the practice to discuss urgent 
needs regardless of the time of day or day of week;
     Continuity of care with a designated member of the care 
team with whom the patient is able to schedule successive routine 
appointments;
     Deliver care in alternative ways to traditional office 
visits to best meet the patient's needs, such as home visits and/or 
expanded hours;
     Overall comprehensive care management;
    ++ Systematic needs assessment (medical and psychosocial).
    ++ System-based approaches to ensure receipt of preventive 
services.
    ++ Medication reconciliation, management and oversight of self-
management.
     Development, implementation, revision, and maintenance of 
an electronic patient-centered comprehensive care plan;
    ++ Care plan is available timely within and outside the billing 
practice as appropriate to individuals involved in the beneficiary's 
care, can be routinely accessed and updated by care team/practitioner, 
and copy of care plan to patient/caregiver;
     Coordination of care transitions between and among health 
care providers and settings, including referrals to other clinicians 
and follow-up after an emergency department visit and discharges from 
hospitals, skilled nursing facilities or other health care facilities 
as applicable;
    ++ Ensure timely exchange of electronic health information with 
other practitioners and providers to support continuity of care.
    ++ Ensure timely follow-up communication (direct contact, 
telephone, electronic) with the patient and/or caregiver after an 
emergency department visit and discharges from hospitals, skilled 
nursing facilities, or other health care facilities, within 7 calendar 
days of discharge, as clinically indicated.
     Ongoing communication and coordinating receipt of needed 
services from practitioners, home- and community-based service 
providers, community-based social service providers, hospitals, and 
skilled nursing facilities (or other health care facilities), and 
document communication regarding the patient's psychosocial strengths 
and needs, functional deficits, goals, preferences, and desired 
outcomes, including cultural and linguistic factors, in the patient's 
medical record;
     Enhanced opportunities for the beneficiary and any 
caregiver to communicate with the care team/practitioner regarding the 
beneficiary's care through the use of asynchronous non-face-to-face 
consultation methods other than telephone, such as secure messaging, 
email, internet, or patient portal, and other communication-technology 
based services, including remote evaluation of pre-recorded patient 
information and interprofessional telephone/internet/EHR referral 
service(s), to maintain ongoing communication with patients, as 
appropriate;
    ++ Ensure access to patient-initiated digital communications that 
require a clinical decision, such as virtual check-ins and digital 
online assessment and management and E/M visits (or e-visits).
     Analyze patient population data to identify gaps in care 
and offer additional interventions, as appropriate;
     Risk stratify the practice population based on defined 
diagnoses, claims, or other electronic data to identify and target 
services to patients;
     Be assessed through performance measurement of 
primary care quality, total cost of care, and meaningful use of 
Certified EHR Technology.).
(3) Level 3 APCM
    We proposed the Level 3 APCM code for patients with QMB status and 
two or more chronic conditions based on our understanding that people 
with both multiple chronic conditions and social risk factors generally 
require more time and resources from primary care practitioners and 
their teams to ensure that the patient's chronic conditions are managed 
appropriately and effectively. We proposed to use a patient's QMB 
status as a method to identify beneficiaries with social risk factors 
that generally necessitate relatively greater resource requirements to 
effectively furnish advanced primary care than people without such risk 
factors. There is significant evidence that such dually eligible 
beneficiaries, on average, are more medically complex and have higher 
healthcare needs; \51\ for example, dually eligible beneficiaries are 
more likely to have poor functional status \52\ and recent expenditure 
data found that the difference in Medicare spending on a per person per 
year basis between dually eligible and non-dually eligible Medicare 
beneficiaries was $13,198 in CY 2021.\53\
---------------------------------------------------------------------------

    \51\ Kaiser Family Foundation. (n.d.). A primer on Medicare: 
What is the role of Medicare for dual-eligible beneficiaries? 
Retrieved June 24, 2024, from https://www.kff.org/report-section/a-
primer-on-medicare-what-is-the-role-of-medicare-for-dual-eligible-
beneficiaries/
#:~:text=A%20larger%20share%20of%20dual,beneficiaries%3B%20and%20more
%20than%20half%20(.
    \52\ ASPE. Report to Congress: Social Risk Factors and 
Performance Under Medicare's Value-Based Purchasing Programs. 
December 2016. https://aspe.hhs.gov/reports/report-congress-social-risk-factors-performance-under-medicares-value-based-purchasing-programs.
    \53\ https://www.macpac.gov/wp-content/uploads/2024/01/Jan24_MedPAC_MACPAC_DualsDataBook-508.pdf.
---------------------------------------------------------------------------

    QMBs are the largest eligibility group within the Medicare-Medicaid 
dually eligible enrollee population, comprising of 66 percent of the 
12.8 million individuals per the most recent available data.\54\ For 
the approximately 8.5 million dually eligible beneficiaries who are 
QMBs, Medicaid covers Medicare's cost sharing requirements. The QMB 
eligibility group helps to ensure full access to the Medicare benefit 
for the lowest income enrollees by covering these costs. Individuals 
can qualify for QMB status if their income is below 100 percent of the 
Federal Poverty Level ($15,300/year in 2024) and assets are no more 
than $9,430/$14,130 (one person/married couple in 2024), although 
States can request our approval to disregard certain income and 
assets.\55\ Beneficiaries apply for this benefit with their State's 
Medicaid program and must be redetermined eligible at least annually.
---------------------------------------------------------------------------

    \54\ Beneficiaries Dually Eligible for Medicare and Medicaid. 
Data from CY 2021. (January 2024). MedPAC and MACPAC. https://www.macpac.gov/wp-content/uploads/2024/01/Jan24_MedPAC_MACPAC_DualsDataBook-508.pdf.
    \55\ Access to Care Issues Among Qualified Medicare 
Beneficiaries (QMB). (2015). Centers for Medicare & Medicaid 
Services. https://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/Downloads/Access_to_Care_Issues_Among_Qualified_Medicare_Beneficiaries.pdf.
---------------------------------------------------------------------------

    There is growing recognition that social risk factors--such as 
income, education, access to food and housing, and employment status--
play a major role in health,\56\ such that social risk

[[Page 97874]]

factors may affect a person's ability to reach their health goals, as 
well as the diagnosis and treatment of their medical problems. A report 
submitted to Congress by the Office of the Assistant Secretary for 
Planning and Evaluation (ASPE) in response to the Improving Medicare 
Post-Acute Care Transformation (IMPACT) Act of 2014 (Pub. L. 113-185) 
found that dual Medicare-Medicaid enrollment as a marker for low income 
was typically the most powerful predictor of poor outcomes on quality 
measures among social risk factors examined.\57\ Beneficiaries with 
social risk factors may have worse health outcomes due to a host of 
factors, including higher levels of medical risk, worse living 
environments (for example, availability of community services, 
pollution, safety), greater challenges in adherence to medication 
regimens and medical recommendations (for example, diet/lifestyle), 
and/or bias or discrimination. Evidence suggests that many health 
outcomes are related more to social, environmental, and economic 
factors (which may be beyond practitioners' control) than to clinical 
interventions.\58\ Dual enrollees, and more specifically, QMBs, are 
therefore a category of Medicare beneficiaries who are the most 
socially at-risk of poorer clinical outcomes. As stated in the ASPE 
report, ``Some of the observed relationship between social risk factors 
and outcomes may be the result of underlying differences in medical 
complexity, frailty, disability, and/or functional status. For example, 
dually-enrolled beneficiaries are more likely to have poor functional 
status, and therefore, may be more likely to be readmitted after a 
hospitalization.'' As another example, a patient with diabetes, heart 
failure, and QMB status may experience food, transportation, or housing 
insecurity that contributes to difficulty maintaining blood glucose 
control which can contribute to medical complications including 
potentially preventable heart failure exacerbations. The primary care 
practitioner's team may need to check-in regularly to ensure, for 
example, that the patient gets needed specialty care such as an 
ophthalmologic examination to avoid the ocular manifestations of 
diabetes; and consider the availability of transportation vouchers so 
the patient can attend the ophthalmology appointment. We proposed the 
Level 3 APCM code to recognize the unique characteristics of QMBs as 
beneficiaries with social risk factors for whom significantly more 
resources are involved in comprehensive care management by 
practitioners that furnish advanced primary care services to them.
---------------------------------------------------------------------------

    \56\ Long P, Abrams M, Milstein A, Anderson G, Apton KL, 
Dahlberg M, Whicher D. Effective care for high-need patients. 
Washington, DC: National Academy of Medicine. 2017. https://nam.edu/wp-content/uploads/2017/06/Effective-Care-for-High-Need-Patients.pdf; Schroeder, S. (2007, September 20). We Can Do Better--
Improving the Health of the American People. New England Journal of 
Medicine, 357(12), 1221-1228. https://www.nejm.org/doi/full/10.1056/NEJMsa073350.
    \57\ ASPE. Report to Congress: Social Risk Factors and 
Performance Under Medicare's Value-Based Purchasing Programs. 
December 2016. https://aspe.hhs.gov/reports/report-congress-social-risk-factors-performance-under-medicares-value-based-purchasing-programs.
    \58\ World Health Organization. (2018). Health Impact Assessment 
(HIA): The determinants of health. http://www.who.int/hia/evidence/doh/en/.
---------------------------------------------------------------------------

    Additionally, we note that patients with QMB status are not 
responsible for the Medicare cost sharing associated with covered 
Medicare Part A or B services, including for any APCM services. 
Generally, States cover such cost sharing on behalf of QMBs, although 
many States use a ``lesser-of'' policy through which States pay less 
than the full cost sharing amounts.\59\ We solicited comments from 
States on how they would cover cost sharing for the proposed APCM 
bundle, considering lesser-of policies.
---------------------------------------------------------------------------

    \59\ Under the ``lesser of'' policy, a State caps its payment of 
Medicare cost sharing at the Medicaid rate for a particular service. 
For example, if the Medicare rate for a service is $100, of which 
$20 is beneficiary coinsurance, and the Medicaid rate for the 
service is $90, the State would only pay $10. If the Medicaid rate 
is $80 or lower, the State would make no payment.
---------------------------------------------------------------------------

    We also sought feedback on the use of QMB status and multiple (two 
or more) chronic conditions as the basis to bill for APCM Level 3 
(G0558), whether QMB status is an appropriate indicator to identify 
beneficiaries with added social risk, and whether there is an 
equivalent marker of social deprivation for use in commercial markets 
that might be a possible alternative identifier.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Several commenters appreciated our recognition of social 
risk as a factor in health outcomes and healthcare delivery and agreed 
that beneficiaries with higher social risk have higher healthcare needs 
but were concerned about our proposed use of QMB status as a proxy 
indicator for patients with added social risk. A few commenters stated 
that there is currently not a widely adopted or universal approach to 
social risk adjustment and asserted that research has not shown dual 
eligibility status to be sufficiently sensitive to capture all at-risk 
beneficiaries. Multiple commenters encouraged us to broaden the 
criteria to identify and address social risk for Level 3 and suggested 
that we use additional data sources, including for example residence in 
areas with high Area Deprivation Index scores, dual eligibility status, 
and presence of unmet SDOH needs, to identify social risk.
    Several commenters recommended that the requirements for Level 3 
APCM include beneficiaries with at least one chronic condition and one 
unmet SDOH need, regardless of their dual eligibility or QMB status. 
Another commenter urged us to adjust payments to practitioners caring 
for patients who experience not only greater medical complexity but 
also greater social-emotional complexity, asserting that it is critical 
that risk adjustment criteria account for health-related social needs 
(HRSNs), including economic stability, education, social and community 
life, one's neighborhood and access to high-quality health care.
    A few commenters were concerned about practitioners' ability to 
determine a patient's QMB status and were concerned about additional 
operational burden. These commenters asserted that this will be a 
significant obstacle to billing G0558 and were concerned that many 
practices may have to bill G0557 if they cannot confirm a patient's QMB 
status. Several commenters recommended that we use more readily 
identifiable criteria, such as dual eligibility status. One commenter 
stated that we should determine what level of APCM a beneficiary 
qualifies for to reduce practitioner burden. A few commenters 
recommended that we make use of existing Z-codes for SDOH (Z55-65) as 
standard identifiers and make payment to practitioners when they ask 
their patients about their SDOH to determine their patients' 
eligibility for APCM Level 3.
    Many other commenters supported the use of QMB status as an 
appropriate indicator to identify beneficiaries with added social risk 
and called it a ``good first approach'' for us and advanced primary 
care practices to stratify the risk of Medicare beneficiaries to whom 
they provide APCM services. One of these commenters suggested that 
future risk stratification should identify other people in need of more 
intensive APCM services, such as those with disabilities, those with 
serious mental and other chronic illnesses, or those with 
disproportionate use of potentially preventable acute care services. 
Other commenters encouraged us to review findings of methodologies 
tested in Innovation Center models, as well as to engage with payers 
and policymakers to align on a common framework that incorporates a 
broader understanding of social risk using validated data and 
methodologies, and then incorporate their learnings into the APCM 
framework.

[[Page 97875]]

    Response: We thank commenters for their feedback. We reiterate our 
view that QMB status is a good indicator for patients with higher SDOH 
needs. As described in the CY 2025 PFS proposed rule (89 FR 61596), we 
chose QMB status as the method to identify beneficiaries with SDOH 
factors who may require relatively greater resources from practitioners 
that furnish advanced primary care services due to the strong evidence 
associated with dual eligibility for Medicare and Medicaid with poorer 
outcomes in Medicare Value-Based Purchasing (VBP) programs, in addition 
to the fact that we have QMB status in our administrative data (in 
contrast to other SDOH data elements) as well as the lack of cost 
sharing for QMBs.\60\ However, we acknowledge that there may be other 
ways to identify patients with higher SDOH needs, including for example 
residence in areas with high Area Deprivation Index scores, dual 
eligibility status, and presence of unmet SDOH needs, and we intend to 
consider possible additional or alternative methods through future 
rulemaking, as appropriate.
---------------------------------------------------------------------------

    \60\ ASPE. Report to Congress: Social Risk Factors and 
Performance Under Medicare's Value-Based Purchasing Programs. 
December 2016. https://aspe.hhs.gov/reports/report-congress-social-risk-factors-performance-under-medicares-value-based-purchasing-programs.
---------------------------------------------------------------------------

    We also appreciate the concerns some commenters raised about 
practitioners' ability to use QMB status to determine patient 
eligibility for Level 3 APCM services. However, we continue to believe 
practitioners have access to this information when verifying a 
patient's Medicare eligibility. Because all Medicare providers and 
suppliers are prohibited from billing QMBs for Medicare cost sharing, 
we have established mechanisms in place to help practitioners identify 
QMB patients. The Medicare 270/271 HIPAA Eligibility Transaction System 
(HETS) became effective in November 2017. Through HETS, health care 
providers can determine QMB status for each patient prior to billing. 
We also include QMB information in the Medicare Remittance Advice (RA) 
for fee-for-service claims after claims processing. Practitioners 
should consider asking their third-party eligibility-verification 
vendors how their products reflect the QMB information in HETS. We also 
recognize that, in some larger practices or practices that are part of 
larger health systems, there may be administrative staff or billing 
departments that have access to this information. For practitioners who 
furnish services to QMBs, including those who plan to bill for Level 3 
APCM services, it would be important to establish internal workflows to 
ensure proper identification of patients with QMB status. Additional 
information can be found at https://www.cms.gov/outreach-and-education/medicare-learning-network-mln/mlnmattersarticles/downloads/se1128.pdf. 
Practitioners can also learn a patient's QMB status directly through 
State Medicaid agencies. While States may use different methods for 
verification, such as telephonic or electronic systems, the Medicaid 
eligibility verification systems will confirm whether an individual is 
covered as a QMB.
    While we acknowledge the opportunities raised by several commenters 
to use additional data sources to identify patients with likely social 
risk, we believe that our proposal to use QMB status is evidence-based, 
operationally feasible, and sufficiently sensitive to capture at-risk 
beneficiaries that require additional resources. As such, are 
finalizing the use of QMB status as proposed. However, as health 
services research continues to evolve in identifying social risk, we 
will continue to explore possible additional or alternative methods to 
identify patients with social risk and modify coding and payment for 
APCM services through future rulemaking as appropriate.
    Comment: Several commenters recommended that we adopt a higher 
intensity APCM code for seriously ill/high needs beneficiaries and 
value this code to account for the higher resource costs involved in 
delivering advanced primary care to patients with complex illness. 
These commenters asserted that an additional APCM code level would 
capture non-QMB patients with significant clinical complexity and 
healthcare needs who require intensive APCM services and resource 
utilization.
    Response: We appreciate commenters' suggestion for potential ways 
to recognize that non-QMB beneficiaries who are seriously ill may have 
increased needs associated with medical complexity and therefore 
require more resources. As we stated in response to comments on the 
Level 1 and Level 2 APCM service levels, we believe that our proposed 
coding approach and the specific recognition of QMBs in one code level 
appropriately balances coding specificity with administrative 
simplicity. We will continue to engage with interested parties to 
assess the appropriate level of code stratification and will address 
any potential refinements through future rulemaking.
    After consideration of public comments, we are finalizing our 
proposal to define Level 3 APCM services based on QMB status and two or 
more chronic conditions. We will continue to evaluate the 
appropriateness of the APCM service levels, coding structure, and 
recognition of social risk. We are finalizing as proposed the code 
descriptor for HCPCS code G0558: HCPCS code G0558 (Advanced primary 
care management services for a patient that is a Qualified Medicare 
Beneficiary with multiple (two or more) chronic conditions expected to 
last at least 12 months, or until the death of the patient, which place 
the patient at significant risk of death, acute exacerbation/
decompensation, or functional decline, provided by clinical staff and 
directed by a physician or other qualified health care professional who 
is responsible for all primary care and serves as the continuing focal 
point for all needed health care services, per calendar month, with the 
following elements, as appropriate:
     Consent;
    ++ Inform the patient of the availability of the service; that only 
one practitioner can furnish and be paid for the service during a 
calendar month; of the right to stop the services at any time 
(effective at the end of the calendar month); and that cost sharing may 
apply.
    ++ Document in patient's medical record that consent was obtained.
     Initiation during a qualifying visit for new patients or 
patients not seen within 3 years;
     Provide 24/7 access for urgent needs to care team/
practitioner, including providing patients/caregivers with a way to 
contact health care professionals in the practice to discuss urgent 
needs regardless of the time of day or day of week;
     Continuity of care with a designated member of the care 
team with whom the patient is able to schedule successive routine 
appointments;
     Deliver care in alternative ways to traditional office 
visits to best meet the patient's needs, such as home visits and/or 
expanded hours;
     Overall comprehensive care management;
    ++ Systematic needs assessment (medical and psychosocial).
    ++ System-based approaches to ensure receipt of preventive 
services.
    ++ Medication reconciliation, management and oversight of self-
management.
     Development, implementation, revision, and maintenance of 
an electronic patient-centered comprehensive care plan;
    ++ Care plan is available timely within and outside the billing 
practice as appropriate to individuals involved in the beneficiary's 
care, can be

[[Page 97876]]

routinely accessed and updated by care team/practitioner, and copy of 
care plan to patient/caregiver;
     Coordination of care transitions between and among health 
care providers and settings, including referrals to other clinicians 
and follow-up after an emergency department visit and discharges from 
hospitals, skilled nursing facilities or other health care facilities 
as applicable;
    ++ Ensure timely exchange of electronic health information with 
other practitioners and providers to support continuity of care.
    ++ Ensure timely follow-up communication (direct contact, 
telephone, electronic) with the patient and/or caregiver after an 
emergency department visit and discharges from hospitals, skilled 
nursing facilities, or other health care facilities, within 7 calendar 
days of discharge, as clinically indicated.
     Ongoing communication and coordinating receipt of needed 
services from practitioners, home- and community-based service 
providers, community-based social service providers, hospitals, and 
skilled nursing facilities (or other health care facilities), and 
document communication regarding the patient's psychosocial strengths 
and needs, functional deficits, goals, preferences, and desired 
outcomes, including cultural and linguistic factors, in the patient's 
medical record;
     Enhanced opportunities for the beneficiary and any 
caregiver to communicate with the care team/practitioner regarding the 
beneficiary's care through the use of asynchronous non-face-to-face 
consultation methods other than telephone, such as secure messaging, 
email, internet, or patient portal, and other communication-technology 
based services, including remote evaluation of pre-recorded patient 
information and interprofessional telephone/internet/EHR referral 
service(s), to maintain ongoing communication with patients, as 
appropriate;
    ++ Ensure access to patient-initiated digital communications that 
require a clinical decision, such as virtual check-ins and digital 
online assessment and management and E/M visits (or e-visits).
     Analyze patient population data to identify gaps in care 
and offer additional interventions, as appropriate;
     Risk stratify the practice population based on defined 
diagnoses, claims, or other electronic data to identify and target 
services to patients;
     Be assessed through performance measurement of primary 
care quality, total cost of care, and meaningful use of Certified EHR 
Technology.).
c. APCM Service Elements and Practice-Level Capabilities
    All the elements within the scope of APCM services are included in 
the service descriptors for G0556, G0557, and G0558, listed in Table 
26, and described in this section. We proposed in the CY 2025 PFS 
proposed rule that APCM services will include nearly the same scope of 
service elements and conditions we established for CCM and PCM services 
(including elements of 24/7 access and care continuity, care management 
and care plan, care coordination, management of care transitions, and 
enhanced communication). This is appropriate because care management is 
a key component of care delivery using an advanced primary care model. 
The phrasing in the code descriptors for APCM services generally tracks 
the code descriptors for CCM and PCM services, except for references to 
``time spent'' or ``minutes'' of service.
    We sought to ensure that the APCM codes will fully and 
appropriately capture the care management services and CTBS that are 
characteristic of the changes in medical practice toward advanced 
primary care, as demonstrated in select CMS Innovation Center models. 
As we do for CCM and PCM services, we proposed to require for APCM 
services that the practitioner provide an initiating visit and obtain 
beneficiary consent (see section II.G.2.c.(1) and II.G.2.c.(2) of this 
final rule). As described in more detail in this section, we proposed 
to incorporate as elements of APCM services ``Management of Care 
Transitions'' and ``Enhanced Communications Opportunities.'' For the 
``Management of Care Transitions'' APCM service element, we proposed to 
specify timely follow-up during care transitions (see section 
II.G.2.c.(6) of this final rule). For the ``Enhanced Communications 
Opportunities'' APCM service element, we proposed to incorporate access 
to CTBS services, including remote evaluation of pre-recorded patient 
information and interprofessional telephone/internet/EHR referral 
service(s), to maintain ongoing communication with the patient, as well 
as access to patient-initiated digital communications that require a 
clinical decision, such as virtual check-ins and digital online 
assessment and management and E/M visits (or e-visits) (see section 
II.G.2.c.(8) of this final rule).
    We also proposed to specify for APCM services the practice-level 
characteristics and capabilities that are inherent to, and necessarily 
present when a practitioner is providing covered services using an 
advanced primary care delivery model. As described in more detail 
below, included in the service descriptors for G0556, G0557, and G0558, 
and listed in Table 26, are practice-level capabilities that reflect 
care delivery using an advanced primary care model and are focused 
around 24/7 access and continuity of care (see section II.G.2.c.(3) of 
this final rule), patient population-level management (see section 
II.G.2.c.(9) of this final rule), and performance measurement (see 
section II.G.2.c.(10) of this final rule). These practice capabilities 
are indicative of, and necessary to, care delivery using an advanced 
primary care model. Further, APCM services, as we proposed to define 
them, could not be fully performed in the absence of these practice 
capabilities; and, in such cases, APCM services should not be billed.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Multiple commenters agreed that the proposed elements and 
requirements reflect the services consistent with effective APCM and 
these standards are consistent with current CMS primary care models and 
demonstration projects. Several commenters supported aspects of the 
proposal that crossed multiple APCM service elements--for example, 
commenters expressed appreciation for the reference to caregivers in 
four of the proposed elements (24/7 access and continuity of care, 
patient-centered comprehensive care plan, management of care 
transitions, and enhanced communications opportunities). Some 
commenters suggested modifications, and several were concerned about 
the volume and burden of requirements.
    Other commenters were concerned that, while most practices may be 
set up to deliver these services, certain primary care practices may 
find it challenging to meet some of the proposed service elements. Some 
commenters raised concerns that the practice-level capabilities will be 
difficult for small or independent practices (and in some cases, health 
centers) to meet and requested that that we modify certain practice-
level capabilities and APCM levels to account for varying levels of 
practice infrastructure.
    One commenter was particularly concerned about the inability of low 
resource safety net providers--settings in which lower income 
individuals and QMBs may receive their primary care, to meet these 
standards, which could

[[Page 97877]]

potentially exacerbate disparities in care and payment for patients at 
the highest risk. They asserted that without the ability to bill for 
APCM services, safety net clinics will continue to face underpayment 
for the important care they provide. The commenters stated that clinics 
that do not meet the requirements to bill for APCM services, but still 
deliver substantial care coordination, management, and advanced primary 
care services to chronically ill beneficiaries with social risk--often 
with limited resources to expand their capacity--are particularly 
vulnerable to underpayment. For these reasons, some commenters 
suggested that implementing tiered practice capability requirements 
could address the current ``all or nothing'' approach, where there are 
some practices that invest significant time and resources in 
infrastructure to provide chronic care management but fall short of the 
requirements to bill for APCM services, and then are ineligible for 
payment for their currently uncompensated services.
    Response: We appreciate commenters' feedback about the proposed 
APCM service elements and practice-level requirements which are 
reflective of the services consistent with care management in advanced 
primary care. As we do for other care management services, we continue 
to recognize the involvement of caregivers in health care for some 
patients.
    We also appreciate commenters' suggested modifications to certain 
service elements and practice-level capabilities, and we acknowledge 
several commenters' concerns about the volume and burden of 
requirements. We welcome information on these issues from interested 
parties and may consider revisions in future rulemaking.
    We remain interested in the use of APCM services in settings such 
as small practices and in rural and underserved areas, and we are 
committed to identifying ways to increase access to primary care in 
underserved communications. We also encourage practitioners who may not 
meet all of the requirements to bill for APCM services to consider 
whether the care coordination and management services they are 
delivering would meet the requirements to bill for other care 
management services such as TCM, CCM, PCM, CHI, PIN, or certain CTBS. 
We will continue to identify and evaluate ways to encourage providers 
to make APCM services available to all their patients in order to 
support care improvement for underserved, high-risk beneficiaries.
    We proposed that practitioners participating in the ACO REACH 
Model, the Making Care Primary model, and the Primary Care First model 
will satisfy the initiating visit, Patient Population-Level Management, 
and performance measurement APCM service elements and practice-level 
capabilities by virtue of their model participation. These CMS 
Innovation Center models promote advanced primary care delivery 
consistent with the proposed APCM service elements and practice-level 
capabilities described in Table 25. The models all utilize attribution 
methods that review the most recently available two years of Medicare 
claims to identify whether a model participant is responsible for a 
Medicare beneficiary's primary care, aligning with the initiating visit 
requirements for APCM services. Additionally, these three models 
include risk stratification and quality and cost performance metrics 
that are aligned or overlap with the ``Value in Primary Care'' Merit-
based Incentive Payment System (MIPS) Value Pathway (MVP).\61\ Around-
the-clock access and continuity of care, Patient Population-Level 
Management, and performance measurement are indicative of, and 
necessary to, care delivery using an advanced primary care model. We 
also considered whether certain practitioners in other types of CMS 
Innovation Center models also satisfy the service elements and 
requirements and sought comments on this question.
---------------------------------------------------------------------------

    \61\ See, for example, ACO Realizing Equity, Access, and 
Community Health (REACH) Model Request for Applications. Available 
at https://www.cms.gov/priorities/innovation/media/document/aco-reach-rfa, ACO Realizing Equity, Access, and Community Health 
(REACH) Model PY 2024 Quality Measurement Methodology. Available at 
https://www.cms.gov/files/document/aco-reach-quality-msr-meth-py24.pdf; Making Care Primary Payment and Attribution Methodologies. 
Available at https://www.cms.gov/files/document/mcp-pymt-att-methodologies.pdf, Primary Care First Payment and Attribution 
Methodologies PY 2024. Available at https://www.cms.gov/files/document/pcf-py24-payment-meth.pdf.
---------------------------------------------------------------------------

    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: A number of commenters requested that we deem all ACO or 
alternative payment model (APM) participants as satisfying all service 
elements and requirements to bill the APCM codes by nature of their 
participation in such a program. A few commenters questioned why 
practitioners in ACOs would need to bill the APCM codes given that the 
proposed service elements may overlap with ACO functions.
    Response: We clarify that practitioners participating in the ACO 
REACH Model, the Making Care Primary model, and the Primary Care First 
model would satisfy the proposed initiating visit, patient population-
level management, and performance measurement APCM service elements and 
practice-level capabilities by virtue of meeting requirements of their 
model participation, and that we are not waiving any of the APCM 
service elements or requirements for practitioners in these models or 
the Shared Savings Program.
    The one proposed practice-level requirement for APCM services that 
is slightly different for these model participants and Shared Savings 
Program participants than for other practitioners is the performance 
measurement requirement. Because these models and the Shared Savings 
Program require their participating practitioners to report on quality 
and cost performance metrics that are aligned or overlap with the Value 
in Primary Care MVP, we proposed that requiring these practitioners to 
report the Value in Primary Care MVP for purposes of billing for APCM 
services would be substantially duplicative. Our proposal would require 
all other APCM service elements and practice-level capabilities to be 
met and maintained in order for the model participants to bill for APCM 
services. We simply noted that, for practitioners participating in the 
ACO REACH Model, the Making Care Primary model, or the Primary Care 
First model, many of the APCM service elements and practice-level 
requirements would be met by meeting model participation requirements. 
Similarly, practitioners participating in other APMs may, by meeting 
requirements of their participation in the APM, meet some or all of the 
APCM service elements and practice-level requirements; however, not all 
APMs require reporting on quality and cost measures that align or 
overlap with the Value in Primary Care MVP.

[[Page 97878]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.056


[[Page 97879]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.057

    We sought comment on whether the proposed service elements and 
practice-level requirements are appropriately reflective of care 
management services for advanced primary care, and whether there are 
elements of APCM services or practice capabilities that should be 
modified or removed.
    We also sought feedback on ways to align the APCM services with 
other Medicare programs and initiatives, such as the Shared Savings 
Program, the ACO REACH Model, and advanced primary care models, and the 
Quality Payment Program, including MIPS and Advanced Alternative 
Payment Models (Advanced APMs). We sought to create a low burden way 
for practitioners to furnish APCM services by appropriately recognizing 
ways in which they may meet APCM billing requirements as part of these 
programs and initiatives. We noted that under the Quality Payment 
Program, practitioners who are MIPS eligible clinicians will report 
measures and activities as specified by us under the four MIPS 
performance categories: quality, cost, improvement activities, and 
Promoting Interoperability. To report to MIPS for a performance period 
(Sec.  414.1320(i)) for the Promoting Interoperability performance 
category, a MIPS eligible clinician must use Certified EHR Technology 
(CEHRT), as defined at paragraph (2) under CEHRT at Sec.  414.1305, 
report on the objectives and associated measures as specified by us and 
submit required attestations as specified in Sec.  414.1375(b)(3). 
Eligible clinicians who participate in Advanced APMs under the Quality 
Payment Program are required under the terms of those APMs to use CEHRT 
as specified in Sec.  414.1415(a)(1)(iii); and are paid under the terms 
of those APMs based on MIPS-comparable quality measures as specified in 
Sec.  414.1415(b).
    As described as part of this final rule, we proposed that a billing 
practitioner who is part of a Shared Saving Program ACO, or CMS 
Innovation Center ACO or participating in Making Care Primary or 
Primary Care First will already satisfy the APCM practice-level 
requirements for Patient Population-Level Management (see section 
II.G.2.c.(9) of this final rule), and performance measurement (see 
section II.G.2.c.(10) of this final rule) by meeting separately 
applicable participation requirements within the Shared Savings Program 
and these APMs. As noted previously, we considered whether 
practitioners in

[[Page 97880]]

other types of CMS Innovation Center models might also satisfy certain 
APCM service elements and practice-level requirements through their 
participation in the models and sought comments on this question. We 
received public comments on these proposals. The following is a summary 
of the comments we received and our responses.
    Comment: We received a few comments recognizing our desire to 
minimize duplicative reporting and the associated burdens, but no 
specific suggestions to achieve this goal. Commenters did not directly 
address the ways in which we may better align with other programs and 
initiatives. Finally, commenters sought confirmation that practices 
participating in either a Shared Savings Program ACO or Innovation 
Center model will satisfy the performance measurement requirements.
    Response: We thank commenters for their feedback and the request 
for clarification. As described in the CY 2025 proposed rule and in 
this final rule, we considered the burden associated with potentially 
duplicative reporting requirements. Practitioners in practices 
participating in a Shared Savings Program ACO or in certain Innovation 
Center models (ACO REACH, Making Care Primary, Primary Care First) will 
satisfy the performance measurement element of the APCM services by 
meeting their respective program and model requirements.
(1) Beneficiary Consent
    Consistent with other care management services, we proposed in the 
CY 2025 PFS proposed rule that the beneficiary's consent to receive 
APCM services must be documented in the medical record as a condition 
of payment for APCM services, as not all Medicare beneficiaries for 
whom APCM services would be medically necessary may want to receive 
these services. As we do for CCM and PCM services, we proposed to 
require billing practitioners to inform the beneficiary of the 
availability of APCM services, and ensure the beneficiary is aware that 
Medicare cost sharing usually applies (though these costs may be 
covered through supplemental health coverage). The practitioner should 
also inform the beneficiary that, by providing APCM services, they 
intend to assume responsibility for all of the patient's primary care 
services and serve as the continuing focal point for all needed health 
care services; and that only one practitioner can furnish and be paid 
for APCM services during a calendar month, but that their consent to 
receive APCM services does not limit their option to receive Medicare 
covered health care services from other practitioners. The practitioner 
should inform the beneficiary that APCM is an ongoing, monthly service 
and of their right to stop APCM services at any time (effective at the 
end of the calendar month), and that they only need to provide consent 
once to receive APCM services from the practitioner. We proposed that 
the practitioner would document in the beneficiary's medical record 
that this information was explained and note whether the beneficiary 
accepted or declined APCM services. We noted that practitioners can 
still elect to obtain written consent rather than verbal consent.
    Practitioners have informed us that beneficiary cost sharing is a 
significant barrier to provision of similar care management services, 
such as CCM services. The patient consent requirement is intended to 
ensure that patients do not incur unexpected expenses for care that is 
largely, or in significant part, non-face-to-face in nature. The 
requirement for patient consent would also help to avoid duplicative 
practitioner billing, as the patient would understand that the 
practitioner intends to serve as the focal point for all their care, 
and that only one practitioner can furnish and be paid for APCM 
services in any particular month.
    We sought feedback on these requirements, including how best to 
effectively educate both practitioners and beneficiaries on the 
benefits of APCM, especially as it reflects a new bundle of services 
that may have previously been separately billed, and whether it would 
be helpful if we provided a template to facilitate patient consent.
    We also sought feedback on whether we should require practitioners 
to revisit consent for APCM services on an ongoing basis with patients.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Most commenters were generally supportive of our proposal 
to require consent. Many commenters felt that consent is important for 
beneficiaries so they understand that cost sharing may apply for these 
services on an ongoing basis. Several commenters requested 
clarification on the frequency in which consent should be obtained, and 
some commenters stated it should be obtained no more than once a year. 
One commenter sought clarification if patients with an existing consent 
for CCM would require a new consent for APCM. Commenters disagreed on 
how consent should be obtained, with some requesting written consent to 
be required, while others requested verbal consent to be allowed, 
citing administrative burden of obtaining written documents. Another 
commenter requested that we create a standardized consent form to be 
used for APCM services. Others criticized consent requirements as an 
administrative burden and stated that this burden is a substantial 
barrier to uptake of current CCM and PCM codes.
    Response: We thank commenters for their feedback. We appreciate 
commenters' feedback about the potential operational difficulty of 
obtaining and documenting consent. However, as discussed in the CY 2014 
PFS final rule (78 FR 74424), we continue to believe that consent is 
important to ensure beneficiaries understand their potential cost 
sharing responsibilities, especially for non-face-to-face services. We 
also encourage practitioners and practices to view the consent process 
as an opportunity to educate the beneficiary about the new coding 
Medicare has created for APCM services and discuss the service elements 
and capabilities that make a practice qualified to perform these 
services. This is also an opportunity to ensure that the beneficiary is 
not receiving APCM services elsewhere, and as discussed in greater 
detail later in this final rule, to ensure that the beneficiary 
acknowledges and understands that this practitioner will serve as the 
focal point of all primary care services until the beneficiary is no 
longer receiving this type of care with this practitioner or practice. 
For these reasons, we do not believe that a patient's previous consent 
for CCM would be sufficient for purposes of the new APCM services, and 
a beneficiary transitioning from CCM to APCM would require a new 
consent.
    After consideration of public comments, we are finalizing as 
proposed that patient consent needs to be obtained at initiation of 
APCM services and documented in the medical record. Written consent is 
not necessary; however, practitioners may obtain written consent if 
they wish. We are also clarifying that the patient consent must be 
obtained to receive APCM services from the billing practitioner--which 
would be the practitioner who intends to be responsible for all primary 
care services and serve as the continuing focal point for all needed 
health care services. A new consent to receive APCM services is 
required if there is a change in the practitioner who furnishes and 
bills for the APCM services, which is in line with consent

[[Page 97881]]

requirements for other care management services.
(2) Initiating Visit
    Consistent with CCM services (CPT codes 99437, 99439, 99487, and 
99489--99491) and PCM services (CPT codes 99424--99427), we proposed in 
the CY 2025 PFS proposed rule to require an initiating visit for APCM 
services only for new patients instead of for all beneficiaries 
receiving APCM services. Consistent with the definition of ``new 
patient'' as described in the CPT[supreg] 2024 Professional Edition 
Code Book on page 4, we proposed to define a ``new patient'' as a 
person who did not receive any professional services from the physician 
or other qualified health care professional or another practitioner in 
the same group practice within the previous 3 years.\62\ The initiating 
visit furnished in advance of APCM services establishes the 
beneficiary's relationship with the billing practitioner, ensures the 
billing practitioner assesses the beneficiary prior to initiating APCM 
services, facilitates collection of comprehensive health information to 
inform the care plan, and provides an opportunity to obtain beneficiary 
consent (although beneficiary consent can be obtained outside of the 
initiating visit). We proposed that the same services that can serve as 
the initiating visit for CCM services could serve as the initiating 
visit for APCM, including a Level 2 through 5 E/M visit, initial 
preventive physician exam (IPPE), or TCM service, and we proposed that 
the initiating visit could be provided in person or as a Medicare 
telehealth service.
---------------------------------------------------------------------------

    \62\ American Medical Association. CPT Professional 2024. 
American Medical Association, 2023.
---------------------------------------------------------------------------

    We proposed that an initiating visit would not be required for 
``established patients'' based on certain circumstances that 
demonstrate an established patient-practitioner relationship in advance 
of furnishing APCM services: (1) if the beneficiary is not a new 
patient (has been seen by the practitioner or another practitioner in 
the same practice within the past three years) or (2) if the 
beneficiary received another care management service (including an APCM 
service, non-complex or complex CCM service (CPT codes 99487, 99489, 
99490, 99491, 99439, 99437), or PCM service (CPT codes 99424, 99425, 
99426, 99427)) within the previous year with the practitioner or 
another practitioner in the same practice. For patients with whom the 
practitioner (or another in the same practice) has an established 
relationship, there is not necessarily a need for an initiating visit 
for APCM services; and we would not want to require an initiating visit 
under circumstances where a visit may not be medically necessary. The 
policy not to require an initiating visit for beneficiaries who have 
received any professional service from the physician or other qualified 
health care professional or another practitioner in the same group 
practice within the previous 3 years is consistent with CPT's 
definition of the term ``established patient,'' such that this captures 
patients who have been seen relatively recently and who have an 
existing relationship with the practice. In the case of beneficiaries 
who have received care management services from a practitioner within 
the practice in the past year, this indicates that the patient is also 
an ``established patient'' in that the patient has an existing 
relationship with the practice, and the patient previously has 
consented to the receipt of care management services, which have 
overlapping service elements with APCM services.
    We noted that these standards would be consistent with applicable 
Shared Savings Program and CMS Innovation Center patient attribution 
standards in the ACO REACH Model, Making Care Primary, and Primary Care 
First. Any beneficiary eligible to be assigned to an ACO because of an 
established care relationship between the beneficiary and a billing 
practitioner who will be billing for APCM services under the ACO 
participant's TIN, including beneficiaries who voluntarily aligned to a 
practitioner in the ACO, would not be considered a new patient and 
would not require an initiating visit. Medicare rules governing patient 
attribution to an ACO on the basis of care provided by an ACO-
participating clinician similarly establish where an existing care 
relationship exists. Similarly, beneficiaries eligible to be assigned 
to a REACH ACO, or a Making Care Primary or Primary Care First practice 
because of an established care relationship between the beneficiary and 
a billing practitioner who will be billing for APCM services under the 
model participant's TIN, including beneficiaries who voluntarily 
aligned to a practitioner participating in one of these three models 
would not be considered a new patient and would not require an 
initiating visit. While we proposed certain exceptions to the 
initiating visit requirement for APCM services, we noted that an 
initiating visit may still be needed even when not required, and the 
billing practitioner can always furnish and bill for medically 
necessary visits, including before initiating APCM services.
    We sought feedback on these requirements, including whether 
additional services could serve as the initiating visit and whether a 
different period of time (for example, patients not seen within one or 
2 years) would be more appropriate.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters were overwhelmingly in favor of our proposals 
not to require initiating visits for established patients, and 
commenters agreed with the definitions proposed for established 
patients. Commenters were also supportive of our proposal to include 
Medicare telehealth visits or in-person visits as initiating visits. 
One commenter suggested that including other specialist visits would 
expedite patients into APCM. A few other commenters agreed with our 
inclusion of the IPPE and stated that we should also include the 
Medicare Annual Wellness Visit (AWV). We did not receive any comments 
about the proposed inclusion of ACO and CMMI model participants as 
established patients.
    Response: We agree that initiating APCM services expeditiously is 
important, but we disagree that an initiating visit could be provided 
by a different practitioner than the practitioner furnishing APCM. APCM 
coding describes services furnished by the specific practitioner who is 
serving as the focal point of all health care for a patient, and we 
continue to believe that the practitioner furnishing the initiating 
visit should be the practitioner who will be furnishing the APCM 
services. We thank the commenters for noticing that we did not include 
the AWV in our proposal. This was an oversight, and we agree that the 
AWV could serve as an initiating visit, so long as the practitioner 
furnishing the AWV is a physician or other qualified health 
professional such as a nurse practitioner, physician assistant, 
clinical nurse specialist, or certified nurse midwife, as discussed 
earlier in this final rule, and will be the same practitioner who will 
furnish the APCM services.
    After consideration of public comments, we are finalizing as 
proposed that an initiating visit is required before a new patient 
receives APCM services. We are finalizing our definition of a ``new 
patient'' for this purpose as described in the CPT[supreg] 2024 
Professional Edition Code Book on page 4, as a person who did not 
receive any

[[Page 97882]]

professional services from the physician or other qualified health care 
professional or another practitioner in the same group practice within 
the previous 3 years.\63\ We are also finalizing that an initiating 
visit is not required for established patients. We are finalizing our 
definition of an ``established patient'' as (1) a beneficiary who has 
been seen by the practitioner or another practitioner in the same 
practice within the past three years or (2) a beneficiary who has 
received another care management service (including an APCM service, 
non-complex or complex CCM service (CPT codes 99487, 99489, 99490, 
99491, 99439, 99437), or PCM service (CPT codes 99424, 99425, 99426, 
99427)) within the previous year from the practitioner or another 
practitioner in the same practice. We are also finalizing that 
beneficiaries who are eligible to be assigned to an ACO because of an 
established care relationship between the beneficiary and the billing 
practitioner who will bill for APCM services and beneficiaries assigned 
to a REACH ACO, or a Making Care Primary or Primary Care First practice 
because of a similarly established care relationship are considered 
established patients.
---------------------------------------------------------------------------

    \63\ American Medical Association. CPT Professional 2024. 
American Medical Association, 2023.
---------------------------------------------------------------------------

    We are finalizing a modification to our proposal to specify that, 
in addition to the initiating visit services we identified in the 
proposed rule, the Medicare AWV can serve as an initiating visit, so 
long as it is furnished by the practitioner who will furnish the APCM 
services.
(3) 24/7 Access and Continuity of Care
    Access and continuity build on the patient-practitioner 
relationship to ensure patients receive the right care at the right 
time from the right care team member. We proposed in the CY 2025 PFS 
proposed rule to include for APCM services the same scope of service 
elements we established for CCM and PCM services for 24/7 Access and 
Continuity of Care with some modifications. For 24/7 Access to Care, 
the scope of the service element we proposed for APCM services would be 
to provide 24/7 access for urgent needs to the care team/practitioner 
with real-time access to patient's medical records, including providing 
patients/caregivers with a way to contact health care professionals in 
the practice to discuss urgent needs regardless of the time of day or 
day of week.
    As described in the CY 2017 PFS final rule, this accurately 
reflects the potential role of clinical staff or call-sharing services 
in addressing after-hours care needs, and that after-hours services 
typically would and should address any urgent needs and not only those 
explicitly related to the beneficiary's chronic conditions (79 FR 
67722). In advanced primary care models of care, primary care practices 
should be at the center of that care--providing an effective ``first 
contact'' for patients, supporting patients in their management of 
care, and coordinating across different settings of care. Achieving 
this level of access to primary care requires timeliness and an 
effective relationship with those in the practice who are providing 
that care. True access is fully informed by knowledge about the patient 
and their care, which is only possible through real-time access to the 
patient's electronic health information. Access to primary care, 
informed by health information technology (IT), makes the right care at 
the right time possible, potentially avoiding costly urgent and 
emergent care. Practices can achieve 24/7 access to care informed by 
health IT through call coverage by a practitioner with health IT system 
access. This can be a practitioner from the practice or a covering 
practitioner who has system access. Many practices and systems use 
nurse call lines or answering services working with standard protocols 
to provide the initial point of contact after hours and effectively 
address common problems. In this situation, an escalation protocol will 
engage a practitioner with system access when needed for decision 
making. Other successful practices expand hours, add urgent care 
services or partner with other practices to provide these services, or 
contract with existing urgent care providers to manage and coordinate 
care after regular office hours.
    For Continuity of Care, the scope of service element would be to 
provide continuity of care with a designated member of the care team 
with whom the patient is able to schedule successive routine 
appointments. Continuity of care refers to the ability of patients to 
receive care from practitioners who know them and are known by them. 
This continuity builds and reinforces a relationship based in trust and 
shared experience that is highly valued by both practitioners and 
patients. Practice focus on continuity of care can translate to 
improved preventive and chronic care, patient and practitioner 
satisfaction, lower hospital utilization, and lower costs.\64\ 
Depending on the type and setting of care, there are three components 
of continuity that improve patient outcomes and experience: \65\ 
relational continuity (defined as the ``ongoing therapeutic 
relationship between a patient (and often their family/caregiver)'' 
which is foundational in advanced primary care), informational 
continuity (where practitioners have access to information on patients' 
past events and personal circumstances to inform current care 
decisions); and longitudinal continuity (which refers to ongoing 
patterns of healthcare visits that occur with the same practice over 
time). A key strategy to optimize continuity is ensuring that all 
practitioners and/or the care team have access to the same patient 
information to guide care within health IT, and successful practices 
start with a review and discussion of the practice-level data developed 
through measurement of continuity.\66\ Practices can develop the 
capability to measure continuity of care between the patient and the 
practitioner/care team using health IT, practice management software, 
or other tracking mechanisms, allowing them to track improvements over 
time.
---------------------------------------------------------------------------

    \64\ Hussey, P.S., Schneider, E.C., Rudin, R.S., Fox, D.S., Lai, 
J., & Pollack, C.E. (2014). Continuity and the costs of care for 
chronic disease. JAMA Internal Medicine, 174(5), 742-748.; Bayliss, 
E.A., Ellis, J.L., Shoup, J.A., Zeng, C., McQuillan, D.B., & 
Steiner, J.F. (2015). Effect of continuity of care on hospital 
utilization for seniors with multiple medical conditions in an 
integrated health care system. The Annals of Family Medicine, 13(2), 
123-129.; Nyweide, D.J., Anthony, D.L., Bynum, J.P., Strawderman, 
R.L., Weeks, W.B., Casalino, L.P., & Fisher E.S. (2013). Continuity 
of care and the risk of preventable hospitalization in older adults. 
JAMA Internal Medicine, 173(20), 1879-1885.; Haggerty, J.L., Reid, 
R.J., Freeman, G.K., Starfield, B.H., & Adair, C.E. (2003). 
Continuity of care: a multidisciplinary review. BMJ, 327, 1219. 
doi:10.1136/bmj.327.7425.1219; Gupta, R., & Bodenheimer, T. (2013). 
How primary care practices can improve continuity of care. JAMA 
Internal Medicine, 173(20), 1885-1886. doi:10.1001/
jamainternmed.2013.7341.; Willard R., & Bodenheimer T. (2012, 
April). The building blocks of high-performing primary care: Lessons 
from the field. California Healthcare Foundation. http://www.chcf.org/publications/2012/04/building-blocks-primary-care.
    \65\ Haggerty, J.L., Reid, R.J., Freeman, G.K., Starfield, B.H., 
& Adair, C.E. (2003). Continuity of care: a multidisciplinary 
review. BMJ, 327, 1219. doi:10.1136/bmj.327.7425.1219.
    \66\ Gupta, R., & Bodenheimer, T. (2013). How primary care 
practices can improve continuity of care. JAMA Internal Medicine, 
173(20), 1885-1886. doi:10.1001/jamainternmed.2013.7341.; Willard 
R., & Bodenheimer T. (2012, April). The building blocks of high-
performing primary care: Lessons from the field. California 
Healthcare Foundation. http://www.chcf.org/publications/2012/04/building-blocks-primary-care.
---------------------------------------------------------------------------

    As included in the APCM code descriptors, we proposed to specify 
for the ``24/7 Access to Care'' APCM service element that the practice 
would maintain the capability to deliver care in alternative ways to 
traditional office

[[Page 97883]]

visits to best meet the patient population's needs, such as e-visits, 
phone visits, home visits, and/or expanded hours. This standard for 
alternatives to office visits is similar to several requirements tested 
in CMS Innovation Center models (such as the CPC+ model's requirement 
that participating practices regularly offer at least one alternative 
to traditional office visits \67\) and reflects the understanding that 
providing alternatives to traditional office visits is an essential 
element of the delivery of care under an advanced primary care model of 
care. Moving care out of traditional office visits can reduce demand 
and open supply for prioritized visits. By changing where and how care 
is delivered, practices may have increased availability for patients 
with complex needs who may be better served by more time-intensive 
visits in the office, at home, or in a nursing home. We did not propose 
that a practice will need to regularly deliver care in all these 
alternative ways--for example, a practice may routinely offer e-visits 
and phone visits, but not regularly furnish home visits, and still 
demonstrate this primary care practice capability. Another practice 
might offer extended hours on certain days to help patients who may 
find it hard to take off work to see their clinician, and this would 
satisfy this practice requirement.
---------------------------------------------------------------------------

    \67\ https://www.cms.gov/priorities/innovation/innovation-models/comprehensive-primary-care-plus.
---------------------------------------------------------------------------

    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Most commenters supported our 24/7 access to care 
requirement for APCM services. One commenter stated that most practices 
currently have this capability, reflected by the fact that physicians 
with hospital privileges generally must demonstrate they have 
continuous coverage for urgent patient needs. Several commenters 
requested clarification on the 24/7 access to care requirement for APCM 
services. A few commenters stated that providing 24/7 access to care is 
very difficult due to physician shortage and burnout, as well as 
certain practice arrangements that may limit real-time access to the 
patient's electronic health information--for example, practices that 
rely on a third party to provide after-hours call coverage. One 
commenter urged us to support improvements in data-sharing 
infrastructures, such as health information exchanges, which may help 
alleviate some of these barriers.
    Another commenter suggested that we should modify the requirement 
for 24/7 availability. This commenter stated that depending on the hour 
of the day, a reasonable amount of time should be allotted to respond 
to patients, such as overnight when the practitioner should have time 
to review the patient's charts before speaking to them. If this is not 
possible, then a previously agreed-upon alternate should be allowed to 
respond to the patient. Another commenter raised concerns about small 
and independent practices in under-resourced settings that might not be 
able to guarantee 24/7 access.
    Commenters generally supported our continuity of care requirement 
for APCM services and acknowledged the alignment of this requirement 
with our proposal that APCM services are to be billed only by the 
practitioner who intends to be the focal point for all needed health 
care for the patient. One commenter was concerned about the lack of a 
measure of continuity for accountability or evaluation as it relates to 
the performance measurement requirement for APCM services and 
recommended that we assess continuity as a measured outcome. This 
commenter asserted that, with continuity, patient health outcomes are 
improved across a wide range of chronic disease areas, including 
diabetes, asthma, cancer, and dementia. Several commenters requested 
clarification on the alternative visit requirement for APCM services, 
including one commenter who asked whether the practitioner/care team is 
required to offer home visits to bill for APCM services.
    Response: We emphasize that our intent with this proposal was to 
ensure that practices have flexibility in how they satisfy the 
requirements, including how they ensure 24/7 access for urgent patient 
needs. While we continue to believe that real-time access to patient 
medical records is best for addressing after-hours care needs, we 
understand this may not always be feasible, especially for smaller 
practices that may rely on third parties for after-hours coverage. 
Furthermore, we would like to reiterate that we did not propose to 
require that a practice would need to regularly deliver care in all of 
the alternative ways we mentioned, but instead that the practice would 
provide care by some alternative means to traditional office visits as 
appropriate to best meet their patient population's needs, including 
but not limited to e-visits, phone visits, home visits, and/or expanded 
in-person patient care hours.
    Comment: Several commenters requested clarification on how to 
document that a practice meets the 24/7 access to care requirement if a 
patient receiving APCM services does not use after-hours care in a 
given month, and asked if they would need to document in each patient's 
medical record that the practice has 24/7 access to care.
    Response: We do not expect that the practice level requirements 
like 24/7 access to care would be documented in each patient's medical 
records for each month for which APCM services are furnished, but we 
would expect that if the patient had an interaction with a care team 
member after hours, this would be documented in the patient's medical 
record. By billing for APCM services, the practice is attesting that it 
meets the requirements included in the code descriptor.
    After consideration of public comments, we are finalizing the 24/7 
access and continuity of care requirement as proposed, but with 
clarification that 24/7 access for urgent needs means reasonable after-
hours care, when necessary, and with a modification that there need not 
be real-time 24/7 access to the patient's medical record. Instead, we 
will require that the after-hours responder must document and 
communicate their interaction with the patient to the primary care 
team/practitioner, and that interaction must be documented in the 
patient's medical record. We are modifying the 24/7 access to care 
requirement because we understand that real-time access to patient 
medical records may not always be feasible, especially for smaller 
practices that may rely on third parties for after-hours coverage. We 
would like to reiterate that real-time access to the patient's medical 
record is a key component of advanced primary care, and we may revisit 
this issue in future rulemaking.
(4) Comprehensive Care Management
    We proposed in the CY 2025 PFS proposed rule to adopt for APCM 
services the ``Comprehensive Care Management'' service element we 
established for CCM and PCM services with some modifications. Rather 
than ``care management for chronic conditions,'' the APCM service 
element would be ``overall comprehensive care management'' which, like 
the element for CCM and PCM services, may include, as applicable, 
``systematic assessment of the patient's medical, functional, and 
psychosocial needs; system-based approaches to ensure timely receipt of 
all recommended preventive care services; medication reconciliation 
with review of adherence and potential interactions; and oversight of 
patient self-management of

[[Page 97884]]

medications.'' This care management standard is similar to several 
requirements tested in CMS Innovation Center models (such as the CPC+ 
model's requirement that participating practices provide targeted, 
proactive, relationship-based care management to all patients 
identified as at increased risk and likely to benefit from intensive 
care management and provide short-term care management, including 
medication reconciliation, to patients following hospital admission/
discharge/transfer, including observation stays, and, as appropriate, 
following an ED discharge) \68\ and is an essential element of the 
delivery of care under an advanced primary care model of care. Care 
management is a resource-intensive process of working with patients, 
generally outside of face-to-face office visits, to help them 
understand and manage their health, navigate the health system, and 
meet their health goals. Practices working with patients who have 
complex care needs have found care management to be an effective and 
necessary strategy for mitigating risk and improving health outcomes. 
Practices have found it valuable to think in terms of two broad types 
of patients who might benefit from different approaches to care 
management: patients with some combination of multiple comorbidities, 
complex treatment regimens, frailty and functional impairment, 
behavioral and social risks, and serious mental illness who would often 
benefit from long-term, proactive, and relationship-based longitudinal 
care management; and patients who are otherwise stable and will benefit 
from short-term, goal-oriented episodic care management during periods 
of increased risk like transitions of care; diagnosis of a new, serious 
illness or injury involving complex treatment regimens; or newly 
unstable chronic illness.
---------------------------------------------------------------------------

    \68\ https://www.cms.gov/priorities/innovation/innovation-models/comprehensive-primary-care-plus.
---------------------------------------------------------------------------

    Successful practices use on-site, non-physician, practice-based, or 
integrated shared care managers to provide longitudinal care management 
for the highest risk cohort of patients, with assistance from other 
practice staff, as needed. Multiple team members may engage in care 
management, but each patient identified as eligible should have a 
clinically trained individual in the practice who is accountable for 
active, ongoing care management that goes beyond office-based clinical 
diagnosis and treatment.\69\ Longitudinal care management is captured 
in health IT and includes providing proactive care that moves beyond 
traditional office visits or crisis-driven care (for example, ED care 
or hospitalization) and is not primarily visit-based. Although office 
visits are opportunities to define goals, plan patient care, engage in 
shared decision making, and build a trusting relationship, most care 
management activities take place by phone, patient portal, email, mail, 
or home visits (and through visits to skilled nursing facilities or 
hospitals to support transitional care).
---------------------------------------------------------------------------

    \69\ Taylor, E. F., Machta, R. M., Meyers, D. S., Genevro, J., & 
Peikes, D. N. (2013). Enhancing the primary care team to provide 
redesigned care: The roles of practice facilitators and care 
managers. Annals of Family Medicine, 11(1), 80-83. doi:10.1370/
afm.1462.
---------------------------------------------------------------------------

    Practices use the concept of episodic care management to identify 
patients who have acute or urgent needs using ``triggering events'' 
(for example, hospital discharge, new diagnoses, medical crisis, major 
life event, decompensation in otherwise controlled chronic condition) 
for short-term, problem-focused care management services. Episodic care 
management is generally time-limited and problem focused and most often 
includes coordination of services and follow-up, patient education and 
support for self-management, and medication reconciliation.
    We sought feedback on these requirements.
    Comment: We received a few comments on this proposal, which were 
overwhelmingly supportive. In particular, several commenters expressed 
appreciation for our efforts to recognize that practices furnish 
comprehensive care management by acknowledging the team-based aspect of 
APCM which may help a patient navigate their complex health conditions.
    Response: We thank the commenters for their support and are 
finalizing the comprehensive care management service element as 
proposed.
(5) Patient-Centered Comprehensive Care Plan
    We proposed in the CY 2025 PFS proposed rule to adopt for APCM 
services the ``Comprehensive Electronic Care Plan'' service element we 
established for CCM and PCM services with some modifications. As 
included in the APCM code descriptors, we proposed to specify that the 
care plan is ``patient-centered'' which, as for CCM and PCM services, 
``is available timely within and outside the billing practice'' as 
appropriate to individuals involved in the beneficiary's care, can be 
routinely accessed and updated by care team/practitioner, and ``copy of 
care plan to patient/caregiver.''
    Providing longitudinal care management, which is an essential 
element of the delivery of care under an advanced primary care model of 
care, includes the process of personalized care planning. The 
personalized care planning process helps practices engage and 
collaborate with patients to ensure that their care aligns with patient 
preferences, goals, and values.\70\ A care plan is a mutually agreed-
upon document that outlines the patient's health goals, needs, and 
self-management activities and is accessible to all team members 
providing care for the patient. The care plan should be patient-
friendly, accessible to the patient, and should limit use of unfamiliar 
medical jargon and acronyms. The care plan should also be structured 
and standardized, documented in health IT to enable sharing among 
patient, caregivers, and care team members. All high-risk patients 
receiving longitudinal care management should have a personalized care 
plan developed in a joint, open-ended conversation between the patient 
and care team. Personalized care planning is a dynamic process; 
therefore, the care plan document should be updated at when applicable 
by the care team and patient. In addition, when patients' health 
status, preferences, goals, and values change, their plans of care 
should, too.
---------------------------------------------------------------------------

    \70\ Coulter A., Entwistle, V. A., Eccles, A., Ryan, S., 
Shepperd, S., & Perera, R. (2015). Personalised care planning for 
adults with chronic or long-term health conditions. Cochrane 
Database System Review, 3, CD010523.; Edwards, S. T., Dorr, D. A., & 
Landon, B. E. (2017). Can personalized care planning improve primary 
care? JAMA, 318(1), 25-26.
---------------------------------------------------------------------------

    As described in the CY 2020 final rule, we proposed language to 
describe the ``typical'' care plan elements which do not comprise a set 
of strict requirements that must be included in a care plan for purpose 
of billing but are intended to reflect those that are typically 
included in a care plan as medically appropriate for a particular 
beneficiary. The comprehensive care plan for all health issues 
typically includes, but is not limited to, the following elements: 
problem list; expected outcome and prognosis; measurable treatment 
goals; cognitive and functional assessment; symptom management; planned 
interventions; medical management; environmental evaluation; caregiver 
assessment; interaction and coordination with outside resources and 
practitioners and providers; requirements for periodic

[[Page 97885]]

review; and when applicable, revision of the care plan (84 FR 62691).
    We sought feedback on these requirements.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Most commenters supported our proposed patient-centered 
comprehensive care plan requirement for APCM services. Several 
commenters requested clarification on the care plan requirement, 
including whether existing CCM care plans meet the service requirements 
and what our expectations are regarding updating the care plan at 
``regularly defined intervals.'' One commenter also asked us to clarify 
whether a member of the care team could initiate the care plan if they 
sent it to the primary practitioner to edit and approve. One commenter 
requested that we embed into the care plan the same requirements for 
cultural and linguistic factors that we proposed in the practitioner, 
home-, and community-based care coordination requirement for APCM 
services. Another commenter requested that we create an additional code 
for updating the care plan (in addition to HCPCS G0506, Comprehensive 
assessment and care plan for patients with chronic conditions), with a 
limit on billing it three times per year. One commenter encouraged us 
to work with other agencies, stakeholders, and physicians to establish 
clear, minimum requirements for EHR vendors that improve the process to 
create, share, reconcile, and integrate multiple plans of care into a 
comprehensive care plan. Other commenters agreed that all the required 
care elements in the plans are necessary elements for care and should 
be included in any final policy.
    Response: We thank the commenters for their feedback. We are 
clarifying that a member of the care team could draft the care plan, as 
appropriate, and send to the practitioner for review and approval. We 
appreciate the recommendation that cultural and linguistic factors be 
included as a care plan requirement and remind commenters that the 
typical care plan elements which are based on the those finalized in 
the CY 2020 PFS final rule (84 FR 62691), are not limited to that list. 
In the instance it is beneficial to the patient to include cultural and 
linguistic factors in the care plan, the practitioner should be 
empowered to add them. We intended that our definition of ``regularly 
defined intervals'' match similar requirements for other care 
management services, and thus are clarifying that the care plan should 
be updated ``when applicable'' to match current requirements for CCM. 
While it may be preferable, when feasible, to update the care plan on 
an annual basis or more frequently, if there are relevant clinical 
changes within that time, we believe that the need and frequency for 
care plan revision should be considered as medically appropriate for a 
particular beneficiary. We emphasize that our intent is to ensure that 
practitioners have flexibility in how they can satisfy the care plan 
requirement, and we do not wish to impose additional administrative 
burden.
    Comment: Some commenters stated that a ``comprehensive care plan'' 
is not needed when a practitioner is engaged in Level 1 APCM services 
for a beneficiary with only one or no chronic conditions, and instead 
suggested that the care plan requirement would be satisfied if the 
practitioner maintains an up-to-date problem and medication list for 
the patient, including the status of preventive services. A few 
commenters recommended that care plans developed as part of the AWV 
should satisfy the care plan requirement for APCM services. One 
commenter was concerned about specific elements of the care plan that 
might be too subjective--for example, expected outcome and prognosis.
    Response: We emphasize that our intent is to ensure that 
practitioners have flexibility in how they satisfy the care plan 
requirement, including who drafts the care plan, what elements are 
included, and as mentioned above, at what frequency they are updated. 
We are sympathetic to commenters' concerns about this element, 
especially in terms of current clinical practice and medical necessity 
for less complex beneficiaries. While we are not requiring a specific 
format for the care plan and, as described above, we provide a series 
of typical care plan elements; we would like to emphasize that the need 
for specific care plan elements should be considered as medically 
appropriate for a particular beneficiary, which we also believe speaks 
to the commenters' questions about the care plan for a level 1 
beneficiary. We also agree with commenters that care plans developed as 
part of the AWV by the same practitioner who furnishes APCM services 
may be used to satisfy this requirement, as appropriate considering the 
particular patient's clinical circumstances.
    After consideration of public comments, we are finalizing the 
patient-centered comprehensive care plan service element for APCM 
services as proposed.
(6) Management of Care Transitions
    We proposed in the CY 2025 PFS proposed rule to adopt for APCM 
services the ``Management of Care Transitions'' service element we 
established for CCM and PCM services with some modifications. Rather 
than requiring that the practice must facilitate communication of 
relevant patient information through electronic exchange of continuity 
of care documents with other health care providers regarding these 
transitions, we proposed more simply to require the billing 
practitioner to ``ensure timely exchange of electronic health 
information'' with other practitioners and providers. As included in 
the APCM code descriptors, we also proposed to specify for the 
``Management of Care Transitions'' APCM service element that the care 
team/practitioner will follow up with the patient and/or caregiver 
within 7 days after each ED visit and hospital discharge. This timely 
follow-up standard is similar to several requirements tested in CMS 
Innovation Center models (such as the CPC+ model's requirement that 
participating practices ensure patients with ED visits received a 
follow-up interaction within one week of discharge \71\ and the MCP 
model's requirement that participating practices implement episodic 
care management to provide timely follow-ups for high-risk patients 
post ED visit and hospitalization \72\), and we patterned the timely 
follow-up element after our policy for TCM services which requires, for 
example, ``communication (direct contact, telephone, electronic) with 
the patient and/or caregiver with 2 business days of discharge'' and a 
``face-to-face visit within 7 calendar days of discharge.'' Providing 
timely follow-ups for patients is an essential element of the delivery 
of care under an advanced primary care model of care, and this will 
help achieve timely, seamless care across settings especially after 
discharge from a facility. Key aspects of follow-up after ED visits and 
hospitalizations include identifying and partnering with target 
hospitals and EDs where the majority of a practice's patients receive 
services to achieve timely notification and transfer of information 
following hospital discharge and ED visits.\73\

[[Page 97886]]

When developing a standardized process for data exchange and timely 
follow-up, successful practices include the following processes: 
information and data exchange about patients seen in an ED or admitted 
to/discharged from a hospital (for example, via HIE, hospital portal, 
hospital-generated report, EHR, or additional health IT system); 
definition for ``timely'' follow-up after discharge (for example, no 
later than within 2 days of discharge from hospital admission or 
observation stay and within 1 week of discharge from the ED); protocols 
for when follow-up will be done (for example, before discharge or 
following a standardized follow-up protocol); process of incorporating 
into the patient's medical record so the information is available at 
the time of the follow-up visit or other patient contact; and 
standardized processes and protocols for data exchange and formalized 
partnerships to develop an efficient workflow to ensure timely follow-
up and facilitate efficient and safe transitions of care.
---------------------------------------------------------------------------

    \71\ https://www.cms.gov/priorities/innovation/files/x/cpcplus-practicecaredlvreqs.pdf.
    \72\ https://www.cms.gov/priorities/innovation/innovation-models/making-care-primary.
    \73\ Carrier, E., Yee, T., & Holzwart, R. A. (2011). 
Coordination Between Emergency and Primary Care Physicians (NIHCR 
Research Brief No. 3). National Institute for Health Care Reform. 
http://nihcr.org/analysis/improving-care-delivery/prevention-improving-health/ed-coordination/; Ventura, T., Brown, D., 
Archibald, T., et al. (2010, January-February). Improving care 
transitions and reducing hospital readmissions: establishing the 
evidence for community-based implementation strategies through the 
care transitions theme. http://www.communitysolutions.com/assets/2012_Institute_Presentations/caretransitioninterventions051812.pdf.
---------------------------------------------------------------------------

    Practices use a variety of scheduling strategies to prioritize 
same-day or next-day access for acutely ill patients and to provide 
timely follow-up for patients experiencing care transitions. Successful 
practices are those that can strike the right balance between timely 
access to visits and the offering patients a provider of their choice 
(Continuity of Care). Establishing standardized protocols and pathways 
to improve and ensure responsiveness and timely callbacks to patients 
is an effective way to impact patient-practitioner/care team 
communication and to ensure a safeguard for addressing emergent and 
urgent patient phone calls. Successful practices routinely evaluate the 
degree to which patients' phone calls are answered promptly or returned 
within a practices' established guidelines (for example, non-urgent, 
emergent, urgent) and routed to the appropriate practitioner or care 
team member, incorporating patients' clinical needs and 
preferences.\74\ Such strategies are paramount for practices whose 
patients may be contacting the practice with care needs that require 
care team prioritization and urgent reply. We sought feedback on these 
requirements.
---------------------------------------------------------------------------

    \74\ Hempel, S., Stockdale, S., Danz, M., Rose, D. E., Kirsh, 
S., Curtis, I., & Rubenstein, L. V. (2018). Access management in 
primary care: Perspectives from an expert panel (Research Report No. 
RR-2536-DVA). Rand Corporation. https://www.rand.org/content/dam/rand/pubs/research_reports/RR2500/RR2536/RAND_RR2536.pdf.; O'Brien, 
L. K., Drobnick, P., Gehman, M., Hollenbeak, C., Iantosca, M. R., 
Luchs, S., Manning, M., Palm, S. K., Potochny, J., Ritzman, A., 
Tetro-Viozzi, J., Trauger, M., & Armstrong, A. D. (2017). Improving 
responsiveness to patient phone calls: A pilot study. Journal of 
Patient Experience, 4(3), 101-107. doi:10.1177/2374373517706611.
---------------------------------------------------------------------------

    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Several commenters were concerned about our proposed 
management of care transitions requirement for APCM services, and 
particularly the requirement for timely follow-up communication within 
7 days of an ED visit or hospital discharge. A few commenters suggested 
that we should modify the requirement for timely follow-up within 7 
days of discharge because this is not always possible. One commenter 
encouraged us to prioritize strategies designed to improve 
interoperability to better coordinate care transitions. Another 
commenter asked us to include pediatric-to-adult care transitions as 
part of this requirement and they suggested that this type of 
transition has a 6-month follow-up timeframe.
    Response: We appreciate the perspective that interoperability 
improvements could assist practitioners with managing care transitions, 
and the feedback on pediatric-to-adult care transitions. We welcome 
additional information from interested parties on these topics. We 
emphasize that our intent with this proposal was to ensure that 
practitioners furnishing APCM services have flexibility within their 
practices as to how they satisfy the requirement, including how they 
ensure timely follow-up after their patient's care transition. While we 
understand that some patients and their caregivers may be difficult to 
reach, we expect that practices make an active effort to timely follow 
up with patients post-discharge. We would like to reiterate that we are 
finalizing that a practice should meet this 7-day follow-up requirement 
whenever possible.
    After consideration of public comments, we are finalizing the 
management of care transitions service element as proposed, but with 
clarification that practitioners should make reasonable efforts to 
provide timely follow-up communication after an ED visit or hospital 
discharge within 7 days when possible. Consistent with other APCM 
service elements, we will require that the efforts to reach the 
patient/caregiver and any interaction must be documented in the 
patient's medical record. Timely follow-up with patients after care 
transitions is a key component of advanced primary care which we 
believe will help achieve timely, seamless care across settings, and we 
may consider revisions to this policy in future rulemaking.
(7) Practitioner, Home-, and Community-Based Care Coordination
    We proposed in the CY 2025 PFS proposed rule to adopt for APCM 
services the ``Home- and Community-Based Care Coordination'' service 
element we established for CCM and PCM services with some 
modifications. As included in the APCM code descriptors, we proposed to 
specify that the ``ongoing communication and coordinating receipt of 
needed services'' is not only with home- and community-based service 
providers, but also with ``practitioners,'' ``community-based social 
service providers, hospitals, and skilled nursing facilities (or other 
health care facilities), as applicable.'' We also proposed to add more 
detail about the communication documented in the patient's medical 
record in that it would include ``the patient's psychosocial strengths 
and needs, and functional deficits, goals, preferences, and desired 
outcomes, including cultural and linguistic factors.''
    Coordinated referral management with specialty groups and other 
community or healthcare organizations ensures referrals are properly 
managed, coordinated, and communicated. These efforts help practices 
achieve goals of enhancing the quality of patient care, improving the 
patient's care experience, and lowering cost, particularly for 
practices serving high-risk patient populations. Evidence suggests that 
the development of formal relationships (for example, collaborative 
care agreements) between the primary care practice and referred groups/
organizations that define shared goals and responsibilities, facilitate 
the coordinated referral management process.\75\ The foundation of 
successful coordinated referral management with specialty groups and 
other community or healthcare organizations is the development of 
processes and procedures to ensure high-value referrals, such as 
collaborative care agreements and electronic consultations (e-
Consults). Establishing clear and agreed-upon expectations regarding 
communication and clinical responsibilities with

[[Page 97887]]

specialty practices and other care organizations, through a 
collaborative care agreement, improves the process. Collaborative care 
agreements often include the following elements: defining the types of 
referrals, consultation, and co-management arrangements available; 
specifying who is accountable for which processes and outcomes for care 
within the referral, consultation, or co-management arrangement; and 
specifying what clinical and other information should be provided, how 
the information is transferred, and timeliness expectations. The 
electronic e-Consults process is typically conducted through a system-
wide EHR or a secure, web-based system by which a practice receives 
guidance from a specialty provider or other care organization.\76\ In 
this process, a practitioner sends a clinical question and relevant 
clinical information to the specialist (or other care organization), 
who responds by providing a clinical opinion and guidance and/or 
confirms the need for a face-to-face appointment with the patient. This 
tool and process has the potential to streamline consultations, reduce 
cost and burden for patients, and improve access to specialty care for 
high-value referrals. As part of the CY 2019 PFS final rule, we 
finalized interprofessional consultation services codes, which support 
payment both to the treating, requesting (primary care) practitioner 
(CPT code 99452) and the receiving, consultative specialist (CPT codes 
99446-99449 and 99451) who engage in e-Consults, and so some 
practitioners have already become accustomed to providing and billing 
for these services (83 FR 59687).
---------------------------------------------------------------------------

    \75\ Medicare Payment Advisory Commission (MedPAC). (2012, 
June). Report to the Congress: Medicare and the Health Care Delivery 
System. http://medpac.gov/docs/default-source/reports/jun18_medpacreporttocongress_sec.pdf?sfvrsn=0.
    \76\ Vimalananda, V., Gupte, G., Seraj, S., Orlander, J., 
Berlowitz, D., Fincke, B., & Simon, S. (2015, September). Electronic 
consultations (e-consults) to improve access to specialty care: A 
systematic review and narrative synthesis. Journal of Telemedicine 
and Telecare 21(6), 323-330. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4561452/.
---------------------------------------------------------------------------

    Strategies for addressing common health-related social needs 
(HRSNs) for a practice's high-risk patients include conducting needs 
assessments at regular intervals, creating a resource inventory for the 
most pressing needs of the patient population, and establishing 
relationships with key community organizations. Practices can focus on 
developing relationships with community-based organizations that 
support patients' most significant HRSNs. Practices can also seek to 
find common ground with community and social service organizations, 
focus on the structure and process of referrals, and develop a 
bidirectional flow of information. Successful practices work with their 
patients to ensure there is a shared understanding of the purpose of 
the referral and aim to understand bottlenecks and barriers to meeting 
their needs through the process. Many practices identify a care team 
member to be a community referral resource for their patients. 
Successful referrals can help practices determine the most useful and 
available resources in their community. We sought feedback on these 
requirements.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Most commenters were generally supportive of our proposal. 
Several commenters expressed appreciation for the inclusion of cultural 
and linguistic factors in the documentation requirements when 
coordinating with and referring to services outside the primary care 
clinic. One commenter was concerned that our proposals do not 
incentivize specialists and other clinicians to coordinate with primary 
care practitioners, recommending that we consider ways to encourage 
clinicians to communicate and collaborate with each other. One 
commenter was concerned that community-based aspect of care 
coordination may pose challenges for certain primary care practices if 
it extends beyond the routinely used home health services. For example, 
lower income and QMB patients may receive their primary care in 
practices that may not be able to meet these standards, such as low 
resource safety net practices. The commenters stated that this could 
potentially exacerbate disparities in care and payment for patients at 
the highest risk.
    Response: We thank the commenters for their support, and we agree 
with commenters that specialists furnishing consultations in 
conjunction with primary care practitioners are an essential element of 
advanced primary care services. We are therefore clarifying in this 
final rule that the interprofessional consultation codes (CPT codes 
99446-99449 and 99451) can be billed concurrently with APCM services. 
We note again that only one practitioner may furnish APCM services in a 
month, so the consulting practitioner must not also furnish APCM 
services to the same beneficiary. See Table 26. We believe that our 
policy to allow concurrent billing of interprofessional consultation 
codes and APCM services is responsive to commenters' concerns that our 
proposals may not incentivize specialists and other clinicians to 
coordinate with primary care practitioners. We appreciate the comments 
about safety net practices and their ability to furnish APCM services. 
As discussed previously in this final rule, we also encourage 
practitioners in practices that may not meet all of the requirements to 
bill the APCM codes to consider whether care management codes other 
than the APCM codes might describe the services they are delivering 
(for example, CCM, PCM, or certain other CTBS). Also as discussed 
previously in this final rule, we will continue to identify and 
evaluate ways to encourage practices and practitioners to make APCM 
services available to all their patients in order to support care 
improvement for underserved, high-risk beneficiaries.
    After consideration of public comments, we are finalizing the 
practitioner, home- and community-based care coordination service 
element as proposed.
(8) Enhanced Communications Opportunities
    We proposed in the CY 2025 PFS proposed rule to include for APCM 
services the element of ``Enhanced Communications Opportunities'' we 
established for CCM and PCM services with some modifications. 
Specifically, we proposed to add ``internet and patient portal'' as 
examples of asynchronous non-face-to-face consultation methods and 
specify that the practitioner will provide ``other communication 
technology-based services, including remote evaluation of pre-recorded 
patient information and interprofessional telephone/internet/EHR 
referral service(s), to maintain ongoing communication with patients, 
as appropriate'' as well as specify ``access to patient-initiated 
digital communications that require a clinical decision, such as 
virtual check-ins and digital online assessment and management and E/M 
visits (or e-visits).'' Providing asynchronous non-face-to-face 
consultation methods and other CTBS services is an essential element of 
the delivery of care under an advanced primary care model of care, and 
this will allow patients to access their usual source of care more 
conveniently (see section II.G.2.c.(3) of this final rule). There is 
growing consensus that incorporating telehealth into primary care will 
allow patients to access their usual source of care more 
conveniently.\77\ Patients using

[[Page 97888]]

telehealth visits have reported high satisfaction, identifying 
convenience and perceived high quality of care as contributors,\78\ 
such that these may be a good alternative and, in some cases, 
preferable to in-person communication.\79\ Expansion of telehealth to 
address episodic and chronic conditions has been a significant trend in 
the evolution of telehealth applications, and there is some evidence 
that video visits may enable more timely communication of test results 
than in-person appointments.
---------------------------------------------------------------------------

    \77\ Levine DM, Linder JA. Retail Clinics Shine a Harsh Light on 
the Failure of Primary Care Access. J Gen Intern Med. 
2016;31(3):260-262.; Dorsey ER, Topol EJ. State of Telehealth. N 
Engl J Med. 2016;375(2): 154-161.; Powell, Rhea E., et al. ``Patient 
perceptions of telehealth primary care video visits.'' The Annals of 
Family Medicine 15.3 (2017): 225-229.
    \78\ Polinski JM, Barker T, Gagliano N, Sussman A, Brennan TA, 
Shrank WH. Patients' Satisfaction with and Preference for Telehealth 
Visits. J Gen Intern Med. 2016;31(3):269-275.
    \79\ Krishnan N, Fagerlin A, Skolarus TA. Rethinking Patient-
Physician Communication of Biopsy Results--The Waiting Game. JAMA 
Oncol. 2015;1(8):1025-1026.; Cusack CM, Pan E, Hook JM, Vincent A, 
Kaelber DC, Middleton B. The value proposition in the widespread use 
of telehealth. J Telemed Telecare. 2008;14(4):167-168.
---------------------------------------------------------------------------

    As noted in section II.G.2.b. of the CY 2025 PFS proposed rule, we 
did not propose timeframe restrictions for this proposed element, which 
includes access to certain CTBS (for example, the restriction for 
virtual check-in services that there is not a related E/M service 
provided within the previous 7 days or an E/M service or procedure 
within the next 24 hours or the soonest available appointment). We 
sought feedback on these requirements.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters supported the emphasis in our proposal on 
technology integration and agreed that the bundling of CTBS with APCM 
services demonstrates our overall commitment to adapting to the 
evolving healthcare landscape, where virtual and asynchronous 
interactions are becoming more prevalent. Several commenters agreed 
with us that the integration of digital health technology into chronic 
care management would enhance patient engagement, facilitate the 
delivery of continuous, patient-centered care, and drive efficiencies 
across the healthcare system. Some commenters asserted that this 
approach would be particularly beneficial in enhancing care delivery in 
rural and underserved areas, where access to specialized services may 
be limited.
    Another commenter recommended that we eliminate the requirement to 
offer digital E/M services and virtual check-ins, since these may not 
be appropriate for certain specialized populations--for example, some 
home-bound patients may benefit from consistent face-to-face 
interventions in the home.
    Response: We take this opportunity to clarify that virtual check-
ins and digital online assessment and management and E/M visits (or e-
visits) are not specific requirements of this service element, but 
rather, are listed as examples. We agree with commenters that 
practitioners are in the best position to determine how their patients 
interact with the practice and therefore are not requiring specific 
types of encounters, but rather encouraging practices to consider ways 
to ensure enhanced access to patient-initiated digital communications, 
including but not limited to virtual check-ins and digital online 
assessment and management and E/M visits (or e-visits).
    Comment: Several commenters requested clarification on the 
documentation required for this proposed service element and the degree 
to which the primary care practitioner needs to be personally involved 
in furnishing CTBS.
    Response: With respect to whether the primary care practitioner 
must be the individual in contact with the patient via any enhanced 
communication methods, as described earlier in this discussion, many 
APCM services would ordinarily be provided by clinical staff incident 
to the professional services of the billing practitioner in accordance 
with our regulation at Sec.  410.26, and as designated care management 
services could be provided by auxiliary personnel under the general 
supervision of the billing practitioner. However, some services, such 
as virtual check-ins or e-visits, necessarily involve the direct 
delivery of care by the primary care practitioner. Furthermore, we 
would not expect that the presence of enhanced communications 
opportunities and capabilities would be documented in each patient's 
medical record except to the extent that they are used to furnish APCM 
services. Rather, if the patient has an interaction with a care team 
member via an enhanced communication tool or service, we would expect 
that interaction to be documented in the patient's medical record. By 
billing for APCM services, the practitioner is attesting that the APCM 
service meets the requirements specified in the code descriptor.
    After consideration of public comments, we are finalizing the 
enhanced communications opportunities service element as proposed.
(9) Patient Population-Level Management
    We proposed in the CY 2025 PFS proposed rule to establish an APCM 
service element for Patient Population-Level Management that will 
include practice capabilities for population-based, data-driven 
approaches to manage preventive and chronic care for their patient 
population and to plan and implement strategies to improve care and 
outcomes. We proposed that all practices will use data to develop clear 
improvement strategies and analytic processes to proactively manage 
population health, including analyzing patient population data to 
identify gaps in care and risk-stratifying the practice population 
based on defined diagnoses, claims, or other electronic data to 
identify and target services to patients (such as those at risk for 
poor health outcomes), and then will offer additional interventions, as 
appropriate.
    These Patient Population-Level Management Standards are similar to 
several requirements tested in CMS Innovation Center models, including 
CPC+, which found that model participants used data to identify and 
resolve gaps in care. We have modeled the Patient Population-Level 
Management standards on the CPC+ care delivery requirements. In the 
CPC+ Model, participating practices were required, for example, to 
``use a two-step risk stratification process for all empaneled 
patients, addressing medical need, behavioral diagnoses, and health-
related social needs'' and ``define at least one subpopulation of 
patients with specific complex needs, develop capabilities necessary to 
better address those needs, and measure and improve the quality of care 
and utilization of this subpopulation.'' \80\ Central to the delivery 
of advanced primary care is the organization of the practice into care 
teams that have the data they need to manage their patient populations 
and that have time allocated to plan and implement practice improvement 
strategies.\81\ Using evidence-based protocols, registries, and the 
registry functionality of the EHR, reminders and outreach help 
practices deliver appropriate preventive care and consistent evidence-
based management of chronic conditions for the entire patient 
population.\82\ Measurement of clinically relevant data at the 
practice-

[[Page 97889]]

level guides testing and implementing strategies to improve care and 
outcomes. Patient Population-Level Management capabilities are 
essential to the delivery of care under an advanced primary care model 
of care and enable practices to meet the preventive and chronic care 
needs of their entire patient population. Regular use of data to 
identify populations or groups of patients with similar needs allows 
practices and care teams to use streamlined strategies, including 
setting goals with measurable outcomes, to positively impact their 
patient populations. Evidence shows that primary care teams supported 
with real-time, Population-Level clinical outcomes data effectively 
manage population health and address care gaps which eliminates 
external costs to close gaps in care.\83\ More specifically, risk 
stratification allows practitioners to identify beneficiaries for 
longitudinal care management, track beneficiaries with higher levels of 
need and manage their conditions, and prevent beneficiaries from 
falling through the cracks, while developing strategies to address 
those patients who are at increased and rising risk and most likely to 
benefit from targeted, proactive, relationship-based care management 
and other strategies essential to APCM.\84\ Empanelment, which assigns 
each active patient to a practitioner and/or care team with 
consideration of patient and caregiver preferences, allows practices to 
build responsive care teams to optimize patient care and to address the 
preventive, chronic, and acute needs of all patients, and provides a 
way for practices to identify care gaps and proactively reach out to 
patients who have not been seen or contacted in a while.\85\ For 
example, these elements of advanced primary care management could 
increase screening rates and ultimately improve care of chronic 
conditions, such as hypertension and diabetes.
---------------------------------------------------------------------------

    \80\ CPC+ Care Delivery Resource. January 2019.
    \81\ CPC+ Care Delivery Resource. January 2019.
    \82\ O'Malley AS, Draper K, Gourevitch R, Cross DA, Scholle SH. 
Electronic health records and support for primary care teamwork. J 
Am Med Inform Assoc. 2015 Mar;22(2):426-34. doi: 10.1093/jamia/
ocu029. Epub 2015 Jan 27. PMID: 25627278; PMCID: PMC4394968.
    \83\ https://www.cms.gov/priorities/innovation/files/x/cpcplus-practicecaredlvreqs.pdf.
    \84\ Hayes, S. L., & McCarthy, D. (2016, December 7). Care 
Management Plus: Strengthening Primary Care for Patients with 
Multiple Chronic Conditions. The Commonwealth Fund. http://www.commonwealthfund.org/publications/case-studies/2016/dec/care-management-plus; Hong, C.S., Siegel, A.L., & Ferris, T.G. (2014, 
August). Caring for High-Need, High-Cost Patients: What Makes for a 
Successful Care Management Program? The Commonwealth Fund. http://
www.commonwealthfund.org/~/media/files/publications/issue-brief/
2014/aug/
1764_hong_caring_for_high_need_high_cost_patients_ccm_ib.pdf Lakin, 
J.R., Robinson, M.G., Obermeyer, Z., Powers, B.W., Block, S.D., 
Cunningham, R., Tumblin, J.M.m Vogeli, c., & Bernacki, R.E. (2019). 
Prioritizing primary care patients for a communication intervention 
using the ``Surprise Question'': A prospective cohort study. Journal 
of General Internal Medicine, 8.
    \85\ Grumbach, K., & Olayiwola, N.J. (2015). Patient 
empanelment: The importance of understanding who is at home in the 
medical home. Journal of the American Board of Family Medicine, 
28(2), 170-272.; Altschuler, J., Margolius, D., Bodenheimer, T., & 
Grumbach, K. (2012). Estimating a reasonable patient panel size for 
primary care physicians with team-based task delegation. Annals of 
Family Medicine, 10(5), 396-400. doi:10.1370/afm.1400.
---------------------------------------------------------------------------

    We noted as part of the CY 2025 PFS that this Patient Population-
Level Management requirement of the APCM services would be met for 
practitioners billing for APCM services through a TIN that is 
participating in an ACO in the Shared Savings Program by virtue of the 
practitioner's participation in the ACO which must meet eligibility 
requirements for population management, care coordination and quality 
improvement, including required processes and patient-centeredness 
criteria in Sec.  425.112. We note that ACOs in the Shared Savings 
Program and their practitioners are already engaged in analyzing the 
patient population for care gaps, risk-stratifying patients to further 
identify those at risk for poor health outcomes, and identifying 
patients for whom additional interventions are appropriate. Similarly, 
the ACO REACH, Making Care Primary, and Primary Care First CMS 
Innovation Center Models all require their participants to deploy 
population health strategies to identify and offer interventions to 
mitigate health risks.\86\ Participants in these models and their 
practitioners are already engaged in population health management as 
described in Table 25. We sought feedback on these requirements.
---------------------------------------------------------------------------

    \86\ ACO Realizing Equity, Access, and Community Health (REACH) 
Model Request for Applications. Available a: https://www.cms.gov/priorities/innovation/media/document/aco-reach-rfa, Making Care 
Primary Request for Applications. Available at https://www.cms.gov/files/document/mcp-rfa.pdf, Primary Care First Request for 
Applications Cohort 2. Available at https://www.cms.gov/priorities/innovation/media/document/pcf-cohort2-rfa.
---------------------------------------------------------------------------

    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: One commenter stated that risk stratification and 
population management will increase a practice's ability to deliver 
care in the most efficient way possible. Another commenter stated that 
population management could help practitioners reach underserved 
populations. A few commenters indicated that the Patient Population-
Level Management and any associated data analysis could be completed by 
the practice and did not necessarily need to be completed by the 
practitioner. One commenter suggested that because practices have 
different infrastructures, they should be allowed flexibility in how to 
implement this requirement. A few commenters stated that they did not 
believe patient Population-Level Management should be required to bill 
APCM, and another commenter indicated it may be resource intensive for 
small practices. One commenter requested that we develop an attribution 
method by which we would help practitioners identify patients for which 
they should conduct population management. Finally, one commenter 
requested that we require practices to conduct Population-Level 
management for the pediatric-to-adult referral population.
    Response: As we indicated earlier, we agree that Population-Level 
management can be beneficial for practices, assisting them with 
addressing gaps in care. While Population-Level management requires the 
development of a process to analyze data and assess gaps in care, we 
believe that the standard we have proposed is broad enough to allow 
practices the flexibility to develop and implement processes in a way 
that best suits the needs of their practice and their patient 
population, and in a manner that does not require significant start-up 
costs. Furthermore, at this time, we do not believe it is necessary to 
dictate for which patients a practice should conduct specific types of 
Population-Level management. We did not propose that the Population-
Level management needed to be completed by the practitioner billing 
APCM, and we agree with commenters that it is not necessary to require 
the practitioner to conduct this work. Finally, we appreciate the 
feedback that an attribution method may be useful for Population-Level 
management and we may consider that topic for future rulemaking.
    Comment: Several commenters requested clarification on how to 
document that a practice meets the Patient Population-Level Management 
requirement.
    Response: As previously explained, we would not expect that the 
practice-level requirements would be documented in each patient's 
medical record except to the extent they are used in furnishing APCM 
services to a specific patient, in which case we would expect the 
service to be documented in the patient's medical record. For example, 
if a practitioner calls a patient after a hospitalization and reviews 
medication changes, a record of what transpired during that 
conversation should be included in that patient's medical record. By 
billing for APCM services, the practitioner is attesting that the 
requirements included in the code descriptor have been met.

[[Page 97890]]

    After consideration of public comments, we are finalizing the 
``Patient Population-Level Management'' service element as proposed.
(10) Performance Measurement
    We proposed, as part of the CY 2025 PFS, for the APCM services a 
practice-level requirement for ``Performance Measurement'' of primary 
care quality, total cost of care, and meaningful use of CEHRT. 
Performance measurement is a critical element of care management 
services delivered in the context of advanced primary care, and it 
forms the basis for practice improvement efforts by enabling practices 
to identify key measures for improvement activities (for example, cost 
and utilization data, clinical quality measures, patient experience of 
care data). Quality measurement improves care delivery, including 
prevention of heart attacks, increasing vaccination rates, and 
improving patient safety,\87\ and quality measures are also effective 
tools to ensure that high-quality advanced primary care, including care 
management, is being delivered. Several performance measurement 
requirements were tested in CMS Innovation Center models (such as the 
CPC+ model's requirement that participating practices use data at both 
the practice- and panel-level to set goals to improve population health 
management and to continuously improve patients' health, experience, 
and quality of care, and decrease cost). Using data resources and 
developing workflows and analytics to guide practice changes can help 
practices achieve reductions in total utilization and cost of care, and 
improvements in patient experience and quality of care. Improving upon 
key outcome measures requires engaged clinical and administrative 
leadership and a commitment to continuous, data-driven improvement.\88\ 
In the context of the PFS, performance management through quality 
measurement as a practice-level requirement also ensures integrity to 
the provision of advanced primary care because it holds billing 
practitioners accountable to factors that are affected by several 
service elements of APCM coding. For example, effective patient 
population-level management can mean the practices close care gaps in 
diabetes management, and the billing practitioner would perform better 
on diabetes quality measures that assess for a patient's control of 
hemoglobin A1c.
---------------------------------------------------------------------------

    \87\ https://www.ahrq.gov/patient-safety/quality-measures/21st-century/challenges.html.
    \88\ https://www.cms.gov/priorities/innovation/innovation-models/comprehensive-primary-care-plus.
---------------------------------------------------------------------------

    We proposed that this practice-level Performance Measurement 
standard could be met in several ways. For MIPS eligible clinicians, 
the requirement would be met by registering for and reporting the 
``Value in Primary Care'' MVP. A practitioner who is part of a TIN that 
is participating in a Shared Savings Program ACO or a REACH ACO, or a 
Primary Care First or Making Care Primary practice would meet these 
requirements by virtue of meeting requirements under the Shared Savings 
Program or CMS Innovation Center ACO REACH, Making Primary Care 
Primary, or Primary Care First models. Because these models require 
their participating practitioners to report on quality and cost 
performance metrics that are aligned or overlap with the Value in 
Primary Care MVP, we proposed that requiring these practitioners to 
report the Value in Primary Care MVP for purposes of billing for APCM 
services would be substantially duplicative.
    In the CY 2024 PFS final rule (88 FR 80042 through 80047), we 
finalized ``The Value in Primary Care'' MVP, which focuses on the 
clinical theme of promoting quality care for patients in order to 
reduce the risk of diseases, disabilities, and death. This MVP includes 
certain cost measures, improvement activities, and quality measures for 
common chronic conditions (for example, hypertension, diabetes, 
depression).\89\ As with all MVPs, the Value in Primary Care MVP also 
requires meaningfully using CEHRT and reporting the objectives, 
measures, and attestations specified for the Promoting Interoperability 
performance category.
---------------------------------------------------------------------------

    \89\ Value in Primary Care. Quality Payment Program. https://qpp.cms.gov/mips/explore-mips-value-pathways/2024/M0005.
---------------------------------------------------------------------------

    The Value in Primary Care MVP contains the Adult Universal 
Foundation quality measure set, which is consistent with the National 
Quality Strategy goal of using the Universal Foundation measures across 
as many programs as is feasible.\90\ We proposed in the CY 2025 PFS 
proposed rule that this MVP is especially well-suited to reflect the 
delivery of care using the advanced primary care model as it was 
developed to include quality metrics that reflect clinical actions that 
are indicative of high-quality primary care. The quality measures 
include key elements such as cancer screening, immunization, blood 
pressure management, behavioral health, care coordination, person-
centered care, and screening for social drivers of health.
---------------------------------------------------------------------------

    \90\ https://www.cms.gov/medicare/quality/cms-national-quality-strategy/aligning-quality-measures-across-cms-universal-foundation.
---------------------------------------------------------------------------

    The improvement activities include engaging community resources to 
address drivers of health, implementing changes in the practice's 
patient portal to improve communication and patient engagement, 
reviewing practices in place on targeted patient population needs, and 
chronic care and preventive care management for empaneled patients, 
aspects of advanced primary care already discussed in this proposal.
    The cost measures include costs for common chronic conditions, such 
as asthma/chronic obstructive pulmonary disease (COPD), diabetes, 
depression, and heart failure, as well as the Total Per Capita Cost 
(TPCC) measure. The TPCC measure is a population-based cost measure 
which assesses the overall cost of care delivered to a patient with a 
focus on the primary care they receive from their provider(s) and 
captures the broader healthcare costs influenced by primary care.\91\
---------------------------------------------------------------------------

    \91\ https://qpp.cms.gov/docs/cost_specifications/2023-12-13-mif-tpcc.pdf.
---------------------------------------------------------------------------

    We proposed in the CY 2025 PFS proposed rule that the Value in 
Primary Care MVP serves to demonstrate performance measurement that is 
reflective of the care furnished using advanced primary care delivery. 
To ensure performance measurement consistent with the delivery of 
advanced primary care services, we proposed as an element of the APCM 
services that a practitioner who is a MIPS eligible clinician as 
defined in Sec.  414.1305 can satisfy the performance measurement 
requirement by registering for and reporting the Value in Primary Care 
MVP for the performance year in which they bill for APCM services. A 
MIPS eligible clinician can report to MIPS as an individual, subgroup, 
group, APM Entity, or in any combination of these four participation 
options, and can participate in multiple ways to report MVPs.\92\
---------------------------------------------------------------------------

    \92\ https://qpp.cms.gov/mips/mvps/learn-about-mvp-reporting-option?option=Group.
---------------------------------------------------------------------------

    We discussed in the CY 2025 PFS proposed rule that MIPS eligible 
clinicians who report the MVP are also required to report the Promoting 
Interoperability performance category objectives, measures, and 
required attestations throughout the performance period in which they 
bill for APCM services,\93\ as required under Sec.  414.1375(b) (Sec.  
414.1365(c)(4)(i)) (see section IV. of the CY 2025 PFS proposed

[[Page 97891]]

rule for details on reporting the objectives, measures, and required 
attestations for the MIPS Promoting Interoperability performance 
category for the CY 2025 performance period/2027 MIPS payment year and 
see section II.G.c.(10) in this final rule for a summary). The MIPS 
Promoting Interoperability performance category includes measures such 
as supporting electronic referral loops by sending health information, 
supporting electronic referral loops by receiving and reconciling 
health information, and providing patients with electronic access to 
their health information, all of which are reflective of important 
communication and coordination channels between primary care, other 
specialist practitioners caring for the patient, and the patient 
themselves. In addition, as set forth in Sec.  414.1375(b)(3), the MIPS 
Promoting Interoperability performance category requires submission of 
affirmative attestations: (1) regarding their cooperation in good faith 
with ONC direct review of their CEHRT; and (2) that they did not 
knowingly and willfully take action (such as to disable functionality) 
to limit or restrict the compatibility or interoperability of 
CEHRT.\94\
---------------------------------------------------------------------------

    \93\ The MIPS Promoting Interoperability performance period is a 
minimum of 180 consecutive days in the calendar year that occurs 2 
years prior to the MIPS payment year (see 42 CFR 414.1320(i)).
    \94\ Note that, under the Quality Payment Program, CMS may 
reweight the MIPS Promoting Interoperability performance category to 
zero percent of the MIPS final score, and not require an individual, 
group, or virtual group to use CEHRT and demonstrate whether they 
are a meaningful user of CEHRT, by granting a significant hardship 
exception or other type of exception based on certain circumstances 
as set forth in 42 CFR 414.1380(c)(2)(i)(C).
---------------------------------------------------------------------------

    We noted as part of the CY 2025 PFS that, for CCM services (CPT 
codes 99437, 99439, 99487, and 99489--99491) and PCM services (CPT 
codes 99424--99427), we established a practice-level service element 
requiring the meaningful use of CEHRT to record certain patient health 
information in a structured format, provide patients with access to 
their health information, and exchange all relevant patient health 
information, including in providing the ``Management of Care 
Transitions'' element of CCM services. For the APCM services, which are 
furnished as part of a practitioner's care delivery using the advanced 
primary care model, we proposed in the CY 2025 PFS proposed rule for 
practitioners who are MIPS eligible clinicians a practice level 
requirement to register for and report the MVP, including but not 
limited to reporting the Promoting Interoperability performance 
category objectives, measures, and required attestations which focus on 
meaningful use of CEHRT, for the performance year in which they furnish 
and bill for APCM services. This would ensure that patients/caregivers 
and physicians or other qualified practitioners or clinical staff have 
real-time access to patient's medical information. Meaningful use of 
CEHRT is a critical element of care management services delivered in 
the context of advanced primary care.
    As we stated in adopting the CEHRT use element for CCM and PCM 
services, the meaningful use of CEHRT is vital to ensure that 
practitioners are capable of providing the full scope of services, such 
as timely care coordination and continuity of care (see our prior 
discussion of this issue at 79 FR 67723 and 84 FR 62696), and 
flexibility in how practices can provide the requisite 24/7 access to 
care, continuity of care, and management of care transitions, can 
facilitate appropriate access to these services for Medicare 
beneficiaries. The meaningful use of CEHRT helps ensure that members of 
the care team have timely access to the patient's most updated health 
information and offer an integrated view of a patient's clinical 
history from different points of care, supporting continuing, quality, 
and integrated healthcare while avoiding duplication of efforts and 
costs, such as repeated exams.\95\ For example, practices can use EHRs 
to identify high-risk patients with chronic conditions to better 
coordinate care and can supplement the practice's EHR data with data 
from external sources (for example, State-level quality organizations) 
to obtain a more comprehensive view of patients. Practices can also 
integrate clinical data from EHRs, health plan claims data, and county-
level social services data to evaluate population needs, stratify by 
risk, and assess what programs would be most effective for supporting 
at-risk patients.\96\ Standardized communication methods, enabled by 
the meaningful use of CEHRT, are a significant part of the advanced 
primary care delivery model. Health IT systems that include remote 
access to the care plan or the full EHR after hours, or enable a 
feedback loop that communicates back to the primary care physician and 
others involved in the beneficiary's care regarding after-hours care or 
advice provided, are extremely helpful.\97\ They help ensure that the 
beneficiary receives necessary follow up, particularly if the patient 
is referred to the ED, and follow up after an ED visit is required 
under the element of ``Management of Care Transitions.'' Accordingly, 
the meaningful use of CEHRT or remote access to the care plan is 
fundamental to providing the APCM service elements of 24/7 Access to 
Care, Continuity of Care, and Management of Care Transitions under an 
advanced primary care delivery model. Requiring performance of the MIPS 
Promoting Interoperability performance category requirements 
demonstrating the meaningful use of CEHRT is similar to several 
requirements tested in CMS Innovation Center models (such as the PCF 
model's requirement that participating practices adopt and maintain 
CEHRT for electronic clinical quality measure reporting, support data 
exchange with other providers and health systems, and connect to their 
regional health information exchange (HIE),\98\ and the MCP model's 
requirement that participating practices use EHR technology that has 
been certified under the ONC Health IT Certification Program \99\). 
Furthermore, the Shared Savings Program generally requires ACO 
participants, providers/suppliers, and professionals (including MIPS 
eligible clinicians, QPs and Partial QPs participating in the ACO) to 
demonstrate meaningful use of CEHRT through the reporting of the MIPS 
Promoting Interoperability performance category measures and 
requirements annually beginning in Performance Year 2025 (Sec.  
425.507).
---------------------------------------------------------------------------

    \95\ McDonald, C.J., Tang, P.C., Hripcsak, G. and In: (eds) 
Biomedical Informatics. Springer, L. (2014), ``Electronic Health 
Record Systems,'' in Biomedical Informatics, Shortliffe, E.H. and 
Cimino, J.J., eds. London: Springer, pp. 391-421.
    \96\ Harvey, Jillian B., et al. ``Understanding how health 
systems facilitate primary care redesign.'' Health Services Research 
55 (2020): 1144-1154.
    \97\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3475839/#CR25.
    \98\ https://www.cms.gov/priorities/innovation/innovation-models/primary-care-first-model-options.
    \99\ https://www.cms.gov/priorities/innovation/innovation-models/making-care-primary.
---------------------------------------------------------------------------

    We noted as part of the CY 2025 PFS that there are many 
practitioners who would not be MIPS eligible clinicians for a year 
because they would have earned Qualifying APM Participant (QP) status 
based on meeting threshold levels of participation in an Advanced APM. 
Based on the characteristics of Advanced APMs described in Sec.  
414.1415, including the requirement that payment is based on MIPS or 
MIPS-comparable quality measures, practitioners who have earned QP 
status are necessarily engaging in performance measurement through the 
Advanced APMs in which they participate in a way that is consistent 
with advanced primary care. We also recognize there are other 
practitioners who are not MIPS eligible clinicians for other reasons,

[[Page 97892]]

such as practitioners who are newly enrolled in Medicare or bill a low 
volume of Medicare services. We proposed in the CY 2025 PFS proposed 
rule that these practitioners technically could bill for APCM services 
if they meet the service and practice level requirements to do so. We 
note that newly enrolled practitioners are only excluded from MIPS for 
one year, after which the practitioner would either be a MIPS eligible 
clinician who would need to report the MVP in order to bill for APCM 
services or excluded from MIPS on another basis such as QP status. 
status. In the case of practitioners with low Medicare volume, we 
anticipate that they would be unlikely to bill for APCM services since 
the delivery of advanced primary care generally involves time and 
resources to establish practice-level infrastructure, and the economies 
of scale usually make this a more likely investment if the 
infrastructure can be utilized across a larger patient panel.
    We also proposed as described in section II.G.c. of this final 
rule, that the performance measurement element of the APCM services 
will be satisfied for practitioners billing for APCM services through a 
TIN that is participating in a Shared Savings Program ACO for a 
performance year in which they furnish APCM services. ACOs are 
currently required to report the APP quality measure set on behalf of 
their practitioners and will be required to report the APP Plus quality 
measure set in section III.G. of this final rule. Practitioners in ACOs 
are also already being held accountable for reporting and performance 
and outcomes on many of the Universal Foundation measures already, 
which are used in the Value in Primary Care MVP, and the APP Plus 
quality measure set would fully align the Shared Savings Program's 
quality performance standard with the Universal Foundation measures 
upon the complete implementation of the APP Plus measure set.
    We proposed in the CY 2025 PFS proposed rule to include the 
performance measurement requirement as an element of APCM services 
furnished by practitioners, see section II.G.2.c. of this final rule. 
MIPS eligible clinicians who intend to report on the Value in Primary 
Care MVP for the CY 2025 performance period/2027 MIPS payment year must 
register to report the Value in Primary Care MVP as described under 
Sec.  414.1365(b). Generally, a MIPS eligible clinician must register 
for an MVP during between April 1 and November 30 of the applicable CY 
performance period to report the MVP. MIPS eligible clinicians submit 
data on measures and activities in the first quarter of the year 
following (CY 2026) the MIPS performance period. Under this proposal, a 
MIPS eligible clinician billing for APCM services furnished in 2025 and 
who satisfies the performance measurement requirement through reporting 
the Value in Primary Care MVP, would need to register for the MVP 
between April and November of 2025 and report data between January and 
March 2026 on measures and activities in the Value in Primary Care MVP 
relating to services furnished in 2025. A MIPS eligible clinician 
billing for APCM services furnished in 2026 and who satisfies the 
performance measurement requirement through reporting the Value in 
Primary Care MVP, would need to register for the Value in Primary Care 
MVP between April and November of 2026, and report data between January 
and March of 2027 on measures and activities in the Value in Primary 
Care MVP relating to services furnished in 2026, and so on in 
subsequent years.
    As described in section II.G.2.c(9) of this final rule, we sought 
feedback on ways to align the APCM services with other Medicare 
programs and initiatives, such as the Shared Savings Program and the 
Quality Payment Program, including MIPS and Advanced APMs. We sought to 
create a low burden way for practitioners to furnish APCM services by 
appropriately recognizing ways in which they may meet APCM billing 
requirements as part of these programs and initiatives, including other 
ways that practitioners may be fulfilling these performance measurement 
requirements.
    We sought feedback on whether there are areas of duplication within 
the APCM service elements and practice capabilities that we should 
consider addressing.
    We also sought comment on how to appropriately align the time 
period for which the practitioner bills the monthly APCM code with the 
calendar year reporting period covered by the MVP, and how we would 
verify and enforce the performance measurement requirement of the APCM 
service.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: We received several comments supporting the practice-level 
performance measurement requirement, and a few commenters appreciated 
that we were using an existing reporting pathway via the Value in 
Primary Care MVP for practices to meet the performance measurement 
requirement. A few commenters requested that we phase the performance 
measurement requirement over time, while others requested we remove it 
entirely, indicating it may be a barrier for some entities to utilize 
the APCM codes. Several commenters suggested that we require the 
reporting of specific quality or patient experience measures, while 
several other commenters offered that we should allow the reporting of 
other, specialty-specific MVPs to fulfill the performance measurement 
requirement, as specialists may bill for APCM if they are directing the 
beneficiary's primary care and continue to be the focal point of a 
beneficiary's primary care.
    Response: We chose to propose the Value in Primary Care MVP as the 
mechanism for meeting the performance measurement requirement both 
because of the flexibility it offers practitioners in reporting on 
quality metrics that align with their patient populations and because 
the measures included in the Value in Primary Care MVP focus on the 
clinical theme of promoting quality care for patients in order to 
reduce the risk of diseases, disabilities, and death. While we 
understand that a specialist may intend to take responsibility for all 
of a patient's primary care and serve as the continuing focal point for 
all needed health care services, and meet other requirement to bill for 
APCM services, as discussed earlier, the specific measures within the 
Value in Primary Care MVP are best suited to measure the performance in 
the context of advanced primary care services; and that performance 
measurement is a key characteristic of advanced primary care that is 
critical for the improvement of primary care delivery over time. We 
appreciate the commenters' feedback and may take these points into 
consideration for possible future rulemaking. At this time, we continue 
to believe the Value in Primary Care MVP is the best fit for purposes 
of performance measurement for MIPS eligible clinicians furnishing APCM 
services. Therefore, it would not be appropriate to specify that the 
performance measurement requirement could be met by reporting a 
different MVP.
    Comment: A few commenters indicated that it may be difficult or 
expensive for some practitioners to meet the MIPS Promoting 
Interoperability performance category requirements, so the electronic 
data sharing and integration requirements of the Value in Primary Care 
MVP should be removed or delayed.
    Response: Health IT and interoperability, through electronic 
exchange of health information and having up-to-date information from

[[Page 97893]]

multiple clinicians, can have a positive impact on patient care and 
enhance efficiency and productivity. The same MIPS Promoting 
Interoperability performance category requirements we are adopting 
generally apply to those MIPS eligible clinicians who report MVPs as 
those reporting traditional MIPS. Therefore, MIPS eligible clinicians 
who want to furnish and bill for APCM services may demonstrate their 
meaningful use of CEHRT through the MIPS Promoting Interoperability 
performance category requirements.
    We acknowledge that there are several cases in which a MIPS 
eligible clinician may be excepted from reporting for one or more MIPS 
performance categories and, thus, not all practitioners billing for 
APCM services will have to meaningfully use CEHRT and meet requirements 
for reporting the MIPS Promoting Interoperability performance category. 
A MIPS eligible clinician may request, that they be excepted from 
reporting MIPS Promoting Interoperability under the MIPS reweighting 
policies at Sec.  414.1380(c)(2)(i). If we approve the reweighting/
exception, then the MIPS eligible clinician does not need to adopt or 
meaningfully use CEHRT or report MIPS Promoting Interoperability 
objectives, measures, or attestations. Similarly, these same exceptions 
to reporting MIPS Promoting Interoperability have also been made 
available to ACO participants under 42 CFR 425.507(b).\100\
---------------------------------------------------------------------------

    \100\ Link to recent guidance is at https://www.cms.gov/files/document/frequently-asked-questions-shared-savings-program-requirement-report-objectives-and-measures-mips.pdf.
---------------------------------------------------------------------------

    We also reiterate that there are practitioners who would not be 
MIPS eligible clinicians for various reasons--for example, they would 
have earned QP status based on meeting threshold levels of 
participation in an Advanced APM, they are newly enrolled in Medicare, 
or they bill a low volume of Medicare services. These practitioners 
could bill for APCM services if they meet the service elements and 
practice-level requirements to do so, but we believe it is appropriate 
for several reasons not to require these practitioners to meet the 
performance measurement requirement for APCM services through reporting 
the Value in Primary Care MVP to MIPS. Eligible clinicians excluded 
from MIPS based on their QP status earned through sufficient 
participation in an Advanced APM are necessarily engaging in 
performance measurement through the Advanced APMs in which they 
participate in a way that is consistent with advanced primary care. As 
noted previously, Advanced APMs must meet several criteria including 
payment based on MIPS or MIPS-comparable quality measures, CEHRT use, 
and assumption of more than a nominal amount of financial risk. Newly 
enrolled practitioners are excluded from MIPS for only one year, after 
which the practitioner would need to meet the performance measurement 
requirement to bill for APCM services. While some newly enrolled 
practitioners would not report at all during this initial year, we note 
that many others would furnish APCM services as part of a group 
practice with other practitioners who deliver advanced primary care. 
Such a practice would be likely to meet the practice-level requirements 
with respect to other practitioners in the group who may bill for APCM 
services. As for eligible clinicians excluded from MIPS based on low 
Medicare volume, these practitioners are unlikely to furnish advanced 
primary care or bill the Medicare program for APCM services since the 
delivery of advanced primary care generally involves routine and 
ongoing care delivery, and a significant investment of time and 
resources to establish practice-level infrastructure. Such a practice 
would be more likely to make the investments necessary to provide 
advanced primary care if the infrastructure can be utilized across a 
larger patient panel. We may consider whether to address performance 
measurement requirements for these practitioners in future rulemaking.
    Comment: A few commenters suggested that we should not require 
practitioners participating in an APM to report the Value in Primary 
Care MVP. Several commenters requested that participants in other CMS 
Innovation Center models be able to meet the performance measurement 
requirement by meeting requirements of their model participation, and 
not have to report the Value in Primary Care MVP.
    Response: While we understand that practitioners participating in 
many APMs, including other Advanced APMs, are subject to performance 
measurement requirements under the APM, the measures within the Value 
in Primary Care MVP are best suited to performance evaluation in the 
delivery of advanced primary care services. We specifically identified 
the Shared Savings Program, the ACO REACH model, the Primary Care First 
model, and the Making Care Primary model, as APMs in which the 
performance measurement requirements significantly overlap with or are 
aligned with the Value in Primary Care MVP. We proposed that for 
practitioners participating in these APMs, the practice-level 
performance measurement requirement for APCM services can be met by 
meeting requirements under these APMs. At this time, the performance 
measurement requirements of other APMs are not sufficiently aligned 
with the Value in Primary Care MVP.
    Comment: Several commenters requested we clarify how APCM services 
and the performance measurement requirements could be implemented by 
Medicare Advantage or other payers, and expressed concern that other 
payers would not use the APCM coding and payment.
    Response: We designed the APCM code set, including the practice-
level performance measurement requirement, for purposes of payment 
under FFS Medicare. We recognize that the practitioners and practices 
that provide care using an advanced primary care delivery model would 
be likely to care for patients with a broad range of health care 
coverage. We also recognize that other health care payers sometimes 
pick up coding adopted for the FFS Medicare program to use for their 
own purposes. We note that the CPT Editorial Panel often considers 
establishing CPT codes that either replace or considerably overlap with 
HCPCS G-codes that CMS establishes. Other payers may consider working 
with the AMA in this regard. Additionally, we note that the code 
descriptors for the APCM services do not reflect all of the detailed, 
Medicare-specific characteristics of the billing and payment policies 
we are finalizing for APCM services. As such, we anticipate that other 
payers could adopt and use the APCM HCPCS codes by adapting their own 
billing and payment policies as needed. We note that the quality 
measures utilized in the Value in Primary Care MVP can also be utilized 
by other payers. To the extent that other payers, including Medicare 
Advantage organizations, Medicaid State plans, or commercial payers, 
decide to use the APCM codes, we encourage them to adopt requirements 
that align with ours in the interest of efficiency and burden reduction 
for practitioners. We also note that multi-payer alignment around 
performance measurement for APCM services would help focus attention on 
the Universal Foundation measures that are included in the Primary Care 
MVP.
    After consideration of public comments, we are finalizing the 
``Performance Measurement'' requirement as proposed. To satisfy this 
practice-level requirement, practitioners who are MIPS eligible 
clinicians must register for and report the Value in Primary Care MVP 
for the performance

[[Page 97894]]

year in which they bill for APCM services. A practitioner who is part 
of a TIN that is participating in a Shared Savings Program ACO or a 
REACH ACO, or in a Primary Care First or Making Care Primary practice 
would meet these requirements by virtue of meeting requirements under 
the Shared Savings Program or CMS Innovation Center ACO REACH, Making 
Primary Care Primary, or Primary Care First models.
    We acknowledge that there are many practitioners who are not MIPS 
eligible clinicians for a year because they earned QP status through 
sufficient participation in an Advanced APM. These practitioners will 
meet the performance measurement requirement for APCM services through 
their involvement in an Advanced APM. We also recognize there are other 
practitioners who are not MIPS eligible clinicians for other reasons, 
such as practitioners who are newly enrolled in Medicare or bill a low 
volume of Medicare services.
    We also acknowledge that there are several circumstances under 
which a MIPS eligible clinician may be excepted from reporting in one 
or more MIPS performance categories. Thus, some MIPS eligible 
clinicians could meet the performance measurement requirement for APCM 
services without demonstrating meaningful use of CEHRT by reporting the 
MIPS Promoting Interoperability performance category. A MIPS eligible 
clinician may request (and CMS may approve) that they be excepted from 
reporting MIPS Promoting Interoperability under the MIPS reweighting 
policies at 42 CFR 414.1380(c)(2)(i). If we approve the reweighting/
exception, then the MIPS eligible clinician does not need to adopt or 
meaningfully use CEHRT or report MIPS Promoting Interoperability 
objectives, measures, or attestations. Similarly, these same 
exclusions/exceptions to reporting MIPS Promoting Interoperability have 
also been made available to ACO participants under 42 CFR 425.507(b). 
We note that these exceptions are generally temporary due to 
extraordinary circumstances, and in general, over the long term, 
practitioners and practices are expected to report in all MIPS 
performance categories.
    We are clarifying that the practice-level performance measurement 
element of APCM services does not apply for practitioners who are not 
MIPS eligible clinicians, for example, because they are newly enrolled 
or bill a low volume of services under the Medicare. As explained 
previously, we recognize that these practitioners technically could 
bill for APCM services if they meet the other service elements and 
practice-level requirements to do so. We may consider whether to 
address performance measurement requirements for them in future 
rulemaking.
    We summarize the final service elements and practice-level 
requirements for the APCM services in Table 25.
d. Duplicative Services and Concurrent Billing Restrictions
    We proposed in the CY 2025 PFS proposed rule to identify the 
services that will overlap substantially with APCM services based on 
the elements of the scope of service for APCM which we have built into 
the service descriptors for G0556, G0557, and G0558 (see sections 
II.G.2.b. and II.G.2.c. of the CY 2025 PFS proposed rule). As such, we 
proposed that APCM services could not be billed by the same 
practitioner or another practitioner within the same practice for the 
same patient concurrent with these other services: CCM, PCM, TCM, 
interprofessional consultation, remote evaluation of patient videos/
images, virtual check-in, and e-visits. Given that we have 
intentionally designed the elements of APCM services to track closely 
with the elements of several other care management service and CTBS 
codes, these services are substantially duplicative of APCM services. 
Further, these specific services (shown in Table 26) are duplicative 
with APCM services because there is significant overlap in the patient 
populations included in the code descriptors for these services and 
APCM services, such as patients who have chronic conditions, high-risk 
conditions, or both complex and chronic conditions.

[[Page 97895]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.058

    As we have described in the sections earlier, comprehensive care 
management services are essential to providing advanced primary care in 
the context of this proposal, and many of the service elements for CCM/
PCM/TCM shown in Table 23 are substantially the same as the elements we 
proposed for APCM services.
    Also described earlier, providing CTBS is an essential element of 
the delivery of care under an advanced primary care model of care. 
Recognizing this, we designed the APCM service elements to 
substantially overlap with the elements of the CTBS (for example, 
interprofessional consultation and e-Visits) shown in Table 26. CTBS 
are used in delivery of advanced primary care to maintain ongoing 
communication with patients and enable interprofessional care teams to 
provide comprehensive support to manage chronic conditions over time, 
which will allow patients to access their usual source of care more 
conveniently.\101\ Furthermore,

[[Page 97896]]

interprofessional consultation can help promote integration of 
behavioral health and primary care.\102\
---------------------------------------------------------------------------

    \101\ Levine DM, Linder JA. Retail Clinics Shine a Harsh Light 
on the Failure of Primary Care Access. J Gen Intern Med. 
2016;31(3):260-262.; Dorsey ER, Topol EJ. State of Telehealth. N 
Engl J Med. 2016;375(2): 154-161.; Powell, Rhea E., et al. ``Patient 
perceptions of telehealth primary care video visits.'' The Annals of 
Family Medicine 15.3 (2017): 225-229.
    \102\ We are planning a separate proposal on expanding who can 
bill for IPC, including clinical psychologists, LCSWs, marriage and 
family therapists (MFTs), and MHCs; see further discussion in 
section II.I. of this final rule.
---------------------------------------------------------------------------

    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters were mixed on many of our proposals. Many 
commenters did not agree with our proposed concurrent billing 
restrictions for the codes shown in Table 26 by a practitioner in the 
same practice as a practitioner who is furnishing APCM services for the 
patient. Some commenters pointed out that specialists within large 
hospital systems or multispecialty clinics may fall under the ``same 
practice'' restriction; these commenters also suggested that 
beneficiaries receiving APCM services from their primary care 
practitioner should still be eligible to receive PCM and many of the 
interprofessional consultation services furnished by specialists if 
needed to augment a beneficiary's care. One commenter stated that a 
patient may be receiving APCM services from their primary care 
practitioner but receiving PCM from their cardiologist who works for 
the same practice and was concerned the proposed concurrent billing 
restriction would impede the beneficiary's care. Other commenters 
expressed similar concerns regarding our inclusion of all of the 
interprofessional consultation codes, again stating that these codes 
are most often used by consulting specialists, and expressing concern 
that limiting these concurrent billing for these codes may have a 
cooling effect on specialists willing to provide consultations.
    Most commenters agreed that CCM and TCM were duplicative with APCM 
if performed by the same practitioner. A few commenters stated that TCM 
may be duplicative, but that it depends on the reason for the 
hospitalization. For example, if a patient is hospitalized for cancer 
treatment or a surgery, it may be an oncologist or surgeon performing 
TCM, rather than the primary care practitioner performing APCM.
    Response: Our intention in proposing the concurrent billing 
restrictions for APCM services and the identified codes was to prevent 
duplicative payment for advanced primary care services by multiple 
practitioners in the same practice. However, we agree with commenters 
who recommended that specialists should still be able to furnish the 
services listed in Table 26 concurrently to patients receiving APCM 
from another practitioner, when medically reasonable and necessary. We 
recognize that there are clinical circumstances where a specialist 
would be the practitioner who furnishes and primarily oversees the care 
of a beneficiary during one or more months. For example, an oncologist 
could primarily manage care, including providing TCM services, for a 
patient who is recently discharged after an admission related to 
chemotherapy side effects while another practitioner in the same 
practice could appropriately continue to furnish APCM services for the 
same patient during the same month. We agree with commenters that the 
services listed in Table 26 are not necessarily duplicative when billed 
by another practitioner in the same practice as the practitioner who is 
billing for APCM services, and accordingly, are finalizing a modified 
policy. After consideration of public comments, we are not finalizing 
the concurrent billing restrictions, except with respect to the one 
practitioner who is furnishing APCM services. The services listed in 
Table 26 may not be billed for a patient in the same month with APCM 
services by the same practitioner but may be billed when medically 
necessary for a patient in the same month by a practitioner other than 
the practitioner furnishing APCM services (HCPCS G0556, G0557, and 
G0558). We remain committed to engaging with interested parties on 
these policies, and we may examine these requirements further in future 
rulemaking.
    We also considered whether other care management services (such as 
Behavioral Health Integration (BHI)), services addressing HRSNs 
(Community Health Integration (CHI), Social Determinants of Health Risk 
Assessment, and Principal Illness Navigation (PIN)), and/or other CTBS 
(Remote Physiologic Monitoring (RPM) and Remote Therapeutic Monitoring 
(RTM)) would be duplicative of the APCM services. These services, when 
appropriate, may complement APCM services rather than substantially 
overlap or duplicate services, and that these other services are 
sufficiently different from the APCM services in the nature and extent 
of the interventions and the qualifications of individuals providing 
the services, to allow concurrent billing for services when 
appropriate. While these may be services that a practitioner using the 
advanced primary care model will be likely to furnish, when 
appropriate, they are not part of the core, routinely and universally 
essential elements of the advanced primary care model. Several of these 
other services (such as BHI, CHI, SDOH Risk Assessment, and PIN) could 
be supplemental to APCM for patients that have specific identified 
health care needs.
    We sought more information from interested parties through our 
Advanced Primary Care RFI about whether to consider incorporating 
additional service elements into the ACPM service elements and 
valuation for APCM codes; and whether and, if so, how to best 
incorporate E/M services into future coding (see section II.G.3. of 
this proposed rule). We note that, for BHI services, there is an 
established evidence base for approaches to caring for beneficiaries 
with behavioral health conditions which involve integration in the 
primary care setting, are typically provided by a primary care team, 
and include structured care management with regular assessments of 
clinical status and modification of treatment. 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. For BHI in particular, including CPT 
codes 99492, 99493, 99494, and 99484 and HCPCS code G0323, we also 
sought information regarding how evolving changes in practice may 
warrant reconsideration of payment and coding policies.
    We proposed that the care management and CTBS codes that are 
identified in Table 23 could not be separately billed with the APCM 
codes for the same beneficiary by the same practitioner, or a different 
one within the same practice, for the same service period. As explained 
previously, we are modifying this proposal to apply the concurrent 
billing restrictions for these codes only to the practitioner who bills 
for APCM services. We stated that we believed this would prevent 
duplicative payments for substantially similar services and would also 
be consistent with how we have paid for potentially overlapping care 
management services in the past.
    As we refine our APCM policies, we note that we did not propose to 
make changes to the coding and payment policies for the existing care 
management and CTBS services, other than to prohibit concurrent billing 
for the same patient during the same month. For CY 2025, those codes 
will

[[Page 97897]]

still be available for practitioners who do not furnish care using the 
advanced primary care model or who may find that the existing care 
management and CTBS codes best describe the services they furnish.
    We also sought comment on potential overlap between APCM services 
and other services, including but not limited to care management and 
care coordination and other CTBS. If interested parties identify 
overlaps between APCM and other services, we sought comment on whether 
the degree of overlap will warrant a policy to restrict the services 
from being billed concurrently with APCM. We also sought comment on 
whether any overlap will depend upon whether the same or a different 
practitioner reports the services.
    As we test new CMS Innovation Center models that include payments 
for the services defined earlier, including CCM, PCM, TCM, 
interprofessional consultation, remote evaluation of patient videos/
images, virtual check-in, and e-visits, or as changes in the advanced 
primary care model of care or more general changes to Medicare payment 
policy take place that affect existing CMS Innovation Center models, 
consistent with existing policy, we will address potential overlaps 
between payments made to model participants with our payment for APCM, 
elements of the proposed APCM service, and these duplicative services, 
and seek to implement appropriate payment policies.
    We received public comments on these considerations. The following 
is a summary of the comments we received and our responses.
    Comment: Nearly all commenters were supportive of our proposal to 
allow concurrent billing of BHI, CHI, PIN, PIN-PS, and the SDOH Risk 
Assessment with APCM services. Commenters agreed that these services 
are unique and serve specific needs not otherwise met by the proposed 
APCM coding. Many commenters discussed the importance of behavioral 
health (including mental health and substance use disorders) on overall 
health and urged 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. These 
commenters also urged us to examine utilization of APCM services in 
conjunction with BHI, PIN, and PIN-PS, to inform future work. One 
commenter requested clarification on whether the Psychiatric 
Collaborative Care Model (CoCM) codes could be billed in conjunction 
with APCM.
    Response: We agree with commenters that these services are 
complementary to APCM services, and do not represent duplication of 
services as long as time and effort involved in furnishing these 
services are not counted more than once, requirements to bill the other 
services are met, and the services are medically reasonable and 
necessary. We also agree with commenters that behavioral health is 
important in the context of overall health, and we will take comments 
recommending strategies for further integration into consideration for 
future rulemaking. We are also clarifying that the BHI codes paid under 
the PFS (CPT codes 99492, 99493, 99494, and 99484 and HCPCS code 
G0323), including CoCM, can be billed concurrently with the APCM codes 
when all applicable requirements for billing both codes are met. As we 
stated in the CY 2025 proposed rule, for BHI services, there is an 
established evidence base for approaches to caring for beneficiaries 
with behavioral health conditions which involve integration in the 
primary care setting, are typically provided by a primary care team, 
and include structured care management with regular assessments of 
clinical status and modification of treatment. 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. We continue to be interested in the use 
of BHI 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.
    Comment: Some commenters expressed that RTM and RPM should not be 
included within the APCM codes, but rather billed separately as 
complementary, non-duplicative services. A few commenters stated that 
RTM and RPM services are not core services that are routinely and 
universally essential elements of advanced primary care models and 
should therefore not be included in the definition of APCM. One 
commenter asserted that these services are not likely to be furnished 
by the types of practitioners who would also furnish advanced primary 
care services.
    Response: We agree with commenters that RTM and RPM services are 
complementary to APCM services, and do not represent duplication of 
services, as long as time and effort involved in furnishing these 
services are not counted more than once, requirements to bill the other 
services are met, and the services are medically reasonable and 
necessary. While we agree with the commenter that these services may 
not be part of the core, routinely and universally essential elements 
of the advanced primary care model, we disagree that these services are 
unlikely to be furnished by a practitioner also furnishing advanced 
primary care services. We are finalizing our policy that RTM and RPM 
services can be billed concurrently with APCM services when all 
applicable requirements for billing both services are met. We continue 
to be interested in the use of RPM and RTM services as they relate to 
advanced primary care and welcome input from interested parties.
    After consideration of public comments, we are finalizing our 
proposal to allow concurrent billing for BHI, CHI, PIN, PIN-PS, the 
SDOH Risk Assessment, RPM, and RTM services in the same month as APCM 
services. We remain committed to engaging with interested parties on 
these policies, including whether there is overlap between APCM 
services and other services and whether to consider incorporating 
additional service elements into the APCM service elements and 
valuation for APCM codes, and we may examine these policies further in 
future rulemaking.
e. Valuation of APCM Services--HCPCS Codes G0556, G0557, and G0558
    To improve the accuracy of payment for the kinds of services 
furnished as part of advanced primary care and reduce the 
administrative burden associated with current coding and billing rules, 
we proposed to create three HCPCS codes to use for reporting the APCM 
service (HCPCS codes G0556, G0557, and G0558) (sections II.G.2.b. and 
II.G.2.c. of the CY 2025 PFS proposed rule). Although these codes are 
unique in that they would be created to differentially pay for advanced 
primary care management, the APCM services incorporate elements of 
existing services with the understanding that some patients will 
require more resources and some fewer based on variability in patient 
complexity and needs (see section II.G.2.b. of the CY 2025 PFS proposed 
rule). As we ordinarily do, we proposed to base the PFS valuation for 
APCM codes on the resources involved in furnishing the typical case of 
the service which may not necessarily reflect the actual resources 
involved in furnishing every individual service.
    We detailed our methods to identify a typical case and set of 
resources involved in furnishing APCM, and the

[[Page 97898]]

valuation of these codes. To value APCM, we compared the service 
elements described by the APCM codes to the values we have established 
for the specific care management and CTBS codes on which we modeled the 
service elements of the APCM codes and which we built into the service 
descriptors for HCPCS codes G0556, G0557, and G0558 (see Table 23 and 
sections II.G.2.b. through II.G.2.d. of the CY 2025 PFS proposed rule). 
As stated above, the elements of APCM services reflect the 
comprehensive approach to care management involved in care delivery 
using the advanced primary care model. This is a model of primary care 
that is being integrated into current medical practice. As such, we 
stated that it would be appropriate to use the current valuation and 
uptake of the codes on which we modeled the APCM codes to inform our 
valuation of APCM services. Using Medicare FFS claims data and evidence 
from our primary care models, we sought to understand how these 
different services have been used historically and relate that 
information to the way we think about the service elements for APCM and 
the valuation of the three APCM code levels. We know that for Medicare 
beneficiaries who receive care management services during a year, the 
non-complex CCM base code is billed on average for five months and with 
three add-on codes during those five months. We also know that initial 
information from practitioner interviews conducted as part of our CCM 
evaluation efforts indicates that practitioners overwhelmingly meet and 
exceed the 20-minute threshold time for billing the non-complex CCM 
base code; typically, these practitioners reported spending between 45 
minutes and an hour per month on CCM services for each patient, with 
times ranging between 20 minutes and several hours per month (81 FR 
80244). However, this does not account for the care management services 
that are provided beyond one time-based billing interval and without 
reaching the next; nor does it account for the resources involved in 
maintaining certain advanced primary care practice capabilities and 
continuous readiness and monitoring activities, including patient 
population monitoring and care needs assessment, to fully furnish and 
bill APCM services as is medically reasonable and necessary for any 
individual patient during any calendar month. Finally, this does not 
account for changes to utilization of APCM that may occur as a result 
of the billing and documentation requirements for APCM services when 
compared to the current coding and payment for care management and CTBS 
services. While our aim is to value APCM services based on refined 
assumptions that better recognize likely utilization of the new codes 
and the work required to furnish APCM services, this is challenging 
without more information. We welcomed comments on ideas for other 
sources of data that would help us to assess APCM services valuation.
    We considered various alternatives for valuing the APCM services 
and how these may impact the broader health care landscape given that 
primary care is of such import across the country. We proposed to set 
baseline APCM code values for this first year based on historical 
utilization of the care management services we have drawn upon in 
designing the APCM codes. We noted that utilization of the care 
management services has been significantly higher than CTBS, and we 
found that CTBS are not typically billed for a patient in the same 
month as care management services. It is unclear whether the kinds of 
services described by the CTBS are not typically provided during these 
months or whether they are being provided but not separately reported. 
We will continue to seek information, including from public comments on 
the proposed rule, to help us identify the best approach to reflecting 
the proposed CTBS elements incorporated into the APCM monthly bundle, 
and we remain interested in data that could illuminate differences 
between what services are furnished and what is being reported 
separately.
    We will continue to consider refinements to the valuation of APCM 
codes to reflect available information about changes in the volume and 
mix of care management and communication activities being furnished as 
part of APCM services in the delivery of advanced primary care.
    We received many public comments on our proposed valuation. 
Following is a summary of comments received and our responses.
    Comment: We received many comments in response to our request for 
other sources of data that would help us assess the valuation for APCM. 
Commenters expressed concerns with using the RUC as the basis for this 
information, citing underrepresentation on the RUC for primary care and 
historical underpayment of primary care services. Many commenters 
stated the need for empirical data for physician work, time and 
practice expense requirements for APCM services, with a few commenters 
discussing the challenge of adequately accounting for the resource 
costs associated with care management services and the use of team-
based care. Many commenters discussed the need for time studies to 
validate valuation, and others stated there is a need for more research 
into primary care services that are not currently recognized for 
payment. One commenter suggested that physician time studies be 
conducted utilizing time stamp data from EHRs to accurately log how 
long practitioners spend on documentation. A few of the commenters 
asked us to conduct these studies, with another commenter asking us and 
Congress to undertake this work.
    Response: We value the work and effort the RUC undertakes to 
provide us with data and recommendations for valuing services under the 
PFS, and we also remind commenters that we do not exclusively rely on 
RUC recommendations and can receive data and recommendations from other 
outside sources as well. We also agree with commenters that empirical 
information about how primary care services are provided would be 
invaluable to assist us in making refinements to payment for APCM 
services to improve accuracy. We are especially interested in practice-
level data that are empirical, routinely updated, able to be audited, 
and comprehensive. We are also open to receiving partial information, 
and we note that interested parties can submit information to us 
through the potentially misvalued codes process that is described in 
Section II.C. of this final rule. We note that submissions for 
consideration in our next annual rule cycle should be received by our 
February 10th deadline. For example, this could include information 
related to the practice expense involved in furnishing these services, 
such as the types of clinical staff, disposable supplies, and 
equipment, as well as the physician or practitioner work involved in 
furnishing these services. We note that the CY 2025 PFS public use 
files, which are available on the CMS website under downloads for the 
CY 2025 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html, 
include a sample PE spreadsheet and a sample work spreadsheet.
    Additionally, we are open to alternative recommendations for how to 
price these and other services, and we will consider all options 
presented to us, with a preference for information with empirical 
evidence behind it. We welcome interested parties to engage with us on 
how external data sources could be developed and leveraged.

[[Page 97899]]

    Comment: Commenters generally suggested that the proposed valuation 
for APCM services underestimated the time and resources involved in 
providing the activities required under APCM such as 24/7 access to 
care, patient population-level management, and performance management. 
Commenters also stated concern with the increased costs of staff and 
infrastructure potentially associated with performing APCM. Commenters 
stated that with the low valuation proposed, practitioners would 
continue to choose existing care management codes or other PFS 
services, resulting in low uptake for APCM. Still others were concerned 
that inadequate payment could discourage provider participation, 
particularly in underserved areas where the need for comprehensive, 
team-based care is greatest. These commenters stated that smaller 
practices in rural areas may lack the potential to benefit from 
economies of scale to support the infrastructure necessary to meet APCM 
requirements.
    Response: We generally agree with commenters that these services 
may be undervalued, given the time and resources that are necessary for 
the provision of advanced primary care, but we also recognize there 
could be a wide range of potential resource costs, especially during 
the initial use of the codes. Consequently, we may revisit valuation of 
these APCM services in future rulemaking. As previously described, if 
interested parties submit additional data and information upon which to 
base revised valuation assumptions, that information could form a basis 
upon which we could refine values for the APCM codes through future 
rulemaking. We appreciate that the scope and service elements for APCM 
are more expansive than existing CCM and PCM coding; however, we 
recognize that some beneficiaries will need more services and some 
less, and thus, as we ordinarily do, we proposed to value these 
services based upon the typical service. We agree with commenters that 
ensuring that these services are available to rural and underserved 
populations is an important priority. We may consider making 
refinements to the valuation, billing rules, and documentation 
requirements through future rulemaking, as necessary.
    Comment: Commenters discussed our valuation methodology, urging us 
to avoid continuing what they view as underinvestment in primary care 
by valuing APCM services with reference to CCM services. Commenters 
also stated that CCM is not a correct reference for valuation of APCM 
services as CCM does not include all the service elements required for 
APCM. Other commenters recommended we use CMS Innovation Center model 
per beneficiary per month (PBPM) payments and conduct greater research 
to determine more appropriate payment rates. Commenters also discussed 
valuation in the context of concurrent billing restrictions, with some 
commenters citing the inclusion of CTBS and interprofessional 
consultation services for which payment rates are in some cases higher 
than the monthly rate for APCM.
    Response: We continue to believe that the most accurate mechanism 
for determining the appropriate work RVU for this service is to refer 
to values established for existing CPT codes. We note further that 
using CCM codes as a reference to value the APCM codes would have the 
benefit of assuring appropriate relativity with similar services.
    Comment: We also received comments that were in favor of our 
proposed valuations. A few commenters recommended that we finalize as 
proposed and monitor utilization as the codes are implemented. Another 
commenter recommended that we finalize as proposed, even if the code 
descriptors and associated payment rates need to be refined in the 
future as interested parties gain experience with the new codes and 
provide feedback.
    Response: We agree with commenters that the valuation of these 
services is likely to be an iterative process, and we may revisit our 
valuation of these codes in future rulemaking.
(1) APCM Level 1 (HCPCS Code G0556)
    For APCM Level 1, we assume the typical case will involve fewer 
resources than the current care management services based upon the 
G0556 code descriptor and a broad eligible population that will require 
limited monthly APCM services; however, it will also involve certain 
resources inherent to maintaining advanced primary care practice 
capabilities and continuous readiness and monitoring activities, 
including patient population monitoring and care needs assessment, to 
fully furnish and bill APCM. As described in sections II.G.2.b. and 
II.G.2.c. of the CY 2025 PFS proposed rule, certain elements of the 
APCM service require resources to maintain continuous readiness and 
monitoring activities to furnish covered services consistent with the 
advanced primary care model of care. We concluded that the APCM Level 1 
services will be similar in work to that of two billing units of the 
non-complex code for CCM services (CPT code 99490 (CCM services 
provided by clinical staff per calendar month)) over the course of a 
year, and therefore based the inputs on CPT code 99490 multiplied by 
\1/6\ (or 2 units over 12 months). Specifically, we propose a work RVU 
for G0556 of 0.17, which is the work RVU for CPT code 99490 multiplied 
by \1/6\. The resulting PE and MP RVUs are proportionately similar to 
those for CPT code 99490 and are available in Addendum B (see https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/addendum-a-b-updates).\103\ Table 27 displays payment amount 
estimates using the 2024 PFS Conversion Factor.
---------------------------------------------------------------------------

    \103\ https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices?DLSort=2&DLEntries=10&DLPage=1&DLSortDir=descending.
---------------------------------------------------------------------------

    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters expressed concerns that the proposed 
valuation of G0556 would be inadequate to support the work and 
necessary infrastructure of this care delivery model. Several 
commenters pointed out that the proposed work RVU of 0.17 for G0556 is 
significantly lower than or similar to the work RVUs for the following 
duplicative component services that cannot be billed during the same 
period with APCM: CPT code 99426 (PCM, first 30 minutes) which has a 
work RVU of 1.00 and CPT code 99427 (PCM, each additional 30 minutes) 
which has a work RVU of 0.71, and these codes would be appropriate for 
managing similar patients as G0556. Another commenter stated that HCPCS 
code G2012 (Virtual check-in), which is a type of CTBS that cannot be 
billed concurrently with APCM is reimbursed at a national rate of 
$13.81, which is less than the proposed rate for one month of care as 
described by HCPCS code G0556. Several commenters also asserted that 
HCPCS code G0556 would result in more billing and administrative costs 
than would be covered by the proposed $10 payment, leading to decreased 
uptake. A few commenters also discussed a ``payment gap'' between G0556 
and G0557, stating that the difference in both work and practice 
expense (PE) between the two codes is not as disparate as a $40 change 
in payment suggests.
    Response: We are sensitive to the administrative burden of new 
coding and payment and sought to reduce administrative burden through 
the use of bundling elements of existing codes

[[Page 97900]]

for APCM. We appreciate the commenters' thoughts on the investments 
required to perform APCM in general, and we understand the commenters' 
perspectives about the ``payment gap'' between two codes that require 
the same level of practice capabilities. We look forward to continuing 
to engage with interested parties as these codes are billed, and we 
remain open to feedback on how to best value these codes in future 
rulemaking.
    Comment: Commenters had several proposed solutions to increase the 
valuation of HCPCS code G0556. Several commenters suggested that we 
increase the work RVU for G0556 to 0.77, equal to that of G0557, to 
reflect the equivalent physician time required when managing any number 
of chronic conditions and to better align with existing work RVUs for 
CCM and PCM. Another commenter suggested we align the valuation of 
HCPCS code G0556 to the population-based payments made under the 
Primary Care First (PCF) model. Another commenter agreed that we should 
use PCM and the PCF model's payments as benchmarks but instead 
suggested that we increase the work RVU for G0556 to 0.25, equal to 
three billing units of CPT code 99490 over an annual period, or 60 
minutes of physician work in CCM equivalents. This commenter also 
suggested that the proposed work RVU of 0.17 underestimates the 
physician work required to establish and maintain these plans of care, 
even if many service elements are not performed every month. This 
commenter estimated that the creation of a care plan as described in 
the service elements would take between 20 and 40 minutes, which they 
viewed as incompatible with our proposal of estimating 2 units of 99490 
or 40 minutes of work time spread over 12 months.
    Another commenter argued that the assumption that Level 1 APCM 
services would be similar in work to that of two billing units of CPT 
code 99490 over the course of a year is flawed, as it assumes a ``sick 
care'' model of care delivery rather than one focused on prevention. 
Several commenters also pointed out that the infrastructure required to 
furnish all of the practice elements must be in place even if that 
beneficiary does not need those services that month and that this was 
especially true for beneficiaries receiving G0556.
    Response: We appreciate the alternate methods suggested by 
commenters, and we are persuaded that the proposed rate for G0556 would 
not fully capture the relative resource costs involved in providing 
continuous, ongoing care management through an advanced primary care 
model of care delivery. We agree with commenters that the methodology 
suggested of increasing HCPCS code G0556 to the equivalent of three 
units of 99490 divided over 12 months would better account for the work 
and PE involved in furnishing APCM services.
    After consideration of public comments, we are increasing the 
valuation of HCPCS code G0556 to reflect the equivalent of three units 
of 99490 or 60 minutes of work time in CCM equivalents divided over 12 
months, or approximately $15 per month. This represents a work RVU of 
0.25. We recognize this is a relatively modest increase in valuation 
for G0556, and we may revisit the valuation of this and other APCM 
codes in future rulemaking.
(2) APCM Level 2 (HCPCS Code G0557)
    For APCM Level 2, which describes APCM services to patients with 
two or more chronic conditions we assumed the typical, higher intensity 
work associated with managing a patient with multiple chronic 
conditions will involve significantly more resources and require more, 
and more frequent, APCM service elements. We concluded that the APCM 
Level 2 services will be similar to current utilization assumptions of 
five billing units of the non-complex CCM code (CPT codes 99490) (CCM 
services provided by clinical staff per calendar month) and three 
billing units of add-on codes annually, given that, for Medicare 
beneficiaries who receive these CCM services during a year, the non-
complex CCM base code is billed on average for five months and with 
three add-on codes during those 5 months. Additionally, we proposed to 
account for continued underutilization of CCM services in this patient 
population by adding one billing unit of the complex CCM code (CPT code 
99490 (CCM services provided by clinical staff per calendar month) 
annually. As we noted in the CY 2020 PFS final rule, ``utilization [of 
CCM services] has reached approximately 75 percent of the level we 
initially assumed under the PFS when we began paying for CCM services 
separately under the PFS; while these are positive results, this 
evidences that CCM services (especially complex CCM services) continue 
to be underutilized,'' as discussed in the CY 2020 PFS final rule (81 
FR 80244 and 84 FR 62688), considering the number of eligible Medicare 
beneficiaries. In 2019, approximately 22.6 million FFS beneficiaries 
were identified as being potentially eligible for CCM (or 63.4 percent 
of the 35.6 million Medicare FFS beneficiaries); however, the use of 
CCM services was low among potentially eligible beneficiaries, such 
that just 4.0 percent of beneficiaries potentially eligible for CCM 
received any CCM services.\104\ Therefore, we based the proposed inputs 
on CPT code 99490 multiplied by \5/12\ (or, five units over 12 months), 
plus CPT add-on code 99439 (CCM services each additional 30 minutes by 
clinical staff directed by a physician or other qualified health care 
professional, per calendar month) multiplied by \1/6\ (or two units), 
plus CPT add-on code 99489 (Complex CCM services each additional 30 
minutes by clinical staff directed by a physician or other qualified 
health care professional, per calendar month) multiplied by \1/12\ (one 
unit), plus CPT code 99487 (Complex CCM services provided by clinical 
staff directed by a physician or other qualified health care 
professional, per calendar month) multiplied by \1/12\ (one unit). 
Specifically, we proposed a work RVU for G0557 of 0.77, which is the 
sum of the work RVU for CPT codes 99490, 99439, 99489, and 99487 
multiplied by their respective proportions above. The resulting PE and 
MP RVUs are proportionately similar and are available in Addendum B 
(see https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/addendum-a-b-updates).\105\ Table 27 displays 
payment amount estimates using the 2024 PFS Conversion Factor.
---------------------------------------------------------------------------

    \104\ The determination of potential eligibility for CCM was 
based on presence of two or more Chronic Condition Warehouse (CCW) 
chronic condition flags, one of which was hypertension, 
hyperlipidemia, or diabetes. Beneficiaries on Medicare Advantage, 
with end stage renal disease (ESRD) or using the hospice benefit 
were excluded. ASPE. Analysis of 2019 Medicare Fee-for-Service (FFS) 
Claims for Chronic Care Management (CCM) and Transitional Care 
Management (TCM) Services. March 2022. https://aspe.hhs.gov/sites/default/files/documents/31b7d0eeb7decf52f95d569ada0733b4/CCM-TCM-Descriptive-Analysis.pdf.
    \105\ https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices?DLSort=2&DLEntries=10&DLPage=1&DLSortDir=descending.
---------------------------------------------------------------------------

    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Several commenters appreciated our attempt to account for 
the underutilization of CCM services in the proposed valuation, but one 
commenter asserted that those adjustments still only account for the 
resources associated with CCM and not the increased work or practice 
expenses incurred with maintaining practice-level advanced primary care 
capabilities or providing APCM services to more beneficiaries.

[[Page 97901]]

    Like HCPCS code G0556, several commenters pointed out that the 
proposed work RVU of 0.77 for HCPCS code G0557 is lower than for the 
following duplicative component services that cannot be billed during 
the same period with APCM: CPT code 99426 (PCM, first 30 minutes) which 
has a work RVU of 1.00; CPT code 99427 (PCM, each additional 30 
minutes) which has a work RVU of 0.71; CPT code 99490 (CCM, clinical 
staff first 20 minutes) which has a work RVU of 1.00; and CPT code 
99439 (CCM, clinical staff each additional 20 minutes) which has a work 
RVU of 0.70. Commenters assert that the proposed HCPCS code G0557 
closely resembles CPT codes 99490 and 99439 for CCM, as all three codes 
would apply to care management for patients with two or more chronic 
conditions. One commenter recommended that payment of G0557 be equal to 
or greater than CPT code 99490. Another commenter asserted that the 
proposed valuation for G0557 does not account for the extensive work in 
creating a comprehensive care plan, citing that this was an initial 
barrier when the care management codes were first introduced and 
improved somewhat once the guidelines became less prescriptive.
    Another commenter was concerned about an inconsistency between the 
assumptions underlying valuation and those underlying our utilization 
estimates for the services. The commenter explained that for purposes 
of estimating utilization, we assumed that beneficiaries who receive 
APCM services will do so for 12 months each year; however, the 
valuation methodology assumed beneficiaries receive only a fraction of 
that--for example, the proposed inputs for G0557 were based on CPT code 
99490 multiplied by \5/12\, CPT add-on code 99439 multiplied by \1/6\, 
CPT add-on code 99489 multiplied by \1/12\, and CPT code 99487 
multiplied by \1/12\. From their perspective, it seems unreasonable to 
expect practices to maintain APCM capabilities and provide APCM 
services for 12 months while setting the value of those capabilities 
and services at a fraction of that time.
    Response: We thank commenters for their feedback. We continue to 
reiterate that because the APCM codes are a bundle of existing care 
management and other services, not all of which would be furnished in 
each month in which the APCM services are billed, and the estimates of 
utilization of services are divided across the span of 12 months, we 
believe that our proposed valuation reference is an appropriate 
approach to estimate the work, time, and intensity of HCPCS code G0557. 
We also reiterate our assumption that beneficiaries receiving APCM 
services may not require any services one month and may have increased 
utilization the next month. We are attempting to reflect the varying 
care needs of the beneficiary, with an understanding that needs often 
ebb and flow over a period of months for which APCM services are 
furnished. As discussed previously, we appreciate that APCM services 
require different practice capabilities as compared to other care 
management services and may revisit valuation of all APCM services in 
future rulemaking.
    After consideration of public comments, we are finalizing the 
valuation of G0557 as proposed. We are finalizing the proposed work RVU 
of 0.77.
(3) APCM Level 3 (HCPCS Code G0558)
    For APCM Level 3 (HCPCS code G0558), which describes APCM services 
to patients with QMB status and two or more chronic conditions, we 
proposed to value the service as a relative increase to the valuation 
of APCM Level 2 based on recent Medicare expenditure data for dually 
eligible Medicare beneficiaries. In CY 2021, per person per year 
spending on dually eligible beneficiaries was $24,370 and for non-
dually eligible beneficiaries was $11,172. The difference between these 
two amounts is 218 percent. We have considered the likely resource 
demands and intensity of the practitioner-patient interaction for this 
patient population, consistent with our coding and valuation policies 
that reflect variations in resource cost and patient-centered care 
delivery policies.\106\ By taking into consideration the difference in 
Medicare spending on a per person per year basis between dually 
eligible and non-dually eligible Medicare beneficiaries, we can capture 
the increased resources involved in furnishing APCM services to 
patients with QMB status and multiple chronic conditions. Therefore, we 
based the inputs for the APCM Level 3 code on the APCM Level 2 inputs 
multiplied by 218 percent. Specifically, we proposed a work RVU for 
G0558 of 1.67, which is the work RVU for G0557 multiplied by 218 
percent. The resulting proposed PE and MP RVUs are proportionately 
similar to those and are available in Addendum B (see https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/addendum-a-b-updates).\107\ Table 27 displays payment amount 
estimates using the 2024 PFS Conversion Factor.
---------------------------------------------------------------------------

    \106\ https://www.macpac.gov/wp-content/uploads/2024/01/Jan24_MedPAC_MACPAC_DualsDataBook-508.pdf.
    \107\ https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices?DLSort=2&DLEntries=10&DLPage=1&DLSortDir=descending.
---------------------------------------------------------------------------

    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Most of the comments we received about the valuation of 
HCPCS code G0558 were in conjunction with comments about expanding or 
changing our proposed population for HCPCS code G0558 and did not 
provide specific valuation recommendations. A few commenters thanked us 
for this proposal and hoped that including QMBs specifically would 
incentivize practitioners to care for this population. Other commenters 
stated that CMS Innovation Center models like Primary Care First (PCF) 
and Comprehensive Primary Care Plus (CPC+) make high complexity payment 
rates of $200-$250, and these commenters recommended we align G0558 
with these values.
    Response: We appreciate the reference to various CMS Innovation 
Center models. We note that each of the models targeted specific 
patient populations with different approaches and payment 
methodologies, serving a different but complementary purpose than the 
coding and payment policies for APCM services. We share the hope of 
commenters that HCPCS code G0558 will encourage practitioners to 
furnish APCM services to this population. As discussed previously, we 
may revisit APCM service valuations in future rulemaking.
    After consideration of public comments, we are finalizing the 
valuation of G0558 as proposed. We are finalizing the proposed work RVU 
of 1.67.
    Table 27 includes the finalized codes, short descriptors, reference 
codes, work RVUs, and approximate payment rate. For illustration 
purposes, we multiplied the APCM relative values for work, practice 
expense (PE), and malpractice (MP), without geographic adjustment, by 
the CY 2024 conversion factor (CF) ($32.7442) to convert the relative 
value units (RVUs) into approximate national payment rates.

[[Page 97902]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.059

    We sought feedback on whether these values appropriately reflect 
the resource costs involved in furnishing these services, or whether 
adjustments to the values or additional coding may be needed. We are 
broadly interested in public comments and input from interested parties 
on potential refinements in code and service definitions, including how 
we might refine our utilization assumptions for these codes, and other 
important information involving coding and payment for APCM services to 
better reflect the current practice of advanced primary care, including 
elements of CTBS and care management services. We are interested in 
developing a better understanding of the resource costs involved in 
furnishing comprehensive care management as part of advanced primary 
care to various patient populations, including specifically QMBs.
    We intend to engage in further discussions with the public over the 
next several years to potentially refine our policies for future years, 
and we expect that having APCM utilization data, once the codes are 
established, will inform future refinement of the valuations for these 
codes.
    Finally, as described in the Advanced Primary Care RFI that 
follows, we note that there is potential for the valuation of these 
codes and future related codes to change and/or scale into larger units 
if we expand them to incorporate more service elements (see section 
II.G.3. of the CY 2025 PFS proposed rule). As we receive more 
information about how these codes are being used and implemented in 
medical practice, we anticipate that these codes and future related 
codes will be refined over time. We note that the development of 
payment and coding policies for these and other kinds of services under 
the PFS is typically an iterative process that responds to changes in 
medical practice and may be best refined over several years through 
annual rulemaking for the PFS, and through the development of CPT codes 
by the AMA's CPT Editorial Committee.
    As described in the next section (see also section XXX of the CY 
2025 PFS proposed rule), this new APCM code set can serve as a chassis 
to incorporate primary care model learnings over time under the PFS and 
an additional pathway to accountable care for primary care 
practitioners.
3. Request for Information: Advanced Primary Care Hybrid Payment
a. Background
    Recent evidence reviews show that while primary care is the only 
part of the health system in which investments routinely result in not 
only improved outcomes but also increased equity,\108\ the practice and 
sustainability of the primary care sector is under significant 
strain.\109\ The NASEM found that many of these challenges relate to a 
primary care payment system that principally rewards visit volume 
versus creation and maintenance of longitudinal \110\ care 
relationships over time.\111\ We have set a goal of having 100 percent 
of traditional Medicare beneficiaries and the vast majority of Medicaid 
beneficiaries in accountable care relationships by 2030. Accountable 
care occurs when a person-centered care team takes responsibility for 
improving quality of care, care coordination and health outcomes for a 
defined group of individuals, to reduce care fragmentation and avoid 
unnecessary costs for individuals and the health system.\112\ Advanced 
primary care is a core mechanism for achieving this goal. With this 
goal, we acknowledge the need to increase the capability of primary 
care clinicians to engage, maintain, and promote longitudinal and 
accountable relationships with beneficiaries through incentives and 
flexibilities to manage quality and total cost of care.
---------------------------------------------------------------------------

    \108\ National Academies of Sciences, Engineering, and Medicine 
(NASEM); Implementing High-Quality Primary Care (https://nap.nationalacademies.org/read/25983).
    \109\ Milbank Memorial Fund, The Health of US Primary Care: 2024 
Scorecard (https://www.milbank.org/wp-content/uploads/2024/02/Milbank-Scorecard-2024-ACCESS_v06.pdf).
    \110\ Longitudinal care management is long-term, proactive, 
relationship-based care management that augments routine and acute 
visits with intentional, proactive outreach, especially during times 
of illness and transitions of care.
    \111\ NASEM, Implementing High-Quality Primary Care (https://nap.nationalacademies.org/read/25983).
    \112\ https://www.cms.gov/priorities/innovation/key-concepts/accountable-care-and-accountable-care-organizations.
---------------------------------------------------------------------------

    Over the past 11 years, the CMS Innovation Center has tested a 
number of primary care models: CPC, CPC+, Maryland Primary Care 
Program, PCF, as well as the upcoming MCP and ACO Primary Care Flex. 
Each of these primary care models has focused on testing what happens 
when we pay for primary care services with hybrid payments (a mix of 
fee-for-service and population-based payments), as described earlier. 
While these models have not met the criteria for expansion to date, the 
findings suggest advanced primary care may reduce unnecessary 
utilization and improve diabetes care and cancer screening rates.
    In addition to testing new approaches to improve care for 
beneficiaries by supporting primary care, we have focused on approaches 
to incorporating these innovations into Medicare programs. For example, 
lessons learned from the CMS Innovation Center's ACO models may be 
incorporated into the Shared Savings Program. As such, part of the 
intent of our proposal to create new APCM payment and coding was that 
we would have a similar foundation to scale advanced primary care model 
learnings over time.
    Previous Innovation Center primary care model tests have helped us 
learn lessons to inform our current and future work. For example, 
participants in primary care models have indicated difficulty investing 
in and maintaining primary care redesign activities due to a range of 
challenges. First, additional non-visit-based primary care payments 
have been generally layered upon base

[[Page 97903]]

payments still predominantly FFS in structure. As such, the incentives 
and abilities of practices to focus on proactive, population-based non-
visit activities may be limited if the funding stream for these 
activities is limited in scope and duration.113 114 
(Examples of non-visit-based activities include, but are not limited 
to: activities to improve care coordination, implement data-driven 
quality improvement, or enhance targeted care management for 
beneficiaries identified as high-risk.) Further, model funding for the 
clinical and administrative staff needed to accomplish advanced primary 
care coordination and population health functions is contingent on 
continued participation in these models.\115\ Once the models end, 
practices are left without the funding that they received under the 
models for the clinical and administrative staff that had supported 
population health functions under the model. Moreover, because these 
models involve additional payments tied to performance rather than 
changes to base primary care payment, practices report that the funding 
they use to support non-visit activities is sometimes received well 
after the non-visit services have occurred, leading to further 
challenges sustaining these efforts fiscally. Solving these challenges 
is a key goal of future Innovation Center model work.\116\
---------------------------------------------------------------------------

    \113\ Independent Evaluation of Comprehensive Primary Care Plus 
(CPC+): Final Report. https://www.cms.gov/priorities/innovation/data-and-reports/2023/cpc-plus-fifth-annual-eval-report.
    \114\ Schurrer J, Timmins L, Gruszczynski M, et al. Evaluation 
of the Primary Care First Model: Second Annual Report. Mathematica. 
February 2024. https://www.cms.gov/priorities/innovation/data-and-reports/2024/pcf-second-eval-rpt.
    \115\ CMS defines population health as health behaviors and 
outcomes of a broad group of individuals, including the distribution 
of such outcomes affected by the contextual factors within the 
group.
    \116\ https://www.cms.gov/about-cms/what-we-do/cms-strategic-plan.
---------------------------------------------------------------------------

    To strengthen the primary care infrastructure within FFS Medicare, 
we explored opportunities to create new sustainable pathways to support 
advanced primary care, equitable access to high-quality primary care, 
and continued transformation among a wide variety of practices. One 
potential strategy to increase access to advanced primary care and 
prepare practitioners in traditional Medicare to engage in more 
accountable care is through the creation and ongoing refinement of 
specific billing and coding under the PFS that better recognizes 
advanced primary care and incorporates the resources involved in 
furnishing longitudinal care and maintaining relationships with 
patients over time. In section II.G.2. of the CY 2025 PFS proposed 
rule, we proposed a set of APCM services that make use of lessons 
learned from the CMS Innovation Center's primary care models, grouping 
existing care management and CTBS service elements into a bundle for 
use starting in CY 2025.
    We sought feedback regarding potential further evolution in coding 
and payment policies to better recognize advanced primary care. Through 
this Advanced Primary Care RFI, we are committed to collaborating with 
interested parties to lay the path for a more transparent movement to 
value-based care. Specifically, we requested input on a broader set of 
questions related to care delivery and incentive structure alignment 
and five foundational components:

 Streamlined Value-Based Care Opportunities
 Billing Requirements
 Person-Centered Care
 Health Equity, Clinical, and Social Risk
 Quality Improvement and Accountability

    We encouraged input on the questions in this section from diverse 
voices, including beneficiaries and advocates, community-based 
organizations, providers, clinicians, researchers, unions, and all 
other interested parties. We plan to summarize comments received in 
response to our Advanced Primary Care RFI in a separate publication, 
which we intend to make available via the Medicare Physician Fee 
Schedule website (https://www.cms.gov/medicare/payment/fee-schedules/physician). Below is a description of the solicitation and questions 
posed in the RFI.
b. Solicitation of Public Comments
    We sought feedback regarding potential changes to coding and 
payment policies for advanced primary care services to be incorporated 
in traditional Medicare. For example, in the future, coding for APCM 
services (in section II.G.2. of the CY 2025 PFS proposed rule) could be 
revised to include additional service elements, including traditional 
E/M services. This Advanced Primary Care RFI is designed to solicit 
feedback on how we can further the goals of reducing administrative 
burden to refocus time on patient care; better recognizing the relative 
resources involved in furnishing care; recognizing interdisciplinary, 
team-based primary care; and supporting primary care sustainability and 
stability (especially for underserved communities). Whenever possible, 
respondents are requested to draw their responses from objective, 
empirical, and actionable evidence and to cite this evidence within 
their responses. We anticipate potential changes to primary care coding 
and payment policies, such as use of coding that recognizes groups of 
services furnished over a fixed time period, that will offer a new 
opportunity within the PFS for primary care clinicians to move to 
payment structures that are not fully dependent on billing for each 
discrete component of overall care and act as a step toward 
accountability for the cost and quality of patient care. Therefore, we 
sought feedback on building advanced primary care payment mechanisms 
that create pathways to recognize how primary care practice has moved 
away from an encounter-based orientation toward population-based care. 
This Advanced Primary Care RFI is the first step in ensuring ample 
opportunity for public input, followed by notice and comment rulemaking 
in subsequent years.
(1) Streamlined Value-Based Care Opportunities
    We sought to create a stepping stone for primary care clinicians, 
including those new to value-based care, to move away from either 
encounters or other discrete components of overall care as the dominant 
method of primary care payment and toward payments in larger units that 
are better tied to the relative resource costs involved in population-
based, longitudinal care. Feedback from interested parties has been 
helpful when considering how to scale the availability of payments into 
larger units, and incorporate population-based variability in 
resources, all while driving toward accountability, and person-centered 
care. Ultimately, to create more opportunities for beneficiaries to 
receive high-quality, accountable primary care, we are focused on 
creating multiple pathways to recognize delivery of integrated care 
across settings, and engagement in comprehensive, team-based, 
longitudinal care.
    When considering the evolution of a hybrid payment system within 
the PFS, we sought input on the following questions:
     How can CMS better support primary care clinicians and 
practices who may be new to population-based and longitudinal care 
management?
     What are the primary barriers to providing particular 
strategies or supports needed for pediatric clinicians and practices?
     How can CMS ensure that potential future advanced primary 
care payment will not induce clinicians to leave

[[Page 97904]]

effective accountable care relationships and clinician networks that 
already produce positive results? Additionally, how can CMS support 
growth over time in existing effective accountable care relationships 
and clinician networks?
     Should CMS evolve the proposed APCM services into an 
advanced primary care payment that includes E/M and other relevant 
services, or maintain a separate code set for APCM?
     If E/M services are bundled together for advanced primary 
care payments, how can CMS ensure that there is not a disincentive for 
primary care clinicians to continue to provide E/M visits, or increase 
accountability to E/M visits as warranted?
     As many codes depend on E/M visits (for example, as the 
base code for an add-on code, or to initiate specific care management 
activities), how should CMS consider the downstream impacts of 
incorporating E/M visits into advanced primary care payments?
     Should CMS consider incorporating other CTBS services into 
advanced primary care hybrid payments, such as Remote Physiologic 
Monitoring and/or Remote Therapeutic Monitoring?
     Should CMS consider incorporating other services that 
involve comprehensive care management and care coordination, such as 
Behavioral Health Integration, End-Stage Renal Disease Monthly 
Capitation Payment (ESRD MCP), Assessment/Care Planning for Cognitive 
Impairment, and/or Advance Care Planning?
     Should CMS consider incorporating other services while the 
patient is under care of home health agencies or hospices, such as Care 
Plan Oversight?
     Newly finalized HCPCS codes are eligible for use by other 
payers, including commercial insurers, State Medicaid agencies, and 
others. We note that value-based alignment is a key goal of CMS. If the 
APCM codes are finalized, they would be eligible for use by these other 
payers as well. To what extent are other payers interested in adopting 
the APCM codes? Are there any other changes that would be necessary for 
other payers to adopt the codes?
     CMS has historically used information presented by the 
Relative Value Scale Update Committee to determine PFS payment rates. 
Are there other sources of data on the relative value of primary care 
services that CMS should consider when setting hybrid payment rates?
(2) Billing Requirements
    Previous CMS Innovation Center primary care models have provided 
key lessons learned about how to increase comfort with population-based 
payments, the importance of reducing the administrative burden of 
billing, and how to begin addressing gaps in equitable access to 
population-based payments.\117\ Specifically, we have learned through 
Innovation Center initiatives that retrospective reconciliation or 
adjustment of payments for services rendered can be especially 
frustrating for practitioners, as it reduces the predictability and 
stability of payments.\118\
---------------------------------------------------------------------------

    \117\ Independent Evaluation of Comprehensive Primary Care Plus 
(CPC+): Final Report. https://www.cms.gov/priorities/innovation/data-and-reports/2023/cpc-plus-fifth-annual-eval-report; Independent 
Evaluation of Primary Care First: Second Annual Report. https://www.cms.gov/priorities/innovation/data-and-reports/2024/pcf-second-eval-rpt.
    \118\ Independent Evaluation of Primary Care First: Second 
Annual Report. https://www.cms.gov/priorities/innovation/data-and-reports/2024/pcf-second-eval-rpt.
---------------------------------------------------------------------------

    For these reasons, we sought to understand how advanced primary 
care hybrid payments can balance program integrity, high-quality care, 
payment stability, and clinician burden.
    We sought input on the following questions:
     How can CMS reduce the potential burden of billing for 
population-based and longitudinal care services?
     Are there particular types of items or services that 
should be excluded from the advanced primary care bundle?
     Are there particular services paid under the PFS today 
that should be included in the advanced primary care bundle?
     Care management activities are currently billed monthly. 
What episode lengths should CMS consider when thinking about an 
advanced primary care bundle of services for hybrid payment? Include 
evidence to support the proposed episode length.
     Should CMS attribute the advanced primary care clinical 
episode to a single clinician, or consider weighted attribution and 
payment for multiple entities or clinicians? How could weighted 
attribution and payment work? What rules or processes should CMS 
consider to attribute the episode?
     Care management coding and payment have historically 
required an initiating visit prior to starting monthly billing, to 
ensure that the services are medically reasonable and necessary and 
consistent with the plan of care. Are there other ways that CMS could 
ensure the clinician billing APCM is responsible for the primary care 
of the Medicare beneficiary?
     Care management coding and payment require beneficiary 
cost sharing. Has beneficiary cost sharing been a barrier to 
practitioners providing such services?
     Consistent with the initiating visit requirement in the 
APCM proposal, should CMS require the billing of specific qualifying 
services for billing of an advanced primary care bundle that is larger 
in scale and scope than APCM?
     Are there Health IT functions beyond what is proposed for 
APCM services that clinicians should be required to have to bill for an 
advanced primary care bundle? What should CMS consider in the design of 
the advanced primary care bundle to effectively incorporate Health IT 
standards and functionality, to support interoperability and the aims 
of advanced primary care?
     Should CMS limit the types of non-physician clinicians 
that can bill for an advanced primary care bundle that is larger in 
scale and scope than APCM? If so, include evidence to support the 
restriction.
     How should CMS reconcile instances where an advanced 
primary care bundle is billed, but primary care services are then 
billed for and provided by separate entities?
(3) Person-Centered Care
    Person-centered care integrates individuals' clinical needs across 
providers and settings, while addressing their social needs.\119\ We 
strive for better, more affordable care and improved health outcomes. 
Key to this mission are care innovations that empower beneficiaries and 
clinicians, while reducing the administrative burden of providing 
episode-based and longitudinal care management. We sought comment on 
how an advanced primary care code(s) could be structured to both 
increase efficiency and promote the use of high-value services.
---------------------------------------------------------------------------

    \119\ CMS White Paper on CMS Innovation Center's Strategy: 
Driving Health System Transformation--A Strategy for the CMS 
Innovation Center's Second Decade (https://www.cms.gov/priorities/innovation/strategic-direction-whitepaper).
---------------------------------------------------------------------------

    We sought input on the following questions:
     What activities that support the delivery of care that is 
coordinated across clinicians, support systems, and time should be 
considered for payment in an advanced primary care bundle that are not 
currently captured in the PFS?
     How can CMS structure advanced primary care hybrid 
payments to improve patient experience and outcomes?
     How can CMS structure advanced primary care hybrid 
payments to ensure appropriate access to telephonic and messaging 
primary care services?
     What is the best reporting structure to ensure that 
targeted services are

[[Page 97905]]

delivered without causing undue or excessive documentation?
     How can CMS facilitate coordination between primary care 
clinicians that bill for advanced primary care bundles and specialists 
to reduce costs and improve patient outcomes?
(4) Health Equity, Social and Clinical Risk
    We define health equity as, ``the attainment of the highest level 
of health for all people, where everyone has a fair and just 
opportunity to attain their optimal health regardless of race, 
ethnicity, disability, sexual orientation, gender identity, 
socioeconomic status, geography, preferred language, or other factors 
that affect access to care and health outcomes.'' \120\ The CMS 
Framework for Health Equity lays out how we are working to advance 
health equity by designing, implementing, and operationalizing policies 
and programs that support health for all the people served by our 
programs, eliminating avoidable differences in health outcomes 
experienced by people who are disadvantaged or underserved, and 
providing the care and support that our beneficiaries need to 
thrive.\121\ For advanced primary care hybrid payments, this may mean 
incorporating different types of social and clinical risk into the 
payment than have typically been considered in traditional E/M or care 
management codes.
---------------------------------------------------------------------------

    \120\ https://www.cms.gov/pillar/health-equity.
    \121\ Centers for Medicare & Medicaid Services, The CMS 
Framework for Health Equity (2022-2032). April 2022. https://www.cms.gov/files/document/cms-framework-health-equity-2022.pdf.
---------------------------------------------------------------------------

    Recent models such as ACO REACH \122\ and Making Care Primary \123\ 
have incorporated risk adjustment for social risk factors, such as Part 
D Low Income Subsidy enrollment status and Area Deprivation Index, to 
better capture factors relevant to care of the patient. We sought input 
on how advanced primary care billing and payment policy could be used 
to reduce health disparities and social risk. Furthermore, we sought to 
balance a simple payment structure that encourages the uptake of 
advanced primary care services, while ensuring that the risk adjustment 
method used to develop the payment rates incentivizes the appropriate 
coding of patient conditions and needs, including those that have 
previously been under-documented, such as dementia and patient 
frailty.\124\
---------------------------------------------------------------------------

    \122\ https://www.cms.gov/priorities/innovation/innovation-models/aco-reach.
    \123\ https://www.cms.gov/priorities/innovation/innovation-models/making-care-primary.
    \124\ National Academies of Sciences, Engineering, and Medicine 
(NASEM); Committee on the Decadal Survey of Behavioral and Social 
Science Research on Alzheimer's Disease and Alzheimer's Disease-
Related Dementias. Reducing the Impact of Dementia in America: A 
Decadal Survey of the Behavioral and Social Sciences. National 
Academies Press. July 26, 2021. https://nap.nationalacademies.org/catalog/26175/reducing-the-impact-of-dementia-in-america-a-decadal-survey.
---------------------------------------------------------------------------

    We sought input on the following questions:
     What non-claims-based indicators could be used to improve 
payment accuracy and reduce health disparities, and how can CMS ensure 
that they are collected uniformly and documented consistently without 
unduly increasing administrative burden?
     What risk factors, including clinical or social, should be 
considered in developing payment for advanced primary care services?
     How can CMS account for apparent changes in risk that are 
due to changes in coding patterns rather than changes in health status?
     What risk adjustments should be made to proposed payments 
to account for higher costs of traditionally underserved populations?
     What indicators are used to capture added social risk in 
commercial insurance? Should CMS consider using these?
     What metrics should be used or monitored to adjust payment 
to ensure that health disparities are not worsened as an unintended 
consequence?
     How can CMS ensure that advanced primary care hybrid 
payment increases access to health care services for patients without a 
usual source of primary care?
     Are there steps CMS can take to ensure advanced primary 
care billing and coding is utilized for dually eligible beneficiaries, 
and by safety net providers?
     Should CMS incorporate Community Health Integration and/or 
Principal Illness Navigation services and payment into an advanced 
primary care bundle?
(5) Quality Improvement and Accountability
    We are committed to affordable quality health care for all people 
with Medicare. We seek feedback regarding how we can continue to 
strengthen beneficiary access to high-quality health services within 
FFS Medicare. One goal of the CMS Innovation Center Strategy Refresh is 
to increase the capability of practitioners furnishing advanced primary 
care to engage in accountable care relationships with beneficiaries 
through incentives and flexibilities to manage clinical quality, 
outcomes, patient experience, and total cost of care. As such, part of 
the intent of evolving and creating over time advanced primary care 
hybrid payments is that the practitioners who bill for these services 
are engaged in a relationship where they are responsible for the 
quality and cost of care for the beneficiary, counting toward the 
overall 2030 goal of every person with Traditional Medicare being in an 
accountable care relationship. This Advanced Primary Care RFI seeks 
input from beneficiaries and their caregivers, primary care and other 
clinicians, and health plans on how advanced primary care bundles could 
support that goal.
    We sought input on the following questions:
     How can CMS ensure clinicians will remain engaged and 
accountable for their contributions to managing the beneficiary's care?
     What are key patient-centered measures of quality, 
outcomes and experience that would help ensure that hybrid payment 
enhances outcome and experience for patients?
     How could measures of quality, outcomes, and experience 
guard against and decrement in access or quality?
     As described in the APCM proposal, registration for and 
reporting of the ``Value in Primary Care'' MVP would be an APCM service 
element for MIPS eligible clinicians. Since this MVP contains measures 
focused on both the total cost and quality of care, would its inclusion 
as an APCM service element be sufficient to count as ``accountable 
care?'' If not, what other service delivery or quality reporting would 
be expected in ``accountable care?''
     What should CMS consider so that advanced primary care 
bundles could be used to promote accountable care across payers, both 
commercial and Medicaid?
     What quality measures are other payers using to drive 
improvements in primary care?
     What utilization measures are other payers using to drive 
improvements in primary care?
     What patient experience measures are other payers using to 
drive improvements in primary care?
     Should CMS consider flexibilities for smaller practices to 
bill the advanced primary care bundle? Should CMS consider 
flexibilities for entities exempt from MIPS to bill the advanced 
primary care bundle?
     Would clinicians be willing to take on more accountability 
to further reduce the frequency and/or administrative burden of 
billing?
     For APCM services, are there other key practice-level 
elements of the service that should be considered for

[[Page 97906]]

advanced primary care practices to bill for advanced primary care?
    Most commenters responding to the Advanced Primary Care RFI were 
generally optimistic about the future of advanced primary care but 
cautioned that fee-for-service payments are still necessary for certain 
services. While several commenters expressed concern about 
administrative burden, many commenters also noted that capacity 
building investments could provide significant support to providers new 
to longitudinal care. Furthermore, a few commenters expressed the need 
for increased payment for primary care and provided recommendations of 
alternative sources of data for determining hybrid payment rates. Some 
commenters preferred to restrict APCM billing to ACOs or total cost of 
care models. Lastly, many commenters supported waiving cost sharing, 
incorporating patient-reported outcome measures, including health 
equity factors (social risk adjustments, stratifying quality data) and 
increasing integration of behavioral health.
    We appreciate the support for our efforts to understand how we 
might build and evolve over time advanced primary care hybrid payments. 
We will continue to review feedback in response to the Advanced Primary 
Care Hybrid Payment RFI as it pertains to future rulemaking.
4. Cardiovascular Risk Assessment and Risk Management
a. Background
    Cardiovascular disease (CVD) is a leading cause of death, 
disability, and health care expenditures in the U.S.\125\ The burden of 
CVD is unequal, with black Americans experiencing higher rates of CVD-
related morbidity than white Americans.\126\ Atherosclerotic CVD \127\ 
is also distinct among leading causes of death for Americans in the 
proportion of CVD attributable to behavioral causes,\128\ making 
improvement in modifiable CVD risk factors (for example, diet, 
exercise, smoking cessation) is a key treatment target to reduce the 
burden of CVD across populations.\129\
---------------------------------------------------------------------------

    \125\ Heart Disease and Stroke Statistics--2023 Update: A Report 
from the American Heart Association Connie W. Tsao, MD, MPH, FAHA 
et. al. Circulation. 2023;147:e93-e621.
    \126\ Cardiovascular Health in African Americans: A Scientific 
Statement From the American Heart Association Mercedes R. Carnethon, 
Ph.D., FAHA et al. Circulation. 2017;136:e393-e423.
    \127\ What is Atherosclerosis? NIH NHLBI. https://www.nhlbi.nih.gov/health/atherosclerosis.
    \128\ Libby, P., Buring, J.E., Badimon, L. et al. 
Atherosclerosis. Nat Rev Dis Primers 5, 56 (2019). https://doi.org/10.1038/s41572-019-0106-z.
    \129\ Ebrahim S, Taylor F, Ward K, Beswick A, Burke M, Davey 
Smith G. Multiple risk factor interventions for primary prevention 
of coronary heart disease. Cochrane Database Syst Rev. 
2011;(1):CD001561 https://pubmed.ncbi.nlm.nih.gov/21249647/.
---------------------------------------------------------------------------

    The CMS Innovation Center's Million Hearts[supreg] Cardiovascular 
Disease (CVD) Risk Reduction model \130\ (hereafter referred to as 
Million Hearts[supreg] model) was launched in 2017 as part of the 
ongoing HHS Million Hearts[supreg] Initiative.\131\ The model's goals 
were to decrease the incidence of first-time heart attacks and strokes 
among medium and high-risk Medicare beneficiaries over five years and 
reduce Medicare spending on cardiovascular events. The model was 
implemented as a randomized design where participant organizations in 
the intervention group agreed to (1) calculate traditional Medicare 
beneficiaries' risk of having a heart attack or stroke over 10 years, 
and (2) provide cardiovascular care management services to high-risk 
patients (defined as a risk of a cardiovascular event in the next 
decade of greater than thirty percent). The model also identified 
medium-risk patients (more than fifteen percent risk of an event in the 
next decade) in its evaluation. In exchange for doing so, CMS paid 
participant organizations $10 for each eligible traditional Medicare 
beneficiary for whom the organizations assessed risk, and in the first 
year of the model, $10 for each high-risk beneficiary during each month 
when cardiovascular care management services were provided.\132\ In 
subsequent years of the model (2018 to 2022) participants were expected 
to reassess cardiovascular risk and were paid based on cardiovascular 
risk reduction ($0 to $10 per beneficiary per month) for high-risk 
beneficiaries.
---------------------------------------------------------------------------

    \130\ Sanghavi DM, Conway PH. Paying for prevention: a novel 
test of Medicare value-based payment for cardiovascular risk 
reduction. JAMA. 2015;314(2):123-124. https://jamanetwork.com/journals/jama/fullarticle/2300705.
    \131\ Frieden TR, Berwick DM. The ``Million Hearts'' initiative: 
preventing heart attacks and strokes. N Engl J Med. 
2011;365(13):e27. https://pubmed.ncbi.nlm.nih.gov/21913835/.
    \132\ Blue L, Kranker K, Markovitz AR, et al. Effects of the 
Million Hearts Model on Myocardial Infarctions, Strokes, and 
Medicare Spending: A Randomized Clinical Trial. JAMA. 
2023;330(15):1437-1447. doi:10.1001/jama.2023.19597.
---------------------------------------------------------------------------

    All CMS Innovation Center models are independently evaluated \133\ 
and the evaluation of the Million Hearts[supreg] model found the model 
reduced the rate of death from any cause for medium and high-risk 
beneficiaries by four percent, as well as reduced the risk of death 
from a cardiovascular event (that is, heart attack or stroke) by eleven 
percent.\134\ We consider this to be due to increased rates of 
cardiovascular risk assessment, discussion of cardiovascular risk by 
participants' clinicians, and the use of appropriate medications to 
reduce cardiovascular risk (for example, aspirin and statins).\135\
---------------------------------------------------------------------------

    \133\ Evaluation of the Million Hearts Cardiovascular Disease 
Risk Reduction Model. Final Report. August 2023. Mathematica. 
https://www.cms.gov/priorities/innovation/data-and-reports/2023/mhcvdrrm-finalannevalrpt.
    \134\ Evaluation of the Million Hearts Cardiovascular Disease 
Risk Reduction Model, p. 43. Final Report. August 2023. Mathematica. 
https://www.cms.gov/priorities/innovation/data-and-reports/2023/mhcvdrrm-finalannevalrpt.
    \135\ Evaluation of the Million Hearts Cardiovascular Disease 
Risk Reduction Model, p. 26. Final Report. August 2023. Mathematica. 
https://www.cms.gov/priorities/innovation/data-and-reports/2023/mhcvdrrm-finalannevalrpt.
---------------------------------------------------------------------------

    During the Million Hearts[supreg] (MH) model (which was tested from 
2017-2022), there was a recently-introduced ASCVD risk assessment tool 
to incorporate demographic (age, sex, race), clinical (blood pressure, 
cholesterol, history of diabetes), and risk behavior (smoking status, 
use of anti-hypertensives, use of statins, use of aspirin) established 
by the American College of Cardiology (ACC),\136\ as well as a 
longitudinal re-assessment tool used within the model.\137\ This tool 
calculated the 10-year risk of a cardiovascular event for beneficiaries 
ages 40-79. Subsequently, additional ASCVD risk assessment tools have 
been developed.\138\
---------------------------------------------------------------------------

    \136\ Grundy SM, Stone NJ, Bailey AL, Beam C, Birtcher KK, 
Blumenthal RS, Braun LT, de Ferranti S, Faiella-Tommasino J, Forman 
DE, Goldberg R, Heidenreich PA, Hlatky MA, Jones DW, Lloyd-Jones D, 
Lopez-Pajares N, Ndumele CE, Orringer CE, Peralta CA, Saseen JJ, 
Smith SC, Sperling L, Virani SS, Yeboah J. 2018 ACC guideline on the 
management of blood cholesterol: a report of the American College of 
Cardiology Foundation/American Heart Association Task Force on 
Clinical Practice Guidelines. J Am Coll Cardiol. 2018. https://tools.acc.org/ldl/ascvd_risk_estimator/index.html#!/calulate/estimator/.
    \137\ Lloyd-Jones DM, Huffman MD, Karmali KN, Sanghavi DM, 
Wright JS, Pelser C, Gulati M, Masoudi FA, Goff DC Jr. Estimating 
Longitudinal Risks and Benefits From Cardiovascular Preventive 
Therapies Among Medicare Patients: The Million Hearts Longitudinal 
ASCVD Risk Assessment Tool: A Special Report From the American Heart 
Association and American College of Cardiology. Circulation. 2017 
Mar 28;135(13):e793-e813.
    \138\ Leading Cardiologists reveal new cardiovascular disease 
prevention risk calculator. https://newsroom.heart.org/news/leading-
cardiologists-reveal-new-heart-disease-risk-
calculator#:~:text=The%20American%20Heart%20Association%20PREVENT,CKM
%20syndrome%20into%20CVD%20prevention.
---------------------------------------------------------------------------

    Today in clinical practice, ASCVD risk is generally calculated 
using a tool combining demographic data, personal history (risk 
behaviors and medical history), and laboratory data (lipid

[[Page 97907]]

panel).\139\ This information is used to calculate into a 10-year 
estimate of a patient's ASCVD risk for use in determining treatment 
advice provided by the treating practitioner. This determination 
requires both data collection at a visit and laboratory data, which may 
not be available at an initial visit. This change in clinical practice 
occurred over time after a series of guidelines from the American Heart 
Association (AHA) recommended using ASCVD risk in determining treatment 
decisions for patients without a prior history of CVD.\140\ This 
treatment guideline also includes recommendations for lifestyle 
modifications for all patients. The CMS Innovation Center Million 
Hearts[supreg] model contributed to this change in clinical practice by 
demonstrating through a rigorous randomized control trial that the 
quantitative assessment of 10-year cardiovascular risk improves quality 
of care, including mortality, compared to prior practice.\141\
---------------------------------------------------------------------------

    \139\ 2019 ACC/AHA Primary Prevention of Cardiovascular Disease. 
https://www.ahajournals.org/doi/pdf/10.1161/CIR.0000000000000678.
    \140\ Arnett DK et. al. 2019 ACC/AHA Guideline on the Primary 
Prevention of Cardiovascular Disease: A Report of the American 
College of Cardiology/American Heart Association Task Force on 
Clinical Practice Guidelines. Circulation. 2019 Sep 10;140(11):e596-
e646. doi: 10.1161/CIR.0000000000000678.
    \141\ Blue L, Kranker K, Markovitz AR, et al. Effects of the 
Million Hearts Model on Myocardial Infarctions, Strokes, and 
Medicare Spending: A Randomized Clinical Trial. JAMA. 
2023;330(15):1437-1447. doi:10.1001/jama.2023.19597.
---------------------------------------------------------------------------

    In the Million Hearts[supreg] model, cardiovascular-focused care 
management services included an initiating visit where an ASCVD risk 
assessment is performed, structured recording of patient health 
information using CEHRT, and a comprehensive care plan focused on 
cardiovascular risk reduction (including the ABCS focused on in the 
Million Hearts[supreg] model), but did not require 24/7 access to care, 
management of care transitions, or home and community-based 
coordination because these services are necessary for the management of 
complex conditions placing a beneficiary at high risk of death, acute 
exacerbation/decompensation, or functional decline, and these services 
are provided to prevent the development of these complex chronic 
conditions. In the Million Hearts[supreg] model, cardiovascular-focused 
risk management services were provided to beneficiaries at high risk 
for CVD (more than a thirty percent risk of a cardiovascular event in 
the next 10 years).
    We interpret the findings of the Million Hearts[supreg] model to be 
both reflective of and perhaps augmenting an evolution in clinical 
practice toward quantitative ASCVD risk assessment. We also do not 
believe the resources involved in these activities are appropriately 
reflected in current coding and payment policies. As such, we proposed 
to establish codes to describe a separately billable cardiovascular 
disease risk assessment that is furnished in conjunction with an E/M 
visit and cardiovascular-focused risk management, when reasonable and 
necessary due to the presence of increased cardiovascular risk factors 
identified for the individual patient.
b. ASCVD Risk Assessment
    We proposed a new stand-alone G-code, HCPCS code G0537 (GCDRA), 
Administration of a standardized, evidence-based Atherosclerotic 
Cardiovascular Disease (ASCVD) Risk Assessment for patients with ASCVD 
risk factors on the same date as an E/M visit, 5-15 minutes, not more 
often than every 12 months. Atherosclerotic Cardiovascular Disease 
(ASCVD) Risk Assessment refers to a review of the individual's 
demographic factors, modifiable risk factors for CVD, and risk 
enhancers for CVD. We proposed this new code to identify and value the 
work involved in administering an ASCVD risk assessment when medically 
reasonable and necessary in relation to an E/M visit.
    We further proposed that the ASCVD risk assessment must be 
furnished by the practitioner on the same date they furnish an E/M 
visit, as the ASCVD risk assessment will be reasonable and necessary 
when used to inform the patient's diagnosis, and treatment plan 
established during the visit. ASCVD risk assessment is reasonable and 
necessary for a patient who has at least one predisposing condition to 
cardiovascular disease that may put them at increased risk for future 
ASCVD diagnosis. These conditions could include but are not limited to, 
obesity, a family history of CVD, a history of high blood pressure, a 
history of high cholesterol, a history of smoking/alcohol/drug use, 
pre-diabetes, or diabetes. We further proposed that the ASCVD risk 
assessment will not be separately billable for patients with a 
cardiovascular disease diagnosis or those who have history of a heart 
attack or stroke.
    We did not propose any specific tool that will have to be used for 
the ASCVD risk assessment, although the assessment tool must be 
standardized and evidence-based. Proposed elements of the ASCVD risk 
assessment service would include:
     Current (from the last 12 months) laboratory data (lipid 
panel) for inputs needed for the risk assessment tool.
     Administration of a standardized, evidence-based ASCVD 
risk assessment tool that has been tested and validated through 
research, and includes the following domains:
    ++ The output of the tool must include a 10-year estimate of the 
patient's ASCVD risk. This output must be documented in the patient's 
medical record.
    ++ Demographic factors (such as age, sex).
    ++ Modifiable risk factors for CVD (such as blood pressure & 
cholesterol control, smoking status/history, alcohol and other drug 
use, physical activity and nutrition, obesity).
    ++ Possible risk enhancers (such as pre-eclampsia, pre-diabetes, 
family history of CVD).
    ++ Billing practitioners may choose to assess for additional 
domains beyond those listed above if the tool used requires additional 
domains. Examples of tools include but are not limited to, the ACC 
ASCVD Risk Estimator \142\ and the AHA PREVENT tool.\143\ CMS expects 
that the tool that is used would not introduce discriminatory bias, 
consistent with Section 1557 final rule.
---------------------------------------------------------------------------

    \142\ Lloyd-Jones DM, Huffman MD, Karmali KN, Sanghavi DM, 
Wright JS, Pelser C, Gulati M, Masoudi FA, Goff DC Jr. Estimating 
Longitudinal Risks and Benefits From Cardiovascular Preventive 
Therapies Among Medicare Patients: The Million Hearts Longitudinal 
ASCVD Risk Assessment Tool: A Special Report From the American Heart 
Association and American College of Cardiology. Circulation. 2017 
Mar 28;135(13):e793-e813.
    \143\ Leading Cardiologists reveal new cardiovascular disease 
prevention risk calculator. https://newsroom.heart.org/news/leading-
cardiologists-reveal-new-heart-disease-risk-
calculator#:~:text=The%20American%20Heart%20Association%20PREVENT,CKM
%20syndrome%20into%20CVD%20prevention.
---------------------------------------------------------------------------

    We proposed for HCPCS code G0537 to have a duration of 5-15 minutes 
for the administration of an ASCVD risk assessment tool, billed no more 
often than once every 12 months.
    We requested comments on these proposals, as well as information 
pertaining to potential clinician education for these proposed codes.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Overall, commenters were supportive of establishing a 
payment mechanism for cardiovascular risk assessment and the proposed 
coding to improve cardiovascular health for beneficiaries. Commenters 
were generally in support of our proposed required domains of the ASCVD 
risk assessment tool. We received a few

[[Page 97908]]

requests to require other domains, such as coronary calcium score.
    Response: We remind commenters that, as stated in the code 
descriptor for ASCVD risk assessment, ``billing practitioners may 
choose to assess for additional domains beyond those listed above if 
the tool used requires additional domains.'' We are also not requiring 
the use of any specific ASCVD risk assessment tool. After consideration 
of public comments, we are finalizing the required elements of the 
ASCVD risk assessment as proposed.
    Comment: Commenters pointed out that the PREVENT tool is an AHA 
tool, not an ACC tool as we stated in the proposed rule.
    Response: We thank commenters for pointing out the error, and have 
accordingly revised the discussion in this final rule.
    Comment: Many commenters requested that the ASCVD risk assessment 
not be required to be furnished on the same date as the associated E/M 
visit since practitioners may not have the necessary laboratory data on 
the same date as the E/M visit.
    Response: We agree with commenters that there are circumstances 
where test results may identify the need for an ASCVD risk assessment 
on a day other than the date of an E/M service, so are not finalizing 
the requirement that the ASCVD risk assessment must be performed on the 
same date as the associated E/M visit. We continue to believe that in 
most cases, HCPCS code G0537 would not be performed in advance of the 
associated E/M visit. We reiterate that the ASCVD risk assessment code, 
HCPCS code G0537, when performed in conjunction with an E/M visit is 
not designed to be a general screening, but rather tied to at least one 
predisposing condition to cardiovascular disease that may put the 
patient at increased risk for future ASCVD diagnosis. We are finalizing 
the code descriptor to align with this change, which will now read: 
``Administration of a standardized, evidence-based Atherosclerotic 
Cardiovascular Disease (ASCVD) Risk Assessment for patients with ASCVD 
risk factors, 5-15 minutes, not more often than every 12 months.''
    Comment: Commenters requested that we provide an exclusionary list 
of predisposing conditions to cardiovascular disease or a list of 
compounding risk factors that may put patients at increased risk for 
future ASCVD diagnosis since there may be a wide range of severity and 
complexity of the beneficiaries' risk factors.
    Response: We do not generally provide exclusionary lists of risk 
factors and/or diagnoses so as not to interfere with the practice of 
medicine. It is up to the practitioner to determine if the patient's 
risk factors, such as obesity, a family history of CVD, a history of 
high blood pressure, a history of high cholesterol, a history of 
smoking/alcohol/drug use, pre-diabetes, or diabetes, may put the 
patient at increased risk for future ASCVD diagnosis.
    Comment: We received comments requesting clarification on the types 
of practitioners who can administer the ASCVD risk assessment.
    Response: We believe these services would typically involve direct 
contact between the patient and the billing practitioner or billing 
practitioner's auxiliary personnel who administers the assessment. 
Typically, CMS does not specify specific specialty codes for billing 
services, and in this case, CMS expects this code to be frequently 
billed both by primary care providers and specialists (that is, 
cardiologists), but other specialists can furnish these services if all 
other requirements are met. Because the ASCVD risk assessment must be 
associated with an E/M visit, the practitioners who can bill for ASCVD 
risk assessment services are limited to those who can furnish E/M 
services.
    Comment: We received comments requesting changes in the requirement 
that the ASCVD risk assessment can only be furnished ``not more often 
than every 12 months'' per beneficiary in cases where a different 
practitioner may need to furnish the risk assessment to furnish 
appropriate ASCVD risk management services. For example, if a 
beneficiary's primary care practitioner conducted the ASCVD risk 
assessment and they were determined to be at high risk for a future 
ASCVD diagnosis, the primary care practitioner may feel the need to 
refer the beneficiary to a cardiologist to finish ASCVD risk management 
services. If needed, the cardiologist could furnish another ASCVD risk 
assessment and ASCVD risk management services if they also determined 
the beneficiary to be at increased risk.
    Response: We agree with commenters about this concern. We are 
finalizing that the ASCVD risk management service can be furnished not 
more often than once every 12 months per practitioner per beneficiary. 
We expect that this service is only furnished by practitioners who 
furnish the bulk of the beneficiary's care, and as this service is for 
Medicare beneficiaries without a previous diagnosis of coronary artery 
disease, it may be most frequently billed by primary care, but some 
beneficiaries may also have a cardiologist for other cardiovascular 
conditions predisposing to ASCVD. We would like to reemphasize that the 
ASCVD risk assessment is reasonable and necessary for a patient who has 
at least one predisposing condition to cardiovascular disease that may 
put them at increased risk for future ASCVD diagnosis and is not 
separately billable for patients with a cardiovascular disease 
diagnosis or those who have history of a heart attack or stroke.
    After consideration of public comments, we are finalizing the code 
descriptor for G0537 ``Administration of a standardized, evidence-based 
Atherosclerotic Cardiovascular Disease (ASCVD) Risk Assessment for 
patients with ASCVD risk factors, 5-15 minutes, not more often than 
every 12 months per practitioner.'' We are finalizing all other aspects 
of G0537 as proposed.
(1) Valuation for ASCVD Risk Assessment G0537
    We proposed a direct crosswalk to HCPCS Code G0136 (Administration 
of a standardized, evidence-based SDOH assessment, 5-15 minutes, not 
more often than every 6 months), with a work RVU of 0.18 as we believe 
this service reflects the resource costs associated when the billing 
practitioner performs the service described. HCPCS code G0136 has an 
intra-service time of 15 minutes, and the physician work is of similar 
intensity to the proposed HCPCS code G0537. Therefore, we proposed a 
work time of 15 minutes for HCPCS code G0537 based on this same 
crosswalk to G0136. We also proposed to use this crosswalk to establish 
the direct PE inputs for HCPCS code G0537.
    We sought comments on these proposals. We received public comments 
on these proposals. The following is a summary of the comments we 
received and our responses.
    Comment: Commenters were generally in support of our proposed 
valuation of ASCVD risk assessment services (G0537). Some commenters 
suggested that the valuation should be increased, as they stated that 
the proposed crosswalk HCPCS code G0136 is undervalued.
    Response: We believe the crosswalk to G0136 is an appropriate 
crosswalk because these services are clinically similar standardized 
risk assessments that take 5-15 minutes. If commenters believe that 
HCPCS code G0136 is undervalued, we welcome information from interested 
parties on a more accurate valuation that we may consider for future 
rulemaking. Individuals and groups may submit codes for review under 
the potentially misvalued codes

[[Page 97909]]

initiative to CMS in one of two ways. Nominations may be submitted to 
CMS via email or through postal mail. Email submissions should be sent 
to the CMS emailbox at [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.
    After consideration of public comments, we are finalizing the 
valuation of G0537 as proposed.
c. Atherosclerotic Cardiovascular Disease Risk Management Services 
(G0538)
    Over the past several years, we have worked to develop payment 
mechanisms under the PFS to improve the accuracy of valuation and 
payment for the services furnished by physicians and other healthcare 
professionals, especially in the context of evolving changes in medical 
practice using evidence-based models of care, such as the Million 
Hearts[supreg] model. We proposed to establish a G-code to describe 
ASCVD risk management services that incorporate the ``ABCS'' of CVD 
risk reduction (aspirin, blood pressure management, cholesterol 
management, and smoking cessation) for beneficiaries at medium or high 
risk for ASCVD (>15 percent in the next 10 years) as previously 
identified through an ASCVD risk assessment. We believe that ASCVD risk 
management services include continuous care and coordination to reduce 
or eliminate further elevation of ASCVD risk over time, and potentially 
prevent the development of future cardiovascular disease diagnoses or 
first-time heart attacks or strokes.
    We proposed new G-code, G0538 (GCDRM), Atherosclerotic 
Cardiovascular Disease (ASCVD) risk management services with the 
following required elements: patient is without a current diagnosis of 
ASCVD, but is determined to be at medium or high risk for CVD 
(15 percent in the next 10 years) as previously determined 
by the ASCVD risk assessment; ASCVD-Specific care plan established, 
implemented, revised, or monitored that addresses risk factors and risk 
enhancers and must incorporate shared decision-making between the 
practitioner and the patient; clinical staff time directed by physician 
or other qualified health care professional; per calendar month. 
Atherosclerotic Cardiovascular Disease (ASCVD) risk management services 
refer to the development, implementation, and monitoring of 
individualized care plans for reducing cardiovascular risk, including 
shared decision-making and the use of the ABCS of cardiovascular risk 
reduction, as well as counseling and monitoring to improve diet and 
exercise. We proposed that the elements of the Atherosclerotic 
Cardiovascular Disease (ASCVD) risk management service will include:

     ASCVD Specific Risk Management, which may include:

++ Promoting receipt of preventive services (including tobacco 
cessation counseling, diabetes screening, diabetes self-management 
training)
++ Medication management (including aspirin or statins to maintain or 
decrease risk of CVD)
++ Ongoing communication and care coordination via certified electronic 
health record (EHR) technology
    --Synchronous, non-face-to-face communication methods must be 
offered

     ASCVD-Specific, Individualized, Electronic Care Plan

++ Must address modifiable risk factors and risk enhancers specific to 
CVD, as applicable, such as:
    --blood pressure and cholesterol control
    --smoking, alcohol, and other drug use status, history, and 
cessation
    --physical activity and nutrition
    --obesity
++ Plan must be established, implemented, and monitored and must 
incorporate shared decision-making between the practitioner and the 
patient

    Although there is no minimum service time requirement for ASCVD 
risk management services in a month, each of the elements must be 
addressed to bill for the service, unless a particular element is not 
medically indicated or necessary at that time for that specific 
patient. For example, the element of smoking cessation will not be 
addressed for a patient who does not use tobacco. Documentation of each 
service element in the patient's medical record is required.
    Comment: Commenters were generally supportive of the proposed 
elements of the ASCVD risk management service. We received requests to 
include the use of blood pressure medications in the medication 
management service element.
    Response: We clarify that medication management is not limited to 
the examples of aspirin and statins that were listed in the proposed 
rule but could include other medications needed to maintain or decrease 
risk of CVD.
    After consideration of public comments, we are finalizing the 
service elements for G0538 as proposed.
    Physicians and non-physician practitioners (NPPs) who can furnish 
E/M services could bill for ASCVD risk management services. We 
anticipate that ASCVD risk management services will ordinarily be 
provided by clinical staff incident to the professional services of the 
billing practitioner in accordance with our regulation at Sec.  410.26. 
We proposed that ASCVD risk management services will 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.
    We proposed that patient consent must be obtained before starting 
ASCVD risk management services. Like other care management services, 
ASCVD risk management services will typically be provided by clinical 
staff outside of face-to-face patient visits. Consent can be written or 
verbal and must be documented in the medical record. Consent should 
also include informing the patient about these services, as well as 
potentially applicable Medicare cost sharing.
    We proposed that ASCVD risk management services can be billed no 
more often than once per calendar month, and that payment is limited to 
one practitioner per beneficiary per month. Patients must be determined 
to be at medium or high risk for CVD (>15 percent in the next 10 years) 
as previously determined by the ASCVD risk assessment and must not have 
a current diagnosis of cardiovascular disease or have a history of 
heart attack or stroke.
    We sought comments on each of these proposals.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: We received many comments requesting clarification on 
whether concurrent billing of other services would be allowed with 
G0538. Some of the examples provided by commenters were care management 
services, Self-Measured Blood Pressure (SMBP) (99473-99474), G0446

[[Page 97910]]

(Intensive Behavioral Therapy for Cardiovascular Disease), and Smoking 
and tobacco use cessation counseling visits (99406-99407).
    Response: Concurrent billing with G0538 would be allowed during the 
same month if time and effort are not counted more than once, 
requirements to bill both services are met, and the services are 
medically reasonable and necessary. We would like to remind 
practitioners that the patient consent requirement for this service 
includes informing the patient about potentially applicable Medicare 
cost sharing. When G0538 is billed concurrently with preventive 
services, like G0446 (Intensive Behavioral Therapy for Cardiovascular 
Disease), practitioners should be sure to inform the patient that G0538 
is not a preventive service, and that cost sharing may apply.
    Comment: We received many comments providing us with further 
information about the current clinical practice metrics for identifying 
patients at medium to high risk of CVD. Many standardized, evidence-
based risk assessment tools use different percentage ranges that may 
fall outside of the proposed ``>15 percent in the next 10 years.'' Many 
current tools identify ``intermediate risk'' as 7.5%-19.9% and ``high 
risk'' as >20%. Commenters also believed that this specific designation 
may not align with changing clinical recommendations for cardiovascular 
risk intervention.
    Response: The elements of G0538 were designed with the findings 
from the Million Hearts[supreg] model in mind, and so the specific risk 
percentiles used in the model were included in the proposed rule. We 
acknowledge that clinical practice evolves over time and the 
categorization of risk percentiles into categories of risk may also 
evolve as risk prediction tools and clinical guidelines are refined. We 
note the most recent 2019 AHA/ACC clinical guidelines for primary 
prevention of cardiovascular disease establish (distinct from the 
Million Hearts[supreg] model) categories of `low risk,' `borderline 
risk,' `intermediate risk,' and `high risk,' and these categories may 
evolve over time as well. For these reasons, we will remove the risk 
management threshold percentile from the code description for G0538 
services, given that the intent of the Million Hearts[supreg] model was 
to identify patients commonly considered to be at intermediate (or 
medium) or high risk of ASCVD for G0538 services.
    After consideration of public comments, we are finalizing G0538 
with the following code descriptor, ``Atherosclerotic Cardiovascular 
Disease (ASCVD) risk management services with the following required 
elements: patient is without a current diagnosis of ASCVD, but is 
determined to be at intermediate, medium, or high risk for CVD as 
previously determined by the ASCVD risk assessment; ASCVD-Specific care 
plan established, implemented, revised, or monitored that addresses 
risk factors and risk enhancers and must incorporate shared decision-
making between the practitioner and the patient; clinical staff time 
directed by physician or other qualified health care professional; per 
calendar month.'' We are finalizing all other policies for G0538 as 
proposed.
(1) Valuation for ASCVD Risk Management Services (G0538)
    We proposed a direct crosswalk to CPT Code 99211 (Office or other 
outpatient visit for the evaluation and management of an established 
patient that may not require the presence of a physician or other 
qualified health care professional), with a work RVU of 0.18 as we 
believe this service reflects the resource costs associated when the 
billing practitioner performs HCPCS code G0538. CPT code 99211 has a 
physician intraservice time of 5 minutes, and the physician work is of 
similar intensity to our proposed HCPCS code G0538. Therefore, we 
proposed a work time of 5 minutes for HCPCS code G0538 based on this 
same crosswalk to CPT 99211. We also proposed to use this crosswalk to 
establish the direct PE inputs for HCPCS code G0538, with modifications 
to reflect non-face-to-face services. These modifications include 
eliminating PE inputs used in face-to-face services such as preparing 
and cleaning the room. We sought comments on these proposals.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters were generally in support of our proposed 
valuation of ASCVD risk management services (G0538).
    Response: After consideration of public comments, we are finalizing 
the work RVU of 0.18 and our proposed PE inputs for G0538.

H. Supervision of Outpatient Therapy Services in Private Practices, 
Certification of Therapy Plans of Care With a Physician or NPP Order, 
and KX Modifier Thresholds

1. Supervision of Outpatient Therapy Services in Private Practices
    In the CY 2024 PFS final rule, we finalized our proposal to allow 
remote therapeutic monitoring (RTM) services to be furnished by 
occupational therapy assistants (OTAs) and physical therapy assistants 
(PTAs) under the general supervision of occupational therapists (OTs) 
and physical therapists (PTs) in private practice, in an effort to 
align with the general supervision policy for these services for 
physicians and other practitioners described in the CY 2023 final rule 
(88 FR 78990). We also noted that we would consider for possible future 
rulemaking the commenters' responses to our request for information 
(RFI) on changing the supervision of therapy assistants in the private 
practice setting to general supervision for all therapy services (88 FR 
78990 through 78992).
    In the CY 2024 PFS proposed rule, we reviewed the statutory 
provisions at sections 1861(p) and 1861(g) (by cross-reference to 
section 1861(p)) of the Act that describe outpatient physical therapy 
and occupational therapy services furnished to individuals by physical 
therapists (PTs) and occupational therapists (OTs) meeting licensing 
and other standards prescribed by the Secretary if the services meet 
the necessary conditions for health and safety. These statutory 
provisions refer separately to outpatient therapy services furnished by 
a provider of services (such as a rehabilitation agency) and those 
services furnished in the therapist's office or the individual's home, 
thus distinguishing therapists who work for an institutional provider 
of therapy services from therapists who furnish and bill independently 
for these outpatient therapy services (88 FR 52358 through 52359). In 
regulations, we have addressed these therapists as physical or 
occupational therapists in private practice (PTPPs and OTPPs) (63 FR 
58868 through 58870). The regulations specific to services furnished by 
occupational or physical therapists in private practice are found at 
Sec. Sec.  410.59(c) and 410.60(c), respectively.
    We also summarized a history of related regulatory provisions in 
the CY 2024 PFS proposed rule. In the CY 2005 PFS final rule with 
comment period (69 FR 66236, 66351 through 66354), we explained that 
the personnel requirements that are applicable for Home Health Agencies 
(HHAs) at 42 CFR part 484 for therapists, therapy assistants and 
speech-language pathologists (SLPs) apply to all outpatient physical 
therapy, occupational therapy, and speech-language pathology services. 
In the CY 2005 PFS final rule, we also added a basic rule at Sec. Sec.  
410.59(a) and 410.60(a), respectively, by cross-referencing the

[[Page 97911]]

qualifications for OTs and their OTAs and PTs and their PTAs for all 
occupational therapy and physical therapy services, respectively, 
including those who work in private practices, to 42 CFR part 484. 
Later, in the CY 2008 PFS final rule (72 FR 66328 through 66332), we 
updated the qualification standards at 42 CFR part 484 for OTs, OTAs, 
PTs, PTAs, and SLPs.
    In the CY 2024 PFS proposed rule, through our RFI on general 
supervision of OTAs and PTAs by OTPPs and PTPPs, respectively, we 
solicited public comment, along with supporting data, for our 
consideration for possible future rulemaking about the following: (a) 
the questions and concerns we highlighted related to access, patient 
safety, and utilization; (b) revising Sec. Sec.  410.59(a)(3)(ii) and 
(c)(2) and 410.60(a)(3)(ii) and (c)(2) to permit general supervision of 
OTAs and PTAs by the OTPP and PTPP, respectively, when furnishing 
therapy services; and (c) any appropriate exceptions to allowing 
general supervision in the furnishing of therapy services (88 FR 52358 
through 52359).
    In the CY 2024 PFS final rule, we reviewed the comments we received 
in response to the proposed rule (please refer to (88 FR 78990 through 
78992)). We noted that we would consider these comments for possible 
future rulemaking--see our review of comments on the RFI in the CY 2024 
PFS final rule (88 FR 78992).
    Over the past several years and again more recently, we have heard 
from interested parties that the direct supervision requirements in the 
private practice setting are problematic for OTPPs and PTPPs who must 
remain on-site and immediately available when Medicare patients are 
treated to bill for therapy services furnished by their supervised OTAs 
and PTAs. As a remedy to this situation, interested parties have 
requested that we revise our requirement for PTPPs and OTPPs to provide 
direct supervision of OTAs and PTAs to align with the general 
supervision policies for OTs and PTs that work in Medicare 
institutional settings that provide therapy services (for example, 
rehabilitation agencies, outpatient hospitals, SNFs and comprehensive 
outpatient rehabilitation facilities (CORFs), etc.), to allow for the 
general supervision of their therapy assistants. These interested 
parties tell us that their respective State laws and policies allow 
general supervision of therapy assistants (most often requiring the OT 
or PT to be in touch with their therapy assistants via 
telecommunication) in at least 44 States for PTAs,\144\ and all but one 
State for OTAs.
---------------------------------------------------------------------------

    \144\ Federation of State Boards of Physical Therapy 
Jurisdiction Licensure Reference Guide https://www.fsbpt.net/lrg/Home/SupervisionRequirementLevelsBySetting.
---------------------------------------------------------------------------

    Some interested parties have reported that allowing for general 
supervision of OTAs and PTAs by OTPPs and PTPPs, respectively, would 
allow for patients to have increased access to outpatient therapy 
services, even with ongoing healthcare workforce shortages. The 
shortages of OTs \145\ and OTAs,\146\ PTs,\147\ and PTAs,\148\ are 
noted by the United States Bureau of Labor Statistics, which shows 
thousands of open positions in all of these fields. Interested parties 
noted that over 22,000 PTs left the workforce in 2021.\149\ 
Additionally, these interested parties noted that workforce shortages 
have greater impact on private practices in rural and underserved areas 
where hourly wages are lower, and the OTPPs and PTPPs in these areas 
tend to have small practices. The interested parties stated that 
Medicare's direct supervision policy, which requires the PTPP and the 
PTA to both be present when a Medicare patient is treated, does not 
allow small practices with one PT and one or two PTAs, for example, to 
work different or overlapping schedules in order to accommodate all 
patients' availability by allowing the OTA/PTA to work before or after 
the OTPP/PTPP normal hours. The interested parties also stated that the 
direct supervision requirement can unfairly delay care for Medicare 
patients when, for example, a PTPP or OTPP is out sick, the practice 
does not have alternative coverage, and appointments for Medicare 
patients must be canceled.
---------------------------------------------------------------------------

    \145\ Bureau of Labor Statistics, U.S. Department of Labor, 
Occupational Outlook Handbook, Occupational Therapists, at https://www.bls.gov/ooh/healthcare/occupational-therapists.htm (visited 
April 17, 2024).
    \146\ Bureau of Labor Statistics, U.S. Department of Labor, 
Occupational Outlook Handbook, Occupational Therapy Assistants and 
Aides, at https://www.bls.gov/ooh/healthcare/occupational-therapy-assistants-and-aides.htm (visited April 17, 2024).
    \147\ Bureau of Labor Statistics, U.S. Department of Labor, 
Occupational Outlook Handbook, Physical Therapists, at https://www.bls.gov/ooh/healthcare/physical-therapists.htm (visited April 
17, 2024).
    \148\ Bureau of Labor Statistics, U.S. Department of Labor, 
Occupational Outlook Handbook, Physical Therapist Assistants and 
Aides, at https://www.bls.gov/ooh/healthcare/physical-therapist-assistants-and-aides.htm (visited April 17, 2024).
    \149\ See the report by Definitive Healthcare dated October 2022 
at https://www.definitivehc.com/sites/default/files/resources/pdfs/Addressing-the-healthcare-staffing-shortage.pdf.
---------------------------------------------------------------------------

    In light of this input, we believe that the direct supervision 
requirement for OTPPs and PTPPs of OTAs and PTAs, respectively, may 
have had an unintended consequence of limiting access to needed therapy 
services. As noted by interested parties, both the OTPP/PTPP and their 
respective OTA/PTA must be present in the office to bill and receive 
Medicare payment for therapy services furnished by OTAs and PTAs. This 
means, for example, that an OTPP/PTPP cannot bill and receive payment 
for therapy services furnished to a Medicare patient in their home when 
furnished by an OTA/PTA, without the presence of the OTPP/PTPP. The 
direct supervision requirement for OTAs and PTAs in the private 
practice setting is more stringent than the supervision requirements 
for OTAs and PTAs in institutional settings. For example, as we noted 
in the CY 2024 PFS proposed rule, 42 CFR 485.713 specifies that when an 
OTA or PTA provides services at a location that is off the premises of 
a clinic, rehabilitation agency, or public health agency, those 
services are supervised by a qualified occupational or physical 
therapist who makes an onsite supervisory visit at least once every 30 
days. We also cited Table 4 in our Report to Congress, titled 
``Standards for Supervision of PTAs and the Effects of Eliminating the 
Personal PTA Supervision Requirement on the Financial Caps for Medicare 
Therapy Services,'' \150\ in the CY 2024 PFS proposed rule to 
demonstrate that the minimum level of supervision by PTs and OTs for 
services performed by PTAs and OTAs working in institutional settings 
is a general level of supervision, in accordance with various 
regulations (88 FR 52359). Therefore, we believe that a change from 
direct to general supervision would allow OTPPs and PTPPs the 
flexibility to better accommodate patients' availability and act to 
ensure access to necessary therapy services. A change from direct to 
general supervision would also allow OTPPs and PTPPs to bill and 
receive Medicare payment for therapy services furnished by their OTAs 
and PTAs when they are not in the office or patient's home at the same 
time.
---------------------------------------------------------------------------

    \150\ See Table 4 of the Report to Congress titled Standards for 
Supervision of PTAs and the Effects of Eliminating the Personal PTA 
Supervision Requirement on the Financial Caps for Medicare Therapy 
Services at https://www.cms.gov/Medicare/Billing/TherapyServices/Downloads/61004ptartc.pdf.
---------------------------------------------------------------------------

    We also believe that it is important to better align our 
supervision policies for OTPPs and PTPPs with the majority of state-
established supervision levels for therapy assistants providing 
occupational therapy and physical therapy services. We note that the 
majority of states allow OTs and PTs to provide general supervision of 
their

[[Page 97912]]

respective OTAs and PTAs when furnishing occupational therapy and 
physical therapy services. We believe that States are well aware of the 
health and safety needs for their residents who receive therapy 
services from OTs and their supervised OTAs, and PTs and their 
supervised PTAs. Given these beliefs and the input from interested 
parties, we proposed to revise our regulations at Sec. Sec.  
410.59(a)(3)(ii) and (c)(2) and 410.60(a)(3)(ii) and (c)(2) to allow 
for general supervision of OTAs and PTAs by OTPPs and PTPPs, when the 
OTAs and PTAs are furnishing outpatient occupational and physical 
therapy services, respectively. We expect that this proposal will both 
increase access to therapy services and more closely align Medicare 
policy with the majority of State practice acts for occupational 
therapy and physical therapy. This revised policy will parallel the 44 
States that allow general supervision of PTAs and the 49 States that 
allow general supervision of OTAs (most often described by States as 
requiring the PT or OT to be in touch via telecommunication). For the 
States with more restrictive supervision levels, such as direct 
supervision, Medicare-covered therapy services provided in those States 
are required to be furnished in compliance with State law. We note that 
while we proposed to allow for general supervision by OTPPs and PTPPs 
of their OTAs/PTAs, an OTPP or PTPP will still be required to provide 
direct supervision to unenrolled OTs and PTs, respectively, in 
accordance with Sec. Sec.  410.59(c)(2) and 410.60(c)(2).
    We solicited comment on our proposals.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters supported our proposal to change the 
required level of supervision of PTAs and OTAs in PT and OT private 
practices from direct to general supervision. Many of these commenters 
cited potential benefits including increased patient access to therapy 
services, alignment with State laws and practice acts and reduced 
administrative burdens. Other commenters appreciated the proposal for 
general supervision because it would provide greater flexibility in 
scheduling and resource allocation--allowing PT and OT clinics to 
address staffing shortages, particularly in rural areas, since the 
therapists and therapy assistants no longer need to both be onsite to 
treat Medicare patients. Some commenters supported our proposal because 
consistent general supervision policies across all Medicare therapy 
settings will decrease administrative burden and confusion. Many 
commenters informed us that providers have demonstrated the ability to 
provide safe and effective care for many years with general supervision 
of PTAs and OTAs in other Medicare therapy settings and believe these 
safeguards will protect patients in the private practice setting. A few 
commenters thanked us for the general supervision proposal, since some 
of the institutional settings with general supervision, for example, 
home health agencies (HHAs) and SNFs, include patients with more 
complex conditions than those in private practice settings where direct 
supervision is required. One commenter supported our proposal for 
general supervision as they believe this change could increase 
employment opportunities for their graduates and allow them to better 
serve patients in their communities. We heard from several other 
commenters that suggested this change in supervision could result in 
Medicare savings--up to an estimated $271 million over 10 years--based 
on a 2022 report by Dobson DaVanzo & Associates commissioned by therapy 
organizations.\151\ One of these commenters that believes the analysis 
presents convincing data that general supervision in private practices 
would create significant savings, even if the supervision change 
resulted in a modest increase in therapy service, is that some services 
of the PT would shift to the PTA--resulting in a greater percentage of 
claims for services furnished by PTAs being paid at 85 percent of what 
we otherwise make to the therapist under the PFS when those services 
are furnished in whole or in part by a PTA.
---------------------------------------------------------------------------

    \151\ See report at: https://www.dobsondavanzo.com/index.php?src=directory&view=Publications&submenu=_pubs&category=Cost%20Estimation&srctype=Publications_lister_redesign.
---------------------------------------------------------------------------

    Response: We appreciate the support for our proposed policy from 
the many commenters.
    Comment: One commenter expressed concerns over potential risks to 
patient safety, quality of care, lost professional development 
opportunities, lack of consistency in treatment, and legal and ethical 
issues, recommending the retention of the direct supervision policy.
    Response: PTAs and OTAs, who are State-licensed or State-regulated 
professionals, will continue to be required to comply with their 
respective State laws, and work under the direction of the PT or OT in 
private practice, which sufficiently safeguards patients' safety and 
quality of care. We do not believe that a change to general supervision 
will affect the consistency in treatment delivery of therapy services 
under the physical therapy or occupational therapy plan of care; nor 
will it create gaps in training and development of PTAs and OTAs by 
their supervising PTs and OTs. Further, we do not agree with the 
commenter that the change to general supervision where it is permitted 
under State law will cause a change in the way therapists or therapy 
assistants fulfill their legal obligations or comply with ethical 
standards.
    After consideration of public comments, we are finalizing as 
proposed the revisions to Sec. Sec.  410.59(a)(3)(ii) and (c)(2) and 
410.60(a)(3)(ii) and (c)(2) to allow for general supervision of OTAs 
and PTAs by OTPPs and PTPPs, when the OTAs and PTAs are furnishing 
outpatient occupational and physical therapy services, respectively.
    We believe that this policy will increase access to therapy 
services and more closely align Medicare policy with the majority of 
State practice acts for occupational therapy and physical therapy. In 
States with more restrictive supervision levels, such as direct 
supervision, Medicare-covered therapy services provided in those States 
are required to be furnished in compliance with State law.
2. Certification of Therapy Plans of Care With a Physician or NPP Order
    Sections 1861(p), (g), and (ll)(2) of the Act define outpatient 
physical therapy services, outpatient occupational therapy services, 
and outpatient speech-language pathology services as services provided 
to an individual outpatient who is under the care of a physician and 
for whom a plan for the physical therapy, occupational therapy, or 
speech-language pathology services that are to be furnished has been 
established by a physician or by a qualified PT, OT, or SLP and is 
periodically reviewed by a physician. Sections 1835(a)(2)(C) and 
1835(a)(2)(D) of the Act require that payment for Medicare therapy 
services may be made for outpatient physical therapy, occupational 
therapy, and speech-language pathology services only if a physician 
certifies (and recertifies, where such services are furnished over a 
period of time) that: (a) the services are or were required because the 
patient needs or needed therapy services; (b) a plan for furnishing 
such services was established by a physician or therapist providing 
such services, and is periodically reviewed by the physician; and (c) 
the services are or were furnished while the individual is or was under 
the care of a physician.

[[Page 97913]]

    In accordance with the statute and Sec.  424.24(b), Medicare Part B 
pays for outpatient physical therapy and speech-language pathology 
services furnished by providers only if a physician certifies the 
content specified in Sec.  424.24(c)(1) or (4). We recognize that it 
may not be clear that Sec.  424.24(c) applies to the occupational 
therapy services furnished by providers, since occupational therapy 
services are currently only explicitly mentioned in the recertification 
requirements at Sec.  424.24(c)(4). We note that there are multiple 
references to Sec.  424.24(c) in the Medicare Benefit Policy Manual, 
Pub. 100-02, chapter 15, sections 220.1--Conditions of Coverage and 
Payment for Outpatient Physical Therapy, Occupational Therapy, or 
Speech-Language Pathology Services, 220.1.2--Plans of Care for 
Outpatient Physical Therapy, Occupational Therapy, or Speech-Language 
Pathology Services, and 220.1.3--Certification and Recertification of 
Need for Treatment and Therapy Plans of Care, which convey our current 
policy that all outpatient physical therapy, occupational therapy, and 
speech-language pathology services are subject to requirements for 
certification and recertification at Sec.  424.24, whether furnished by 
providers or by suppliers such as therapists in private practice 
(TPPs). We note that while section 1835 of the Act explicitly refers to 
services furnished by providers of services, which would include 
hospitals and other institutional providers as defined in section 
1861(u) of the Act, and clinics, rehabilitation agencies, or public 
health agencies as further described in section 1835(a) of the Act, we 
have interpreted the requirements of section 1835(a)(2)(C) and 
1835(a)(2)(D) as applying to therapy services furnished by both 
providers and suppliers, which would include a physician or other 
practitioner, or an entity other than a provider, that furnishes health 
care services under Medicare.\152\ See Medicare Benefit Policy Manual, 
Pub. 100-02, chapter 15, sections 220.1, 220.1.2, and 220.1.3 for 
references to Sec.  424.24. We believe that this interpretation is 
based on the certification and recertification requirements under 
section 1835(a) of the Act as a way to effectuate the requirement in 
sections 1861(p), (g), and (ll)(2) of the Act that the patient is under 
the care of a physician, and that the plan of treatment/care for the 
physical therapy, occupational therapy, or speech-language pathology 
services has been established by a physician or by a qualified PT, OT, 
or SLP and is periodically reviewed by a physician. Additionally, we 
thought it was important to establish conforming policies for these 
therapy services in both the outpatient provider and private practice 
settings.
---------------------------------------------------------------------------

    \152\ 42 CFR 400.202.
---------------------------------------------------------------------------

    Due to the foregoing concerns, we proposed to revise the headings 
of paragraphs (c) introductory text and (c)(1)(i) to include the term 
``occupational therapy'' after physical therapy. We proposed to replace 
the term speech pathology with the accepted term speech-language 
pathology in 42 CFR 424.24(c)(1)(i). We also proposed to add the term 
``occupational therapist'' to 42 CFR 424.24(c)(3)(ii) between physical 
therapist and speech-language pathologist.
    The regulations at 42 CFR 424.24(c) require that a physician, nurse 
practitioner (NP), physician assistant (PA), or clinical nurse 
specialist (CNS) who has knowledge of the case sign the initial 
certification for the patient's plan of treatment. We reminded readers 
that plan of treatment is synonymous with the ``plan of care'' 
mentioned above. This terminology appears in several sections of Pub. 
100-02, chapter 15, and both terms may be used interchangeably. In 
accordance with Sec.  424.24(c)(2), the initial certification must be 
obtained as soon as possible after the plan is established by a PT, OT, 
or SLP. In Pub. 100-02, chapter 15, section 220.1.3 for Certification 
and Recertification of Need for Treatment and Therapy Plans of Care, we 
specified that the physician or nonphysician practitioner (NPP) must 
sign the initial plan of care (POC) with a dated signature or verbal 
order within 30 days from the first day of treatment, including 
evaluation (or 14 days if a verbal order), in order for the PT, OT, or 
SLP to be paid for the services. For this reason, the manual also 
states that the therapist should forward the treatment plan to the 
physician/NPP as soon as it is established rather than waiting to do 
so. The manual allows for a delayed certification when the physician or 
NPP completes certification and includes a reason for the delay, and 
delayed certifications are accepted without justification up to 30 days 
after the due date.
    The regulations at Sec.  424.24(c)(4) require recertification at 
least every 90 days, and the plan or other documentation in the 
patient's medical record must indicate the continuing need for physical 
therapy, occupational therapy, or speech-language pathology services. 
The physician, nurse practitioner, clinical nurse specialist, or 
physician assistant who reviews the plan must recertify the plan by 
signing the medical record. Pub. 100-02, chapter 15, section 220.1.4.C 
clarifies that payment and coverage conditions require that the plan of 
care be reviewed as often as necessary but at least whenever it is 
certified or recertified, to meet the certification requirements. We 
explained in the CY 2008 PFS final rule, when changing the plan of care 
recertification interval from 30 to 90 days, this was done to allow 
more flexibility to the physician/NPP to order the appropriate amount 
of therapy for each patient's needs (72 FR 66333). Thus, a physician or 
non-physician practitioner (NPP) may certify or recertify a plan of 
care at an interval the physician or NPP determines is appropriate, as 
long as the amount of time between each recertification does not exceed 
90 calendar days. As many episodes of therapy treatment are completed 
in less than 30 calendar days, we expect that physicians and NPPs will 
continue to certify plans of care that appropriately estimate the 
duration of needed therapy treatment for a patient, even if the 
duration is less than 90 days.
    Over the past two years, representatives of several therapy-related 
organizations have requested that CMS reduce the administrative burden 
involved with attempting to obtain signed plans of treatment from the 
physician/NPP. They expressed concern that therapists are held 
accountable for the action or inaction of physicians/NPPs who may be 
overwhelmed with paperwork. These interested parties report that 
therapists make exhaustive efforts to obtain the physician/NPP's 
signature--some reporting that they contact physician offices (via 
phone, email, or fax, etc.) more than 30 times. Without the required 
signature, the therapist will not meet the conditions to be paid for 
the services they deliver. These interested parties recommend that 
payment for therapy services should be determined by the medical 
necessity of the service and whether the therapist has met their 
statutory and regulatory requirements. Some of these interested parties 
have noted that Pub. 100-02, chapter 15, section 220.1.1, states that 
the physician/NPP order provides evidence that the patient is under the 
care of a physician and that the services are medically necessary. 
Interested parties told us that while CMS allows treatment to begin 
before the physician's/NPP's signature is obtained, PTs, OTs, and SLPs 
in private practice do so at their own risk, knowing that they might 
not

[[Page 97914]]

be paid for the services if the physician's office does not send back 
the signed plan of treatment. Accordingly, such interested parties have 
said that care is delayed while awaiting a physician's signature, which 
could place the beneficiary's health at risk due to the delay in 
obtaining outpatient therapy services.
    While we do not require an order or referral for a Medicare patient 
to see a PT, OT, or SLP, we have explained that the presence of a 
signed order from the treating physician satisfies statutory 
requirements that therapy is/was medically necessary and the patient 
is/was under the care of a physician (Pub. 100-02, chapter 15, section 
220.1.1). However, with this order documented in the medical record, 
after the therapist evaluates the patient and establishes the plan of 
treatment, based on the evaluation's findings, the therapist forwards 
the patient's plan of treatment back to the referring physician/NPP to 
obtain a dated signature for the same patient with the same diagnosis 
to meet coverage and payment conditions to satisfy the initial 
certification requirement--creating an administrative burden for both 
the physician/NPP and the therapist. Interested parties have reported 
to us that most patients seeking outpatient therapy services have 
written orders from their physician, not to be confused with a written 
plan of treatment. These interested parties have suggested that we 
amend the regulation at Sec.  424.24(c) to permit the presumption of a 
physician/NPP signature for purposes of certification and 
recertification in cases where a signed written order or referral from 
the patient's physician/NPP is on file and there is written 
documentation in the patient's medical record to substantiate the 
method and date (such as a fax, email, etc.) that the therapist 
forwarded the plan of care to the physician/NPP.
    Additionally, interested parties representing all therapy 
disciplines requested that CMS allot time for plan of treatment 
changes. Interested parties requested that when a physician/NPP orders 
the therapy services, the physician/NPP be allotted 10 business days to 
modify the plan of treatment by contacting the therapist directly after 
receiving it from the therapist. For patients without a physician/NPP 
order, interested parties requested that physician/NPPs be given 30 
days after receipt of the plan of treatment to modify the treatment 
plan.
    After reviewing our current regulatory requirements and considering 
the suggestions of interested parties, we believe it would be 
appropriate to propose to amend the regulation at Sec.  424.24(c) for 
those cases when a patient has a signed and dated order/referral from a 
physician/NPP for outpatient therapy services. Since our policy has 
been to accept the physician or NPP's signature on the plan of 
treatment to be their certification of the treatment plan's conditions 
in the content requirements of Sec.  424.24(c)(1)--that the patient 
needs or needed physical therapy, occupational therapy or speech-
language pathology services, the services were furnished while the 
individual was under the care of a physician, NP, PA, or CNS, and the 
services were furnished under a plan of treatment that meets the 
requirements of Sec.  410.61--we proposed that a signed and dated 
order/referral from a physician/NPP combined with documentation of such 
order/referral in the patient's medical record along with further 
evidence in the medical record that the therapy plan of treatment was 
transmitted/submitted to the ordering/referring physician or NPP is 
sufficient to demonstrate the physician or NPP's certification of these 
required conditions. Rather than characterizing this proposal as a 
``presumption,'' we are taking the view that when the patient's medical 
record includes a signed and dated written order or referral indicating 
the type of therapy needed, CMS (and our contractors) would treat the 
signature on the order or referral as equivalent to a signature on the 
plan of treatment. We believe our proposal will be reflective of the 
intent of the ordering/referring physician/NPP when that order/referral 
is on file in the patient's medical record. We further believe that 
this will still be consistent with the initial certification required 
under section 1835(a) of the Act for providers of therapy services and 
our current policy for therapy in the private practice setting. When 
the ordering/referring physician writes the referral for the type of 
therapy services they determine their patient needs or needed, they 
also review the treatment plan the therapist established at the time it 
is forwarded to them, and they verify that the services are or were 
furnished while the patient is or was under their care. As such, we 
proposed to carve out an exception to the physician signature 
requirement at Sec.  424.24(c) by adding a new paragraph (c)(5). The 
policy will be an exception to the physician signature requirement for 
purposes of an initial certification in cases where a signed and dated 
order/referral from a physician, NP, PA, or CNS is on file and the 
therapist has documented evidence that the plan of treatment has been 
delivered to the physician, NP, PA, or CNS within 30 days of completion 
of the initial evaluation. However, at this time, we did not propose 
and do not intend to establish an exception to the signature 
requirement for purposes of recertification of the therapy plan of 
treatment. We believe that physicians and NPPs should still be required 
to sign a patient's medical record to recertify their therapy treatment 
plans, in accordance with Sec.  424.24(c)(4), to ensure that a patient 
does not receive unlimited therapy services without a treatment plan 
signed and dated by the patient's physician/NPP.
    Under our proposal, CMS or its contractors will be able to treat 
the physician/NPP signature on the order or referral as equivalent to a 
signature on the plan of treatment for purposes of the initial 
certification if that physician/NPP has not signed and returned the 
patient's plan of treatment to the therapist within 30 days of the 
initial evaluation, but only in cases where the patient's physician/NPP 
has signed and dated the written order or referral and indicated the 
type of therapy needed, and that written order or referral is on file 
in the medical record. This policy will not affect a contractor's 
ability or authority to determine whether therapy services are 
reasonable and necessary for a given beneficiary. Lastly, because there 
is no requirement for a physician/NPP order or referral for patients to 
obtain outpatient therapy services, we proposed to make clear in Sec.  
424.24(c)(5) that the references to an order or referral in Sec.  
424.24(c)(5) shall not be construed to require an order or referral for 
outpatient physical therapy, occupational therapy, or speech-language 
pathology services. We welcomed comments on this proposal.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: One commenter supported our technical revisions to Sec.  
424.24(c) to specifically include occupational therapy services under 
the certification requirements and to add the services of an 
occupational therapist, in addition to physical therapists and speech-
language pathologists, as these revisions more clearly identify that 
the certification requirements outlined in Sec.  424.24(c) apply to the 
outpatient therapy services furnished by OTs.
    Response: We thank the commenter for their support.
    Comment: Several commenters expressed support for our proposal to 
accept a physician's or NPP's signed and dated order as equivalent to a 
signature on the initial certification of a therapist-established plan 
of treatment

[[Page 97915]]

in cases where the written order or referral from the patient's 
physician/NPP is on file and the therapist has documented evidence that 
the treatment plan was transmitted to the physician/NPP within 30 days 
of the initial evaluation. They stated this change will reduce 
administrative burden for therapists and physicians/NPPs, as well as 
encourage more timely and efficient care delivery. Many of these 
commenters urged us to finalize the proposal so that they would no 
longer have to waste time and resources tracking down physicians who 
fail to return signed plans of care and added that the proposed 
exception to the signature requirement, if finalized, would greatly 
reduce uncertainty of payment, in addition to reducing administrative 
burden.
    Response: We thank the commenters for their supportive comments.
    Comment: A few commenters expressed concerns. One commenter stated 
that before we make any changes to the certification process, we should 
consider the roles and contributions of each health care provider 
involved in the patient's care plan and ensure that the physician is 
still the head of the care team, while not hindering access to needed 
therapy.
    Response: PTs, OTs, and SLPs are all practitioners of outpatient 
therapy services and while coverage for outpatient therapy services 
relies on the patient being under the care of a physician, these 
practitioners do not require the supervision of physicians or NPPs to 
furnish Medicare-covered therapy services. However, the plans of care 
that therapists establish require the signature of the physician, NP, 
PA, or CNS who has knowledge of the case. As such, the care plan team 
consists of the physician or NPP and the therapist. This care plan team 
is the same as the one that currently exists for treatment plans 
requiring the physician/NPP signature for certification and will remain 
unchanged once our proposal to amend the certification regulations is 
finalized.
    Comment: Some commenters agreed with our proposal to recognize the 
signed and dated order for only the initial certification and that the 
existing signature requirements should be kept for certifications when 
the patient does not have an order or referral and for all 
recertifications irrespective of a whether the patient has a referral. 
Several commenters suggested that the recertification should also be 
included as part of our proposal, while a few other commenters, perhaps 
misunderstanding our proposal, stated that they supported our proposal 
for both the certification and recertification of treatment plans. One 
commenter asked that we confirm our proposed policy.
    Response: We are confirming that our proposed policy as noted in 
the CY 2025 PFS proposed rule (89 FR 61739) would only apply to the 
certification in those cases where the patient has an order or referral 
for physical therapy, occupational therapy, or speech-language 
pathology services; and, stress that we did not propose, nor did we 
intend to establish an exception to the signature requirement for 
purposes of recertification of therapy plans of treatment. In cases 
when the patient does not have a written order or referral from their 
physician/NPP, the POC signature requirement for certifications would 
still apply, as we proposed at Sec.  424.24(c)(5).
    Comment: Several commenters asked CMS to make the policy in this 
proposal clear to our contractors (MACs), that is, the specifics of 
what we included in the CY 2025 PFS proposed rule (89 FR 61739): ``When 
the patient's medical record includes a signed and dated written order 
or referral indicating the type of therapy needed, CMS (and our 
contractors) would treat the signature on the order or referral as 
equivalent to a signature on the plan of treatment.'' They additionally 
asked that we notify our MACs/contractors through a formal program 
memorandum prior to the policy becoming effective on January 1, 2025, 
stating that physician signature requirement for the POC certification 
has been a frequent targeted area for denials and oversight.
    Response: The proposed exception to the signature requirement would 
take effect for dates of service on and after January 1, 2025, based on 
the date of the therapist's initial evaluation (which begins the 
episode of care); and we would plan to notify our contractors of the 
policy changes to the certification process through our usual change 
management process using the same or similar language suggested by the 
commenters.
    Comment: Several commenters asked us to provide a comprehensive 
list of all the acceptable ways that the plan of care can be delivered/
transmitted to the physician/NPP. Three of these commenters gave 
examples of the methods of delivery that their members and/or staff 
have utilized in the past. Their collective list includes the 
following: electronic health record (EHR) systems (with a time stamp) 
and electronic signatures, other electronic means, facsimile sheets/
logs, paper records and paper logs (for example, physicians providing 
signatures at the nursing desk in a facility), electronic date stamps, 
call logs, tracking forms, and those POCs hand delivered to physicians 
(including to physicians in their offices or during weekly rounds in 
the facility). Two of these commenters stated that CMS must convey to 
the MACs that all of these methods of documentation are acceptable. One 
commenter asked CMS to confirm if facsimile logs or other electronic 
means could be accepted as evidence that the POC was submitted/
transmitted to the referring physician/NPP.
    Response: We have not established and are not aware of a 
comprehensive listing of ``acceptable'' delivery mechanisms. However, 
since policies relating to POC delivery/transmission to the physician/
NPP have been in place for many years, we will direct our contractors 
to continue to accept the same methods of delivery as they have in the 
past.
    Comment: Several commenters requested that we issue clarifying 
guidance materials to ensure the ordering/referring physicians and 
treating therapists are fully aware of the information that must be 
included in the order or referral.
    Response: As we stated in the proposed rule, the order or referral 
must be written, dated and signed by the ordering or referring 
physician/NPP and include the type of therapy--physical therapy, 
occupational therapy, or speech-language pathology--the patient 
requires. We are clarifying here that we would also expect the order or 
referral to include information to identify the beneficiary and 
ordering/referring physician/NPP.
    Comment: Two commenters informed us that they believe there is a 
difference between the terms order and referral--stating that a 
referral is broadly inclusive of the more specific term ``order'' that 
might contain specific treatment specifications (for example, duration, 
frequency) and would be treated functionally the same as a referral 
broadly specifying the need for therapy services. They pointed out that 
the Medicare Benefit Policy Manual (MBPM) contains the term ``order'', 
and it may be confusing if the regulation and MBPM terminology differ. 
These commenters stated that they would like us to use only one term, 
``referral'', ``order'' or ``order/referral'', preferably ``referral'', 
for this policy and regulation and related MBPM sections for therapy 
services that they claim will be helpful to PTs who use the MBPM to 
learn about and understand our policies.
    Response: We thank the commenters for their remarks. As we have 
used the ``order or referral'' and ``order/referral'' terminology 
throughout this rulemaking

[[Page 97916]]

for our proposed exception to the signature requirement policy, we will 
continue to use it here and in the regulation text at Sec.  
424.24(c)(5). We agree that our Medicare Benefit Policy Manual (MBPM), 
Pub. 100-02, chapter 15, should conform with the regulation and, as 
such, we will revise the manual in section 220, to reflect that the 
terms ``order or referral'' can be used interchangeably.
    After consideration of public comments, we are finalizing our 
proposal to amend the certification regulations at 42 CFR 424.24(c) to 
provide an exception to the physician/NPP signature requirement on the 
therapist-established treatment plan for purposes of the initial 
certification in cases where a written order or referral from the 
patient's physician/NPP is on file and the therapist has documented 
evidence that the treatment plan was transmitted to the physician/NPP 
within 30 days of the initial evaluation. We are also finalizing the 
regulation text at Sec.  424.24(c), as proposed for paragraphs (c), 
(c)(1)(i), and (c)(3)(ii). We are finalizing the added paragraph (c)(5) 
with a modification to replace the term ``plan of care'' with ``plan of 
treatment.'' We recognize that we have used the term ``plan of care'' 
and ``POC'' in our preamble discussion in the CY 2025 PFS proposed rule 
and in this final rule, and consider ``plan of care'' and ``plan of 
treatment'' to have the same meaning. However, we are substituting the 
term ``plan of treatment'' for ``plan of care'' in the regulation to be 
consistent with the other uses of plan of treatment found at Sec.  
424.24(c). We will be implementing this exception to the signature 
requirement policy and the clarifications added above via our usual 
change management process to our contractors.
    In addition, we solicited comments to gather more information about 
the need for a regulation that will address the amount of time for 
changes to plans of treatment. Our regulations at 42 CFR 410.61(d), 
which are further clarified in our manual provisions in Pub. 100-02, 
chapter 15, section 220.1.2.C, currently allow for changes to the 
treatment plan by the physician/NPP without time restrictions. 
Interested parties have suggested that we allow physicians/NPPs to have 
just 10 business days from the date of receipt of a plan of care to 
modify that plan of care (in the case of a patient with an order for 
the therapy services).
    We received public comments on this comment solicitation. The 
following is a summary of the comments we received and our responses.
    Comment: Many commenters supported having a 10-business day window 
of opportunity for the physician or NPP to provide modification to the 
plan of care while some of these commenters stated that 10 business 
days was a reasonable timeline for the physician/NPP to make changes to 
the patient's POC. One commenter supporting the 10-business day 
timeline expressed concern that POC communications about his/her 
patients to and/or from the smaller therapy provider without a robust 
EHR system may prove challenging.
    Response: We thank the commenters for their comments.
    Comment: Several commenters did not support the 10-business day 
window. One commenter stated that the NPP may not be able to respond 
within 10 days, and could determine that a modification is necessary 
after a later review. Another commenter opposed any limitation on the 
physician's ability to modify the plan of care stating that his/her 
order/referral in these cases means that they are relinquishing their 
ability to direct the patient's care, including those occasions when 
during the episode of care a patient sees the physician with a change 
in their condition that necessitates a modification. Another commenter 
voiced concern about establishing restrictive time limits for 
physicians/NPPs to make POC modifications since none exist currently 
and they recommend we maintain standing policy until more input is 
gathered from stakeholders.
    Response: We thank the commenters for their comments.
    Comment: A few commenters stated that allowing 10 days for a 
physician to provide modification to the POC was too long. One 
commenter pointed out that this 10-day window is a disservice to 
patients since it could postpone healing, pain relief, or receipt of 
other needed care including increased mobility; and it could complicate 
scheduling appointments that will accommodate them and their 
caregivers.
    Response: We thank the commenters for their comments.
    Comment: Many commenters urged us to clarify that physician/NPP 
modifications to therapy POCs are only applied on a prospective basis 
and asked us to guarantee payment for those therapists' services 
provided prior to a physician/NPP modification to the POC as the 
patient was under the care of a physician/NPP. They believe that prior 
to the modification of the POC, the therapy services provided to the 
patient met Medicare requirements for reimbursement--being both 
medically necessary and under the care of a physician. The commenters 
further stated unless we ensured payment for the therapy services 
furnished prior to the POC being modified by the physician/NPP, 
therapists would continue to have to decide, just as they do now, 
whether to risk providing timely care or waiting 10 days before 
providing therapy services to avoid nonpayment for a modification. We 
also heard from many therapist commenters who told us they believe the 
10-day window both guarantees payment for their services and allows 
physicians/NPPs the opportunity to provide input to the POC without 
impeding the provision of timely therapy services. One commenter stated 
that the time limit was not needed at all if we were to guarantee 
payment for services prior to physicians/NPPs modification of the POC 
during the episode of care.
    Response: We thank the commenters for their comments.
    Comment: One commenter stated their support for the 10-day review 
policy; however, they also stressed that it is important to preserve 
existing processes that allow therapists and physicians to work closely 
together to deliver medically necessary care. Currently, physicians may 
request changes to POCs at any point throughout the episode of care and 
the therapist will adjust the POC based on the physician's 
recommendation. If we finalize the 10-day window review policy, the 
commenter suggests we view the 10-day review period as an opportunity 
for establishing the physician's immediate feedback and that it does 
not preclude their ability to provide future input later in the 
episode.
    Response: We appreciate the commenters' remarks as to the 
importance of maintaining the ability of the physician/NPP to make 
changes to a patient's POC outside of the 10-day window, as noted at 
Sec.  410.61(d), if we were to adopt this 10-day window policy.
    Comment: Two commenters requested that we clarify how the 
physician-modified POC is treated once the therapist has adjusted the 
POC and sent it back to the referring physician/NPP. They both question 
whether the modified POC ``presumptively'' meets the signature 
requirement because the physician input has been incorporated; while 
one of these commenters also asked if the amended POC requires a 
physician signature or whether the new POC is subject to the same 
exception requirement and if the 10-day review period restarts from the 
date the new

[[Page 97917]]

POC was transmitted back to the physician.
    Response: The fact that a physician/NPP has modified the POC does 
not alter the fact that the POC was first established by the therapist 
at the beginning of the episode of care with an order/referral from 
that physician/NPP which is maintained in the patient's medical record. 
If we were to adopt the 10-business day window policy, we would 
continue to treat the modified plan of care as meeting the exception to 
the signature requirement, unless the physician/NPP returns the POC 
with the modifications to the therapist signed, at which point it meets 
the signature requirement and the exception would not be needed.
    Comment: One commenter stated that we should educate the MACs well 
in advance of the effective date of these new policies and suggested we 
consider a formal program memorandum to do so. They stated that the 
MACs have singled out the signature requirement for the POC 
certification most frequently for denials and oversight, citing 
examples of the Targeted Probe and Educate program and claims audits. 
These commenters requested that we ensure that the new finalized 
policies are understood by our contractors in advance of claims 
processing for 2025.
    Response: Currently, MACs primarily perform prepayment review after 
claims from therapists or providers are submitted and prior to claims 
processing. However, the physician/NPP signature itself does not 
represent medical necessity or ensure payment for the therapy service 
whether it's on the order/referral or on the POC without an order--in 
these prepayment review cases, the MACs would look at the therapy 
services provided to determine their medical necessity. The physician/
NPP order/referral would demonstrate the intent for the skilled 
service, which should then be reflected in the therapist-established 
plan of care. We will implement these provisions using our usual change 
management process to provide instructions to contractors and make 
manual revisions to the applicable sections of the MBPM, chapter 5.
    After consideration of public comments, we express appreciation for 
the feedback from commenters and will take the comments into 
consideration for possible future rulemaking.
    We acknowledge the concerns raised by commenters about payment for 
any therapy services furnished prior to a physician/NPP modifying a 
plan of care. We agree with commenters that payment should be made for 
such therapy services if all applicable payment requirements, including 
medical necessity, are met. We are clarifying that whenever a 
physician/NPP amends the therapist-established POC at any point during 
the patient's episode of care, payment determinations for services 
provided by the therapist prior to the amendment should be based on the 
POC that had been timely submitted to the physician/NPP who had written 
the order/referral, or under a POC without an order/referral submitted 
to the physician/NPP with knowledge of the case, and considering all 
other applicable payment requirements, including medical necessity. 
That said, we remind readers that our final policy, as we noted in the 
CY 2025 PFS proposed rule (89 FR 61739), will not affect a contractor's 
ability or authority to determine whether therapy services are 
reasonable and necessary for a given beneficiary; and, as noted above, 
the same medical necessity requirements are applied for POCs 
established with and without orders, with the exception that for those 
POCs established with an order, the medical reviewers may additionally 
look for documentation in the patient's medical record of the written 
order/referral and evidence that the POC was submitted to the 
physician/NPP within 30 days of the therapist's evaluation. We believe 
that our finalized policy to permit the physician/NPP written order/
referral for therapy services to substitute for the signature on the 
initial certification of the therapist-established treatment plan, will 
allow therapists to provide therapy services without any delay and at 
the same financial risk that he/she would have after receiving, after a 
period of waiting for, a signed POC from the physician/NPP without an 
order. This is because, as we noted above, the physician/NPP signature 
itself--whether on the order/referral or on the POC without an order--
does not determine medical necessity or ensure payment for the therapy 
service. While the therapist has a 30-day timeline to send the POC to 
the physician/NPP writing the order/referral, sending the POC to the 
physician/NPP as soon as it is established would allow a MAC conducting 
medical review on a prepayment basis to be able to see the order on 
file and evidence that the POC had be sent to the physician/NPP in a 
timely manner while reviewing all documentation in order to determine 
the medical necessity of the POC and services provided. Additionally, 
we reiterate what we stated in the CY 2025 PFS proposed rule (89 FR 
61739), and wish to clarify in this final rule, and at Sec.  
424.24(c)(5) with a minor amendment, that any reference to an order or 
referral at Sec.  424.24(c)(5) cannot be construed to require an order 
or referral for outpatient physical therapy, occupational therapy, or 
speech-language pathology services. As we noted in the above section, 
we will implement these provisions using our usual change management 
process to provide instructions to contractors and make manual 
revisions to the applicable sections of in the Medicare Benefit Policy 
Manual, Pub. 100-02, chapter 15, Sections 220 and 230. We are also 
considering providing education to therapy providers through a separate 
article should the usual education correlating to the program 
instruction with manual changes not be available until after the new 
policy takes effect on January 1, 2025.
    Additionally, we solicited comment as to whether there should be a 
90 calendar day time limit on the order/referral for outpatient therapy 
services in cases where the order/referral is intended to be used in 
relation to the proposed regulatory amendment for the initial 
certification of the treatment plan at Sec.  424.24(c)(5) discussed 
previously--that 90-day limit would span from the order/referral date 
until the initial treatment of the patient, including the evaluation 
furnished by the PT, OT, or SLP. We also sought feedback about whether 
this limit, or one of a different duration, should be incorporated into 
the regulatory provision we proposed previously for Sec.  424.24(c)(5).
    We received public comments on this comment solicitation. The 
following is a summary of the comments we received and our responses.
    Comment: Some comments voiced opposition to the 90-day limitation 
we discussed in the comment solicitation. One commenter stated 90 days 
was too short and suggested a 6-month limit as more reasonable. Another 
commenter stated a 90-day limit to physician referrals would pose 
significant problems for certain patients whose physicians write 
referrals for therapy at the same time they order surgery, and by the 
time the patient is able to start therapy the referral could be older 
than 90 days--taking into consideration time for the surgery to be 
scheduled followed by a recovery period when needed. This commenter 
also said that having to implement different workflows for the 
referrals over 90 days would be difficult to manage. One commenter 
stated their concerns about the creation of a 90-day limit on orders/
referrals that would be used specifically for purposes of the exception 
to the signature requirement on POC certification as it would create 
confusion and administrative burden

[[Page 97918]]

and may limit patients from receiving timely therapy services. Two 
commenters stated that workforce distribution has created variable 
staffing challenges across the country and believes that a backlog of 
referrals may exist in some states that typically results in therapy 
being scheduled months in advance--sometimes having to schedule new 
patients over 90 days after they received the referral. This commenter 
stated that they believe that a 90-day limit would overcomplicate the 
ability of these staffing-challenged therapy clinics because they would 
have the added burden of tracking down physician signatures and could 
have benefitted from the certification policy without the 90-day order 
limit. Both commenters suggested that we could reconsider this policy 
in the future should the agency determine that a significant amount of 
therapy is initiated beyond 90 days.
    Response: We thank the commenters for their comments.
    Comment: Several commenters supported the 90-day limit to the 
order/referral for these therapy services. Two of these commenters 
stated that a greater than 90-day period between the order/referral and 
the receipt of therapy might result in changes the patient's condition 
that could potentially require the referring physician/NPP to 
reevaluate or reassess the patient's condition in order to provide 
needed additional direction to the therapist. One of these commenters 
stated that their support for the exception to the signature 
requirement policy is contingent upon the adoption of the 90-day time 
limit on the physician order/referral.
    Response: We thank the commenters for their comments.
    After consideration of public comments, we appreciate the feedback 
from commenters and will take the comments into consideration for 
possible future rulemaking.
    We clarify that we did not propose to amend Sec.  424.27 for 
comprehensive outpatient rehabilitation facilities (CORFs) physical 
therapy, occupational therapy, and speech-language pathology treatment 
plans to align with our proposed amendments at Sec.  424.24 because 
section 1861(cc) of the Act and regulation at 42 CFR 410.105(c) require 
these treatment plans to be established by a physician.
3. KX Modifier Thresholds
    The KX modifier thresholds were established through section 50202 
of the Bipartisan Budget Act of 2018 (Pub. L. 115-123, February 9, 
2018) (BBA) and were formerly referred to as the therapy cap amounts. 
These per-beneficiary amounts under section 1833(g) of the Act (as 
amended by section 4541 of the Balanced Budget Act of 1997) (Pub. L. 
105-33, August 5, 1997) are updated each year based on the percentage 
increase in the Medicare Economic Index (MEI). Specifically, these 
amounts are calculated by updating the previous year's amount by the 
percentage increase in the MEI for the upcoming calendar year and 
rounding to the nearest $10.00. Thus, for CY 2025, we proposed to 
increase the CY 2024 KX modifier threshold amount by the most recent 
forecast of the 2017-based MEI. For CY 2025, the proposed MEI increase 
was estimated to be 3.6 percent and was based on the expected 
historical percentage increase of the 2017-based MEI. Multiplying the 
CY 2024 KX modifier threshold amount of $2,330 by the proposed CY 2025 
percentage increase in the MEI of 3.6 percent ($2,330 x 1.036) and 
rounding to the nearest $10.00 resulted in a proposed CY 2025 KX 
modifier threshold amount of $2,410 for physical therapy and speech-
language pathology services combined and $2,410 for occupational 
therapy services. We also proposed to update the MEI increase for CY 
2025 based on historical data through the second quarter of 2024, and 
we proposed to use such data, if appropriate, to determine the final 
MEI percentage increase and the CY 2025 KX modifier threshold amounts 
in the CY 2025 PFS final rule.
    Section 1833(g)(7)(B) of the Act describes the targeted medical 
review (MR) process for services of physical therapy, speech-language 
pathology, and occupational therapy services. The threshold for 
targeted MR is $3,000 through CY 2027. Effective beginning with CY 
2028, the MR threshold levels will be annually updated by the 
percentage increase in the MEI, per section 1833(g)(7)(B) of the Act. 
Consequently, for CY 2025, the MR threshold is $3,000 for physical 
therapy and speech-language pathology services combined and $3,000 for 
occupational therapy services. Section 1833(g)(5)(E) of the Act states 
that CMS shall identify and conduct targeted medical review using 
factors that may include the following:
    (1) The therapy provider has had a high claims denial percentage 
for therapy services under this part or is less compliant with 
applicable requirements under this title.
    (2) The therapy provider has a billing pattern for therapy services 
under this part that is aberrant compared to peers or otherwise has 
questionable billing practices for such services, such as billing 
medically unlikely units of services in a day.
    (3) The therapy provider is newly enrolled under this title or has 
not previously furnished therapy services under this part.
    (4) The services are furnished to treat a type of medical 
condition.
    (5) The therapy provider is part of a group that includes another 
therapy provider identified using the factors described previously in 
this section.
    We track each beneficiary's incurred expenses for therapy services 
annually and count them towards the KX modifier and MR thresholds by 
applying the PFS rate for each service less any applicable multiple 
procedure payment reduction (MPPR) amount for services of CMS-
designated ``always therapy'' services (see the CY 2011 PFS final rule 
at 75 FR 73236). We also track therapy services furnished by critical 
access hospitals (CAHs), applying the same PFS-rate accrual process, 
even though they are not paid for their therapy services under the PFS 
and may be paid on a cost basis (effective January 1, 2014) (see the CY 
2014 PFS final rule at 78 FR 74406 through 74410).
    When the beneficiary's incurred expenses for the year for 
outpatient therapy services exceed one or both of the KX modifier 
thresholds, therapy suppliers and providers use the KX modifier on 
claims for subsequent medically necessary services. Using the KX 
modifier, the therapist and therapy provider attest that the services 
above the KX modifier thresholds are reasonable and necessary and that 
documentation of the medical necessity for the services is in the 
beneficiary's medical record. Claims for outpatient therapy services 
exceeding the KX modifier thresholds without the KX modifier included 
are denied.
    Comment: Several commenters supported the change in the KX modifier 
threshold amounts for CY 2025 and urged us to finalize them.
    Response: We appreciate the supportive remarks from the commenters.
    Comment: One commenter asked us to provide a clarification as to 
why we grouped physical therapy and speech-language pathology together 
stating they should each have their own distinct threshold.
    Response: Section 1833(g) of the Act defines dollar amounts for the 
KX modifier thresholds--there is one amount for physical therapy and 
speech language pathology services combined and a separate amount for 
occupational therapy services--just as with the incurred expenses for 
the prior therapy cap amounts. More information about

[[Page 97919]]

the KX modifier threshold amounts can be found on the therapy services 
web page in the article titled The Implementation of the Bipartisan 
Budget Act of 2018 that is located at https://www.cms.gov/medicare/coding-billing/therapy-services.
    We stated in the CY 2025 PFS proposed rule that we would use the 
MEI update based on historical data through the 2nd quarter of 2024 to 
determine the final MEI percentage increase and the CY 2025 KX modifier 
threshold amounts in the CY 2025 PFS final rule. The final CY 2025 MEI 
is 3.5 percent based on historical data through the second quarter of 
2024. Using this percentage increase results in a KX modifier threshold 
amount of $2,410 for physical therapy and speech-language pathology 
services combined and $2,410 for occupational therapy services, which 
we are finalizing for CY 2025.

I. Advancing Access to Behavioral Health Services

1. Safety Planning Interventions and Post-Discharge Telephonic Follow-
Up Contacts
a. Background
    In the CY 2024 PFS proposed rule, we sought comment on whether 
there is a need for potential separate coding and payment for 
interventions initiated or furnished in the emergency department (ED) 
or other crisis settings for patients with suicidality or at risk of 
suicide, such as safety planning interventions and/or telephonic post-
discharge follow-up contacts after an emergency department visit or 
crisis encounter, or whether existing payment mechanisms are sufficient 
to support furnishing such interventions when indicated. Several 
commenters encouraged CMS to enable wider implementation under Medicare 
of the Safety Planning Intervention (SPI) and the Post-Discharge 
Telephonic Follow-up Contacts Intervention (FCI) and expressed that the 
current payment mechanisms are not sufficient, noting that the lack of 
adequate payment mechanisms and suitable billing codes for these 
interventions are barriers that are essential to address. The 
commenters noted that EDs are not the only care setting where there is 
need and opportunity to enhance suicide prevention, but that elevated 
suicide risk is particularly prevalent among ED patients. One commenter 
noted that a designated code for SPI would make it significantly easier 
to document that SPI was furnished, including in quality reporting and 
value-based payment programs.
    More than 49,000 people died by suicide in 2022 \153\ and death by 
suicide is growing significantly in older adults, who comprise most of 
the Medicare population. Among those age 65 and older, the suicide rate 
increased 4.5% from 2021 to 2022.\154\ We recognize data showing that 
suicide by intentional overdose is a growing concern, particularly 
among young people, older people, and Black women, although researchers 
acknowledge the complexities of distinguishing intentional from 
unintentional death.\155\
---------------------------------------------------------------------------

    \153\ https://www.cdc.gov/suicide/facts/data.html.
    \154\ https://wonder.cdc.gov/.
    \155\ https://www.nih.gov/news-events/news-releases/suicides-drug-overdose-increased-among-young-people-elderly-people-black-women-despite-overall-downward-tren.
---------------------------------------------------------------------------

b. Safety Planning Interventions (SPI)
    Safety planning interventions involve a patient working with a 
clinician to develop a personalized list of coping and response 
strategies and sources of support that the person can use in the event 
of experiencing thoughts of harm to themselves or others. This is not a 
suicide risk assessment, but rather, an intervention provided to people 
determined to have elevated risk for suicide. Safety planning 
interventions have also been used to reduce the risk of overdose. The 
basic components of a safety plan include the following: (1) 
recognizing warning signs of an impending suicidal crisis or actions 
that increase the risk of suicide; (2) employing internal coping 
strategies; (3) utilizing social contacts and social settings as a 
means of distraction from suicidal thoughts and/or taking steps to 
reduce the risk of suicide; (4) utilizing family members, significant 
others, caregivers, and/or friends to help resolve the crisis; (5) 
contacting mental health professionals, crisis services, or agencies; 
and (6) making the environment safe, including restricting access to 
lethal means, as applicable.\156\ One important aspect of making an 
environment safe could be, for example, addressing a person's access to 
lethal means, such as firearms, environmental means (including bridges 
and tall structures), and medications/drugs.
---------------------------------------------------------------------------

    \156\ Barbara Stanley, Gregory K. Brown, Safety Planning 
Intervention: A Brief Intervention to Mitigate Suicide Risk, 
Cognitive and Behavioral Practice, Volume 19, Issue 2, 2012, Pages 
256-264, ISSN 1077-7229, https://doi.org/10.1016/j.cbpra.2011.01.001.
---------------------------------------------------------------------------

    We understand that safety planning is consistent with current 
practice standards and that many hospitals and clinicians in other 
settings are already providing some or all of these services to the 
people who need them, including through the Department of Veterans 
Affairs (VA).157 158 However, in one survey of EDs, only 
15.3 percent could confirm routinely implementing safety planning with 
all of the structured elements mentioned above. Provision of individual 
safety planning elements ranged from 24.8 percent 
(n[thinsp]=[thinsp]492) to 79.2 percent (n[thinsp]=[thinsp]1710), with 
2 of 6 elements being routinely provided more than 50 percent of the 
time: lists of professionals or agencies to contact in a crisis (1710 
[79.2 percent]) and helping patients to recognize warning signs of 
suicide (1075 [52.2 percent]).\159\ Suicide risk among people with 
substance use disorders who also are at high risk for or may have 
experienced an intentional overdose is not well recognized.\160\
---------------------------------------------------------------------------

    \157\ https://www.mentalhealth.va.gov/docs/vasafetyplancolor.pdf.
    \158\ https://www.mirecc.va.gov/visn19/research/our-research/implementation.asp.
    \159\ Bridge JA, Olfson M, Caterino JM, Cullen SW, Diana A, 
Frankel M, Marcus SC. Emergency Department Management of Deliberate 
Self-harm: A National Survey. JAMA Psychiatry. 2019 Jun 1;76(6):652-
654. doi: 10.1001/jamapsychiatry.2019.0063. PMID: 30865243; PMCID: 
PMC6552299.
    \160\ Ries RK, Livengood AL, Huh D, et al. Effectiveness of a 
Suicide Prevention Module for Adults in Substance Use Disorder 
Treatment: A Stepped-Wedge Cluster-Randomized Clinical Trial. JAMA 
Netw Open. 2022;5(4):e222945. doi:10.1001/jamanetworkopen.2022.2945.
---------------------------------------------------------------------------

    Therefore, we proposed in the CY 2025 PFS proposed rule to 
establish separate coding and payment under the PFS describing safety 
planning interventions. Specifically, we proposed to create an add-on 
G-code that would be billed along with an E/M visit or psychotherapy 
when safety planning interventions are personally performed by the 
billing practitioner in a variety of settings. We recognize that 
training and expertise are needed to perform these interventions safely 
and appropriately and sought comment regarding whether clinical staff 
who meet the definition of auxiliary personnel defined at 42 CFR 
410.26(a)(1) or who are employed by a hospital could participate in 
furnishing this service under the supervision of the billing 
practitioner in certain settings with the relevant training needed to 
perform the service as well as what sort of training would be needed.
    The proposed G-code is HCPCS code G0560: Safety planning 
interventions, including assisting the patient in the identification of 
the following personalized elements of a safety plan: recognizing 
warning signs of an impending suicidal crisis; employing internal 
coping strategies; utilizing social contacts and social settings as a 
means of distraction from suicidal thoughts; utilizing family members, 
significant others, caregivers, and/or friends to help resolve the 
crisis;

[[Page 97920]]

contacting mental health professionals or agencies; and making the 
environment safe; (List separately in addition to an E/M visit or 
psychotherapy). We welcomed comments on the proposed elements of the 
safety planning code.
    We proposed to value HCPCS code G0560 based on the valuation for 
CPT code 90839 (Psychotherapy for crisis), which describes 60 minutes, 
and which we believe describes a similar level of intensity as HCPCS 
code G0560. For HCPCS code G0560, we assumed a typical time of 20 
minutes, resulting in a work RVU of 1.09 (based on one third of the 
work value currently assigned to CPT code 90839, which is 3.28). We 
welcomed comments on whether 20 minutes accurately captures the typical 
amount of time spent with a patient on safety planning interventions, 
including all six elements enumerated in this section. Additionally, we 
welcomed comments on whether these interventions typically occur in the 
context of an encounter, such as an E/M visit or psychotherapy, or 
whether there may be times when they may be furnished as a standalone 
service and whether we should consider allowing this code to be billed 
on its own. We also welcomed comments regarding which clinician types 
might be most likely to bill such a code on its own.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters recommended that we finalize this code as 
a standalone code, rather than an add-on code, noting that 
practitioners need a way to capture time spent performing safety 
planning interventions beyond the initial 20 minutes. Commenters noted 
that in settings such as emergency departments, crisis centers, and 
primary care, SPI will be conducted on its own at times and at other 
times, SPI will be provided in addition to services such as 
psychotherapy or E/M services and stated it is essential to establish a 
billing mechanism that meets the requirements for each of these 
scenarios. They noted that as currently proposed, there is a risk that 
additional services that are not required will be conducted to justify 
billing this code. Other commenters emphasized that the flexibility to 
bill SPI as a standalone service is essential for providing timely 
interventions, especially in emergency settings or during critical 
periods when a full E/M visit or psychotherapy session may not be 
feasible. These commenters also believe that the proposed typical time 
of 20 minutes does not accurately capture the typical amount of time 
spent with a patient to provide evidence-based safety planning 
interventions, noting that 20 minutes would be the minimum and that 20-
45 minutes is typical, while some commenters stated that 45-60 minutes 
is typical for adults and 90 minutes would be typical for minors or 
adults who require caregiver assistance. Many commenters recommended 
that we should allow this code to be billed in units of 20 minutes and 
allow up to 6 units per encounter. The commenters state that this would 
accommodate the varying needs of patients, ensuring that those 
requiring more intensive intervention receive the appropriate level of 
care.
    Response: We thank the commenters for their feedback. We are 
persuaded by the commenters that there may be times when SPI may need 
to be furnished as a standalone service, that more time may be needed 
to complete safety planning interventions and that one 20-minute code 
may not accurately reflect the resource costs involved in furnishing 
these services. Therefore, we are finalizing HCPCS code G0560 as a 
standalone code that can be billed in 20-minute increments.
    Comment: Several commenters stated they believe that there is 
sufficient evidence to support trained clinical staff providing this 
service under the supervision of the billing practitioner and stated 
that restricting the service to only allowing the billing practitioner 
to personally provide the service will severely limit uptake and access 
for beneficiaries. Several commenters noted that allowing a broader 
spectrum of staff to provide SPI mirrors the approach used in clinical 
studies and is consistent with how many existing programs operate. Some 
commenters stated they agreed that training and practicing within scope 
is crucial, and also noted that continued training and education is 
also important and cited that most providers who furnished suicide 
safety planning desired further training. Other commenters recommended 
that we require the same staff qualifications that are required for 
mental health community case management and/or mental health community 
support under the Medicaid Rehabilitation Option as these positions are 
frequently used to provide the same services under Medicaid.
    Response: We appreciate the feedback from the commenters on this 
issue. While some commenters emphasized the importance of training, we 
did not receive specific feedback regarding the nature of the training 
that would be needed. We also note that for services furnished in 
hospital settings, services provided by clinical staff would not be 
separately payable. We are finalizing as proposed that HCPCS code G0560 
would need to be personally performed by the billing practitioner for 
CY 2025, but we will continue to consider this issue for future 
rulemaking. We also note that the billing practitioner could be any 
practitioner who is authorized to furnish services for the diagnosis 
and treatment of mental illness, including Clinical Social Workers, 
Mental Health Counselors, Marriage and Family Therapists, Clinical 
Psychologists, as well as physicians and NPPs.
    Comment: Some commenters requested that this code be allowed to be 
billed when furnished via telehealth.
    Response: We thank the commenters for this response. Since HCPCS 
code G0560 is similar to other services already on the Medicare 
Telehealth list, such as psychotherapy for crisis, we are finalizing 
adding HCPCS code G0560 to the Medicare Telehealth list. The full list 
of services being added to the Medicare Telehealth list for CY 2025 can 
be found Section II.D. of this final rule, Payment for Medicare 
Telehealth Services Under Section 1834(m) of the Act.
    Comment: A few commenters noted that we acknowledged the increasing 
usage of safety plans related to overdose prevention, but pointed out 
that the proposed code descriptor reads as if the code is specific to 
safety planning to prevent an impending suicidal crisis. The commenters 
suggested that we update the code descriptor to reflect ``recognizing 
warning signs of an impending suicidal or substance use-related 
crisis'' and to update the language regarding contacting professionals 
to read, ``contacting mental health or substance use disorder 
professionals or agencies.'' Similarly, another commenter also 
requested that we update the language regarding utilizing social 
contacts and social settings as a means of distraction from suicidal 
thoughts to also add the language, ``or risky substance use.'' Other 
commenters requested that we add an additional step in the language in 
the code descriptor to include reference to a ``crisis narrative'' in 
which the patient is asked to describe how they found themselves at a 
point where they were thinking of suicide and also, for clarity, to add 
the words ``that are documented in a form.''
    Response: We thank the commenters for their feedback and note that 
we are updating the code descriptor to include ``recognizing warning 
signs of an impending substance-use related crisis,'' ``contacting 
mental health or substance use disorder professionals or agencies,''

[[Page 97921]]

and adding ``or risky substance use,'' as suggested. In response to the 
comments requesting that we revise the code descriptor to refer to a 
crisis narrative and add the words ``that are documented in a form,'' 
we agree that a crisis narrative would be a typical component of these 
services and that the safety plan would be documented in a form, 
however, we do not believe that these items need to be listed in the 
code descriptor. Additionally, we note that GSPI1 was a placeholder 
code and the final code number is HCPCS code G0560 (Safety planning 
interventions, each 20 minutes personally performed by the billing 
practitioner, including assisting the patient in the identification of 
the following personalized elements of a safety plan: recognizing 
warning signs of an impending suicidal or substance use-related crisis; 
employing internal coping strategies; utilizing social contacts and 
social settings as a means of distraction from suicidal thoughts or 
risky substance use; utilizing family members, significant others, 
caregivers, and/or friends to help resolve the crisis; contacting 
mental health or substance use disorder professionals or agencies; and 
making the environment safe.
    In summary, after consideration of public comments, we are 
finalizing our proposal to create separate coding and payment for 
safety planning interventions, with modifications. Specifically, we are 
finalizing HCPCS code G0560 as a standalone code, rather than an add-on 
code as proposed. We are also finalizing that HCPCS code G0560 can be 
billed in units of 20 minutes. We are finalizing as proposed that HCPCS 
code G0560 would need to be personally performed by the billing 
practitioner for CY 2025, but we will continue to consider this issue 
for future rulemaking.
c. Post-Discharge Telephonic Follow-Up Contacts Intervention (FCI)
    Some research suggests that patients seen in the ED with deliberate 
self-harm, intentional overdose, and/or suicidal ideation have been 
associated with substantially increased risk of suicide and other 
mortality during the year following their visit to the ED.\161\ FCI is 
a specific protocol of services for individuals with suicide risk 
involving a series of telephone contacts between a provider and patient 
in the weeks and sometimes months following discharge from the 
emergency department and other relevant care settings, that occurs when 
the person is in the community and is designed to reduce the risk for 
subsequent adverse outcomes. FCI calls are typically 10-20 minutes in 
duration and aim to encourage use of the Safety Plan (as needed in a 
crisis) and updating it to optimize effectiveness, expressing 
psychosocial support, and helping to facilitate engagement in any 
indicated follow-up care and services. We note that this service would 
not be within the scope of Medicare telehealth services and not subject 
to the restrictions described in Section 1834(m) because these services 
are specifically structured to be delivered via audio-only phone calls 
and are not a substitute for an in-person service.
---------------------------------------------------------------------------

    \161\ Goldman-Mellor S, Olfson M, Lidon-Moyano C, Schoenbaum M. 
Association of Suicide and Other Mortality With Emergency Department 
Presentation. JAMA Netw Open. 2019 Dec 2;2(12):e1917571. doi: 
10.1001/jamanetworkopen.2019.17571. PMID: 31834399; PMCID: 
PMC6991205.
---------------------------------------------------------------------------

    In a recent study led by the Joint Commission, which surveyed a 
national sample of hospitals to assess the prevalence of SPI and 
several other recommended suicide prevention services, fewer than half 
of responding hospitals reported furnishing any post-discharge follow-
up contacts. Of these, only 33 percent (16 percent of responding 
hospitals overall) reported reaching discharged patients ``most of the 
time.'' Further, among hospitals that furnish follow-up contacts, fewer 
than half reported covering any of the main aims of FCI, for example, 
41 percent review the Safety Plan, 49 percent provide psychosocial 
support, and 38 percent facilitate outpatient care.\162\
---------------------------------------------------------------------------

    \162\ https://www.sciencedirect.com/science/article/pii/S1553725024000679?via%3Dihub.
---------------------------------------------------------------------------

    However, some studies have demonstrated that SPI and other services 
may be able to reduce suicidal behaviors. For example, in the ED-SAFE 
trial for emergency department (ED) patients identified with elevated 
suicide risk, the intervention included SPI and up to seven post-
discharge follow-up calls with the patient ``focused on identifying 
suicide risk factors, clarifying values and goals, safety and future 
planning, facilitating treatment engagement/adherence, and facilitating 
patient-significant other problem-solving.'' \163\ In the SAFE VET 
study \164\ of ED patients identified with elevated suicide risk, the 
intervention included SPI and at least two follow-up calls with 
patients ``to monitor suicide risk, review and revise the SPI, and 
support treatment engagement.'' \165\ Each of these studies reported 
significantly lower suicide behaviors--attempts and/or deaths--among 
intervention patients compared to the respective control conditions.
---------------------------------------------------------------------------

    \163\ Miller IW, Camargo CA Jr, Arias SA, Sullivan AF, Allen MH, 
Goldstein AB, Manton AP, Espinola JA, Jones R, Hasegawa K, Boudreaux 
ED; ED-SAFE Investigators. Suicide Prevention in an Emergency 
Department Population: The ED-SAFE Study. JAMA Psychiatry. 2017 Jun 
1;74(6):563-570. doi: 10.1001/jamapsychiatry.2017.0678. PMID: 
28456130; PMCID: PMC5539839.
    \164\ https://pubmed.ncbi.nlm.nih.gov/29998307/.
    \165\ Stanley B, Brown GK, Brenner LA, Galfalvy HC, Currier GW, 
Knox KL, Chaudhury SR, Bush AL, Green KL. Comparison of the Safety 
Planning Intervention With Follow-up vs Usual Care of Suicidal 
Patients Treated in the Emergency Department. JAMA Psychiatry. 2018 
Sep 1;75(9):894-900. doi: 10.1001/jamapsychiatry.2018.1776. PMID: 
29998307; PMCID: PMC6142908.
---------------------------------------------------------------------------

    In light of this, we proposed in the CY 2025 PFS proposed rule to 
create a monthly billing code to describe the specific protocols 
involved in furnishing post-discharge follow-up contacts that are 
performed in conjunction with a discharge from the emergency department 
for a crisis encounter, as a bundled service describing four calls in a 
month, each lasting between 10-20 minutes. The G-code is HCPCS code 
G0544: Post discharge telephonic follow-up contacts performed in 
conjunction with a discharge from the emergency department for 
behavioral health or other crisis encounter, per calendar month. We 
sought comment on whether we should consider finalizing a specified 
duration that HCPCS code G0544 could be billed) following discharge, 
for example, allowing this code to be billed for up to two months 
following discharge or whether a longer duration would be appropriate, 
the number of calls per month, the billing structure (for example, four 
calls for each discharged patient), and any other relevant feedback.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    We proposed to price this service based on a direct crosswalk to 
CPT code 99426 (Principal care management; first 30 minutes of clinical 
staff time directed by a physician or other qualified healthcare 
professional), which is assigned a work value of 1.00 work RVUs. Since 
CPT code 99426 describes care management for a single condition, we 
believe the work will be similar in nature and intensity. We noted that 
under this proposal, HCPCS code G0544 could be billed regardless of 
whether HCPCS code G0560 was also furnished and billed for the same 
patient. We proposed that the billing practitioner will need to meet a 
threshold of at least one real-time telephone interaction with the 
patient in order to bill HCPCS code G0544, and that unsuccessful 
attempts to reach the patient will not qualify as

[[Page 97922]]

a real-time telephone interaction. We welcomed comments on this 
threshold to bill HCPCS code G0544, recognizing that while 
practitioners may attempt to reach the patient, there may be times when 
the patient cannot be reached. We also proposed that the billing 
practitioner could not count time or effort more than once for the 
purposes of billing this code and another service.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Several commenters recommended that we unbundle these 
calls, stating they should be billable per call, allowing up to four 
calls per month. Commenters stated that unbundling would discourage 
delaying initiation of these services due to concerns about having 
enough time in a calendar month to complete a call, especially given 
the challenges of reaching patients; would incentivize placing multiple 
calls per month; provide flexibility; and generate data on the number 
of calls completed, which could be used for future refinement of the 
code. Commenters also noted that qualifying index visits for billing 
FCI should include discharge from psychiatric inpatient units/
facilities. Several commenters also cited that evidence from the 
Emergency Department Safety Assessment and Follow-Up Evaluation (ED-
SAFE) trial indicates that a longer follow-up period (6 months to a 
year) significantly enhances the effectiveness of suicide prevention 
efforts.
    Response: We thank the commenters for their feedback. However, we 
continue to believe that a monthly billing structure would be the most 
efficient manner in which to bill these services and therefore, we are 
finalizing HCPCS code G0544 as a monthly bundle, as proposed. Regarding 
the comments about a longer follow-up period, we acknowledge the 
evidence cited and are not finalizing a set duration that this could be 
billed for; rather, we are finalizing that we will allow for this code 
to be billed and paid for as long as the service is medically 
reasonable and necessary.
    Comment: A commenter suggested that instead of establishing G-
codes, CMS could propose extending the use of or revising the existing 
CPT codes for transitional care management and/or discharge day 
management services to help patients safely return to their home or 
community from the ED or other settings.
    Response: We appreciate these comments and may consider them for 
future rulemaking. We are finalizing HCPCS code G0544 as proposed. We 
also recognize that the CPT Editorial Panel has frequently created CPT 
codes describing services for which we originally established G-codes 
and adopted them through the CPT Editorial Panel process. We would 
consider using any newly available CPT coding to describe services 
similar to those described here in future rulemaking.
    Comment: A few commenters recommended that payment or partial 
payment be made for earnest attempts to contact the individual, even if 
the contact is unsuccessful, in order to recognize the effort and time 
it takes for the provider to attempt to furnish critical follow up.
    Response: We thank the commenters for this feedback. However, we 
are finalizing as proposed that the billing practitioner will need to 
meet a threshold of at least one real-time telephone interaction with 
the patient in order to bill HCPCS code G0544, and that unsuccessful 
attempts to reach the patient will not qualify as a real-time telephone 
interaction.
    Comment: A few commenters suggested that CMS should value HCPCS 
code G0544 based on a crosswalk to CPT code 99490, Chronic Care 
Management, first 20 minutes, which is assigned a work RVU of 1.00.
    Response: The proposed work RVU for HCPCS code G0544 is 1.00, based 
on a crosswalk to CPT code 99426 (Principal Care Management). Since CPT 
code 99426 and 99490 are currently both assigned the same work RVU of 
1.00, we are finalizing this valuation as proposed.
    Comment: Several commenters suggested that HCPCS code G0544 should 
be applicable to other settings where an individual is discharged for a 
crisis encounter and some commenters suggested that CMS should allow 
this service to be provided in conjunction with a discharge from a 
hospital, inpatient behavioral health facility, and other inpatient 
settings.
    Response: We thank the commenters for this feedback. We wish to 
clarify that HCPCS code G0544 can be billed by practitioners in any 
instance in which the beneficiary has been discharged following a 
crisis encounter, including discharge from psychiatric inpatient care, 
or crisis stabilization.
    Comment: Some commenters requested clarification regarding whether 
auxiliary personnel could participate in furnishing the services 
described by HCPCS code G0544 incident to the services of the billing 
practitioner.
    Response: We thank the commenters for this request. We wish to 
clarify that the services described by HCPCS code G0544 can be provided 
by auxiliary personnel incident to the services of the billing 
practitioner in accordance with the requirements of Sec.  410.26.
    Additionally, as we recognized that behavioral health 
practitioners, training programs, and institutions have worked 
conscientiously to have risk assessment and safety planning for high-
risk patients integrated into their workflows for many years and that 
discharge instructions and after visit planning may represent one of 
many final products from the synthesis of all the steps involved in 
these encounters, we noted that we do not intend to unnecessarily 
disaggregate aspects of streamlined clinical workflows that providers 
are successfully using to treat high risk patients. Moreover, we 
recognized that practitioners may currently be billing for safety 
planning activities using existing coding, such as E/M visits, 
psychotherapy, and crisis management codes or potentially for follow-up 
calls using existing care management services. However, to the extent 
that this intervention is part of the standard of care, we believe that 
Medicare payment should accurately reflect the additional resource 
costs involved in furnishing this service.
    Lastly, as applicable Part B cost sharing would apply for HCPCS 
code G0544, we proposed to require the treating practitioner to obtain 
verbal (or written) beneficiary consent in advance of furnishing the 
services described by G0544, which would be documented by the treating 
practitioner in the medical record, similar to the conditions of 
payment associated with care management and other non-face-to-face 
services paid under the PFS. We noted that under this proposal, 
obtaining advance consent would include: (1) ensuring that the patient 
is aware that Medicare cost sharing applies to these services; (2) 
furnishing and receiving the necessary information to enable the 
patient to receive these services (for example, obtaining the patient's 
telephone number(s)); and (3) confirming that the patient consents to 
the contacts.
    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: One commenter stated that while they agree that consent 
would be necessary for these services given the financial liability the 
patient will incur, it may not be possible to obtain consent before 
performing the services and therefore urged CMS to allow consent to be 
obtained during the initial phone call. Some commenters suggested

[[Page 97923]]

eliminating cost sharing for this service, noting that who require 
these services are already in an emotionally and mentally vulnerable 
place and may be reluctant to interact with healthcare providers.
    Response: We thank the commenters for this feedback. In response to 
the comments, we agree that it may not be possible to obtain consent 
prior to the first phone call, and therefore, we are finalizing to 
allow consent to be obtained either prior to, or during the initial 
phone call. Regarding the suggestion to eliminate cost sharing for this 
service, we note that we do not have statutory authority to waive cost 
sharing for these services.
    Lastly, we note that GFCI1 was a placeholder code. The final code 
number describing this service is HCPCS code G0544.
2. Digital Mental Health Treatment (DMHT)
    We proposed Medicare payment to billing practitioners for digital 
mental health treatment (DMHT) devices furnished incident to or 
integral to professional behavioral health services used in conjunction 
with ongoing behavioral health care treatment under a behavioral health 
treatment plan of care. We refined the digital cognitive behavioral 
therapy ``digital CBT'' terminology that we have used previously (88 FR 
52262, 52370 through 52371, 88 FR 78818, 79012 and 79013). In this 
final rule we use the term ``digital mental health treatment (DMHT) 
device'' to include the term ``digital CBT'' we used in prior 
rulemaking 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 noted first that the Diagnostic and Statistical Manual of Mental 
Disorders-5 (DSM-5) does not refer to psychiatric disorders but to 
mental disorders. In this section, following the DSM-5, we used the 
term 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. Second, we noted 
that FDA guidance refers to computerized behavioral therapy by the 
acronym CBT. We stated in the proposed rule that we aimed 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 in 
the care they furnish, and their use by patients for the treatment of 
behavioral health conditions. We also noted that we recognized that 
there are certain statutory limitations on payment for products under 
the broader category of ``digital health interventions.'' We 
acknowledged that the field of digital therapeutics is evolving and are 
open to feedback from the public on this topic, including the CPT 
Editorial Panel. Additionally, we recognized that historically, the CPT 
Editorial Panel has frequently created CPT codes describing services 
that we originally established using G codes and adopted them through 
the CPT Editorial Panel process. We noted that we would consider using 
any newly available CPT coding to describe services similar to those 
described here in future rulemaking.
a. Background
    Over the last 5 years the AMA CPT Editorial Panel and CMS have 
developed coding and separate payment for monitoring physiologic status 
using software enabled devices that capture and record or transmit data 
that may be reported to and interpreted by practitioners to manage a 
patient under a specific treatment plan (83 FR 59452, 59574). Medicare 
payment has long been available for practitioner provision of 
monitoring equipment and other kinds of devices provided incident to or 
integral to the practitioner's professional services. Most recently we 
have finalized payment for devices which record data related to signs, 
symptoms, and functions of a therapeutic response (typically for use in 
association with physical or occupational therapy care) (86 FR 64996, 
65114-65116).
    However, technologies that rely primarily on software, licensing, 
and analysis fees, with minimal costs in equipment and hardware may not 
have been typical and are not well accounted for in our practice 
expense (PE) methodology. PE resources involved in furnishing services 
are characterized as either direct or indirect costs. Direct costs of 
the PE resources involved in furnishing a service are estimated for 
each HCPCS 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 is the Physician Practice Information Survey (PPIS), last 
administered in 2007 and 2008, prior to the adoption of digital therapy 
technologies (86 FR 65037). Nevertheless, in past rulemaking, we have 
recognized that in some cases practitioners do incur resource costs for 
the purchase and ongoing use of software (86 FR 65038).
    In the CY 2023 PFS final rule, we finalized our proposal to accept 
the RUC recommendation to contractor price CPT code 98978 (Remote 
therapeutic monitoring (e.g., therapy adherence, therapy response); 
device(s) supply with scheduled (e.g., daily) recording(s) and/or 
programmed alert(s) transmission to monitor cognitive behavior therapy, 
each 30 days), a PE-only device code (86 FR 69523, 69646). At the time, 
specialty societies indicated that the technologies for this service 
are still evolving, and that as a result, there were no invoices for 
devices specific to the cognitive behavioral therapy monitoring 
services described by the code that could be shared. Further, there was 
no professional work associated with the code.
    In the CY 2024 PFS proposed rule, we requested information on 
digital therapeutics for behavioral health. Among many questions, we 
asked how practitioners determine which patients might be best served 
by digital therapeutics and how practitioners monitor the effectiveness 
of prescribed interventions on an ongoing basis once the intervention 
has begun. We also asked how the treating clinician was involved in the 
services received. We asked what scientific and clinical evidence of 
effectiveness CMS should consider when determining whether digital 
therapeutics for behavioral health, including care for substance use 
disorders, depression, sleep disorders and other conditions are 
reasonable and necessary. We asked whether DMHT devices were used as 
incident to supplies or independent of a patient visit with a 
practitioner and if practitioners in such cases issued an order for 
such devices (88 FR 52262, 52370 through 52371). These factors related 
to the nature of this treatment compared to other PFS services pose 
challenges for fitting DMHT services into the existing benefit 
structure under the PFS.
    Setting appropriate pricing under the PFS has also presented 
challenges. As noted previously, technologies that rely primarily on 
software, licensing, and analysis fees, with minimal costs in equipment 
and hardware are not well accounted for in our practice expense

[[Page 97924]]

(PE) methodology, even though these items may be appropriately 
considered practice expenses. Consequently, over the past several 
years, we have relied on a crosswalk methodology to approximate 
relative resource costs for these kinds of services relative to other 
PFS services, or contractor pricing.
    Interested parties requested that we adopt coding specifically for 
DMHT devices, where the digital software device is the actual therapy/
intervention (the algorithm software is the DMHT) as opposed to a 
therapeutic monitoring device that transmits patient data as described 
by CPT code 98978 for which we finalized contractor pricing in CY 2023. 
Interested parties have also asked us to set national pricing for the 
service to supply the DMHT device and education/onboarding that 
reflects the direct practice expense incurred by practitioners when 
furnishing DMHT. One of the interested parties submitted invoices to 
provide data we could use as the basis to set payments for DMHT coding. 
The interested party submitted four invoices reflecting considerable 
variation in the cost of the DMHT treatment over 30-day and 90-day 
periods.
    As the field of innovative products including digital therapeutics 
and computerized behavioral therapy devices for psychiatric or mental 
disorders develops and expands, the FDA and Substance Abuse and Mental 
Health Services Administration (SAMHSA) among other agencies such as 
the Veterans Health Administration (VHA) are also monitoring the 
development of the field of digital therapeutic devices, including for 
behavioral health care purposes. For example, VHA is providing digital 
behavioral health applications as self-help tools, not independent 
treatment interventions. The FDA has a regulatory framework, discussed 
in this section, to classify devices and review computerized behavioral 
therapy devices for psychiatric disorders.
b. Payment for Digital Mental Health Treatment (DMHT) Devices
    We recognize that digital therapeutics may offer innovative means 
to access certain behavioral health care services. The FDA definition 
of devices encompasses software intended by the manufacturer to be 
used, alone or in combination, for the specific medical purpose of 
diagnosis, prevention, monitoring, treatment or alleviation of disease 
and does not achieve its primary intended action by pharmacological, 
immunological or metabolic means.\166\ SAMHSA has adopted the 
International Organization for Standardization's definition of DTx as 
``health software intended to treat or alleviate a disease, disorder, 
condition, or injury by generating and delivering a medical 
intervention that has a demonstrable positive therapeutic impact on a 
patient's health.'' \167\ SAMHSA also notes that ``DTx may be used 
independently or in concert with medications, devices, or other 
therapies to optimize patient care and health outcomes.'' Given 
nationwide behavioral health workforce shortages combined with 
increasing demand for behavioral health care services, some Medicare 
beneficiaries may have limited access to these services.\168\ This 
proposal encompasses only part of what may be a spectrum of broadly 
similar products, most of which might require a new statutory Medicare 
benefit category. Specifically, we proposed in the CY 2025 PFS proposed 
rule to pay billing practitioners for DMHT devices furnished incident 
to or integral to professional behavioral health services used in 
conjunction with ongoing behavioral health care treatment under a 
behavioral health treatment plan of care if that device had been 
cleared by FDA for use under 21 CFR 882.5801. Given that devices are 
not ``cleared'' by FDA for use under 21 CFR 882.5801, we clarify here 
that this proposed coding and payment policy would apply to DMHT 
devices that have been cleared under section 510(k) of the Food, Drug, 
and Cosmetics Act (FD&C Act) or granted De Novo authorization by FDA 
and classified under 21 CFR 882.5801, as discussed below. Many digital 
platforms and applications are marketed as behavioral health and 
wellness interventions; this proposal does not extend to such platforms 
and applications in part because other than some DTx, few at this time 
show evidence demonstrating improved behavioral health outcomes.\169\
---------------------------------------------------------------------------

    \166\ https://www.imdrf.org/sites/default/files/docs/imdrf/final/technical/imdrf-tech-131209-samd-key-definitions-140901.pdf.
    \167\ https://store.samhsa.gov/product/advisory-digital-therapeutics-management-and-treatment-behavioral-health/pep23-06-00-001.
    \168\ https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/data-research/behavioral-health-2013-2025.pdf.
    \169\ https://store.samhsa.gov/product/advisory-digital-therapeutics-management-and-treatment-behavioral-health/pep23-06-00-001.
---------------------------------------------------------------------------

    We proposed to create three new HCPCS codes for DMHT devices 
modeled on coding for RTM services. Effective beginning in CY 2025, we 
proposed that physicians and practitioners who are authorized to 
furnish services for the diagnosis and treatment of mental illness 
would be able to bill a new HCPCS code: G0552 (Supply of digital mental 
health treatment device and initial education and onboarding, per 
course of treatment that augments a behavioral therapy plan) for 
furnishing a DMHT device. HCPCS code G0552 would be payable only if the 
DMHT device has been cleared under section 510(k) of the FD&C Act or 
granted De Novo authorization by FDA and classified under 21 CFR 
882.5801 and the billing practitioner is incurring the cost of 
furnishing the DMHT device to the beneficiary. Furnishing of the DMHT 
device must be incident to the billing practitioner's professional 
services in association with ongoing treatment under a plan of care by 
the billing practitioner. The billing practitioner must diagnose the 
patient and prescribe or order the DMHT device. The patient could then 
use the DMHT device at home or perhaps in an office or other outpatient 
setting, if that is how the device has been classified by FDA for use 
under 21 CFR 882.5801. The DMHT device furnished must have demonstrated 
a reasonable assurance of safety and effectiveness. The FDA makes a 
determination of safety and effectiveness under 21 CFR 860.7. When 
making this determination, the FDA will consider a variety of factors 
including users, conditions of use, probable benefit to health weighed 
against probable injury, and reliability. The regulation at 21 CFR 
860.7, states that ``[t]here is reasonable assurance that a device is 
safe when it can be determined, based upon valid scientific evidence, 
that the probable benefits to health from use of the device for its 
intended uses and conditions of use, when accompanied by adequate 
directions and warnings against unsafe use, outweigh any probable 
risks.'' HCPCS code G0552 would not be payable in cases where the 
billing practitioner incurs no cost in acquiring and furnishing the 
DMHT device, or a patient procures the DMHT device independent of the 
practitioner. We will continue to monitor how DMHT devices are used as 
part of overall care.
    We sought comment about other parameters that we should consider 
regarding the services described by HCPCS code G0552:
     Whether payment should be made if the practitioner 
furnishes a digital device that has not been classified by FDA for a 
specific use under 21 CFR 882.5801 for mental health treatment, even if 
the digital device has been classified by the FDA for another specific 
use under 21 CFR 882.5801;

[[Page 97925]]

     Whether payment should be made for DMHT devices cleared 
under section 510(k) of the FD&C Act or granted De Novo authorization 
by FDA and classified not only under 21 CFR 882.5801 but also under 
other regulations;
     Whether and how payment might be limited if a patient 
discontinues use of the DMHT device before completing a course of 
treatment; and
     Whether and how payment might be limited to a set number 
of DMHT devices per calendar month per patient.
    In light of the pricing variability, as discussed previously, we 
proposed contractor pricing for HCPCS code G0552. We sought comment 
regarding what national pricing methodology we might consider, 
including what potential crosswalks would be appropriate.
    We also proposed to establish payment for two additional new HCPCS 
codes. These codes are 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). Under this proposal, HCPCS code 
G0552 requires that the billing practitioner who diagnosed the patient 
and prescribed or ordered the DMHT device or that billing 
practitioner's clinical staff must monitor the patient's therapeutic 
response to the DMHT device and adjust the behavioral health therapy 
plan as needed. HCPCS codes G0553 and G0554 should only be billed when 
there is ongoing use of the DMHT device and should not be billed in 
cases where the patient discontinues use of the DMHT device.
    For HCPCS code G0553 (first 20 minutes of monthly treatment 
management services directly related to use of the DMHT device), we 
proposed valuing the first 20 minutes of treatment management services 
based on a direct crosswalk to CPT code 98980 (remote therapeutic 
monitoring first 20 minutes), which is assigned a work RVU of .62. For 
HCPCS code G0554 (each additional 20 minutes of monthly treatment 
management services directly related to DMHT device), we proposed to 
value this code based on a crosswalk to CPT code 98981 (remote 
therapeutic monitoring each additional 20 minutes), which is assigned a 
work RVU of .61. We believe that the work and PE described by these 
crosswalk codes are analogous to the services described in HCPCS codes 
G0553 and G0554, respectively, because they include similar physician/
other qualified health care professional time in a calendar month 
requiring at least one interactive communication with the patient/
caregiver during the calendar month. We welcomed comments on the 
proposed RVUs.
    We received many public comments on these proposals. Most 
commenters expressed general support for our proposed coding. Only 
about a dozen expressed opposition or overall negative sentiment. 
Several dozen commenters expressed directional support but recommended 
significant refinements. The following is a summary of the comments we 
received and our responses.
    Comment: Many commenters recommended we broaden our inclusion 
criteria for which devices would qualify for billing HCPCS code G0552. 
Some commenters felt that any product that had been classified as 
software as a medical device by the FDA under Section 201(h)(1) of the 
FD&C Act should be payable under our policy. Others opined that any 
remote therapeutic intervention based on medical devices as defined by 
FDA should be payable under HCPCS code G0552. Others felt that any 
digital therapeutic device for diagnosis or treatment of a behavioral 
health condition should be payable under HCPCS code G0552, and that 
clinicians may review the scientific literature around such devices and 
find them helpful and appropriate parts of certain behavioral health 
plans.
    Other commenters recommended that we define ``mental health 
condition'' to explicitly include neurological conditions including 
dementia that are currently subject to treatment with effective FDA-
authorized digital behavioral or psychological interventions. Many 
commenters advocated that we include medical and neurodevelopmental 
disorders to adequately cover the range of disorders treated by FDA-
authorized products. Others recommended we clarify that all conditions 
in the DSM-5 are included, including SUD. Others asked that we make 
payment for evidenced-based psychotherapies for medical conditions that 
are not generally considered a mental health condition as defined by 
the DSM-5, for example, irritable bowel syndrome (IBS0, cancer care or 
obesity treatment. (Whether any of these may be classified as a 
``somatic symptom disorder'' in the DSM-5 would be a matter for 
clinical judgement.)
    Many supported payment for digital therapeutic devices specifically 
when they are furnished incident to a professional health service or 
ordered by a qualified health professional. Some commenters asked that 
we clarify which health professionals may report HCPCS code G0552 and 
asked whether auxiliary personnel such as peer support specialists and 
community health workers can bill the new codes because education and 
engagement are critical parts of successful use of digital mental 
health services.
    Others, in response to our question about payment for devices 
classified by FDA under regulations besides 21 CFR 882.5801, 
Computerized behavioral therapy device for psychiatric disorders, 
offered that we should include devices for Gastrointestinal Conditions 
(21 CFR 876.5960), Attention Deficit Hyperactivity Disorder (21 CFR 
882.5803), and Sleep Disturbance for Psychiatric Conditions (21 CFR 
882.5705). Others recommended payment for Biofeedback (21 CFR 882.5050) 
devices.
    Several commenters proposed that we adopt the definition provided 
in the Access to Prescription Digital Therapeutics Act of 2023, S723/
HR1458: A product, device, internet application, or other technology 
that is cleared or approved under section 510(k), 513(f)(2), or 515 of 
the FD&C Act; has a cleared or approved indication for the prevention, 
management or treatment of a medical disease, condition or disorder; 
primarily uses software to achieve its intended result; and is a device 
that is exempt from section 502(f)(1) of the FD&C Act under 21 CFR 
801.109.
    On the other hand, some commenters expressed concern that FDA 
regulatory pathways are inadequate FD&C Act because many devices are 
authorized without having submitted rigorous studies demonstrating 
safety or effectiveness. Other commenters wanted to ensure that DMHT 
devices are safe and beneficial for clinicians and patients. Several 
commenters

[[Page 97926]]

recommended we define digital mental health treatment device 
independent of FDA regulatory classification pathways. Some commenters 
recommended that CMS create a registry of all eligible devices as a 
condition of payment or adopt a model developed by the American 
Psychiatric Association to evaluate their efficacy.
    Other commenters supported our proposal's focus on digital 
interventions for behavioral health (including mental health and 
substance use disorders). Other commenters felt we should also include 
devices that are granted De Novo classification under section 513(f)(2) 
of the FD&C Act or granted Premarket Approval under section 515 of the 
FD&C Act. Others felt that DMHT devices do not always provide better 
health outcomes, and only high-quality, safe, and effective devices 
should be used. Others supported payment for DMHT devices as long as 
they are part of a physician-directed care plan. Another commenter 
supported our limited proposal because they believed DMHT applications 
are proliferating and their evidence base is minimal. Some referenced 
various efforts underway to develop an evidence-based evaluation 
framework for digital therapies. Another encouraged the continued 
evaluation of these services to ensure their efficacy in patient care. 
Another suggested CMS issue a broader RFI to gain stakeholder input on 
a fair and transparent process for evaluating ``Algorithm Based Health 
Services''. Another opined that CMS should identify opportunities and 
encourage vendors and billing practitioners to join in efforts to 
leverage interoperable DMHT data measure quality. Many commenters also 
recommended that DMHT devices and their technologies ensure or 
demonstrate data privacy and security. One commenter remarked about our 
inconsistent language in the proposal using the phrase ``incident to or 
integral to professional behavioral health services.''
    Response: We appreciate all the comments and recommendations 
offered for our consideration. Commenters expressed wide ranging views 
about how broadly we should define DMHT devices for payment under HCPCS 
code G0552. First, we acknowledge the inconsistent use of the term 
``incident to or integral to professional behavioral health services.'' 
We note that ``integral to'' is language reflected in one of the 
elements of the applicable regulation, 42 CFR 410.26(b)(2). We clarify 
that we were referencing 42 CFR 410.26 in the language ``incident to or 
integral to'' used in the proposed rule and that for clarity we are 
using ``incident to'' by itself in this section regarding DMHT devices 
furnished incident to professional behavioral health services used in 
conjunction with ongoing behavioral health treatment under a behavioral 
health treatment plan of care. Second, as stated above, we wish to 
clarify that the definition of DMHT device as proposed would include 
devices cleared under section 510(k) of the FD&C Act or granted De Novo 
authorization by FDA. In both instances, however, the device would need 
to be classified under 21 CFR 882.5801 to be payable under this policy.
    We agree with commenters who expressed concern with ensuring that 
DMHT devices are not only safe for patients but also beneficial for 
patients. The technologies and platforms for digital therapeutics are 
evolving rapidly. We are at a starting point 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 and 
anticipate that this will be an iterative process. We are also 
cognizant that some of the definitions for DMHT devices that commenters 
proposed, or devices commenters recommended should be payable under 
HCPCS code G0552, including most Class I devices (exempt from 510(k)) 
may not be aligned with similar terms used by other agencies and may 
encompass devices not evaluated or authorized by the FDA. Commenters 
have noted the work of the American Psychiatric Association, and the 
Agency for Health Research and Quality (AHRQ), among others. Commenters 
have suggested CMS leverage its convening power to bring interested 
parties together to develop frameworks, quality measures, or DMHT 
device registries. Recommendations for CMS to do so are beyond the 
scope of the proposed policies in the CY 2025 PFS proposed rule. We do 
not have the capacity as some commenters have suggested to undertake 
evaluation of DMHT devices.
    While partly in recognition of our inability to evaluate every DMHT 
device, we proposed to define DMHT device under the proposed codes as 
devices cleared under section 510(k) of the FD&C Act or granted De Novo 
authorization by FDA and classified under 21 CFR 882.5801 in an effort 
to ensure our payment policies for DMHT devices are aligned with 
devices the FDA classified with special controls requiring clinical 
data to validate the model of behavioral therapy as implemented by the 
device. We appreciate commenters concerns for patient privacy and data 
security. FDA's regulation of medical devices focuses on safety and 
effectiveness. Although loss of confidential health information is 
generally not considered to be a direct impact on safety and 
effectiveness, under Section 524B of the FD&C Act, a person who submits 
a 510(k), PMA, PDP, De Novo, or HDE for a device that meets the 
definition of a cyber device is required to submit information to 
ensure that cyber devices meet the cybersecurity requirements under 
section 524(b) of the FD&C Act.\170\ FDA recommends that manufacturers 
submit their cybersecurity management plans as part of their premarket 
submissions so that FDA can assess whether the manufacturer has 
sufficiently addressed how to maintain the safety and effectiveness of 
the device after marketing authorization is achieved. Additionally, 
please note that manufacturers may be obligated to protect the 
confidentiality, integrity and availability of protected health 
information (PHI) throughout the product lifecycle in accordance with 
applicable federal and state laws, including the Health Insurance 
Portability and Accountability of 1996 (HIPAA).
---------------------------------------------------------------------------

    \170\ Cybersecurity in Medical Devices: Quality System 
Considerations and Content of Premarket Submissions, Guidance for 
Industry and Food and Drug Administration Staff, issued September 
27, 2023. https://www.fda.gov/media/119933/download.
---------------------------------------------------------------------------

    We are finalizing payment under HCPCS code G0552 for DMHT devices 
furnished incident to professional behavioral health services used in 
conjunction with ongoing behavioral health treatment under a behavioral 
health treatment plan of care. Specifically, we are finalizing that 
DMHT devices under this payment policy must be cleared under section 
510(k) of the FD&C Act or granted De Novo authorization by FDA and in 
each case must be classified under 21 CFR 882.5801 for mental or 
behavioral health treatment. While presently use cases for insomnia, 
substance use disorder, depression and anxiety have been classified by 
the FDA under 21 CFR 882.5801, future use cases are not necessarily 
limited to these. Our objective in proposing that DMHT devices be 
classified under 21 CFR 882.5801 as a condition of payment was to set 
guardrails within our payment policy for patient safety and benefit. As 
clarified above, devices granted De Novo authorization by FDA if 
classified under 21 CFR 882.5801 would fall under the definition of 
DHMT device. We proposed to limit payment to

[[Page 97927]]

devices classified under 21 CFR 882.5801 which are required to comply 
with the Class II special controls set forth at 21 CFR 882.5801(b), 
including clinical data to validate the model of behavioral therapy as 
implemented by the device.
    Furthermore, we are finalizing that a physician or other 
practitioner who is authorized to diagnose, evaluate, and treat a 
mental health disorder may prescribe or order a DMHT device as 
permitted under the device's FDA clearance in accordance with State 
prescriptive authority and may report HCPCS code G0552. We are 
clarifying that auxiliary personnel meeting the requirements of 42 CFR 
410.26(a)(1) may only provide part of the initial education and 
onboarding described in HCPCS code G0552, and cannot report HCPCS code 
G0552, as they do not have the statutory authority to serve as the 
billing practitioner. Additionally, we are clarifying that we do not 
define behavioral health services by HCPCS codes or by direct reference 
to the DSM-5. In the CY 2023 PFS final rule we did not propose to do so 
and did not do so when we finalized to allow behavioral health services 
to be furnished under the general supervision of a physician or NPP 
when these services or supplies are provided by auxiliary personnel 
incident to the services of a physician or NPP (87 FR 69546). In 
general, we understand a behavioral health service to be any service 
furnished for the diagnosis, evaluation, or treatment of a mental 
health disorder, including substance use disorders (SUD). However, we 
continue to believe individual practitioners are in the best position 
to determine whether particular services are behavioral health 
services. As stated in the CY 2022 PFS final rule (86 FR 65061), SUD 
services are considered mental health services for the purposes of the 
expanded definition of ``interactive telecommunications system.'' 
Moreover, in the CY 2010 PFS final rule (74 FR 61787), we referenced 
that the outpatient mental health treatment limitation, which was 
phased out as of 2014, applied to outpatient treatment of a mental, 
psychoneurotic, or personality disorders, identified under the 
International Classification of Diseases (ICD) diagnosis code range 
290-319.
    Comment: Several commenters recommended we refine the code 
descriptors of HCPCS codes G0552, G0553 and G0554. Some commenters 
suggested we define the course of treatment to be 30 days and allow 
HCPCS code G0552 to be billed in subsequent 30-day increments. For this 
purpose, they recommended that the work RVU for initial education and 
onboarding be removed from HCPCS code G0552 or that a second subsequent 
month per course of treatment device code could be created. Other 
commenters welcomed the inclusion of initial education and onboarding 
in HCPCS code G0552. While commenters generally supported the two HCPCS 
codes G0553 and G0554 for treatment management related to a patient's 
therapeutic use of a DMHT device, several commenters recommended that 
we acknowledge that many DMHT devices do not collect patient data. Many 
commenters recommended that we distinguish the treatment management 
codes from existing RTM codes by revising the descriptors for HCPCS 
codes G0553 and G0554 to replace the words: ``reviewing data generated 
from the DMHT device from'' with ``reviewing information related to the 
use of the DMHT device, including.'' In particular, some commenters who 
opposed our proposal thought that the RTM family of codes as revised 
effective January 1, 2024, by the AMA CPT Editorial Panel would overlap 
with HCPCS code G0552 and create confusion for practitioners.
    Response: We thank commenters for their feedback about refining the 
descriptors for our proposed HCPCS codes G0552, G0553 and G0554. We are 
finalizing HCPCS code G0552 as proposed. We are finalizing HCPCS code 
G0553 with these refinements: 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 information related to the use 
of the DMHT device, including 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). We 
are finalizing HCPCS code G0554 with the following refinements: (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 
information related to the use of the DMHT device, including 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. (List separately in addition to 
HCPCS code G0553)). We have noted that DMHT devices vary in the typical 
course of treatment and acknowledge that persons with mental health and 
behavioral health conditions may experience circumstances necessitating 
that their practitioners extend the time. As commenters noted, limiting 
HCPCS code G0552 to a monthly period would necessitate creating another 
code to account for a course of treatment beyond a month. As to 
commenters concerns for potential overlap, we believe that HCPCS code 
G0552 is specific enough that practitioners could determine when to use 
RTM coding instead of HCPCS code G0552. We are finalizing refinements 
to HCPCS codes G0553 and G0554 to clarify that these codes are for 
treatment management with a DMHT device which is intended as a 
therapeutic intervention as opposed to RTM devices which, beginning 
January 1, 2024, will describe devices that may have a digital 
therapeutic intent as well as be intended to monitor response to a 
therapeutic intervention not necessarily delivered by an RTM device. 
HCPCS code G0552 does not describe a device intended to monitor 
response to therapeutic intervention. We expect that practitioners will 
report the more specific HCPCS code G0552 when the DMHT device meets 
conditions of payment we are finalizing. We expect that practitioners 
will report the more specific HCPCS codes G0553 and G0554 when 
treatment management services are directly related to a DMHT device 
described by HCPCS code G0552 meeting these conditions of payment. 
HCPCS code G0552 would be payable only if:
     The DMHT device has been cleared under section 510(k) of 
the FD&C Act or granted De Novo authorization by FDA and classified 
under 21 CFR 882.5801 as described above.
     The billing practitioner is incurring the cost of 
furnishing the DMHT device to the beneficiary.
     Furnishing of the DMHT device is incident to the billing 
practitioner's professional services in association with ongoing 
behavioral health treatment under a plan of care by the billing 
practitioner.
     The billing practitioner diagnoses the patient with a 
mental health condition and prescribes or orders the DMHT device.
    HCPCS code G0552 shall not be payable in cases where the billing 
practitioner incurs no cost in acquiring and furnishing the DMHT 
device, or a patient procures the DMHT device independent of the 
practitioner. One commenter noted an example of a

[[Page 97928]]

DMHT device classified by the FDA under 21 CFR 882.5801, that is 
prescribed by a practitioner, but the practitioner bears no cost for 
the device. In that case the commenter is correct that payment is not 
available to the practitioner. The benefit category for HCPCS code 
G0552 requires that payment for the DMHT device as a supply incident to 
a practitioner's professional services be a supply cost that the 
practitioner has incurred. We are aware this may be a limitation with 
respect to DMHT devices being payable under HCPCS code G0552.
    Comment: In response to questions we raised in the proposed rule, 
commenters were divided among those concerned principally by greater 
access to treatment versus guarding against potential waste or misuse, 
and those concerned principally by patient safety. Some commenters felt 
that a practitioner and patient should determine whether to use a 
device ``off-label'' and whether it would be appropriate to use more 
than one device when the patient had more than one behavioral health 
condition. While others felt the risks for using a device for a 
different indication than for which it was authorized by FDA, or using 
more than one device at a time could pose unknown risks and furthermore 
that similar efficacy could not be inferred for these use cases. MedPAC 
suggested we consider giving the Parts A/B Medicare Administrative 
Contractors (MACs) the discretion to cover use of digital devices for 
purposes other than what has been approved by the FDA, similar to MACs' 
ability to cover non- cancer drugs for off-label indications.
    Response: We agree with commenters who expressed concerns about 
unknown risks and that similar efficacy could not be inferred for cases 
using a device for a different indication than for which it was 
authorized. We are finalizing that payment may only be made for DHMT 
devices for mental health treatment in accordance with the use 
indicated in their FDA classification under 21 CFR 882.5801.
    Comment: Commenters generally supported payment for concurrent use 
of different DMHT devices used in the treatment of different mental 
health or behavioral health conditions. Some suggested heightened 
documentation requirements for such cases.
    Response: We agree that many individuals with mental health or 
behavioral health conditions may have more than one co-occurring 
condition. We are not finalizing any limits in this regard.
    Comment: Some commenters noted that practitioners who bore the cost 
of acquiring the device should not be liable for the cost of the device 
when a patient discontinued treatment given that patients with mental 
health conditions often go off treatment and return subsequently. Some 
commenters felt reduced payment was appropriate in those circumstance 
and suggested that Modifier-52 could be reported for reduced services.
    Response: We agree with commenters who noted many individuals with 
certain behavioral health conditions are at a higher risk of not 
adhering to treatment or experiencing events that may necessitate 
temporary pauses in treatment. For these reasons, we are not finalizing 
a reduction in payment at this time for discontinued use of the 
treatment before the full course of treatment has been completed.
    Comment: Some commenters urged us to set a national price based on 
invoices submitted to us or based on crosswalks to PE-only codes and 
codes with work RVUs for the initial education and onboarding. Some 
commenters recommended we adopt contractor pricing temporarily until we 
and our contractors have gained enough experience to adopt national 
pricing on product specific or product class specific codes. Some 
commenters noted that one device code was impractical for the range of 
devices they thought we intended and others recommended including that 
product classes be defined by treatment length, mechanism of action and 
hardware requirements. Most commenters supporting the proposal 
expressed no opinion about the proposed pricing. Some commenters 
recommended CM work with CMMI on developing a payment model. Finally, 
MedPAC recommended payment for the device be included in larger payment 
bundles.
    Response: After consideration of public comments, we are finalizing 
to contractor price HCPCS code G0552, as proposed. We are also 
finalizing payment for HCPCS codes G0553 and G0554 as proposed. We note 
that the invoices we received vary considerably. At this time, we do 
not believe we can appropriately price all the DMHT devices for which 
we propose to make payment. As we have noted, the technologies and DMHT 
therapies are evolving rapidly. 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 under HCPCS code G0552 
at this time. However, we continue to welcome information on this and 
may consider national pricing through future rulemaking.
3. Interprofessional Consultation Billed by Practitioners Authorized by 
Statute To Treat Behavioral Health Conditions
a. Background
    In the CY 2019 PFS final rule (83 FR 59489), we finalized payment 
for six CPT codes regarding interprofessional consultations (99451, 
99452, 99446, 99447, 99448, 99449). The six codes describe assessment 
and management services conducted through telephone, internet, or 
electronic health record consultations furnished when a patient's 
treating physician or other qualified healthcare professional requests 
the opinion and/or treatment advice of a consulting physician or 
qualified healthcare professional with specific specialty expertise to 
assist with the diagnosis and/or management of the patient's condition 
without the need for the patient's face-to-face contact with the 
consulting physician or qualified healthcare professional. We 
established coding and payment for these services to reflect changing 
healthcare practices, technology, and the shift to treatment of chronic 
conditions in the Medicare population. In the CY 2019 PFS final rule 
(83 FR 59491), we established a policy to limit billing of these codes 
to the types of practitioners who can independently bill Medicare for 
E/M visits. We did not finalize the expansion of practitioners beyond 
those who can furnish E/M visits in the CY 2019 PFS final rule due to 
our belief that interprofessional consultations are primarily for the 
ongoing evaluation and management of the patient, including 
collaborative medical decision making among practitioners (83 FR 
59491).
    In the CY 2024 PFS proposed rule (88 FR 52369), we sought comment 
on expanding access to behavioral health services, including whether we 
should consider new coding to allow interprofessional consultation to 
be billed by practitioners in specialties whose covered services are 
limited by statute (Clinical psychologists at section 1861(ii) of the 
Act, Clinical social workers at section 1861(hh) of the Act, Marriage 
and Family Therapists and Mental Health Counselors at sections 
1861(lll)(1) and 1861(lll)(3) of the Act, respectively) to services for 
the diagnosis and treatment of mental illness (which includes substance 
use disorders). The CPT codes describing interprofessional consultation 
(CPT codes 99451, 99452, 99446, 99447, 99448, 99449) are currently 
limited to being billed by practitioners who can

[[Page 97929]]

independently bill Medicare for E/M visits. As such, they cannot be 
billed by clinical psychologists, clinical social workers, marriage and 
family therapists, or mental health counselors because these 
practitioners cannot independently bill Medicare for E/M visits. We 
proposed new codes that would allow clinical psychologists, clinical 
social workers, marriage and family therapists, and mental health 
counselors to bill for interprofessional consultations with other 
practitioners whose practice is similarly limited, as well as with 
physicians and practitioners who can bill Medicare for E/M services and 
would use the current CPT codes to bill for interpersonal 
consultations. These new codes would facilitate interprofessional 
consultations between treating/requesting practitioners and consultant 
practitioners, whether one or both of the practitioners is in a 
specialty whose practice is limited to the diagnosis and treatment of 
mental illness. When the treating/requesting practitioner or consultant 
practitioner is a physician or practitioner authorized to bill Medicare 
for E/M services, the practitioner will continue to bill using the 
current CPT codes that describe interprofessional consultation, listed 
previously in this section. Depending on which practitioner type is 
billing, and assuming all service requirements of the code descriptors 
are met, the consulting practitioner could bill the applicable codes, 
either HCPCS code (G0546-G0551) or CPT code (99451, 99446, 99447, 
99448, 99449), determined by the amount of time spent on the 
consultation and whether a written and verbal consultation is provided 
or only a written consultation is provided. Similarly, depending on 
which practitioner type is billing, and assuming all service 
requirements of the code descriptors are met, the treating/requesting 
practitioner could bill either HCPCS code G0551 or CPT code 99452 for 
the time spent on their referral service.
    We believe that proposing payment for these interprofessional 
consultations performed via communications technology such as telephone 
or internet (including videoconference) is consistent with our ongoing 
efforts to appropriately recognize and reflect behavioral health care 
within the PFS. Currently, there is no payment mechanism to recognize 
the time and effort of performing these services by clinical 
psychologists, clinical social workers, marriage and family therapists, 
or mental health counselors. We have also previously received comments 
from interested parties that by not making separate payment for these 
services, CMS would not be accurately paying for the work of both the 
treating and consulting practitioner in a consultative scenario. With 
the proliferation of team-based approaches to care that are often 
facilitated by electronic medical record technology, we believe that 
making separate payment for interprofessional consultations undertaken 
for the benefit of treating a patient will contribute to payment 
accuracy under the PFS for behavioral health services.
b. Coding
    To further expand access to behavioral health services, we proposed 
payment for six new G codes: G0546 (Interprofessional telephone/
internet/electronic health record assessment and management service 
provided by a practitioner in a specialty whose covered services are 
limited by statute to services for the diagnosis and treatment of 
mental illness, including a verbal and written report to the patient's 
treating/requesting practitioner; 5-10 minutes of medical consultative 
discussion and review), G0547 (Interprofessional telephone/internet/
electronic health record assessment and management service provided by 
a practitioner in a specialty whose covered services are limited by 
statute to services for the diagnosis and treatment of mental illness, 
including a verbal and written report to the patient's treating/
requesting practitioner; 11-20 minutes of medical consultative 
discussion and review), G0548 (Interprofessional telephone/internet/
electronic health record assessment and management service provided by 
a practitioner in a specialty whose covered services are limited by 
statute to services for the diagnosis and treatment of mental illness, 
including a verbal and written report to the patient's treating/
requesting practitioner; 21-30 minutes of medical consultative 
discussion and review), G0549 (Interprofessional telephone/internet/
electronic health record assessment and management service provided by 
a practitioner in a specialty whose covered services are limited by 
statute to services for the diagnosis and treatment of mental illness, 
including a verbal and written report to the patient's treating/
requesting practitioner; 31 or more minutes of medical consultative 
discussion and review), G0550 (Interprofessional telephone/internet/
electronic health record assessment and management service provided by 
a practitioner in a specialty whose covered services are limited by 
statute to services for the diagnosis and treatment of mental illness, 
including a written report to the patient's treating/requesting 
practitioner, 5 minutes or more of medical consultative time), and 
G0551 (Interprofessional telephone/internet/electronic health record 
referral service(s) provided by a treating/requesting practitioner in a 
specialty whose covered services are limited by statute to services for 
the diagnosis and treatment of mental illness, 30 minutes). We welcomed 
comments on this proposal.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters overwhelmingly supported interprofessional 
consultations provided by a practitioner in a specialty whose covered 
services are limited by statute to services for the diagnosis and 
treatment of mental illness. We also received comments requesting that 
instead of creating new HCPCS coding, we establish an exception to the 
interprofessional consultation CPT codes. Commenters cited potential 
confusion for having separate codes for the same service.
    Response: In the CY 2019 PFS final rule (83 FR 59491), we 
established a policy to limit billing of the CPT interprofessional 
consultation codes to the types of practitioners who can independently 
bill Medicare for E/M visits since the text of these codes specifies 
that the practitioners involved in the consultation be physicians or 
other qualified health care professionals. We continue to believe that 
the CPT interprofessional consultation codes are most appropriate for 
physicians or other qualified health care professionals, and HCPCS 
G0546-G0551 are most appropriate for practitioners in a specialty whose 
covered services are limited by statute to services for the diagnosis 
and treatment of mental illness.
    Comment: Commenters requested clarification on whether the 
treating/requesting practitioner and the consulting provider must be in 
the same organization to bill interprofessional consultation codes.
    Response: No, the treating/requesting practitioner and the 
consulting provider do not have to be in the same organization to 
furnish interprofessional consultation services.
    After consideration of public comments, we are finalizing HCPCS 
G0546-G0551 codes as proposed.
    Additionally, since these codes describe services that are 
furnished by the treating/requesting practitioner and the consultant 
practitioner without the

[[Page 97930]]

involvement of the patient, we proposed to require the treating 
practitioner to obtain the patient's consent in advance of these 
services, which would be documented by the treating practitioner in the 
medical record, similar to the conditions of payment associated with 
the CPT interprofessional consultation codes and certain other non-
face-to-face services paid under the PFS. Obtaining advance patient 
consent includes ensuring that the patient is aware that Medicare cost 
sharing applies to these services, including informing the patient that 
there may be cost sharing for two services (one for the treating/
requesting practitioner's service and another for the consultant 
practitioner's service). We welcomed comments on this proposal.
    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters generally supported obtaining patient consent 
for these services, as they are usually furnished outside the presence 
of the patient. Some commenters requested that the requirement for 
consent not apply when the patient already has a relationship with the 
billing practitioner.
    Response: We continue to believe that consent must be obtained for 
these services since they are furnished outside the presence of the 
patient. In addition, we continue to believe that it is important that 
patients are informed that they may be responsible for the cost sharing 
of two services.
    After consideration of public comments, we are finalizing the 
consent requirements for HCPCS codes G0546-G0551 as proposed.
c. Valuation
    We proposed to value the six proposed new G codes based on 
crosswalks to the six CPT codes for interprofessional consultations for 
practitioners who can independently bill Medicare for E/M visits (CPT 
codes 99451, 99452, 99446, 99447, 99448, 99449). We proposed a work RVU 
of 0.35 for G0546 based on a crosswalk to CPT code 99446, a work RVU of 
0.70 for G0547 based on a crosswalk to CPT code 99447, a work RVU of 
1.05 for G0548 based on a crosswalk to CPT code 99448), a work RVU of 
1.40 for G0549 based on a crosswalk to CPT code 99449, a work RVU of 
0.70 for G0550 based on a crosswalk to CPT code 99451, and a work RVU 
of 0.70 for G0551 based on a crosswalk to 99452. Since there are no 
direct PE inputs assigned to the six CPT codes describing 
interprofessional consultation services on which we are basing the 
proposed valuation for the new HCPCS codes G0546-G0551, we did not 
propose any direct PE inputs for these codes. We welcomed comments on 
this proposal.
    Comment: Commenters were supportive of our proposed valuations for 
HCPCS codes G0546-G0551.
    Response: We thank commenters for their support.
    After consideration of public comments, we are finalizing HCPCS 
codes G0546-G0551 as proposed.
4. Comment Solicitation on Payment for Services Furnished in Additional 
Settings, Including Freestanding SUD Treatment Facilities, Crisis 
Stabilization Units, Urgent Care Centers, and Certified Community 
Behavioral Health Clinics (CCBHCs)
    In the CY 2024 OPPS final rule (88 FR 81809 through 81858), we 
finalized payment for Intensive Outpatient Program (IOP) services 
furnished in hospital outpatient departments (HOPDs), Community Mental 
Health Centers (CMHCs), Federally Qualified Health Centers (FQHCs), and 
Rural Health Clinics (RHCs), and Opioid Treatment Programs (OTPs). We 
noted that Section 4124 of the Consolidated Appropriations Act (CAA), 
2023, authorized payment for IOP services in HOPDs, CMHCs, FQHCs, RHCs, 
and that we additionally used existing statutory authority to propose 
and finalize payment for IOP services furnished in OTPs. CMS is 
monitoring utilization and uptake of IOP services in these settings. We 
have heard from other treatment settings that furnish IOP services that 
do not fall into the categories of HOPDs, CMHCs, FQHCs, RHCs, or OTPs, 
such as freestanding SUD facilities, that have an interest in billing 
Medicare for these services. In light of this, we sought comment on 
whether IOP services are furnished in other settings in order to 
determine whether potential coding and payment for IOP services under 
the PFS would facilitate these services being billed in additional 
settings.
    In particular, we were interested in feedback on the following 
questions, as well as any other relevant feedback:
     To what extent do freestanding SUD facilities or other 
entities that furnish IOP services employ practitioner types who can 
supervise auxiliary personnel and bill Medicare for their services? For 
example, do they typically employ physicians, clinical psychologists, 
nurse practitioners, clinical nurse specialists, certified nurse 
midwives and physician assistants who are eligible to provide general 
supervision to auxiliary personnel who furnish behavioral health 
services?
     Would bundled payments under the PFS similar to those 
finalized in the CY 2024 OPPS final rule (88 FR 81809-81858) better 
facilitate billing for IOP services in a broader range of settings?
     If CMS outlined how freestanding SUD facilities could bill 
Medicare under the PFS, would there be an impact in underserved areas?
     To what extent do freestanding SUD facilities see patients 
with Medicare or who are dually eligible for Medicare and Medicaid?
    We received public comments on these questions. The following is a 
summary of the comments we received and our responses.
    Comment: Several commenters stated they believe that freestanding 
SUD facilities and other entities that furnish IOP services serve an 
important function in their communities and thus should have a 
sustainable payment structure because of their vital role in treatment 
engagement. Several commenters urged CMS to enable payment for 
freestanding facilities that furnish IOP services, as well as for other 
levels of care along the continuum of SUD treatment and recovery 
(including Level 0.5 early intervention and screening, Level 1 
outpatient treatment, Level 2.5 high-intensity outpatient treatment 
(previously partial hospitalization (PHP)), and Level 2.7 medically 
managed intensive outpatient treatment) to facilitate greater access to 
and continuity of SUD care. Absent statutory changes, the commenters 
encouraged CMS to adopt an ``incident to'' billing model for 
freestanding SUD treatment facilities for all of these levels of care, 
so long as (1) the reimbursement rate is no lower than the hospital 
outpatient department rate, (2) an add-on code is developed to 
appropriately compensate the billing practitioner--especially if they 
are external to the facility--in a way that does not dilute the rate 
for the freestanding SUD treatment facility; and (3) the billing 
practitioner is able to perform their duties via telemedicine so as not 
to delay or deter access to care where appropriate. One commenter from 
a provider of SUD services noted that according to their internal data, 
they had to turn away approximately 3,000 Medicare beneficiaries who 
called seeking services because they are not an approved setting for 
Medicare services and urged CMS to expand the Medicare provider type 
definition to include non-hospital based state licensed freestanding or 
standalone SUD treatment centers to ensure that participation under 
Medicare does not

[[Page 97931]]

exclude high-quality facilities that are not classified as an OTP, 
HOPD, CMHS, FQHC, or RHC. One commenter stated that CMS should only 
expand IOP services to other types of entities if they follow the same 
rules that apply for the approved entities now in place, including 
regulatory requirements from State licensing and accreditation bodies 
that create a layer of accountability. This commenter supported having 
a physician (or equivalent) guiding and directing all admissions, 
treatment planning, and discharges for IOP regardless of the type of 
organization providing the services. AABH also strongly advocates for 
the use of a multi-disciplinary team to provide the level of care that 
should be provided and billed as an IOP.
    Response: We thank the commenters for the detailed comments 
received on these topics and note that we may consider this input for 
potential policy proposals through future rulemaking.
    Comment: Some commenters noted that CCBHCs are able to provide 
services that typically comprise an IOP program, noting that based on 
the community needs assessment, this may look different across the 
country as CCBHCs can respond with the level of intensity of care that 
is responsive and personalized to an individual's need in the 
community, and ultimately the care provided could rise to a level of 
care similar to what an IOP program might consist of at a community 
mental health center (CMHC). However, the commenter urged CMS' caution 
in pursuing this benefit at CCBHCs, stating that CMHCs appear to face 
challenges in providing the IOP benefit under Medicare because the 
Medicare CMHC Conditions of Participation (CoPs) pose challenges and 
significant administrative burden for provider organizations.
    Response: We thank the commenters for the detailed comments 
received on these topics and note that we may consider this input for 
potential policy proposals through future rulemaking.
    Additionally, we sought comment on entities that offer community-
based crisis stabilization, including 24/7 receiving and short-term 
stabilization centers, that provide immediate access to voluntary and/
or involuntary care, without the need for a referral. Regarding such 
crisis stabilization units, we were interested in feedback on the 
following questions, as well as any other relevant feedback:
     What kind of services do crisis stabilization units 
provide? Do crisis stabilization units provide services similar to 
those described by the psychotherapy for crisis codes (CPT codes 90839 
and 90840)?
     Does the definition of crisis stabilization unit vary by 
State? If so, what are the variations and similarities across States?
     If CMS outlined how crisis stabilization units could bill 
Medicare under the PFS, would there be an impact in underserved areas?
     To what extent do crisis stabilization units see patients 
with Medicare or who are dually eligible for Medicare and Medicaid?
     To what extent do crisis stabilization units employ 
practitioner types who can supervise auxiliary personnel and bill 
Medicare for their services. For example, do crisis stabilization units 
typically employ physicians, clinical psychologists, nurse 
practitioners, clinical nurse specialists, certified nurse midwives and 
physician assistants who are eligible to provide general to auxiliary 
personnel who furnish behavioral health services?
    We received public comments on these questions. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters stated that innovative approaches such as 
crisis stabilization units have helped communities improve coordination 
of emergency psychiatric care, and they can serve as models for other 
communities to implement and build upon to help alleviate the overall 
load on the mental health care system and emergency psychiatric 
boarding. Another commenter stated that payment for mental health and 
SUD services in these settings would greatly expand access to care in 
the midst of the ongoing overdose epidemic and mental health crisis, 
which has been exacerbated by workforce shortages. This commenter noted 
that especially with the increased access to crisis services through 
the 988 crisis line and the new mobile crisis psychotherapy code, 
expanding access to crisis receiving and crisis stabilization services 
at these settings would ensure that Medicare beneficiaries have access 
to the full continuum of crisis services and supports they need. One 
commenter stated that the definition of crisis stabilization, as well 
as ``sobering care,'' can vary from state to state, and noted that 
variations can include: acceptance of involuntary admissions, referring 
parties (law enforcement, EMS, walk-in, etc.), length of stay, 
environment, staffing levels and qualifications, etc.
    Response: We thank the commenters for the detailed comments 
received on these topics and note that we may consider this input for 
potential policy proposals through future rulemaking.
    Additionally, as a separate example, we have received information 
from interested parties that there is a similar concern regarding 
urgent care centers more broadly. These interested parties note 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 are 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 
particular, we were interested in feedback on the following questions, 
as well as any other relevant feedback:
     What types of services would alternative settings to EDs 
need to offer to meet beneficiaries' non-emergent, urgent care needs?
     Does the current ``Urgent Care Facility'' Place of Service 
code (POS 20) adequately identify and define the scope of services 
furnished in such settings? Is this place of service code sufficiently 
distinct from others such as ``Walk-in Retail Health Clinic (POS 17) 
and ``Office'' (POS 11)? If not, how might these Place of Service code 
definitions be modified?
     Does the existing code set accurately describe and value 
services personally performed by professionals and costs incurred by 
the facility in these settings?
     How might potential strategies to reduce overcrowding and 
wait times in EDs advance equity in access to health care services?
    We received public comments on these questions. The following is a 
summary of the comments we received and our responses.
    Comment: One commenter suggested that CMS create a payment 
structure in which urgent care centers are differentially compensated. 
In response to our question about the existing place of service codes, 
they stated that the current place of service (POS) definitions are 
inadequately

[[Page 97932]]

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 UCCs 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 hours. They suggested 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 question about 
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 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.
    One commenter stated they appreciate the important role that non-
emergency facilities, such as urgent care centers, can play treating 
patients, but emphasized that it is essential to preserve the 
fundamental right for patients to seek emergency care when they think 
they are experiencing a medical emergency. They encouraged CMS to 
consider how best to educate beneficiaries about when they should seek 
emergency treatment, their right to do so, and when another setting 
such as an urgent care center may be appropriate to address their 
health care needs. The commenter stated they believe that physician-led 
care teams offer the highest quality of care, and every urgent care 
should seek to have an emergency physician on staff and that in the 
setting of physician-led teams, urgent care should be capable of caring 
for the full range of non-life-threatening conditions. Another 
commenter noted that many urgent care centers and retail clinics do not 
accept public insurance (i.e., Medicare, Medicaid, CHIP, Tricare) due 
to low reimbursement rates, stating that this disproportionately 
impacts the ability for underserved patient populations to access non-
ED services for acute, unscheduled care. The commenter stated that 
improving Medicare and Medicaid reimbursement for urgent care services 
would advance equity and access for acute care amongst this patient 
population.
    Response: We thank the commenters for the detailed comments 
received on these topics and note that we may consider this input for 
potential policy proposals through future rulemaking.
    Lastly, we sought comment regarding Certified Community Behavioral 
Health Clinics (CCBHCs). Specifically, we were interested in feedback 
on the following questions:
     What kind of services do CCBHCs provide? Do they provide 
IOP services, services for the treatment of substance use disorders, 
psychotherapy, behavioral health integration, community health 
integration, or principal illness navigation services to patients with 
either Medicare or another payer?
     If CMS outlined how CCBHCs could bill Medicare under the 
PFS, would there be an impact in underserved areas?
     To what extent do CCBHCs see patients with Medicare or who 
are dually eligible for Medicare and Medicaid?
     To what extent do CCBHCs employ practitioner types who can 
supervise auxiliary personnel and bill Medicare for their services? For 
example, do CCBHCs employ physicians, clinical psychologists, nurse 
practitioners, clinical nurse specialists, certified nurse midwives and 
physician assistants who are eligible to provide general supervision to 
auxiliary personnel who furnish behavioral health services?
    We received public comments on these questions. The following is a 
summary of the comments we received and our responses.
    Comment: Several commenters stated that they understand that CCBHCs 
can bill Medicare if they are registered as a different provider type 
such as an Office or CMHC but noted that Medicare does not cover all 
required CCBHC services. They also noted that CCBHCs are already 
certified per federal and state Medicaid criteria and to the extent 
Medicare were to allow CCBHCs as a Medicare provider, they encouraged 
alignment of any potential future Medicare CCBHC conditions of payment 
with existing Medicaid and state certification requirements.
    A joint comment letter submitted by several specialty societies and 
interested parties also described the history of CCBHCs, noting that 
most recently, the Consolidated Appropriations Act, 2024 (CAA 2024) 
provided a definition for CCBHCs in Medicaid statute, permanently 
establishing CCBHCs as an optional Medicaid benefit. They stated that 
CCBHCs can be implemented and funded through the Section 223 Medicaid 
Demonstration, CCBHC Expansion Grants administered by SAMHSA, or 
through independent state programs and noted that states participating 
in the Demonstration select one of four Medicaid Prospective Payment 
System (PPS) rate methodologies to establish payment rates for CCBHCs 
based on the expected cost of delivering care.\171\ They stated there 
are currently nearly 500 CCBHCs across 46 states and territories 
(offering services in 40 percent of all U.S. counties, covering 62 
percent of the nation's population), serving an estimated 3 million 
people nationwide.\172\ A regularly updated list of CCBHCs across the 
country can be found on National Council for Mental Wellbeing's 
website.\173\
---------------------------------------------------------------------------

    \171\ https://www.medicaid.gov/medicaid/financial-management/downloads/section-223-ccbh-pps-prop-updates-022024.pdf.
    \172\ https://www.thenationalcouncil.org/resources/2024-ccbhc-impact-report/.
    \173\ https://www.thenationalcouncil.org/program/ccbhc-success-center/ccbhc-locator/.
---------------------------------------------------------------------------

    Response: We thank the commenters for the detailed comments 
received on these topics and note that we may consider this input for 
potential policy proposals through future rulemaking.

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)

[[Page 97933]]

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).
    In the CY 2023 PFS final rule, we also 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). Hereafter in this section we will refer to 
these services as dental services that are ``inextricably linked to 
other covered services.''
    We also note that the examples provided in our regulation at Sec.  
411.15(i)(3)(i) are not exclusive. Medicare administrative contractors 
(MACs) retain discretion to determine on a claim-by-claim basis whether 
a patient's circumstances do or do not fit within the terms of the 
preclusion or exceptions specified in section 1862(a)(12) of the Act 
and Sec.  411.15(i).
    In the CY 2024 PFS final rule, we discussed our plans to issue 
educational and outreach materials to inform billing and payment for 
finalized policies for dental services. We reiterated our commitment to 
review submissions we receive through the public submissions process. 
We 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. We also described our partnership with the Agency for 
Healthcare Research and Quality (AHRQ) to assist us to review available 
clinical evidence and consider the relationship between dental services 
and specific covered medical services and to identify other potential 
clinical circumstances in which dental services are inextricably linked 
to other covered services (88 FR 79029).
    In the CY 2025 PFS proposed rule (89 FR 61747 through 61765), we: 
(1) described recent rapid response reports conducted by our partner 
agency, AHRQ, on the potential connection between sickle cell disease 
and hemophilia and dental services; (2) summarized submissions we 
received through the public submission process that we considered for 
CY 2025 rulemaking; (3) proposed to amend section Sec.  411.15(i)(3)(i) 
to permit payment for certain dental services that are inextricably 
linked to other covered services (certain dental services for patients 
receiving dialysis services to treat end-stage renal disease (ESRD)); 
(4) requested public comment and information related to other clinical 
scenarios that may involve dental services that are inextricably linked 
to other covered services; and (5) are included proposals related to 
Medicare billing and payment policy for dental services. We also 
included a request for information regarding oral sleep apnea 
appliances.
b. Consideration of Dental Services That May Be Inextricably Linked to 
Other Covered Services
    We received several nominations through our public submission 
process and have partnered with AHRQ to help us consider the evidence 
supporting the relationship between dental services and other specific 
covered services. Specifically, AHRQ reviews available clinical 
evidence regarding this relationship and provides analysis of clinical 
scenarios where dental services may be inextricably linked to other 
covered services. To better address the public's immediate dental 
needs, AHRQ conducted rapid response reports instead of systematic 
reviews. With these rapid response reports, we can better specify which 
payments can be made under Medicare Parts A and B for specific dental 
services that are inextricably linked to other covered services.
    Through the public submissions process for consideration in CY 2024 
rulemaking, interested parties nominated dental services for 
individuals living with sickle cell disease (SCD) or hemophilia, urging 
us to consider adding payment for these services. Acknowledging the 
importance of dental health to overall well-being of patients with 
these two types of diseases, in the CY 2024 proposed rule, we 
summarized information provided by submitters utilizing the public 
submission process and solicited comment on whether certain dental 
services are inextricably linked to covered services in the treatment 
of SCD (88 FR 52374).
    In the CY 2024 PFS final rule, we discuss the comments received 
from commenters suggesting to expand dental service coverage for 
individuals with SCD. We concluded that the information provided by 
commenters did not sufficiently demonstrate that dental services are 
essential to the clinical success of treatments for SCD, including 
hydroxyurea therapy. Therefore, we did not expand the examples under 
Sec.  411.15(i)(3)(i) to include additional covered medical services 
for SCD. Please refer to the CY 2024 PFS final rule (88 FR 79031 
through 79032) for more detailed information.
    In the CY 2024 PFS proposed rule, we similarly solicited comments 
on hemophilia regarding whether certain dental services are considered 
so integral to the primary covered services that the necessary dental 
interventions are inextricably linked to, and substantially related and 
integral to clinical success of, the primary covered services for 
individuals with hemophilia (88 FR 52382). In the CY 2024 PFS final 
rule, we discuss the comments received from commenters advocating 
Medicare Part A and Part B payment for dental services for individuals 
with hemophilia, citing guidelines from Hemophilia Treatment Centers 
(HTCs), the Centers for Disease Control and Prevention (CDC), and the 
World Federation of Hemophilia (WFH). While we acknowledged the 
importance of maintaining oral health to prevent complications such as 
serious gum bleeding, especially problematic for those with hemophilia, 
we also reiterated that for the purposes of the PFS payment policy for 
dental services inextricably linked to covered medical services, our 
statute and regulations require that specific evidence supports the 
integral connection between dental services and clinical success in 
managing hemophilia-related medical services, and, therefore, we did 
not expand the examples under Sec.  411.15(i)(3)(i) to include 
additional covered medical services for hemophilia. Please refer to the 
CY 2024 PFS final rule (88 FR 79032 through 79033) for more detailed 
information.
    In the CY 2025 PFS proposed rule, we noted that while interested 
parties have suggested the interaction of oral health

[[Page 97934]]

care for SCD or hemophilia, further research was necessary to find 
specific evidence supporting specific medical services for which dental 
services are inextricably linked to their clinical success. We 
explained, to gain further understanding of any potential relationship 
between dental services and specific covered SCD or hemophilia medical 
services, we again partnered with researchers at AHRQ to review 
available clinical evidence regarding the relationship between dental 
services and covered SCD or hemophilia medical services. As a result, 
AHRQ created two rapid response reports, which summarized recent 
evidence, aiming to inform CMS policy development related to the 
possible linkage between dental services and treatment modalities and 
services for SCD or hemophilia patients (89 FR 61748). For more 
detailed information about the search strategies and findings, please 
refer to the two AHRQ rapid response reports available at https://effectivehealthcare.ahrq.gov/products/sickle-cell-dental/research and 
https://effectivehealthcare.ahrq.gov/products/hemophilia-dental/research.
    In the CY 2025 PFS proposed rule, we gave a detailed discussion and 
summary of these two rapid response reports provided by AHRQ. We 
explained that after reviewing AHRQ's rapid response reports both SCD 
and hemophilia, we found the evidence related to the linkage between 
dental services and outcomes for covered medical services for both SCD 
and hemophilia lacking in the current research and literature. Both 
rapid responses noted a limited number of studies examining the impact 
of dental care on outcomes for individuals with SCD or hemophilia. 
Currently, the evidence base does not appear to support that dental 
services may be inextricably linked to covered services for SCD or 
hemophilia. Also, the body of evidence evaluating dental services 
before, during, or after the treatment of SCD and hemophilia lacks 
primary clinical data and relies on available guidelines and reviews. 
We stated, however, that the limited information in both the SCD and 
hemophilia rapid responses did support the need for preventive care and 
patient education as essential practices for both SCD and hemophilia 
patients to minimize the likelihood of oral infections, periodontal 
disease, and major dental procedures. In addition, both rapid response 
reports recommend collaborative efforts between dentists, 
hematologists, and specialized clinics as crucial for improved patient 
care, despite the lack of primary evidence informing the potential 
effect of dental care on treatment. While both rapid response reports 
discuss their findings on the importance of a multidisciplinary 
approach, both rapid response reports also found that the current 
reviews and guidelines do not address dental care as a standard of care 
that is inextricably linked to hemophilia or SCD treatment. Instead, 
their focus was on managing the respective conditions during dental 
services, not on the inextricable linkage between dental and medical 
services. Please refer to the CY 2025 PFS proposed rule (89 FR 61748 
through 61749) for a more detailed discussion of the two rapid response 
reports provided by AHRQ for both SCD and hemophilia.
    In the CY 2025 PFS proposed rule, we stated that interested parties 
had asked us to consider the conditions of SCD and hemophilia for the 
purposes of the Medicare Parts A and B payment policy for dental 
services that are inextricably linked to other covered services. We 
then explored the inextricable link between dental and covered services 
associated with SCD and hemophilia by partnering with AHRQ to generate 
rapid responses on these topics. However, we did not find the evidence 
base to support that dental services may be inextricably linked to 
services for SCD or hemophilia within the meaning of the standard at 
Sec.  411.15(i)(3). We stated that given the new and evolving therapies 
and treatments in this space, we will consider conducting additional 
evaluations as new studies are carried out to examine the impact of 
dental services on SCD and hemophilia outcomes and will take any future 
studies into consideration. We noted that we continue to seek clinical 
evidence demonstrating the integral connection between dental services 
and other covered services for SCD and hemophilia, and we welcomed any 
comments or literature regarding these two conditions. We explained 
that we did not propose to amend Sec.  411.15(i)(3)(i) since we have 
not identified additional dental services that are inextricably linked 
to certain services associated with SCD or hemophilia. We stated that 
we remain open to considering any such services identified by public 
commenters, and, if sufficient evidence is presented, we may consider 
adding such services to our regulations in the final rule. In addition, 
we encouraged interested parties to supply additional submissions for 
consideration in future PFS rulemaking through the public submission 
process, which may include relevant medical evidence, peer-reviewed 
literature, clinical guidelines, or supporting documentation as 
described in section II.J.1.c. of this final rule (89 FR 61750).
    We received 9 public comments on our consideration of dental 
services that may be inextricably linked to covered services for the 
treatment of SCD and hemophilia. Commenters included patient advocacy 
organizations, hospital associations, medical and dental associations 
representing several different specialties and specialty societies, and 
dental plan associations. The following is a summary of the comments we 
received and our responses.
    Comment: A few commenters provided information on beneficiaries 
with SCD. The commenters explained that these individuals represent a 
particularly vulnerable group since it is an inherited blood disorder 
primarily affecting individuals of African descent. The commenters 
stated that beneficiaries with SCD have significant healthcare needs 
due to the complex nature of their condition. For example, these 
individuals may experience chronic complications such as pain crises, 
organ damage, and an increased risk of infections, as well as have 
comorbidity conditions such as chronic kidney disease, heart failure, 
and depression, which further complicates their care. The commenters 
also indicated that these individuals are at risk for oral health 
complications, including infections that could trigger a sickle cell 
crisis. The commenters explained that beneficiaries with SCD often 
experience higher rates of emergency department visits and 
hospitalizations. This commenter also stated that approximately half of 
individuals with SCD are enrolled in Medicaid, while 11 percent are 
enrolled in Medicare, often as dually eligible beneficiaries and that 
research indicates that SCD patients who are enrolled in both Medicare 
and Medicaid experience worse survival outcomes compared to those with 
single coverage.
    A few commenters provided information on beneficiaries who have 
hemophilia. The commenters explained that these individuals also 
represent a particularly vulnerable group since advancements in medical 
care have extended their life expectancy and now living longer, they 
often face multiple comorbidities such as hepatitis C, human 
immunodeficiency virus, hypertension, and diabetes, which can further 
complicate their overall health management. The commenters explained 
that the need for dental management is heightened due to the increased 
risk of bleeding during and after dental procedures, especially in 
those with severe hemophilia. One

[[Page 97935]]

commenter stated that individuals living with bleeding disorders such 
as hemophilia are often hesitant to perform normal oral hygiene 
practices due to the fear of a bleed, which can make these individuals 
more susceptible to oral diseases and conditions, such as gingivitis, 
dental caries, and periodontal disease. This commenter also stated that 
if an individual with a bleeding disorder does require an oral 
procedure or surgery, it is typical that a large amount of clotting 
factor would be needed to control the bleeding during such a procedure 
or surgery. Other commenters stated that while hemophilia is rare, 
managing severe hemophilia A presents a significant economic burden, 
with annual treatment costs ranging from approximately $600,000 to over 
$900,000, depending on the type of prophylactic therapy used.
    Some commenters referenced CMS' partnership with AHRQ to conduct 
response reports on both SCD and hemophilia. One commenter expressed 
their appreciation for this arrangement but conveyed that they 
disagreed with CMS' assessment that there is a lack of literature to 
support coverage of dental services for these conditions. The commenter 
specifically pointed to the Kawar study from AHRQ's report on SCD which 
clearly states that ``standard of care for dental management of sickle 
cell disease patients'' includes ``prevention and early intervention . 
. . routine dental visits . . . collaboration between healthcare team 
(including hematologist) and dentist is important''.\174\ A different 
commenter agreed with CMS's assessment that the cited sources in AHRQ's 
report do not demonstrate that dental services are inextricably linked 
to covered medical services for SCD and that, based on the available 
evidence, dental services are not inextricably linked to covered 
medical services for hemophilia. Another commenter acknowledged that 
while dental care is essential for managing complications associated 
with hemophilia, current evidence may not be sufficient to support 
expanding Medicare coverage beyond the existing provisions since the 
focus remains on preventing bleeding complications rather than 
enhancing hemophilia treatment outcomes through dental interventions.
---------------------------------------------------------------------------

    \174\ Kawar N., Alrayyes S., Yang B., Aljewari H. Oral health 
management considerations for patients with sickle cell disease. 
Dis. Mon. 2018;64(6):296-301. (In eng). DOI: 10.1016/
j.disamonth.2017.12.005.
---------------------------------------------------------------------------

    Commenters stated that they recognize that CMS is only able to pay 
for dental services when the services are inextricably linked to an 
already covered Medicare service and that, to date, there is not enough 
evidence to support the need to pay for dental services that are 
inextricably linked to services for SCD or hemophilia. The commenters 
then concluded that the broader impact of expanded dental benefits 
remains an area for further research which they believe reflects the 
complex relationship between dental health and overall care, suggesting 
that more exploration is needed without endorsing specific policy 
changes.
    Many commenters supported CMS's commitment to continue seeking 
clinical evidence regarding circumstances in which dental services are 
inextricably linked to treatments for SCD and hemophilia. One commenter 
explained that there are significant racial disparities in the 
incidence and severity of these health conditions that coverage of 
dental services would improve. Another commenter appreciated CMS' 
ongoing commitment to allowing stakeholders to continue presenting 
evidence that they believe can support policy coverage changes for 
these critical conditions. However, one commenter thanked CMS for 
thoroughly reviewing their request to consider coverage for dental 
services linked to Medicare services for the treatment of SCD. This 
commenter explained that while they understand that CMS did not believe 
that the data and other evidence submitted met the threshold, in their 
members' experience caring for individuals living with SCD, they find 
that dental health is indeed inextricably linked to their overall 
health and treatment.
    Lastly, we received several recommendations from commenters. 
Several commenters requested that CMS continue to partner with 
researchers to monitor the literature related to dental services to 
obtain additional evidence that may support payment for dental and oral 
health treatments and ancillary services that improve the 
affordability, access, and treatments for sickle cell and hemophilia. 
Another commenter suggested that CMS actively collaborate with 
organized dentistry and medicine in their scientific review process 
that goes into coverage determinations.
    Response: We thank commenters for their feedback. The information 
commenters provided did not support a finding that dental services are 
inextricably linked to a covered medical service for SCD or that the 
standard of SCD care would be compromised without dental services or 
that the standard of SCD care would require dental services to be 
performed in conjunction with treatments for SCD. We also found the 
same with regard to the information commenters provided for hemophilia.
    As we stated in the CY 2024 PFS final rule, in order for us to find 
that dental services are inextricably linked to, and substantially 
related and integral to the clinical success of treatments for SCD or 
hemophilia, we would need clinical evidence to demonstrate that the 
standard of care would be not to proceed with the other covered 
services without providing the dental services in conjunction with the 
treatment for SCD or hemophilia (88 FR 79032 through 79033). As 
discussed below in section II.J.1.c. of this final rule, to consider 
whether certain dental services are inextricably linked to the clinical 
success of other covered services, we need to identify specific covered 
medical services for which there is medical evidence that certain 
dental services are so integral to their clinical success that they are 
inextricably linked to the covered service. Based on the information 
provided, we have not been able to identify such a specific covered 
medical service for SCD or hemophilia, and thus we are unable to 
evaluate whether any medical evidence would support an inextricable 
linkage to certain dental services.
    We thank the commenters for their perspectives and we agree that 
maintaining good oral health and preventing dental problems is highly 
important in the prevention of oral diseases that can lead to serious 
complications for beneficiaries with SCD or hemophilia. However, the 
information generally provided by commenters did not establish an 
inextricable link between dental services and a covered medical 
service. Because the Medicare statute generally prohibits payment for 
dental services, payment may be made in limited situations such as when 
the dental services are inextricably linked to, and substantially 
related and integral to the clinical success of certain other covered 
services as provided by our regulations at Sec.  411.15(i)(3)(i), or 
under the exceptions provided by section 1862(a)(12) of the Act and 
codified at Sec.  411.15(i)(2).
    After consideration of public comments, we are not expanding the 
examples of clinical scenarios under Sec.  411.15(i)(3)(i) to include 
additional covered medical services for SCD or hemophilia. We remain 
committed to exploring whether there is an inextricable link between 
dental services and other covered services associated with SCD and 
hemophilia.
    We plan to continue reviewing the clinical evidence on this topic 
and

[[Page 97936]]

welcome continued engagement from the public.
c. Submissions Received Through Public Submission Process
    As we have in the CY 2023 and CY 2024 PFS final rules, we continue 
to encourage interested parties to engage with us regularly and to 
submit recommendations through our public submissions process for our 
consideration of additional clinical scenarios where dental services 
may be inextricably linked to covered services under Sec.  
411.15(i)(3)(i). Through our annual public submissions process, 
interested parties should provide clinical evidence and other 
documentation to support their recommendations (87 FR 69685). We are 
using the PFS annual rulemaking process to discuss public submissions 
and to consider whether the clinical scenario described in the 
submissions should be added to Sec.  411.15(i)(3)(i) as an example of a 
circumstance where payment can be made for dental services inextricably 
linked to other covered services. Using our annual notice and comment 
rulemaking process to discuss submitted recommendations allows the 
public to comment and submit further medical evidence and important 
feedback to assist us in evaluating whether certain dental services 
furnished in certain clinical scenarios would meet the standard to 
permit Medicare payment for the dental services.
    Through this process, we review clinical evidence included in 
submissions and public comments in rulemaking, as well as information 
and analysis provided by AHRQ in rapid response reports, to assess 
whether there is an inextricable link between certain dental services 
and certain covered services. We would find that there is an 
inextricable link where the standard of care for a service is such that 
the practitioner would not proceed with the procedure or service 
without performing the dental service(s), for example, because the 
covered services would or could be significantly and materially 
compromised absent the provision of the inextricably-linked dental 
services, or where dental services are a clinical prerequisite to 
proceeding with the primary medical procedure and/or treatment. As 
such, documentation accompanying recommendations should include medical 
evidence to support that certain dental services are inextricably 
linked to certain covered services. Specifically, as we specified in 
the CY 2023 PFS final rule, we request that the medical evidence 
included in submissions through the public submissions process should:
    (1) Provide support that the provision of certain dental services 
leads to improved healing, improved quality of surgery outcomes, and 
the reduced likelihood of readmission and/or surgical revisions because 
an infection has interfered with the integration of the medical implant 
and/or interfered with the medical implant to the skeletal structure;
    (2) Be clinically meaningful and demonstrate that the dental 
services result in a material difference in terms of the clinical 
outcomes and success of the procedure such that the dental services are 
inextricably linked to other covered services; and,
    (3) Be compelling to support that certain dental services would 
result in clinically significant improvements in quality and safety 
outcomes (for example, fewer revisions, fewer readmissions, more rapid 
healing, quicker discharge, and quicker rehabilitation for the patient) 
(87 FR 69686).
    This evidence should include at least one of the following:
    (1) Relevant peer-reviewed medical literature and research/studies 
regarding the medical scenarios requiring medically necessary dental 
care;
    (2) Evidence of clinical guidelines or generally accepted standards 
of care for the suggested clinical scenario;
    (3) Other ancillary services that may be integral to the covered 
services; and/or
    (4) Other supporting documentation to justify the inclusion of the 
proposed medical clinical scenario requiring dental services (87 FR 
69686).
    Submissions should focus on the inextricably linked relationship 
between dental services and other services necessary to diagnose and 
treat the individual's underlying medical condition and clinical 
status, and whether it would not be clinically advisable to move 
forward with the other covered services without performing certain 
dental services. To be considered for purposes of CY 2026 PFS 
rulemaking, submissions through our public submissions process should 
be received by February 10, 2025, via email at 
[email protected]. To facilitate processing, 
interested parties should include the words ``dental recommendations 
for CY 2026 review'' in the subject line of their email submission. We 
continue to stress to submitters that recommendations must include at 
least one of the types of evidence listed earlier. We further note that 
we may also consider recommendations that are submitted as public 
comments during the comment period following the annual publication of 
the PFS proposed rule.
    In the CY 2025 PFS proposed rule, we discussed the 13 public 
submissions received from various organizations and individuals on or 
before February 10, 2024, with recommendations for additional clinical 
scenarios for which they believe Medicare payment for dental services 
would be consistent with the policies we codified at Sec.  
411.15(i)(3)(i). The clinical scenarios discussed include hematologic 
disorders, blood cancers, chronic graft versus host disease, post-
treatment for head and neck cancer, autoimmune diseases, renal 
diseases, and diabetes Several submitters represented dozens or 
hundreds of other organizations in making these recommendations. We 
noted one submission was received after the deadline that presented 
nominations for clinical scenarios addressed by other submitters and a 
proposal outside the scope of clinical scenarios where dental services 
may be inextricably linked to covered medical services under Sec.  
411.15(i)(3)(i). Please refer to the CY 2025 PFS proposed rule (89 FR 
61751 through 61752) for a more detailed discussion of the public 
submissions received for CY 2025 rulemaking consideration.
2. Additions to Current Policies Permitting Payment for Dental Services 
Inextricably Linked to Other Covered Services
    In the CY 2025 PFS proposed rule, we explained that we have 
received information and requests from interested parties, including 
entities submitting information through the public submissions process 
as well as organizations providing comments in response to prior 
rulemaking efforts, that an inextricable linkage exists between dental 
services and dialysis treatment services for individuals diagnosed with 
end-stage renal disease (ESRD) who are receiving dialysis services, 
particularly those experiencing comorbidities. Commenters and 
submitters have stated that dental treatment is inextricably linked and 
integral, and substantially related to the clinical success and 
outcomes of covered dialysis medical services (89 FR 61752).
    In the CY 2024 PFS final rule, we stated that commenters had 
provided comments in response to the CY 2024 PFS proposed rule 
supporting the coverage of annual dental examinations, and treatment as 
clinically indicated, for individuals with chronic kidney disease and 
ESRD. The commenters stated that

[[Page 97937]]

chronic immunosuppression increases the risk of dental infections 
leading to potentially deadly complications including BSI, peritoneal 
dialysis-associated peritonitis, and the exacerbation of chronic 
cardiovascular conditions. They also stated that when established by 
patient-specific medical and dental parameters, dental services can be 
unquestionably integral to the outcome of covered medical procedures. 
We thanked the commenters for the information they submitted regarding 
these suggestions; however, at that time, commenters did not provide 
sufficient evidence to support an inextricable link between certain 
dental services and certain covered services for chronic kidney disease 
and ESRD (88 FR 79034).
    Subsequent to the issuance of the CY 2024 PFS final rule and as we 
discuss in section II.J.1.c. of this final rule, we received 
recommendations through the public submissions process for our 
consideration in CY 2025 rulemaking. That is, the submitters stated 
that there is a connection between dental services to identify and 
address dental or oral infections and covered medical services for 
individuals receiving dialysis in the treatment of ESRD. In the CY 2025 
PFS proposed rule (89 FR 61752 through 61756), as well as in the 
following paragraphs of this final rule, we discuss the research and 
recommendations provided by the public through the submission process 
and our analyses of the studies and research available regarding the 
connection between dental services and the clinical success of dialysis 
services for individuals with ESRD.
    ESRD is a medical condition in which a patient's kidneys 
successively experience loss of functionality on a permanent basis, 
leading to the need for a regular course of long-term dialysis or a 
kidney transplant to maintain life.\175\
---------------------------------------------------------------------------

    \175\ https://www.cms.gov/medicare/coordination-benefits-recovery/overview/end-stage-renal-disease-esrd.
---------------------------------------------------------------------------

    Chronic kidney disease (CKD) is a progressively debilitating 
disease and is marked by the presence of kidney damage or reduction in 
the kidneys' filtration rate. CKD is a state of progressive loss of 
kidney function, in that the disease worsens over time and cannot be 
reversed, ultimately resulting in the need for renal replacement 
therapy, generally dialysis or transplantation.\176\ The Kidney Disease 
Improving Global Outcomes (KDIGO) Organization established guidelines 
that define five stages of CKD using kidney damage markers, including 
factors that determine proteinuria (level of protein in the urine) and 
glomerular filtration rate (level of kidney function/filtration) in its 
KDIGO 2012 Clinical Practice Guideline for the Evaluation and 
Management of Chronic Kidney Disease.\177\ Chronic kidney disease is 
generally defined as the presence of two factors (glomerular filtration 
rate [GFR] less than 60 mL/min and albumin greater than 30 mg per gram 
of creatinine) along with abnormalities of kidney structure or function 
for greater than three months. Stage 5 of CKD is labeled end-stage 
renal disease (ESRD) with a GFR of less than 15 mL/min.\178\ According 
to the National Institutes of Health (NIH), more than 500,000 people in 
the United States live with ESRD.\179\
---------------------------------------------------------------------------

    \176\ https://www.ncbi.nlm.nih.gov/books/NBK535404/.
    \177\ https://kdigo.org/wp-content/uploads/2017/02/KDIGO_2012_CKD_GL.pdf.
    \178\ https://www.ncbi.nlm.nih.gov/books/NBK499861/.
    \179\ https://www.ncbi.nlm.nih.gov/books/NBK499861/.
---------------------------------------------------------------------------

    Per the American Academy of Family Physicians, individuals with 
ESRD are typically referred to nephrologists for the development of 
treatment plans. Collectively the various modalities utilized to 
replicate kidney function are referred to as renal replacement therapy 
(RRT). Most ESRD patients are treated with dialysis, regardless of 
whether transplantation ultimately occurs. Generally, kidney 
transplantation typically yields the best patient outcomes; however, 
not all patients with ESRD are eligible for or able to undergo 
transplantation, and some therefore continue dialysis treatment.\180\ 
Standards of medical care for CKD outline the need for monitoring for 
signs of progression of the disease and early referral to specialists 
for RRT.\181\ Dialysis is generally supplied via two primary modes: 
hemodialysis or peritoneal dialysis. In hemodialysis, blood is filtered 
through a dialyzer, outside of the body. A dialyzer is sometimes 
referred to as an ``artificial kidney.'' \182\ To access the 
circulatory system, several access points may be placed and utilized, 
including an arteriovenous (AV) fistula, AV graft, and in some cases a 
central venous catheter.183 184 185 In peritoneal dialysis, 
a fixed catheter is placed in the abdomen, and dialysis solution is 
administered into the abdomen. The solution absorbs wastes and excess 
fluid from the patient's body.186 187
---------------------------------------------------------------------------

    \180\ Am. Fam. Physician. 2021;104(5):493-499. https://www.aafp.org/pubs/afp/issues/2021/1100/p493.html.
    \181\ https://pubmed.ncbi.nlm.nih.gov/29763036/.
    \182\ https://www.niddk.nih.gov/health-information/kidney-disease/kidney-failure/hemodialysis.
    \183\ https://www.ncbi.nlm.nih.gov/books/NBK563296/.
    \184\ https://www.mayoclinic.org/tests-procedures/hemodialysis/about/pac-20384824.
    \185\ https://www.cdc.gov/dialysis/patient/.
    \186\ https://www.mayoclinic.org/tests-procedures/peritoneal-dialysis/about/pac-20384725.
    \187\ https://www.niddk.nih.gov/health-information/kidney-disease/kidney-failure/peritoneal-dialysis.
---------------------------------------------------------------------------

    Submissions we received through the public submissions process for 
consideration in CY 2025 rulemaking provided information regarding the 
potential linkage between dental services and specific covered medical 
services associated with ESRD and dialysis including:
     CPT codes 36901-36906: Dialysis circuit procedures;
     CPT codes 90935, 90937, 90940: Hemodialysis procedures;
     CPT code 90961: Physician or other qualified healthcare 
professional visits for ESRD;
     CPT codes 90989-90999: Other dialysis procedures; and,
     DRG code 872: Hospitalization for septicemia or severe 
sepsis.
    We noted that Medicare provides coverage for individuals with ESRD, 
regardless of age, when certain requirements are met.\188\
---------------------------------------------------------------------------

    \188\ https://www.cms.gov/medicare/coordination-benefits-recovery/overview/end-stage-renal-disease-esrd.
---------------------------------------------------------------------------

    We also noted that dialysis procedures may be utilized for 
individuals who do not have ESRD in the treatment of acute intoxication 
or poisoning. For example, in the case of a patient experiencing 
poisoning, dialysis hemoperfusion may be employed, which passes the 
blood through a column packed with granules that include a resin that 
act as absorbents. In this procedure, physicochemical properties of an 
absorbent are used to remove toxins. Conversely, in hemodialysis 
utilized in the treatment of ESRD, there is a concentration gradient 
between the blood and the solvent across the dialysis membrane.\189\ We 
noted that the patient accessing dialysis treatment for the treatment 
of acute intoxication or poisoning would not present with the same 
diagnostic profile, treatment needs, nor face the same risks of 
immunodeficiency and infection as individuals with ESRD as described 
below.\190\
---------------------------------------------------------------------------

    \189\ Durakovic Z. Combined hemoperfusion and hemodialysis 
treatment of poisoning with cholinesterase inhibitors. Korean J 
Intern Med. 1993 Jul;8(2):99-102. doi: 10.3904/kjim.1993.8.2.99. 
PMID: 8031730; PMCID: PMC4532091. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4532091.
    \190\ Ouellet G, Bouchard J, Ghannoum M, Decker BS. Available 
extracorporeal treatments for poisoning: overview and limitations. 
Semin Dial. 2014 Jul;27(4):342-9. https://pubmed.ncbi.nlm.nih.gov/24697909/.

---------------------------------------------------------------------------

[[Page 97938]]

    Periodontal diseases and dental caries are the main chronic 
infectious diseases of the oral cavity. Periodontal diseases include a 
group of chronic inflammatory diseases that affect the periodontal 
supporting tissues of teeth and encompass destructive and 
nondestructive diseases. Gingivitis is inflammation of the soft tissue 
without apical migration of the junctional epithelium. It is a 
reversible, nondestructive disease that does not involve loss of 
periodontal tissues. Periodontitis is inflammation of the periodontium 
that is accompanied by apical migration of the junctional epithelium, 
leading to destruction of the connective tissue attachment and alveolar 
bone loss.\191\
---------------------------------------------------------------------------

    \191\ Albandar, J.M. (2005). Epidemiology and risk factors of 
periodontal diseases. Dent Clin North Am, 49(3), 517-532, v-vi. 
doi:10.1016/j.cden.2005.03.003.
---------------------------------------------------------------------------

    Periodontitis serves as a prime example of a disrupted balance 
between the local microbiome and the host's inflammatory response, a 
condition known as dysbiosis. Although the inflammatory response is 
ostensibly triggered to manage the microbial threat, it proves to be 
ineffective and inadequately regulated in individuals prone to the 
condition. This leads to the inflammatory destruction of the 
periodontium, which encompasses the tissues that encase and support the 
teeth, including the gingiva, periodontal ligament, and alveolar bone. 
Without appropriate treatment, this disease can progress to tooth loss, 
adversely affecting chewing, appearance, and overall quality of 
life.\192\
---------------------------------------------------------------------------

    \192\ Hajishengallis, G., & Chavakis, T. (2021). Local and 
systemic mechanisms linking periodontal disease and inflammatory 
comorbidities. Nature Reviews Immunology, 21(7), 426-440. 
doi:10.1038/s41577-020-00488-6.
---------------------------------------------------------------------------

    In 2017, the American Academy of Periodontology (AAP) and the 
European Federation of Periodontology (EFP) co-presented the 2017 
Classification of Periodontal and Peri-Implant Diseases and Conditions. 
This disease classification framework serves to guide treatment 
planning for periodontitis and aims to support customized approaches to 
patient care. The revised classification includes a multi-dimensional 
staging and grading system for periodontitis classification, a 
recategorization of various forms of periodontitis, and a 
classification for peri-implant diseases and conditions.\193\
---------------------------------------------------------------------------

    \193\ https://www.perio.org/wp-content/uploads/2019/08/Staging-and-Grading-Periodontitis.pdf.
---------------------------------------------------------------------------

    Individuals with ESRD experience compromised immune systems as the 
immune system and the kidneys are closely integrated and 
interdependent. In healthy individuals, the kidneys contribute to 
immune homeostasis and regulation, while components of the immune 
system mediate many acute forms of renal disease and play a central 
role in the progression of chronic kidney disease. A dysregulated 
immune system can have either direct or indirect renal effects.\194\ 
Moreover, uremia, the buildup of waste products in the blood that 
occurs as a result of declining or decreasing kidney function, can lead 
to inflammation and reduction in the immune system's ability to 
function as evidenced by an increased risk of viral-associated cancers, 
increased susceptibility to infections, and decreased vaccination 
responses in patients with ESRD.\195\ ESRD is also characterized by 
diminished endocrine and metabolic functions of the kidney with 
subsequent retention and accumulation of toxic metabolites.\196\ 
Additionally, the presence of indwelling catheters and grafts utilized 
for the administration of dialysis, malnutrition, dysregulated 
inflammation, and acquired immune dysfunction due to uremia contribute 
to the immune deficiency in ESRD and increase susceptibility to 
infection.\197\ Notably, infection is the second leading cause of death 
in hemodialysis patients.\198\ \199\
---------------------------------------------------------------------------

    \194\ Tecklenborg J, Clayton D, Siebert S, Coley SM. The role of 
the immune system in kidney disease. Clin Exp Immunol. 2018 
May;192(2):142-150. doi: 10.1111/cei.13119. Epub 2018 Mar 24. PMID: 
29453850; PMCID: PMC5904695.
    \195\ Betjes MG. Immune cell dysfunction and inflammation in 
end-stage renal disease. Nat Rev Nephrol. 2013 May;9(5):255-65. doi: 
10.1038/nrneph.2013.44. Epub 2013 Mar 19. PMID: 23507826. https://pubmed.ncbi.nlm.nih.gov/23507826/.
    \196\ Costantinides F, Castronovo G, Vettori E, Frattini C, 
Artero ML, Bevilacqua L, Berton F, Nicolin V, Di Lenarda R. Dental 
Care for Patients with End-Stage Renal Disease and Undergoing 
Hemodialysis. Int J Dent. 2018 Nov 13;2018:9610892. doi: 10.1155/
2018/9610892. PMID: 30538746; PMCID: PMC6258100.
    \197\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7404977/.
    \198\ U.S. Renal Data System. USRDS 2015 Annual Data Report: 
Atlas of End-Stage Renal Disease in the United States, Bethesda, 
National Institutes of Health, National Institute of Diabetes and 
Digestive and Kidney Diseases, 2015.
    \199\ Dalrymple LS, et al. Infection-related hospitalizations in 
older patients with ESRD. Am. J. Kidney Dis. 2010;56:522-530. doi: 
10.1053/j.ajkd.2010.04.016.
---------------------------------------------------------------------------

    Several submitters providing information through the public 
submissions process stated that comorbidities frequently occur in the 
ESRD patient population and can cause complications for the patient, 
potentially jeopardizing the outcomes of the dialysis treatment. For 
example, submitters stated that comorbid diabetes can result in 
clinical complications for individuals receiving dialysis services in 
the treatment of ESRD, stating that periodontitis can worsen blood 
glucose control in diabetics by increasing levels of inflammatory 
mediators and may interfere with insulin, resulting in clinical 
complications. Additionally, periodontitis is associated with oral 
health-related quality of life in individuals with ESRD. One study 
evaluated whether periodontitis may be independently associated with 
oral health-related quality of life (OHRQoL) in individuals with ESRD. 
Researchers assessed 180 adults with ESRD and evaluated for impacts on 
various domains, and found that periodontitis exerts an influence on 
OHRQoL in individuals with ESRD, with a more severe condition impacting 
different domains.\200\ Moreover, a prospective cohort study aimed to 
determine the association between an index of radiographically assessed 
oral health, Panoramic Tomographic Index (PTI), and cardiovascular and 
all-cause mortality, major adverse cardiovascular events (MACEs) and 
episodes of bacteremia and laboratory measurements during a three-year 
prospective follow-up in chronic kidney disease (CKD) stage 4-5 
patients not on maintenance dialysis at baseline. The study showed that 
radiographically assessed and indexed dental health is independently 
associated with all-cause and cardiovascular mortality and MACEs in CKD 
stage 4-5 patients transitioning to maintenance dialysis and renal 
transplantation during follow-up (but not with the incidence of 
bacteremia).\201\
---------------------------------------------------------------------------

    \200\ Oliveira, L.M., Sari, D., Schoffer, C., Santi, S.S., 
Antoniazzi, R.P., & Zanatta, F.B. (2020). Periodontitis is 
associated with oral health-related quality of life in individuals 
with end-stage renal disease. Journal of Clinical Periodontology, 
47(3), 319-329. doi:10.1111/jcpe.13233.
    \201\ Jarvisalo, M.J., Jokihaka, V., Hakamaki, M., Lankinen, R., 
Helin, H., Koivuviita, N.S., . . . Metsarinne, K. (2021). Dental 
health assessed using panoramic radiograph and adverse events in 
chronic kidney disease stage 4-5 patients transitioning to dialysis 
and transplantation--A prospective cohort study. PLOS ONE, 16(9), 
e0258055. doi:10.1371/journal.pone.0258055.
---------------------------------------------------------------------------

    Submitters providing information through the public process also 
stated that BSI, poor glycemic control, and other complications arising 
from dental infection can jeopardize the clinical success of medical 
therapies employed to manage ESRD. Research provided by submitters 
described that issues and changes in the mouth and oral cavity, such as 
periodontitis and other consequences of poor oral health, frequently 
occur in patients with CKD and may contribute to increased morbidity 
and mortality because of

[[Page 97939]]

systemic consequences such as inflammation, infections, protein-energy 
wasting, and atherosclerotic complications.\202\
---------------------------------------------------------------------------

    \202\ Harun Akar, Gulcan Coskun Akar, Juan Jesus Carrero, Peter 
Stenvinkel, and Bengt Lindholm. Systemic Consequences of Poor Oral 
Health in Chronic Kidney Disease Patients, Clin J Am Soc Nephrol 6: 
218-226, 2011. doi: 10.2215/CJN.05470610.
---------------------------------------------------------------------------

    Several submitters also stated that addressing oral health issues, 
including identifying and resolving dental infections through the 
provision of dental and oral services, can be inextricably linked and 
integral and related to the clinical success of Medicare covered 
dialysis services for the treatment of ESRD. The submitters stated that 
the consequences of poor oral health are worse for ESRD patients than 
for the general population due to ESRD patient characteristics such as 
advanced age, higher prevalence of comorbid diabetes, polypharmacy, and 
impaired immune function, and that medically necessary dental care may 
improve the clinical success of the dialysis services.
    A few submitters supplied a general position paper on the need for 
dental care and services in the ESRD patient population receiving 
dialysis services, describing the unique risks for individuals with 
ESRD and the increased risk of infection from oral sources. 
Specifically, the position paper states that ``oral diseases represent 
a potential and preventable cause of poor health outcomes in people 
with ESRD due to their relation to infection, inflammation, and 
malnutrition. Oral health represents a potential determinant of health 
outcomes in patients with end-stage renal diseases (ESRD).'' \203\ 
Several submitters also provided a cohort outcomes study of 675 
randomly selected individuals receiving peritoneal dialysis 
services.\204\ The study outcomes described that ``poor oral health was 
associated with lower educational levels, diabetes, older age, 
marriage, and worse nutritional indicators (including lower time-
averaged serum albumin and phosphate concentrations).'' \205\
---------------------------------------------------------------------------

    \203\ Costantinides F, Castronovo G, Vettori E, Frattini C, 
Artero ML, Bevilacqua L, Berton F, Nicolin V, Di Lenarda R. Dental 
Care for Patients with End-Stage Renal Disease and Undergoing 
Hemodialysis. Int J Dent. 2018 Nov 13;2018:9610892. doi: 10.1155/
2018/9610892. PMID: 30538746; PMCID: PMC6258100.
    \204\ Sirirat Purisinsith, Patnarin Kanjanabuch, Jeerath 
Phannajit, Bruce Robinson, Kriang Tungsanga, et al. ``Oral Health-
Related Quality of Life, A Proxy of Poor Outcomes in Patients on 
Peritoneal Dialysis.'' doi: https://doi.org/10.1016/j.ekir.2022.07.008 (August 5, 2022).
    \205\ Ibid.
---------------------------------------------------------------------------

    The research further isolated that poor oral health is 
independently associated with an increased risk of peritonitis, an 
infection of the peritoneum where the peritoneal access graft is 
placed, and mortality in patients receiving peritoneal dialysis. The 
authors describe that ``after adjusting for age, sex, comorbidities, 
serum albumin, shared frailty by study sites, and PD vintage, poor oral 
health was associated with increased risks of peritonitis (adjusted 
hazard ratio [HR] = 1.45, 95 percent confidence interval [CI]: 1.06-
2.00) and all-cause mortality (adjusted HR = 1.55, 95 percent CI: 1.04-
2.32) but not hemodialysis (HD) transfer (adjusted HR = 1.89, 95 
percent CI: 0.87-4.10) compared to participants with good oral 
health.'' Furthermore, the study explained that ``poor oral health 
status was present in one-fourth of peritoneal dialysis patients and 
was independently associated with a higher risk of peritonitis and 
death.'' \206\ Moreover, submitters provided information that suggests 
that patients with ESRD receiving hemodialysis services and receiving 
preventive oral and dental services experience increased survival while 
those not receiving dental services were associated with increased 
mortality. A prospective cohort outcomes study of 4,205 hemodialysis 
patients assessed the impact of dental health on mortality from 2010 to 
2012. The study described that ``in adults treated with hemodialysis, 
poorer dental health was associated with early death, whereas 
preventive dental health practices were associated with longer 
survival.'' \207\
---------------------------------------------------------------------------

    \206\ Ibid.
    \207\ See, for example, Palmer S.C., Ruospo M., Wong G., et al. 
Oral-D study investigators. Dental health and mortality in people 
with end-stage kidney disease treated with hemodialysis: a 
multinational cohort study. American Journal of Kidney Diseases. 
2015;66:666-676.
---------------------------------------------------------------------------

    Additionally, in a systematic review supplied by several 
submitters, studies show that patients on RRT (for example 
hemodialysis, peritoneal dialysis, and/or transplantation) experience a 
high prevalence of dental caries, a common chronic infectious disease 
resulting from tooth-adherent cariogenic bacteria.\208\ The 
observational data presented in the review suggests a link between oral 
health and mortality in patients on RRT.\209\ The review highlighted 
the need for further research in this area but also stated that 
improved, multidisciplinary, patient-centered dental care concepts are 
required to support dental and overall oral health in individuals on 
RRT.
---------------------------------------------------------------------------

    \208\ https://www.ncbi.nlm.nih.gov/books/NBK551699/.
    \209\ Deborah Kreher et.al., Prevalence of Dental Caries in 
Patients on Renal Replacement Therapy--A Systematic Review J. Clin. 
Med. 2023, 12, 1507. https://doi.org/10.3390/jcm12041507.
---------------------------------------------------------------------------

    Several submitters also noted that the Society for Vascular Surgery 
has stated that transient bacteremia from dental infections can seed 
hemodialysis access grafts. Among strategies to prevent infection of 
vascular grafts, recommended preoperative measures include identifying 
and treating remote site infections, including dental or oral sites of 
infection.210 211 Statements regarding best practices for 
managing infection control advise that sources of infection, including 
those within the oral cavity, should be addressed in order to minimize 
the risk of broader infection in the ESRD patient receiving 
hemodialysis.\212\
---------------------------------------------------------------------------

    \210\ Surgical Site Infection Toolkit, CDC, SSI Toolkit Activity 
C: ELC Prevention Collaboratives (cdc.gov).
    \211\ Pear S, Patient Risk Factors and Best Practices for 
Surgical Site Infection Prevention, https://www.halyardhealth.com/wp-content/uploads/patient_risk_factors_best_practices_ssi.pdf.
    \212\ Ibid.
---------------------------------------------------------------------------

    We concluded that the evidence base indicates that evaluation for 
and treatment of oral infection leads to improved outcomes and reduced 
risk of mortality for individuals with ESRD receiving covered dialysis 
services (89 FR 61755).
    We noted that in the CY 2023 PFS final rule, we agreed with 
commenters that there is clinical evidence to support that medically 
necessary dental care may advance the clinical success of organ 
transplants and finalized that payment can be made under Medicare Parts 
A and B for dental services such as dental examinations, including 
necessary treatment, performed as part of a comprehensive workup prior 
to organ transplant surgery and medically necessary diagnostic and 
treatment services immediately necessary to eliminate or eradicate the 
infection or its source that are provided before transplantation 
because such services are inextricably linked to, and substantially 
related and integral to the clinical success of, the organ transplant 
procedure (87 FR 69676).
    Furthermore, we stated that we appreciated commenters' feedback 
regarding those individuals who are awaiting organ transplantation and 
the commenters' request that Medicare provide payment for medically 
necessary dental services prior to transplantation. We described that 
in a case where an individual is awaiting organ transplantation, we 
believe that it is appropriate for Medicare to provide payment for, 
including but not limited to, an oral or dental examination, and

[[Page 97940]]

medically necessary diagnosis and treatment for only those services 
that are considered immediately necessary to eliminate or eradicate the 
infection or its source prior to the organ transplant (87 FR 69676).
    In the CY 2025 PFS proposed rule, we stated, in consideration of 
research and recommendations provided by the public and our analyses of 
the studies and research available regarding the connection between 
dental services and the clinical success of dialysis services for 
individuals with ESRD, that we believe that dental services to diagnose 
and treat infection prior to dialysis services in the treatment of ESRD 
represent a clinically analogous scenario to dental services for which 
Medicare payment under Parts A and B is currently permitted when 
furnished in the inpatient or outpatient setting, such as prior to 
organ transplant. The clinical evidence supports that the medically 
necessary dental care may similarly advance the clinical success of 
dialysis services in the treatment of ESRD because an oral or dental 
infection can present substantial risk to the success and outcomes of 
these procedures (including the risk of systemic infection, BSI, 
sepsis, and death) (89 FR 61755 through 61756).
    As such, we stated in the proposed rule that we believe that if a 
patient requiring dialysis services in the treatment of ESRD has an 
oral infection, the success of those dialysis services could be 
compromised if the infection is not properly diagnosed and treated 
prior to the covered medical services. Without an oral or dental 
examination to identify such an infection and the provision of 
necessary treatment, such as restorative dental services, to eradicate 
the infection prior to the dialysis procedure, the patient's ability to 
complete the dialysis services could be seriously complicated or 
compromised and the risk of infection would further increase the risk 
of mortality for the patient (89 FR 61756).
    We provided examples of restorative dental services to eradicate 
infection: extractions (removal of the entire infection, such as 
pulling of teeth--for example, CDT D7140, D7210), restorations (removal 
of the infection from tooth/actual structure, such as fillings--for 
example, CDT D2000-2999), periodontal therapy (removal of the infection 
that is surrounding the tooth, such as scaling and root planning--for 
example, CDT D4000-4999, more specifically D4341, D4342, D4335 and 
D4910), or endodontic therapy (removal of infection from the inside of 
the tooth and surrounding structures, such as root canal--for example, 
CDT D3000-3999) (89 FR 61756).
    We explained that if such an infection is not treated prior to 
dialysis services in the treatment of ESRD, then there is an increased 
likelihood for morbidity and mortality resulting from spreading of the 
local infection to BSI and sepsis. Likewise, we stated that we believe 
that infections occurring during the course of dialysis treatment 
should similarly be addressed and resolved in order to minimize the 
risk of infection and death for the patient with ESRD receiving 
dialysis services (89 FR 61756).
    We stated that because an oral or dental infection can present 
substantial risk to the success of dialysis treatment for ESRD, we 
believe dental services furnished to identify, diagnose, and treat oral 
or dental infections prior to or contemporaneously with dialysis 
services in the treatment of ESRD are not in connection with the care, 
treatment, filling, removal, or replacement of teeth or structures 
directly supporting teeth, but instead are inextricably linked to, and 
substantially related and integral to the clinical success of, these 
other covered medical services. We noted that, in these circumstances, 
the necessary treatment to eradicate an infection may not be the 
totality of recommended dental services for a given patient. For 
example, if an infected tooth is identified in a patient requiring 
dialysis services in the treatment of ESRD, the necessary treatment 
would be to eradicate the infection, which could result in the tooth 
being extracted. Additional dental services, such as a dental implant 
or crown, may not be considered immediately necessary to eliminate or 
eradicate the infection or its source prior to surgery. Therefore, such 
additional services would not be inextricably linked to, and 
substantially related and integral to, the clinical success of 
Medicare-covered dialysis services when used in the treatment of ESRD. 
As such, no Medicare payment would be made for the additional services 
that are not immediately necessary prior to or contemporaneously with 
dialysis for ESRD to eliminate or eradicate the infection (89 FR 
61756).
    In consideration of the concerns discussed above in this section, 
we proposed to add this clinical scenario to the examples of clinical 
scenarios under which payment can be made for certain dental services 
in our regulation at Sec.  411.15(i)(3)(i)(A). Specifically, we 
proposed to amend the regulation in paragraph A to include dental or 
oral examination performed as part of a comprehensive workup in either 
the inpatient or outpatient setting prior to Medicare-covered dialysis 
services when used in the treatment of ESRD; and medically necessary 
diagnostic and treatment services to eliminate an oral or dental 
infection prior to, or contemporaneously with Medicare-covered dialysis 
services when used in the treatment of ESRD. We sought comments on all 
aspects of this proposal (89 FR 61756).
a. Consideration of Dental Services That May Be Inextricably Linked to 
Covered Services for the Treatment of Chronic Kidney Disease
    In section II.J.1.b. of this final rule, we discuss that we have 
partnered with AHRQ to help us consider the relationship between dental 
services and other specific covered services. Specifically, AHRQ 
reviews available clinical evidence regarding this relationship and 
provides analysis of clinical scenarios where dental services may be 
inextricably linked to other covered services. To better address the 
public's immediate dental needs, AHRQ conducts rapid response reports 
instead of systematic reviews. With these rapid response reports, we 
can better specify which payments can be made under Medicare Parts A 
and B for certain dental services that are inextricably linked to other 
covered services.
    In the CY 2025 PFS proposed rule (89 FR 61752), we provided an 
overview of the information we received from the public through the 
submission process. In that discussion, we summarized the submissions 
received from interested parties asserting that dental treatments can 
be integral to the clinical success of covered nephrology-related 
medical services. We found the evidence submitted through the 
submission process compelling with respect to dental services furnished 
to identify, diagnose, and treat oral or dental infections prior to or 
contemporaneously with dialysis services in the treatment of ESRD, 
which led to our proposal discussed above.
    We acknowledge the importance of dental health to overall well-
being of patients with kidney related diseases, such as, CKD. To gain 
further understanding of potential relationships between dental 
services and specific covered CKD medical services, we partnered with 
researchers at AHRQ to review available clinical evidence regarding 
this topic.
    AHRQ created a rapid response report, which was not available at 
the time of the proposed rule's publication, that summarized recent 
evidence, aiming to inform CMS policy

[[Page 97941]]

development related to the possible linkage between dental services and 
treatment modalities and services for CKD patients. Specifically, the 
report reviewed the available clinical evidence on the efficacy of 
dental services in improving health outcomes for patients with CKD 
across different treatment modalities and stages of the disease. For 
more detailed information about the search strategies and findings, 
please refer to the AHRQ rapid response report available at https://effectivehealthcare.ahrq.gov/products/treatment-outcomes-chronic-kidney/rapid-research.
    CKD affects around 14 percent of American adults \213\ and 850 
million people globally,\214\ and its prevalence is rising faster than 
that of other major diseases like diabetes and heart disease.\215\ As 
stated in the AHRQ rapid response report, CKD is a condition 
characterized by impaired kidney function, which leads to the 
accumulation of excess fluid and toxic waste. This impairment can 
result in various health complications, including high blood pressure, 
heart disease, and stroke. AHRQ stated that assessing kidney function 
and damage involves the use of several biomarkers, with serum 
creatinine and other serum indicators employed to estimate the 
estimated glomerular filtration rate (eGFR). CKD is classified into 
five stages based on eGFR levels and evidence of kidney damage.\216\ 
According to the rapid response report, stages 1, 2, 3 and 4 have eGFR 
values of >90, 60-89, 30-59 and 15-29 mL/min/1.73m\2\ respectively. CKD 
stage 4 represents severe kidney damage. CKD stage 5 represents severe 
kidney damage or failing kidneys and is also termed end-stage renal 
disease (ESRD), which is defined by eGFR below 15 mL/min/1.73m\2\. For 
individuals in Stage 5, treatment options include dialysis (for 
example, hemodialysis and peritoneal dialysis) or kidney replacement 
therapy.
---------------------------------------------------------------------------

    \213\ American Kidney Fund. All about the kidneys. Stages of 
kidney disease (CKD). https://www.kidneyfund.org/all-about-kidneys/stages-kidney-disease (accessed 2024-07-21).
    \214\ Centers for Disease Control and Prevention. About Post-
Streptococcal Glomerulonephritis. https://www.cdc.gov/group-a-strep/about/post-streptococcal-glomerulonephritis.html.
    \215\ Ibid.
    \216\ American Kidney Fund. All about the kidneys. Stages of 
kidney disease (CKD). https://www.kidneyfund.org/all-about-kidneys/stages-kidney-disease (accessed 2024-07-21).
---------------------------------------------------------------------------

    AHRQ's rapid response report highlights that chronic oral diseases 
(COD), such as dental caries, gingival infection, periodontal disease, 
and tooth loss,\217\ are common in the United States and can 
significantly impact overall health. Periodontitis, in particular, is a 
condition that can cause systemic inflammation, which can worsen CKD. 
According to the rapid response review, the prevalence of periodontitis 
approaches 100 percent in patients on dialysis in some studies,\218\ 
suggesting that this is a near-ubiquitous comorbidity with severe CKD. 
A recent study finding identified that dental intervention may reduce 
total medical treatment for these patients by delaying or preventing 
disease progression.\219\ Additionally, periodontitis may also 
significantly exacerbate cardiovascular risk and total mortality in 
patients with CKD at all severity levels.\220\
---------------------------------------------------------------------------

    \217\ Centers for Disease Control and Prevention. About Post-
Streptococcal Glomerulonephritis. https://www.cdc.gov/group-a-strep/about/post-streptococcal-glomerulonephritis.html.
    \218\ Craig, R.G. Interactions between Chronic Renal Disease and 
Periodontal Disease. Oral Dis 2008, 14 (1), 1-7. https://doi.org/10.1111/j.1601-0825.2007.01430.x.
    \219\ Grubbs, V.; Vittinghoff, E.; Beck, J.D.; Kshirsagar, A.V.; 
Wang, W.; Griswold, M.E.; Powe, N.R.; Correa, A.; Young, B. 
Association Between Periodontal Disease and Kidney Function Decline 
in African Americans: The Jackson Heart Study. Journal of 
Periodontology 2015, 86 (10), 1126-1132. https://doi.org/10.1902/jop.2015.150195.
    \220\ Sharma, P.; Dietrich, T.; Ferro, C.J.; Cockwell, P.; 
Chapple, I. L. C. Association between Periodontitis and Mortality in 
Stages 3-5 Chronic Kidney Disease: NHANES III and Linked Mortality 
Study. J Clin Periodontol 2016, 43 (2), 104-113. https://doi.org/10.1111/jcpe.12502.
---------------------------------------------------------------------------

    In their rapid response, the Preferred Reporting Items for 
Systematic Reviews and Meta-Analyses (PRISMA) flow diagram, used in 
systematic reviews and meta-analyses to describe the review's findings, 
revealed that 515 records were initially identified from two large 
databases, of which 23 relevant articles met the study's eligibility 
criteria for inclusion. Of these 23 articles, 7 were systematic reviews 
and/or meta-analyses, 15 were randomized clinical trials, non-
controlled clinical trials, or observational studies, and 1 article 
related to practice guidelines.
    Based on the report, no evidence is available regarding the impact 
of dental services on health outcomes, specifically for individuals 
with stage 4 CKD alone. However, the report found evidence suggesting 
improved outcomes for all-cause mortality for hemodialysis patients 
after nonsurgical periodontal therapy (NSPT), as well as evidence 
indicating a decreased risk of cardiovascular events with NSPT or 
endodontic treatment for hemodialysis patients. A single study in their 
report suggested a decrease in all-cause mortality among ESRD patients 
undergoing either hemodialysis or peritoneal dialysis. The report also 
found that there is insufficient evidence suggesting that NSPT leads to 
lower rates of bacteremia, pneumonia, osteomyelitis, brain abscess, or 
renal and perinephric abscess outcomes. Additionally, the report found 
that the evidence regarding the effect of dental services on all-cause 
mortality in patients undergoing hemodialysis or peritoneal dialysis is 
inconsistent.
    The rapid response report noted several limitations in the evidence 
base, including varying severities of periodontitis among patient 
populations and differences in study designs, which affect the overall 
quality of the findings. Additionally, follow-up periods were generally 
short, limiting the ability to assess long-term effects. Furthermore, 
no recent trials or cohort studies have been conducted in the U.S., 
making it unclear to what extent this evidence is generalizable to the 
U.S. population.
    The findings of the AHRQ rapid responses highlight that this area 
merits further study by researchers and industry to explore potential 
connections between dental services and improved outcomes for 
individuals with CKD. Specifically, the body of evidence evaluating 
dental services before, during, or after the initiation of dialysis 
lacks primary clinical data. Additionally, the current literature lacks 
comprehensive guidance and evidence-based protocols for addressing the 
diverse oral health needs of CKD patients, including the appropriate 
frequency and duration of dental services for patients at any stage of 
CKD.
    We received 54 public comments on the proposal to amend the 
regulation at Sec.  411.15(i)(3)(i)(A) to include dental or oral 
examination performed as part of a comprehensive workup in either the 
inpatient or outpatient setting prior to Medicare-covered dialysis 
services when used in the treatment of ESRD; and medically necessary 
diagnostic and treatment services to eliminate an oral or dental 
infection prior to, or contemporaneously with Medicare-covered dialysis 
services when used in the treatment of ESRD. Commenters included 
members of Congress, patient advocacy organizations, hospitals and 
hospital associations, medical and dental associations representing 
several different specialties and specialty societies, dialysis 
organizations, dental plan associations, and health insurance 
companies, among others. The following is a summary of the comments we 
received and our responses.
    Comment: All commenters supported our proposal. Commenters stated 
they agree with CMS's conclusion that the clinical evidence indicates 
that

[[Page 97942]]

medically necessary dental care may advance the clinical success of 
dialysis services in the treatment of ESRD because an oral or dental 
infection can present a substantial risk to the success and outcomes of 
these procedures. Commenters offered many ways that dental and oral 
care play a critical role in the success and outcomes of dialysis for 
individuals living with kidney failure. For example, they explained 
that dental services furnished to identify, diagnose, and treat oral or 
dental infections may enhance access to kidney transplants, lessen the 
risk of morbidity, mortality, and negative cardiovascular events, 
protect against peritoneal dialysis associated peritonitis, prevent 
hospitalizations, improve overall health and prognosis of individuals 
with ESRD, prevent complications including bloodstream infections and 
poor glycemic control, improve quality of life, and keep patients 
stable on their current dialysis modality.
    Commenters stated that the proposal is a crucial step towards 
addressing health disparities and enhancing access to transplantation 
services. They explained that without Medicare coverage, many 
beneficiaries on dialysis may not have access to dental services, which 
serves as a serious health equity issue and a real barrier to care and 
applauded CMS for taking an important step to close a real health 
equity gap for Americans living with kidney disease. Commenters 
explained that oral health related infections result in worse prognoses 
for ESRD patients and perpetuate disparities based on race. The 
commenters discussed how kidney disease disproportionately affects 
communities of color and explained that Black people are nearly four 
times more likely to be affected by kidney disease than white people, 
and more than one-third of people with ESRD come from neighborhoods 
that are disproportionately impoverished. These commenters stated that 
expanding access to these services would address these disparities in 
communities that have long been underserved by medical and dental care.
    One commenter stated that the proposal, if finalized, would improve 
the health outcomes of pediatric patients who are receiving dialysis. 
The commenter also offered to work with CMS to explore other policies 
that would ensure pediatric patients have access to these services. 
Other commenters shared their support of the proposal and noted that 
many residents of nursing homes and assisted living residences with 
ESRD requiring dialysis also have dental diseases that may result in 
infections and other complications that can impair the effectiveness of 
the dialysis intervention.
    Commenters had different interpretations of the proposal with 
regard to the population of beneficiaries with ESRD for which Medicare 
would cover dental services as well as the scope and frequency of such 
services. Most commenters described the proposal as providing that for 
individuals with ESRD receiving Medicare-covered dialysis, since these 
treatments are not a one-time procedure like an organ transplant but 
instead are ongoing and life-sustaining, the duration of dental 
services should be the same as for dialysis sessions, because the 
policy's premise is that they are inextricably linked to the dialysis 
services. Other descriptions that commenters used included casting the 
proposed policy as offering comprehensive dental care and an expansion 
of dental benefits. However, some commenters conveyed their 
understanding that the oral examinations would be covered only before 
the onset of dialysis, that is, the time an individual initiates the 
first dialysis treatment. Some commenters requested clarity on the 
allowable frequency of dental services.
    One commenter restated the proposal as permitting payment for 
dental exams prior to or contemporaneously with dialysis services, 
while another commenter described the dental services as reliable which 
could suggest that they are consistent or planned. A different 
commenter restated the proposal as permitting payment for periodic 
dental care and later in their comment referred to regular dental care 
and how these services can identify and reduce the occurrence of 
infections.
    One commenter restated the proposal as permitting payment for oral 
evaluations for ESRD patients prior to commencing dialysis, while 
another commenter described the services as an oral examination 
performed as part of a comprehensive workup prior to the initiation of 
Medicare-covered dialysis to treat ESRD. A different commenter stated 
that a comprehensive workup prior to the initiation of dialysis 
services does not routinely include a dental and oral examination. The 
commenter also referenced the Conditions for Coverage for ESRD 
Facilities (CfCs) at Sec.  494.80, where it states that an ESRD 
facility's interdisciplinary team conducts an ``individualized and 
comprehensive assessment'' of the patient's needs, which is then used 
to develop and implement a comprehensive plan of care. The commenter 
stated that while the initial assessment might identify a patient's 
oral health needs, an ESRD facility has no ability or financing with 
which to incorporate such into the plan of care except perhaps through 
referral to outside dental services. Likewise, dental issues may 
surface throughout dialysis treatment, when a patient may relay dental 
pain or discomfort to a health care provider. The commenter stated 
that, at that point, too, if a patient and/or health provider realize 
dental or oral services are needed, the only recourse would be 
referral.
    One commenter stated that it is unclear whether the proposal would 
permit payment for a dental exam prior to each dialysis session, since 
dialysis services can be frequent and long-lasting. The commenter 
stated that ESRD patients often receive dialysis up to three times per 
week. One commenter requested additional information to understand the 
proposal. The commenter requested a detailed definition of what 
constitutes a medically necessary dental or oral examination and asked 
that we provide the criteria or guidelines that will be used to 
determine the necessity of such examinations. The commenter also 
requested clarification on the specific diagnostic and treatment 
services considered medically necessary, as well as any relevant 
criteria or thresholds that will determine the necessity for these 
services.
    Commenters expressed appreciation for CMS listening to 
recommendations provided by the kidney community and evaluating the 
clinical research that demonstrates the connection between dental 
services and the clinical success of dialysis services for individuals 
with ESRD. One commenter stated the proposal aligns with CMS's 
longstanding policy of covering treatments related to ESRD, including 
dialysis services and kidney transplant surgeries. The commenter stated 
that given the critical role of dialysis in managing ESRD and the 
importance of oral health in these patients, expanding coverage for 
dental services linked to dialysis is a logical progression. A 
different commenter stated that they were pleased to see CMS expand 
access to dental services for individuals with kidney failure seeking 
transplants in the CY 2023 PFS rule and believe this further expansion 
to all beneficiaries with ESRD is incredibly positive. The commenter 
stated that all beneficiaries who require dialysis, including in-
center, home peritoneal, and home hemodialysis patients, should have 
access to dental services. A different commenter was pleased that this 
year's proposal would be another significant step to ensure another 
high-risk patient

[[Page 97943]]

population can access medically necessary dental services. This 
commenter stated that they are root canal specialists and witness 
firsthand the severe consequences of untreated dental infections, which 
can rapidly spread, exacerbating existing health conditions and 
potentially become life-threatening.
    Several commenters urged CMS to ensure that payment is permitted 
for dental services not only for patients diagnosed with ESRD (ICD-10 
code N18.6) but also for patients diagnosed with stage 5 CKD (ICD-10 
code N18.5) who have not yet initiated dialysis, stating that these 
patients should receive the dental care needed to prevent infections 
that exacerbate diabetes and kidney disease. These commenters further 
requested that the policy apply to claims for patients with a diagnosis 
encompassing one of those conditions, such as Hypertensive Chronic 
Kidney Disease with stage 5 CKD or ESRD (ICD-10 code I12.0).
    Several commenters also urged CMS to reconsider whether certain 
dental services may be inextricably linked to treatment for stage 4 CKD 
(ICD-10 code N18.4). They explained that when a patient is at CKD stage 
4, they have severe kidney damage, and it is critical to slow the loss 
of kidney function by managing health problems, such as oral/dental 
infection, that directly complicate and are complicated by their kidney 
disease. They further explained that resolving dental infections in 
patients at that stage can improve eGFR, inflammatory markers, 
erythrocyte count, and nutrition, as well as reduce the risk of 
cardiovascular and other serious medical events. They stated that these 
clinical factors are commonly exacerbated by CKD and negatively impact 
CKD outcomes, and since dental care can play a substantial role in 
addressing these factors in patients with stage 4 CKD, it can help to 
delay or avoid progression to stage 5 and ESRD, and the consequent need 
for dialysis or kidney transplantation.
    One commenter also requested that CMS consider expanding the 
proposed policy to stage 4 CKD, stating that it is critical that CMS go 
upstream to address the needs of patients with advanced CKD who may not 
yet be starting dialysis, but whose eGFR points to a likely start in 
the near future. The commenter explained that this can be a critical 
time for a patient--whether in preparation for transplant or transition 
to dialysis--to address, in collaboration with their nephrologist, 
dental and/or oral health challenges in a comprehensive manner. Access 
to necessary oral and dental care is one means of doing so. The 
commenter asked CMS to clarify that its expansion of dental coverage as 
related and integral to treatment of kidney disease includes those 
patients whose course of treatment may not yet have started but is 
anticipated in the near term. The commenter agreed with our statement 
in the proposed rule, that the evidence indicates that evaluation for 
and treatment of oral infections lead to improved outcomes and reduced 
risk of mortality for individuals with ESRD receiving covered dialysis 
services and further noted that not only does dental and oral care have 
the potential to improve kidney care outcomes, but it also has the 
potential to ultimately generate cost savings.
    Response: We agree with commenters that there is evidence to 
support that dental services are inextricably linked to, and 
substantially related and integral to the clinical success of dialysis 
services in the treatment of ESRD. We note that the two leading causes 
of death in the dialysis patient population are cardiovascular disease 
and infection. The AHRQ rapid response report identified a high-quality 
retrospective cohort study comparing 3613 patients who received 
hemodialysis and intensive periodontal disease treatment to patients on 
hemodialysis without periodontal disease treatment. The treatment 
cohort exhibited significantly lower cumulative incidences of 
cardiovascular disease events and all-cause mortality.\221\ The AHRQ 
rapid response report also identified a high-quality retrospective 
cohort study that followed 12,454 patients receiving either 
hemodialysis or peritoneal dialysis over the course of 16 years. From 
this population, two subgroups were further defined, those that 
received root canal therapy and those that did not. The results showed 
that members of the non-root canal therapy group had a significantly 
higher mortality rate than those of the root canal therapy group. This 
study suggested that patients on either hemodialysis or peritoneal 
dialysis who received root canal therapy had a lower risk of death than 
patients who did not receive root canal therapy. The study also noted 
infectious diseases had a significant role in mortality among dialysis 
patients who did not receive root canal therapy.\222\
---------------------------------------------------------------------------

    \221\ Huang, S.-T.; Yu, T.-M.; Ke, T.-Y.; Wu, M.-J.; Chuang, Y.-
W.; Li, C.-Y.; Chiu, C.-W.; Lin, C.-L.; Liang, W.-M.; Chou, T.-C.; 
Kao, C.-H. Intensive Periodontal Treatment Reduces Risks of 
Hospitalization for Cardiovascular Disease and All-Cause Mortality 
in the Hemodialysis Population. J Clin Med 2018, 7 (10), 344. 
https://doi.org/10.3390/jcm7100344.
    \222\ Chiu, C.-C.; Chang, Y.-C.; Huang, R.-Y.; Chan, J.-S.; 
Chung, C.-H.; Chien, W.-C.; Kao, Y.-H.; Hsiao, P.-J. Investigation 
of the Impact of Endodontic Therapy on Survival among Dialysis 
Patients in Taiwan: A Nationwide Population-Based Cohort Study. Int 
J Environ Res Public Health 2021, 18 (1), 326. https://doi.org/10.3390/ijerph18010326.
---------------------------------------------------------------------------

    As earlier stated, we also found submitter information compelling. 
Specifically, submitters provided a cohort outcomes study of 675 
randomly selected individuals receiving peritoneal dialysis 
services.\223\ After adjusting for age, sex, comorbidities, serum 
albumin, shared frailty by study sites, and peritoneal dialysis 
vintage, poor oral health was associated with increased risks of 
peritonitis and all-cause mortality compared to participants with good 
oral health. While we do note that a specific dental treatment service 
was not part of this study design, we still find the increased risk of 
peritonitis in the poor oral health population, which likely would 
affect the ability to perform and the clinical success of peritoneal 
dialysis, compelling evidence in support of the assertion that dental 
services are inextricably linked to, and substantially related, and 
integral to the clinical success of dialysis services in the treatment 
of ESRD.
---------------------------------------------------------------------------

    \223\ Sirirat Purisinsith, Patnarin Kanjanabuch, Jeerath 
Phannajit, Bruce Robinson, Kriang Tungsanga, et al. ``Oral Health-
Related Quality of Life, A Proxy of Poor Outcomes in Patients on 
Peritoneal Dialysis.'' doi: https://doi.org/10.1016/j.ekir.2022.07.008 (August 5, 2022).
---------------------------------------------------------------------------

    In consideration of the submissions and comments provided by the 
public and the research conducted by AHRQ, we find that the clinical 
evidence supports that the medically necessary dental care are 
inextricably linked to, and substantially related, and integral to the 
clinical success of dialysis services in the treatment of ESRD because 
an oral or dental infection can present a substantial risk to the 
success and outcomes of these procedures (including the risk of 
systemic infection, BSI, sepsis, and death). Therefore, the dental 
services are so integral to medically necessary dialysis services in 
the treatment of ESRD that they are not in connection with the care, 
treatment, filling, removal, or replacement of teeth or structures 
directly supporting teeth within the meaning of section 1862(a)(12) of 
the Act. Rather, such dental services are inextricably linked to the 
clinical success of the medical service and are substantially related 
and integral to the covered medical service of dialysis. We note that 
these medical services include either modality of dialysis that a 
beneficiary is receiving,

[[Page 97944]]

hemodialysis or peritoneal dialysis--and whether or not it is 
administered in the home or in-center at an ESRD facility. As such, we 
are finalizing our proposal that Medicare Part A and Part B payment can 
be made for certain dental services, such as a dental or oral 
examination performed as part of a comprehensive workup prior to 
dialysis services in the treatment of ESRD, and medically necessary 
diagnostic and treatment services to eliminate an oral or dental 
infection prior to, or contemporaneously with, dialysis services in the 
treatment of ESRD.
    We note that we are finalizing the proposal with modifications, as 
discussed below, after consideration of public comments to reflect the 
duration of dialysis services for the treatment of ESRD. The clinical 
evidence demonstrates that if an infection is not treated prior to, or 
contemporaneously with dialysis services in the treatment of ESRD, then 
there is an increased likelihood for morbidity and mortality resulting 
from spreading of the local infection to BSI and sepsis. Likewise, 
infections occurring during the course of dialysis treatment should 
similarly be addressed and resolved in order to minimize the risk of 
infection and death for the patient with ESRD receiving dialysis 
services.
    Some of the commenters appear to have interpreted the proposal as 
an expansion of Medicare coverage of dental services. This was not our 
intention. As we explained in the CY 2023 PFS final rule, under our 
interpretation of section 1862(a)(12) of the Act, items and services 
furnished in connection with the care, treatment, filling, removal, or 
replacement of teeth or structures directly supporting the teeth 
generally are not covered by Medicare, and no payment may be made for 
them under either Medicare Part A or Part B, subject to certain 
exceptions specified in the statute (87 FR 69664). The proposal would 
not expand Medicare coverage of dental services. Rather, it would add 
certain dental services that are inextricably linked to Medicare-
covered dialysis services used in the treatment of ESRD to the non-
exhaustive list of examples of clinical scenarios under Sec.  
411.15(i)(3)(i) in which Medicare may pay for certain specified dental 
services.
    With regard to the comments on the population for which Medicare 
would pay for dental or oral examinations before dialysis, we note 
payment under Medicare Part A and B may be made for dental services 
that are inextricably linked to other covered services only for 
individuals who are entitled to and enrolled in Medicare. To clarify, 
individuals of any age with ESRD who receive dialysis on a regular 
basis or a kidney transplant are entitled to Medicare if they file an 
application and meet certain requirements. Entitlement usually begins 
after a 3-month waiting period has been served.224 225 226 
While the proposal references payment for dental or oral examination 
performed as part of a comprehensive workup prior to Medicare-covered 
dialysis services when used in the treatment of ESRD, it does not 
change the existing terms of Medicare entitlement. We agree with 
commenters that the proposal would allow for payment for oral 
evaluations prior to the onset of dialysis, that is, the initial 
treatment furnished to a patient with ESRD. We also agree with 
commenters that the proposal would allow for payment for dental 
services that identify, diagnose, and treat the occurrence of 
infections for the duration that a beneficiary with ESRD is on 
dialysis, because dialysis is ongoing and life-sustaining unless a 
kidney transplant occurs. This means that the duration of the provision 
of dental services that are inextricably linked to dialysis services 
for these beneficiaries with ESRD may be ongoing but still would have 
to be medically reasonable and necessary.
---------------------------------------------------------------------------

    \224\ Section 226A of the Act.
    \225\ 42 CFR 406.13.
    \226\ Pub. 100-01 Medicare General Information, Eligibility and 
Entitlement Manual, Chapter 2 Hospital Insurance and Supplementary 
Medical Insurance, Sections 10.4 and 10.4.2.
---------------------------------------------------------------------------

    After consideration of these comments, we are finalizing the 
proposal with a modification to address the duration of the provision 
of dental services that are inextricably linked to dialysis services 
for the treatment of ESRD. We are finalizing the addition of new 
paragraph (F) to the regulation at Sec.  411.15(i)(3)(i) to include 
dental or oral examination performed as part of a comprehensive workup 
prior to, or contemporaneously with, Medicare-covered dialysis services 
when used in the treatment of ESRD; and medically necessary diagnostic 
and treatment services to eliminate an oral or dental infection prior 
to, or contemporaneously with, Medicare-covered dialysis services when 
used in the treatment of ESRD.
    With regard to commenters' concerns about how frequently the dental 
services can be furnished and paid for under Medicare Part A and B and 
the comment requesting detail on what constitutes dental services that 
are medically necessary, MACs retain discretion to decide that payment 
can be made for dental services in accordance with the regulation on a 
claim-by-claim basis.
    With regards to the comments requesting that the policy extend to 
beneficiaries that are in the earlier stages of CKD, we agree that 
dental services may improve outcomes for such individuals; however, the 
clinical evidence available to us does not demonstrate an inextricable 
link between dental services and other covered medical services that 
such individuals may receive.
    We appreciate the comment referencing the CfCs at Sec.  494.80. We 
believe that the provisions discussed under this regulation are outside 
the scope of the proposals for this rule, since they outline the 
conditions that dialysis facilities must meet to be certified under the 
Medicare program. We note, as discussed in the CY 2023 PFS final rule 
(87 FR 69663 through 69688), that we believe the dental services and 
the other covered services related to the treatment of ESRD would most 
often be furnished by different professionals and that in order for the 
dental services to be inextricably linked to the other covered services 
such that Medicare payment can be made, there must be coordination 
between these professionals. This coordination should occur between the 
practitioners furnishing the dental and covered services regardless of 
whether both individuals are affiliated with or employed by the same 
entity. This coordination can occur in various forms, such as, but not 
limited to, a referral or exchange of information between the 
practitioners furnishing the dental and other covered services. 
Additionally, any evidence of coordination between the professionals 
furnishing the primary medical service and dental services should be 
documented. If there is no evidence to support the exchange of 
information, or integration, between the professionals furnishing the 
primary medical service and the dental services, then there would not 
be an inextricable link between the dental and other covered services 
within the meaning of our regulation at Sec.  411.15(i)(3)(i). As such, 
Medicare payment for the dental services would be excluded under 
section 1862(a)(12) of the Act (though payment for the dental services 
might be available through supplemental health or dental coverage).
    Comment: Commenters urged CMS to be careful not to suggest a 
preference for tooth extraction as ``the necessary treatment'' for 
eradicating infections despite our listing of other restorative (and 
tooth-sparing) services provided in the proposed rule that may be paid 
for. The commenters explained that doing so could lead MACs to 
improperly impose an extra burden on health care

[[Page 97945]]

providers to justify choosing a procedure other than an extraction in a 
particular instance. The commenters had the same concern with how CMS 
discusses additional services by using crowns as an example of a 
service that may not be paid and expressed concern that these types of 
statements should be approached with ample clinical basis, since the 
standard of care in certain root canal procedures, among other 
situations, requires application of a crown to prevent root canal 
failure, fracture, infection, and other complications in the immediate 
and longer term. One commenter recognized that implants or crowns may 
not be immediately necessary on their own to address an acute oral 
infection but explained that these services become necessary once 
treatment to extract a tooth is initiated. The commenter expressed the 
concern that since dialysis for ESRD is a long-term, rather than an 
acute treatment, the removal of teeth without associated restoration of 
the mouth and oral structures to function and allow for healthy chewing 
and eating will have reverberating effects on dialysis treatment 
outcomes. A different commenter explained that despite the availability 
of tooth-saving and oral health preservation options such as fluoride 
applications or restoration of the teeth that are salvageable through 
root canal treatment or fillings, beneficiaries end up living with 
fewer natural teeth. They further explained that this partial or 
complete edentulism impairs their ability to eat healthy food, maintain 
a social life, and keep an esthetic facial profile and can impair the 
healing and health maintenance activities that are often necessary to 
manage the underlying medical condition.
    Conversely, one commenter did not believe the proposal properly 
delineated those dental services that would be deemed inextricably 
linked to Medicare-covered dialysis treatments for ESRD patients, and, 
as a result, is concerned with CMS's open-ended proposal to cover many 
complex dental services which they believe are not warranted. The 
commenter explained that although CMS mentions several restorative 
dental services in the preamble of the proposed rule, these are only 
examples, since a MAC would not be precluded from allowing Medicare 
payment for other dental services. The commenter also stated that the 
proposed coverage of endodontics (root canals), which would warrant 
related restorative treatment, represents a significant expansion, as 
CMS would only customarily cover an extraction of an infected tooth. In 
addition, the commenter questioned CMS' logic of covering root canals 
while excluding implants and crowns as ``not immediately necessary.'' 
The commenter requested that CMS consider defining infection for this 
purpose as an acute infection, limit covered dental services to 
extractions, and provide clarification on the specific dental services 
that would qualify as restorative dental services to eradicate 
infection.
    Response: In the CY 2025 PFS proposed rule we stated that examples 
of restorative dental services to eradicate infection could include: 
extractions (removal of the entire infection, such as pulling of 
teeth--for example, CDT D7140, D7210), restorations (removal of the 
infection from tooth/actual structure, such as fillings--for example, 
CDT D2000-2999), periodontal therapy (removal of the infection that is 
surrounding the tooth, such as scaling and root planning--for example, 
CDT D4000-4999, more specifically D4341, D4342, D4335 and D4910), or 
endodontic therapy (removal of infection from the inside of the tooth 
and surrounding structures, such as root canal--for example, CDT D3000-
3999) (89 FR 61756). Because an oral or dental infection can present 
substantial risk to the success of dialysis treatment for ESRD, payment 
under Medicare Part A and B is permitted for only those dental services 
furnished to identify, diagnose, and treat the infection. We gave the 
example of dental implants or crowns as additional dental services that 
might not be considered immediately necessary to eliminate or eradicate 
the infection or its source because these types of services may have 
other uses in the dental space.
    Comment: One commenter stated that while linking dental services to 
other services such as a stent for hemodialysis, or a vascular access 
graft would be a benefit for ESRD patients, receipt of dental services 
is not a clinical requirement in order to receive dialysis. The 
commenter said that beneficiaries with ESRD should have access to 
dental services when necessary, and dental services should not become a 
requirement that precludes a patient from receiving another important 
service.
    Response: We thank the commenter for their perspective and sharing 
of clinical insight.
3. Request for Comment on Dental Services Integral to Specific Covered 
Services To Treat Diabetes
    We have received information from interested parties, including 
submitters providing evidence through the public submissions process as 
well as commenters on prior proposed rules suggesting that dental 
services are inextricably linked to treatment services for individuals 
with diabetes mellitus. As we discussed in the CY 2025 PFS proposed 
rule (89 FR 61752), several interested parties using the public 
submissions process have urged us to provide Medicare payment for 
dental services for individuals diagnosed with diabetes for 
consideration in CY 2025 rule making. These submissions included 
information and references supporting oral and dental treatment of 
advanced periodontitis among individuals with diabetes to improve 
markers related to management of the diabetes.
    Submitters stated that clinical studies demonstrate that dental 
treatments for oral infections, such as advanced periodontitis and 
related inflammation, meaningfully advance and improve the treatment 
of, management of, and outcomes for patients with diabetes. Submitters 
also stated that conversely, the absence of treatment of chronic dental 
infections in turn complicates covered medical treatment for the 
management of diabetes and potentially exacerbates insulin resistance, 
worsens glycemic control, and other diabetes-related complications, 
leading to poor outcomes for the individuals with diabetes. Submitters 
also noted that studies demonstrate cost savings when dental services 
are employed in the treatment of individuals with diabetes and also 
serve to advance health equity among vulnerable populations.
    Submitters provided information detailing the increased risk of 
dental caries and periodontal disease in people with diabetes, many of 
whom lose teeth, which greatly limits nutrition, general well-being, 
and overall quality of life. Submitted studies demonstrated the 
bidirectional nature of periodontal disease and diabetes, suggesting 
that both conditions influence each other and can worsen or conversely 
improve outcomes.
    As described by submitters, numerous basic and clinical studies 
describe the relationship between oral diseases and inflammation in 
persons with diabetes, which increases risks for micro- and 
macrovascular complications including retinopathy, nephropathy, 
neuropathy, cardiovascular diseases, and stroke. Several submitters 
stated that there is a documented reduction in hospitalizations in 
persons with diabetes who receive conservative periodontal treatment. 
Consequently, submitters stated that periodontal treatment is 
recommended for patients

[[Page 97946]]

with diabetes by the American Diabetes Association Clinical Guidelines 
and is also promoted by the American Association of Clinical 
Endocrinologists and others.\227\
---------------------------------------------------------------------------

    \227\ Nuha A. El Sayed, Grazia Aleppo, Vanita R. Aroda, 
Raveendhara R. Bannuru, Florence M. Brown, Dennis Bruemmer, Billy S. 
Collins, Kenneth Cusi, Sandeep R. Das, Christopher H. Gibbons, John 
M. Giurini, Marisa E. Hilliard, Diana Isaacs, Eric L. Johnson, Scott 
Kahan, Kamlesh Khunti, Mikhail Kosiborod, Jose Leon, Sarah K. Lyons, 
Lisa Murdock, Mary Lou Perry, Priya Prahalad, Richard E. Pratley, 
Jane Jeffrie Seley, Robert C. Stanton, Jennifer K. Sun, Crystal C. 
Woodward, Deborah Young-Hyman, Robert A. Gabbay; on behalf of the 
American Diabetes Association, Summary of Revisions: Standards of 
Care in Diabetes--2023. Diabetes Care 1 January 2023; 46 
(Supplement_1): S5-S9. https://doi.org/10.2337/dc23-Srev.
---------------------------------------------------------------------------

    Diabetes mellitus is a chronic, metabolic disease characterized by 
elevated levels of blood glucose (or blood sugar), which, over time, 
may lead to serious damage to the heart, blood vessels, eyes, kidneys, 
and nerves. Type 2 diabetes, which usually occurs in adults, causes the 
body to become resistant to insulin or not to make enough insulin. Type 
1 diabetes, previously referred to as juvenile diabetes or insulin-
dependent diabetes, is a chronic condition in which the pancreas 
produces little or no insulin.\228\
---------------------------------------------------------------------------

    \228\ https://www.who.int/health-topics/diabetes.
---------------------------------------------------------------------------

    A primary goal for diabetes treatment is glycemic control and 
requires accurate individualization and customization of available 
treatment options. Interventions to address lipoproteins, blood 
pressure, weight control, mental health, and lifestyle are important 
factors that contribute to quality of life and the frequency of 
diabetes-associated complications.\229\ According to recent statistics 
from the Centers for Disease Control and Prevention, approximately 38 
million people in the United States may have diabetes, and the CDC 
estimates that 1 in 5 of them do not know they have the condition. 
Approximately 98 million U.S. adults likely have prediabetes, and more 
than 8 in 10 of them may not know they have prediabetes. Notably, 
diabetes is the eighth leading cause of death in the United States (and 
maybe underreported). Type 2 diabetes accounts for approximately 90 to 
95 percent of all diagnosed cases of diabetes, while Type 1 diabetes 
accounts for approximately 5-10 percent. The CDC reports that over the 
last 20 years, the number of adults diagnosed with diabetes has more 
than doubled as the overweight and obesity have become more prevalent 
in the American population.230 231
---------------------------------------------------------------------------

    \229\ Melmer A, Laimer M. Treatment Goals in Diabetes. Endocr 
Dev. 2016;31:1-27. doi: 10.1159/000439364. Epub 2016 Jan 19. PMID: 
26824869. https://pubmed.ncbi.nlm.nih.gov/26824869/.
    \230\ https://www.cdc.gov/diabetes/basics/quick-facts.html.
    \231\ https://www.cdc.gov/ncbddd/disabilityandhealth/materials/factsheets/fs-communicating-with-people.html.
---------------------------------------------------------------------------

    One key marker for the measurement of glycemic control, a key goal 
in the treatment of diabetes, in individuals with diabetes is the 
hemoglobin A1c test. The hemoglobin A1c (also referred to as glycated 
hemoglobin, glycosylated hemoglobin, HbA1c, or A1c) test is used to 
evaluate a person's level of glucose control and shows an average of 
the blood sugar level over the past 90 days and represents a 
percentage.\232\
---------------------------------------------------------------------------

    \232\ https://www.ncbi.nlm.nih.gov/books/NBK549816/.
---------------------------------------------------------------------------

    Submitters through the public submissions process provided multiple 
research studies regarding the interaction between dental services and 
outcomes for medical services to treat diabetes. The Cochrane Library 
(ISSN 1465-1858) is a collection of databases that contain high-
quality, independent evidence to inform healthcare decision-making. The 
Cochrane Library is owned by Cochrane and published by Wiley.\233\ In 
the Cochrane Review entitled Treatment of periodontitis for glycemic 
control in people with diabetes mellitus, evidence from 30 trials 
(results from 2,443 participants) showed that periodontitis treatment 
reduces blood sugar levels (measured by HbA1c) in diabetic patients on 
average by 0.43 percentage points (for example, from 7.43 to 7 percent; 
4.7 mmol/mol) 3 to 4 months after receiving the treatment compared with 
no active treatment or usual care. A difference of 0.30 percent (3.3 
mmol/mol) was seen after 6 months (12 studies), and 0.50 percent (5.4 
mmol/mol) at 12 months (one study).\234\ All studies in the review used 
a parallel randomized controlled trials (RCT) design and followed 
participants for between 3 and 12 months. The studies generally focused 
on people with type 2 diabetes, save one study that included 
participants with type 1 or type 2 diabetes. Most studies were mixed in 
terms of whether metabolic control of participants at baseline was 
good, fair, or poor and were carried out in secondary care. Researchers 
compared periodontitis treatment with control, which could be no (or 
delayed) treatment or usual care (oral hygiene instruction (OHI) or 
supragingival scaling with or without OHI). The degree and nature of 
advanced periodontitis were not specifically defined in the context of 
the studies. Additionally, the studies did not control for other types 
of interventions deployed in the treatment of diabetes (that is, 
strategies used to manage glycemic control), so patients may have been 
receiving other types of treatment during the study periods.
---------------------------------------------------------------------------

    \233\ https://www.cochranelibrary.com/about/about-cochrane-library.
    \234\ Simpson TC, et al. Treatment of periodontitis for 
glycaemic control in people with diabetes mellitus. Cochrane 
Database Syst Rev. 2022;4:CD004714 https://www.ncbi.nlm.nih.gov/pubmed/35420698.
---------------------------------------------------------------------------

    The types of periodontal treatment provided covered a wide range of 
oral services: subgingival instrumentation, surgical periodontitis 
treatment--flap surgery or gingivectomy; antimicrobial therapy 
(encompassing antibacterials and antibiotics), either locally applied 
(including mouth rinses, gels, or dentifrices) or systemically 
administered; other drug therapy with a possible benefit of improving 
the periodontal health of the participant; other novel interventions to 
manage periodontitis; supragingival scaling (also known as professional 
mechanical plaque removal (PMPR)); oral hygiene instruction; and/or, 
education or support sessions to improve self-help or self-awareness of 
oral hygiene.
    In summary, the Cochrane review demonstrated that individuals with 
diabetes who have periodontitis who receive dental services for the 
treatment of the periodontitis experience a statistically significant 
reduction of HbA1c. Again, measurement of HbA1c is a metric for gauging 
glycemic control which is a primary goal of treatment for all 
individuals with diabetes. The study suggests that individuals with 
diabetes who also have a diagnosis of periodontitis who receive 
treatment to address the periodontitis subsequently experience a 
reduction in HbA1c. The study authors described the clinical outcomes 
related to preventive dental care, conservative periodontal treatment, 
and reduction in HbA1c as statistically and clinically significant. 
Moreover, the authors of the research stated that ``further trials 
evaluating no treatment vs usual care are unlikely to change this 
conclusion.'' \235\
---------------------------------------------------------------------------

    \235\ Simpson TC, et al. Treatment of periodontitis for 
glycaemic control in people with diabetes mellitus. Cochrane 
Database Syst Rev. 2022;4:CD004714 https://www.ncbi.nlm.nih.gov/pubmed/35420698.
---------------------------------------------------------------------------

    Submitters providing information through the public submissions 
process suggested that dental services could be inextricably linked to 
the following specific medical services in the treatment of diabetes:
     CPT 36901-36906: Dialysis circuit procedures.
     CPT 82947: Chemistry procedures, blood glucose testing.

[[Page 97947]]

     CPT 83036: Hemoglobin A1C testing.
     CPT 90935, 90937, 90940: Hemodialysis procedures.
     CPT 90961: Physician or other qualified healthcare 
professional visits for ESRD.
     CPT 90989-90999: Other dialysis procedures.
     CPT 92227-92229: Diabetic retinopathy screening.
     CPT 99091: Collection and interpretation of physiologic 
data.
     CPT 99202-99215: Evaluation and Management (E/M) Services.
     CPT 99211: Office visit for an established patient.
     CPT 99487: Complex chronic care management services.
     CPT 99490-99491: Chronic care management services.
     CPT 99497: Remote physiologic monitoring services.
     CPT 99605-99607: Medication Management.
     CPT 99802-99804: Assessment, Intervention, Face to Face 
(F2F).
     DRG 637: Hospitalization for diabetes with major 
complications.
     G0108: Diabetes Self-Management Training.
     G0109: Group Diabetes Self-Management Training.
     G0270: Nutrition Therapy.
     G0466: FQHC visit new patient.
     G0467: FQHC visit established patient.
    In the CY 2025 PFS proposed rule (89 FR 61758), we discussed how 
the research provided by submitters suggests that periodontal treatment 
for an individual with both a diagnosis of diabetes and periodontitis 
led to improved HbA1c measures.
    We stated in the proposed rule that in the case of an individual 
with diabetes who also has a diagnosis of periodontitis, oral services 
and treatment to address the periodontitis potentially lead to a 
reduction in HbA1c, a marker of glycemic control that may be used to 
determine the effectiveness of interventions for treatment of diabetes. 
We noted that in the description of the studies submitted, the research 
seems to indicate that the improvement of glycemic control as evidenced 
by the HbA1c is due to the provision of treatment for the 
periodontitis. The dental and oral services may not be integral to 
other specific medically necessary, covered services, but rather the 
dental and oral services may serve to influence clinical outcomes 
directly. The studies compare the impact of the treatment for the 
periodontitis to the impact of pharmacological interventions.
    We recognized that evidence submitted by interested parties 
demonstrates that an individual with both a diagnosis of diabetes and a 
diagnosis of periodontitis who in turn receives periodontal treatment 
services may experience improvements in markers for HbA1c, which is a 
key target outcome for the patient population with diabetes. However, 
the interaction between these diagnoses and the potential improvements 
due to periodontal treatment services does not appear to align with the 
framework we have established to pay for dental services inextricably 
linked to covered services; in our framework, the delivery of certain 
dental services are integral to the successful completion of or 
outcomes related to the covered services.
    We stated that under Sec.  411.15(i)(3), we have specified that 
payment can be made for certain dental services that are inextricably 
linked to other services when the specific covered services with which 
the dental services are inextricably linked are identified. The studies 
that have been provided to CMS through submissions have not identified 
any specific covered services for the treatment of diabetes to which 
dental services are inextricably linked. Rather, the studies indicate 
that the primary treatment of periodontal disease in patients with 
diabetes generally leads to better outcomes in the management of the 
patients' diabetes. While the research makes the case that the dental 
services are medically necessary for patients with diabetes, medical 
necessity alone does not permit payment for dental services given the 
broad statutory prohibition under section 1862(a)(12) on payment for 
services ``in connection with the care, treatment, filling, removal, or 
replacement of teeth or structures directly supporting teeth.'' In the 
case of patients with diabetes, the research does not appear to show 
that certain dental services are inextricably linked with certain other 
covered services for the treatment of diabetes, in accordance with our 
regulation at Sec.  411.15(i)(3) such that the statutory prohibition 
under section 1862(a)(12) does not apply.
    We noted that some of the examples of medical services for diabetes 
treatment provided by submitters are general in nature and not specific 
to patients with diabetes who may also have periodontal disease, 
including CPT codes 99202-99215: Evaluation and Management (E/M) 
Services that broadly describe outpatient office visits for the 
diagnosis and medical management of practically any illness, disease, 
or condition.
    Additionally, we noted that submitters providing evidence for our 
consideration suggested that the services described by codes for 
diabetes self-management training (for example, G0108: Diabetes Self-
Management Training, and G0109: Group Diabetes Self-Management 
Training) are services with which dental services may be inextricably 
linked. However, we were not persuaded by this evidence and do not 
believe that dental services would be inextricably linked to improved 
outcomes for services for diabetes self-management training.
    In the CY 2025 PFS proposed rule (89 FR 61758 through 61760) we 
sought comment from the public regarding specific covered services for 
management of patients with diabetes with which dental services may be 
inextricably linked. We stated that we did not propose to amend Sec.  
411.15(i)(3)(i) since we had not identified additional dental services 
that are inextricably linked to certain services in the treatment of 
diabetes. However, we noted that we remain open to considering any such 
services identified by public commenters, and, if sufficient evidence 
is presented, we may consider adding such services to our regulations 
in this final rule.
    In the context of payment for dental services for an individual 
with diabetes, we sought information from the public regarding what the 
coordination between a medical and dental professional would entail in 
the scenario where an individual with a diagnosis of diabetes presents 
with suspected periodontitis. In the CY 2023 PFS final rule, we 
explained that we would make payment when a doctor of dental medicine 
or dental surgery (referred to as a dentist) furnishes dental services 
that are an integral part of the covered primary procedure or service 
furnished by another physician, or non-physician practitioner, treating 
the primary medical illness. However, if there is no exchange of 
information, or integration, between the medical professional 
(physician or other non-physician practitioner) in regard to the 
primary medical service and the dentist in regard to the dental 
services, then there would not be an inextricable link between the 
dental and covered medical service within the meaning of our regulation 
at Sec.  411.15(i)(3). Without both integration between the Medicare 
enrolled medical and dental professional, and the inextricable link 
between the dental and covered services, Medicare payment for dental 
services would be prohibited under section 1862(a)(12) because the 
services are in connection with the care,

[[Page 97948]]

treatment, filling, removal, or replacement of teeth or structures 
directly supporting teeth; though they may be covered by types of 
supplemental health or dental coverage (87 FR 69687 through 69688).
    We asked, in a situation where a medical professional believes that 
an individual with a diagnosis of diabetes may also have a diagnosis of 
periodontitis, how are recommendations conveyed between the medical and 
dental professionals? What coordination, if any, occurs between the 
medical and dental professionals? We noted that we expect that 
inextricably linked services related to the treatment of periodontitis 
in an individual with diabetes would require significant communication 
between the medical and dental professionals.
    We mentioned that we have stated previously that an inextricable 
linkage may exist between dental services and covered services when the 
standard of care for the medical service is such that the practitioner 
would not proceed with the medical procedure or service without 
performing the dental services, because the covered medical services 
would or could be significantly and materially compromised, or where 
dental services are a clinical prerequisite to proceeding with the 
primary medical procedure and/or treatment (87 FR 69669). While 
evidence supports that individuals with diabetes and periodontitis who 
receive periodontal treatment experience improvements in their HbA1c 
markers, dental services do not appear to serve as a precondition to 
overall treatment for the diabetes. We sought information from the 
public on how oral treatment services may be a clinical prerequisite in 
the treatment protocol for the care of individuals with diabetes.
    We noted that there does not appear to be a clear or singular 
definitional framework for categorizing the state of diabetes, such as 
``controlled'' or ``uncontrolled'' diabetes. Research submitted by the 
public discusses improvements in glycemic control as evidence by HbA1c 
markers, but does not delineate the characteristics of a patient that 
would require direct clinical intervention (pharmacological, 
behavioral, usage of DME such as insulin pumps, etc.) versus a patient 
that would not require interventions given that their disease state is 
not within a concerning range requiring direct medical treatment.
    Additionally, we noted that in the current literature, there are 
two types of severity measures that can help categorizing the state of 
diabetes: the severity of diabetes itself and the severity of 
periodontal disease among individuals with diabetes. With respect to 
the severity of diabetes, the American Diabetes Association recommends 
that most adults with diabetes aim for a HbA1c level below 7.0% (<53 
mmol/mol), along with other recommended targets such as blood pressure 
below 130/80 mmHg and LDL cholesterol below 100 mg/dL.\236\ In the 
current literature, uncontrolled hyperglycemia is typically defined as 
an HbA1c level above 8.0% (>64 mmol/mol), according to guidelines from 
various medical organizations, including the ADA, American College of 
Physicians, Association of Clinical Endocrinologists, and American 
College of Endocrinology.237 238 239 240 Based on the 
literature, this threshold serves as a ``take action'' point in 
managing diabetes and has been used in previous studies to indicate 
poor glycemic control. Achieving and maintaining target HbA1c levels is 
essential for individuals with diabetes (as well as the general 
population) and is a key goal of treatment. Moreover, we noted that for 
the purposes of Quality Payment Program (QPP) measures, CMS has issued 
measures for diabetes (for example, Quality ID #1 (NQF 0059): Diabetes: 
Hemoglobin A1c (HbA1c) Poor Control (>9%)).\241\ The measure is 
described as ``Percentage of patients 18-75 years of age with diabetes 
who had hemoglobin A1c >9.0% during the measurement period.'' 
Furthermore, measures of HbA1c may fluctuate over time; therefore, a 
strict threshold could lead to incentives for multiple rounds of 
testing to aim for the levels established. In general, guidelines 
exist, but standards vary for defining diabetes states based on 
multiple severity measures.
---------------------------------------------------------------------------

    \236\ American Diabetes Association. ``Standards of medical care 
in diabetes--2011.'' Diabetes care vol. 34 Suppl 1,Suppl 1 (2011): 
S11-61. doi:10.2337/dc11-S011.
    \237\ Liu, Longjian et al. ``Burden of Uncontrolled 
Hyperglycemia and Its Association with Patients Characteristics and 
Socioeconomic Status in Philadelphia, USA.'' Health equity vol. 4,1 
525-532. 30 Dec. 2020, doi:10.1089/heq.2020.0076.
    \238\ Qaseem, Amir et al. ``Glycemic control and type 2 diabetes 
mellitus: the optimal hemoglobin A1c targets. A guidance statement 
from the American College of Physicians.'' Annals of internal 
medicine vol. 147,6 (2007): 417-22. doi:10.7326/0003-4819-147-6-
200709180-00012.
    \239\ Cortez-Espinosa, Nancy et al. ``Abnormal expression and 
function of Dectin-1 receptor in type 2 diabetes mellitus patients 
with poor glycemic control (HbA1c>8%).'' Metabolism: clinical and 
experimental vol. 61,11 (2012): 1538-46. doi:10.1016/
j.metabol.2012.03.020.
    \240\ Hu, Huanhuan et al. ``Hba1c, Blood Pressure, and Lipid 
Control in People with Diabetes: Japan Epidemiology Collaboration on 
Occupational Health Study.'' PloS one vol. 11,7 e0159071. 20 Jul. 
2016, doi:10.1371/journal.pone.0159071.
    \241\ https://qpp.cms.gov/docs/QPP_quality_measure_specifications/CQM-Measures/2023_Measure_001_MIPSCQM.pdf.
---------------------------------------------------------------------------

    In addition, the severity of periodontal disease is not uniformly 
defined. ICD-10 codes, such as K05.2 for Aggressive Periodontitis and 
K05.3 for Chronic Periodontitis may be utilized to describe more severe 
instances of periodontitis (and in this instance when such diagnosis 
codes are also partnered with diagnoses related to diabetes for a 
particular individual). Another approach involves using the Armitage 
criteria for periodontal diagnosis.242 243 Severity 
assessment can be based on the clinical attachment level (CAL), with 
CAL between 1 mm and 2 mm classified as slight, 3 mm and 4 mm as 
moderate, and >=5 mm as severe.\244\ Again, some standards exist 
relative to the staging of periodontitis, but such criteria vary. 
Additionally, we believe that the current practice of medicine would 
allow for variation in clinical attributes as well as judgment and 
discernment by the referring practitioner regarding the clinical status 
of the individual when determining the need for consultation with other 
practitioner types, including the dentist. We sought comment on whether 
clinical standards exist that describe and define the disease state of 
diabetes that would serve to inform the selection of treatment 
modalities, including potential referrals to dental professionals with 
respect to concerns related to oral health. We also sought comment from 
the public regarding the ways that CMS could ensure that practitioners 
do not decrease the quality of diabetes treatment in an effort to 
maintain a beneficiary's potential access to Medicare payment for 
dental services.
---------------------------------------------------------------------------

    \242\ Armitage, G C. ``Development of a classification system 
for periodontal diseases and conditions.'' Annals of periodontology 
vol. 4,1 (1999): 1-6. doi:10.1902/annals.1999.4.1.1.
    \243\ Caton, Jack G et al. ``A new classification scheme for 
periodontal and peri-implant diseases and conditions--Introduction 
and key changes from the 1999 classification.'' Journal of clinical 
periodontology vol. 45 Suppl 20 (2018): S1-S8. doi:10.1111/
jcpe.12935.
    \244\ Pinho, M Morado et al. ``Periodontitis and 
atherosclerosis: an observational study.'' Journal of periodontal 
research vol. 48,4 (2013): 452-7. doi:10.1111/jre.12026.
---------------------------------------------------------------------------

    We explained that the evidence supplied by submitters also 
described periodontitis but without a clear and consistent definitional 
structure. The 2017 World Workshop on the Classification of Periodontal 
and Peri-Implant Diseases and Conditions resulted in a new 
classification of periodontitis characterized by a multidimensional 
staging and grading system. The staging considers the aspects of 
severity, complexity, extent,

[[Page 97949]]

and distribution while the grading contemplates primary criteria such 
as progression and grade modifiers, including risk factors such as 
smoking and diabetes.\245\
---------------------------------------------------------------------------

    \245\ Tables from Tonetti, Greenwell, Kornman. J Periodontol 
2018;89 (Suppl 1): S159-S172. https://www.perio.org/wp-content/uploads/2019/08/Staging-and-Grading-Periodontitis.pdf.
---------------------------------------------------------------------------

    For the purposes of our consideration of medical services for the 
treatment of diabetes for individuals with diabetes who have 
periodontitis, we sought comment from the public on clinical criteria 
that will determine eligibility for the effectiveness of periodontal 
treatment as described in the Cochrane review and other studies. We do 
not believe that a condition such as gingivitis or early stages of 
periodontitis will require oral treatment that, in turn, will influence 
the outcomes for an individual with diabetes. However, we sought 
information to address the following questions. At what stages and 
grading will the periodontitis be considered advanced and/or requiring 
dental and oral treatment intervention? What types of practitioners are 
able to make determinations regarding the staging of periodontitis? We 
also sought comment on patient eligibility. What determines patient 
eligibility for treatment for advanced periodontitis? Are there other 
criteria for consideration?
    Additionally, we sought comment on the duration of potential 
periodontal treatment. How is the length of treatment determined? If a 
patient's clinical status improves with respect to the periodontal 
disease, what factors determine when periodontal treatment comes to an 
end? What does maintenance treatment entail? What services are provided 
in the treatment of advanced periodontal disease? What is the service 
definition? Are services bundled? If yes, what is included in the 
bundle? When are the services provided and over what period? Is it 
provided over a calendar month period? A single day? Multiple days? Are 
services timed? Who provides the services? What specific terminology is 
involved? Are these services ever provided under supervision? Or 
``incident to'' by other clinical staff?
    We also sought information on how services for advanced periodontal 
disease are provided. Where and how are services for treatment of 
advanced periodontal disease provided? Are there any special rules, 
such as obtaining advance consent or performance of an initiating 
visit?
    We also sought information regarding coding and billing of 
periodontal services. What coding is utilized for the treatment 
services for advanced periodontal disease? What claims format is 
employed for the submission of claims with related oral and dental 
services (for example, 837D and/or 837P)?
    Additionally, we sought comment from the public regarding the risk 
of recurrence of periodontal disease for this patient population. What 
is the level of risk for re-development of advanced periodontitis and 
likelihood of recurrence?
    We also sought information regarding the role of caries in 
management of diabetes. What is the prevalence of caries in this 
patient population? What is the impact of caries on management of 
diabetes?
    We also sought information regarding the disease state of the 
diabetes itself and its interaction with dental services. Does evidence 
exist to support that certain characteristics related to diabetes 
management (for example, maintenance of HbA1c) are more closely tied to 
certain oral interventions' ability to yield clinical improvements?
    We reiterated that 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. Thus, 
payment is permitted only where the dental services are inextricably 
linked to covered medical services. We believe that general maintenance 
and management of oral disease processes clearly falls within the 
statutory exclusion, and therefore, Medicare would not permit payment 
for routine dental and oral services.
    We noted that many submitters stated that good dental and oral 
health benefits a patient's overall health in general. Several 
commenters responding to the CY 2023 PFS proposed rule also expressed 
that good oral hygiene, along with routine dental services, contributes 
to better outcomes for patients. We recognized in the CY 2023 PFS final 
rule in response to those comments that there is a great deal of 
evidence suggesting that dental health is generally an important 
component of overall health; however, we are interested in comments on 
whether certain dental services are considered so integral to the 
primary covered services that the necessary dental interventions are 
inextricably linked to, and substantially related and integral to 
clinical success of, the primary covered services such that they are 
not subject to the statutory preclusion on Medicare payment for dental 
services under section 1862(a)(12) of the Act (88 FR 79033).
    In summary, we sought comment on whether certain dental services 
are inextricably linked to certain other covered services for diabetes, 
supported by clinical evidence as outlined in section II.J.1.c. of this 
final rule. We also sought comment specifically on whether dental 
services such as prophylaxis are a standard of care in the management 
of diabetes. We stated that we are committed to continuing to explore 
the potential inextricable relationship between dental services and 
covered medical services utilized in treatment for individuals with 
diabetes. We thanked submitters for the information they provided 
through the public submissions process and indicated that may consider 
revisions to the clinical examples codified in our regulations at Sec.  
411.15(i)(3)(i) based upon additional data and information received in 
response to the proposed rule.
a. Consideration of Dental Services That May Be Inextricably Linked to 
Covered Services for the Treatment of Diabetes
    In section II.J.1.b. of this final rule, we discuss that we have 
partnered with AHRQ tohelp us consider the relationship between dental 
services and other specific covered services. In the CY 2025 PFS 
proposed rule (89 FR 61752), we provided an overview of the information 
we received from the public through the submission process.
    We acknowledge the importance of dental health to overall well-
being of patients with diabetes. We believe that further research is 
necessary to find specific evidence supporting specific medical 
services for which dental services are inextricably linked to their 
clinical success. To gain further understanding of any potential 
relationship between dental services and specific covered diabetes 
medical services, we partnered with researchers at AHRQ to review 
available clinical evidence regarding the relationship between dental 
services and covered diabetes medical services.
    AHRQ created a rapid response report, which was not available at 
the time of the proposed rule's publication, which summarized recent 
evidence, aiming to inform CMS policy development related to the 
possible linkage between dental services and treatment modalities and 
services for diabetes patients. The AHRQ report reviewed the available 
clinical evidence on the efficacy of dental services in improving 
health outcomes for patients with diabetes mellitus (type 1 and 2). For 
more detailed information about the search strategies and findings, 
please

[[Page 97950]]

refer to the AHRQ rapid response report available at https://effectivehealthcare.ahrq.gov/products/treatment-outcomes-diabetes/rapid-research.
    According to the response report, diabetes mellitus (DM) 
characterized by high blood sugar levels (HbA1c >6.5 percent) affects 
approximately 37 million adults in the United States \246\ and 500 
million globally.247 248 Diabetes is a chronic metabolic 
disease that can lead to severe health complications, including lower 
limb amputations, blindness, chronic kidney disease, and cardiovascular 
diseases. As stated in the report, Type II DM is a highly prevalent 
metabolic disorder characterized by the loss of ability to adequately 
control blood glucose levels due to insulin resistance in body tissues 
and typically emerges in adulthood. On the other hand, Type I DM 
(formerly commonly known as juvenile diabetes), where an autoimmune 
response results in the destruction of insulin-secreting [beta] cells 
in the pancreas, requires life-long insulin therapy.
---------------------------------------------------------------------------

    \246\ Cho, N.H.; Shaw, J.E.; Karuranga, S.; Huang, Y.; Da Rocha 
Fernandes, J.D.; Ohlrogge, A.W.; Malanda, B. IDF Diabetes Atlas: 
Global Estimates of Diabetes Prevalence for 2017 and Projections for 
2045. Diabetes Research and Clinical Practice 2018, 138, 271-281. 
https://doi.org/10.1016/j.diabres.2018.02.023.
    \247\ Tsalamandris, S.; Antonopoulos, A.S.; Oikonomou, E.; 
Papamikroulis, G.-A.; Vogiatzi, G.; Papaioannou, S.; Deftereos, S.; 
Tousoulis, D. The Role of Inflammation in Diabetes: Current Concepts 
and Future Perspectives. Eur Cardiol 2019, 14 (1), 50-59. https://doi.org/10.15420/ecr.2018.33.1.
    \248\ Heydari, M.-H.; Sharifi, F.; Sobhaninejad, S.; Sharifi, 
A.; Alizadeh, L.; Darmiani, S.; Bijari, S.; Parvaie, P.; 
Bakhshandeh, S.; Shoaee, S.; Khoshnevisan, M.-H. The Association 
between Dental Caries, Periodontal Diseases, and Tooth Loss with 
Diabetes Mellitus among the Elderly Population. J Diabetes Metab 
Disord 2024, 23(1), 1371-1380. https://doi.org/10.1007/s40200-024-01434-2.
---------------------------------------------------------------------------

    Notably, chronic oral diseases (COD) including dental caries, 
gingival infection, periodontal disease, and tooth loss are 
significantly more common and more severe in diabetic patients.\249\ As 
stated in the rapid response report, emerging evidence shows a complex 
relationship between diabetes and oral health (see Figure 1 in the AHRQ 
report). Increasing COD severity results in greater systemic 
inflammation, reducing glycemic control \250\ and worsening diabetes 
outcomes. Conversely, poorly controlled diabetes can lead to increased 
severity of oral diseases such as periodontitis,\251\ creating a cycle 
that negatively impacts overall health. The report also highlights a 
growing body of data indicating that oral inflammation affects general 
diseases.\252\ According to the findings, diabetes patients with severe 
COD can have a significantly increased risk of all-cause mortality, 
underscoring the impact of oral health on cardiovascular, immune, and 
renal function.
---------------------------------------------------------------------------

    \249\ Triebl, Z.; Bencze, B.; B[aacute]nyai, D.; R[oacute]zsa, 
N.; Hermann, P.; V[eacute]gh, D. Poor Glycemic Control Impairs Oral 
Health in Children with Type 1 Diabetes Mellitus--a Systematic 
Review and Meta-Analysis. BMC Oral Health 2024, 24(1), 748.
    \250\ Tsalamandris, S.; Antonopoulos, A.S.; Oikonomou, E.; 
Papamikroulis, G.-A.; Vogiatzi, G.; Papaioannou, S.; Deftereos, S.; 
Tousoulis, D. The Role of Inflammation in Diabetes: Current Concepts 
and Future Perspectives. Eur Cardiol 2019, 14(1), 50-59. https://doi.org/10.15420/ecr.2018.33.1.
    \251\ L[ouml]e, H. Periodontal Disease: The Sixth Complication 
of Diabetes Mellitus. Diabetes Care 1993, 16(1), 329-334. https://doi.org/10.2337/diacare.16.1.329.
    \252\ National Institutes of Health. Oral Health Care in 
America: Advances and Challenges. Bethesda, MD: U.S. Department of 
Health and Human Services, National Institutes of Health, National 
Institute of Dental and Craniofacial Research.; 2021.
---------------------------------------------------------------------------

    The relationship between oral health treatment and diabetes 
management has been investigated in several studies; however, the exact 
correlation between oral health management and diabetes (both Type 1 
and Type 2) has not been comprehensively addressed. Thus, the rapid 
response report conducted literature searches using large databases. As 
presented in the PRISMA diagram, the search identified 601 studies, of 
which 27 met the inclusion and exclusion criteria for the current 
review. Of these 27 articles, 16 were randomized clinical trials or 
non-randomized controlled observational studies, 6 were systematic 
reviews or meta-analyses, 3 were reviews of reviews, and 2 were 
practice guidelines.
    The report found that there is consistent evidence that non-
surgical periodontal therapy (NSPT) can improve glycemic control in 
diabetic patients, as measured by HbA1c. In the report, a subgroup 
analysis that divided patients into different baseline HbA1c groups 
suggested that dental care treatments may lead to greater improvement 
in glycemic control for patients with higher baseline HbA1c levels. 
Additionally, three primary studies show a statistically significant 
reduction in inflammatory markers, such as C-reactive protein and TNF-
alpha, with the use of NSPT. Based on the report, guidelines reflected 
the available literature, demonstrating the effectiveness of NSPT in 
improving glycemic control in people with diabetes. There is also 
concordance in these guidelines regarding the need for an integrated 
care approach that includes dental health as part of comprehensive 
diabetes management.
    The report also provided a few equivocal findings. The report found 
insufficient evidence to determine whether periodontal treatment 
sustains glycemic improvement or reduces inflammatory status for 
periods longer than 6 months. Outcomes related to mortality, 
hospitalizations, cardiovascular events, and quality of life (QoL) have 
been variable across studies. Additionally, a significant reduction in 
HbA1c levels in patients with type 2 DM after dental prophylaxis alone 
has not been consistently demonstrated. Furthermore, no significant 
changes in non-diabetes-specific metrics, such as inflammation and 
lipid markers, have been observed following non-periodontal dental 
services.
    The report highlights three major limitations in the evidence: a 
lack of comprehensive reporting on important factors such as insulin 
resistance and additional inflammatory mediators beyond C-reactive 
protein (CRP); a limited follow-up duration of most interventional 
studies, typically capped at six months; and the generalizability of 
the current evidence to the U.S. population is unknown.
    The findings of the AHRQ rapid response reports underscore that 
this area warrants further investigation by researchers and industry to 
explore potential connections between dental services and improved 
outcomes for individuals with diabetes. Specifically, future research 
can focus on identifying which subgroups of diabetic patients, and with 
what degree of periodontal disease, are most likely to experience 
significant improvements in glycemic control through concurrent 
treatment of their periodontal disease. Additionally, research is 
needed to determine whether recurring periodontal treatments, or a 
combination of periodontal and non-periodontal dental services, are 
necessary to sustain glycemic improvements and/or reductions in 
inflammatory status for periods longer than six months. Such studies 
could provide valuable insights for policymakers when assessing whether 
there is an inextricable link between certain dental and covered 
services for patients with diabetes.
    We received 23 public comments responding to the request for 
information on whether certain dental services are inextricably linked 
to certain other covered services for diabetes. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters provided information and references supporting 
oral and dental treatment of periodontal disease among individuals with 
diabetes to improve markers related to management of the diabetes 
(mainly,

[[Page 97951]]

glycemic control). Some commenters urged us to continue to review 
findings, work within our authority and with stakeholders to support 
policies for individuals with diabetes to receive appropriate dental 
care while others recommended that we continue a judicious approach in 
consideration of expanding the policy for Medicare payment for dental 
services. One commenter stated that an act of Congress is required to 
further expand coverage to manage life-long chronic conditions because 
there are no specific medical services that can be used to qualify 
payment for dental services under the policy's framework. Commenters 
expressed concern about the broad application of the policy, and some 
suggested that CMS assess the similar standards of care found within 
the Veterans Health Administration and within Medicare Advantage.
    Response: We thank commenters for their thoughtful feedback on the 
requests for information and note that we will take these comments into 
consideration for the future. The information provided to CMS through 
public comment did not identify any specific covered services for the 
treatment of diabetes to which dental services are inextricably linked. 
Rather, the information indicates that the primary treatment of 
periodontal disease in patients with diabetes generally leads to better 
outcomes in the management of the patients' diabetes, which is 
consistent with information provided through the public submission 
process. We continue to believe that while the research makes the case 
that the dental services are medically necessary for patients with 
diabetes, medical necessity alone does not permit payment for dental 
services given the broad statutory prohibition under section 
1862(a)(12) of payment for services ``in connection with the care, 
treatment, filling, removal, or replacement of teeth or structures 
directly supporting teeth.''
    While the AHRQ rapid response report and the public comments we 
received provided more information regarding the standard of care and 
severity levels of diabetes along with severity levels of periodontitis 
and certain dental services that may improve clinical outcomes, this 
information lacks evidence that supports an inextricable link between 
dental services and certain other covered services for the treatment of 
diabetes. We will continue to engage with interested parties on this 
topic and are interested in information that could assist us in 
identifying specific covered medical services that the dental services 
are inextricably linked to. We believe that the list of services 
identified by submitters provided above in section II.J.3 of this final 
rule may be a good starting point in considering how to apply the 
inextricably linked standard to chronic disease management. Are there 
codes that describe specific services that align to patients with these 
conditions or needs (for example, an uncontrolled diabetic that has 
periodontitis)? Are there physicians' services that dental services 
would be inextricably linked to for beneficiaries with these needs?
4. Request for Comment on Dental Services Integral to Specific Covered 
Services To Treat Systemic Autoimmune Disease Requiring 
Immunosuppressive Therapies
    We have received information from interested parties, including 
submitters providing evidence through the public submissions process as 
well as commenters on prior proposed rules suggesting that certain 
dental services are inextricably linked to immunosuppressive therapies 
for individuals with autoimmune disorders.
    According to the NIH's National Institute of Environmental Health 
Sciences, a healthy immune system is able to defend the body against 
disease and infection. However, if the immune system malfunctions, it 
may mistakenly attack healthy cells, tissues, and organs. This scenario 
is called autoimmune disease, and these attacks can affect any part of 
the body, weaken bodily function, and in some cases become life-
threatening.\253\ There are over 100 autoimmune diseases, including 
Type 1 diabetes, multiple sclerosis, lupus, rheumatoid arthritis, and 
inflammatory bowel disease. There are also other autoimmune diseases 
that are rare and difficult to diagnose. In some cases, patients may 
suffer for years before receiving a proper diagnosis, and most of these 
diseases have no cure. Additionally, some autoimmune diseases require 
lifelong treatment for system management.\254\
---------------------------------------------------------------------------

    \253\ https://www.niehs.nih.gov/health/topics/conditions/autoimmune.
    \254\ Ibid.
---------------------------------------------------------------------------

    Autoimmune diseases are continuously affecting more people. 
Estimates indicate that as many as 50 million people in the U.S. have 
an autoimmune disease, making it the third most prevalent disease 
category, surpassed only by cancer and cardiac disease. Generally 
speaking, a person's genes, in combination with infections and other 
environmental exposures, likely play a significant role in disease 
development, though in some instances, the pathology may be unknown. 
Additionally, nearly 80 percent of people with a chronic autoimmune 
condition are women.\255\ Symptoms of autoimmune diseases can include: 
fatigue, pain, dermatologic manifestations, weight loss or gain, 
insomnia, fever, and a myriad of other symptoms.\256\
---------------------------------------------------------------------------

    \255\ Ibid.
    \256\ https://www.womenshealth.gov/a-z-topics/autoimmune-diseases.
---------------------------------------------------------------------------

    Many treatment modalities are employed in the management of 
autoimmune diseases. Treatments could include use of oral medications, 
including steroids, anti-inflammatory medications, as well as infusion 
immunotherapy. Some autoimmune conditions may present in a localized 
fashion, such as Sjogren's, and many of the independent organ 
inflammations require immunosuppressive therapies, and may progress to 
a more systemic involvement. Conversely, some systemic autoimmune 
diseases, like sarcoidosis, may not require immunosuppression in mild 
cases.
    Submissions through the public submissions process urged us to 
provide that payment can be made for dental services for individuals 
with autoimmune diseases receiving immunosuppressive therapy. In 
submissions, several interested parties have asserted that 
immunosuppressive therapies utilized in the treatment of autoimmune 
disease have similar immunosuppressive effects as those of toxic 
chemotherapy utilized in the treatment of cancer and that these 
treatments are analogous to the clinical examples finalized in CY 2024 
PFS rulemaking for dental services inextricably linked to covered 
medical services in the treatment of cancer.
    Submitters stated that oral and dental treatment is also often 
integral to the successful care and management of beneficiaries with 
autoimmune diseases who are initiating or undergoing immunosuppressive 
or immunomodulator therapy because the absence of medically necessary 
oral and dental treatment can pose serious complications to those 
beneficiaries and the covered medical services they receive. Submitters 
state that, for example, dental infections can spread quickly when host 
immunity is compromised by immunosuppressing or immunomodulating drugs 
utilized in treatment. As such, submitters note that the American 
College of Physicians has described that the implications of dental 
disease in patients who are undergoing immunosuppressive therapy extend

[[Page 97952]]

beyond their oral disease, with potentially life-threatening 
complications if the dental problems are not treated. For these 
reasons, submitters state that the covered services upon which 
immunocompromised patients depend (for example, immunosuppressive 
therapy) should not proceed until a dental or oral exam is performed to 
address the oral complications and/or clear the patient of an oral or 
dental infection.
    Submitters provided information regarding specific covered services 
that they believe could be associated with treatments for 
immunosuppressive therapy for the treatment of autoimmune disease and 
that may increase infection risk, such as:
     CPT codes 99212-99215: Evaluation and Management (E/M) 
Services.
     CPT codes 96365-96368: Infusion services.
    Submitters also provided coding information related to drug 
therapies, such as CPT codes for immunosuppressant drugs, including:
     J0129: Abatacept (Orencia) for Rheumatoid Arthritis.
     J0135: Adalimumad (Humira) for Crohn's, Ulcerative 
Colitis, Rheumatoid Arthritis.
     J0490: Belimumab (Benlysta) for systemic lupus 
erythematosus (SLE), Lupus Nephritis, and Sj[ouml]gren's.
     J0491: Anifrolumab-fnia (Saphnelo) for systemic lupus 
erythematosus (SLE).
     J1303: Ravulizumab-cwvz (Ultomiris) for Generalized 
Myasthenia Gravis.
     J1438: Etanercept (Enbrel) for Rheumatoid Arthritis, 
Ankylosing Spondylitis.
     J1595: Glatiramer (Copaxone) for Multiple Sclerosis.
     J1602: Golimumab (Simponi) for Rheumatoid Arthritis, UC, 
Ankylosing Spondylitis.
     J1745: Infliximab (Remicade) for Crohn's, Ulcerative 
Colitis, Rheumatoid Arthritis.
     J2250: Upadacitinib (Rinvoq) for Rheumatoid Arthritis, 
Ulcerative Colitis, Crohn's.
     J2323: Natalizumab (Tysabri) for Multiple Sclerosis.
     J2350: Ocrelizumab (Ocrevus) for Multiple Sclerosis.
     J3262: Tocilizumab (Actemra) for Scleroderma-associated 
lung fibrosis.
     J3357: Ustekinumab (Stelara) for Crohn's, Ulcerative 
Colitis, Psoriatic Arthritis.
     J3380: Vedolizumab (Entyvio) for Crohn's, Ulcerative 
Colitis.
     J3590: Secukinumab (Cosentyx) for Plaque Psoriasis.
     J7500: Azathioprine (Imuran) for Lupus, Crohn's, 
Sj[ouml]gren's.
     J7517: Mycophenolate (Cellcept) for Lupus, Sj[ouml]gren's.
     J9070: Cyclophosphamide (Cytoxan) for Sj[ouml]gren's, 
Vasculitis.
     J9250: Methotrexate for Sj[ouml]gren's, Rheumatoid 
Arthritis (unresponsive to other treatment).
     J9302: Ofatumumab (Kesimpta) for Multiple Sclerosis.
     J9312: Rituximab (Rituxan) for Rheumatoid Arthritis, 
Sj[ouml]gren's.
     J9332: Efgartigimod (Vyvgart) for Myasthenia Gravis.
    Submitters also provided coding information for potential medical 
services for medical treatment for pulmonary diseases when aspiration 
of dental pathogens risk or cause the initiation and/or recurrence of 
complications, such as:
     CPT codes 99212-99215: Evaluation and Management (E/M) 
Services.
     CPT code 99291: Critical Care Services.
     DRG code 177: Hospitalization for respiratory infections 
and inflammation.
     DRG code 190: COPD with complications.
    Submitters also provided coding regarding medical treatment for 
dentally sourced dissecting maxillofacial space infections:
     CPT 41000: Intraoral incision and drainage of abscess.
     CPT 87181: Antibiotic susceptibility study.
     CPT 96365: Infusion of antibiotic.
     CPT codes 99281-99285: Emergency department services.
     CPT codes 99291-99292: Critical care services.
     DRG code 135: Sinus procedures with CC/MCC.
     DRG code 141: Major head and neck procedures with CC.
     DRG code 872: Hospitalization for septicemia or severe 
sepsis.
    Submitters providing information through the public submissions 
process stated that if dental or oral infections are left undetected or 
untreated in the population of individuals undergoing immunosuppressive 
therapy for autoimmune disease, serious complications may occur and 
negatively impact the course and outcome of the covered medical 
procedures, which submitters state is analogous to previously finalized 
policies for dental services inextricably linked to covered cancer 
treatment for the patient. Several submitters pointed out that we 
stated in the CY 2024 PFS final rule that proceeding without a dental 
or oral exam of the mouth prior to chemotherapy could lead to systemic 
infection or sepsis, among other complications, and that similar 
outcomes can follow for those receiving immunosuppressive therapy to 
treat autoimmune diseases.
    The submitters noted that in the CY 2024 PFS final rule, we 
described that AHRQ identified evidence to support that dental 
evaluation/treatment prior to cancer treatment led to decreased 
incidence and/or less severity of serious oral infections and 
complications like oral mucositis and encouraged CMS to explore this 
connection to confirm that dental evaluations and treatment prior to 
immunosuppressive therapy would lead to decreased incidence of serious 
oral infections in a similar fashion. The submitters also stated that 
they believe it is critical that beneficiaries with an autoimmune 
disease that requires immunosuppressive therapy have access to 
necessary dental services, as proper dental care for this population 
can reduce the incidence of serious infection and improve overall 
patient outcomes for the covered service.
    In the CY 2025 PFS proposed rule (89 FR 61762), we stated that we 
appreciate the evidence and information provided by submitters and 
agree that we should continue to research whether there is a connection 
between dental and oral evaluations and treatment prior to 
immunosuppressive therapy and outcomes for said therapies, including 
the potential decreased incidence of serious oral infections.
    However, we sought comment on whether the level of 
immunosuppression utilized in the treatment of autoimmune diseases is 
analogous to the immunosuppression levels employed in the treatment of 
cancer. We believe that the level of immunosuppression for systemic 
autoimmune disease has different characteristics versus therapies 
utilized in chemotherapy for the treatment of cancer. For example, the 
usage of monoclonal antibodies in the treatment of autoimmune disease 
may not render the same level of immunosuppression and subsequent 
susceptibility to infection as chemotherapy used in the treatment of 
cancer.
    We also sought information on the connection between 
immunosuppressive therapy in the treatment of autoimmune disease and 
the likelihood of systemic infection and sepsis. Specifically, we 
sought information regarding the likelihood of dental and oral sources 
as the locus of the seeding of infection in this patient population. 
Additionally, we sought information regarding standards of care or 
clinical guidelines that recommend that a dental infection be addressed

[[Page 97953]]

before proceeding with the immunosuppressive treatment or the 
administration of drugs or whether oral antibiotics would be prescribed 
to resolve the infection and that the therapy would advance without 
direct dental or oral services to address the infection.
    We also sought information regarding whether there is differential 
impact between drugs that are administered in an office setting or 
similar versus those medications that are taken in an oral fashion.
    We thanked submitters for the information they provided through the 
public submissions process. We explained that we believe that 
additional information is necessary to consider whether there is an 
inextricable link between dental services and covered services to treat 
systemic autoimmune disease requiring immunosuppressive therapies and 
sought comment from the public. We indicated that we remain open to 
considering any such services identified by public commenters, and if 
sufficient evidence is presented, we may consider adding such services 
to Sec.  411.15(i)(3) in this final rule.
a. Consideration of Dental Services That May Be Inextricably Linked to 
Covered Services for the Treatment of Systemic Autoimmune Disease 
Requiring Immunosuppressive Therapies
    In section II.J.1.b. of this final rule, we discuss that we have 
partnered with AHRQ to help us consider the relationship between dental 
services and other specific covered services. In the CY 2025 PFS 
proposed rule (89 FR 61752), we provided an overview of the information 
we received from the public through the submission process.
    We acknowledge the importance of dental health to overall well-
being of patients with autoimmune disease. We believe that further 
research is necessary to find specific evidence supporting specific 
medical services for which dental services are inextricably linked to 
their clinical success. To gain further understanding of any potential 
relationship between dental services and specific covered autoimmune 
disease medical services, we again partnered with researchers at AHRQ 
to review available clinical evidence regarding the relationship 
between dental services and covered autoimmune disease medical 
services.
    AHRQ created a rapid response report, which was not available at 
the time of the proposed rule's publication, which summarized recent 
evidence, aiming to inform CMS policy development related to the 
possible linkage between dental services and treatment modalities and 
services for patients with autoimmune conditions. The AHRQ report 
reviewed the available clinical evidence on the efficacy of dental 
services in improving health outcomes for patients with autoimmune (AI) 
diseases treated with biologics and other immunosuppressants. For more 
detailed information about the search strategies and findings, please 
refer to the AHRQ rapid response report available at https://effectivehealthcare.ahrq.gov/products/autoimmune-disease/rapid-research.
    As stated in the AHRQ rapid response report, AI, such as systemic 
lupus erythematosus (SLE), rheumatoid arthritis (RA), and limited 
cutaneous systemic sclerosis (lcSSc), affect over 50 million people in 
the United States,\257\ with oral symptoms often serving as early 
indicators of AI disease.\258\ Patients with autoimmune conditions 
frequently experience poor oral health (for example, increased plaque 
index, gum disease, and edentulism) compared to healthy 
individuals.259 260 261 262 Additionally, as chronic 
autoimmune and inflammatory diseases are correlated with an elevated 
risk of periodontitis, patients with both periodontitis and lcSSc 
exhibited greater arterial stiffness and disease activity compared to 
healthy individuals with periodontitis,\263\ a gum disease that damages 
local tissue and can promote systemic inflammation.\264\ The rapid 
response underscores a bidirectional relationship for autoimmune 
diseases, including SLE, where the dysregulated immune system 
exacerbates oral inflammation and dysbiosis of the oral microbiota. In 
turn, oral infections contribute to systemic inflammation and the 
progression of SLE.\265\ For more details on the causal model depicting 
the relationship between rheumatoid arthritis and oral disease, please 
refer to Figure 1 in the AHRQ report.
---------------------------------------------------------------------------

    \257\ About Autoimmunity. Autoimmune Association. https://autoimmune.org/resource-center/about-autoimmunity/.
    \258\ Mays, J.W.; Sarmadi, M.; Moutsopoulos, N.M. Oral 
Manifestations of Systemic Autoimmune and Inflammatory Diseases: 
Diagnosis and Clinical Management. J Evid Based Dent Pract 2012, 12 
(3 Suppl), 265-282. https://doi.org/10.1016/S1532-3382(12)70051-9.
    \259\ Julkunen, A.; Heikkinen, A. M.; S[ouml]der, B.; 
S[ouml]der, P.-[Ouml].; Toppila-Salmi, S.; Meurman, J.H. Autoimmune 
Diseases and Oral Health: 30-Year Follow-Up of a Swedish Cohort. 
Dent J (Basel) 2017, 6 (1), 1. https://doi.org/10.3390/dj6010001.
    \260\ Rodr[iacute]guez-Lozano, B.; Gonz[aacute]lez Febles, J.; 
S[aacute]nchez Alonso, F.; Garnier Rodr[iacute]guez, J.L.; Dadlani, 
S.; Barrios, Y.; Sanz Alonso, M.; D[iacute]az Gonz[aacute]lez, F. Is 
There an Association between Periodontitis and Levels of Anti-
Citrullinated Peptides Antibodies in Rheumatoid Arthritis? Annals of 
the Rheumatic Diseases 2017, 76, 1115. https://doi.org/10.1136/annrheumdis-2017-eular.4420.
    \261\ de Pablo, P.; Dietrich, T.; McAlindon, T.E. Association of 
Periodontal Disease and Tooth Loss with Rheumatoid Arthritis in the 
US Population. J Rheumatol 2008, 35 (1), 70-76.
    \262\ Yang, B.; Pang, X.; Guan, J.; Liu, X.; Li, X.; Wang, Y.; 
Chen, Z.; Cheng, B. The Association of Periodontal Diseases and 
Sjogren's Syndrome: A Systematic Review and Meta-Analysis. Front Med 
(Lausanne) 2023, 9, 904638. https://doi.org/10.3389/fmed.2022.904638.
    \263\ Jud, P.; Wimmer, G.; Meinitzer, A.; Strohmaier, H.; 
Schwantzer, G.; Moazedi-F[uuml]rst, F.; Schweiger, L.; Brodmann, M.; 
Hafner, F.; Arefnia, B. Periodontal Disease and Its Association to 
Endothelial Dysfunction and Clinical Changes in Limited Systemic 
Sclerosis: A Case-Control Study. J Periodontal Res 2023, 58 (3), 
621-633. https://doi.org/10.1111/jre.13111.
    \264\ Hajishengallis, G.; Chavakis, T. Local and Systemic 
Mechanisms Linking Periodontal Disease and Inflammatory 
Comorbidities. Nat Rev Immunol 2021, 21 (7), 426-440. https://doi.org/10.1038/s41577-020-00488-6.
    \265\ Sojod, B.; Pidorodeski Nagano, C.; Garcia Lopez, G.M.; 
Zalcberg, A.; Dridi, S. M.; Anagnostou, F. Systemic Lupus 
Erythematosus and Periodontal Disease: A Complex Clinical and 
Biological Interplay. J Clin Med 2021, 10 (9), 1957. https://doi.org/10.3390/jcm10091957.
---------------------------------------------------------------------------

    Given a bidirectional relationship between oral health and 
autoimmune disease, the Centers for Disease Control and Prevention 
(CDC) emphasizes the importance of daily oral hygiene and professional 
dental care, which reduce rates of tooth decay and oral 
inflammation.\266\ Maintaining good oral health and reducing overall 
plaque may be especially beneficial to AI patients with dysregulated 
inflammatory responses.
---------------------------------------------------------------------------

    \266\ CDC. About Tooth Loss. Oral Health. https://www.cdc.gov/oral-health/about/about-tooth-loss.html (accessed 2024-08-29).
---------------------------------------------------------------------------

    According to the report, there are various therapies available for 
treating RA and other autoimmune diseases. One key group of treatments, 
disease-modifying anti-rheumatic drugs (DMARDs), has been used 
effectively for multiple autoimmune conditions. DMARDs are divided into 
two main types: conventional small molecule drugs like methotrexate, 
and biologics, which are more targeted therapies. Both types work by 
suppressing the immune system but through different mechanisms. 
Conventional DMARDs inhibit inflammatory pathways broadly, while 
biologics are more selective, targeting specific immune components such 
as cytokines or B-cells.
    As stated in the AHRQ rapid response report, an electronic database 
search conducted in Medline and Embase yielded 127 records, of which 38 
articles were assessed for eligibility. Of the 38 full-text articles 
retrieved and reviewed for eligibility, 25 articles were excluded. In 
total, 13 unique publications--

[[Page 97954]]

including 10 primary studies and 3 systematic reviews with meta-
analyses--were included, extracted, and synthesized in this rapid 
response review.
    The evidence reviewed on the impact of dental services on 
autoimmune disease outcomes primarily focused on patients with RA 
receiving non-surgical periodontal treatment (NSPT). There is limited 
evidence for other autoimmune diseases and no studies assessing the 
effect of other dental services. Additionally, all studies examined 
NSPT during autoimmune treatments, with no evidence available on the 
impact of NSPT prior to immunosuppressive therapy. The report found 
that the evidence generally supports the effectiveness of NSPT in 
reducing disease activity scores for RA and psoriasis, with follow-up 
times ranging from 6 weeks to 6 months. Additionally, there is moderate 
evidence that C-reactive protein (CRP) and erythrocyte sedimentation 
rate (ESR) levels decrease post-NSPT in patients with RA and SLE.
    The report also provided a few equivocal findings. There is a lack 
of evidence regarding dental services other than NSPT. Findings on the 
reduction of the number of tender or swollen joints in RA patients 
after NSPT are inconsistent. Additionally, there is inconsistent 
evidence showing that NSPT had no significant effect on quality of life 
(QoL) measures for RA and psoriasis. The report found insufficient 
evidence of any effect of NSPT on disease activity in SLE. Also, there 
has been no reported impact of NSPT on adverse effects related to 
therapies for autoimmune conditions. A guidance article on RA published 
by the American Dental Association included recommendations for oral 
health management,\267\ and of the 30 clinical practice guidelines on 
autoimmune diseases, only one--focused on Sjogren's syndrome--provided 
recommendations for dental care.
---------------------------------------------------------------------------

    \267\ De Rossi, S.S.; Ciarrocca, K.N. Autoimmune and Connective 
Tissue Diseases. In The ADA Practical Guide to Patients with Medical 
Conditions; John Wiley & Sons, Ltd, 2015; pp 201-229. https://doi.org/10.1002/9781119121039.ch10.
---------------------------------------------------------------------------

    The report found that there are several limitations to the current 
body of evidence. Most studies had short follow-up periods (typically 3 
months or less), preventing a full assessment of NSPT's long-term 
effects on autoimmune disease outcomes. The report also highlighted 
high variability across studies, making it difficult to draw definitive 
conclusions about the benefits of periodontal therapy. Additionally, 
most research focuses on rheumatoid arthritis, leaving gaps in 
understanding of other autoimmune conditions and dental services beyond 
non-surgical periodontal treatment. Finally, the generalizability to 
diverse populations, particularly in the U.S., remains uncertain.
    Based on this report, several future research areas can be 
identified. More studies could focus on examining the impact of dental 
services on autoimmune conditions beyond RA. Additionally, researchers 
could evaluate whether improvements in disease activity scores are 
appropriate metrics for clinical improvement in RA, especially when 
these scores do not appear to correlate with improvements in clinical 
joint inflammation. Furthermore, it may be necessary to subdivide 
DMARDs, used to treat RA and other autoimmune diseases, into categories 
such as corticosteroids, biologics, and antimetabolites to better 
assess their specific impacts on treatment outcomes.
    We received 22 public comments in response to the request for 
information on whether certain dental services are inextricably linked 
to certain other covered services for individuals with autoimmune 
disorders requiring immunosuppressive therapies. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters provided information on the value of dental 
services, both prior to and during, for beneficiaries undergoing 
immunosuppressive therapy due to their compromised immune system. 
Commenters stated that immunosuppressive therapies, used to treat 
conditions such as autoimmune diseases and certain cancers, often 
exacerbate oral health problems. Commenters stated that the level of 
immunosuppression for systemic autoimmune disease has different 
characteristics versus therapies used in chemotherapy in the treatment 
of cancer. Commenters stated the variability in therapies, severity 
levels of dental disease, and severity levels of compromised immunity 
but urged CMS to recognize that the risk of immunosuppression is real, 
as is the associated risk for infection-related complications. Some 
commenters urged us to continue to review findings, work within our 
authority and with stakeholders to support policies for individuals 
with autoimmune disease who are undergoing immunosuppressive therapy to 
receive appropriate dental care while others recommended that we 
continue a judicious approach in consideration of expanding the policy 
for Medicare payment for dental services. Some commenters suggested 
that CMS assess the similar standards of care for immunocompromised 
individuals found within the Veterans Health Administration.
    Response: We thank commenters for their thoughtful feedback on the 
requests for information and note that we will take these comments into 
consideration for the future. We agree with commenters that people who 
are immunocompromised due to receiving immunosuppressive therapies may 
be prone to serious infection. We also believe that information 
provided by commenters further supports the idea that, broadly, dental 
health is an important component of good overall health. However, we 
reiterate that dental services in connection with the care, treatment, 
filling, removal, or replacement of teeth or structures directly 
supporting the teeth are statutorily excluded from payment under 
Medicare Parts A and B unless a specific exception applies.
    We agree with commenters that comparing autoimmune diseases and 
cancer as related to immunosuppression is difficult due to several 
factors such as the location of cancer and the modality of treatment. 
We also agree that in order to make a meaningful comparison, it would 
be necessary to identify the specific autoimmune disease and 
immunosuppressive therapy, or both.
    While the AHRQ rapid response report and the public comments we 
received provided more information regarding certain autoimmune 
diseases and therapies and certain dental services that may improve 
clinical outcomes, this information lacks evidence to help us determine 
whether there is an inextricable link between dental services and 
covered services for treating autoimmune disease. Specifically, we 
believe that we need more clinical evidence to help us identify whether 
there are clinical scenarios where dental services are inextricably 
linked with specific clinical outcomes of a medical service for people 
with immunosuppression.
    We will continue to engage with interested parties on this topic 
and are interested in information that could assist us in identifying 
specific clinical scenarios and the covered medical services that the 
dental services are inextricably linked to. Similarly, with what we 
stated for diabetes, we believe that the list of services identified by 
submitters provided above in section II.J.4 of this final rule may be a 
good starting point in considering how to apply the inextricably linked 
standard to chronic disease management. In

[[Page 97955]]

addition, we are interested in information on specific autoimmune 
diseases, level of severity, and the extent to which there is a linkage 
of an autoimmune disease to dental infection. Are there metrics 
available to indicate the depth and breadth of immunosuppression? If 
so, what could be the level of immunosuppression that creates 
susceptibility to infection? How do the different therapies impact 
immunosuppression levels and health outcomes? Are there specific 
immunosuppressive therapies that pose higher risks to patients? Does 
the duration of use for a particular immunosuppressant play a role and 
if so how? What are the clinical scenarios where an immunosuppressive 
must be stopped because they are placing the individual's health and 
continued treatment at risk?
5. Implementation of Payment for Dental Services Inextricably Linked to 
Other Specific Covered Services
    In the CY 2024 PFS final rule (88 FR 79035 through 79039), we 
solicited comments on whether we should provide additional guidance 
that would aid in processing claims for dental services that are 
inextricably linked to a Medicare-covered medical service. Some 
commenters suggested the usage of a modifier on the dental claim format 
that would better identify when dental services are inextricably linked 
to specific covered medical services. As we continue to consider 
improvements to our payment policies and have gained experience around 
the provision of dental services inextricably linked to covered medical 
services, we have explored tools and resources that may help to 
facilitate the implementation and coordination of dental services that 
are currently covered under Medicare, including the possible usage of 
modifiers and diagnosis codes. The usage of modifiers on a dental claim 
would seek to identify the dental service as a service the billing 
practitioner identifies as inextricably linked to a specific covered 
medical service and for which there was an exchange of information, or 
integration, between the medical and dental professional (physician, 
including a dentist, or other non-physician practitioner) as specified 
in the CY 2023 PFS final rule (87 FR 69663 through 69688). We have 
explained that if there is no exchange of information, or integration, 
between the medical professional (physician or other non-physician 
practitioner) regarding the primary medical service and the 
practitioner furnishing the dental services, then there would not be an 
inextricable link between the dental and covered medical service within 
the meaning of our regulation at Sec.  411.15(i)(3). Furthermore, 
integration between medical and dental professionals can occur when 
these professionals coordinate care. This level of coordination can 
occur in various forms such as, but not limited to, a referral or 
exchange of information between the medical professional (physician or 
non-physician practitioner) and the dentist. This coordination should 
occur between a dentist and another medical professional (physician or 
other non-physician practitioner) regardless of whether both 
individuals are affiliated with or employed by the same entity.
    In the CY 2025 PFS proposed rule, we explained that the KX modifier 
is currently submitted on a Medicare Part B claim to indicate that the 
service or item is medically necessary, and that the healthcare 
provider has included appropriate documentation in the medical record 
to support or justify the medical necessity of the service or item. We 
stated that we believe that usage of the KX modifier in the context of 
claims for dental services inextricably linked to covered services 
would be appropriate and support claims processing and program 
integrity efforts.
    We further explained that based on comments received and summarized 
in the CY 2024 PFS final rule (88 FR 79037), interested parties 
requested that we provide more guidance on how a practitioner 
submitting claims for dental services can attest that the dental and 
medical services are inextricably linked, and that the criteria have 
been met to support payment. We believe that the use of the KX modifier 
would allow practitioners to signal that the dental services meet the 
criteria to support payment. We also noted that the use of the KX 
modifier may improve the MACs' ability to ascertain the volume of 
claims that are being submitted for dental services inextricably linked 
to covered services.
    Therefore, we proposed that, effective January 1, 2025, the KX 
modifier will be required for claims submission for dental services 
inextricably linked to covered medical services on both the dental 
claim format 837D and the professional claim format 837P. We proposed 
that practitioners who bill for dental services for which they seek 
payment in accordance with Sec.  411.15(i)(3) must include the KX 
modifier on the 837D or 837P claim to indicate that they believe that 
the dental service meets the established payment criteria; that the 
practitioner has included appropriate documentation in the medical 
record to support or justify the medical necessity of the service or 
item and that demonstrates the inextricable linkage to covered medical 
services; and that coordination of care between the medical and dental 
practitioners has occurred.
    We discussed how practitioners now have the option to utilize the 
KX modifier as proposed, for services with dates of service in CY 2024 
as a way to help with this transition to potentially requiring use of 
the KX modifier for claims submission beginning in 2025. We stated that 
this optional usage in CY 2024 will not be mandatory and will serve to 
support both clinician and MAC claims processing activities. We noted 
our intent to provide additional instruction and education through 
subregulatory guidance regarding this voluntary phase of the usage of 
the KX modifier on claims submitted for dental services inextricably 
linked to covered medical services. We sought comment on all aspects of 
this proposal. (89 FR 61762 through 61763)
    In the CY 2025 PFS proposed rule, we also discussed that while the 
KX modifier indicates that the services are medically necessary, the GY 
modifier (along with three other HCPCS denial modifiers) serves to 
indicate that a service is not covered because it is outside of the 
scope of Medicare coverage authorized by the statute. We reiterated 
that denial modifiers should be used when physicians, practitioners, or 
suppliers want to indicate that the item or service is statutorily non-
covered.
    We explained that the use of the GY modifier could support MAC 
efforts to adjudicate claims and remove from the claims processing 
pipeline those claims that do not require further processing. We sought 
comment on whether we should recommend the usage of the GY modifier on 
the 837D or 837P dental claim format in instances where a Medicare 
claim denial is sought for purposes of submission to third party payers 
or when the service does not fit within a Medicare benefit category and 
is statutorily excluded from coverage.
    Additionally, we stated that in general, the Act and our 
regulations mandate the submission of diagnostic coding (for example, 
ICD-10 codes) on Medicare claims. Section 1842(p)(1) of the Act states 
that ``each request for payment, or bill submitted, for an item or 
service furnished by a physician or practitioner specified in 
subsection (b)(18)(C) for which payment may be made under this part 
shall include the appropriate diagnosis code (or codes) as established 
by the Secretary for such item or service.'' Under this section, each 
bill or request for payment for

[[Page 97956]]

physicians' services under Medicare Part B must include the appropriate 
diagnostic code ``as established by the Secretary'' for each item or 
service for which the Medicare beneficiary received treatment. We noted 
that in the March 4, 1994 final rule entitled Medicare Program; 
Diagnosis Codes on Physician Bills, we codified that each bill or 
request for payment for a service furnished by a physician under 
Medicare Part B must include appropriate diagnostic coding for the 
diagnosis or the symptoms of the illness or injury for which the 
Medicare beneficiary received care and revised our regulations at Sec.  
424.32, Basic requirements for all claims, to state specifically that a 
claim for physician services must include appropriate diagnostic coding 
using diagnostic information (59 FR 10290).
    We noted that in the CY 2023 PFS final rule, we stated that 
dentists are included in the statutory definition of physician at 
section 1861(r)(2) of the Act and would generally be considered and 
treated as a physician for purposes of enrollment, compliance, and 
other administrative programs (87 FR 69673). Therefore, dentists, who 
are physicians for the purposes of the Medicare program, are required 
to submit diagnosis codes on claims for physician services as described 
in the statute and regulations. Furthermore, we noted that diagnosis 
code information is currently required on the submission of the 
professional claim form 837P; professional claims lacking such 
information are returned to the healthcare provider and are not 
processed.
    We also noted that in the CY 2023 PFS final rule (87 FR 69679 
through 69680), we acknowledged the need to address and clarify certain 
operational issues related to Medicare payment for dental services 
inextricably linked to covered services and noted that we were working 
to address these issues, including claims processing questions raised 
by the commenters. We stated that we anticipated resolving many of the 
additional operational issues raised by commenters potentially as soon 
as CY 2024, including efforts to adopt the dental claim form (837D). 
Similarly, in the CY 2024 PFS final rule (88 FR 79036), we stated that 
we continue to work to address issues raised by commenters, such as 
questions related to claims processing and efforts to accommodate the 
dental claim form within our claims processing systems, effective 2024. 
The efforts related to adopting the dental claim form are ongoing, and 
as efforts advance to address the implementation and functionality of 
claims processing systems for the dental claim form, we intend to 
provide appropriate guidance and education to interested parties. (89 
FR 61763)
    In the CY 2025 PFS proposed rule, we explained that we anticipate 
that our systems will be able to process claims submitted using the 
dental claim form 837D (OMB Control No. 0938-1471) by January 1, 2025. 
We stated that consistent with the statutory and regulatory 
requirements discussed above, we intend to require a diagnosis code to 
be included on claims submitted for physicians' services for dental 
services inextricably linked to covered medical services on both the 
837P and 837D formats, beginning on January 1, 2025. However, given the 
complexities related to the operational launch of and transition to the 
837D dental claims format, we also considered further delaying the 
requirement to include a diagnosis code on the 837D form. For example, 
interested parties have indicated that in current dental practice, 
claims processing systems may not require the submission of a diagnosis 
code on claims for dental services, and therefore, dental practices may 
need time to adjust to this requirement for the 837D form. We also 
stated that we believe that it may be appropriate to delay this 
requirement for a limited time to support clinicians and billing 
entities as they seek to change their workflows and transition to using 
the 837D form. We sought comment on our intention to require the 
inclusion of a diagnosis code on the 837D form beginning on January 1, 
2025. We were particularly interested in any operational challenges 
that interested parties may face in attempting to comply, as well as 
other considerations that we should take into account with regard to 
the timing of this requirement. (89 FR 61763)
    We received 25 public comments on these proposals. The following is 
a summary of the comments we received and our responses.
    Comment: Commenters supported the proposal to require the KX 
modifier for claims submission of dental services inextricably linked 
to covered medical services on both the dental claim format 837D and 
the professional claim format 837P. One commenter stated they support 
the use of the KX modifier to indicate that a dental service is 
inextricably linked to a covered medical service and that there has 
been integration between the medical and dental providers. The 
commenter stated that a patient's provider is well positioned to 
determine that a KX modifier should or should not be added.
    Overall, commenters responded favorably to our comment solicitation 
on whether we should recommend the usage of the GY modifier on the 837D 
or 837P dental claim format in instances where a Medicare claim denial 
is sought for purposes of submission to third party payers or when the 
service does not fit within a Medicare benefit category and is 
statutorily excluded from coverage. Most commenters supporting the 
proposed use of the KX modifier also supported usage of the GY modifier 
in this context. These commenters indicated that the KX and GY 
modifiers would streamline and improve claim submission and generally 
help to establish a more clear, transparent standard to help ensure 
coordination between the dental and clinical professional and agree 
that it will help to demonstrate when dental services are inextricably 
linked to Medicare covered services. One commenter supported the use of 
both modifiers, stating that this will ensure claims are accurately 
categorized and processed more efficiently for both CMS and providers.
    One commenter expressed concern about the overuse of the GY 
modifier and explained that using the same modifier for different 
scenarios may create confusion procedurally for providers and their 
teams because it may be unclear on how to proceed with payment. The 
commenter recommended that CMS consider the use of two or more unique 
modifiers--one for coordination of benefits issues or third-party 
responsibility, another when the service is statutorily excluded from 
coverage (the dental procedure), and one in which the service may not 
be statutorily excluded but does not meet the conditions for payment. 
Commenters requested clarification around the specific instances when a 
claim must be submitted with the GY modifier, for example, whether a 
dental claim must be submitted with the GY modifier to coordinate 
dental benefits with a State's Medicaid program, even in cases in which 
the Medicaid provider knows a dual-eligible patient will be ineligible 
for dental benefits under the medically necessary payment rules.
    Two commenters did not support the use of the KX or the GY 
modifiers. The commenters stated that the dental industry and dental 
software are not ready for the requirement of modifiers within the 
current architecture supporting the industry's operational aspects. In 
addition, the commenters stated that the modifiers would entail 
significant costs for new programs and training to dental offices and 
carriers alike and would add complexity

[[Page 97957]]

without a therapeutic benefit. Further, the commenters stated that they 
do not believe that the use of the GY modifier would be beneficial but 
did not give an explanation.
    Many commenters supported our intent to require a diagnosis code on 
claims submitted for physicians' services for dental services 
inextricably linked to covered medical services on both the 837P and 
837D formats, beginning on January 1, 2025. Commenters recognized that 
the inclusion of these codes is intended to improve the accuracy and 
coordination of care between medical and dental providers, particularly 
for services that are intrinsically linked to medical procedures.
    Overall, the comments received on the use of modifiers and the 
inclusion of a diagnosis code on claims requested that CMS allow delay 
of their implementation. Commenters were concerned that time is needed 
to resolve potential claims processing issues. Regarding the KX and GY 
modifiers, commenters stated that there is currently no place on dental 
claim forms to accommodate them. They were particularly concerned with 
the readiness of healthcare IT infrastructure, stating that there has 
been minimal testing among software developers, electronic dental 
record companies, and claims clearinghouses to verify that CDT codes 
with these modifiers can be processed accurately. They also stated that 
the ADA 2024 Paper Claim Form cannot accommodate modifiers at the 
procedure level.
    Commenters appreciated our engagement with them to learn more about 
the challenges associated with including ICD-10 codes in Medicare 
dental claim submissions. One commenter explained that using diagnosis 
codes may create operational difficulties for dental providers since 
dental practices, especially small dental practices, do not typically 
have access to patient medical records to include ICD-10 codes on the 
837D. A different commenter explained that the dental community does 
not have a widespread adoption of reporting diagnosis codes and as a 
result, a delay is necessary to ensure providers can adjust to these 
new requirements, including updating their practice management systems 
and training staff on the correct use of ICD-10 codes.
    Given these concerns about the potential challenges associated with 
implementing the reporting of the two modifiers and a diagnosis code, 
commenters suggested several options for a delay such as, until mid-
2025, January 1, 2026, and January 1, 2027. We note that with each 
suggestion for the duration of a delay, commenters did not provide 
information that would distinguish a need for one timeframe from 
another. Commenters explained a delay would allow sufficient time for 
comprehensive testing, reporting, and educational materials for 
providers, vendors, and payors. During this transitional period, some 
commenters recommended CMS allow MACs to adjudicate claims without 
modifiers, with an approved claim report advising providers that 
modifiers will be required starting January 1, 2026. Commenters 
indicated this approach would help alleviate any confusion for 
providers and ensure the continuation of quality patient care for these 
new coding requirements. Meanwhile, one commenter strongly urged CMS 
not to delay the requirement of a diagnosis code, stating that a 
diagnosis code is critically necessary to understand whether a dental 
service is covered under Medicare.
    Response: We thank commenters for their support of our proposal to 
require the usage of the KX modifier on the dental claim format 837D 
and the professional claim format 837P to identify dental services 
inextricably linked to covered medical services; our intent to require 
the reporting of a diagnosis code on the 837P and 837D forms for 
physicians' services for dental services inextricably linked to covered 
medical services; and our recommendation on the use of the GY modifier 
on the 837P and 837D forms. We agree with commenters that these claim 
payment mechanisms would streamline and improve claim submission and 
generally help to establish a more clear, transparent standard to help 
ensure coordination between the dental and clinical professional and 
agree that it will help to identify when dental services may be 
inextricably linked to other Medicare covered services. We appreciate 
commenters' concerns regarding the challenges they may encounter in 
implementing these new aspects of claims submission and found the need 
for additional time compelling. Therefore, we are finalizing a delay of 
implementing the requirement for reporting the KX modifier on the 
professional, dental, and institutional (as discussed in the following 
comment and response) claim forms to identify dental services 
inextricably linked to covered medical services. We are also finalizing 
a delay of implementing the requirement for reporting a diagnosis code 
on the dental claim form for physicians' services for dental services 
inextricably linked to covered medical services. That is, both of these 
billing requirements will be effective July 1, 2025. We agree with 
commenters that suggested a mid-2025 effective date and believe that 
this timeframe would allow sufficient time for comprehensive testing, 
reporting, and educational materials for healthcare providers, vendors, 
and payors. We are also finalizing that the GY modifier may be used on 
the professional, dental, and institutional (as discussed in the 
following comment and response) claim forms in instances where a 
Medicare claim denial is sought for purposes of submission to third 
party payers or when the dental service does not fit within a Medicare 
benefit category and is statutorily excluded from coverage.
    Comment: Commenters stated that the scope of the proposed billing 
policies only included the dental claim format 837D and the 
professional claim format 837P. These commenters requested CMS to 
clarify if reporting the KX and GY modifiers would apply to the 
institutional claim format 837I. Commenters explained that this 
clarification is needed because of the discussion in section III.B.8 of 
the CY 2025 PFS proposed rule (89 FR 61805 through 61806) wherein CMS 
establishes that the modifier KX billing requirement applies to rural 
health clinics (RHC) and federally qualified health center (FQHC) 
claims, which are submitted using the 837I claim format. This commenter 
also stated that the 837I claim format is used by Method II critical 
access hospitals (CAHs) to submit professional charges.
    Response: We agree with commenters that the discussion in the CY 
2025 PFS proposed rule only referenced the dental claim format 837D and 
the professional claim format 837P and that we need to be clear 
regarding whether these proposed billing policies are applicable to the 
institutional claim format 837I. In the CY 2023 PFS final rule (87 FR 
69663 through 69688), we clarified and codified at Sec.  
411.15(i)(3)(i) 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 recognize that when dental services are 
furnished in either the inpatient or outpatient setting, depending on 
the provider or supplier, they may be billed using the 837I, 837P, or 
the 837D claim forms. As the commenter stated, FQHC services are paid 
under Medicare Part B and are billed to Medicare on the 837I claim

[[Page 97958]]

form. Therefore, we are finalizing that in addition to the 837D and 
837P claim forms, the KX modifier will be required for claims 
submission for dental services inextricably linked to covered medical 
services on the institutional claim format 837I. We are also finalizing 
that the GY modifier may be used on the institutional claim format 837I 
in instances where a Medicare claim denial is sought for purposes of 
submission to third party payers or when the dental service does not 
fit within a Medicare benefit category and is statutorily excluded from 
coverage. Regarding the requirement to report a diagnosis code, we note 
that this is already a requirement for the institutional claim format. 
Please see section III.B.8. of this final rule for the policy 
discussion of dental services inextricably linked to other covered 
services when furnished in an RHC or FQHC.
    Comment: Several commenters provided feedback regarding operational 
issues for our dental policies. Many commenters supported CMS adoption 
of the dental claim format and stated this is a great step to 
streamline communication between providers and payors alike. A few 
commenters emphasized there is currently no standard to define what 
qualifies as an exchange of information or care coordination between a 
physician and dentist. Commenters mentioned this lack of clarity 
creates a lot of challenges and recommended CMS establish clear 
guidance to the MACs to avoid any inconsistences or ambiguity. One 
commenter requested that CMS ensure that MACs are duly evaluating 
claims and not automatically denying payment on the basis that they do 
not squarely match up with a listed clinical example in the regulation. 
This commenter also asked that CMS issue guidance directing MACs to 
carefully evaluate--and not simply pass on--claims in which there is 
indication that a patient needed dental clearance in order to qualify 
for a Medicare-covered procedure or treatment. A different commenter 
suggested adopting the ``ADA Medicare Referral Form'' as a standard 
template to verify coordination of care.
    Response: We thank commenters for their suggestions and for raising 
concerns regarding the MACs' evaluation of claims. CMS continues to 
provide guidance to the MACs on processing claims for dental services 
and encourages interested parties to share similar feedback with the 
MACs to better streamline communication between health care providers 
and MACs.
    Comment: Additionally, the majority of commenters urged CMS to 
educate providers on billing practices and how dental policies applies 
to different programs. For example, commenters wanted more information 
on how dually eligible beneficiaries are affected and a few commenters 
recommended CMS update the Medicare Managed Care Manual to discuss how 
it interacts with any supplemental dental coverage. Also, a few 
commenters offered suggestions on how best to educate providers on 
billing practices such as through the usage of MLNs, NCDs, as well as 
establishing a list of services of relevant conditions for which dental 
care is inextricably linked for providers to utilize. By doing so, 
commenters highlighted this will encourage more dental providers to 
enroll in Medicare, including those dental providers that are already 
contracted with Medicaid.
    Response: We thank commenters for their suggestions and will 
continue to seek ways to better educate healthcare providers on our 
dental policies related to billing practices and supplemental dental 
coverage. We would like to highlight that many common questions posed 
by the commenters regarding billing, claims, or inextricably linked-
covered services can be found on our website at: https://www.cms.gov/medicare/coverage/dental.
    In the CY 2023 PFS final rule, we stated that we believed that MACs 
are appropriately situated to establish contractor prices for dental 
services inextricably linked to covered services until we have 
additional pricing data that could enable national pricing (87 FR 
69680). Therefore, as we acknowledged in the CY 2025 PFS proposed rule, 
dental services inextricably linked to covered services are currently 
contractor priced. However, we stated in the proposed rule that we have 
received feedback from the MACs regarding pricing information for 
dental services inextricably linked to covered services, and the MACs 
have requested information that would support their efforts to assign 
payment amounts for such dental services. We stated that the MACs 
retain broad flexibility with respect to assigning payment amounts to 
claims for dental services inextricably linked to covered services; 
however, we seek to facilitate the sharing of available pricing 
information with the MACs for these purposes. Thus, in the CY 2025 PFS 
proposed rule, we sought comment from the public on potential sources 
of payment information for the pricing of dental services inextricably 
linked to covered services. We noted, for example, that publicly 
available data (such as Fair Health cost data) are available for 
purchase; however, we understand that this information may not directly 
inform payment amounts in a manner useful for the payment of Medicare 
claims for dental services. We noted that according to Fair Health's 
website, cost estimate information is based on claims for medical and 
dental services paid for by private insurance plans, including the 
country's largest insurers.\268\ We also noted that we are aware of 
other fee schedules, such as those used by State governments for State 
employees, or discount fee schedules, such as discount dental programs 
(for example, https://www.dentalbenefitprogram.com/groupfees.php?id=NEV.) We aimed to support the ongoing efforts by the 
MACs to price these services and sought any information from the public 
that may serve to support and inform the MAC development of payment 
amounts for dental services inextricably linked to covered services. 
(89 FR 61763 through 61764)
---------------------------------------------------------------------------

    \268\ https://www.fairhealthconsumer.org/#answer2; Accessed May 
22, 2024.
---------------------------------------------------------------------------

    We received 7 public comments on this comment solicitation. The 
following is a summary of the comments we received and our responses.
    Comment: Several commenters stated the best source of data 
available for pricing dental services is by utilizing national 
benchmark prices, such as those in the FAIR Health database, to help 
support and inform interim contractor pricing for dental claim 
reimbursement. A few commenters also mentioned CMS should require MACs 
to update payment rates annually using the Medicare Economic Index. 
Additionally, one commenter suggested CMS should establish national 
rates for CDT codes in the PFS RVU files to ensure consistent 
reimbursement of these services.
    Response: We thank commenters for these suggestions and will take 
them into consideration in our future development of payment policies 
for dental services.
    We remind readers once again that, to be considered for purposes of 
the CY 2026 PFS rulemaking, submissions through our public process for 
recommending additional clinical scenarios where dental services may be 
inextricably linked to covered services under Sec.  411.15(i)(3)(i) 
should be received by February 10, 2025, via email at 
[email protected]. Interested parties should 
include the words ``dental recommendations for CY 2026 review'' in the 
subject line of their email

[[Page 97959]]

submission to facilitate processing. We continue to stress to 
submitters that recommendations must include at least one of the types 
of evidence listed in section II.J.1.c. of this final rule when 
submitting documentation to support the inextricable link between 
specified dental services and other covered services. We further note 
that we may also consider recommendations that are submitted as public 
comments during the comment period following the publication of the PFS 
proposed rule.
6. Miscellaneous Comments
    We also received the following miscellaneous comments concerning 
our proposals.
    Comment: We received many comments generally supporting the ongoing 
public submission process and our use of the annual rulemaking process 
to evaluate whether evidence submitted by interested parties meets the 
standard to permit Medicare payment for dental services. Commenters 
supported what they described as CMS's efforts to ensure that the 
``medically necessary'' standard keeps up with growing clinical 
evidence and evolving standards of care.
    One commenter stated that our rigorous review process for 
determining whether dental services are inextricably linked to other 
covered services is essential to ensuring that Medicare beneficiaries 
receive comprehensive care that addresses both their medical and dental 
needs. The commenter suggested a collaboration with us and offered 
their scientific and clinical insights.
    One commenter requested that we allow payment for dental services 
when a beneficiary is pregnant. The commenter explained patients should 
be routinely counseled about the maintenance of good oral health habits 
throughout their lives as well as the safety and importance of oral 
health care during pregnancy.
    One commenter requested that we consider payment for dental 
services following organ and stem cell transplants due to the 
development of oral chronic graft versus host disease, which damages 
mucosa and salivary glands and causes sclerotic changes in the oral 
cavity. The commenter also requested that we consider payment for 
dental services for a period of time following treatment for head and 
neck cancer and other cancer types, including blood cancers, as well as 
following antiresorptive therapy for non-cancer conditions, such as 
osteoporosis.
    One commenter recommended that we clarify the regulatory language 
to provide that dental and oral care extends to medically necessary 
diagnostic and treatment services to ensure that the patient is in 
acceptable oral health prior to any surgical procedure. The commenter 
stated that dental services and interventions to remove plaque and 
biofilm from the teeth and gums prior to surgery aid in the prevention 
of infection.
    One commenter requested that we permit payment for dental services 
for beneficiaries with intellectual and/or developmental disabilities 
(IDD). The commenter stated that beneficiaries with IDD experience 
higher rates of complications of poorer oral health such as aspiration 
pneumonia, cardiovascular disease, diabetes, respiratory disease and 
stroke,\269\ therefore, improving dental coverage for people with IDD 
will provide better overall health outcomes for these individuals and 
substantial savings in Medicare spending by preventing and reducing 
complications that arise from poor oral health. Further, the commenter 
stated while the importance of improving access and payment for dental 
services for people with IDD is robustly clear, they understand the 
need to gain further understanding of any potential relationship 
between dental services and specific covered medical services for 
patients with IDD. They suggested that we partner with AHRQ to conduct 
a rapid response report focused on people with IDD.
---------------------------------------------------------------------------

    \269\ Wilson NJ, Lin Z, Villarosa A, George A. Oral health 
status and reported oral health problems in people with intellectual 
disability: a literature review. J Intellect Develop Disabil. 
2019:44(3):292-304.
---------------------------------------------------------------------------

    One commenter suggested that we explore ways to integrate dentists 
in the coordination of care for cancer and other illnesses and stated 
that The National Cancer Institute recommends that dental professionals 
be considered part of the cancer care team in individuals undergoing 
cancer treatment and that people see their dentist 4 weeks prior to 
initiating cancer treatment (if possible) to allow for healing if any 
dental work is required.
    Response: We thank commenters for their support and suggestions. 
Regarding the specific clinical scenarios identified by these 
commenters, we did not find that the information they provided 
indicated an inextricable link between dental services and a covered 
medical service such that dental services would not be in connection 
with the care, treatment, filling, removal, or replacement of the teeth 
or structures supporting the teeth. As we have previously stated, 
because the Medicare statute generally prohibits payment for dental 
services, payment may be made in limited situations such as when the 
dental services are inextricably linked to, and substantially related 
and integral to the clinical success of certain other covered services 
as provided by our regulations at Sec.  411.15(i)(3), or under the 
exceptions provided by section 1862(a)(12) of the Act and codified at 
Sec.  411.15(i)(2).
7. Request for Information: Services Associated With Furnishing Oral 
Appliances Used for the Treatment of Obstructive Sleep Apnea
    In the CY 2025 PFS proposed rule (89 FR 61764 through 61765) we 
included a Request for Information (RFI) to help us determine if oral 
appliances used to treat obstructive sleep apnea can withstand repeated 
use (furnished as rental equipment for use by successive patients) and 
thus could be classified as durable medical equipment (DME). We also 
requested information regarding the types of services furnished by a 
dentist or other practitioner related to oral sleep apnea appliances. 
Specifically, we sought information regarding details that may inform 
or support a future proposal regarding a code assignment for services 
related to oral sleep apnea appliances under the Medicare physician fee 
schedule.
    We received 400 comments in response to this RFI. We received 
comments responding to some or all of the RFI questions from 
approximately 209 stakeholders, with an additional 191 comments that 
indirectly addressed the RFI questions. While we are not responding to 
the comments here, we thank the commenters for their detailed and 
thoughtful input and will consider these comments for future 
rulemaking.

K. Payment for Skin Substitutes

    In the CY 2023 PFS proposed rule (87 FR 46027 through 46029), we 
outlined several objectives related to refining skin substitute 
policies under Medicare, 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) using a uniform 
benefit category across products within the physician office setting, 
regardless of whether the product is synthetic or comprised of human or 
animal-based material, to incorporate more consistent payment 
methodologies; and (4) maintaining clarity for interested parties on 
CMS skin substitutes policies and procedures. When considering 
potential changes to policies involving skin substitutes, we noted that 
we believe it would be appropriate to take a phased

[[Page 97960]]

approach over multiple rulemaking cycles to examine how we could 
appropriately incorporate skin substitutes as supplies under the PFS 
ratesetting methodology. After receiving feedback from commenters 
requesting more information on how CMS intends to achieve a consistent 
payment approach for skin substitute products, we did not finalize any 
policies in the CY 2023 PFS final rule.
    In alignment with our objectives, in the CY 2024 PFS final rule, we 
solicited comments on different approaches CMS could use to identify 
appropriate practice expense (PE) direct costs for skin substitute 
products, such as reviewing various sources for price information, 
including performing market research, reviewing invoices submitted by 
interested parties, or cost information on Medicare claims. Discussing 
these approaches in the CY 2024 PFS final rule provided interested 
parties with more details about payment mechanisms CMS is considering 
under our PFS ratesetting methodology.
    The CY 2024 PFS proposed rule did not contain a specific proposal 
for changing how skin substitute products are paid under the PFS; 
however, we continue to pursue our objectives for refining skin 
substitute payment policies under Medicare, as mentioned above. More 
specifically, we continue examining ways to treat skin substitute 
products as incident-to supplies under the PFS ratesetting methodology. 
Additionally, we believe continuing this dialogue with interested 
parties on payment for skin substitute products will help inform 
potential policy changes for future rulemaking.
    We recognize that skin substitute products may vary in composition, 
size, and applicability and will continue to consider these distinct 
characteristics in proposing a consistent payment approach and policy. 
We also note an increase in HCPCS Level II coding request applications 
for newly developed skin substitute products and are considering 
broadly all of our relevant payment policies. Such policies, for 
example, include the discarded drug refund policy and the Part B drug 
inflation rebate policy and how these policies may align with the usage 
and payment for skin substitute products. In the CY 2024 PFS final rule 
(88 FR 79060 through 79061), we finalized that billing and payment 
codes that describe products currently referred to as skin substitutes 
are not counted for identifying refundable drugs for calendar quarters 
during 2023 and 2024. While we continue to consider making changes to 
the Medicare Part B payment policies for such products, similar to last 
year, for CY 2025, we proposed that billing and payment codes that 
describe products currently referred to as skin substitutes will not be 
counted for purposes of identifying refundable drugs for calendar 
quarters in 2025. We plan to revisit discarded drug refund obligations 
for skin substitutes in future rulemaking. In section III.I. of this 
final rule, CMS is finalizing codification of existing policy by 
including products currently referred to as skin substitutes on the 
list of product categories that are not considered Part B rebatable 
drugs in Sec.  427.101(b)(5).
    CMS did not make any proposals for payment for skin substitute 
products for CY 2025; however, we did receive public comments on our 
intention to move forward with a future proposal to achieve a 
consistent payment mechanism for all skin substitute products. The 
following is a summary of comments received and our responses.
    Comment: Several commenters raised similar objections to paying for 
all skin substitute products as supplies, including: (1) commenters 
suggested skin substitute products should not be treated as supplies 
since they are affixed into the wound; (2) commenters stated that 
assessing the costs of skin substitute products within the PE RVU 
methodology is challenging due to the variability in usage of these 
products (size, intended use, composition); and (3) commenters 
suggested bundling payment for skin substitute products would 
significantly reduce payment for providers, which they state would 
negatively affect innovation and access to care for Medicare 
beneficiaries.
    Response: We thank commenters for their feedback as we continue to 
work through ways in which to achieve consistent payment for skin 
substitute products under the PFS. We refer readers to a similar 
discussion in the CY 2024 PFS final rule (88 FR 78987 through 78990) 
where CMS discussed numerous factors we could consider in establishing 
a consistent payment approach. As also mentioned in the CY 2024 PFS 
final rule (88 FR 78989), our goal is to achieve a consistent payment 
approach for skin substitute products that does not negatively impact 
beneficiary access.
    Comment: Many commenters also mentioned alternative options to 
achieving consistent payment for all skin substitute products under the 
PFS, such as applying the ASP+6% payment methodology to all skin 
substitute products and enforcing ASP reporting for skin substitute 
products. Another commenter recommended an alternative option of 
applying a maximum fee-for-service price of $150 per cm squared that 
would be applicable to all skin substitute product, for both Q and A 
codes. Additionally, one commenter recommended that CMS replace 
application CPT codes 15271-15278 with newer, temporary codes to 
describe the more complex wound procedures and offer revisions to the 
sizing increments.
    Response: We thank these commenters for their suggestions and may 
consider these alternative policies for future rulemaking.
    Comment: Several commenters applauded CMS for delaying a proposal 
for payment of skin substitute products and appreciated our efforts to 
continue to engage with interested parties. These same commenters also 
acknowledged the urgency to finalize a proposal to change the way skin 
substitute products are treated and paid for under the PFS.
    Response: We thank these commenters for their feedback and 
reiterate CMS' commitment to achieving a consistent payment mechanism 
for all skin substitute products under the PFS. CMS also acknowledges 
the desire for a proposal on this issue and intends to bridge the gap 
in variation of pricing for these products through establishing a 
consistent framework for payment of skin substitutes under the PFS in 
future rulemaking.
    Comment: One commenter recommended reverting to the pre-2014 policy 
where each skin substitute with its own HCPCS code was paid separately 
to ensure consistency, given the ASP reporting requirements that became 
effective on January 1, 2022. The commenter recommended against 
bundling skin substitute products under the PFS, emphasizing the need 
for specific PE RVUs and careful consideration of the diverse uses and 
types of skin substitutes. The commenter also recommended that all skin 
substitute manufacturers be required to report ASP data, consistent 
with the approach of treating skin substitutes as drugs and 
biologicals.
    Response: We thank the commenter for their feedback. As discussed 
in the CY 2024 PFS final rule (88 FR 78987 through 78990), we are 
working to develop a consistent payment approach for skin substitute 
products that maintains beneficiary access by evaluating various 
payment policy aspects, including the diverse uses and types of skin 
substitutes, in alignment with our goals of consistency and fairness.
    Additionally, we acknowledge the recommendation for requiring all 
skin substitute manufacturers to report ASP data and the concerns 
regarding bundling under the PFS. These

[[Page 97961]]

considerations will be factored into our ongoing efforts as we continue 
to develop future payment policies for skin substitutes and may 
consider these suggestions for future rulemaking.
    Comment: One commenter urged CMS to acknowledge that skin 
substitutes should not be classified as refundable drugs under the 
discarded drug refund program, as this exclusion is mandated by law, 
irrespective of the year. The commenter highlighted that skin 
substitutes do not fall within the definition of ``single source drug 
or biological'' as outlined in section 1847A(c)(6)(D). This is because 
they are neither approved by the FDA as a biological under section 351 
of the Public Health Service Act nor produced or distributed under an 
FDA-approved new drug application.
    Response: We thank the commenter for the feedback and are 
continuing to consider this issue. As noted, we are finalizing our 
proposal to continue our policy that billing and payment codes that 
describe products currently referred to as skin substitutes will not be 
counted for purposes of identifying refundable drugs for calendar 
quarters in 2025.
    Comment: We received one comment requesting that CMS acknowledge 
skin substitutes as exempt from the discarded drug refund program in 
all future years.
    Response: We are not establishing skin substitutes as exempt from 
the discarded drug refund policy for all future years, as we plan to 
revisit the refund obligations for skin substitutes in future 
rulemaking. However, while we continue to consider making changes to 
the Medicare Part B payment policies for such products, we are 
finalizing that billing and payment codes that describe products 
currently referred to as skin substitutes will not be counted for 
purposes of identifying refundable drugs for calendar quarters in 2025.

L. Strategies for Improving Global Surgery Payment Accuracy

1. Background
    Currently, there are approximately 4,100 physicians' services that 
are coded and valued under the PFS as global surgical packages (herein 
``global packages''). Global packages are single codes that are valued 
to include a specific surgical procedure and all related services 
provided during a specified period of days (0-day, 10-day, or 90-day 
global packages) by a physician (or another practitioner in the same 
group practice). The PFS Look-up Tool provides information on each 
procedure code, including the global surgery indicator. This tool is 
available at https://www.cms.gov/medicare/physician-fee-schedule/search/overview.
    The global packages include:
     The surgical procedure itself, including day-of pre-
service activities and day-of recovery care;
     Related post-operative evaluation and management (E/M) 
visits and discharge services provided during specified post-operative 
periods (10-day or 90-day periods for most minor and major procedures, 
respectively; 0-day global packages do not include post-operative 
visits);
     Related pre-operative visits on the day of the procedure 
(for services with 10-day and 90-day periods) and pre-operative visits 
on the day prior to the procedure (for major procedures with 90-day 
periods only);
     Services provided during the post-operative period (for 
services with 10-day and 90-day periods) related to the procedure (for 
example, treatment of complications, pain management).
    Any medical care that requires a return to the operating room 
during the global period is paid separately and starts a new global 
period. Like other services paid under the PFS, post-operative visits 
that are part of the global packages can vary by level and site of 
service. Global packages are valued using our annual PFS rulemaking 
process.
    As we described and discussed beginning in the CY 2015 PFS final 
rule (79 FR 67582 through 67591), both CMS and other interested parties 
have concerns with the accuracy of global package valuation and payment 
under the PFS. Foremost, we have longstanding concerns regarding 
whether the number and level of post-operative visits assumed to occur 
within global packages are consistent with the number and kind of post-
operative services actually being furnished. Findings from multiple OIG 
reports suggest that practitioners perform fewer post-operative visits 
than are expected and accounted for in the valuation of the global 
packages. We also described concerns that global packages as currently 
defined and valued may cause potential distortions in valuation among 
other PFS services. Furthermore, we noted that the structure of the 
current packages assumes a single model of care delivery (a single 
practitioner or other practitioners in the same group practice 
furnishing the surgical procedure and all associated care) and does not 
directly address scenarios where the surgical procedure and follow-up 
care are provided by different practitioners or in different group 
practices.
    Taking these findings and concerns into account, we finalized a 
policy to transition all 10-day and 90-day global packages to 0-day 
global packages, which would allow any post-operative visits furnished 
after the day of the procedure to be billed separately as standalone 
visits by any practitioner who furnishes them. However, in 2015, 
through amendments made by section 523 of the Medicare Access and CHIP 
Reauthorization Act of 2015 (MACRA; Pub. L. 114-10, enacted April 16, 
2015), we were prohibited under section 1848(c)(8)(A) of the Act from 
implementing this finalized policy. Further, under section 
1848(c)(8)(B), we were required to collect data beginning in 2017 on 
the number and level of post-operative visits typically provided to 
patients during 10-day and 90-day global periods and to use this newly 
collected data and other data beginning in 2019 to improve the accuracy 
of global package valuation.
    In response to these requirements, over the past 9 years, we have:
     Initiated research contracts and implemented a data-
collection process to analyze data to understand the extent to which 
post-operative visits are furnished to patients and improve the 
accuracy of payment rates for the global surgical packages. This 
research contract was funded by CMS (HHSM-500-2014-00036I) and carried 
out within the Payment, Cost, and Coverage Program in RAND Health Care 
(``RAND'').
     Released three RAND reports (located at https://www.cms.gov/medicare/payment/fee-schedules/physician/global-surgery-data-collection) on the number of post-operative visits furnished 
during post-operative periods, with the most recent published finding 
that only 4 percent of expected post-operative visits in 10-day global 
packages and 38 percent of expected post-operative visits following 90-
day global packages were furnished to patients.
     Fielded and released a RAND report on a survey of selected 
global packages, collecting information related to the level and 
complexity of medical visits furnished during post-operative periods 
which found post-operative visits following common procedures were of 
similar length and intensity as corresponding separately billed E/M 
visits.
     Released two RAND reports on potential approaches for 
revaluing the global packages based on these findings.
     Internally, we analyzed the prevalence of transfer of care 
modifiers (-54 for surgical care only; -55 for post-operative 
management only; and -56 for

[[Page 97962]]

pre-operative management only) applied to global packages.
    More recently, in the CY 2023 PFS proposed and final rules, we 
reviewed the prior work and conversations around the accuracy of global 
package valuations and solicited comments from the public on (1) 
suggested strategies for revaluing these services, (2) information on 
how changes to healthcare delivery and payment may be impacting the 
relevance or accuracy of global package payments, and (3) possible 
impact of changes to global packages on health care access for 
beneficiaries (see 87 FR 69432 through 69437). In response to the 
comment solicitation in the CY 2023 PFS proposed rule, some commenters 
generally disagreed with our findings that the post-operative visits in 
the global packages are not performed as frequently as assumed in our 
valuation of global surgical packages. However, opposition from 
commenters was based on anecdotal assertions rather than alternative 
data. Many of these commenters' specific points restated earlier 
comments submitted in response to our request for feedback in the CY 
2020 PFS proposed rule on claims-based reporting of post-operative 
visits, survey findings on the level of visits, and potential 
revaluation approaches. Some commenters supported eliminating 10-day 
global package periods and requested that the AMA RUC review these 
services. However, these commenters also acknowledged that the AMA RUC 
review process could take years. In addition to the comments we 
received in response to the CY 2023 PFS proposed rule, we have received 
feedback over several years from many interested parties regarding the 
findings from claims-based reporting of post-operative visits and 
considered revaluation methodologies presented in our prior reports.
    Overall, we have continued exploring ways to improve the accuracy 
of valuation and payment for global packages to ensure appropriate 
payments to the practitioners providing pre-operative, surgery, and 
post-operative care to Medicare beneficiaries while considering 
feedback from interested parties. In addition, commenters have not 
proposed specific alternative strategies to revalue global surgical 
packages beyond what CMS has previously proposed.
    Separately, we continue to review approaches to better describe 
physicians' services in the context of the evolving care delivery 
landscape and to allow practitioners to furnish patient-centered care. 
Our review work includes considering care delivery models discussed 
with interested parties (and developed though our CMS Innovation Center 
work), reviewing our policies and billing requirements, identifying 
care elements that could serve as the building blocks for describing 
newer, impactful services, and seeking opportunities to reduce 
administrative burdens for practitioners while ensuring accurate 
payment. Through this lens, we have also recently reviewed our billing 
requirements and payment policies for the global packages, concurrent 
with continued analysis of the Medicare claims data.
    While ongoing, our review highlights opportunities for us to 
clarify or revise longstanding policy and billing instructions for 
global packages, using data and experience gathered over the last 
several years, consistent with our overall objectives to pay more 
accurately for services and to right-size the valuation of PFS services 
based on how practitioners currently furnish these services. In this 
final rule, we discuss proposals (1) to revise our transfer of care 
policy for global packages to address instances where one practitioner 
furnishes the surgical procedure and another practitioner furnishes 
related post-operative E/M visits during the global period, and (2) to 
develop a new add-on code that would account for resources involved in 
post-operative care provided by a practitioner who did not furnish the 
surgical procedure. In the proposed rule, we stated that we believe 
that clarifying the scope of global surgical packages, addressing the 
use of transfer of care modifiers, and documenting the time and 
resources involved when practitioners who do not furnish the surgical 
procedure provide post-operative care, are essential steps in aligning 
payment with the way in which surgical procedures are currently 
furnished as evidenced in our data, and would make meaningful progress 
toward more accurate payment for these services in particular and 
improve relative valuation for PFS services overall.
2. Clarifying the Scope of Global Surgical Packages
    We have valued global packages to include the surgical procedure 
and services furnished during the specified global period related to 
the surgical procedure when furnished by the practitioner who performs 
the surgery (hereafter in this section, the proceduralist) or by 
another practitioner in the same group practice as the proceduralist.
    Under current Medicare payment policy, certain services furnished 
during the global period by the proceduralist or by another 
practitioner in the same group practice may be separately billed with 
an appropriate modifier:
     Initial decision for surgery: E/M service billed with 
modifier -57 (Decision for Surgery).
     E/M services unrelated to the procedure: billed with 
modifier -24 (Unrelated E/M Service During a Global Period).
     Other services unrelated to the procedure (including 
underlying condition treatment, diagnostic tests, distinct procedures) 
not including care for complications/returns to the operating room: no 
modifier required.
     Failure of a less extensive procedure requiring a more 
extensive procedure: no modifier required.
     Organ transplant immunosuppressive therapy: no modifier 
required.
     Critical care services unrelated to surgery: billed with 
modifier -FT if in the post-operative period.
    Under our current policy, the scope of the global package extends 
to services furnished by the entire group practice of the 
proceduralist, including services furnished by practitioners in the 
group practice who are a different specialty from the proceduralist. In 
other words, the PFS payment for post-operative visits and other 
services furnished during the global period that are related to the 
surgical procedure and provided by the proceduralist or a practitioner 
in the same group practice as the proceduralist is bundled into the 
global package, and those services are not separately billable. If the 
proceduralist or a practitioner in the same group practice as the 
proceduralist wants to bill during the global period for a service 
furnished to the surgical patient, but unrelated to the global package, 
the correct modifier must be used to indicate that the service is not 
related to the global package. Without a modifier to indicate 
otherwise, during the global period for a global package, all E/M 
services furnished to the patient by the proceduralist or another 
practitioner in the same group practice as the proceduralist are 
presumed to be related to, and included in the payment for, the global 
package. Modifiers for separate payment (such as modifier -24) are 
required when services unrelated to the global package are billed by 
the proceduralist or a practitioner in the same group practice as the 
proceduralist during the global period.
    In general, except where a formal transfer of care modifier 
applies, a practitioner other than the proceduralist or a practitioner 
in the same group practice as the proceduralist can bill separately for 
an E/M visit for services

[[Page 97963]]

they furnish during the global period for a global package, including 
post-operative E/M visits related to the procedure. We established 
formal transfer of care modifiers to apply in cases where the work, 
time, and resources involved in furnishing services included in the 
global packages are split between the proceduralist (or another 
practitioner in the same group practice) and other practitioners 
providing related post-operative visits during the global period. Under 
our current transfer of care policy, transfer of care modifiers must be 
reported when a formal transfer of care arrangement is documented by 
both the proceduralist and a practitioner (or group practice) providing 
the related post-operative visits. Based on our analysis of Medicare 
fee-for-service claims data, these formal transfer of care modifiers 
are rarely used and, when they are, it is often with respect to certain 
ophthalmologic procedures (for example, cataract surgery).
3. Strategies To Address Global Package Valuation
    We recognize that we are precluded under section 1848(c)(8)(A) of 
the Act from revisiting the policy we established in the CY 2015 PFS 
final rule to revalue all 10-day and 90-day global packages to 0-day 
global packages (79 FR 67582 through 67591). Further, we note that 
transitioning all global packages to 0-day global periods could take 
several years and require substantial CMS resources (see CY 2014 PFS 
final rule (77 FR 44737 through 44738) for previous discussion). We 
have also considered revaluing 10-day and 90-day global packages to 
reflect the observed number of post-operative visits furnished to 
patients based on data we have collected over nearly a decade and note 
that this approach would be quicker to implement, assuming there would 
be straightforward ways to revalue the services with the data. However, 
interested parties have continued to express uncertainty about the 
validity of claims-based counts of post-operative visits. This 
uncertainty stems in part from CMS not having complete information 
surrounding the use of the transfer of care modifiers since they are 
not currently routinely used. The same interested parties also object 
conceptually to revaluing the 10-day and 90-day global packages using 
the ``building block'' framework, where each component of a service, 
including bundled post-operative visits, contributes to total valuation 
to align valuation with the number of post-operative visits typically 
provided to patients. Some interested parties have expressed larger 
concerns about the redistributive impacts across the PFS among 
specialties if we were to implement and revalue all global packages.
    We acknowledge the practical challenges involved in revaluing 10-
day and 90-day global packages, whether they remain as 10-day and 90-
day periods with fewer post-operative visits or are transitioned to 0-
day global packages, and continue to carefully consider how to best 
improve global package valuation given access to administrative claims 
data and other inputs that help us understand the scope of services 
provided to patients within global packages. Ultimately, we want to 
ensure payments to practitioners and the relative values assigned to 
global surgical packages are accurate and, to the extent possible, 
driven by real-world objective and updatable information regarding the 
relative resources involved in furnishing the services.
    For CY 2025, we focused on different aspects of our policy 
objectives for global packages and proposed policies (as discussed in 
greater detail later in this section), which are not mutually 
exclusive, to obtain information and allow for more accurate payment to 
reflect time and resources spent on post-operative care associated with 
the current global packages. We will continue to assess and monitor for 
potential future opportunities to improve our payment approach for the 
global packages more broadly.
    Additionally, in developing our proposed policies to pay more 
accurately for the global packages, we also considered whether, when, 
or how our policies may be affected when services are provided by the 
proceduralist, versus another practitioner who did not perform the 
procedure but is providing follow up care. We also recognized that 
there may be multiple practitioners in the same or different 
specialties in the same group practice and considered how our policies 
should apply to practitioners in a range of specialties within the same 
group practice. We sought comment on these considerations in the 
context of our proposed policies and welcomed feedback that may further 
inform our valuation of global surgical services and payment policy for 
global packages. Additionally, as we continue to better understand what 
services are being furnished in the global period, by whom, and how the 
global surgical packages are valued and billed, we sought comment on 
how remote monitoring and other types of new technologies represent new 
resource costs and/or produce efficiencies and effectiveness of post-
operative care. This information could be useful both for purposes of 
valuation for surgical and post-operative care, as well as for policies 
regarding when specific PFS codes should be reported during global 
periods for global packages.
    We sought public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters were generally supportive of our ongoing 
efforts to pay more accurately for global surgical services. Some 
commenters stated that finalizing these policies is an essential step 
in aligning payment with how surgical procedures are currently 
furnished and that these proposed policies would make meaningful 
progress toward more accurate payment for these services and improve 
relative valuation for PFS services overall.
    Many commenters requested that CMS update the values of the global 
surgical packages to reflect the revalued E/M visits with the full 
increase of work and physician time for the inpatient hospital and 
observation care visits (CPT codes 99231-99233, 99238, and 99239), and 
office visits (CPT codes 99202-99215) for each CPT code with a global 
period of 10 days and 90 days, in addition to updating the practice 
expense inputs. Several commenters suggested referring the 90-day 
global packages to the RUC for revaluation.
    A few commenters objected to the policy of global surgical packages 
entirely, or provided suggestions on how they could be revalued by CMS, 
for example, by shifting 10-day and 90-day global periods to 0-day 
global periods or aligning work RVUs with the amount of post-operative 
care typically provided to patients. Commenters also expressed concerns 
about unbundling post-operative visits from the global packages and the 
effect this could have on beneficiary cost-sharing and stated that the 
financial burden may cause patients to not seek follow up care.
    We received some specific feedback from commenters in response to 
our solicitation for comments specific to the provision of RPM and RTM 
during the global period. These commenters supported allowing separate 
billing and payment for RPM and RTM during the global period by the 
physician who performed the procedure. Commenters expressed that there 
is a shift to value-based care and these services do not replace an 
alternate form of care, rather they enhance care with additional 
capabilities that improve patient outcomes and ultimately lower 
Medicare costs. Other commenters

[[Page 97964]]

stated that good patient care should not be impeded by coding or 
billing restrictions. One commenter cautioned that the current coding 
and billing restrictions related to Medicare global payments for 
surgical services prevent the providers of these services from using 
remote monitoring technology.
    Another commenter suggested that CMS provide clarification related 
to post-operative visits that are furnished via telehealth or 
telecommunications and stated that follow up care can be done remotely 
and alleviates travel burden.
    Response: We appreciate the recommendation to consider a broader 
revaluation of global surgical packages as a critical next step to 
improving the accuracy of global surgical valuation and payment. As we 
note above, we consider improving the accuracy of global surgical 
package valuation and payment as a crucial, ongoing process. We view 
our proposals for the CY 2025 PFS rulemaking cycle as steps in this 
direction.
    While not directly related to our proposals, in public comments on 
the CY 2025 PFS proposed rule, many commenters stated that CMS should 
increase the valuation of the global surgical packages based on the 
previously revalued E/M visits. We have discussed these concerns in 
previous rules and consider this topic out of scope with respect to our 
proposals. We refer the commenters to our most recent discussion in the 
CY 2020 PFS final rule (84 FR 62858).
    We understand commenters' concerns about unbundling post-operative 
visits from the global packages and the effect this could have on 
beneficiary cost-sharing and potential financial burden that may cause 
patients to not seek follow up care. While we do not have the authority 
under section 1848 of the Act to waive beneficiary cost-sharing for 
services furnished under the PFS, we understand the potential for 
financial implications and will take this into consideration in our 
process for improving global payment accuracy in possible future 
rulemaking.
    We appreciate the commenters' support and insight describing the 
use of RPM and RTM in the post-operative global period and may consider 
these comments for future rulemaking. CMS considers improving the 
accuracy of global surgical package valuation and payment as a crucial, 
ongoing process. With regard to the provision of follow up visits via 
Medicare telehealth, we wish to clarify that when a separately billable 
E/M visit is furnished via Medicare telehealth during the global 
period, that visit is subject to the requirements of section 1834(m) 
and should be reported with the applicable Medicare telehealth place of 
service codes. For global surgeries, the applicable place of service 
(POS) code would be the one associated with where the procedure is 
performed.
4. Expand Applicability of Transfer of Care Modifiers
    We created transfer of care payment modifiers at the inception of 
the PFS. Under our current policy, these modifiers are required to be 
appended to the relevant global package code when billing for services 
that are within the scope of the global package (within the global 
period and related to the surgical procedure) only when the 
proceduralist and one or more other practitioners who are not in the 
same group practice as the proceduralist formally document their 
agreement to provide distinct portions of the global package.
    The following transfer of care modifiers describe the different 
portions of the global surgical package that could be provided by 
different practitioners:
     Modifier-54 Surgical Care Only: this modifier is appended 
to the relevant global package code to indicate that the proceduralist 
performed only the surgical procedure portion of the global package.
     Modifier-55 Post-operative Management Only: this modifier 
is appended to the relevant global package code to indicate that the 
practitioner performed only the post-operative management portion of 
the global package.
     Modifier-56 Pre-operative Management Only: this modifier 
is appended to the relevant global package code to indicate that the 
practitioner performed only the pre-operative portion of the global 
package.
    For each of these modifiers, the payment for the global package is 
adjusted based on the applicable percentage noted in the PFS Relative 
Value files https://www.cms.gov/medicare/payment/fee-schedules/physician/pfs-relative-value-files.
    As previously noted, we currently require the transfer of care 
modifiers (-56 for pre-operative care, -54 for procedures, and -55 for 
post-operative care) to be appended in cases where there is a formal 
documented transfer of care agreement, that is, ``in the form of a 
letter or an annotation in the discharge summary, hospital record, or 
Ambulatory Surgical Center (ASC) record'' (CMS Manual System, Pub 100-
04 Medicare Claims Processing, Transmittal 11287). In our recent 
analyses of 2022 Medicare claims data, we identified that these 
modifiers were rarely used other than for certain ophthalmology global 
packages. We found over 99 percent of claim lines for 90-day surgical 
procedures billed with modifier -54 were ophthalmology services 
(primarily cataract-related procedures). We also identified a 
difference in the number of claim lines annually for a given 90-day 
global package with modifier -54 and with modifier -55. In other words, 
there are sometimes more claim lines billed with modifier -54 than 
there are corresponding lines with modifier -55 and vice versa during a 
year. We note that modifier -56 (pre-operative management only) is only 
very rarely used in practice. These recent observations suggest (1) the 
overwhelming concentration of reported transfer of care modifiers is in 
ophthalmology procedures, and (2) a potential mismatch in billing for 
formal transfer of care cases between proceduralists and other 
practitioners providing post-operative care.
    While we recognize the benefits to continuity of care when the 
proceduralist also provides pre-operative and follow-up care for the 
procedure, we also recognize that it is not always feasible, or even 
perhaps typical practice for the same practitioner to furnish all 
portions of the global package; for example, in instances when the 
practitioner furnishing the procedure does not schedule a post-
operative visit(s) on the day of the procedure or plans for the patient 
to follow up with their primary care provider, or when the practitioner 
performing the surgery arranges alternative follow-up care because it 
would be difficult for the beneficiary to travel to return for follow-
up care. Because our current policies require use of the transfer of 
care modifiers only where there is a formal documented agreement 
between practitioners to provide specific portions of the global 
package, we believe there are many practical and potentially common 
circumstances under which the transfer of care modifiers would not be 
required or used.
    Beginning for services furnished in 2025, we proposed to broaden 
the applicability of the transfer of care modifiers for the 90-day 
global packages. We proposed to require the use of the appropriate 
transfer of care modifier (modifier -54, -55, or -56) for all 90-day 
global surgical packages in any case when a practitioner plans to 
furnish only a portion of a global package (including but not limited 
to when there is a formal, documented transfer of care as under current 
policy,

[[Page 97965]]

or an informal, non-documented but expected, transfer of care). 
Practitioners billing for a global package procedure code with modifier 
-54 and other practitioners in the same group practice as that 
practitioner would still be able to bill during the global period for 
any separately identifiable E/M services they furnish to the patient 
that are unrelated to the global package procedure. To do so, the 
practitioner would append modifier -24 to the claim line for the E/M 
service.
    We stated in the proposed rule that this proposed policy, which 
would be a first step toward improved valuation and payment would 
provide us with more accurate information on the resources involved in 
furnishing components of global surgical packages. This proposal would 
prevent duplicative Medicare payment for post-operative care because 
the global surgical package payment would be adjusted based on the 
appended modifier, and payment for post-operative care would not be 
made both as part of a global surgical package and through separately 
billed E/M visits. We also stated that we anticipate that the proposed 
policy would provide us with insight into changes in standards of 
practice and post-operative patient care for services that are not 
billed with transfer of care modifiers pursuant to our current policy 
(that is, services other than certain ophthalmology procedures).
    We acknowledge the potential challenge associated with anticipating 
whether other practitioners (or their group practices) will furnish 
post-operative care and, accordingly, appending the appropriate 
modifier when billing global package services.
    We are interested in understanding and sought comment on the 
circumstances under which practitioners in separate group practices 
furnish different portions of the care included in global packages, and 
what that means for reporting the transfer of care modifiers. While we 
made proposals related to the 90-day global periods beginning for 
services furnished in 2025, we also sought comment on whether we should 
consider proposing these changes for the 10-day global packages in 
future rulemaking.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Some commenters supported our proposal regarding the use 
of transfer of care modifiers. Several commenters stated that 
broadening the cases where transfer of care modifiers must be reported 
is an important step in improving the accuracy of payment for global 
surgical services. One commenter stated that broader use of transfer of 
care modifiers provides an important opportunity for CMS to emphasize 
the expectation that billing practitioners accurately indicate when a 
portion of care is shared with another provider to inform CMS on how 
the post-operative care is being furnished and to avoid inaccurate or 
fraudulent billing. Other commenters said this clarification of the 
transfer of care modifiers will align with CMS's objective of reducing 
administrative burden and ensuring accurate payments. Another commenter 
stated that CMS should collaborate with HHS leadership and the Office 
of the Inspector General to assess the use of the transfer of care 
modifiers and the impact of this policy change to ensure it has the 
intended effect on reducing duplicative Medicare payment for post-
operative care.
    Some commenters expressed concerns regarding our proposed policy 
and intent for expanding the scope for transfer of care modifier 
reporting, while others requested clarification regarding how CMS plans 
to identify an informal transfer of care.
    Commenters also expressed concern regarding the oversight and 
monitoring of modifier use through several aspects; namely the Recovery 
Audit Contractor (RAC), Medicare Administrative Contractors (MACs), and 
in consideration of the False Claims Act. Commenters stated that the 
modifiers were not well defined and are unnecessary, and thus their use 
would give rise to more frequent auditing and therefore not decrease 
costs overall. Commenters stated that the modifiers would require 
significant monitoring for accuracy and processes for appeal when 
inaccuracies are recognized, and their use would require extensive work 
and likely be ineffective.
    Response: We appreciate the commenters' support for our proposal to 
broaden the required use of the transfer of care modifiers. We agree 
that our proposal is a first step in an iterative process towards 
improving the accuracy of global surgical service valuation and 
payment.
    We acknowledge the concerns raised by commenters regarding the 
applicability of the transfer of care modifiers. We are finalizing the 
requirement that in instances when a practitioner only intends to 
perform the procedure and does not intend to provide the post-operative 
care, that the appropriate modifier (modifier-54) be applied.
    We appreciate commenters' concerns surrounding potential increased 
risk for audit and general oversight of these modifiers. We will 
continue to monitor these concerns by monitoring claims data and may 
address them in future rulemaking if needed. Additionally, we will 
continue to engage with interested parties for education and feedback 
as needed.
    Comment: Some commenters expressed concerns with the proposal to 
require that transfer of care modifiers be reported for both formal 
(per our current policy) and other transfers of care. Commenters 
suggested that CMS should maintain current policy and only require 
transfer of care modifiers for formal transfers of care, while others 
stated that these transfers do not occur often. Several commenters 
asked CMS to clarify between formal and other transfers of care, what 
it means when the transfer of care is `expected', and what steps the 
practitioner furnishing the follow up care would need to take to 
``accept'' transfer of care from the proceduralist. One commenter 
stated they were unclear on the application of the transfer of care 
modifiers when the transfer occurs in an emergent situation or in 
instances where practitioners may not have the tools to provide the 
post-operative care appropriately.
    Some commenters stated concerns regarding administrative burden 
associated with modifier use while others stated that the 
responsibility for the patient's post-operative care rests primarily 
with the operating surgeon and transferring may compromise care. Some 
commenters broadly criticized our rationale for expanding the 
application of the transfer of care modifiers, stating that in modern 
medical practice it is common for a surgeon to direct a patient's 
overall post-operative care while the patient also sees other 
practitioners, for example, a primary care practitioner. Commenters 
expressed concerns about the assignment of liability to either the 
surgeon or the practitioner assuming post-operative care under the 
proposed transfer of care modifier expansion and stated that CMS needs 
to clarify which clinician would assume liability for post-operative 
care.
    Response: We acknowledge that the commenter expressed uncertainty 
surrounding the application of the transfer of care modifiers in an 
emergent situation or in instances where practitioners may not have the 
tools to provide the post-operative care appropriately. As we stated 
previously, we acknowledge the potential challenge associated with 
anticipating whether other practitioners will furnish portions of the 
global package and, accordingly, appending the appropriate modifier

[[Page 97966]]

when billing global package services. We are finalizing that in 
instances when a practitioner only intends to perform the procedure and 
does not intend to provide the post-operative care, that the 
appropriate modifier (modifier-54) be applied. We note that when 
practitioners intend to bill a significant service that is medically 
reasonable and necessary separately outside a global package, standard 
Medicare billing rules continue to apply.
    Comment: One commenter stated that if the surgeon did not report 
modifier -54, the claim from a different physician or practice during 
the 90-day global period is denied as ``bundled'' unless it is an 
unrelated E/M service. Should the post-operative visit be correctly 
billed with modifier-55, they stated that allowing the physicians to 
communicate directly about surgical package component billing is a 
reasonable and far better solution than our proposed policy.
    Commenters expressed confusion about how modifier-55 should be 
appropriately used and documented under our proposal, as well as 
concern about the need for extensive education for operating and non-
operating practitioners to ensure appropriate use. Many commenters 
further questioned the applicability of the transfer of care modifiers 
to services that may be subject to the multiple procedure payment 
reduction (MPPR) and identified by modifier-51. Commenters asked CMS to 
only apply payment adjustments to the primary procedure when multiple 
procedures are performed and billed on the same day and not to adjust 
payment on the second and subsequent services reported with modifier-
51. Commenters stated that the MPPR already reduces payment for the 
second and subsequent service(s) and therefore, a reduction for the 
service to which a transfer of care modifier applies would be 
redundant.
    Several commenters stated that this proposal would add 
administrative burden and layers of complexity and also stated that the 
data received from the modifier usage could be misinterpreted or not 
actionable and possibly skewed with a high number of modifier-55. 
Commenters also expressed concerns about potential inaccuracies in 
claims data when utilization of procedure codes are reported by both 
the performing surgical specialty and the non-proceduralist managing 
the post-operative care. One commenter stated utilization may remain 
low due to a lack of clinician education. One commenter did not object 
to the use of the transfer of care modifiers but questioned how much 
the utilization of the modifiers would change based on the proposal. 
They stated that surgeons and hospitalists, for example, would not be 
discussing and adjudicating which party should get credit for which 
clinical services and urged CMS to continue to evaluate the gaps that 
exist between the goals of global periods and the results they achieve, 
and ensure that clinicians are accurately and appropriately credited 
for the services they provide. One commenter asked that we clarify how 
our proposed policy would affect the use of modifier-24 (Unrelated E/M 
Service During a Global Period) for services provided during the post-
operative period.
    Another commenter suggested that CMS should also take into 
consideration that even when an in-person post-operative visit does not 
take place, significant time is still spent on phone calls from the 
patient/caregiver and discussions with the patient's primary and 
referring health care providers and stated that the time spent should 
count towards the cumulative global period or be separately reimbursed.
    Several commenters recommended CMS delay implementation of the 
transfer of care modifier proposal until CY 2026. Commenters suggested 
that CMS implement the proposed transfer of care modifier changes in 
the CY 2025 PFS final rule for tracking purposes only and delay payment 
changes associated with these modifiers until CY 2026. Commenters 
stated a delay until CY 2026 would allow CMS more time to refine the 
policy so it does not create inadvertent burden for all clinicians 
involved in the billing of these modifiers and would allow for time to 
adjust to new workflows.
    Response: We appreciate and acknowledge these comments related to 
the implementation of the transfer of care modifiers proposal. However, 
broadly, we emphasize the need to balance any potential administrative 
burden on practitioners and billers with accurate valuation and payment 
for global surgical services. Without separate billing by the 
practitioners furnishing procedures and post-operative visits, when 
appropriate, Medicare may be making duplicative payment for some of the 
services included in global surgical package valuations (for example, 
by making an unmodified global surgery payment to the proceduralist in 
addition to separate payment for follow-up E/M services to other 
practitioners). Ultimately, the solution to both global surgical 
package valuation and practitioner burden may be to update the 
valuations to reflect the number of post-operative visits typically 
provided by the proceduralist or by another practitioner in the same 
group practice. Then, services outside the scope of global surgical 
packages (for example, those furnished by a practitioner who is not in 
the same group practice as the proceduralist) could be separately 
billed without the need to refer to the initial global surgical 
procedure.
    We clarify the purpose of our proposal and emphasize that our main 
focus was on scenarios where the proceduralist does not anticipate 
seeing the patient for any follow-up visits. In those instances, under 
our proposal, the proceduralist would append the transfer of care 
modifier, modifier-54. We acknowledge the concerns from commenters 
regarding the lack of clarity around the actions a practitioner may 
have to take to accept the transfer of the patient's care; however, 
this was not intended to be the primary focus of our proposed policy. 
For the reasons we discussed in the proposed rule, we believe the 
transfer of care modifier-54 is important to append even if the 
proceduralist does not formally transfer the patient's care, and we are 
finalizing our policy as proposed with regard to modifier-54.
    With regard to commenters' concerns about the liability of the 
surgeon performing the procedure or practitioner assuming post-
operative care, our proposal was not intended to affect the scope of 
services that a physician or other practitioner would otherwise 
furnish. Rather, we believe that the proposed policy would serve as a 
mechanism to reflect practice patterns that are already occurring. As 
we stated previously, we view this as a first step in ensuring global 
surgical package payment accuracy, and we are putting other tools in 
place (such as the add-on code, as discussed later) to appropriately 
account for time and resources and recognize practice patterns that are 
already occurring.
    We acknowledge the substantial confusion from commenters regarding 
the applicability of the other transfer of care modifiers, particularly 
modifier-55. After consideration of the comments received, we are not 
finalizing any changes to our current policy with regard to the use of 
modifier-55 or modifier-56. Because our policy for CY 2025 remains 
unchanged for formal transfers of care, we do not expect the 
practitioner `receiving' the patient through an informal transfer of 
care to use modifier-55. Practitioners other than the proceduralist 
and, if applicable, those outside the proceduralist's group practice, 
can continue to separately bill for post-operative services without the 
need to report a modifier.

[[Page 97967]]

    We thank the commenters for their suggestions regarding the MPPR 
modifier (modifier-51). Modifier-51 is the most commonly applied 
modifier under the PFS, and it typically reduces the payment of a 
second (and any subsequent) procedure if conducted on the same patient 
on the same day, most often with the most expensive procedure getting 
paid in full and additional procedures having their payment cut in 
half. It is a very common modifier for surgical services of all types, 
and we continue to believe that modifier-51 should continue to apply 
and payment for any subsequent surgeries should be reduced regardless 
of whether the proceduralist performed only the surgery and not the 
pre- or post-operative visits or performed the entire global surgery 
package.
    Comment: One commenter suggested CMS consult with ophthalmologists 
about how they have integrated the transfer of care modifiers into 
their clinical practice to see if there is guidance that could be 
developed to apply across specialties based on their practice of using 
these modifiers more frequently than other physicians.
    Response: We appreciate the commenter's suggestion.
    After consideration of the public comments, we are finalizing the 
proposal to broaden the applicability of transfer of care modifier-54 
for 90-day global packages as proposed. Beginning with services 
furnished in CY 2025, modifier-54 is required for all 90-day global 
surgical packages in any case when a practitioner plans to furnish only 
the surgical procedure portion of the global package (including both 
formal and other transfers of care). We are not finalizing any changes 
regarding the use of modifier-55 and modifier-56 for CY 2025. 
Modifiers-55 and -56 will continue to be billed exclusively in cases 
where there is a documented formal transfer of care.
    We will continue to assess the full range of modifiers for future 
consideration.
5. Payment for Global Packages
    In the proposed rule, we stated that under our current policy for 
global packages where the transfer of care modifiers are used (required 
only where there is a formal transfer of care arrangement), the total 
combined PFS payment made for the global package during the global 
period does not exceed the total global surgical package payment 
established for the procedure when billed without any transfer of care 
modifier. In general, we continue to believe this is the appropriate 
result when more than one practitioner furnishes portions of a global 
package. Under our proposal (which we are finalizing, as discussed 
previously), we would require that practitioners performing the 
surgical procedure but not intending to furnish the post-operative 
portions of a 90-day global service would appropriately append 
modifier-54, which would adjust the portion of the payment received to 
reflect that the proceduralist did not provide post-operative care.
    More specifically, as noted in the discussion earlier, the transfer 
of care modifiers correspond to three distinct portions of the global 
package (pre-operative services, the surgical procedure itself, and 
post-operative care). We have assigned a proportion of the global 
package payment to each portion of the service based on longstanding 
assumptions. We stated in the proposed rule that under our current 
policy, the payment for the entire global package is made to the 
billing practitioner unless a transfer of care modifier is included on 
the claim. Payment is only adjusted if a transfer of care modifier is 
included on the claim. We requested comments, as we further develop our 
payment policies for global packages, on how best to determine the 
appropriate payment proportions for the three portions of the global 
package, which impact payment to the different practitioners who may 
furnish different portions of the global surgical service.
    We noted in the proposed rule that 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, and 
anticipate revising the allocations through future rulemaking. We 
sought comment on potential approaches to revise these payment 
allocations and how they could be established to 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 payment to more 
appropriately reflect the resources involved in each portion. We stated 
in the proposed rule that we would appreciate and carefully consider 
recommendations from interested parties, including the AMA RUC, on what 
those allocation percentages should be, based on how the global package 
codes are valued and any 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 the basis for calculating new data-driven payment 
allocations.
    We received public comments in response to our comment 
solicitations. The following is a summary of the comments we received 
and our responses.
    Comment: A few commenters stated that the current component 
percentages published in the PFS were developed using magnitude 
estimation and cross-specialty scaling. These commenters stated they 
did not believe that any reverse engineering of work and time can be 
performed to develop a better percentage of pre-, intra- and post-
operative work than what is currently published in the PFS.
    Response: We appreciate the information received on the origins of 
allocation percentages. However, we note the development of the 
component percentages occurred three decades ago and that both PFS 
global surgical procedures and relative valuations have since changed.
    We also note that a series of analytic reports from RAND have found 
(located at https://www.cms.gov/medicare/payment/fee-schedules/physician/global-surgery-data-collection) that fewer post-operative 
visits are provided to patients compared to the number of visits 
reflected in the valuation of global packages, with variation across 
procedure services in the share of visits assumed to occur during 
global periods (as noted in the Physician Time File) versus the number 
of visits actually furnished. Both the RAND reports (located at https://www.cms.gov/medicare/payment/fee-schedules/physician/global-surgery-data-collection) and, in prior PFS rules, CY 2015 PFS final rule (79 FR 
67582 through 67591), and CY 2023 PFS final rule (see 87 FR 69432 
through 69437), CMS, note data from claims-based reporting of post-
operative visits could be used to exclude post-operative visit RVUs 
from total global package valuation on a code-by-code level.
    If our allocation of the global package payment based on the 
presence of transfer of care modifiers were to undervalue the surgical 
procedure portion or the post-operative care portion of the global 
package, we are concerned that we could unintentionally introduce 
incentives that influence current medical practice for transfers of 
care. This points to RAND's prior recommendation that we revalue global 
packages to reflect the actual number of post-operative visits provided 
to patients. After revaluation, separating the procedure and post-
operative payments would reflect observed data and mitigate any 
possible inappropriate incentives in place for practitioners to 
initiate transfers of care

[[Page 97968]]

and support use of transfer of care modifiers as medically appropriate. 
This approach has the advantage of anchoring the valuation of separate 
modifier-54 and -55 components using real-world information on post-
operative visits reported to CMS rather than on historical assumptions 
or current survey data reflecting estimates of the typical number and 
level of visits.
    In our internal review of the percentages assigned for the pre-
operative, surgical care, and post-operative portions of the global 
package, 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. HCPCS codes 77750 (Infusion or 
instillation of radioelement solution (includes 3-month follow-up 
care)), HCPCS code 77761 (Intracavitary radiation source applic 
simple), HCPCS code 77762 (Intracavitary radiation source applic 
intermed), and HCPCS code 77763 (Intracavitary radiation source applic 
complex) do not have assigned percentages in our RVU files. It is our 
understanding, however, that the MACs have local edits in place to 
ensure appropriate payment for these services when billed with the 
transfer of care modifiers. We sought comment on whether we should 
consider, first, whether these codes are appropriately categorized as 
90-day global package codes. If these are appropriately considered to 
be 90-day global package codes, we sought comment on what the assigned 
percentages should be for the pre-operative, surgical care, and post-
operative portions of the service.
    We did not receive public comments in response to this comment 
solicitation.
6. Post-Operative Care Services Add-on Code
    We recognize the importance of continuity in surgical and post-
operative care. However, we recognize that there are instances where 
post-operative care is not furnished by the proceduralist or another 
practitioner in the same group practice, or even by a practitioner who 
is in the same specialty as the proceduralist, despite there being no 
formal transfer of care. We also recognize that there is an extra level 
of complexity involved when a practitioner sees a patient post-
operatively after a surgical procedure performed by another 
practitioner in those circumstances. The practitioner providing the 
post-operative care may not be involved in creating the surgical plan 
and may not have access to the operative notes to know how the surgery 
went or be abreast of any particular considerations related to the 
procedure that may factor in medical care decisions for the post-
operative care. As such, we recognize that there are comparatively more 
resource costs incurred when a practitioner who did not furnish the 
surgical procedure in a global package provides the follow-up care. We 
proposed to address these scenarios, which can occur in a few different 
ways, by establishing a new add-on code that would account for 
resources involved in post-operative care for a global package provided 
by a practitioner who did not furnish the surgical procedure and does 
not have the benefit of a formal transfer of care. However, we noted in 
the proposed rule that when a patient is seen by practitioners in the 
same group practice or specialty as the surgeon, the same resources are 
not incurred during follow-up and therefore, the add-on code should not 
be billed by another practitioner in the same group practice as the 
practitioner who performed the surgical procedure, or in the same 
specialty as the practitioner who performed the surgical procedure. In 
the case of a practitioner providing follow up care who is of a 
different specialty and not within the same group practice as the 
proceduralist, researching the procedure to determine expected post-
operative course and potential complications may be needed, which would 
warrant using the add-on code. We also acknowledged that sometimes the 
proceduralist does not schedule the patient to follow up with them 
post-operatively and directs the patient to follow up with other 
practitioners as needed, such as with the patient's primary care 
provider. The patient may independently choose to follow up with their 
primary care provider or another practitioner based on other 
considerations such as convenience of the practice location or ease of 
scheduling. We stated that we understand and acknowledge that the 
patient can choose to see another practitioner without the knowledge of 
the practitioner who performed the procedure.
    To more appropriately reflect the time and resources involved in 
these kinds of visits, we proposed to make payment using a new add-on 
code to be billed with an office/outpatient E/M visit for post-
operative follow-up care during the global period of a global package 
to capture additional resources associated with practitioners who were 
not involved in furnishing the surgical procedure. This follow-up care 
may include, but is not limited to, obtaining and reviewing the 
surgical notes and surgical history, monitoring for signs and symptoms 
of infection, taking into account any considerations from the surgical 
procedure that may affect the medical care, and monitoring for any 
potential post-operative complications that may arise. It is often 
difficult in these circumstances for the practitioner who did not 
perform the surgical procedure to know how the wound looked after the 
procedure, and so it is more challenging to recognize possible changes 
that may have occurred since the time of the procedure (when this is 
something the operating surgeon would have been able to know). This new 
code would be billed by the practitioner who furnishes the post-
operative office/outpatient E/M visits when that practitioner is not 
the proceduralist and is not in the same specialty or group practice as 
the proceduralist. Documentation in the medical record must justify use 
of the add-on code and that the E/M visit was, as clinically understood 
by the reporting practitioner, related to a post-operative visit 
furnished during the 90-day post-operative period. As noted earlier, we 
proposed and are finalizing an expansion of our current policy for 
reporting the transfer of care modifiers-54 and -55 as a first step 
toward improving payment accuracy for the global packages to promote 
improved valuation and payment for these services. Instituting an add-
on code to capture the time and intensity of post-operative work absent 
a formal transfer of care would be an essential step in recognizing how 
the services are currently furnished and make meaningful progress 
toward `right-sizing' the structure of the global packages.
    Given the history of the global packages since data collection 
began, as specified in section 1848(c)(8) of the Act, and in 
consideration of our policies for post-operative care and our proposal 
requiring the use of the transfer of care modifiers in a broader set of 
circumstances, we stated in the proposed rule that we believe that the 
timing is appropriate to establish an add-on code and payment for post-
operative care provided in the office/outpatient setting by a 
practitioner other than the proceduralist (or another practitioner in 
the same specialty) to account for the additional time, intensity, and 
resources that are involved in post-operative care. We proposed a new 
HCPCS code, G0559, to capture the additional time and resources spent 
in providing follow up post-operative care by a practitioner who did 
not perform the surgical

[[Page 97969]]

procedure and who has not been involved in a formal transfer of care 
agreement.
    We proposed the following code and descriptor for the add-on code:
    G0559 (Post-operative follow-up visit complexity inherent to 
evaluation and management services addressing surgical procedure(s), 
provided by a physician or qualified health care professional who is 
not the practitioner who performed the procedure (or in the same group 
practice), and is of a different specialty than the practitioner who 
performed the procedure, within the 90-day global period of the 
procedure(s), once per 90-day global period, when there has not been a 
formal transfer of care and requires the following required elements, 
when possible and applicable:
     Reading available surgical note to understand the relative 
success of the procedure, the anatomy that was affected, and potential 
complications that could have arisen due to the unique circumstances of 
the patient's operation.
     Research the procedure to determine expected post-
operative course and potential complications (in the case of doing a 
post-op for a procedure outside the specialty).
     Evaluate and physically examine the patient to determine 
whether the post-operative course is progressing appropriately.
     Communicate with the practitioner who performed the 
procedure if any questions or concerns arise. (List separately in 
addition to office/outpatient evaluation and management visit, new or 
established)).
    We proposed that HCPCS code G0559 would be reported by a physician 
or other practitioner who did not perform the surgical procedure for a 
global package and provides related post-operative visits during the 
global period despite the absence of a formal transfer of care. We 
proposed that the add-on code (HCPCS code G0559) would only be reported 
with an office or other outpatient E/M visit for the evaluation and 
management of a new or established patient. We would expect the 
documentation in the medical record to indicate the relevant surgical 
procedure, to the extent the billing practitioner can readily identify 
it, in order to aid in our understanding of the post-operative care 
being furnished and when there is no transfer of care modifier appended 
on the claim.
    We proposed that this code could be billed only once during the 90-
day global period for the global package because we believe the 
practitioner will only have additional resource costs upon the first 
visit following the procedure. We proposed to assign a ZZZ global 
period payment indicator for HCPCS code G0559, as this allows the add-
on code to be billed during the post-operative time frame that applies 
to payment for each surgical procedure and, under our proposed policy, 
this code would be reportable with an E/M visit. The ZZZ global period 
payment indicator would identify this code as a service that is related 
to another service paid under the PFS and is always included in the 
global period of the other service.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Several commenters supported CMS's proposal to establish a 
new add-on code to capture the time and resources spent by a 
practitioner who is assuming post-operative care for a patient. Some of 
these commenters stated that the add-on code would support patient 
flexibility to seek follow up care from practices other than those that 
performed the surgery, such as when patients have had to travel long 
distances for their surgery. Several commenters stated that the policy 
would help address inadequate payment for post-operative care delivered 
by clinicians and primary care physicians. Another commenter stated 
that the add-on code would improve access to post-operative care. One 
commenter supported the introduction of an add-on code, but was 
concerned about the impact it would have on overall PFS budget 
neutrality.
    Response: We appreciate commenters' support of the proposed new 
add-on code. We agree our proposals in the CY 2025 PFS proposed rule 
would result in more accurate payment by helping to ensure that 
practitioners of other specialties, who do not have a formal transfer 
of care agreement with the surgeon, providing post-operative care are 
paid for the time and work involved in furnishing post-operative care. 
We also agree with commenters that patients' ability to choose their 
practitioner for post-operative follow up care would be positively 
impacted thus improving patients' access to care. We continue to 
believe that it is important to accurately value the relative resource 
costs involved in furnishing services that pertain to a procedure that 
are not explicitly described in the E/M code set.
    Comment: Several commenters voiced strong general opposition to the 
add-on code viewing our rationale as ignoring the expertise, training 
and continuity necessary to perform appropriate follow-up care for some 
procedures and skeptical that non-specialists could adequately learn 
the necessary information to provide appropriate follow-up care within 
minutes. Other commenters suggested that the proposed time was not 
sufficient to learn and address everything surrounding the post-
operative visits including complications. Some commenters supported the 
add-on code although some stated that the proposed code descriptor was 
ambiguous, poorly defined, and requested clarification regarding when 
it could be billed and that it should not be limited to the office/
outpatient E/M visits. Some commenters stated that the current E/M 
visit codes are sufficient to account for additional time and resources 
and that the revised E/M guidelines is robust and designed to capture 
the varying intensity of services while also reducing administrative 
reporting burdens. Commenters requested clarification as to which 
specialty can bill the new add-on code for post-operative work, whether 
multiple practitioners are able to bill, and, if so, how payment would 
be impacted. Commenters questioned whether patient consent is required, 
whether coordination between the surgeon and the non-surgeon 
practitioner billing G0559 is required, and some commenters questioned 
the regulatory oversight of the code being billed. Other commenters 
questioned whether use of HCPCS code G0559 would result in reliable 
data on the number of visits furnished by the operating surgeon or if 
it would confirm the care was related to the surgery.
    A few commenters pointed to CPT code 99024 and how it is currently 
available to report unpaid post-operative visits that are normally 
included in the surgical package and this could provide data that CMS 
can consider.
    Response: We appreciate commenters' concerns regarding the proposed 
add-on HCPCS code G0559 and lack of clarity surrounding when and by 
whom it can be billed. Under our proposal, HCPCS code G0559 would be 
reported by a physician or other practitioner who did not perform the 
surgical procedure within a global package but provided a related post-
operative visit during the global period despite the absence of a 
formal transfer of care agreement. We understand that there may be 
instances where there is no formal coordination (i.e., to require 
billing of the transfer of care modifier -55) or no coordination at all 
between the proceduralist and the practitioner who provides post-
operative care and expect that HCPCS code G0559 would be used in those 
instances. We are finalizing HCPCS code G0559 with modification such 
that

[[Page 97970]]

it may be billed by a practitioner of the same specialty as the 
proceduralist who is not in the same group practice as the 
proceduralist. We recognize that in some clinical scenarios, it is 
possible that post-operative care would be furnished only by a 
particular specialty. We believe it is plausible for a patient to 
follow up with another practitioner in the same specialty as the 
proceduralist in cases where a patient may travel for the procedure or 
in instances where a patient may opt to follow up with another 
practitioner of their choosing. Additionally, there may be instances 
when a surgeon may refer a patient to another practitioner specifically 
for post-operative care and they may be of the same specialty as the 
proceduralist. We continue to believe that when a patient is seen by 
practitioners in the same group practice regardless of their specialty, 
the same resources are not incurred during post-operative care as 
compared to when a patient is seen by a practitioner who is not in the 
same group practice. For this reason, the add-on code should not be 
billed by another practitioner in the same group practice as the 
practitioner who performed the surgical procedure. In cases where the 
practitioner furnishing the post-operative care is of the same 
specialty as the surgeon but not within the same group practice, they 
would be able to bill for HCPCS code G0559 given the time and resources 
that could be incurred by a practitioner who is providing post-
operative care when they themselves did not perform the actual 
procedure.
    As discussed above regarding the expanded policy for reporting 
transfer of care modifier -54, the new G-code, HCPCS code G0559, is a 
mechanism to account for practice patterns that are already happening 
where practitioners are spending time and resources with patients who 
are seen for a post-operative visit and to ensure those practice 
patterns are accurately reflected in coding and payment policy.
    We expect the add-on code will be reported with an office or other 
outpatient E/M visit for the evaluation and management of a new or 
established patient. We understand commenters' concerns surrounding not 
knowing which global surgical package was billed and how one may not 
know whether there was a transfer of care modifier appended on the 
claim. Practitioners can bill the G-code when applicable, regardless of 
whether the proceduralist billed for the procedure with or without 
transfer of care modifier -54. We specifically proposed the G-code to 
capture the work involved when a practitioner may not know the surgical 
history. We expect that this code would be billed only once per 
practitioner during the 90-day global period for the global package 
because we expect the patient to typically see one practitioner, either 
a specialist or their primary care physician for post-operative care.
    We appreciate the commenters pointing to CPT code 99024 and its 
applicability during the global surgical period. We note that CPT code 
99024 is billed by the proceduralist, or another practitioner in the 
same group, to indicate that a post-operative visit was performed 
during the global period and that CPT code 99024 is not separately 
payable. We clarify that CPT code 99024 should not be reported by 
practitioners in a different group practice than the proceduralist when 
billing for post-operative care.
    Regarding concerns surrounding program integrity and audit, as with 
implementation of any new billing code, we will be monitoring its use 
going forward, not just for data and other purposes, but also for 
program integrity reasons.
    After consideration of public comments, we are finalizing the 
proposed code descriptor with modification, as follows:
     G0559 (Post-operative follow-up visit complexity inherent 
to evaluation and management services addressing surgical procedure(s), 
provided by a physician or qualified health care professional who is 
not the practitioner who performed the procedure (or in the same group 
practice) and is of the same or of a different specialty than the 
practitioner who performed the procedure, within the 90-day global 
period of the procedure(s), once per 90-day global period, when there 
has not been a formal transfer of care and requires the following 
required elements, when possible and applicable:
    ++ Reading available surgical note to understand the relative 
success of the procedure, the anatomy that was affected, and potential 
complications that could have arisen due to the unique circumstances of 
the patient's operation.
    ++ Research the procedure to determine expected post-operative 
course and potential complications (in the case of doing a post-op for 
a procedure outside the specialty).
    ++ Evaluate and physically examine the patient to determine whether 
the post-operative course is progressing appropriately.
    ++ Communicate with the practitioner who performed the procedure if 
any questions or concerns arise. (List separately in addition to 
office/outpatient evaluation and management visit, new or 
established)).
7. Valuation for G0559 Add-On Code
    We noted in the proposed rule that the proposed valuation of HCPCS 
code G0559 is meant to capture the additional resource costs, including 
for visit complexity inherent to office/outpatient care associated with 
a post-operative visit that is not accounted for in the appropriate 
office/outpatient E/M base code billed by the physician or 
practitioner. Therefore, we stated that we believe that CPT code 90785 
(Interactive complexity (List separately in addition to the code for 
primary procedure)) serves as an appropriate reference for the purposes 
of valuing HCPCS code G0559. CPT code 90785 was created to capture 
additional work that occurs during diagnostic psychiatric evaluation, 
psychotherapy, psychotherapy performed with an E/M service and group 
psychotherapy sessions, and the service refers to specific 
communication factors that complicate the delivery of a psychiatric/
psychotherapy procedure. However, we also stated that we believe there 
may be relatively less work involved for G0559 when compared to the 
work of CPT code 90785, considering the amount of time needed to gather 
the operative history and conduct the elements discussed above. 
Therefore, we proposed a work RVU of 0.16, which represents 
approximately half of the assigned work for minutes of CPT code 90785. 
Additionally, we proposed a work time of 5.5 minutes (or half of the 11 
minutes established for CPT code 90785), personally performed by the 
billing practitioner including the elements discussed above during the 
post-operative E/M visit furnished during the global period, that is, 
no later than 90-days following a 90-day global code, respectively. CPT 
code 90785 has no direct PE inputs, and we proposed the same for HCPCS 
code G0559.
    To help inform whether our proposed valuation reflects the typical 
service, we sought comment on the typical time and intensity physicians 
and practitioners spend over and above a separately billed E/M visit 
when providing post-operative care to a patient when they did not 
perform the surgical procedure, gathering the surgical history as well 
as the pre-operative, intra-operative, and post-operative, and on the 
proposed service elements and the relative intensity compared to 
similar service elements of other CPT codes. For the individual 
practitioner, not having an intimate knowledge of the procedure itself 
and not having a before/after comparison to look at for the wound can 
all complicate their E/M visit. The proposed work RVUs are intended to

[[Page 97971]]

account for the additional relative resource costs in time and 
intensity in addition to those involved in the E/M visit.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Some commenters were generally supportive of the proposed 
valuation of HCPCS code G0559.
    Response: We thank the commenters for their support.
    Comment: Several commenters stated that the proposed work RVU and 
work time for HCPCS code G0559 was not sufficient to accurately reflect 
assessment of certain post-operative patients. One commenter stated the 
complexity of post-operative work for patients in some settings, such 
as tertiary care centers, may often exceed the ``typical'' post-
operative work in other settings. One commenter stated the shift to 
value-based care in the last decade has led to evolution in how many 
surgical procedures are managed, which requires a new comprehensive 
consideration.
    One commenter acknowledged that other specialists should be 
involved when a patient has relevant complications and the current 
procedural RVUs are not valued to include management of such 
complications, stating that current valuations only include routine 
post-operative care. One commenter had concerns about whether CPT code 
90785, primarily used in diagnostic psychiatric evaluation, is the 
appropriate reference for post-operative E/M care from a clinician that 
did not perform the index surgery.
    Response: We thank the commenters for sharing their concerns 
surrounding the valuation of the add-on code. While CMS agrees some 
providers (such as tertiary care centers) may provide more post-
operative care within global periods than typical compared to other 
settings, we note that the proposed add-on code, HCPCS code G0559, can 
only be valued to reflect the typical work time and resources for this 
service. We believe that the proposed work RVU and work time accurately 
capture the initial time and resources spent by a practitioner when 
they see the patient for a post-operative visit.
    Finally, we recognize that historically, the CPT Editorial Panel 
has frequently created CPT codes describing services for which we 
originally established G-codes and adopted them through the CPT 
Editorial Panel process. We note that we would consider using any newly 
available CPT coding to describe services similar to those described 
here in future rulemaking.
    For discussion of our expected utilization assumptions for this 
service, see the outline in the Regulatory Impact Analysis section of 
this final rule.
    After consideration of public comments, we are finalizing valuation 
for HCPCS code G0559 as proposed.

III. Other Provisions of the Proposed Rule

A. Drugs and Biological Products Paid Under Medicare Part B

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 redesignate 
subsection (h) as subsection (i) and insert a new subsection (h), which 
requires manufacturers to provide a refund to CMS for certain discarded 
amounts from a refundable single-dose container or single-use package 
drug (hereinafter referred to as ``refundable drug'') for calendar 
quarters beginning January 1, 2023.
    In the CY 2023 PFS final rule (87 FR 69710 through 69734), we 
finalized many policies to implement this provision. First, we 
finalized the requirement that billing providers and suppliers report 
the JW modifier for all separately payable drugs and biologicals 
(hereinafter referred to as ``drugs'') with discarded drug amounts from 
single use vials or single use packages payable under Part B, beginning 
January 1, 2023 (87 FR 69719). We also finalized the requirement that 
billing providers and suppliers report the JZ modifier for all such 
drugs with no discarded amounts beginning no later than July 1, 2023, 
and we stated that we would begin claims edits for both the JW and JZ 
modifiers beginning October 1, 2023 (87 FR 69718 through 69719). After 
the issuance of the CY 2023 PFS final rule, CMS published a JW Modifier 
and JZ Modifier Policy Frequently Asked Questions (FAQ) document \270\ 
to provide further guidance on the correct use of these modifiers.
---------------------------------------------------------------------------

    \270\ https://www.cms.gov/medicare/medicare-fee-for-service-payment/hospitaloutpatientpps/downloads/jw-modifier-faqs.pdf.
---------------------------------------------------------------------------

    Second, we adopted a definition of ``refundable single-dose 
container or single-use package drug'' at Sec.  414.902, which also 
specifies exclusions from this definition (87 FR 69724). These three 
exclusions are: radiopharmaceutical or imaging agents, certain drugs 
requiring filtration, and drugs approved by FDA on or after November 
15, 2021 for which payment has been made under Part B for fewer than 18 
months.
    Third, regarding reports to manufacturers, we specified that we 
would send reports (including information described in section 
1847A(h)(1) of the Act) for each calendar quarter, on an annual basis, 
to each manufacturer of a refundable drug (87 FR 69726).
    Fourth, we finalized how the refund amount will be calculated, 
which is specified in regulation at Sec.  414.940 (87 FR 69731). We 
stated we would issue a preliminary report based on available claims 
data from the first two quarters of CY 2023 to provide manufacturers 
information regarding discarded amounts of refundable drugs prior to 
the initial refund report (87 FR 69725). In these reports, which were 
sent in December of 2023, we included preliminary information on 
estimated discarded amounts of refundable drugs for each labeler code 
based on available claims data from the first 2 quarters of CY 2023 for 
any refundable drug for which discarded units were billed using the JW 
modifier. More information about discarded drugs, including the 
discarded drug refund and the JW and JZ modifier policy, can be found 
at https://www.cms.gov/medicare/payment/part-b-drugs/discarded-drugs.
    Fifth, we addressed drugs with unique circumstances for which we 
can, through notice-and-comment rulemaking, increase the applicable 
percentage otherwise applicable for determining the refund. 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. 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). Lastly, we adopted a dispute resolution 
process through which manufacturers can challenge refund calculations, 
and we established enforcement provisions, including manufacturer 
audits, provider audits, and civil money penalties required by statute 
(87 FR 69732 through 69734).
    In the CY 2024 PFS final rule (88 FR 79047 through 79064), we 
finalized the

[[Page 97972]]

date of the initial refund report to manufacturers, the date for 
subsequent reports, method of calculating refunds for discarded amounts 
in lagged claims data, method of calculating refunds when there are 
multiple manufacturers for a refundable drug, increased applicable 
percentages for certain drugs with unique circumstances, and a future 
application process by which manufacturers may apply for an increased 
applicable percentage for a drug, which would precede proposals to 
increase applicable percentages in rulemaking.
    We also finalized that drugs separately payable under Part B from 
single-dose containers that are furnished by a supplier who is not 
administering the drug are required to be billed with the JZ modifier, 
since we believe it is unreasonable to collect discarded drug data from 
beneficiaries. We were concerned that claim rejections may occur in the 
absence of a claims modifier to designate that a drug was dispensed, 
but not administered, by the billing supplier.
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. 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.
    We received one application for increased applicable percentage for 
CY 2025 from the manufacturer of Leukine[supreg] (sargramostim). 
Leukine[supreg] is a leukocyte growth factor that is primarily used in 
hematological malignancies to increase white blood cell counts. The 
applicant submitted the information required under Sec.  414.940(e)(1), 
including its justification for consideration for increased applicable 
percentage, and justification for the requested applicable percentage 
of 72 percent. The applicant did not submit FDA-approved labeling for 
the drug for the adjuvant uses described in the application (further 
described below in this paragraph) due to ongoing cancer vaccine 
adjuvant trials. The applicant states that there are several 
manufacturers in late-stage (Phase II and Phase III) development using 
Leukine[supreg] as a vaccine adjuvant in oncology indications, 
specifically in stimulating the immune response of dendritic cells when 
used alongside these vaccines. Cancer treatment vaccines are different 
from the vaccines that work against viruses (for example, influenza). 
Cancer treatment vaccines try to get the immune system to mount an 
attack against cancer cells in the body. Instead of preventing disease, 
they are meant to get the immune system to attack a disease that 
already exists.\271\ The applicant stated 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 March 2025 \272\ and the 
latest in March 2029.\273\ 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 suggested 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, 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.
---------------------------------------------------------------------------

    \271\ https://www.cancer.org/cancer/managing-cancer/treatment-types/immunotherapy/cancer-vaccines.html.
    \272\ https://clinicaltrials.gov/study/NCT04229979.
    \273\ https://clinicaltrials.gov/study/NCT05100641.
---------------------------------------------------------------------------

    As part of CMS's review of the application, we analyzed existing 
claims data from the first quarter of 2023 through the first quarter of 
2024 and found the percentage of units discarded for the Healthcare 
Common Procedure Coding System (HCPCS) code for Leukine[supreg] (J2820) 
ranged from 1.2 percent to 3.8 percent, which is below the applicable 
percentage of 10 percent. Since we did not yet know the impact of a new 
adjuvant indication with a type of immunotherapy commonly referred to 
as cancer vaccines \274\ on the current percentage of units discarded, 
we did not propose an increased applicable percentage. 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, and stated the applicant 
may reapply in a future application cycle when more information becomes 
available.
---------------------------------------------------------------------------

    \274\ https://www.cancerresearch.org/treatment-types/cancer-vaccines.
---------------------------------------------------------------------------

    The following is a summary of the comments we received and our 
responses.
    Comment: We received one comment related to the single application 
we received for an increased applicable percentage beginning in CY 
2025. The manufacturer of Leukine[supreg] agreed with our rationale, 
noting that we lacked sufficient information to determine whether 
Leukine[supreg] has unique circumstances that would prompt an

[[Page 97973]]

increase in the applicable percentage. The commenter indicated they 
will reapply in a future application cycle when more information 
becomes available.
    Response: We appreciate the commenter's feedback and agreement with 
why we did not propose an increased applicable percentage at this time 
for this product. Taking into account the commenter's support for our 
assessment of the application for increased applicable percentage 
application beginning in CY 2025 for Leukine[supreg], we are finalizing 
that we will not increase the applicable percentage for the drug at 
this time. As discussed above in this section, the application, 
including reapplication, for an increased applicable percentage is due 
by February 1 of the calendar year prior preceding the year in which 
the increased applicable percentage would apply, as described at Sec.  
414.940(e).
    We received several comments related to categories and products 
that commenters believe we should consider for increased applicable 
percentages for unique circumstances, as well as a general comment 
concerning the finalized applicable percentage for orphan drugs.
    Comment: We received comments recommending increases in the 
applicable percentages in the following scenarios:
    (1) an increased applicable percentage above 10 percent when 
treating pediatric indications with products packaged for adult dosing. 
The commenter did not suggest a specific applicable percentage increase 
and stated that some discarded amounts of drug is unavoidable with 
pediatric patients, as their dosing is typically based on adult 
requirements;
    (2) a 100 percent applicable percentage for all products with vial 
fill volumes smaller than 1 mL. The commenter stated that the small 
amount of drug remaining in vials after intravitreal injections is not 
``wastage'' and should not be subject to the refund requirement;
    (3) a 100 percent or the highest possible applicable percentage for 
all cell and gene therapies, without requiring manufacturers to submit 
applications justifying the exemption. The commenter noted that the 
unique characteristics of these therapies necessitate tailored 
approaches to drug availability and administration, requiring upfront 
preparation and sufficient drug supply. They also emphasized the 
importance of having the personalized medication available to avoid 
delays and potential complications, particularly in outpatient 
settings;
    (4) a unique circumstances category to exempt orphan drugs with a 
single indication from drug refund liability; and
    (5) a unique circumstances category to increase the applicable 
percentage for drugs that treat multiple indications across diverse 
patient types and characteristics (for example, weight-based dosing and 
dose titration).
    Response: As we discussed in prior rulemaking, we continue to 
believe it would be inappropriate for any product to have an applicable 
percentage of 100 percent, as stated in the CY 2024 PFS final rule (88 
FR 79053), or to expand the list of exclusions described in section 
1847A(h)(8)(B) of the Act by proposing an increased applicable 
percentage of 100 percent to drugs not excluded in such section. Such 
an applicable percentage would, in effect, exclude drugs from the 
refund liability altogether, creating a significant loophole that 
undermines the goal of minimizing discarded amounts. This could 
jeopardize the integrity of our policy framework. We also recognize 
that there may be other drug products with unique circumstances, and 
that an increased applicable percentage for these products would have 
to be determined through future notice and comment rulemaking, as 
required by section 1847A(h)(3)(b)(ii) of the Act. In the CY 2023 PFS 
(88 FR 79060), we finalized the application process for increased 
applicable percentages, including the application deadline of February 
1 of the calendar year preceding the year in which the increased 
applicable percentage would apply. We direct commenters to Sec.  
414.940(e) for further details and urge commenters seeking increased 
applicable percentages to utilize this request process for CY 2026 and 
subsequent years.
    Comment: We received a comment in support of the increased 
applicable percentage of 26 percent for certain orphan drugs, which we 
finalized last year in the CY 2024 PFS final rule.
    Response: We thank the commenter for its support.
    After reviewing all comments, we are not finalizing any changes to 
the applicable percentage for any drug, including those used in 
pediatrics, ophthalmology, cell and gene therapies, or drugs with 
multiple indications.
c. Clarifications for the definition of refundable single-dose 
container or single-use package drug
    (1) Exclusions for drugs for which payment has been made under Part 
B for fewer than 18 months
    Section 1847A(h)(8)(B)(iii) of the Act excludes from the definition 
of refundable drug a drug approved or licensed by FDA on or after 
November 15, 2021, and for which payment has been made under Part B for 
fewer than 18 months. This is codified in the definition of refundable 
single-dose container or single-use package drug in Sec.  414.902. In 
the CY 2023 PFS final rule (87 FR 69720 through 69731), we finalized 
that the 18-month period begins on the first day of the calendar 
quarter following the date of first sale as reported to CMS for the 
first National Drug Code (NDC) assigned to the HCPCS code. We expected 
that the first date of sale would approximate the date of payment of 
the first Part B claim, and we finalized that we would use the first 
date of sale because it is more operationally feasible than identifying 
the date when the first Part B claim was paid for a new drug. We did 
not receive any opposing comments to this approach when the policy was 
proposed (87 FR 69719 through 69724). Since then, however, we found one 
instance where the date of first sale for a drug, as reported to CMS, 
did not adequately approximate the first date for which payment was 
made under Part B.
    As such, we proposed that, while we would continue to use the first 
date of sale reported to CMS for most refundable drugs, we would use 
the date on which the drug is first paid under Part B if the date of 
first sale as reported to CMS does not adequately approximate the first 
date of payment under Part B due to an applicable National Coverage 
Determination (NCD). Under the proposed exception, the first date for 
which the drug was actually paid under Part B (not the date of first 
sale) would be used to determine the beginning of the 18-month 
exclusion period.
    As an example, we described in the case of Leqembi[supreg] 
(lecanemab-irmb), a drug targeting cerebral amyloid-beta plaques in 
Alzheimer's disease to receive FDA approval, the first date of sale 
reported to CMS via the Average Sales Price (ASP) portal was in January 
2023, as it was marketed and sold under accelerated approval granted on 
January 6, 2023. However, because Leqembi[supreg] was subject to the 
NCD for Monoclonal Antibodies Directed Against Amyloid for the 
Treatment of Alzheimer's Disease under coverage with evidence

[[Page 97974]]

development (CED),\275\ and because Leqembi[supreg] was initially 
marketed and sold under accelerated approval, Leqembi[supreg] coverage 
under Part B required the product to be furnished in a randomized 
controlled trial (RCT) conducted under an investigational new drug 
(IND) application.\276\ In public comments on the CY 2024 proposed 
rule, the manufacturer of Leqembi[supreg] explained that 
Leqembi[supreg]'s Phase III confirmatory trial was already fully 
enrolled and complete prior to FDA granting accelerated approval, and 
as such, there was no RCT in which to enroll Medicare beneficiaries. 
Leqembi[supreg] received traditional approval on July 6, 2023. The 
first Part B payments for Leqembi[supreg] did not occur until after 
traditional FDA approval of the drug on July 6, 2023, and Medicare paid 
for the drug beginning that month in CED studies using a registry.\277\ 
Under policies finalized in the CY 2023 PFS final rule, the 18-month 
exclusion period for Leqembi[supreg] would begin on April 1, 2023, 
which marks the first day of the calendar quarter after the drug's 
first date of sale as reported to CMS in January 2023. Based on this 
example, we believed that, in this situation, our current policy of 
using the date of first sale as reported in ASP data does not 
adequately approximate the beginning of the 18-month period for which 
payment has been made for the drug under Part B.
---------------------------------------------------------------------------

    \275\ Section 200.3 of the Medicare National Coverage 
Determinations Manual.
    \276\ https://www.cms.gov/medicare/coverage/coverage-evidence-development/monoclonal-antibodies-directed-against-amyloid-treatment-alzheimers-disease-ad.
    \277\ https://www.cms.gov/newsroom/press-releases/statement-broader-medicare-coverage-leqembi-available-following-fda-traditional-approval.
---------------------------------------------------------------------------

    As stated in the CY 2025 PFS proposed rule (89 FR 61768), we 
proposed that the 18-month exclusion for Leqembi[supreg] would be 
October 1, 2023, through March 31, 2025 (that is, 6 full calendar 
quarters following the date that the drug was first paid under Medicare 
Part B).
    Therefore, to maintain operational feasibility of this provision 
and better align the policy with statutory language when the date of 
first sale reported to CMS does not adequately approximate the date of 
first payment under Medicare Part B, we proposed to amend the 
exclusions in the definition of refundable single-dose container or 
single-use package drug at Sec.  414.902. We noted that we also 
proposed to revise the structure of the definition of Refundable 
single-dose container or single-use package drug and as part of that 
restructuring, we proposed that exclusions would be defined at 
paragraph (2) of the definition. Moreover, we proposed to add a fourth 
exclusion to paragraph (2) to address drugs for which the date of first 
sale does not adequately approximate the first date of payment under 
Part B due to an applicable NCD. We stated that we anticipate that 
instances of inadequately approximating the date of first payment under 
Medicare Part B based on the date of first sale due to an applicable 
NCD will be rare, as coverage of a drug under Part B is not often 
restricted by an NCD.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters supported our proposal regarding the 18-
month exclusion period, which uses the date a drug is first paid under 
Part B when the date of first sale reported to CMS does not adequately 
approximate the first date of payment under Part B due to an applicable 
NCD. Three commenters recommended creating a new unique circumstance 
category to extend the exclusionary period up to 36 months for 
manufacturers actively conducting post-marketing product formulation 
optimization efforts. They stated that an additional 18 months would 
accommodate the typical development, testing, and production of new 
drug delivery systems or vial sizes.
    Response: We appreciate the support from the commenters regarding 
the clarification of the 18-month exclusion period. Section 
1847A(h)(8)(B)(iii) of the Act excludes from the definition of 
refundable single-dose container or single-use package drug those drugs 
or biologicals approved by FDA on or after November 15, 2021 for which 
payment has been made under Part B for fewer than 18 months. The 18-
month period is therefore prescribed in the statutory text, and as 
such, we do not have flexibility to extend it to 36 months to 
accommodate post-marketing product formulation optimization efforts.
    Comment: One commenter requested that CMS notify manufacturers when 
the first Part B payments are made as this would allow manufacturers to 
be aware of the starting point for any potential 18-month exclusion 
period.
    Response: Although drugs described in section 1847A(h)(8)(B)(iii) 
of the Act are excluded from the definition of refundable single-dose 
container or single-use package drugs, we agree that providing 
information regarding discarded amounts from such drugs would be 
beneficial to the manufacturers during the 18-month exclusion period. 
In the CY 2023 PFS final rule (87 FR 69726), we finalized that an 
annual refund report would provide information on the total number of 
units of the billing and payment code of drugs meeting this exclusion 
(and not meeting any other exclusion in section 1847A(h)(8)(B) of the 
Act) that were discarded during the 18-month exclusion period. We 
reiterate that, in most cases, the first date of sale indicated in the 
annual refund report would approximate the date of payment for the 
first Part B claim (87 FR 69719 through 69724). However, for refundable 
drugs where the date of first sale does not approximate the first date 
of payment under Part B, the annual refund report will include them 
after the first Part B claim for those drugs is paid.
    Comment: One commenter recommended the use of consistent language, 
noting that the regulatory text describing the standard 18-month 
exclusion period uses the term ``has been marketed (as reported to 
CMS),'' while the proposed new paragraph for drugs subject to an NCD 
uses ``date of first sale.''
    Response: We thank the commenter for the feedback. We agree with 
the commenter that the regulation text should use consistent 
terminology. Therefore, we are finalizing a modification to the 
regulatory text at Sec.  414.902 describing the 18-month exclusion for 
drugs subject to an NCD from ``date of first sale as reported to CMS'' 
to ``date the drug was first marketed (as reported to CMS)'' to use 
consistent terminology throughout the definition of refundable drug.
    After considering public comments, we are finalizing that we will 
amend the exclusions in the definition of refundable single-dose 
container or single-use package drug at Sec.  414.902 as proposed.
(2) Clarification for identifying single-dose containers
    In the CY 2023 PFS final rule (87 FR 69719), we finalized that the 
definition of refundable drug would apply to drugs paid under Medicare 
Part B (that is, under any payment methodology) that are described in 
FDA-approved labeling as being supplied in a ``single-dose'' container 
or ``single-use'' package. This definition also includes drugs 
described in FDA-approved labeling as a part of a ``kit'' that is 
intended for a single dose or single use. We also finalized that for a 
drug to meet the definition of refundable drug, all NDCs assigned to 
the drug's billing and payment code must be single-dose containers, as 
described in each product's labeling.
    During our analysis in identifying refundable drugs for the 
preliminary

[[Page 97975]]

reports (which are based on available JW modifier data from the first 
and second quarters of 2023), we learned that some product labeling 
\278\ did not specify the package type terms (for example, whether the 
product was supplied in a single-dose or single-use package or a 
multiple-dose preparation). This might occur in drugs that were 
approved prior to October 2018 when FDA issued guidance \279\ regarding 
the selection of the appropriate package terms to address bacterial and 
viral infections among patients resulting from improper use of single-
dose containers such as vials, ampules, and prefilled syringes. The 
guidance defines a single-dose container as a container of a sterile 
medication for parenteral administration (injection or infusion) that 
is not required to meet the antimicrobial effectiveness testing 
requirements. The guidance further states a single-dose container is 
designed for use with a single patient as a single injection/infusion 
and, when space permits, the label should include the correct package 
type term and appropriate discard statements. Discard statements 
include instruction for discarding or, if appropriate, storage guidance 
for drugs remaining after preparation. The guidance defines a multiple-
dose container as a container of sterile medication for parenteral 
administration that has met antimicrobial effectiveness testing 
requirements or is excluded from such testing requirements. In 
addition, the guidance defines the term ``single-patient-use'' 
container, which describes a package that contains multiple doses of an 
injectable medical product that is intended to be used in a single 
patient.
---------------------------------------------------------------------------

    \278\ ``Product labeling'' in this document means the container 
label, carton labeling, or prescribing information.
    \279\ https://www.fda.gov/media/117883/download.
---------------------------------------------------------------------------

    Some drugs approved prior to the release of this guidance (that is, 
those prior to October 2018) and certain orphan drugs did not include 
the package type terms and explicit discard statements. Examples of 
drugs without the package type terms and discard statements included 
certain manufacturers of digoxin injection (approved in 1954), oxytocin 
injection (approved in 1980), diphenhydramine hydrochloride injection 
(approved in 1982), phenobarbital sodium injection (orphan drug without 
FDA approval). Several of these drugs were available in small 
containers with only a few mL of labeled drug in the containers.
    Based on these reasons, we proposed to include injectable drugs 
with a labeled volume of 2 mL or less and that lack the package type 
terms and explicit discard statements in their product labeling to be 
single-dose containers in the definition of refundable single-dose 
container or single-use package drugs. We identified 2 mL as a 
threshold for this proposal for several reasons. For intramuscular 
administration, the maximum volume administered at one time for 
diphenhydramine hydrochloride and digoxin is less than or equal to 2 
mL. We also noted that for adults, the maximum volume \280\ for 
intramuscular administration is typically limited to 3 mL. For drugs 
administered intravenously and supplied in containers containing 2 mL 
or less, like digoxin and phenobarbital sodium, dosages are calculated 
based on body weight, potentially leading to discarded amounts. We 
believe that preparation of these drugs would likely be used for a 
single dose based on the range of dose sizes for these drugs and the 
amount of drug in the container. In other words, it is unlikely that 
more than one dose could be prepared from the amount of drug in the 
container.
---------------------------------------------------------------------------

    \280\ Open Resources for Nursing (Open RN); Ernstmeyer K, 
Christman E, editors. Nursing Skills [internet]. 2nd edition. Eau 
Claire (WI): Chippewa Valley Technical College; 2023. Chapter 18 
Administration of Parenteral Medications. Available from https://www.ncbi.nlm.nih.gov/books/NBK596739/.
---------------------------------------------------------------------------

    Another category of drugs approved before 2018 that lack discard 
statements is drugs contained in ampules (also spelled as ampoules or 
ampuls, hereinafter referred to as ``ampules''). The term ampule is an 
airtight vial made of glass, plastic, metal, or any combination of 
these materials.\281\ Examples of drugs currently contained in ampules 
include epinephrine injection (approved in 1939), lidocaine 
hydrochloride injection (1948), dicyclomine hydrochloride injection 
(1950), digoxin injection (1954), chlorpromazine hydrochloride 
injection (1957), fentanyl citrate injection (1968), promethazine 
hydrochloride injection (1973), alprostadil injection (1981), 
nalbuphine hydrochloride injection (1993), and tacrolimus injection 
(1994). Drugs contained in ampules are accessed by breaking the 
concaved part (``the neck''), and the content should be passed through 
a sterile filter to remove any residual glass particles.\282\
---------------------------------------------------------------------------

    \281\ 40 CFR 273.9.
    \282\ Pharmaceutical Compounding--Sterile Preparations. USP-NF 
2023. November 1, 2023.
---------------------------------------------------------------------------

    Therefore, we also proposed to amend the definition of refundable 
single-dose container or single-use package drug to include drugs 
contained in ampules and for which there is no discard statement. We 
proposed to classify drugs supplied in ampules to be drugs in single-
dose containers for purposes of this discarded drug policy because this 
approach will be consistent with the description of single-dose 
container in the October 2018 FDA guidance. We noted that some drugs 
contained in ampules may be excluded from the definition of refundable 
drug under section 1847A(h)(8)(B)(ii) of the Act because dosage and 
administration instructions included in the product labeling require 
filtration during the drug preparation process, prior to dilution and 
administration, and require that any unused portion of such drug after 
the filtration process be discarded after the completion of such 
filtration process. This exclusion will still be applicable for ampules 
that can demonstrate that they meet that exclusion. However, this is 
not the case for the product labeling of all drugs contained in 
ampules.
    In summary, we proposed to amend the definition of Refundable 
single-dose container or single-use package drug at Sec.  414.902 by 
including ``single-patient-use container'' as a package type term and 
adding three types of products that may be considered refundable 
single-dose container or single-use package drugs under paragraph (1). 
These are:
    (1) Product furnished from a single-dose container or single-use 
package based on FDA-approved labeling or product information.
    (2) Product furnished from an ampule for which product labeling 
does not have a discard statement or language indicating the package 
type term, like ``single-dose container,'' ``single-use package,'' 
``multiple-dose container,'' or ``single-patient-use container''.
    (3) Product furnished from a container with a total labeled volume 
2 mL or less for which product labeling does not have language 
indicating the package type term, like ``single-dose container,'' 
``single-use package,'' ``multiple-dose container,'' or ``single-
patient-use container''. As noted above, we also proposed to revise the 
organization of this definition in the regulatory text.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: We received many comments expressing general support for 
our proposals to include injectable drugs with a labeled volume of 2 mL 
or less that lack package type terms and explicit discard statements in 
their product labeling, as well as drugs contained in ampules without 
discard statements, in the definition of refundable single-dose 
container or single-use package drugs.

[[Page 97976]]

    Response: We thank the commenters for their support.
    Comment: One commenter stated that ``many'' drugs with a labeled 
volume of 2 mL or less do not specify whether they are single-dose 
container or single-use package. The commenter added that these drugs 
often require administrative equipment from different suppliers, which 
contribute to the discarding of a portion of the drug during 
administration. The commenter expressed concern that the proposal may 
incentivize manufacturers to produce formulations requiring in-office 
dilution to avoid potential rebate [sic] for discarded amounts.
    Response: We disagree with the commenter's claim that there are 
``many'' drugs with a labeled volume of less than 2 mL that lack 
package type terms and explicit discard statements in their labeling. 
The commenter did not specifically name ``many'' drugs but cited one 
study utilizing botulinum exotoxin A (that is, botulinum toxin type A). 
All four commercially available botulinum toxin type A products 
mentioned in the study cited by the commenter are supplied in single-
dose vials and instruct users to discard any unused remaining 
solution.\283\ Additionally, these four products require dilution 
without filtration to achieve the various final concentrations, which 
range from 1.25 units per 0.1 mL to 50 units per 0.1 mL.
---------------------------------------------------------------------------

    \283\ https://dailymed.nlm.nih.gov/dailymed/drugInfo.cfm?setid=485d9b71-6881-42c5-a620-a4360c7192ab.
---------------------------------------------------------------------------

    While we acknowledge that additional administrative equipment may 
be required to achieve a final product volume of less than 2 mL, this 
dilution process does not exempt these products from discarded drug 
refund requirements. We reiterate that drugs or biologicals that 
require filtration prior to dilution and administration are exempt from 
discarded drug refund requirements, as described in section 
1847A(h)(8)(B)(ii) of the Act. Furthermore, we have not seen evidence 
that the equipment used during drug preparation results in discarded 
amounts exceeding 10 percent.
    Comment: One commenter raised concern about the proposed change to 
classify injectable drugs with a label of 2 mL or less as single-dose 
containers, noting that this would impose an administrative burden to 
retinal care specialists who commonly administer such drugs.
    Response: We disagree with the commenter regarding the 
administrative burden on retinal care specialists who frequently 
administer drugs with a labeled volume of 2 mL or less. We note that 
the clarification we are making in this final rule as to injectable 
drugs with a labeled volume of 2 mL or less as single-dose containers 
applies only to those without package type terms or explicit discard 
statements in their product labeling. While many ophthalmic drugs have 
a labeled volume of 2 mL or less, many of these ophthalmic drugs 
include package type terms and explicit discard statements in their 
labeling; therefore, this proposal does not apply to them.
    Comment: A few commenters requested CMS publish NDC codes for drugs 
identified as meeting the definitions of single-dose containers or 
single-use packages, as well as multiple-dose containers, on at least a 
quarterly basis. They noted that regular publication of NDC codes would 
help providers in verifying and reporting discarded amounts accurately.
    Response: Drugs and biologicals payable under Medicare Part B are 
billed using billing and payment codes (that is, HCPCS codes) rather 
than the NDC of each individual product. CMS has published a non-
exhaustive list of specific billing and payment codes assigned 
exclusively to single-dose containers or single-use packages on the 
Discarded Drug Refund website,\22\ having manually identified each 
code. An analysis to definitively identify an exhaustive list of all 
NDCs that would be accurate in real time is not operationally feasible 
at this time. Because new drugs, including therapeutically equivalent 
drugs and those with new formulations are continuously introduced, we 
intend to update this list periodically as they become available and as 
is feasible.
    Comment: One commenter objected to the proposal to include 
injectable drugs with a labeled volume of 2 mL or less, which lack 
package type terms and explicit discard statements, in the definition 
of refundable single-dose containers or single-use package drugs. The 
commenter argued that the 2 mL threshold is arbitrary and would result 
in the misclassification of numerous drugs. The commenter recommended a 
comprehensive review of a broader range of injectable drugs, in 
consultation with physicians who administer these drugs, to determine 
if 2 mL is an appropriate threshold.
    Response: We disagree with the commenter that the 2 mL threshold is 
arbitrary. According to FAQs \284\ published by the Joint Commission in 
response to the question, ``What are the Joint Commission's 
expectations for managing multi-dose vials of sterile, injectable 
medication?'', multiple-dose vials are labeled as such by the 
manufacturer and typically contain an antimicrobial preservative to 
help prevent the growth of bacteria. If a multiple dose vial has been 
opened or accessed (for example, needle-punctured), the vial should be 
dated with the last date that the product should be used (expiration 
date) and discarded within 28 days unless the manufacturer specifies a 
different (shorter or longer) date for that opened vial. An exception 
to this guidance on the presence of preservative applies to certain 
vaccines and allergenic product described in 21 CFR 610.15(a).\285\ In 
contrast, single-dose or single-use vials are labeled as such by the 
manufacturer and typically lack an antimicrobial preservative. As a 
result, once the necessary amount is withdrawn, any remaining contents 
in the single-dose or single-use vials must be discarded.
---------------------------------------------------------------------------

    \284\ https://www.jointcommission.org/standards/standard-faqs/
behavioral-health/medication-management-mm/000001529/
#:~:text=If%20a%20multi%2Ddose%20has,date%20for%20that%20opened%20via
l.
    \285\ https://www.ecfr.gov/current/title-21/part-610/section-610.15#p-610.15(a).
---------------------------------------------------------------------------

    When a drug lacks explicit package terms or discard statement, we 
proposed to treat it as a single-dose container. If a drug does not 
contain a preservative or include labeling about stability and 
sterility after being opened, it is reasonable to infer that it is not 
intended to be used as a multiple-dose container. In the absence of 
such critical information, treating the product as single-dose 
container minimizes the risk of contamination from multiple entries, 
which could compromise patient safety. This conservative approach 
aligns with the principle of first, do no harm,\286\ ensuring that 
safety is prioritized in the face of uncertainty.
---------------------------------------------------------------------------

    \286\ https://www.cms.gov/blog/first-do-no-harm.
---------------------------------------------------------------------------

    Initially, we considered injectable drugs that lacked the package 
type terms and explicit discard statements, regardless of their labeled 
volume, to be packaged in single-dose containers. However, given that 
many of these drugs have a labeled volume of 2 mL or less and typically 
yield no more than one dose from the container, we intentionally 
proposed to narrow the scope of our policy to only drugs with a labeled 
volume of 2 mL or less. We proposed this narrowing in an effort to 
mitigate any unintended consequences from this policy change. We note 
that this clarification would apply to very few drugs, most likely 
those approved by the FDA before 2018, as most drugs approved since the 
publication of FDA

[[Page 97977]]

guidance include package type terms and discard statements.
    Comment: One commenter inquired how refunds will be calculated when 
a drug subject to the discarded drug refund policy no longer meets the 
definition of refundable drug mid-way through a quarter. Specifically, 
the commenter asked on which date CMS would consider a single source 
drug to become a multiple source drug, thereby no longer meeting the 
definition of refundable drug.
    Response: CMS internally evaluates drugs each quarter to determine 
whether each is a single-source drug or biological (as defined in 
section 1847A(c)(6)(D) of the Act) or multiple source drug (as defined 
in section 1847A(c)(6)(C) of the Act). That is, for a given calendar 
quarter, a drug cannot be considered both a single source drug and a 
multiple source drug. When a drug that is rated as therapeutically 
equivalent in FDA's Orange Book \287\ to a previously single source 
drug is newly marketed and sold, and partial quarter data is reported 
to CMS for the therapeutically equivalent product in a quarter, then 
that data is included in the calculation of the volume-weighted ASP-
based payment limit for the quarter. The therapeutically equivalent 
product is crosswalked to the same billing and payment code as the 
previously single source drug. Therefore, both drugs become multiple 
source drugs for that entire quarter. It follows that, if a refundable 
drug becomes multiple source drug mid-way through a quarter, it would 
be a multiple source drug for the entire quarter and would not meet the 
definition of refundable drug for the quarter, provided that both the 
original product (likely the reference listed drug) and one or more 
therapeutically equivalent products are marketed and sold in the same 
quarter.
---------------------------------------------------------------------------

    \287\ https://www.fda.gov/drugs/drug-approvals-and-databases/approved-drug-products-therapeutic-equivalence-evaluations-orange-book.
---------------------------------------------------------------------------

    For example, if a therapeutically equivalent product to a single 
source drug is first marketed and sold in May 2024, the original 
product (that is, the single source drug) would be reclassified as a 
multiple source drug starting in the second quarter of 2024. Even 
though the therapeutically equivalent product was introduced mid-way 
through the quarter, both drugs would be treated as multiple source 
drugs for the entire second quarter. As a result, starting in the 
second quarter of 2024 and continuing thereafter, the original drug 
would no longer be classified as a single source drug or meet the 
definition of a refundable single-dose container or single-use package 
drug. This change exempts the drug from the discarded drug refund 
policy for that quarter and beyond.
    In contrast, if all therapeutically equivalent products are no 
longer sold or marketed and only the reference listed drug remains, 
which was previously classified as a multiple source drug, the 
reference listed drug would be reclassified as a single source drug. 
However, if the reference listed drug is no longer sold or marketed and 
only one therapeutically equivalent product remains, the 
therapeutically equivalent product would continue to be classified as a 
multiple source drug because it was approved by the FDA under an 
abbreviated new drug application (ANDA). According to section 
1847A(c)(6)(D)(ii) of the Act, a single source drug is defined as a 
drug approved by the FDA under a new drug application.
    After consideration of public comments, we are finalizing the 
amendment of the definition of Refundable single-dose container or 
single-use package drug at Sec.  414.902 as proposed.
(3) Skin substitutes
    As discussed in the CY 2023 PFS final rule (87 FR 69650 through 
69655), CMS aims to create a consistent coding and payment approach for 
the suite of products currently referred to as skin substitutes. In the 
CY 2024 PFS final rule (88 FR 79060 through 79061), we finalized that 
billing and payment codes that describe products currently referred to 
as skin substitutes were not counted for purposes of identifying 
refundable drugs for calendar quarters during 2023 and 2024.
    While we continue to consider changes to the Medicare Part B 
payment policies for these products, we are finalizing, similar to last 
year, that billing and payment codes that describe products currently 
referred to as skin substitutes will not be counted for the purposes of 
identifying refundable drugs for calendar quarters in 2025. A more 
detailed discussion of potential future billing approaches for skin 
substitute products, including comments and responses, is provided in 
section II.K of this final rule.
d. Discarded amounts
    Effective January 1, 2017, providers and suppliers were required to 
report the JW modifier on all claims that bill for drugs separately 
payable under Medicare Part B with unused and discarded amounts (that 
is, discarded amounts) from single-dose containers or single-use 
packages. In the CY 2023 PFS, we finalized the requirement to use the 
JW modifier for single-dose container drugs that are separately payable 
under Part B, and we finalized the use of the JW modifier (or any 
successor modifier that includes the same data) to identify discarded 
billing units of a billing and payment code for the purpose of 
calculating the refund amount as described in section 1847A(h)(3) of 
the Act. In that final rule, to align with the JW modifier policy, we 
also finalized the requirement that, beginning July 1, 2023, the JZ 
modifier is required when there are no discarded amounts of a single-
dose container drug for which the JW modifier would be required if 
there were discarded amounts.
    In the CY 2023 PFS final rule (87 FR 69723), we discussed the 
applicability of the JW and JZ modifiers to drugs that are not 
administered by the billing supplier, including drugs furnished through 
a covered item of DME that may be administered by the beneficiary. In 
such cases, we stated that the reporting requirement does not apply to 
drugs that are self-administered by a patient or caregiver in the 
patient's home. In the JW Modifier and JZ Modifier Policy FAQ document 
\288\ released on January 5, 2023, we reiterated that suppliers who 
dispense but do not actually administer a separately payable drug are 
not expected to report the JW or JZ modifier.
---------------------------------------------------------------------------

    \288\ https://www.cms.gov/medicare/medicare-fee-for-service-payment/hospitaloutpatientpps/downloads/jw-modifier-faqs.pdf.
---------------------------------------------------------------------------

    Then, in the CY 2024 PFS final rule (88 FR 79062), we finalized a 
change to this policy, such that drugs separately payable under Part B 
from single-dose containers that are furnished by a supplier who is not 
administering the drug be billed with the JZ modifier. This meant that 
the JW modifier would not be used on these claims. As we stated in that 
rule, in the absence of a claims modifier to designate that a drug was 
dispensed, but not administered, by the billing supplier (as finalized 
in the CY 2023 PFS), we were concerned that claims rejections may 
occur. Therefore, this change in policy required the JZ modifier on all 
such claims to ensure claims rejections did not occur unnecessarily. On 
October 16, 2023, we updated the JW Modifier and JZ Modifier Policy FAQ 
document to include the requirement of the JZ modifier by the supplier. 
However, after this policy was finalized, interested parties have 
requested further clarification on how to appropriately bill for 
discarded amounts from single-dose containers when there are amounts

[[Page 97978]]

discarded during preparation by the billing supplier who is not 
administering the drug. To provide additional clarity, we proposed to 
require the JW modifier if a billing supplier is not administering a 
drug, but there are amounts discarded during the preparation process 
before supplying the drug to the patient. Such a supplier would report 
the JZ modifier if no amounts were discarded during the preparation 
process before supplying the drug to the patient.
    We believe this proposal is appropriate because drug preparation 
occurs before supplying a drug to the beneficiary and the billing 
supplier can determine the discarded amount at the site of drug 
preparation. These discarded units should be billed using the JW 
modifier in the same way as a drug that is administered incident-to 
physician service. In addition, suppliers and other interested parties 
have expressed that suppliers are accustomed to using the JW modifier 
in this context already. Therefore, we proposed to require the JW 
modifier if a billing supplier is not administering a drug, but there 
are amounts discarded during the preparation process before supplying 
the drug to the patient. For example, if a billing supplier prepares a 
dose from a single-dose vial labeled as containing a total of 50 
billing units such that 45 billing units of the drug are used in the 
prepared dose and 5 billing units are discarded during preparation, and 
then the drug is supplied to the patient (but not administered by the 
supplier), the claim should be submitted on two lines: 45 units 
(without a modifier) and 5 units with the JW modifier. We reiterate 
that suppliers who dispense a drug, but do not actually administer the 
drug, are not expected to monitor or bill for discarded amounts that 
are discarded after the drug is supplied because they are not at the 
site of administration to measure discarded amounts. For example, if 
the patient who was supplied the above dose with 45 billing units 
subsequently only receives 35 of those billing units, the above billing 
supplier would not be expected to account for the 10 subsequently 
discarded billing units on the claim. We received public comments on 
this proposal. The following is a summary of the comments we received 
and our responses.
    Comment: Four commenters expressed general support for the proposal 
to require the JW modifier for reporting discarded amounts during drug 
preparation by a billing supplier.
    Response: We thank the commenters for their support.
    Comment: One commenter requested clarification on the definitions 
of ``supplier'' and ``provider'' as they relate to the JW modifier to 
prevent ambiguity about who this proposed policy applies to.
    Response: In Sec.  400.202,\289\ ``supplier'' is defined as a 
physician, or other practitioner, or an entity other than a provider 
that furnishes health care services under Medicare. In contrast, 
``provider'' is defined in Sec.  400.202 as a hospital, critical access 
hospital (CAH), skilled nursing facility, comprehensive outpatient 
rehabilitation facility, home health agency, hospice, or a clinic, 
rehabilitation agency, or public health agency that furnishes 
outpatient physical therapy or speech pathology services, all of which 
must have an agreement to participate in Medicare. The definition of 
``provider'' also includes community mental health centers with a 
similar agreement to provide partial hospitalization services. For the 
purposes of the JW and JZ modifier requirements, a billing supplier or 
billing provider who prepares but does not administer the drug would be 
subject to the JW and JZ modifier requirements.
---------------------------------------------------------------------------

    \289\ https://www.ecfr.gov/current/title-42/section-400.202.
---------------------------------------------------------------------------

    We received several comments regarding the JW and JZ modifier 
requirements more generally. The following is a summary of the comments 
we received and our responses.
    Comment: A few commenters expressed concern about the 
administrative burden associated with the use of modifiers. One 
commenter, without providing further details, stated that the use of 
any modifiers for billing drugs creates an administrative burden. 
Another commenter specified that the burden stems from the added 
complexity involved in preparing and administering chemotherapy drugs. 
Specifically, one commenter noted that drugs used for cancer treatments 
are disproportionately subject to discarded drug refund requirements, 
citing 2020 CMS drug pricing dashboard data that showed 22 of the 39 
drugs with over 10 percent discarded amount were cancer drugs. The 
commenters suggested CMS conduct outreach to impacted providers for 
modifier training and collect data to evaluate whether the JW modifier 
imposes an excessive burden on suppliers.
    Response: We thank the commenters for their feedback. For a 
complete discussion on potential burden as to JW and JZ modifiers, we 
refer readers to our discussion in the CY 2023 PFS final rule (87 FR 
69711 through 69720), in which we codified the JW modifier policy that 
had been in place since 2017.
    In that rule, we explained that the most practicable method for 
improving our data quality for amounts of discarded drug is by 
requiring providers filing claims for drugs from single-dose containers 
to report either a JW modifier when there are discarded amounts, or JZ 
modifier when no amount is discarded. We continue to believe providers 
are the only party that can obtain complete and accurate information on 
used and discarded amounts of variably dosed drugs. We acknowledge 
that, in some situations, it may be difficult to quantify discarded 
quantities of drugs and associate the specific amount with a single 
beneficiary, but we believe that, in most situations, there are no 
practical impediments that would prevent billing providers or other 
staff, such as nurses or pharmacists, from incorporating the 
measurement of discarded amounts into the process of preparing and 
administering the drug.
    Further, we stated in the CY 2024 PFS final rule (88 FR 79062) that 
we believe that in most cases the JW and JZ modifier requirements 
impose no new burdens on providers beyond the requirement of measuring 
and reporting discarded amounts by use of the JW modifier that predates 
the enactment of the discarded drug refund policy under section 
1847A(h) of the Act. Providers and suppliers who have been complying 
with the JW modifier requirement effective January 1, 2017 have already 
been assessing and documenting what is needed for the JZ modifier, and 
the new requirement of reporting the JZ modifier is minimal and 
justifiable for the purposes of obtaining more complete discarded 
amount data.
    According to the HHS Assistant Secretary for Planning and 
Evaluation (ASPE),\290\ biologicals contributed to 89 percent of the 
growth in Part B drug spending from 2008 to 2021. The report also 
highlighted that 12 of the 20 top drugs and biologicals by expenditure 
carried oncology indication(s). As the utilization and expenditure of 
drugs and biologicals continue to rise, the implementation of the 
discarded drug refund policy will help reduce waste and control 
spending within the Medicare Part B program.
---------------------------------------------------------------------------

    \290\ https://aspe.hhs.gov/sites/default/files/documents/fb7f647e32d57ce4672320b61a0a1443/aspe-medicare-part-b-drug-pricing.pdf.
---------------------------------------------------------------------------

    As noted in the 2024 PFS final rule (88 FR 79059), most drugs in 
single-dose containers are manufactured in package sizes efficient 
enough to keep discarded amounts below 10 percent. We believe that 
drugs with more than 10 percent

[[Page 97979]]

discarded amounts could reflect an inefficiency related to vial sizes 
and high utilization. Since JZ and JW modifiers apply equally to all 
drugs packaged in single-dose containers, CMS does not target any 
particular subset of drugs, including therapeutic classes. A high 
discarded amount is likely due to mismatch between vial sizes and 
patient needs, leading to excess drug being discarded after each use.
    CMS has created Discarded Drug Refund website \22\ for additional 
information, and following the publication of this final rule, the 
Medicare Claims Processing Manual will be updated with the finalized 
policies regarding the JW and JZ modifiers. These updates will be 
accompanied by other CMS communications, such as an MLN Matters[supreg] 
article, directed to the provider community.
    Comment: One commenter expressed concern about the administrative 
burden on ophthalmic practices due to the drug modifier requirement, 
particularly for intravitreal drug injections. The commenter requested 
a 100 percent increase in the applicable percentage to exempt 
ophthalmic drugs with labeled volume of less than 1mL.
    Response: As discussed in the previous response, we stated in the 
CY 2023 PFS final rule (87 FR 69711 through 69720) that the burden of 
the JW and JZ modifier requirements is not a recent occurrence, as the 
JW modifier policy has been in place since 2017 and was codified in the 
CY 2023 final rule without change. Providers should currently be 
reporting the JW modifier on their claims, as well as documenting the 
discarded amounts in the beneficiary's medical records. We further 
explained that the most practicable method for improving our data 
quality for amounts of discarded drug is by requiring providers filing 
claims for drugs from single-dose containers to report either a JW 
modifier when there are discarded amounts, or JZ modifier when no 
amount is discarded. We also stated (87 FR 69724) that increasing the 
applicable percentage to 100 percent does not relieve the burden 
complying with the JW and JZ modifier requirements.
    Section 1847A(h) of the Act establishes that CMS provide 
information on the total number of units of the billing and payment 
code, if any, that were discarded during a quarter, as determined by 
the JW modifier (or any such successor modifier that includes such 
data). Section 1847A(h)(8)(B) of the Act delineates three exclusions 
from the definition of refundable drug, one of which includes a 
specific class of drugs--radiopharmaceuticals and imaging agents--and 
does not include ophthalmic drugs. CMS has compiled a list of drugs 
with an increased applicable percentage, emphasizing that many 
injectable ophthalmic drugs are already included in this category on 
the Discarded Drug Refund website.\291\
---------------------------------------------------------------------------

    \291\ https://www.cms.gov/medicare/payment/part-b-drugs/discarded-drugs.
---------------------------------------------------------------------------

    Comment: One commenter noted the use of the JW modifier might lead 
to unintended consequences with Medicare's Medically Unlikely Edits 
(MUEs), potentially resulting in unnecessary claim denials. MUEs set 
the maximum number of units of a drug or service that can be reported 
on a claim. The current MUE policy includes both administered and 
discarded units in this calculation. The commenter explained that the 
MUE limit for Tecvayli[supreg] (teclistamab-cqyv, HCPCS code J9380) is 
480 billing units, which could lead to claims denials if two vials of 
Tecvayli[supreg], each containing 153 mg (that is, 306 billing units 
per vial), are used. The commenter recommended that the MUE policy be 
amended to exclude discarded units identified by the JW modifier from 
the unit of service calculations to prevent these unnecessary denials.
    Response: The MUE files \292\ for both facility outpatient hospital 
services and practitioner services, effective July 1, 2024, listed the 
MUE limit for Tecvayli[supreg] as 480 units, as the commenter noted. 
However, we clarify that effective October 1, 2024, the limit in the 
MUE file is 612 units to accommodate claims for two vials.
---------------------------------------------------------------------------

    \292\ https://www.cms.gov/medicare/coding-billing/national-correct-coding-initiative-ncci-edits/medicare-ncci-medically-unlikely-edits.
---------------------------------------------------------------------------

    After consideration of public comments, we are finalizing the 
proposal that the JW modifier is required when a billing supplier is 
not administering a drug but discards drug amounts during the 
preparation process before supplying it to the patient. We are 
finalizing that JZ modifier is required if no drug amounts are 
discarded during preparation.
    We received a few general comments about the discarded drug refund 
provisions. Below is a summary of comments and our responses.
    Comment: One commenter cited Loper Bright Enterprises v. Raimondo, 
stating that ``courts [must] use every tool at their disposal to 
determine the best reading of the statute.'' \293\ The commenter argued 
that CMS failed to adopt the ``best reading'' of the statutory 
requirement for the discarded drug refund, contending that its 
interpretation unfairly penalizes manufacturers with ``refundable 
drugs'' available on the market when the regulations took effect, 
despite regulatory decisions being made in compliance with laws prior 
to the enactment of section 90004 of the Infrastructure Act.
---------------------------------------------------------------------------

    \293\ Loper Bright Enters. v. Raimondo, No. 22-1219, 2024 WL 
3208360, at *16 (2024).
---------------------------------------------------------------------------

    Response: As stated in the CY 2023 PFS final rule (87 FR 69713), we 
do not have discretion on whether to implement the Infrastructure Act, 
which was signed into law on November 15, 2021. As these policies 
affect refunds that will be paid in the future after the promulgation 
of the rule, there are no retroactive effects on payments that have 
already been made.
    Specifically, manufacturers were informed that drugs in vial sizes 
specified in FDA labeling, with discarded amounts exceeding the 10 
percent applicable percentage, would trigger the refund policy 
beginning on January 1, 2023, such that no retroactive penalties are 
imposed. While some vial sizes optimized for manufacturing prior to the 
Infrastructure Act may no longer be considered efficient due to 
resulting discarded amounts, our policy reflects the standards set by 
Congress. Therefore, we maintain that our interpretation of the 
statutory requirement for the discarded drug refund is appropriate and 
does not unfairly penalize manufacturers.
    Comment: One commenter expressed the requirement in the CY 2024 PFS 
final rule raises due process concern, stating that ``the requirement 
attaches new legal consequences to events completed prior to enactment 
of the law, and this retroactive effect of the law is in conflict with 
the well-established due process principle of fair notice.''
    Response: We disagree with the view that implementation violated 
the principle of fair notice. As these policies affect refunds that 
will be paid in the future after the promulgation of the rule, we 
disagree that our proposed implementation of section 1847A(h) of the 
Act violates the due process principle of fair notice. There are no 
retroactive effects on payments that have already been made. 
Additionally, we have finalized the requirement to provide ample notice 
that the refund amounts specified in the initial refund report must be 
paid no later than February 28, 2025. This includes provisions for the 
application process related to increased applicable percentages and 
dispute resolution. Furthermore, we have made every effort to keep 
interested parties informed

[[Page 97980]]

about the new requirements by providing as much advance notice as 
possible, including information on the decision to revisit the process 
and timeline for manufacturers' provisions of refunds (87 FR 69727) to 
align with the Medicare Prescription Drug Inflation Rebate Program.
    The rule aligns with fair notice standards by clearly setting forth 
explicit criteria, timelines, and thresholds, allowing manufacturers to 
adjust their practices accordingly. While we recognize that adjusting 
vial sizes may require time and resources, the regulation applies 
prospectively and is intended to promote efficiency and minimize drug 
waste in a fair and transparent manner.
    Comment: One commenter recommended evaluating whether CMS's 
proposals regarding the 18-month exclusion period, the clarification 
for identifying single-dose containers, and use of JW and JZ modifiers 
when a billing supplier is not administering a drug effectively reduce 
wastage and inappropriate overpayment for unused medication. The 
commenter recommended that CMS conduct this evaluation by measuring 
payment timeliness, administrative burden, and product adjustments by 
provider.
    Response: We recognize the importance of assessing whether these 
measures effectively reduce wastage and prevent inappropriate payment 
for unused medications. We began applying claims edits for both the JW 
and JZ modifiers on October 1, 2023 (87 FR 69718 through 69719). As we 
monitor reporting information for refundable drugs with multiple 
manufacturers, we plan to analyze the following: (1) the frequency of 
claims with JW versus JZ modifiers, which will help identify drugs with 
non-optimized package sizes and prescribing patterns by providers; (2) 
trends in refund amount, which may reveal insights, such as decreasing 
refund amounts suggesting lower drug utilization or optimized package 
sizes, while increasing refund amounts may indicate higher drug 
utilization or new indications requiring different dosing; (3) the 
frequency of disputes and the timeliness of their resolution, which may 
highlight issues that we cannot directly measure, such as 
administrative burden. We also regularly update the list of specific 
billing and payment codes that we identified as being assigned 
exclusively to single-dose containers. We believe that analyzing the 
variability in the percentage of discarded drugs from quarter to 
quarter can inform future policy development.
2. Payment Limit Calculation When Manufacturers Report Negative or Zero 
Average Sales Price (ASP) Data (Sec.  414.904)
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,\294\ which are both updated 
quarterly.
---------------------------------------------------------------------------

    \294\ https://www.cms.gov/medicare/payment/part-b-drugs/asp-pricing-files.
---------------------------------------------------------------------------

    We generally calculate the payment limits for drugs payable under 
Part B on a quarterly basis using the manufacturer's ASP (as defined in 
Sec.  414.902). Manufacturers are required to report ASP to CMS under 
sections 1847A(f)(2) and 1927(b)(3) of the Act. Manufacturers are 
instructed to calculate ASP in accordance with section 1847A(c) of the 
Act and Sec.  414.804(a).
    For each NDC, in most cases, the manufacturer's ASP is a positive 
dollar value, along with a positive number of units sold (hereinafter 
referred to as ``positive manufacturer's ASP data''). However, 
sometimes the reported data is not positive manufacturer's ASP data. 
Specifically, a manufacturer could report that an NDC has a negative or 
zero-dollar value for the manufacturer's ASP with a positive, negative, 
or zero number of units sold, or a positive dollar value for the 
manufacturer's ASP with a negative or zero number of units sold (each 
of these scenarios is hereinafter referred to as ``negative or zero 
manufacturer's ASP data''). Such negative or zero manufacturer's ASP 
data could occur because of lagged discounts, units returned to the 
manufacturer, drug shortages, discontinuation of a drug, or other 
reasons that are not known to CMS. Negative or zero manufacturer's ASP 
data can occur when a manufacturer calculates its ASP in accordance 
with section 1847A of the Act.
    First, section 1847A(c)(3) of the Act requires that the 
manufacturer's calculation of its ASP for an NDC must 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 or the Medicare 
Prescription Drug Inflation Rebate Program) (hereinafter referred to as 
``price concessions''). Second, section 1847A(c)(5)(A) of the Act 
requires each manufacturer to apply a methodology based on a 12-month 
rolling average for the manufacturer to estimate costs attributable to 
price concessions if there is a lag in the reporting of the information 
on rebates and chargebacks under section 1847A(c)(3) of the Act. These 
provisions may result in the inclusion of large price concessions from 
a quarter or quarters with a higher sales price prior to price 
concessions in the ASP calculation for a subsequent quarter with a much 
lower sales price, which can result in negative dollar value ASP. The 
same situation could happen in a quarter if more units were returned to 
the manufacturer than are sold, which can result in a negative dollar 
value ASP as well as a negative number of units sold. The requirement 
to use a rolling average for lagged price concessions is codified at 
Sec.  414.804(a)(3), which states that, to the extent data on price 
concessions are available on a lagged basis, the manufacturer must 
estimate its ASP in accordance with the described methodology in that 
paragraph. In certain instances, as stated above, lagged price 
concessions can lead to negative or zero manufacturer's ASP data.
    In 2022, the U.S. Department of Health and Human Services Office of 
Inspector General (OIG) issued a report assessing potential 
inaccuracies in manufacturer reporting of ASP and noted that 
manufacturers believe additional guidance may be needed to reduce 
distortions and inconsistencies in the calculation of payment 
limits.\295\ The report found that several manufacturers would like 
additional guidance regarding reporting of negative ASP data and how 
CMS uses negative ASP data in payment limit calculations. CMS concurred 
with the OIG's recommendation to actively review current guidance and 
determine whether additional guidance would

[[Page 97981]]

ensure more accurate and consistent ASP calculations.
---------------------------------------------------------------------------

    \295\ OEI-BL-21-00330. https://oig.hhs.gov/oei/reports/OEI-BL-21-00330.asp.
---------------------------------------------------------------------------

    Accordingly, we reviewed our current guidance and determined that 
it is appropriate for us to provide additional guidance regarding how 
CMS will handle payment for drugs separately payable under Part B when 
the manufacturer's ASP for at least one NDC within the billing and 
payment code (that is, HCPCS code) of the drug is negative or zero. 
Currently, when all NDCs assigned to a HCPCS code have negative or zero 
manufacturer's ASP data, CMS establishes the payment limit in other 
ways. As appropriate given the data available for a drug, we will 
either calculate a payment limit for a billing and payment code based 
on other applicable and available pricing data or not include a payment 
limit for the billing and payment code on the ASP pricing file. When a 
payment limit for a drug separately payable under Part B is not 
included in the ASP pricing file, the payment limit is based on either 
the published Wholesale Acquisition Cost (WAC) or invoice pricing, as 
described in section 20.1.3, Chapter 17 of the Medicare Claims 
Processing Manual.\296\
---------------------------------------------------------------------------

    \296\ https://www.cms.gov/%E2%80%8BRegulations-and-Guidance/%E2%80%8BGuidance/%E2%80%8BManuals/%E2%80%8BDownloads/%E2%80%8Bclm104c17.pdf.
---------------------------------------------------------------------------

    We previously contemplated how to set a payment limit in certain 
situations in which ASP data is ``not available'' for multiple source 
drugs. In the CY 2011 PFS final rule (75 FR 73461 through 73465), we 
addressed situations in which ASP data for some, but not all, NDCs in a 
multiple source drug billing and payment code are not available for the 
calculation of an ASP payment limit (for example, if a manufacturer's 
entire submission of data was not received or manufacturer's ASP data 
for specific NDCs was not reported).\297\ In that rule, we finalized a 
process, consistent with authority in section 1847A(c)(5)(B) of the 
Act, to update payment limits based on the manufacturer's ASP reported 
for the most recent quarter for which data are available. We specified 
that if manufacturer's ASP data is not available for some but not all 
NDCs in a multiple source drug billing and payment code prior to the 
publication deadline for quarterly payment limits and such 
unavailability of manufacturer's ASP data significantly changes the 
quarterly payment limit for the billing and payment code when compared 
to the prior quarter's payment limit, CMS will calculate the payment 
limit by carrying over the most recently available manufacturer's ASP 
from a previous quarter for an NDC, adjusted by the weighted average of 
the change in the manufacturer's ASPs for the NDCs that were reported 
for both the most recently available previous quarter and the current 
quarter, and codified this policy in Sec.  414.904(i).\298\ In that 
final rule, we explained that such circumstances are limited to when a 
manufacturer's data for a multiple source drug product with sales 
during a quarter is missing, and efforts to obtain manufacturer 
reported ASP data before Medicare ASP payment limits publication 
deadlines have not been successful. We continue to believe that this 
process, which we apply in cases ASP data is ``not available'' for some 
but not all NDCs associated with a multiple source billing and payment 
code, is appropriate.
---------------------------------------------------------------------------

    \297\ https://www.govinfo.gov/content/pkg/FR-2010-11-29/pdf/2010-27969.pdf.
    \298\ https://www.ecfr.gov/current/title-42/part-414/section-414.904#p-414.904(i).
---------------------------------------------------------------------------

b. Approach to Payment Limit Calculations When Manufacturer's ASP Data 
is not Available
    As described in the previous section, we determined that it is 
appropriate for CMS to provide additional guidance regarding how we 
will handle payment for drugs separately payable under Part B when the 
reported manufacturer's ASP for at least one NDC within the billing and 
payment code (that is, HCPCS code) of the drug is negative or zero 
(that is, has negative or zero manufacturer's ASP data). As detailed 
below, we proposed to consider ASP data to be not ``available'' for the 
purposes of calculating a payment limit in circumstances in which 
negative or zero manufacturer's ASP data is reported, consistent with 
section 1847A(c)(5)(B) of the Act. We also proposed how CMS would 
calculate a payment limit in these circumstances, consistent with 
section 1847A(c)(5)(B) of the Act.
    Our existing policy, before the regulatory changes finalized in 
this final rule as discussed below, did not address how payment limits 
are calculated for several situations in which a drug separately 
payable under Part B does not have available ASP data. The set of 
situations in which this might occur include circumstances in which 
either some or all NDCs for a billing and payment code have a negative 
or zero manufacturer's ASP data; in which negative or zero 
manufacturer's ASP data is reported for a drug which has been 
discontinued; and vary further depending on whether a drug is multiple 
source or single source (both as defined in Sec.  414.902). In each of 
these circumstances, there are various other pricing data available 
that we believe can appropriately be used to calculate a payment limit.
    Therefore, we proposed, consistent with section 1847A(c)(5)(B) of 
the Act, a methodology for calculating payment limits in certain 
circumstances based on manufacturer's ASP for the most recent quarter 
for which data are available. Specifically, we proposed to specify that 
positive manufacturer's ASP data are considered ``available'' and that 
negative or zero manufacturer's ASP data are considered ``not 
available'' for purpose of CMS calculating a payment limit under the 
statute. We believe it is appropriate to consider negative or zero 
manufacturer's ASP data to be not available because if used to 
calculate a payment limit, this data can result in a negative or zero 
payment limit, which would require CMS to collect payment from 
providers and suppliers for a drug, rather than make payment for a 
drug. Negative or zero payment limits for a drug are not reasonable 
because Medicare does not expect to collect payment from providers and 
suppliers for their provision of separately payable drugs. Therefore, 
we proposed to specify the methodology we will use for calculating the 
payment limit in such circumstances to ensure reasonable payment 
amounts based on the best available data for separately payable drugs. 
In the following sections, we proposed how payment limits would be 
determined using available ASP data for each scenario.
    We received comments regarding this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: One commenter expressed support for our proposal to 
consider positive manufacturer's ASP data ``available'' and to consider 
negative or zero manufacturer's ASP data ``not available'' for the 
purpose of calculating payment limits under the section 1847A of the 
Act. The commenter stated they believe this would provide 
predictability for manufacturers and mutual accountability between CMS 
and manufacturers when ASP data isn't available. Another commenter 
shared their support for using available pricing data as a basis for 
payment limits when manufacturers report negative or zero 
manufacturer's ASP data. The commenter stated that they support a 
pricing metric that accounts for price concessions, citing program cost 
savings, and oppose those that do not account for price concessions, 
such as WAC and average wholesale price (AWP).
    Response: We thank the commenter for their support. We generally 
agree

[[Page 97982]]

with the commenter that a pricing metric that accounts for price 
concessions is preferable as the basis of payment limits when 
manufacturer's ASP data from the most recent quarter is unavailable; in 
general, we also believe use of the most recent positive ASP data 
available for a billing and payment code for a drug is most consistent 
with the payment limit calculations described in section 1847A(b) and 
(c) of the Act, including section 1847A(c)(5)(B) of the Act.
    After consideration of public comments, we are finalizing our 
policy as proposed that for the purposes of calculating a payment limit 
for Part B drugs, we will consider positive manufacturer's ASP data 
``available'' and negative or zero manufacturer's ASP data ``not 
available.''
c. Single and Multiple Source Drugs When Negative or Zero 
Manufacturer's ASP Data is Reported for some, but not all NDCs
    In the case that a drug separately payable under Part B has 
negative or zero manufacturer's ASP data reported for some, but not 
all, NDCs associated with a billing and payment code for that drug, we 
proposed to calculate a payment limit using only NDCs with positive 
manufacturer's ASP data (and omitting NDCs with negative or zero 
manufacturer's ASP data) for that drug and proposed to codify this at 
Sec.  414.904(i). We proposed this policy to apply to both single 
source drugs and biologicals, including biosimilar biological products 
(defined at Sec.  414.902) (hereinafter referred to as a 
``biosimilars'') and multiple source drugs. We believed this was 
appropriate because it would result in payment limits based on the most 
recent positive manufacturer's ASP data reported by manufacturers with 
NDCs associated with a billing and payment code.
    However, we noted that, as discussed in section III.A.2.a of this 
final rule, CMS already has a policy in place for multiple source drugs 
for which the absence of ASP data would result in a significant change 
(that is, a 10 percent or greater change) in the ASP payment limit 
compared to the payment limit of the previous quarter, as finalized in 
the CY 2011 PFS final rule (75 FR 73461 through 73465). In that 
discussion (75 FR 73462), we noted several examples of situations in 
which data is not available to be included in the calculation of a 
payment limit, such as when a manufacturer's entire submission was not 
received or when the manufacturer's ASP data for specific NDCs has not 
been reported. We did not intend for our proposed policy to override 
that existing policy; rather, we intend for the proposed policy 
described above to address circumstances not addressed in that 
rulemaking (that is, we intend to address circumstances of single 
source drugs when negative or zero manufacturer's ASP data is reported 
for some, but not all NDCs, and of multiple source drugs when negative 
or zero manufacturer's ASP data is reported for some, but not all NDCs 
and the absence of such data from the calculation of the payment limit 
does not result in a significant change in the payment limit compared 
to the payment limit of the previous quarter) and thus fill a policy 
gap. In addition, the circumstances we provided as examples in which 
ASP data is not available in the CY 2011 PFS final rule continue to be 
circumstances we consider manufacturer's ASP data not available under 
current Sec.  414.904(i) (which we proposed to move within Sec.  
414.904(i) to fit within the structure of the proposed new set of 
payment limit methodologies); but, as noted in section III.A.2.b of the 
rule, we are expanding what we consider to be not available to include 
circumstances in which negative or zero manufacturer's ASP data is 
reported.
    We received several public comments on the proposed payment limit 
calculation for single and multiple source drugs when negative or zero 
manufacturer's ASP data is reported for some, but not all NDCs. The 
following is a summary of the comments we received and our responses.
    Comment: One commenter expressed support for the proposal for 
calculation of the payment limit for drugs when negative or zero 
manufacturer's ASP data is reported for some, but not all NDCs, 
specifically as it would apply to biosimilars.
    Response: We thank the commenter for their support.
    Comment: One commenter opposed the approach of using available 
positive ASP data when some but not all NDCs are reported with positive 
ASP data for single source drugs and biologicals, including 
biosimilars. The commenter recommended an alternative approach that 
calculates the volume-weighted ASP for a drug in this circumstance 
using the most recent positive manufacturer's ASP for each NDC in the 
billing and payment code, while using the current quarter's reported 
units sold for each NDC. The commenter suggested this would result in a 
payment limit that more accurately reflects market conditions than 
simply relying on only the NDCs that have positive ASP data in a given 
quarter, as we proposed in this section.
    Response: We thank the commenter for their thoughtful response. 
Subsection 1847A(c)(5)(B) of the Act directs the Secretary to update 
quarterly a drug's ASP payment limit using manufacturer's ASP data from 
the most recent calendar quarter for which such data are available. We 
believe our proposal for single source drugs and biologicals is 
consistent with subsection (c)(5)(B) of section 1847A of the Act, which 
directs the Secretary to use available ASP data from a singular 
quarter, that being the most recent one with positive manufacturer's 
ASP data for a given drug.
    Further, we believe the proposed policy would base payment limits 
on data most closely related to the current market conditions because 
it would rely on the most recently available data required to be 
reported under section 1847A(c) of the Act from a full calendar quarter 
associated with a billing and payment code. We disagree with the 
commenter that calculating the payment limit for a drug using positive 
manufacturer's ASP data from multiple quarters would result in a 
payment limit that is more reflective of current market conditions 
because more time would have passed since the sales reflected in the 
additional quarters for which inclusion is sought by the commenters. 
The manufacturer's positive ASP data in a given quarter represent the 
full set of most recently available data for the statutory calculation 
of an ASP-based payment limit, as discussed in section III.A.2.a of 
this final rule; the data set is not made more complete or accurate by 
the inclusion of older data.
    Comment: Two commenters recommended that in lieu of our proposal 
for calculating a payment limit for a drug with negative or zero 
manufacturer's ASP data reported for some, but not all, associated 
NDCs, the ASP payment limit should be calculated using a volume-
weighted average of available positive manufacturer's ASP data from the 
previous four quarters for which data are available. The commenters 
recommended this approach to smooth payment limit fluctuations caused 
by changes in the market. One commenter described this recommendation 
as consistent with the policy we finalized in the CY 2011 PFS final 
rule (75 FR 73461 through 73465), described above.
    Response: We thank the commenters for their feedback. As noted 
above, section 1847A(c)(5)(B) of the Act directs the Secretary to 
update quarterly a drug's ASP payment limit using manufacturer's ASP 
data from the most recent single calendar quarter for which such data 
are available, rather than

[[Page 97983]]

several quarters. For this reason, we believe using a single quarter of 
data, as proposed, is most appropriate.
    We disagree with the commenters who described carrying over four 
quarters of ASP data as consistent with the existing carryover policy 
finalized in the CY 2011 PFS final rule. Under this policy, in 
circumstances in which the unavailability of manufacturer's ASP data 
for an NDC causes a significant change in the ASP payment limit when 
compared to that of the previous quarter, CMS carries over only a 
single previous quarter's available ASP data for the NDC. In addition, 
as the commenter suggested a need for smoothing, we note that a 
smoothing function is already incorporated in the calculation of ASP 
payment limits by section 1847A(c)(5)(A) of the Act and codified at 
Sec.  414.804(a)(3), which requires manufacturers to factor a 12-month 
rolling average to estimate the costs attributable to rebates and 
chargebacks. We disagree with the commenters that an additional 
smoothing function using older data would lead to payment limits more 
representative of current market prices.
    After consideration of these comments, and for the reasons stated 
above and in the proposed rule, we are finalizing as proposed the 
calculation of the payment limit for a drug separately payable under 
Part B with negative or zero manufacturer's ASP data reported for some, 
but not all, NDCs associated with a billing and payment code for that 
drug at Sec.  414.904(i). We will calculate the payment limit for such 
a drug using only NDCs with positive manufacturer's ASP data (and 
omitting NDCs with negative or zero manufacturer's ASP data). This 
policy applies to single source drugs and biologicals, including 
biosimilars, and multiple source drugs.
d. Multiple Source Drugs With Only Negative or Zero Manufacturer's ASP 
Data
    In the case of a multiple source drug (as defined in Sec.  414.902) 
separately payable under Part B that has negative or zero 
manufacturer's ASP data reported for all NDCs associated with a billing 
and payment code for that drug (and at least one NDC for the drug is 
actively being marketed (that is, not discontinued)), we proposed to 
carry over all positive manufacturer's ASP data from the most recently 
available previous quarter with positive manufacturer's ASP data for at 
least one NDC until at least one NDC for the drug has positive 
manufacturer's ASP data for a quarter. Specifically, we proposed to 
calculate the payment limit for the applicable quarter using data from 
the most recent calendar quarter for which ASP data are available, that 
is, for which there is positive manufacturer's ASP data. We believe 
this is appropriate because, similar to the methodology described in 
section III.A.2.c of this rule, it would result in payment limits based 
on the most recent positive manufacturer's ASP data reported by 
manufacturers with NDCs associated with a billing and payment code. 
Similarly, we believe the most recently available positive 
manufacturer's ASP data from NDCs associated with a billing and payment 
code are more likely to be reflective of providers' acquisition costs 
for drugs associated with that billing and payment code in a given 
quarter than other pricing data, and unlikely to result in challenges 
to access for these drugs for providers and beneficiaries.
    We note that because section 1847A of the Act provides for payment 
limit calculations that differ between single-source drugs (as defined 
in section 1847A(c)(6)(D) of the Act and Sec.  414.902) and multiple 
source drugs (as defined in section 1847A(c)(6)(C) of the Act and Sec.  
414.902), we proposed different ways to determine payment limits for 
each, in cases in which only negative or zero manufacturer's ASP data 
is reported, to reflect these differences. Specifically, the payment 
limit for single source drugs is described in section 1847A(b)(4) of 
the Act; for multiple source drugs, the payment limit is described in 
section 1847A(b)(3) of the Act. The payment limit for single source 
drugs is determined using the lesser of ASP or WAC; but WAC is not used 
for multiple source drugs whose ASP exceeds WAC. Nonetheless, our 
proposals for the calculation of the payment limit for single source 
and multiple source drugs with only negative or zero manufacturer's ASP 
data are consistent in that, where ASP is used, we proposed to use the 
most recently available positive manufacturer's ASP data from at least 
one NDC for the drug. We believe using similar input data in our 
calculation of the payment limit is consistent with our goal to ensure 
reasonable payment amounts based on the best available data for 
separately payable drugs.
    We proposed to amend Sec.  414.904(i) to include the above proposal 
regarding how CMS would calculate the payment limit in circumstances in 
which only negative or zero manufacturer's ASP data is reported for a 
multiple source drug.
    We received two comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: Both commenters recommended that for multiple source drugs 
with only negative or zero manufacturer's ASP data, CMS calculate the 
ASP payment limit using a volume-weighted average of available positive 
manufacturer's ASP data from the previous four quarters for which data 
are available.
    Response: We thank the commenters for their feedback. Our proposed 
approach to use a single calendar quarter of data is most consistent 
with the Secretary's requirement under section 1847A(c)(5)(B) of the 
Act because the statute directs that Secretary to update quarterly a 
drug's ASP payment limit using manufacturer's ASP data from the most 
recent single calendar quarter for which such data are available, 
rather than several quarters. For this reason, we believe using a 
single quarter of data is most appropriate. We also note a smoothing 
function for lagged price concessions is already incorporated into the 
ASP payment limit calculation by section 1847A(c)(5)(A) of the Act. We 
disagree with the commenters that an additional smoothing function 
using older data would lead to payment limits more representative of 
current market prices. We refer readers to the response to the same 
approach recommended for single and multiple source drugs when zero or 
negative manufacturer's ASP data are reported for some, but not all 
NDCs in section III.A.2.c of this rule.
    After consideration of these comments, and for the reasons stated 
above and in the proposed rule, we are finalizing as proposed the 
methodology for calculating the payment limit for a multiple source 
drug separately payable under Part B that has negative or zero 
manufacturer's ASP data reported for all NDCs associated with a billing 
and payment code for that drug at Sec.  414.904(i). We will calculate 
the payment limit for such a drug using all positive manufacturer's ASP 
data from the most recently available previous quarter for which ASP 
data are available for at least one NDC.
e. Single Source Drugs With Only Negative or Zero Manufacturer's ASP 
Data, Excluding Biosimilar Biological Products
    In the case of a single source drug, excluding biosimilars (both as 
defined in Sec.  414.902), separately payable under Part B that has 
negative or zero manufacturer's ASP data reported for all NDCs 
associated with a billing and payment code for that drug (and at least 
one NDC for the drug is actively being marketed (that is, not 
discontinued)), we proposed to set the payment limit for

[[Page 97984]]

the given quarter for the single source drug at the lesser of the 
following until at least one NDC for the drug has positive 
manufacturer's ASP data for a quarter:
     106 percent of the volume-weighted average of the most 
recently available positive manufacturer's ASP data from a previous 
quarter in which at least one NDC for the drug has positive 
manufacturer's ASP data for a quarter. If the payment limit from the 
quarter with the most recently available positive manufacturer's ASP 
data was based on 106 percent of the WAC because of the application of 
Sec.  414.904(d)(1), that payment limit would be carried over; or
     106 percent of the WAC for the given quarter. If there is 
more than one WAC per billing unit for the drug, the payment limit 
would be set using the lowest WAC per billing unit.
    We proposed to only use the lesser of the positive manufacturer's 
ASP or WAC data from that previous quarter or the WAC data from the 
given quarter until positive manufacturer's ASP data are available for 
a future quarter. We proposed that once positive manufacturer's ASP 
data for a drug is available again in a future quarter, we would have 
data available to input into the routinely used methodologies described 
in section 1847A(b) of the Act and Sec.  414.904.
    As discussed above, we continue to believe it is appropriate to 
apply different policies for determining payment limits for single and 
multiple source drugs when negative or zero manufacturer's ASP data is 
reported because of statutory differences in the payment limit 
calculations.
    We received several public comments on this proposal. The following 
is a summary of the comments we received and our responses.
    Comment: One commenter supported our proposal for single source 
drugs, excluding biosimilars, when all NDCs have negative ASP data.
    Response: We thank the commenter for their support.
    Comment: One commenter recommended that for single source drugs 
with only negative or zero manufacturer's ASP data, excluding 
biosimilars, CMS set the payment limit by calculating the volume-
weighted ASP for a drug in this circumstance using the most recent 
positive manufacturer's ASP for each NDC in the billing and payment 
code, while using the current quarter's reported units sold for each 
NDC.
    Response: We thank the commenter for their feedback. Our proposed 
approach is most consistent with section 1847A(c)(5)(B) of the Act, 
which directs the Secretary to update quarterly a drug's ASP payment 
limit using manufacturer's ASP data from the most recent calendar 
quarter for which such data are available. In addition, we believe the 
proposed policy would base payment limits on data most closely related 
to the current market conditions because it would rely on the most 
recently available data required to be reported under section 1847A(c) 
of the Act from a full calendar quarter associated with a billing and 
payment code. We disagree with the commenter that calculating the 
payment limit for a drug using positive manufacturer's ASP data from 
multiple quarters would result in a payment limit that is more 
reflective of current market conditions because more time has passed 
since the sales reflected in the additional quarters for which 
inclusion is sought by the commenter. We refer readers to the response 
to the same approach recommended for single and multiple source drugs 
when zero or negative manufacturer's ASP data are reported for some, 
but not all NDCs in section III.A.2.c of this rule.
    Comment: Two commenters recommended that for single source drugs 
with only negative or zero manufacturer's ASP data, excluding 
biosimilars, CMS calculate the ASP payment limit using a volume-
weighted average of available positive manufacturer's ASP data from the 
previous four quarters for which data are available.
    Response: We thank the commenters for their feedback. Our proposed 
approach to use a single calendar quarter of data is most consistent 
with the Secretary's requirement under section 1847A(c)(5)(B) of the 
Act because the statute directs that Secretary to update quarterly a 
drug's ASP payment limit using manufacturer's ASP data from the most 
recent single calendar quarter for which such data are available, 
rather than several quarters. For this reason, we believe using a 
single quarter of data is most appropriate. We also note a smoothing 
function for lagged price concessions is already incorporated into the 
ASP payment limit calculation by section 1847A(c)(5)(A) of the Act. We 
refer readers to the response to the same approach recommended for 
single and multiple source drugs when zero or negative manufacturer's 
ASP data are reported for some, but not all NDCs in section III.A.2.c 
of this rule.
    After consideration of the comments we received, and for the 
reasons stated above and in the proposed rule, we are finalizing as 
proposed the methodology for calculating the payment limit for a single 
source drug, excluding biosimilars, separately payable under Part B 
that has negative or zero manufacturer's ASP data reported for all NDCs 
associated with a billing and payment code for that drug at Sec.  
414.904(i). We will set the payment limit for such a drug at the lesser 
of 106 percent of the volume-weighted average of the most recently 
available positive manufacturer's ASP data from a previous quarter in 
which at least one NDC for the drug has positive manufacturer's ASP 
data for a quarter and 106 percent of the WAC for the given quarter. In 
the former case, if the payment limit from the quarter with the most 
recently available positive manufacturer's ASP data was based on 106 
percent of the WAC because of the application of Sec.  414.904(d)(1), 
that payment limit will be carried over. In the latter case, if there 
is more than one WAC per billing unit for the drug, the payment limit 
would be set using the lowest WAC per billing unit.
f. Biosimilars With Only Negative or Zero Manufacturer's ASP Data
    In circumstances in which negative or zero manufacturer's ASP data 
is reported for all NDCs for a biosimilar for a given quarter (and at 
least one NDC for the biosimilar is actively being marketed (that is, 
not discontinued)), and positive manufacturer's ASP data are available 
for another biosimilar(s) with the same reference biological product 
(hereinafter referred to as a ``reference product'') for the given 
quarter, we proposed to set the payment limit for the given quarter 
equal to the sum of the following until at least one NDC for the 
particular biosimilar for which negative or zero manufacturer's ASP 
data is reported for all NDCs has positive manufacturer's ASP data for 
a quarter:
     The volume-weighted average of the positive manufacturer's 
ASP data from all other biosimilars with the same reference product, 
and
     6 percent (or 8 percent for qualifying biosimilar 
biologicals as defined in Sec.  414.902, as appropriate) of the amount 
determined under section 1847A(b)(4) of the Act for the reference 
biological product (as defined in Sec.  414.902) for the given quarter.
    We believe this proposal was appropriate because section 351(i)(2) 
of the Public Health Service Act defines the terms biosimilar and 
biosimilarity to mean that a biosimilar is highly similar to its 
reference product, notwithstanding minor differences in clinically 
inactive components, and that there are no clinically meaningful 
differences between the biosimilar and the reference product in terms 
of the

[[Page 97985]]

safety, purity, and potency of the product. In addition, biosimilars 
with the same reference product likely compete in the marketplace since 
they all rely on FDA's previous determination of safety, purity, and 
potency for the reference product for approval. For these reasons, we 
believe that when a biosimilar has only negative or zero manufacturer's 
ASP data, the volume-weighted average of positive manufacturer's ASP 
data of biosimilars with the same reference product would be an 
appropriate payment limit for a biosimilar that, under this proposal, 
would be considered to have ASP data that is not available. As such, we 
proposed to calculate the payment limit for a biosimilar with only 
negative or zero manufacturer's ASP data based on the positive 
manufacturer's ASP data of other biosimilars with the same reference 
product.
    We noted that in the CY 2016 PFS final rule (80 FR 71096 through 
71101), we finalized that we would group all biosimilars with a common 
reference product in a single billing and payment code with a single 
payment rate, in a manner similar to how we price multiple source or 
generic drugs because of the significant similarities between each 
biosimilar and its reference product. In the CY 2018 PFS final rule (82 
FR 53182 through 53187), we changed the initial policy and finalized 
separate coding and payment for biosimilars. In that final rule, we 
stated that that there is a program need for assigning Part B 
biosimilars into separate billing and payment codes; specifically, that 
this policy change addressed concerns about the public interest in a 
stronger marketplace, access to these drugs in the United States 
marketplace, and provider and patient choice and competition. Our 
proposal for biosimilars with negative or zero manufacturer's ASP data 
reported for all NDCs is consistent with the CY 2018 PFS rulemaking, as 
it would not result in grouping biosimilars with a shared reference 
product in a single billing and payment code. Rather, it would allow 
CMS to calculate an operationally reasonable payment limit using 
positive manufacturer's ASP data for products that are biosimilar to a 
shared reference product in limited instances.
    This proposal would also provide payment limit stability that could 
help avoid potential access issues for providers and beneficiaries that 
could otherwise occur if we were to calculate a payment limit for a 
drug with negative or zero manufacturer's ASP data that is far below 
the provider's cost for acquiring the drug. If a biosimilar's ASP falls 
below zero only after several quarters of declining but still positive 
manufacturer's ASP data, the most recent positive manufacturer's ASP 
data from a previous quarter for a drug may be significantly lower than 
the volume-weighted average of the biosimilars with the same reference 
product as the biosimilar with negative ASP data. In such a case, the 
payment limit based on the ASPs of competitor biosimilars would be 
higher than if we were constrained to use ASP data only from the 
biosimilar that has most recently reported negative or zero 
manufacturer's ASP data. We noted that under the methodology proposed 
in section III.A.2.c of this rule, in circumstances in which some, but 
not all NDCs of a single or multiple source drug are negative or zero, 
we would similarly calculate the payment limit using only NDCs with 
positive manufacturer's ASP data from the given quarter and omitting 
those that had declined to zero or a negative value in ASP or sales. 
Likewise, we believe that such an approach would likely result in a 
payment limit reflective of providers' acquisition costs of biosimilars 
and be helpful in avoiding access issues for providers and 
beneficiaries.
    In circumstances in which negative or zero manufacturer's ASP data 
is reported for all NDCs for a biosimilar for a given quarter and 
either no other biosimilars have been approved for the same reference 
product or no other biosimilars with the same reference product report 
positive manufacturer's ASP data for the given quarter, we proposed 
that we would set the payment limit for the given quarter equal to the 
sum of the following until at least one NDC for the biosimilar has 
positive manufacturer's ASP data for a quarter:
     The volume-weighted average of the most recently available 
positive manufacturer's ASP data from a previous quarter, and
     6 percent (or 8 percent for qualifying biosimilar 
biologicals, as appropriate) of the amount determined under section 
1847A(b)(4) of the Act for the reference product (as defined in Sec.  
414.902) for the given quarter.
    In situations in which CMS would use the volume-weighted average of 
the most recently available positive manufacturer's ASP data from a 
previous quarter, we proposed we would only use positive manufacturer's 
ASP data from that previous quarter until positive manufacturer's ASP 
data are available for a future quarter. This proposed methodology is 
similar to the proposed methodology for multiple source drugs and 
single source drugs that are not biosimilars when manufacturers report 
negative or zero manufacturer's ASP for all NDCs.
    In addition to the payment approaches we proposed for biosimilars 
with only negative or zero manufacturer's ASP data, we considered two 
alternatives for which we solicited public comment. Under the first 
alternative, the volume-weighted ASP calculation would include the ASP 
data and billing units sold of its reference product for a given 
quarter along with those of the other biosimilars that reference the 
same reference product in the volume-weighted average calculation. We 
believe including the reference product's data in the blended 
calculation for a biosimilar's payment limit in the limited 
circumstance described could be appropriate in determining an 
operationally reasonable payment limit because the FDA approval for the 
biosimilar relies in part on FDA's previous determination of safety, 
purity, and potency for the reference product, and the biosimilar is 
necessarily approved for at least one condition of use that has been 
previously approved for its reference product, as required under the 
351(k) approval pathway; \299\ therefore, the case that the two are 
comparable is at least as strong as that for any two biosimilars with 
the same reference product. If it is preferable, as we proposed, to 
base the payment limit on the available positive manufacturer's ASP 
data submitted by manufacturers of market competitor biosimilars (in 
this context, biosimilars that reference the same reference product), 
then including the ASP data and billing units sold of the reference 
product would also increase the likelihood that positive data in such a 
group is available, particularly in the case that a reference product 
only has one biosimilar. Under this alternative, the payment limit 
would be set equal to the sum of the volume-weighted average of the 
positive manufacturer's ASP data from all other biosimilars with the 
same reference product and the reference product plus 6 or 8 percent, 
as appropriate, of the amount determined under section 1847A(b)(4) of 
the Act for the reference product for the given quarter. We solicited 
public comments about whether including ASP data from the reference 
product in a variant of the proposed calculation would produce a more 
appropriate payment limit for a biosimilar with only negative or zero 
manufacturer's ASP data.
---------------------------------------------------------------------------

    \299\ Section 351(k)(2)(A)(i)(III) of the Public Health Service 
Act (42 U.S.C. 262).
---------------------------------------------------------------------------

    Under the second alternative, we would calculate payment limits for 
all

[[Page 97986]]

biosimilars with only negative or zero manufacturer's ASP data in the 
manner described above for biosimilars when either no other biosimilars 
have been approved for the same reference product or no other 
biosimilars with the same reference product report positive 
manufacturer's ASP data for the given quarter. That is, under this 
alternative we would not consider the manufacturer's ASP data of other 
biosimilars with the same reference product; rather, we would base the 
payment limit of the biosimilar on the volume-weighted average of the 
its own most recently available positive manufacturer's ASP data from a 
previous quarter and either 6 or 8 percent, as appropriate, of the 
amount determined under section 1847A(b)(4) of the Act for the 
reference biological product for the given quarter. We solicited 
comments from interested parties about whether, and if so, why, it is 
preferable for the payment limit to be calculated only using 
manufacturer's ASP data from the biosimilar that reports negative or 
zero manufacturer's ASP data in a given quarter.
    We received many public comments on our proposed payment limit 
calculations for biosimilars with only negative or zero manufacturer's 
ASP data and alternatives considered in this section. The following is 
a summary of the comments we received and our responses.
    Comment: Regarding our proposal to calculate the payment limit for 
a biosimilar with all negative or zero manufacturer's ASP data for a 
given quarter when positive manufacturer's ASP data are available for 
another biosimilar(s) with the same reference product for the given 
quarter, multiple commenters opposed the proposed use of ASP data from 
drugs with other billing and payment codes to calculate a payment 
limit. Commenters stated that they believe this may create competitive 
asymmetries between biosimilars and reference products.
    Two commenters stated that they believe treating payment for 
biosimilars in a manner similar to that of multiple source drugs, even 
in the limited circumstances described in the proposal, would distort 
the ASP-based payment system as a whole for biosimilars. Multiple 
commenters argued the biosimilar proposal would undermine profitability 
in the biosimilar marketplace and result in less participation by 
manufacturers and fewer treatment options for patients.
    Several commenters opposed the proposal on the grounds that they 
believe it would undermine the policy we established in the CY 2018 PFS 
final rule (82 FR 53182 through 53187) to allocate separate billing and 
payment codes for each biosimilar product and urged that we extend that 
policy to circumstances in which no manufacturer ASP data is available 
in a given quarter. Commenters stated that the interests we articulated 
in the CY 2018 rulemaking, namely, to advance patient access, improve 
marketplace dynamics, and long-term program savings, continue to be 
served by the assignment of unique payment limits for each biosimilar 
and would be undercut by either the proposed methodology for 
biosimilars with all negative or zero manufacturer's ASP data when 
positive manufacturer's ASP data are available for another 
biosimilar(s) with the same reference product or the first alternative. 
Two commenters stated that they believe payment limits for single 
source drugs and biosimilars reporting zero or negative manufacturer's 
ASP data must reflect the unique market dynamics that an individual 
product faces and be based on the product's own sales data. One 
commenter stated that they believe we should avoid implicating 
interchangeability where it hasn't been established.
    In general, commenters who opposed the proposal favored the second 
alternative. Several commenters explained their support for the second 
alternative due to its consistency with the requirement in section 
1847A(b)(8) of the Act that a biosimilar's payment limits be based on 
its own ASP data when ASP data is available. Commenters also expressed 
approval of its consistency with other drug pricing methodologies that 
employ a carryover approach when manufacturer data is negative or zero.
    Response: We appreciate the commenters' thoughtful responses to our 
proposal and alternatives and recognize the variety of different policy 
preferences expressed in the comments. In response to feedback 
expressed by the majority of interested parties, we are finalizing the 
second alternative policy as described in the proposed rule (89 FR 
61774). That is, we will set the payment limit for a biosimilar for 
which negative or zero ASP data are reported for all NDCs equal to the 
sum of the following until at least one NDC for the biosimilar has 
positive manufacturer's ASP data for a quarter:
     The volume-weighted average of the most recently available 
positive manufacturer's ASP data from a previous quarter, and
     6 percent (or 8 percent for qualifying biosimilar 
biologicals, as appropriate) of the amount determined under section 
1847A(b)(4) of the Act for the reference biological product (as defined 
in Sec.  414.902) for the given quarter.
    We will not consider the manufacturer's ASP data of other 
biosimilars with the same reference product.
    After considering the comments, we are persuaded by feedback 
provided by interested parties that the second alternative also 
supports our stated goal in the proposed rule: to codify a clear 
payment methodology for situations in which manufacturer ASP data is 
zero or negative, while accurately and fairly paying for these drugs 
and biosimilars. While we continue to believe our proposal would be 
suitable to achieve these program objectives and is consistent with the 
other calculations we are finalizing in sections III.A.d and e of this 
final rule, the second alternative also offers the advantages of 
methodologic simplicity and has broad support from interested parties.
    However, we continue to believe that there are advantages to our 
original proposed policy relative to the alternative method that we are 
finalizing. As stated in the proposed rule, we believe the proposed 
policy is consistent with policies finalized in the CY 2018 PFS 
rulemaking, as the proposal would allow CMS to calculate an 
operationally reasonable payment limit using positive manufacturer's 
ASP data for highly similar products in limited instances, but also not 
group biosimilars with a shared reference product in a single billing 
and payment code.
    We also disagree with commenters that our original proposed policy 
would cause general disruptions in the biosimilar market, provide 
competitive advantages to certain products relative to a reference 
biological product, or lead to the withdrawal of treatment options for 
patients, given the very narrow range of circumstances in which it 
would have applied. Furthermore, both the proposal and the second 
alternative would result in positive payment limits increased by the 
use of alternative data when price concessions for the given quarter 
would otherwise reduce the manufacturer's ASP to or below zero and 
neither would affect the payment limits of competitor products. The 
argument that one calculation would undermine the market or introduces 
harmful competitive asymmetries solely due to the source of the data 
and the other would not is unpersuasive.
    Our priority, however, is to establish a transparent and 
predictable payment approach and avoid unnecessary inconsistency in the 
overall payment policy structure. Therefore, we are

[[Page 97987]]

finalizing the second alternative as described in the proposed rule, 
meaning we are finalizing that we will calculate payment limits for all 
biosimilars for which negative or zero manufacturer's ASP data is 
reported for all NDCs regardless of whether other biosimilars have been 
approved for the same reference product or whether other biosimilars 
with the same reference product report positive manufacturer's ASP data 
for the given quarter, as set forth in the language we are finalizing 
at Sec.  414.904(i)(3)(ii), by setting the payment limit equal to the 
sum of the following until at least one NDC for the biosimilar has 
positive manufacturer's ASP data for a quarter:
     The volume-weighted average of the most recently available 
positive manufacturer's ASP data from a previous quarter, and
     6 percent (or 8 percent for qualifying biosimilar 
biologicals, as appropriate) of the amount determined under section 
1847A(b)(4) of the Act for the reference biological product (as defined 
in Sec.  414.902) for the given quarter.
    Comment: One commenter opposed the proposal and recommended that 
for biosimilars with only negative or zero manufacturer's ASP data, CMS 
set the payment limit by calculating the volume-weighted ASP using the 
most recent positive manufacturer's ASP for each NDC in the billing and 
payment code, while using the current quarter's reported units sold for 
each NDC. The commenter noted that if we do not incorporate this 
recommendation into our final policy, they would support the second 
alternative.
    Response: We thank the commenter for their feedback. The approach 
we are finalizing, basing the payment limit of the biosimilar on the 
volume-weighted average of the its own most recently available positive 
manufacturer's ASP data from a previous quarter and an add-on payment 
amount determined under section 1847A(b)(4) of the Act for the 
reference biological product, is most consistent with section 
1847A(c)(5)(B) of the Act, which directs the Secretary to update 
quarterly a drug's ASP payment limit using manufacturer's ASP data from 
the most recent calendar quarter for which such data are available. In 
addition, we believe the policy we are finalizing will base payment 
limits on data most closely related to the current market conditions 
because it would rely on the most recently available data required to 
be reported under section 1847A(c) of the Act from a full calendar 
quarter associated with a billing and payment code. We disagree with 
the commenter that calculating the payment limit for a drug using 
positive manufacturer's ASP data from multiple quarters would result in 
a payment limit that is more reflective of current market conditions 
because more time has passed since the sales reflected in the 
additional quarters for which inclusion is sought by the commenter. We 
refer readers to the response to the same approach recommended for 
single and multiple source drugs when zero or negative manufacturer's 
ASP data are reported for some, but not all NDCs in section III.A.2.c 
of this rule.
    Comment: Two commenters expressed support for the second 
alternative discussed in the proposed rule, but requested that it be 
modified by calculating the first component of the payment limit with 
the volume-weighted average of the positive ASP data from the previous 
four quarters for which positive data are available for the biosimilar, 
rather than only the most recent calendar quarter for which data are 
available.
    Response: We thank the commenters for their feedback. The 
calculation we are finalizing for biosimilars for which negative or 
zero ASP data is reported for all NDCs, using a single calendar quarter 
of data, is most consistent with the Secretary's requirement under 
section 1847A(c)(5)(B) of the Act because the statute directs that 
Secretary to update quarterly a drug's ASP payment limit using 
manufacturer's ASP data from the most recent single calendar quarter 
for which such data are available, rather than several quarters. For 
this reason, we believe using a single quarter of data is most 
appropriate. We also note a smoothing function for lagged price 
concessions is already incorporated into the ASP payment limit 
calculation by section 1847A(c)(5)(A) of the Act. We refer readers to 
the response to the same approach recommended for single and multiple 
source drugs when zero or negative manufacturer's ASP data are reported 
for some, but not all NDCs in section III.A.2.c of this rule.
    Comment: Several commenters stated that they believe CMS does not 
have the statutory authority to set payments limit for biosimilars for 
which ASP data is not available using pricing data associated with 
other biosimilar products. Some of those commenters stated that they 
believe section 1847A(b)(8) of the Act, which provides the methodology 
for calculating the payment limit of biosimilars when manufacturer's 
ASP data is available, requires the calculation of ASP-based payment 
for biosimilars to be particular to each biosimilar product even when 
ASP data is not available for a given quarter and prohibits the 
proposed blending of manufacturer ASP data. Two commenters stated that 
they believe section 1847A(b)(8)(A) of the Act similarly prohibits 
basing a payment limit on a reference product's ASP data, and therefore 
they believe the first alternative is similarly impermissible.
    One commenter stated its view that the Social Security Act does not 
expressly provide for how CMS should calculate payment amounts for 
separately payable Part B drugs when manufacturers report negative or 
zero ASP data, but urged CMS to apply a policy in these circumstances 
that adheres as closely as possible to the statutory payment limit 
requirements that apply when ASP data is available. The commenter 
stated that the main proposal and the first alternative considered are 
inconsistent with statutory requirements when positive manufacturer's 
ASP data is available, which require payment limit calculations, other 
than the add-on payment, to be specific to each biosimilar.
    Response: We disagree with commenters regarding our statutory 
authority to implement the proposed policy (which we note we are not 
finalizing).. The methodology described in section 1847A(b)(8)(A) of 
the Act applies to circumstances in which manufacturer's ASP data is 
available for the calculation of a biosimilar's payment limit for a 
given quarter, which is not the circumstance we are addressing in this 
policy.
    We agree with the commenter who expressed the view that the section 
provides no statutory methodology for the calculation of a drug's 
payment limit when manufacturers report negative or zero ASP data. We 
also agree with the commenter that the proposal for calculating the 
payment limit for a biosimilar for which negative or zero ASP data are 
reported for all NDCs is dissimilar from the methodology provided in 
statute for circumstances when positive manufacturer's ASP data is 
available. While such inconsistency does not preclude the from 
establishing a payment limit calculation for circumstances not 
described in section 1847A of the Act, the calculation are finalizing 
earlier in this section aligns more closely with the methodology 
described in section 1847A(b)(8)(A) of the Act and other calculations 
finalized in this final rule for payment limits for drugs for which 
negative or zero ASP data are reported for all NDCs.
    Comment: One commenter noted that our proposal and the second 
alternative do not address situations in which price

[[Page 97988]]

concessions significantly reduce the ASP-based payment limit but the 
payment limit is still positive, and urged that we pursue either a 
legislative proposal to exclude certain rebates from payment limit 
calculations, discussed further below in section III.A.2.h of this 
rule, or the first alternative considered. The commenter stated that 
the first alternative would provide the greatest assurance that the 
payment limit for a biosimilar does not fall below provider acquisition 
costs and recommended finalizing that methodology.
    Response: We appreciate the commenter's response. However, 
circumstances in which price concessions significantly reduce the ASP 
payment limit but the limit is still positive are outside the scope of 
the proposed rule. We appreciate the commenter's support for the first 
alternative, but for the reasons discussed above, we are finalizing the 
second alternative. We note that section 1847A(c)(3) of the Act 
expressly requires that in calculating the manufacturer's ASP, such 
price shall be calculated net of discounts as described in that 
paragraph.
    Comment: One commenter, while generally supporting the proposal and 
the first alternative, expressed concern that in biosimilar markets 
with few participants, the proposal and first alternative would provide 
manufacturers a perverse incentive to employ aggressive rebate 
strategies or otherwise manipulate pricing data in order that 
competitor products' ASP data be used as the basis for a more favorable 
payment limit.
    Response: We thank the commenter for their feedback. As we are 
finalizing neither the proposal nor the first alternative, we are not 
considering refinements to these approaches that may stem any pricing 
data manipulation resulting from these approaches.
    Comment: Two commenters recommended that in lieu of our proposal, 
we propose measures that address the underlying causes of negative or 
zero ASP data or biosimilar market dynamics that may cause 
manufacturers to exit the market.
    Response: We thank the commenters for their feedback and note that 
we may consider this input for potential policy proposals through 
future rulemaking.
g. Discontinued Drugs
    Generally, for single source drugs and multiple source drugs for 
which negative or zero manufacturer's ASP data is reported for all NDCs 
and for which all relevant applications (for example, new drug 
applications (NDAs), biologics license applications (BLAs), or 
abbreviated new drug applications (ANDAs)) have a marketing status of 
``discontinued'' on the FDA website,300 301 we proposed that 
the drug be priced by MACs consistent with section 20.1.3 in Chapter 17 
of the Medicare Claims Processing Manual for developing payment limits 
for covered drugs when CMS does not supply the payment allowance limit 
on the ASP drug pricing file.\302\
---------------------------------------------------------------------------

    \300\ https://www.accessdata.fda.gov/scripts/cder/daf/index.cfm.
    \301\ https://purplebooksearch.fda.gov/.
    \302\ Medicare Claims Processing Manual Chapter 17, section 
20.1.3: https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c17.pdf.
---------------------------------------------------------------------------

    Once a drug is discontinued, as indicated by the marketing status 
on the FDA website (either at Drugs@FDA \303\ for drugs or the Purple 
Book \304\ for biologicals), the manufacturer might not have sales to 
calculate an ASP and, therefore, the manufacturer often reports zero 
sales for the drug or a negative number for its calculated ASP or 
number of sales. However, even if a drug has a marketing status of 
discontinued on the FDA website, there may theoretically be available 
product that could be billed by the provider until the expiration date 
of the last lot sold for the drug. Relatedly, we have observed that 
very few claims are paid for drugs following their discontinuation. For 
these reasons, setting a payment limit for drugs with a marketing 
status of discontinued on the FDA website is not expected to be 
practically useful for claims processing and is not a prudent use of 
CMS resources.
---------------------------------------------------------------------------

    \303\ https://www.accessdata.fda.gov/scripts/cder/daf/index.cfm.
    \304\ https://www.fda.gov/drugs/therapeutic-biologics-applications-bla/purple-book-lists-licensed-biological-products-reference-product-exclusivity-and-biosimilarity-or.
---------------------------------------------------------------------------

    We did not receive any public comments on our proposal to have 
single source drugs and multiple source drugs for which negative or 
zero manufacturer's ASP data is reported for all NDCs and all NDCs have 
a marketing status of ``discontinued'' priced by the MACs consistent 
with section 20.1.3 in Chapter 17 of the Medicare Claims Processing 
Manual and are finalizing it as proposed.
h. General Comments
    Comment: One commenter expressed general support for the proposed 
changes under each of the circumstances, and expressed the view that 
these changes, if finalized, will simplify the process of establishing 
a payment limit when a drug is under circumstances that would otherwise 
make doing so difficult. Another commenter expressed support for the 
principle of using positive ASP data from the most recent quarter with 
at least one NDC with positive ASP to calculate a drug's payment limit 
when the manufacturer reports negative or zero ASP data. One commenter 
expressed general support of the use of ASP as the basis of payment 
whenever possible and appropriate, and added that ASP is the most 
transparent, predictable, and consistent pricing metric available.
    Response: We thank the commenters for their support.
    Comment: One commenter requested clarification on several technical 
aspects regarding when manufacturers report negative or zero ASP, 
including: whether negative values are to be noted by putting a number 
in parentheses or by including an initial minus sign; and how ``false 
positive'' ASPs (that is, ASPs calculated with negative values for both 
total sales and total units sold) are to be reported.
    Response: We thank the commenter for their request. Manufacturers 
should report negative values with a minus sign. In instances of false 
positives, manufacturers should report zero for the drug's ASP and 
provide clarification in their reasonable assumptions. We will update 
the Medicare Part B ASP Module Submitter User Guide and ASP Quarterly 
Publication Process Frequently Asked Questions documents to reflect 
these instructions.
    Comment: A couple commenters supported the proposed policies, but 
expressed concern that they do not go far enough to address the 
challenges posed by drugs for which the provider acquisition costs 
exceed their payment limits. Several commenters urged CMS to work with 
Congress to modify the payment limit calculations described in section 
1847A of the Act to ensure payment limits are greater than acquisition 
costs. Specifically, commenters requested legislative proposals 
including an add-on payment for drugs based on 8 percent of acquisition 
costs and the exclusion of certain price concessions from the payment 
limit calculation, such as rebates paid to pharmacy benefit managers 
(PBMs). One commenter requested that CMS clarify that PBMs, group 
purchasing organizations (GPOs), and payers are not purchasers 
referenced in section 1847A(c) of the Act and that sales to such 
entities are excluded from ASP payment limit calculations.
    Response: We thank the commenters for their feedback on the gaps 
between provider acquisition costs and payment

[[Page 97989]]

limits. As the commenters noted, in previous rules (that is, the 
Manufacturer Submission of Manufacturer's ASP Data for Medicare Part B 
Drugs and Biologicals interim final rule with comment (69 FR 17936) and 
the Manufacturer Submission of Manufacturer's ASP Data for Medicare 
Part B Drugs and Biologicals final rule (69 FR 55763 through 55765) on 
what price concessions described in section 1847A(c)(3) of the Act must 
be included in manufacturer's ASP calculations, we did not distinguish 
between whether the recipient of the concession is a purchaser or not. 
Further information is available in the ASP Quarterly Publication 
Process Frequently Asked Questions document,\305\ which specifies that 
manufacturers must report each drug's sales volume including the 
manufacturer's sales to all purchasers in the United States and ASP 
reflecting all price concessions as specified in 42 CFR 414.804(a)(2) 
and (a)(3). We note, however, that both the legislative proposals and 
the recommended interpretation of a purchaser as it relates to 
manufacturer ASP calculations under section 1847A(c) of the Act are out 
of scope for this final rule.
---------------------------------------------------------------------------

    \305\ https://www.cms.gov/files/document/frequently-asked-questions-faqs-asp-data-collection.pdf.
---------------------------------------------------------------------------

i. Summary
    We are finalizing amendments to Sec.  414.904(i) to reflect CMS's 
approach to setting a payment limit in circumstances in which negative 
or zero manufacturer's ASP data is reported by a manufacturer for a 
drug, beginning with the payment limits included in the January 2025 
ASP Drug Pricing file. Specifically, we are finalizing our proposal to 
codify that in cases where negative or zero manufacturer's ASP data is 
reported for some, but not all, NDCs of a multiple source drug, we will 
calculate the payment limit using the positive manufacturer's ASP data 
reported for the drug, except for the existing carryover policy for 
multiple source drugs that we will apply when unavailable data results 
in a significant change in the ASP payment limit. We are finalizing our 
proposal to move this carryover policy for multiple source drugs within 
Sec.  414.904(i) to fit within the structure of the proposed new set of 
payment limit methodologies. We also finalizing our proposal to codify 
that in the case of a multiple source drug for which negative or zero 
manufacturer's ASP data is reported for all NDCs, we will set the 
payment limit using the most recently available positive manufacturer's 
ASP data from a previous quarter until at least one NDC for the drug 
has positive manufacturer's ASP data for a quarter.
    We are finalizing our proposal to codify that in cases where 
negative or zero manufacturer's ASP data is reported for some, but not 
all, NDCs of a single source drug that is not a biosimilar, we will 
calculate the payment limit using the positive manufacturer's ASP data 
reported for the drug. We finalizing our proposal to codify that for 
single source drugs that are not biosimilars with all negative or zero 
manufacturer's ASP data for a given quarter, the payment limit will be, 
until at least one NDC for the drug has positive manufacturer's ASP 
data for a quarter, the lesser of 106 percent of the volume-weighted 
average of the most recently available positive manufacturer's ASP data 
for at least one NDC from a previous quarter and 106 percent of the 
WAC, and we will use 106 percent of the lowest WAC per billing unit if 
there is more than one WAC per billing unit available.
    We are also finalizing our proposal to codify that in cases where 
negative or zero manufacturer's ASP data is reported for some, but not 
all, NDCs of a biosimilar, we will calculate the payment limit using 
the positive manufacturer's ASP data reported for the biosimilar. 
Lastly, we are finalizing a modification to our proposal to codify a 
methodology for calculating payment limits when the manufacturer 
reports negative or zero manufacturer's ASP for all NDCs for a 
biosimilar for a given quarter. We are adopting the approach proposed 
for circumstances when no other biosimilars have been approved for the 
same reference product or no other biosimilars with the same reference 
product report positive manufacturer's ASP data for the given quarter 
for all circumstances, regardless of whether positive ASP data is 
reported for other biosimilars that reference the same reference 
product. In other words, we are finalizing for all biosimilars with all 
negative or zero manufacturer's ASP data that we will set the payment 
limit equal to the sum of the volume-weighted average of the most 
recently available positive manufacturer's ASP data from a previous 
quarter plus 6 percent (or 8 percent for a qualifying biosimilar 
biological) of the amount determined under section 1847A(b)(4) of the 
Act for the reference biological product for the given quarter.
3. Payment of Radiopharmaceuticals in the Physician Office
    Section 303(c) of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (MMA) (Pub. L. 108-173, enacted December 8, 
2003) revised the payment methodology for most Medicare-covered Part B 
drugs by adding section 1847A to the Act, which established a new ASP 
drug payment methodology for separately payable Medicare Part B drugs, 
beginning January 1, 2005. Specifically, section 303(h) of the MMA 
states, ``Nothing in the amendments made by this section [303 of the 
MMA] shall be construed as changing the payment methodology under 
[Medicare] Part B . . . for radiopharmaceuticals, including the use by 
carriers of invoice pricing methodology.''
    In accordance with the law, radiopharmaceuticals are not required 
to be paid using payment methodology under section 1847A of the Act, as 
currently described in the Medicare Claims Processing Manual (MCPM) 
Chapter 17, section 20.1.3. The manual instructs MACs to determine 
payment limits for radiopharmaceuticals based on the methodology in 
place as of November 2003, before the passage of the MMA, in the case 
of radiopharmaceuticals furnished in settings other than the hospital 
outpatient department. Currently, payment can vary by MAC. For example, 
payment can be based on 95 percent of Average Wholesale Price (AWP), 
invoices, or other reasonable payment methods/data made available when 
the product is contractor priced.306 307 308 309 310 311
---------------------------------------------------------------------------

    \306\ How Does Palmetto GBA Price Drugs and Biologics?, Palmetto 
GBA. https://www.palmettogba.com/palmetto/jjb.nsf/DIDC/
8EELKH2211~Specialties~Drugs%20and%20Biologicals.
    \307\ Radiopharmaceutical Fee Schedule 2024 Update, Noridian. 
https://med.noridianmedicare.com/web/jeb/fees-news/fee-schedules/radiopharmaceutical-fees.
    \308\ Radiopharmaceutical Drugs--Billing Instructions, A 
Celerian Group Company. https://www.cgsmedicare.com/partb/pubs/news/2013/0313/cope21543.html.
    \309\ Reimbursement Guidelines for Radiopharmaceuticals HCPCS 
Level II Codes, Novitas Solutions. https://www.novitas-solutions.com/webcenter/portal/MedicareJL/pagebyid?contentId=00231502.
    \310\ Reimbursement Guidelines for Radiopharmaceuticals 
Procedure Codes (Prior to January 2023), First Coast Service 
Options, Inc. https://medicare.fcso.com/Coverage_News/0494780.asp.
    \311\ Radiopharmaceutical Reimbursement, National Government 
Services. https://www.ngsmedicare.com/web/ngs/fee-schedule-lookup-details?lob=93617&state=97256&rgion=93623&selectedArticleId=4920515.
---------------------------------------------------------------------------

    We have heard from MACs and other interested parties that there is 
confusion about which exact methodologies are available to MACs for 
pricing of radiopharmaceuticals in the physician office setting, as 
different MACs had different methodologies in place as of

[[Page 97990]]

November 2003. MACs are uncertain whether they can use any of these 
payment policies that were in place, or only the policy that was in 
place for their jurisdiction as of November 2003.
    Accordingly, while we evaluate our broader policies in this space 
for future rulemaking, we proposed to clarify that any payment 
methodology that was being used by any MAC prior to the enactment of 
the MMA can continue to be used by any MAC, including the use of 
invoice pricing. That is, we proposed to clarify that any methodology 
that was in place to set pricing of radiopharmaceuticals in the 
physician office setting prior to November 2003 can be used by any MAC, 
regardless of whether that specific MAC used the methodology prior to 
November 2003.
    Thus, we proposed to codify in regulations at Sec.  414.904(e)(6) 
that, for radiopharmaceuticals furnished in a setting other than the 
hospital outpatient department, MACs shall determine payment limits for 
radiopharmaceuticals based on any methodology used to determine payment 
limits for radiopharmaceuticals in place on or prior to November 2003. 
Such methodology may include, but is not limited to, the use of 
invoice-based pricing. We received public comments on these proposals. 
The following is a summary of the comments we received and our 
responses.
    Comment: We received many comments expressing general support for 
the proposal to clarify that any MAC may use any radiopharmaceutical 
payment methodology available on or prior to November 2003. One 
commenter expressed strong support for separate Medicare payment for 
radiopharmaceuticals.
    Response: We thank the commenters for their support.
    Comment: Several commenters recommended various approaches to 
improve transparency around how MACs make payment for 
radiopharmaceuticals, including for CMS to closely monitor and evaluate 
how MACs make payment for radiopharmaceuticals and to direct MACs to 
publish the prices of these radiopharmaceuticals and publicly state the 
specific payment methodology that they use. Specifically, one commenter 
recommended CMS require that MACs routinely update (for example, 
quarterly or semiannually) their invoice and AWP reference files to 
accurately set payment limits for these therapies. In addition, the 
commenter requested that CMS publish AWP and WAC pricing information 
for therapeutic radiopharmaceuticals in the quarterly ASP pricing file 
on the CMS website. Another commenter encouraged CMS to work with MACs 
to ensure that appropriate metrics such as WAC, invoice pricing, and 
ASP are used as the basis to establish payment rates.
    Response: We appreciate the many commenters for their feedback. In 
accordance with our clarification, any payment methodology that was 
being used by any MAC prior to the enactment of the MMA can continue to 
be used by any MAC, including the use of invoice pricing. MACs update 
their own pricing files, and therefore, we suggest that the commenters 
share their concerns with the MACs. We note that CMS was able to find 
public pricing file information for some MACs.312 313 We 
appreciate the other commenters' feedback and may address our broader 
policies regarding payment of radiopharmaceuticals in the physician 
office in future rulemaking.
---------------------------------------------------------------------------

    \312\ Radiopharmaceutical Fee Schedule, Noridian Healthcare 
Solutions. https://med.noridianmedicare.com/web/jfb/fees-news/fee-schedules/radiopharmaceutical-fees.
    \313\ Fee Schedule Lookup Details, National Government Services. 
https://www.ngsmedicare.com/web/ngs/fee-schedule-lookup-details?lob=93617&state=97256&rgion=93623&selectedArticleId=4920515.
---------------------------------------------------------------------------

    Comment: A few commenters urged CMS to direct MACs to utilize a 
single payment methodology across all the MACs, and the commenters 
suggested that they believe uniform payment would alleviate confusion 
for MACs. They also stated that payment variation across MACs results 
in difficulty obtaining the payment rate prior to submitting a claim. 
Other commenters raised concern that there is significant variation in 
coverage of radiopharmaceuticals across jurisdictions, resulting in 
some providers not offering certain radiopharmaceuticals. One commenter 
recommended implementing invoice-based pricing, asserting that that 
payment methodology would result in savings for Medicare. Another 
commenter recommended standardizing a single rate across MACs of AWP 
minus 5%, which they claim would ensure acquisition and administration 
costs are covered to support access to this treatment in the community-
based setting.
    Response: We appreciate the commenters feedback. We may consider 
these comments on the broader policies regarding payment of 
radiopharmaceuticals in the physician office if addressed in future 
rulemaking.
    Comment: A few commenters recommended CMS issue educational 
materials on radiopharmaceutical payment as well as to reach out to 
contractors, providers, and other stakeholders to educate them on this 
issue. One commenter requested CMS engage with interested parties early 
in any process that could potentially impact longstanding Medicare 
payment policies for radiopharmaceuticals.
    Response: We appreciate the feedback from commenters. CMS plans to 
update the Medicare Claims Processing Manual to reflect the finalized 
policies for payment of radiopharmaceuticals in the physician office. 
In addition, we welcome engagement on other ways to educate interested 
parties on our current payment policies, as well as possible payment 
policies CMS could consider.
    Comment: We received one comment that recommends MACs disclose how 
payment rates will be determined, and for this method to be open for 
public comment. The commenter also requested MACs work with providers 
if the resulting payment is below the cost of the radiopharmaceutical.
    Response: We appreciate the commenter's feedback. This 
recommendation as to the way MACs determine appropriate payment rates 
is outside the scope of this proposal. This proposal clarifies that 
MACs may use any payment methodology that was being used on or prior to 
November 2003.
    After consideration of public comments, we are finalizing as 
proposed a revision to Sec.  414.904(e)(6). For radiopharmaceuticals 
furnished in a setting other than the hospital outpatient department, 
MACs shall determine payment limits for radiopharmaceuticals based on 
any methodology used to determine payment limits for 
radiopharmaceuticals in place on or prior to November 2003. Such 
methodology may include, but is not limited to, the use of invoice-
based pricing.
4. Immunosuppressive Therapy (Sec. Sec.  410.30 and 414.1001)
a. Background
    Medicare Part B coverage of drugs used in immunosuppressive therapy 
was established by section 9335(c) of the Omnibus Budget Reconciliation 
Act of 1986 (Pub. L. 99-509) (OBRA '86). OBRA '86 added subparagraph 
(J) to section 1861(s)(2) of the Act to provide Medicare Part B 
coverage for immunosuppressive drugs, furnished to an individual who 
receives an organ transplant for which Medicare payment is made, for a 
period not to exceed 1 year after the transplant procedure. Coverage of 
these drugs under Medicare Part B began January 1, 1987. Section

[[Page 97991]]

4075 of the Omnibus Budget Reconciliation Act of 1987 (Pub. L. 100-203) 
(OBRA '87) revised section 1861(s)(2)(J) of the Act so that the scope 
of coverage was expanded from coverage of ``immunosuppressive drugs'' 
to coverage of ``prescription drugs used in immunosuppressive 
therapy.'' For the purposes of this proposed rule, we refer to this 
benefit as the immunosuppressive drug benefit.
    In the February 16, 1995 Medicare Coverage of Prescription Drugs 
Used in Immunosuppressive Therapy final rule (60 FR 8951 through 
8955),\314\ we codified policies related to the scope of drugs for 
which payment may be made under this benefit. We finalized that payment 
may be made for prescription drugs used in immunosuppressive therapy 
that have been approved for marketing by the U.S. Food and Drug 
Administration (FDA) and meet one of the following conditions:
---------------------------------------------------------------------------

    \314\ https://www.govinfo.gov/content/pkg/FR-1995-02-16/pdf/95-3835.pdf.
---------------------------------------------------------------------------

    (1) The approved labeling includes the indication for preventing or 
treating the rejection of a transplanted organ or tissue.
    (2) The approved labeling includes the indication for use in 
conjunction with immunosuppressive drugs to prevent or treat rejection 
of a transplanted organ or tissue.
    (3) Have been determined by a Part B carrier, in processing a 
Medicare claim, to be reasonable and necessary for the specific purpose 
of preventing or treating the rejection of a patient's transplanted 
organ or tissue, or for use in conjunction with immunosuppressive drugs 
for the purpose of preventing or treating the rejection of a patient's 
transplanted organ or tissue. (In making these determinations, the 
carriers may consider factors such as authoritative drug compendia, 
current medical literature, recognized standards of medical practice, 
and professional medical publications.)
    We also finalized the period of coverage eligibility for a 
transplant patient.\315\ Lastly, we established the policy that drugs 
are covered under this provision irrespective of whether they can be 
self-administered. We codified these policies at Sec.  410.31 (later 
redesignated as Sec.  410.30).
---------------------------------------------------------------------------

    \315\ Since the establishment of the benefit by the enactment of 
OBRA '86, the period of coverage for a transplant patient under 
section 1861(s)(2)(J) of the Social Security Act has been 
subsequently amended by section 202 of the Medicare Catastrophic 
Coverage Act of 1988 (Pub. L. 100-360), the Medicare Catastrophic 
Coverage Repeal Act of 1989 (Pub. L. 101-234), section 13565 of the 
Omnibus Reconciliation Act of 1993 (OBRA '93) (Pub. L. 103-66), 
section 160 of the Social Security Act Amendments of 1994 (Pub. L. 
103-432), section 113 of the Medicare, Medicaid and SCHIP Benefits 
Improvement and Protection Act of 2000 (Pub. L. 106-554) (BIPA 
2000). The last of these statutory changes eliminates the time 
limits for coverage of prescription drugs used in immunosuppressive 
therapy under the Medicare program, effective with immunosuppressive 
drugs furnished on or after December 21, 2000.
---------------------------------------------------------------------------

    We note that we do not maintain a list of drugs covered under this 
benefit; rather, MACs are expected to maintain a list of these drugs, 
as stated in section[thinsp]80.3, Chapter 17 of the Medicare Claims 
Processing Manual. MACs are expected to keep informed of FDA approvals 
of immunosuppressive drugs and update guidance as applicable.
    While the eligibility timeframe has been extended and eligibility 
has been expanded since the immunosuppressive drug benefit under 
Medicare Part B was revised by OBRA '87, the scope of drugs payable 
under this benefit has not changed. Some examples of how the benefit 
has been extended and expanded include: section 13565 of the Omnibus 
Reconciliation Act of 1993 (OBRA '93) (Pub. L. 103-66), amended section 
1861(s)(2)(J) of the Act to extend the duration of coverage for the 
immunosuppressive drug benefit to 36 months from the hospital discharge 
date following a covered transplant procedure for drugs furnished after 
CY 1997; section 113 of the Medicare, Medicaid and SCHIP Benefits 
Improvement and Protection Act of 2000 (Pub. L. 106-554) (BIPA) revised 
section 1861(s)(2)(J) of the Act to eliminate the time limits for 
coverage of prescription drugs used in immunosuppressive therapy under 
the Medicare program; and most recently, section 402 of the 
Consolidated Appropriations Act, 2021 (Pub. L. 116-260) amended section 
226A(b)(2) to allow certain individuals whose Medicare entitlement 
based on ESRD would otherwise end 36 months after a kidney transplant 
to continue enrollment under Medicare Part B only for the coverage of 
immunosuppressive drugs described in section 1861(s)(2)(J) of the Act.
    After reviewing our longstanding policies for the immunosuppressive 
drug benefit and engaging with interested parties about current 
practices and challenges, we proposed policies aimed to reduce barriers 
faced by beneficiaries receiving immunosuppressive drugs under this 
benefit, as described below.
b. Compounded Immunosuppressive Drugs With Oral or Enteral Routes of 
Administration
    As discussed in the previous section, the immunosuppressive drug 
benefit currently includes immunosuppressive therapies that have been 
approved for marketing by the FDA (and meet other regulatory 
requirements at Sec.  410.30). Interested parties have expressed 
concern that compounded formulations of immunosuppressive drugs (for 
example, a liquid formulation of an immunosuppressive drug not 
commercially available from a manufacturer but prepared by a 
pharmacist) are not included in the immunosuppressive therapy benefit 
because these formulations are not approved by the FDA (that is, FDA 
does not review these drugs to evaluate their safety, effectiveness, or 
quality before they reach patients \316\), which is a regulatory 
requirement under the current benefit. These interested parties 
communicated that compounded formulations are frequently used in the 
treatment of transplant recipients who cannot swallow oral capsules or 
tablets due to age or oral-motor dysfunction. Some examples of drugs 
compounded for preventing or treating the rejection of a transplanted 
organ or tissue include, but are not limited to, azathioprine,\317\ 
cyclophosphamide,\318\ and tacrolimus.\319\
---------------------------------------------------------------------------

    \316\ https://www.fda.gov/drugs/human-drug-compounding/compounding-laws-and-policies.
    \317\ United States Pharmacopeia (2024). USP Monographs, 
Azathioprine Compounded Oral Suspension. USP-NF. Rockville, MD: 
United States Pharmacopeia.
    \318\ United States Pharmacopeia (2024). USP Monographs, 
Cyclophosphamide Compounded Oral Suspension. USP-NF. Rockville, MD: 
United States Pharmacopeia.
    \319\ United States Pharmacopeia (2024). USP Monographs, 
Tacrolimus Compounded Oral Suspension. USP-NF. Rockville, MD: United 
States Pharmacopeia.
---------------------------------------------------------------------------

    We recognize certain patient groups, such as those with dysphagia, 
those with enteral feeding tubes (for example, a nasogastric feeding 
tube or a percutaneous endoscopic gastrostomy (PEG) tube), and many 
pediatric patients 320 321 covered under Medicare rely on 
compounded immunosuppressive drugs for maintenance therapy and believe 
that

[[Page 97992]]

their inclusion in the immunosuppressive drug benefit will help to 
ensure that each beneficiary is able to access the most clinically 
appropriate formulation of an immunosuppressive 
drug.322 323 324 Nonadherence to lifelong maintenance 
immunosuppressive therapy contributes to unfavorable post-transplant 
outcomes, with obstacles to accessing medication being a prominent risk 
factor for such nonadherence.\325\ Therefore, in the CY 2025 PFS 
proposed rule, we proposed revisions at Sec.  410.30 to include orally 
and enterally administered compounded formulations with active 
ingredients derived only from FDA-approved drugs where approved 
labeling includes an indication for preventing or treating the 
rejection of a transplanted organ or tissue, or for use in conjunction 
with immunosuppressive drugs to prevent or treat rejection of a 
transplanted organ or tissue, or have been determined by a MAC, in 
processing a Medicare claim, to be reasonable and necessary for this 
specific purpose as outlined in the immunosuppressive drug benefit. As 
we intend this proposal to enhance access and address adherence 
concerns for patients who are not able to swallow capsules or tablets 
and we do not believe there are access concerns with other types of 
formulations, we proposed to limit the included compounded formulations 
to those products with oral and enteral routes of administration (for 
example, oral suspensions or solutions).
---------------------------------------------------------------------------

    \320\ In the United States, children under 18 years of age 
comprise only 0.14 percent of the total Medicare ESRD population. 
Source: CY 2024 End-Stage Renal Disease Prospective Payment System 
final rule (88 FR 76374).
    \321\ Lentine, K, Smith, JM, Lyden, GR, Miller, JM, Dolan, TG, 
Bradbrook, K, Larkin, L, Temple, K, Handarova, DK, Weiss, S, Israni, 
AK, Snyder, JJ (2024). OPTN/SRTR 2022 Annual Data Report: Kidney. 
American Journal of Transplantation, 24(2), S19-S118. https://doi.org/10.1016/j.ajt.2024.01.012.
    \322\ Silva RME, Portela RDP, da Costa IHF, et al. 
Immunosuppressives and enteral feeding tubes: An integrative review. 
J Clin Pharm Ther. 2020;45:408-418. https://doi.org/10.1111/jcpt.13093.
    \323\ Goorhuis JF, Scheenstra R, Peeters PM, Albers MJ. Buccal 
vs. nasogastric tube administration of tacrolimus after pediatric 
liver transplantation. Pediatr Transplant. 2006 Feb;10(1):74-7. 
https://doi:10.1111/j.1399-3046.2005.00402.x. PMID: 16499591.
    \324\ Liverman, R, Chandran, MM, Crowther, B. Considerations and 
controversies of pharmacologic management of the pediatric kidney 
transplant recipient. Pharmacotherapy. 2021 Jan;41(1): 77-102. 
https://doi.org/10.1002/phar.2483.
    \325\ Fine RN, Becker Y, De Geest S, et al. Nonadherence 
consensus conference summary report. Am J Transplant. 2009; 9(1): 
35-41. doi: 10.1111/j.1600-6143.2008.02495.x.
---------------------------------------------------------------------------

    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: Several commenters expressed support for the proposal to 
include orally and enterally administered compounded formulations for 
immunosuppressive drugs covered under the Part B immunosuppressive 
therapy benefit. Several commenters reiterated that compounded 
medications may be the only treatment option available for certain 
patient populations in need of immunosuppressive therapy, such as those 
with dysphagia, those with enteral feeding tubes, and children who are 
transplant recipients. These commenters stated that the proposed policy 
would ensure these patient groups have access to appropriate care.
    Response: We thank the comments for their support.
    Comment: One commenter requested clarification on whether the 
proposed revision to the immunosuppressive therapy benefit includes 
compounds prepared with the same active ingredients contained in the 
FDA-approved drug or whether the FDA-approved drug must itself be 
compounded. The commenter also asked whether all active ingredients in 
the FDA-approved drug must be included in the compounded formulation 
administered to the beneficiary to be included in the benefit, or 
whether a subset of active ingredients from the FDA-approved drug may 
be included in the compounded formulation.
    Response: We thank the commenter for the questions. We clarify that 
for a compounded formulation to be included in the immunosuppressive 
therapy benefit, it must be compounded from an FDA-approved drug for 
which the approved labeling includes an indication for preventing or 
treating the rejection of a transplanted organ or tissue, or for use in 
conjunction with immunosuppressive drugs to prevent or treat rejection 
of a transplanted organ or tissue, or has been determined by a MAC, in 
processing a Medicare claim, to be reasonable and necessary for this 
specific purpose as outlined in the immunosuppressive drug benefit. A 
bulk drug substance \326\ (in other words, an active pharmaceutical 
ingredient for compounding) can be a component of an FDA-approved drug 
product. However, since the bulk drug substance itself does not meet 
one of those definitions, compounded immunosuppressives made from a 
bulk drug substance are not included in the benefit. Accordingly, a 
compounded formulation that meets one of the three proposed definitions 
must be compounded from the FDA-approved drug.
---------------------------------------------------------------------------

    \326\ https://www.fda.gov/drugs/human-drug-compounding/bulk-drug-substances-used-compounding
---------------------------------------------------------------------------

    Comment: One commenter disapproved of the proposal and requested it 
be limited to coverage of compounded drugs that are in an FDA-
designated shortage. The commenter cited patient safety, efficacy, and 
quality concerns, as compounded drugs are not reviewed by the FDA. The 
commenter also expressed concern that including compounded drugs in the 
immunosuppressive therapy benefit could lead to medication cost 
increases due to supply constraints.
    The commenter also raised billing concerns, including that dosage 
adjustments in compounded formulations make billing monitoring more 
challenging and the use of Not Otherwise Classified (NOC) billing and 
payment codes adds to the complexity of making correct payments.
    Response: We thank the commenter for their feedback. Because of the 
limited scope of this proposal to the coverage of compounded 
immunosuppressives from FDA-approved drugs, we believe the safety, 
efficacy, and quality concerns relative to the commercial formulations 
to be minimal. The aim of the proposal is to allow coverage under Part 
B for certain liquid compounded immunosuppressives that may not be 
available as an FDA-approved product so that individuals who require 
such formulations can receive the most clinically appropriate therapy. 
To minimize safety concerns, we limited these compounded versions to 
orally and enterally administered versions and did not permit 
compounded versions with other routes of administration that may have 
more safety considerations (for example, intravenously administered 
drugs).
    To the commenter's concern about access and cost increases, we 
estimate the patient population of these compounded immunosuppressive 
drugs is currently no more than 2,000 patients a year.\327\ We do not 
believe a patient population of this size will have a significant 
impact on compounding pharmacy resources or the costs of compounded 
drugs.
---------------------------------------------------------------------------

    \327\ There were a total of 2,662 Medicare Part D prescription 
drug events (PDEs) for compounded immunosuppressive drugs in CY 
2023.
---------------------------------------------------------------------------

    We acknowledge the commenter's concern regarding the billing for 
compounded immunosuppressive drugs with a NOC billing and payment code. 
In order to ensure correct payments in processing claims under the 
revised benefit, MACs could require providers and suppliers who bill 
for compounded immunosuppressive drugs to include information necessary 
(for example, the name of the drug, NDC, total dosage, and the method 
of administration) in the narrative field, or Item 19 of claim form 
CMS-1500 or electronic claim

[[Page 97993]]

equivalent and/or request additional documentation.
    After consideration of public comments, we are finalizing as 
proposed to include orally and enterally administered compounded 
formulations with active ingredients derived only from FDA-approved 
drugs where approved labeling includes an indication for preventing or 
treating the rejection of a transplanted organ or tissue, or for use in 
conjunction with immunosuppressive drugs to prevent or treat rejection 
of a transplanted organ or tissue, or have been determined by a MAC, in 
processing a Medicare claim, to be reasonable and necessary for this 
specific purpose as outlined in the immunosuppressive drug benefit at 
Sec.  410.30(a).
c. Immunosuppressive Refill Policy and Supplying Fee
    Section 303(e)(2) of the MMA added section 1842(o)(6) of the Act 
which requires the Secretary to pay a supplying fee (less applicable 
deductible and coinsurance) to pharmacies for certain Medicare Part B 
drugs and biologicals, as determined appropriate by the Secretary, 
including for immunosuppressive drugs described in section 
1861(s)(2)(J) of the Act.
    In the CY 2005 PFS, we established a supplying fee of $50 for the 
initial oral immunosuppressive prescription supplied in the first month 
after a transplant (69 FR 66312 through 66313). In the CY 2006 PFS, we 
established a supplying fee of $16 for all subsequent prescriptions 
after the initial prescription supplied during a 30-day period (70 FR 
70233 through 70236).
    Following the CY 2006 rulemaking, we issued program instruction 
\328\ to the MACs that prohibits payment for refills of 
immunosuppressive drug prescriptions in most circumstances and limits 
payment for prescriptions to 30-day supplies. We stated in Chapter 17 
of the Medicare Claims Processing Manual that contractors should limit 
payment for prescriptions to those of 30-day supplies, except in 
special circumstances, because dosage frequently diminishes over time; 
it is not uncommon for the provider to change the prescription from one 
drug to another; and coinsurance liability on unused drugs could be a 
financial burden to the beneficiary.
---------------------------------------------------------------------------

    \328\ Section[thinsp]80.3, Chapter 17 of the Medicare Claims 
Processing Manual.
---------------------------------------------------------------------------

    We have heard from interested parties that both the 30-day limit on 
supplies and prohibition on payment for refills no longer align with 
current practice for treating patients on maintenance immunosuppression 
regimens who are prescribed a stable dosage for months or years and 
receive refillable supplies for several months' use at a time. Frequent 
dosage adjustments for some immunosuppressive drugs that require 
therapeutic drug monitoring and dose titration based on blood 
concentrations, such as tacrolimus, tend to occur more often in newly 
transplanted recipients, and less frequently once patients are on 
stable regimens.\329\ Other immunosuppressive drugs, such as 
mycophenolate mofetil, do not require routine therapeutic drug 
monitoring and have fixed recommended dosages per labeling where 
patients may be maintained on stable dosages for several months unless 
patients experience complications.\330\ Transplant recipients must take 
immunosuppressive drugs on a lifelong basis to prevent rejection, 
maintain allograft function, and, for some transplanted organs, prevent 
death. Most patients are eventually prescribed stable maintenance 
immunosuppressive drug dosages post-transplant for extended periods of 
time. For example, liver transplant guidelines recommend review of the 
immunosuppressive drug regimen at least every 6 months.\331\ For 
transplant beneficiaries, we believe that the limitation on payment to 
a maximum 30-day supply of immunosuppressive therapy by our program 
instruction is an unnecessary burden that poses a greater risk to 
adherence than does the potential for a sudden change in dosage needs. 
There is considerable concern among providers and advocates that 
interrupted access to immunosuppressive drugs caused by running out of 
or having insufficient medication supply can decrease medication 
adherence, increase risk of organ transplant rejection, and ultimately 
decrease the rate of survival of transplant 
recipients.332 333 We agree with interested parties that it 
would be beneficial to patients to reduce barriers that complicate 
access to immunosuppressive medication and reasonable for CMS to make 
programmatic changes consistent with this objective.
---------------------------------------------------------------------------

    \329\ Tacrolimus [package insert]. Northbrook, IL: Astellas 
Pharma, Inc.; 2022. https://www.accessdata.fda.gov/drugsatfda_docs/label/2023/050708s055,010115s007lbl.pdf.
    \330\ Cellcept [package insert]. San Francisco, CA: Genentech 
USA, Inc.; 2022. https://www.accessdata.fda.gov/drugsatfda_docs/label/2022/050722s050,050723s050,050758s048,050759s055lbl.pdf.
    \331\ Lucey MR, Terrault N, Ojo L, et al. Long-term management 
of the successful adult liver transplant: 2012 practice guideline by 
the American Association for the Study of Liver Diseases and the 
American Society of Transplantation. Liver Transpl. 2013 
Jan;19(1):3-26. doi: 10.1002/lt.23566.
    \332\ Nelson J, Alvey N, Bowman L, et al. Consensus 
recommendations for use of maintenance immunosuppression in solid 
organ transplantation: Endorsed by the American College of Clinical 
Pharmacy, American Society of Transplantation, and the International 
Society for Heart and Lung Transplantation. Pharmacotherapy. 2022; 
42:599-633. doi: 10.1002/phar.2716.
    \333\ Chisholm MA, Lance CE, Williamson GM, Mulloy LL. 
Development and validation of an immunosuppressant therapy adherence 
barrier instrument. Nephrol Dial Transplant. 2005 Jan;20(1): 181-
188. https://doi.org/10.1093/ndt/gfh576.
---------------------------------------------------------------------------

    Accordingly, we proposed two changes regarding supplying fees and 
refills for immunosuppressive drugs. First, we proposed to allow 
payment of a supplying fee for a prescription of a supply of up to 90 
days. To reflect this proposal, we proposed to revise Sec.  414.1001 to 
allow payment of a supplying fee to a pharmacy for first prescriptions 
and for prescriptions following the first prescription for greater than 
a 30-day supply. We proposed additional modifications at Sec.  414.1001 
to combine paragraphs (a) (for supplying fees) and (b) (for supplying 
fees following a transplant). Accordingly, we also proposed to remove 
paragraph (b) and redesignate paragraphs (c) and (d) as paragraphs (b) 
and (c), respectively. We stated that further study the supplying fee 
amounts for immunosuppressive drugs is needed and did not propose to 
make any changes to the supplying fee amounts at this time (meaning the 
current 30-day supplying fees would apply to any amount of days' 
supply). The dispensing and supplying fees under Part B (Sec.  
414.1001) have been shown to be higher than dispensing fees paid in the 
commercial market.\334\ So, until additional study is done regarding 
input costs for dispensing drugs billed to Medicare Part B and 
subsequent notice-and-comment rulemaking can be done, if appropriate, 
in response to such information, we aim to continue the current fee 
amounts regardless of the days' supply dispensed. Second, we proposed 
to allow payment of refills for these immunosuppressive drugs. Under 
this proposal, the prescribing healthcare provider may adjust the days' 
supply up to 90 days and allow refills for an immunosuppressive drug 
based on the individual circumstance of the beneficiary in accordance 
with applicable State laws.
---------------------------------------------------------------------------

    \334\ https://www.pcmanet.org/rx-research-corner/mandating-
pharmacy-reimbursement-increase-spending/08/31/2021/
#:~:text=The%20average%20dispensing%20fee%20in,the%20state's%20Medica
id%20FFS%20rate.
---------------------------------------------------------------------------

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

[[Page 97994]]

    Comment: Two commenters expressed support for both allowing a 
supplying fee for a prescription of a supply for up to 90 days, rather 
than 30 days as is the case under current regulation, and to allow 
refills for an immunosuppressive drug. One commenter affirmed the 
proposal would reduce barriers to treatment and in so doing reduce the 
occurrence of organ rejection.
    Response: We thank the commenters for their support.
    After consideration of public comments, we are finalizing as 
proposed to allow payment of a supplying fee for a prescription of a 
supply of up to 90 days and to allow refills for an immunosuppressive 
drug based on the individual circumstance of the beneficiary in 
accordance with applicable State laws.
d. General Comments
    Comment: Several commenters requested we clarify that patients who 
receive stem cell transplants have access to the immunosuppressive 
therapy benefit.
    Response: Our regulations at Sec.  410.30(b) specify the 
immunosuppressive therapy is available to individuals who received an 
organ or tissue transplant for which Medicare payment is made, provided 
the individual is eligible to receive Medicare Part B benefits. Stem 
cells are taken from various tissues throughout the body, such as blood 
and bone marrow.335 336 337 Therefore, stem cells are 
included in the meaning of a ``tissue,'' as it is used in Sec.  
410.30(b), and individuals who receive a stem cell transplant are 
eligible for the immunosuppressive therapy benefit, so long as they 
also otherwise meet the eligibility requirements. We also note that 
both DME MACs recognize recipients of stem cell transplants as eligible 
for the immunosuppressive therapy benefit.\338\
---------------------------------------------------------------------------

    \335\ https://www.cms.gov/medicare-coverage-database/view/article.aspx?articleId=52879.
    \336\ https://www.cancer.gov/about-cancer/treatment/types/stem-cell-transplant.
    \337\ https://www.cancer.org/cancer/managing-cancer/treatment-types/stem-cell-transplant/types-of-transplants.html.
    \338\ https://www.cms.gov/medicare-coverage-database/view/article.aspx?articleId=52474.
---------------------------------------------------------------------------

e. Out of Scope Comments
    Comment: We received comments on topics that were outside the scope 
of the proposed rule. Those topics included: (1) coverage for all other 
compounded drugs that are part of treatment plans for pediatric 
Medicare beneficiaries and (2) a request that we work with compounding 
pharmacy interested parties if we consider changes to immunosuppressive 
supplying fee amounts in the future.
    Response: We implemented section 1861(s)(2)(J) of the Act, which 
provides coverage for health services including prescription drugs used 
in immunosuppressive therapy furnished to an individual who receives an 
organ transplant for which Medicare payment is made, in the 
Immunosuppressive Therapy final rule (60 FR 8951 through 8955). As we 
finalized in section III.A.4.b, Sec.  410.30(a) describes drugs that 
have approved labeling with indications for preventing or treating the 
rejection of a transplanted organ or tissue or for use in conjunction 
with immunosuppressive drugs to prevent or treat rejection of a 
transplanted organ or tissue; drugs that have been approved for 
marketing by FDA and determined by a MAC to be reasonable and necessary 
for the specific purpose of preventing or treating the rejection of a 
patient's transplanted organ or tissue, or for use in conjunction with 
immunosuppressive drugs for the purpose of preventing or treating the 
rejection of a patient's transplanted organ or tissue; and drugs that 
are a compounded formulation with active ingredients derived only from 
either of the first two groups of covered drugs. Drugs with indications 
for other conditions not described in Sec.  410.30(a), such as mineral 
deficiencies or hypertension, would not be covered under the 
immunosuppressive therapy benefit.
    Regarding changes to supplying fee amounts, we noted in the CY 2025 
PFS proposed rule that further study for input costs for dispensing 
drugs billed to Medicare Part B is needed and could propose, if 
appropriate, changes to fee amounts in future notice-and-comment 
rulemaking. As the comment we received was about the amount of the 
supplying fee, it is outside the scope of this rulemaking. However, we 
welcome engagement with interested parties regarding supplying fees for 
immunosuppressives.
    As such, while these comments are out of scope for this final rule 
because they do not relate to the specific proposals included in the 
proposed rule, we appreciate the feedback and may consider these 
recommendations for future rulemaking.
5. Blood Clotting Factors (Sec.  410.63)
a. Background
    Hemophilia is a genetic bleeding disorder resulting in a deficiency 
of coagulation Factor VIII (hemophilia A) or coagulation Factor IX 
(hemophilia B) due to mutations in the respective clotting factor 
genes.339 340 Prophylactic use of clotting factors has been 
proven to improve quality of life by preventing joint bleeds but 
requires maintenance therapy, usually throughout the life of the 
patient. Preventing joint damage early is crucial because the initial 
damage will progress, irrespective of whether further bleeds occur in 
the affected joints.\341\ Currently, clotting factor treatments 
include: plasma-derived products, which are virally inactivated and 
made from human donor plasma; recombinant products, such as recombinant 
Factors VIIa, VIII, IX, X, XIII, which are created using genetically 
engineered cells and recombinant technology; and a monoclonal antibody 
product that binds to specific receptor sites of missing clotting 
factor, which is needed for effective hemostasis.342 343 
Individuals with hemophilia generally self-infuse clotting factor at 
home, often learning to do so in childhood.344 345 346
---------------------------------------------------------------------------

    \339\ https://www.hemophilia.org/bleeding-disorders-a-z/types/hemophilia-a, accessed April 9, 2024.
    \340\ https://www.hemophilia.org/bleeding-disorders-a-z/types/hemophilia-b, accessed April 9, 2024.
    \341\ Aledort LM, Haschmeyer RH, Pettersson H. A longitudinal 
study of orthopaedic outcomes for severe factor-VIII-deficient 
haemophiliacs. The Orthopaedic Outcome Study Group. J Intern Med. 
1994 Oct;236(4):391-9.
    \342\ Srivastava A, et al. Haemophilia. 2020;26(suppl 6):1-158.
    \343\ https://dailymed.nlm.nih.gov/dailymed/drugInfo.cfm?setid=2483adba-fab6-4d1b-96c5-c195577ed071.
    \344\ GAO-03-184 Medicare: Payment for Blood Clotting Factor. 
www.gao.gov/assets/gao-03-184.pdf.
    \345\ Valentino, L. A., Baker, J. R., Butler, R., Escobar, M., 
Frick, N., Karp, S., . . . Skinner, M. (2021). Integrated Hemophilia 
Patient Care via a National Network of Care Centers in the United 
States: A Model for Rare Coagulation Disorders. Journal of Blood 
Medicine, 12, 897-911. https://doi.org/10.2147/JBM.S325031.
    \346\ https://www.hemophilia.org/bleeding-disorders-a-z/treatment/current-treatments, accessed April 9, 2024.
---------------------------------------------------------------------------

    Section 2324 of the Deficit Reduction Act of 1984 (Pub. L. 98-369) 
added subparagraph (I) to section 1861(s)(2) of the Act to provide 
Medicare Part B coverage of blood clotting factor treatments for 
hemophilia patients who are competent to use such factors to control 
bleeding without medical supervision (that is, self-administered), and 
items related to the administration of such factors; this is codified 
at Sec.  410.63(b). As set forth in section 1842(o)(1)(C) of the Act, 
payment for clotting factor product is the amount provided for under 
section 1847A of the Act.

[[Page 97995]]

    In January of 2003, the Comptroller General of the United States 
published a report entitled ``Payment for Blood Clotting Factor Exceeds 
Providers Acquisition Cost'' \347\ (hereinafter referred to the January 
2003 report). Among other things, the January 2003 report found that 
``providers incur additional costs associated with delivering clotting 
factor that are not separately reimbursed by Medicare.'' Specifically, 
the January 2003 report cited delivery costs generated in inventory 
management, specialized refrigerated storage, shipping, and the 
provision of ancillary supplies such as needles, syringes, and 
tourniquets to patients that were not accounted for by Medicare payment 
for the clotting factor product alone.
---------------------------------------------------------------------------

    \347\ https://www.gao.gov/assets/gao-03&-184.pdf.
---------------------------------------------------------------------------

    After the release of the January 2003 report, section 303(e)(1) of 
the MMA amended section 1842(o) of the Act by adding a new paragraph 
(5), requiring the Secretary to establish a furnishing fee for the 
items and services associated with the furnishing of blood clotting 
factor. Specifically, section 1842(o)(5) of the Act requires that for 
clotting factors furnished on or after January 1, 2005, the Secretary 
shall provide for a separate payment to the entity which furnishes 
blood clotting factors for items and services related to the furnishing 
of such factors in an amount that the Secretary determines to be 
appropriate. Accordingly, the clotting factor furnishing fee was 
codified at Sec.  410.63(c), which states that the furnishing fee is 
added on a per unit basis to the clotting factor.
    In 2005, CMS established a furnishing fee of $0.14 per unit of 
clotting factor. The clotting factor furnishing fee is increased by the 
percentage increase in the Consumer Price Index (CPI) for Medical Care 
for the 12-month period ending with June of the previous year, as 
required by section 1842(o)(5)(C) of the Act, and updated annually in 
chapter 17, section 80.4.1 of the Medicare Claims Processing Manual. 
For 2024, the clotting factor furnishing fee is $0.250 per unit. 
Chapter 17 of the Medicare Claims Processing Manual, section 80.4.1 
indicates that ``CMS includes this clotting factor furnishing fee in 
the nationally published payment limit for clotting factor billing 
codes'' along with the pricing file, which denotes which HCPCS codes 
have the furnishing fee added. The payment limit in the pricing file 
includes the payment limit for the clotting factor product (under 
methodology in section 1847A of the Act) plus furnishing fee.
    As was the case at the time the clotting factor furnishing fee 
regulations were originally finalized, we continue to believe the 
products eligible for payment of the clotting factor furnishing fee and 
those eligible for payment as clotting factor products are the same 
subset of products: that is, self-administered clotting factor 
products, as described above. Similar to section 1861(s)(2)(I) of the 
Act, section 1842(o)(5) of the Act specifically contemplates that 
clotting factors are self-administered. In particular, section 
1842(o)(5)(A)(ii) of the Act specifies that the furnishing fee can take 
into account ``ancillary supplies and patient training for the self-
administration of such factors.'' As stated in the CY 2005 PFS final 
rule, the furnishing fee accounts for the costs associated with 
supplying the clotting factor, including patient training necessary for 
self-administration of such factors (69 FR 47523; 69 FR 66311). Thus, 
the clotting factor furnishing fee, as implemented, pays for services 
and supplies in connection with the patient's self-administration of 
the product.
    We note that section 1842(o)(5)(A) of the Act directed the 
Secretary to ``review[. . .] the January 2003 report'' when 
establishing the separate payment for entities which furnish blood 
clotting factors to the patient. The January 2003 report refers to 
self-administration of clotting factor and the benefits beneficiaries 
receive from home-use of the product throughout the report. For 
example, the January 2003 report states, ``Individuals with hemophilia 
generally self-infuse clotting factor. Clotting factor can be infused 
on demand, when a bleeding episode occurs, or for prevention, known as 
prophylactic use. By self-infusing, individuals can avoid waiting for 
care at a medical facility.''
    Most notably, for purposes of understanding the Medicare clotting 
factor payment inadequacy that was addressed by Congress by adding the 
furnishing fee, the January 2003 report states ``[t]he method of 
delivery of clotting factor has implications for Medicare payment. Most 
outpatient drugs covered by Medicare are administered in a physician's 
office. When a beneficiary visits a physician in order to receive a 
drug, the physician receives one payment from Medicare for the drug and 
another payment through the physician fee schedule for administering 
the drug. Clotting factor, however, is generally not administered in a 
physician's office.'' That is, the January 2003 report highlighted that 
Medicare payment for clotting factor, in particular, was inadequate 
because there are costs associated with supplying the clotting factor, 
but because it is self-administered, the furnishing of clotting factor 
was generally not eligible for the administration fee. Generally, the 
January 2003 report noted that payment for supplying other outpatient 
drugs covered by Medicare Part B were adequate because they are 
eligible for the administration fee. Again, as stated above, Congress 
addressed this issue by creating the furnishing fee for these self-
administered clotting factor products in the MMA.
    More recently, gene therapies have been FDA-approved for the 
treatment of hemophilia. These gene therapies introduce a functional 
gene to the patient, which provides the genetic information needed for 
the patient to produce the missing or nonfunctional protein. A viral 
vector in the gene therapies, engineered with adeno-associate virus, 
delivers the functional copy of the clotting factor gene into the 
patient's liver cells. The viral vector then releases the functional 
gene which integrates into the cell's DNA and starts producing the 
missing clotting factor protein (that is, Factor VIII or Factor IX) to 
restore normal clotting function.
    In the case of hemophilia A or B, the gene therapy introduces the 
functional gene that enables the patient to produce Factor VIII or 
Factor IX, respectively, on their own. Unlike clotting factors, which 
promptly restore balance in the coagulation cascade at the point of 
deficiency or bridge activated Factor IX and Factor X to restore the 
function of missing activated Factor VIII,\348\ allowing for stable 
blood clot formation and hemostasis, the gene therapies do not directly 
integrate into the coagulation cascade.349 350 In the 
coagulation cascade, clotting factors become activated in response to 
damaged tissues or exposure to collagen at the injury site. This 
activation initiates the conversion of prothrombin to thrombin. 
Thrombin then converts fibrinogen into fibrin strands, forming the 
blood clot. Clotting factors restore normal clotting function by 
replacing deficient factors through repeated, dose-adjustable infusions 
or injections. In contrast, a single administration of gene therapies 
maintains a consistent and adequate level of clotting factors over the 
long term by enabling the self-

[[Page 97996]]

production of the clotting factor proteins--an indirect method that 
relies on the patient's cells to increase clotting factor levels. 
However, as the self-production of clotting factor proteins takes time, 
the sustained outcomes of gene therapies may take several weeks to 
fully manifest. Interested parties have asked if CMS considers these 
gene therapies to be clotting factors for which the clotting factor 
furnishing fee would be paid.
---------------------------------------------------------------------------

    \348\ Genentech, Inc. Hemlibra (emicizumab-kxwh) injection, for 
subcutaneous use. South San Francisco, CA: Genentech, Inc.; 2023. 
Package insert.
    \349\ Hoffman, M., & Monroe, D.M. (2001). A cell-based model of 
hemostasis. Thrombosis and Haemostasis, 85(6), 958-965.
    \350\ Schenone M., Furie B.C., Furie B. The blood coagulation 
cascade. Curr Opin Hematol. 2004 Jul;11(4):272-7.
---------------------------------------------------------------------------

    Gene therapies for hemophilia are administered via a one-time, 
single-dose intravenous infusion in a setting where personnel and 
equipment are immediately available to treat infusion-related 
reactions. They are not typically administered by the patient in his or 
her home, and close monitoring is required for at least three hours 
after the end of the infusion.\351\ While these gene therapy products 
may have a similar goal to clotting factor products, in that both 
products are designed to improve outcomes for patients with hemophilia, 
gene therapy products prompt the body to make clotting factors, but are 
not clotting factors themselves. Given that the administration would 
occur incident to a physician service (that is, the product is not 
self-administered), the differing mechanism of action from replacing 
deficient factors (that is, triggering the body to make clotting 
factors rather than infusing clotting factors into the body), and the 
requirement of close monitoring by a healthcare professional post-
infusion, these gene therapies do not have the characteristics 
described in the January 2003 report that is referenced in section 
1842(o)(5) of the Act, which the Secretary relied on in drafting Sec.  
410.63(c). Therefore, they do not constitute ``clotting factors'' for 
purposes of Medicare payment.
---------------------------------------------------------------------------

    \351\ Carvalho M., Sepodes B., Martins AP., Patient access to 
gene therapy medicinal products: a comprehensive review BMJ 
Innovations 2021;7:123-134.
---------------------------------------------------------------------------

    Accordingly, gene therapies for hemophilia are eligible for payment 
as drugs or biologicals under Part B as part of (or incident to) a 
physician's service. The ``incident to'' coverage is limited to drugs 
that are not usually self-administered and the physician generally must 
incur a cost for the drug and must bill for it. Furnishing entities 
will bill for its administration, and the administration fees will 
reflect the resources necessary to furnish the drug. For example, 
certain CPT codes for administering drugs include preparation of the 
dose and patient monitoring. Specifically, CPT codes 96401-96549 
(chemotherapy administration and nonchemotherapy injections and 
infusions) include clinical labor activities such as clinical staff 
preparation of chemotherapy agent(s) as well as evaluation and 
management services.\352\
---------------------------------------------------------------------------

    \352\ Section 30.5, Chapter 12 of the Medicare Claims Processing 
Manual.
---------------------------------------------------------------------------

    For the reasons explained above, we do not believe gene therapies 
for hemophilia meet the definition of a clotting factor for purposes of 
Medicare payment, but even if they did, they still would not be 
eligible for the furnishing fee because the costs associated with 
furnishing these gene therapies would already be reflected in 
applicable administration codes paid under the Physician Fee Schedule. 
In accordance with Sec.  410.63(c)(1), a clotting factor furnishing fee 
is not payable when the costs associated with furnishing a clotting 
factor are paid through another payment system. In this case, the 
payment system is the payment system established under the Physician 
Fee Schedule. Furnishing fees for drugs that are physician administered 
would result in physicians being paid twice for incidental costs of 
administering the drug because the furnishing fee is intended to 
compensate for supplies like needles, syringes, and tourniquets as well 
as storage costs, and so is the Part B payment for administering the 
drug. We do not believe this double payment is appropriate, nor do we 
believe this is what Congress intended in directing CMS to establish a 
clotting factor furnishing fee.
    Accordingly, we proposed to update Sec.  410.63(b) to clarify 
existing CMS policy that blood clotting factors must be self-
administered to be considered clotting factors for which the furnishing 
fee applies. Additionally, we proposed to clarify at Sec.  410.63(c) 
that the furnishing fee is only available to entities that furnish 
blood clotting factors, unless the costs associated with furnishing the 
clotting factor are paid though another payment system, including the 
Physician Fee Schedule. That is, we proposed to clarify through 
revisions to Sec.  410.63 that clotting factors (as specified in 
section 1861(s)(2)(I) of the Act) and those eligible to receive the 
clotting factor furnishing fee (as specified in section 1842(o)(5) of 
the Act) are the same subset of products.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Four commenters expressed general support of our proposal 
to clarify that only self-administered blood clotting factors be 
eligible for furnishing fees. One of these commenters agreed with our 
proposal that cell and gene therapies used to treat hemophilia are not 
clotting factors.
    Response: We thank the commenters for their support.
    Comment: Two commenters disagree with our interpretation of section 
1861(s)(2)(I) of the Act. One commenter stated that section 
1861(s)(2)(I) of the Act addresses only coverage of self-administered 
clotting factors under Medicare Part B but does not dictate which 
products are eligible to receive a furnishing fee. Another commenter 
stated that our interpretation of section 1861(s)(2)(I) of the Act is 
incorrect because they state the phrase ``without medical or other 
supervision'' describes a capability of certain patients, not a 
limitation on the definition of clotting factors themselves. Further, 
one of the commenters stated that if Congress had intended to limit 
clotting factors to self-administered products in section 1861(s)(2)(I) 
of the Act, they could have used explicit language to that effect, as 
they did in section 1861(s)(2)(A) of the Act.
    Response: Section 1861(s)(2)(I) of the Act provides Medicare Part B 
coverage of blood clotting factors for hemophilia patients who are 
competent to use such factors to control bleeding without medical or 
other supervision (that is, self-administered), and items related to 
the administration of such factors; this is codified at Sec.  
410.63(b). Treatments for hemophilia that are not self-administered but 
rather administered in a setting where personnel and equipment are 
immediately available do not fit the description of coverage set forth 
in section 1861(s)(2)(I).
    Commenters compared the language used in the Social Security Act 
for clotting factor and coverage of ``medical and other health 
services.'' Specifically, they noted section 1861(s)(2)(A) of the Act, 
which provides for Medicare Part B coverage of ``services and supplies 
(including drugs and biologicals which are not usually self-
administered by the patient) furnished as an incident to a physician's 
professional service.'' Commenters stated that because the same exact 
words were not used to describe the limits of these two different 
subsets of coverage, that is, medical and other health services and 
clotting factor, then Congress could not have meant the same thing. We 
disagree. The two different statutory provisions function differently 
within the statute and refer to coverage of different items that are 
distinct from one another. It is not necessary for Congress to use the 
same language in different parts of the statute to describe coverage of 
different items

[[Page 97997]]

and services. Here, context, and the words themselves, show that the 
two different phrases have the same meaning.
    Comment: Three commenters disagree with our interpretation that 
section 1842(o)(5) of the Act requires a clotting factor be self-
administered in order to be eligible for the furnishing fee, citing 
what the commenters stated was Congress's choice to reference self-
administration in section 1842(o)(5)(A)(ii) of the Act, and not in 
section 1842(o)(5)(A)(i) of the Act or elsewhere in the paragraph. The 
commenters state that this shows that the furnishing fee is not limited 
to self-administered clotting factors. The commenters stated that they 
believe this provision merely establishes the furnishing fee payment 
for clotting factor products and they believe nothing in this provision 
prohibits a clotting factor product that is not self-administered from 
being eligible for the furnishing fee. One of these commenters stated 
that they believe our interpretation limiting section 1842(o)(5) of the 
Act to self-administered clotting factors is unlawful. Another 
commenter argued that neither the statute's legislative history nor the 
January 2003 report included in the statute demonstrate Congressional 
intent to require that blood clotting factors be self-administered to 
receive the furnishing fee.
    Response: The products eligible for payment of the clotting factor 
furnishing fee and those eligible for payment as clotting factor 
products are the same subset of products: that is, self-administered 
clotting factor products. Section 1842(o)(5) of the Act provides for 
the payment of a furnishing fee to an entity that furnishes clotting 
factors. Like section 1861(s)(2)(I) of the Act, section 1842(o)(5) 
specifically contemplates that clotting factors are self-administered. 
In particular, section 1842(o)(5)(A)(ii) of the Act, which was amended 
after the release of the January 2003 report, specifies that the 
furnishing fee can take into account ``ancillary supplies and patient 
training for the self-administration of such factors.'' CMS set the 
clotting factor furnishing fee through rulemaking, taking into account 
the costs associated with supplying the clotting factor, including 
patient training necessary for self-administration of such factors (see 
69 FR 47523; 69 FR 66311). Thus, the clotting factor furnishing fee, as 
implemented, pays for services in connection with the patient's self-
administration of the product.
    Such a payment for furnishing of a product would be inappropriate 
for a product that cannot be self-administered and requires significant 
medical supervision. Rather, physician-administered clotting factors 
are eligible to receive a separate administration fee under Part B as 
part of (or incident to) a physician's service.
    Comment: Two commenters opposed CMS's clarification that the 
furnishing fee is only available to entities that furnish blood 
clotting factors, unless the costs associated with furnishing the 
clotting factor are paid though another payment system, including the 
PFS. One commenter argued that the PFS is not another payment system, 
and that the administration fees providers will bill for does not 
negate the need for the costs the furnishing fee covers for physician-
administered gene therapies for hemophilia. The commenter claims that 
providing both fees would not result in duplicate payment.
    Response: In accordance with Sec.  410.63(c)(1), a clotting factor 
furnishing fee is not payable when the costs associated with furnishing 
a clotting factor are paid through another payment system. In this 
case, the payment system is the payment system established under the 
PFS. Furnishing fees for drugs that are physician administered would 
result in physicians being paid twice for incidental costs of 
administering the drug because the furnishing fee is intended to 
compensate for supplies like needles, syringes, and tourniquets as well 
as storage costs, and Part B payment is meant to capture the costs 
associated with administering the drug. We do not believe this double 
payment would be appropriate.
    Comment: One commenter argued that the January 2003 report defines 
blood clotting factor in a way that includes gene therapies.
    Response: Because gene therapies did not exist at the time when the 
statute and January 2003 report were written, they could not have 
contemplated such a therapy at that time. Furthermore, gene therapies 
treating hemophilia are not clotting factors themselves and do not 
interact directly with the coagulation cascade; rather, they are 
genetic treatments that enable the body to produce its own clotting 
factors. Because gene therapies are not themselves clotting factors, 
they are not eligible for the clotting factor furnishing fee.
    Comment: One commenter urged CMS to clarify that there is an 
exception to the eligibility of the furnishing fee for when a patient 
needs a blood clotting factor for hemophilia and surgery while in the 
hospital, contending that absent the recommendation, there could be a 
significant impact on hospitals due to lack of payment.
    Response: Effective January 1, 2005, a furnishing fee of $0.14 per 
unit of clotting factor is paid to entities that furnish blood clotting 
factors unless the costs associated with furnishing the clotting factor 
are paid through another payment system, for example, hospitals that 
furnish clotting factor to patients during a Part A covered inpatient 
hospital stay. This is codified at 42 CFR 410.63(c)(1).
    Comment: We received comments on topics that were outside the scope 
of the proposed rule. Those topics included establishing payment for 
providers for educating patients on cell and gene therapies and 
engaging with stakeholders to gather input on potential impacts of 
classification decisions and to consider developing a framework that 
can accommodate the evolving landscape of hemophilia treatments without 
requiring frequent regulatory updates.
    Response: While these comments are out of scope for this final rule 
because they do not relate to the specific proposals included in the 
proposed rule, we appreciate the feedback and may consider these 
recommendations for future rulemaking.
    After consideration of public comments, we are finalizing as 
proposed to update Sec.  [thinsp]410.63(b) to clarify existing CMS 
policy that blood clotting factors must be self-administered. In 
response to comments, we are also clarifying in Sec.  [thinsp]410.63(b) 
that therapies that enable the body to produce clotting factor and do 
not directly integrate into the coagulation cascade are not themselves 
clotting factors for which the furnishing fee applies. Additionally, we 
are finalizing the proposed clarification at Sec.  [thinsp]410.63(c) 
that the furnishing fee is only available to entities that furnish 
blood clotting factors, unless the costs associated with furnishing the 
clotting factor are paid though another payment system, including the 
PFS.
B. Rural Health Clinics (RHCs) and Federally Qualified Health Centers 
(FQHCs)
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

[[Page 97998]]

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 
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 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 proposed to rebase and revise the FQHC 
market basket to reflect a 2022 base year; see section III.B.7 of this 
final rule.
2. General Care Management Services in RHCs and FQHCs
a. Background
    We have been engaged in a multi-year examination of coordinated and 
collaborative care services in professional settings, and as a result 
established codes and separate payment in the PFS to independently 
recognize and pay for these important services. 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. 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.
    Before we get into the detailed background of our RHC and FQHC 
payment policies for care coordination services, we want to acknowledge 
that we have used several terms to describe these services and are 
providing clarification. We use the terms ``care coordination'' 
services interchangeably with the term ``care management'' services in 
preamble and manual guidance to describe the type of work discussed 
above. We began to use the term ``general care management'' when we 
established the HCPCS code G0511 for CY 2018. Use of ``general care 
management'' is meant to describe certain non-face-to-face care 
management work involved in primary care that we have identified as 
appropriate for separate payment as discussed in the following 
paragraphs.
    As we discussed in the CY 2016 PFS final rule (80 FR 71081 through 
71088), to address the concern that the non-face-to-face care 
management work involved in furnishing comprehensive, coordinated care 
management for certain categories of beneficiaries is not adequately 
paid for as part of an office visit, beginning on January 1, 2015, 
practitioners billing under the PFS are paid separately for chronic 
care management (CCM) services when CCM service requirements are met. 
We explained 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. Although many RHCs and FQHCs pay for coordination of 
services within their own facilities and may sometimes help to 
coordinate services outside their facilities, the type of structured 
care management services that are now payable under the PFS for 
patients with multiple chronic conditions, particularly for those who 
are transitioning from a hospital or SNF back into their communities, 
are generally not included in the RHC or FQHC payment because in 
general, although a few of the services required for CCM payment may be 
provided by some RHCs and FQHCs on occasion, the systematic provision 
of care management, the level and intensity of care coordination, and 
the interoperability of care plans with external providers is not 
typically found in RHCs or FQHCs Therefore, separate payment was 
established in the CY 2016 PFS final rule (80 FR 71080 through 71088) 
for RHCs and FQHCs that furnish CCM services. We believe the non-face-
to-face time required to coordinate care is not captured in the RHC AIR 
or the FQHC PPS payment, particularly for the rural and/or low-income 
populations served by RHCs and FQHCs. Allowing separate payment for CCM 
services in RHCs and FQHCs is intended to reflect the additional 
resources necessary for the unique components of CCM services.
    In the CY 2018 PFS final rule (82 FR 53169 through 53180), we 
finalized revisions to the payment methodology for CCM services 
furnished by RHCs and FQHCs and established requirements for general 
behavioral health integration (BHI) and psychiatric collaborative care 
management (CoCM) services furnished in RHCs and FQHCs, beginning on 
January 1, 2018. We also initiated the use of HCPCS codes G0511 and 
G0512. HCPCS code G0511 is a general care management code for use by 
RHCs or FQHCs when at least 20 minutes of qualified CCM or general

[[Page 97999]]

BHI services are furnished to a patient in a calendar month. HCPCS code 
G0512 is for psychiatric CoCM and can be billed by RHCs or FQHCs when 
at least 60 minutes of qualified psychiatric CoCM services are 
furnished to a patient in a calendar month.
    For CY 2018 the payment amount for HCPCS code G0511 was set at the 
average of the 3 national non-facility PFS payment rates for the CCM 
and general BHI codes and updated annually based on the PFS amounts. 
That is, for CY 2018 the 3 codes that comprised HCPCS code G0511 were 
CPT code 99490 (20 minutes or more of CCM services), CPT code 99487 (60 
minutes or more of complex CCM services), and CPT code 99484 (20 
minutes or more of BHI services).
    In the CY 2019 PFS final rule (83 FR 59683), we explained that 
another CCM code was introduced for practitioners billing under the 
PFS, CPT code 99491, which would correspond to 30 minutes or more of 
CCM furnished by a physician or other qualified health care 
professional and is similar to CPT codes 99490 and 99487. Therefore, 
for RHCs and FQHCs, we added CPT code 99491 as a general care 
management service and included it in the calculation of HCPCS code 
G0511. Starting on January 1, 2019, RHCs and FQHCs were paid for HCPCS 
code G0511 based on the average of the national non-facility PFS 
payment rates for CPT codes 99490, 99487, 99484, and 99491 (83 FR 
59687).
    In the CY 2021 PFS final rule (85 FR 84697 through 84699), we 
explained that the requirements described by the codes for principal 
care management (PCM) services were similar to the requirements for the 
services described by HCPCS code G0511; therefore, we added HCPCS codes 
G2064 and G2065 to HCPCS code G0511 as general care management services 
for RHCs and FQHCs. Consequently, effective January 1, 2021, RHCs and 
FQHCs are paid when a minimum of 30 minutes of qualifying PCM services 
are furnished during a calendar month. The payment rate for HCPCS code 
G0511 for CY 2021 was the average of the national non-facility PFS 
payment rate for the RHC and FQHC care management and general 
behavioral health codes (CPT codes 99490, 99487, 99484, and 99491), and 
PCM codes (HCPCS codes G2064 and G2065). We noted that in the CY 2022 
PFS final rule (86 FR 65118), HCPCS codes G2064 and G2065 were replaced 
by CPT codes 99424 and 99435. Therefore, for CY 2022 the payment rate 
for HCPCS code G0511 was the average of the national non-facility PFS 
payment rate for CPT codes 99490, 99487, 99484, 99491, 99424, and 
99425).
    In the CY 2023 PFS final rule (87 FR 69735 through 69737), we 
included chronic pain management (CPM) services described by HCPCS code 
G3002 in the general care management HCPCS code G0511 when at least 30 
minutes of qualifying non-face-to-face CPM services are furnished 
during a calendar month. We explained since HCPCS code G3002 is valued 
using a crosswalk to the PCM CPT code 99424, which is currently one of 
the CPT codes that comprise HCPCS code G0511, there was no change made 
to the average used to calculate the HCPCS code G0511 payment rate to 
reflect CPM services.
    Most recently, in the CY 2024 PFS final rule (88 FR 79071 through 
79073) we included the CPT codes that are associated with the suite of 
services that comprise remote physiologic monitoring (RPM) and remote 
therapeutic monitoring (RTM) in the general care management HCPCS code 
G0511 when these services are furnished by RHCs and FQHCs. In addition, 
we included community heath integration (CHI), principal illness 
navigation (PIN), and PIN--peer support services in HCPCS code G0511 
when these services are furnished by RHCs and FQHCs (88 FR 79073 
through 79081). We noted that for each of these newly included services 
that they must be medically reasonable and necessary, meet all 
requirements, and not be duplicative of services paid to RHCs and FQHCs 
under the general care management code for an episode of care in a 
given calendar month. We also clarified RHCs and FQHCs may bill HCPCS 
code G0511 multiple times in a calendar month, as long as all of the 
requirements are met and resource costs are not counted more than once 
(88 FR 79075).
    Additional information on care management requirements is available 
on the CMS Care Management web page and on the CMS RHC and FQHC web 
pages.353 354 355
---------------------------------------------------------------------------

    \353\ https://www.cms.gov/medicare/payment/fee-schedules/physician/care-management.
    \354\ https://www.cms.gov/center/provider-type/rural-health-clinics-center.
    \355\ https://www.cms.gov/medicare/payment/prospective-payment-systems/federally-qualified-health-centers-fqhc-center.
---------------------------------------------------------------------------

b. Regulatory Update (Sec.  405.2464(c))
    During our development of the proposals discussed in sections 
III.B.2.c. and III.B.2.d. of this final rule, we determined that the 
language located in Sec.  405.2464(c) could use additional information 
to streamline and provide clarity on our payment policy for care 
coordination services. For example, using consistent terms, effective 
dates, and the description of the basis of payment. Therefore, we 
proposed technical changes to Sec.  405.2464(c) to accurately reflect 
the iterations of our payment policy for care coordination services as 
detailed in this background section.
    We received a few comments on the proposed technical changes to 
Sec.  405.2464(c) to accurately reflect the iterations of our payment 
policy for care coordination services. The following is a summary of 
the comments we received and our responses.
    Comment: One commenter stated they were encouraged to learn that 
CMS proposed revisions to Sec.  405.2464(c). The commenter stated that 
the average health care inflation rate has increased 3.5 percent per 
year over the past 4 years and that it appeared that actuarial analysis 
underlying the changes made last year were based on historical 
utilization and reimbursement, not provider expenses to provide these 
services. The commenter further stated that expansion of population 
health management requires a sustainable and viable reimbursement 
schema. Another commenter, who supported the proposed technical changes 
to Sec.  405.2464(c), stated that this change represented a significant 
improvement in how care management services are billed and reimbursed 
and that it aligned with broader goals to enhance flexibility and 
accuracy in reimbursement, ensuring fair compensation for the full 
spectrum of care management services.
    Response: We thank commenters for their support of the proposed 
technical changes to Sec.  405.2464(c) to accurately reflect the 
iterations of our payment policy for care coordination services.
    After consideration of public comments, we will finalize our 
proposed technical changes to Sec.  405.2464(c) to accurately reflect 
the iterations of our payment policy for care coordination services.
c. Payment Policy for General Care Management Services
    As discussed previously, in the last few years of PFS payment rules 
we have expanded the scope of care management services billable using 
HCPCS code G0511. Prior to CY 2024, HCPCS code G0511 was based on the 
national average non-facility PFS payment rate for each base code 
identified as billable general care management services. That is, we 
added each payment rate divided by the total number of codes to arrive 
at the payment amount for HCPCS code G0511. This payment amount was a 
flat

[[Page 98000]]

rate that was not subsequently adjusted for locality.
    In the CY 2024 PFS final rule (88 FR 79076 through 79079), we 
explained continuing to calculate the value of HCPCS code G0511 using 
an approach based on an average may no longer be appropriate payment 
for those services since we are simply dividing by the number of codes 
that comprise HCPCS code G0511. As that number of services with lower 
payment rates increases, the payment rate per service decreases. We 
noted that while the policy may address providing a payment for 
furnishing non-face-to-face services, the magnitude of the value may 
not appropriately account for the costs. Therefore, we finalized a 
revised methodology for the calculation of HCPCS code G0511 by looking 
at the actual utilization of the services. We used a weighted average 
of the services that comprise HCPCS code G0511. For the utilization 
data of the services, we used the most recently available utilization 
data from the services paid under the PFS in the physician office 
setting. We explained that the physician office setting may provide an 
appropriate proxy for utilization of these services in the absence of 
actual data because this setting most closely aligns with the types of 
services furnished in RHCs and FQHCs since they typically furnish 
primary care.
    To ensure we accounted for payments accurately, we explained that 
we looked at PFS utilization of the base code for the service and any 
applicable add-on codes used in the same month as well as any base 
codes reported alone in a month for all of the services comprising 
general care management (that is, the array of services that made up 
HCPCS code G0511). We believed we needed to account for the payment 
associated with the base code along with an applicable add-on code in 
our calculation as this demonstrates a complete encounter. Then to 
arrive at the payment rate for HCPCS code G0511 for CY 2024, we took 
the weighted average of the base code and add-on code pairs, in 
addition to the individual base codes for all of the services that 
comprise HCPCS code G0511 by using the CY 2021 PFS utilization.
    We determined that this approach was a more accurate representation 
of the payment since it is consistent with practitioners billing under 
the PFS, and it accounts for the additional time spent in care 
coordination.
    Subsequent to the issuance of the CY 2024 PFS final rule, 
interested parties have requested that CMS give them the ability to 
bill Medicare for each of the care management services that comprise 
HCPCS code G0511 when they are furnished in RHCs and FQHCs. RHCs, 
FQHCs, and associations supporting access to health care for rural 
populations have expressed concerns regarding the transparency of the 
services being billed with HCPCS code G0511. We noted, in the CY 2024 
PFS final rule we stated that HCPCS code G0511 could be billed multiple 
times in a calendar month for each care management code that comprised 
HCPCS code G0511 as long as all requirements were met, there was no 
overlapping of resource time and services were furnished in accordance 
with CPT coding guidelines and conventions. However, providing this 
guidance triggered questions on how CMS tracks which general care 
management service is being furnished if the bundled code is reported 
so they would know when it was appropriate to bill multiple care 
management services on a single claim. RHCs and FQHCs have also 
requested the ability to bill the add-on codes that describe additional 
minutes spent on furnishing care management services and often ask for 
guidance on how to account for additional time spent.
    We have also heard from interested parties that RHCs and FQHCs 
would not find it burdensome to report the actual HCPCS code that 
describes the care management service furnished, which was the main 
concern we had when we implemented HCPCS code G0511 (82 FR 53172). We 
understand that RHCs and FQHCs have become more sophisticated with 
billing and therefore reporting multiple codes has become less 
burdensome than in CY 2018 when we implemented G0511. In addition, we 
have heard that RHCs and FQHCs are interested in having more exposure 
and recognition in playing their part in the delivery of quality 
primary care and believe that this could be achieved with data that 
shows their utilization of services which could also be used in future 
payment refinements.
    Due to these concerns, we reevaluated our payment policy for care 
management services. We agree with interested parties that it is 
important to identify the actual services being furnished and 
understand the utilization of these services, especially given our 
strong interest in their volume and their contribution to initiatives 
on health equity and social needs of services in the care coordination 
space. Therefore, we proposed to require RHCs and FQHCs to bill the 
individual codes that make up the general care management HCPCS code, 
G0511. The current list of base and add-on codes that make-up G0511 are 
listed in Table 28, titled ``General Care Management HCPCS Codes and 
Descriptors.'' Under this proposal, HCPCS code G0511 would no longer be 
payable when billed by RHCs and FQHCs. We noted that the payment 
amounts for some services that make up G0511 are less than the payment 
amount for G0511 and if an RHC or FQHC mostly furnishes these services, 
they could see a potential decline in payment. We also proposed to 
allow RHCs and FQHCs to bill the add-on codes for additional time spent 
once the minimum threshold of time was met to account for a complete 
encounter. This could potentially offset any decrease in payments. 
Payment for these services would be 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 believe 
that these proposals promote transparency in billing and payment and 
allowing RHCs and FQHCs to bill the individual care management codes 
would take into account the complexity of the service and the time 
spent furnishing the service.

[[Page 98001]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.060


[[Page 98002]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.061


[[Page 98003]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.062


[[Page 98004]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.063


[[Page 98005]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.064


[[Page 98006]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.065


[[Page 98007]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.066


[[Page 98008]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.067

    We proposed revisions at Sec.  405.2464(c) to reflect the proposed 
payment method for care management services furnished in RHCs and FQHCs 
beginning January 1, 2025.
    We received several comments on our proposal to permit RHCs and 
FQHCs to report and bill under the individual codes that make up the 
general care management HCPCS code G0511.
    The following is a summary of the comments we received and our 
responses.
    Comment: Many commenters were very supportive of our proposal to 
unbundle HCPCS G0511 and require RHCs and FQHCs to report and bill for 
the actual codes that make up the general care management HCPCS code 
G0511. One commenter stated that they appreciated CMS' proposed steps 
to harmonize access to payment for asynchronous remote monitoring 
across the Medicare system.
    Response: We thank the commenters for their support.
    Comment: Although many commenters support our proposal to unbundle 
HCPCS G0511 and require RHCs and FQHCs to bill the individual codes 
that make up the general care management HCPCS code G0511, many 
commenters had additional requests/recommendations. A few commenters 
urged CMS to establish adequate reimbursement rates to ensure health 
centers continued financial viability and stated that although this 
proposal makes a lot of sense, the financial implications of a reduced 
payment for some of the services could jeopardize sustainability. These 
commenters implored CMS to ensure payment rates accurately reflect the 
cost of providing these services as CMS calculates the reimbursement 
rates for all these different general care management services. These 
commenters requested that CMS ensure sufficient reimbursement for all 
services previously under the HCPCS code G0511 to promote financial 
stability for health centers. Another commenter stated that CMS must 
ensure reimbursement rates are sufficient to enable providers to adopt 
high-value applications of software-based technologies. This commenter 
also recommended that CMS, alongside with ensuring adequate 
reimbursement, work with medical specialty societies to define high-
value remote patient monitoring applications and develop clinical 
guidelines to help providers deliver evidence-based care. One commenter 
requested that CMS reconsider the approach of encouraging other codes 
to be utilized to offset the potential decline in reimbursement from 
HCPCS code G0511 to CPT code 99490 (chronic care management services). 
The commenter explained that for example, an FQHC in the Southeastern 
U.S. that was billing 1,000 CCM patients using HCPCS code G0511 would 
likely need to bill the additional 20-minute code (99439) for at least 
500 patients each month to make up the difference in net reimbursement 
after factoring in

[[Page 98009]]

the cost of care. The commenter further explained that while this is 
certainly possible, many CCM patients do not need or want an additional 
20 minutes of care, especially when factoring in the potential for an 
additional cost share each month. The commenter shared concerns that 
FQHCs will suffer from this change by both (i) not being able to 
successfully replace the lost reimbursement through CPT code 99439 (or 
other additional codes) and (ii) seeing a decline in CCM participation 
from patients opting out of the program due to additional cost sharing. 
The commenter requests that CMS consider maintaining the G0511 
reimbursement rate for 99490 in 2025.
    Finally, other commenters had specific requests related to RPM/RTM 
services. Some commenters stated that reimbursement rates for Remote 
Patient Monitoring (RPM) have been flagged to potentially generate 
lower reimbursement rates, which could result in health centers, 
especially smaller health centers with limited budgets, struggling to 
provide this crucial service to their patients.
    Response: We noted above and in the proposed rule that the payment 
amounts for some services that make up G0511 are less than the payment 
amount for HCPCS code G0511 and if an RHC or FQHC mostly furnishes 
these services, they could see a potential decline in payment. We also 
proposed to allow RHCs and FQHCs to bill the add-on codes for 
additional time spent once the minimum threshold of time was met to 
account for a complete encounter. Payment for these services would be 
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. These payment rates reflect the cost of services provided 
and are in line with services in other comparable settings.
    Comment: In addition to supporting our proposal to unbundle HCPCS 
code G0511, a few commenters requested that CMS waive co-insurance for 
these services. One commenter supported the elimination of co-insurance 
for care management programs, stating that removing coinsurance will 
eliminate a significant obstacle for patients requiring ongoing care 
management, especially those with chronic conditions needing frequent 
monitoring and intervention. The commenter stated that eliminating 
coinsurance will increase access to necessary care management services, 
encourage more consistent patient engagement with their care plans, and 
potentially reduce overall healthcare costs by preventing 
complications, decreasing hospital admissions, and ensuring timely and 
appropriate care. Another commenter urged CMS to waive the 20 percent 
copay as we have with AWV's to accelerate the adoption by physicians 
and participation by patients or at the very least allow the physicians 
to make the decision if they wish to waive the 20 percent copay for 
those who do not have the ability to pay. This commenter further urged 
CMS to allow RHC's to be able to conduct an AWV the same day as an 
office visit as they noted they believe it is often difficult either 
logistically or financially for many in the rural healthcare setting to 
make 2 trips, and as a result they do not believe as many patients 
whose only access to healthcare that is being served by a RHC are 
benefiting from AWV's.
    Response: As we stated in the CY 2018 PFS final rule (82 FR 53178), 
we are aware that the copayment and/or deductible in RHCs and the 
copayment in FQHCs can be a barrier for some beneficiaries, but we do 
not have the statutory authority to waive these charges. Because these 
services are typically furnished non-face-to-face, and therefore, are 
not visible to the patient, it is important that adequate information 
is given to patients during the consent process on cost-sharing 
responsibilities and the benefits of care management services. RHCs and 
FQHCs should also provide information on the availability of assistance 
to qualified patients in meeting their cost-sharing obligations, or any 
other programs to provide financial assistance, if applicable. We note 
that Part B coinsurance would apply for the unbundled codes that make 
up the list of codes included in HCPCS code G0511, as mandated for Part 
B services by section 1833(a)(1) of the Act. Regarding the comment 
about AWVs, we thank the commenter for this feedback, but note that it 
is out of the scope of this final rule.
    Comment: Many other commenters who supported the proposal requested 
that CMS implement a transition period for at least one year to allow 
time for providers to either continue to bill under HCPCS code G0511 or 
under individual codes proposed for CY 2025 to ensure continued access 
to care and ease the transition for providers. Other commenters 
suggested that a transition period would also help to ensure that a 
patient beginning treatment in 2024 does not lose access to that 
treatment in 2025 as reimbursement models change. Other commenters 
stated that the transition period would help providers begin to prepare 
for the proposed changes since the addition of the new codes to G0511 
in the past years complicated billing for these providers. A few 
commenters stated that the transition period will allow the greatest 
access to care management services for patients and simplify compliance 
for providers that are still new to billing these services. Other 
commenters' transition requests were specific to RPM/RTM services. 
These commenters noted they believe that the shift in RHC and FQHC 
reimbursement for RPM would lead to patients being cut off from care. 
They also requested that CMS create, at a minimum, a one-year 
transition period for patients and providers who have only just begun 
offering and receiving RPM services at RHCs and FQHCs because of the 
harmful impact of this change on RPM access.
    Response: We understand why some commenters might want a 
transition. We would expect those individual RHCs/FQHCs that have the 
capability to bill the individual HCPCS codes that make up HCPCS code 
G0511 to do so. However, we recognize that some RHCs/FQHCs may need 
more time to implement systems changes needed to incorporate the change 
for billing purposes. These changes should be on a facility basis and 
not on a patient-by- patient or claim-by-claim basis. To this end, we 
were persuaded by the commenters' requests and are allowing 6 months 
RHCs and FQHCs to come into compliance. We are allowing facilities at 
least until July 1, 2025, to enable them to be able to update their 
billing mechanisms. During this period during which RHCs and FQHCs 
bring themselves into compliance, RHCs and FQHCs shall continue 
reporting G0511. However, RHCs and FQHCs that have the infrastructure 
in place to report the individual HCPCS codes that describe the 
individual services may do so. We want to clarify that at the facility 
level when billing Medicare, RHCs and FQHCs should report these 
services with G0511 or the individual codes, but not both.
    Comment: A few commenters who were also supportive of our proposal 
also requested that CMS provide additional resources and support to 
help FQHCs transition to the new billing method and meet the increased 
documentation requirements when billing for individual general care 
management codes previously included in HCPCS code G0511, including 
providing the following resources: updated cost reporting instructions 
to help FQHCs understand the specific requirements for each service 
code and ensure accurate documentation;

[[Page 98010]]

comprehensive training guides, such as FAQs, to educate FQHC staff on 
the detailed documentation requirements, time tracking, and compliance 
with each service code; access to technical assistance; and support to 
help FQHCs implement new billing systems and processes effectively. 
Another commenter recommended that CMS provide clear guidelines for 
documentation and billing purposes for when FQHCs can bill, for how 
much time, and how many times per month. Additionally, the commenter 
encouraged CMS to issue guidance for understanding what is not allowed 
to be billed concurrently.
    Response: We encourage interested parties to review the guidance on 
all of the various care coordination services on our website.\356\ We 
will provide subregulatory guidance updates and educational resources, 
including updates to the RHC and FQHC Medicare Benefit Policy Manual, 
CMS MLN publications, and various web pages including the RHC and FQHC 
web pages and CMS' Care Management web page.
---------------------------------------------------------------------------

    \356\ Care Management [verbar] CMS (https://www.cms.gov/medicare/payment/fee-schedules/physician/care-management).
---------------------------------------------------------------------------

    Comment: One commenter urged CMS to implement a policy to allow 
FQHCs/RHCs to bill for Community Health Integration (CHI), Principal 
Illness Navigation (PIN) and Principal Illness Navigation Peer Support 
(PIC-PS) CHI/PIN/PIN-PS, using the same set of HCPCS billing codes 
available to traditional providers with no cap or limit on the volume 
of services rendered to a beneficiary per calendar month. This 
commenter stated that the requirement that only one provider bill for 
CHI/PIN/PIN-PS at a time, while simultaneously requiring FQHCs/RHCs to 
bill for a range of care management services under the same code, 
places FQHCs/RHCs at considerable risk of having their claims denied as 
being for duplicate services. The commenter identified barriers to 
adopting CHI/PIN/PIN-PS including: the risk of a claim denial because 
another provider is rendering a different service coded under the same 
HCPCS code (G0511), and the lack of clarity regarding the volume of 
CHI/PIN/PIN-PS that can be provided to a beneficiary during a calendar 
month.
    Response: As proposed in the CY 2025 proposed rule (89 FR 61596, 
61782), we would like to reiterate that we proposed to unbundle the 
codes that make up HCPCS G0511, including CHI/PIN/PIN-PS, and require 
RHCs and FQHCs to bill the individual codes that make up the general 
care management codes HCPCS code G0511. The current billing policies 
and requirements for the care coordination codes remain applicable. In 
addition, regarding the comment about the requirement that only one 
provider bill for CHI/PIN/PIN-PS, we would also like to reiterate that 
as we stated in the CY 2024 PFS final rule (88 FR 78923), we finalized 
a policy of only allowing one provider to bill CHI.
    Comment: We received several comments from the RHC and FQHC 
community requesting CMS modify other bundled codes or provide separate 
unbundled payments for additional services. Many commenters suggested 
that CMS make changes to HCPCS code G0512. Some of those suggested 
changes included: allow FQHCs/RHCs to utilize the 99 set of HCPCS codes 
(99492, 99493, and 99494) in addition to the CPT Time Rule, unbundle 
HCPCS code G0512 to support the adoption of CoCM, and to reconsider the 
ongoing use of HCPCS code G0512 for Collaborative Care management 
services in RHCs and FQHCs and instead harmonize and unify the coding 
for Collaborative Care using the dedicated CPT codes. Other commenters 
also requested that CMS allow additional codes to be added to the list 
of HCPCS code G0511 that we proposed to unbundle. One commenter 
commended CMS's proposal to allow clinicians in RHCs and FQHCs to bill 
individual care management codes but urged CMS to include CPT code 
99483, Cognitive Assessment and Care Planning Services, among the 
eligible codes. Other commenters advocated for payment parity for all 
care management services in RHC and FQHC settings and supported the 
elimination of HCPCS G0511 and adopt the full complement of Fee-for-
Service (FFS) codes including any new care management code in the 
future such as Atherosclerotic Cardiovascular Disease (ASCVD). Another 
commenter stated that they would support RHCs being eligible for 
reimbursement under the HCPCS code G2211 code, as primary care 
clinicians in other settings are. This commenter noted they believe 
this would help both CMS and RHCs fully account for the additional 
time, intensity, and practice expense inherent to longitudinal care 
that HCPCS code G2211 was designed to capture.
    Another commenter requested guidance to understand how these care 
management codes should be billed, as more FQHCs enter value-based care 
through the Medicare Shared Shavings Program, Making Care Primary (MCP) 
Model, or other CMMI models.
    Response: We thank you for your support and appreciate your 
feedback regarding unbundling of HCPCS code G0512 and the addition of 
other services such as Cognitive Assessment and Care Planning Services, 
and Atherosclerotic Cardiovascular Disease (ASCVD) risk assessment 
service, and HCPCS code G2211 services. Regarding HCPCS code G0512, we 
did not propose to unbundle those services in the same way as HCPCS 
code G0511; however, we can evaluate further and contemplate for future 
rulemaking. Since cognitive assessment and care planning and the ASCVD 
risk assessment services happen in face-to-face visits with a provider, 
they would be included in the RHC AIR and the FQHC PPS and not be paid 
separately. Regarding HCPCS code G2211, RHCs and FQHCs in most cases 
are not paid according to complexity of the patient. Except for the 
services paid outside of the all-inclusive rates, we pay an encounter 
rate. HCPCS code G2211 is bundled into the RHC AIR and the FQHC PPS and 
not paid separately. Since we did not make any proposals regarding 
these services, these comments are out of scope. However, we will 
consider your feedback for future rulemaking. Finally, the CMS programs 
(MSSP or CMMI models) that currently use HCPCS code G0511 are aware of 
the changes we are making and will evaluate their programs accordingly.
    After consideration of public comments, we are finalizing our 
proposal as proposed with a modification to permit RHCs and FQHCs 6-
months to come into compliance, to enable those RHCs/FQHCs to be able 
to update their billing systems. We will also finalize the technical 
corrections at Sec.  405.2464(c) to reflect the proposed payment method 
for care management services furnished in RHCs and FQHCs beginning 
January 1, 2025.
d. New Codes for Advanced Primary Care Management (APCM) Services
    As discussed in section II.G of this final rule, HHS and CMS have 
been analyzing opportunities to strengthen and invest in primary care 
in alignment with the goals of the HHS Initiative to Strengthen Primary 
Care.\357\ Research has demonstrated that greater primary care 
physician supply is associated with improved population-level mortality 
and reduced disparities,\358\ and also that

[[Page 98011]]

establishing a long-term relationship with a primary care provider 
leads to reduced emergency department (ED) visits,\359\ improved care 
coordination, and increased patient satisfaction.\360\ HHS recognizes 
that effective primary care is essential for improving access to 
healthcare, for the health and wellbeing of individuals, families, and 
communities, and for achieving health equity. The first coordinated set 
of HHS-wide actions to strengthen primary care, as part of the 
Initiative, is in primary care payment; for example, adjusting payment 
to ensure it supports delivery of advanced primary care. CMS Innovation 
Center models, described in section II.G.2.a.(1) of this final rule, 
reflect the ongoing work within HHS and the unified, comprehensive 
approach to HHS primary care activities that we are accomplishing 
through our current statutory authorities and funding.
---------------------------------------------------------------------------

    \357\ U.S. Department of Health and Human Services. (2023). 
Primary Care: Our First Line of Defense. https://www.hhs.gov/sites/default/files/primary-care-issue-brief.pdf.
    \358\ Basu S, Berkowitz SA, Phillips RL, Bitton A, Landon BE, 
Phillips RS. Association of Primary Care Physician Supply With 
Population Mortality in the United States, 2005-2015. JAMA Intern 
Med. 2019;179(4):506-514. doi:10.1001/jamainternmed.2018.7624. 
https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2724393.
    \359\ Willemijn L.A. Sch[auml]fer et al., ``Are People's Health 
Care Needs Better Met When Primary Care Is Strong? A Synthesis of 
the Results of the QUALICOPC Study in 34 Countries,'' Primary Health 
Care Research and Development 20 (2019): e104. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6609545/.
    \360\ Michael J. van den Berg, Tessa van Loenen, and Gert P 
Westert, ``Accessible and Continuous Primary Care May Help Reduce 
Rates of Emergency Department Use: An International Survey in 34 
Countries,'' Family Practice 33, no. 1 (Feb. 2016): 42-50. https://academic.oup.com/fampra/article/33/1/42/2450446.
---------------------------------------------------------------------------

    In recent years, we have implemented significant changes aimed at 
better capturing the resources required for care management services, 
including chronic care management (CCM), principal care management 
(PCM), and transitional care management (TCM) and more recently, 
community health integration (CHI), principal illness navigation (PIN) 
and PIN-peer support services. For RHCs and FQHCs, we have established 
payment for these suites of care coordination services outside of the 
RHC AIR and FQHC PPS.
    In section II.G.2.b. of this final rule, we proposed to establish 
coding and make payment under the PFS for a newly defined set of APCM 
services described and defined by three new HCPCS G-codes. This new 
coding would reflect the recognized effectiveness and growing adoption 
of the advanced primary care approach to care. It would also encompass 
a broader range of services and simplify the billing and documentation 
requirements, as compared to existing care management codes. The 
proposed coding for APCM incorporates 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 incorporates 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. For example, remote evaluation of patient videos/images, 
virtual check-in, and e-visits. Therefore, to allow RHCs and FQHCs the 
ability to simplify the billing and documentation requirements 
associated with furnishing APCM services we proposed to allow RHCs and 
FQHCs to bill for these services and receive separate payment. 
Consistent with section II.G.2.b. of this final rule, 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 proposed 
rule, we proposed to adopt the three new APCM codes GPCM1, GPCM2, and 
GPCM3 and the finalized HCPCS codes are as follows: G0556, G0557 and 
G0558, respectively. For further discussion on the proposed HCPCS codes 
G0556, G0557, and G0558, please see section II.G.2.b. of this final 
rule.
    As we have established previously, care coordination services are 
RHC/FQHC services and as such, we proposed to align once again with the 
PFS and adopt the new codes for APCM services. Additionally, allowing 
separate payment for APCM services in RHCs and FQHCs is intended to 
reflect the additional time and resources necessary for the unique 
components of care coordination services.
    Further, in alignment with our proposal earlier in this section to 
require RHCs and FQHCs to utilize the same coding as when billing under 
the PFS and no longer use HCPCS code G0511, which described many care 
coordination services, we proposed to require RHCs and FQHCs when 
furnishing APCM to use the more specific coding, that is, the three 
HCPCS G-codes described above. We would pay for these services in 
addition to the RHC AIR or FQHC PPS because we consider these services 
as non-face-to-face services and similar to other care management 
services such as chronic care management, principal care management, 
and remote physiological monitoring, where these services are not 
captured in the RHC AIR or FQHC PPS payment. Similarly, we proposed 
that payment for these services would be paid at the PFS non-facility 
rate.
    It is important to note that if RHCs and FQHCs report these new 
codes, they are per calendar month bundles. If the RHC/FQHC decides to 
bill for APCM then they would not bill for certain other individual 
services. For further discussion on duplicative services and concurrent 
billing restrictions with regard to APCM policies, we refer readers to 
section II.G.2.d. of this final rule.
    We received several comments on our proposal to require RHCs and 
FQHCs when furnishing APCM services to use the three newly created 
HCPCS G-codes created for the PFS and paid at the PFS non-facility 
rate.
    The following is a summary of the comments we received and our 
responses.
    Comment: A few commenters fully supported our proposal to establish 
coding and making payment under the PFS for the three new HCPCS G-codes 
for APCM services. One commenter stated that these codes will also 
provide payment for services that are often already provided but for 
which they are often not compensated and urged CMS to support all care 
integration efforts. One commenter stated that RHCs and FQHCs are 
critical sources of primary care for low-income beneficiaries, 
including those with intellectual and developmental disabilities (IDD) 
who are dually eligible and/or often turned away by private medical 
practices. Another commenter stated that these new codes will likely 
give RHC providers flexibility in choosing the most appropriate care 
management option for their patients and the clinic's capacity--whether 
they elect to perform and bill for individual care management services, 
or the consolidated codes based on complexity of patient conditions. 
The commenter appreciated the clarity regarding which care management 
services can be billed simultaneously with APCM codes versus those that 
are considered duplicative.
    Response: We thank the commenters for their support of our proposal 
to require RHCs and FQHCs when furnishing APCM services to use the 
three newly created HCPCS G-codes created for the PFS and paid at the 
PFS non-facility rate. We agree that adopting these three new HCPCS G-
codes will give RHCs and FQHCs providers the flexibility to choose the 
most

[[Page 98012]]

appropriate care management option for their patients and the clinic's 
capacity.
    Comment: Although a few commenters fully supported our proposal to 
adopt the three new HCPCS G-codes for APCM services, other commenters 
were generally supportive and had additional requests/recommendations. 
Many commenters recommended that CMS allow a coinsurance waiver for 
FQHC and RHC patients who consent to using APCM services. These 
commenters stated many health center patients are financially 
vulnerable and that while health centers can place this co-insurance 
obligation on the sliding fee scale, patients have historically been 
wary of monthly payment requirements for general care management 
services. The commenters stated that waiving co-insurance costs of APCM 
for FQHC patients alleviates potential financial barriers to care and 
will help maintain patient enrollment in receiving these vital 
services. Some commenters expressed their concern about the burden a 
monthly cost-sharing responsibility will have on health center patients 
and recommended CMS allow a co-insurance waiver for FQHC patients who 
consent to using APCM services to help alleviate patient cost burdens, 
while another commenter urged CMS to examine any existing authority to 
permit health centers to waive co-pays to alleviate cost burdens to 
patients, whether it is done by working with OIG, incorporating 
flexibilities from demonstration models, or working with Congress. One 
commenter urged CMS to waive the applicable co-pay for APCM services 
furnished in RHCs/FQHCs or at the very least allow physicians to make 
the decision if they wish to waive the 20 percent copay for those who 
do not have the ability to pay.
    Response: We thank commenters for their support and feedback. 
Regarding commenters' requests for waiving coinsurance costs, we note 
that we do not have any statutory authority that would allow us to 
waive the applicable coinsurance for APCM services. For more detail, 
please refer to section II.G2.2.
    Comment: One commenter, who supports our proposal to adopt the 
three new APCM HCPCS G-codes, requests further clarification. The 
commenter does not recommend that these bundled payments include CHI 
and PIN services as the payment would be inadequate and the CHI and PIN 
provide different but complementary services. The commenter stated that 
if care management code G0511 is eliminated, FQHCs would need to be 
allowed to bill CHI and PIN separately and distinctly in addition to 
the APCM codes. The commenter requests clarification and guidance on 
the time constraints for FQHCs and billing for APCM services versus 
general care management services, which they stated could burden an 
FQHC's ability to bill these codes.
    Another commenter stated that CMS is proposing to mandate both RHCs 
and FQHCs to bill individual codes that make up the general care 
management HCPCS code G0511 using three new G-codes, GPCM1, GPCM2, and 
GPCM3. The commenter stated that to offset decreases in payment for 
services that make up G0511, CMS proposes to include these add-on codes 
for additional time spent when the minimum threshold of time is met to 
adjust for a complete encounter. The commenter further stated that CMS 
believes that this will promote transparency in billing and payment, 
and it will also account for the complexity of the service and the time 
for each service. The commenter stated that while they appreciated the 
steps CMS is taking to improve primary care, these care management 
codes will only further create administrative burdens for practices and 
confusion for patients, as mentioned previously and that the 
introduction of three new G-codes will cause the conversion factor to 
decrease and reduce reimbursement. The commenter urged CMS to delay 
implementation and involve stakeholders in this conversation. One 
commenter requested that APCM bundle codes exclude CHI and PIN 
services.
    Response: We note that CHI and PIN may be billed concurrently with 
APCM. We think that these services are unique and serve specific needs 
not otherwise met by the proposed APCM coding and believe that these 
services are additive to APCM services, and do not represent 
duplication of services, as long as time and effort are not counted 
more than once, requirements to bill the other services are met, and 
the services are medically reasonable and necessary. In response to the 
comment about the use of the three new APCM codes and G0511, we again 
reiterate that general care management services that make up HCPCS 
G0511 include chronic care management (CCM), principal care management 
(PCM), chronic pain management (CPM), general behavioral health 
integration (BHI), remote physiologic Monitoring (RPM), remote 
therapeutic monitoring (RTM), community health integration (CHI), 
principal illness navigation (PIN), and principal illness navigation-
peer support (PIN-PS). As stated in the CY 2025 PFS proposed rule (88 
FR 61782), we proposed to require RHCs and FQHCs to bill the individual 
codes that make up the general care management HCPCS code, G0511. The 
APCM codes are not included in the list of codes that make up HCPCS 
G0511. Therefore, we will not be delaying the implementation of 
adopting the APCM codes. If RHCs and FQHCs provide APCM, they should 
report the APCM codes.
    Comment: One commenter requested that CMS develop additional 
resources/technical assistance, beyond cost reporting instructions, to 
help health centers understand how to take up this new APCM bundled 
payment option.
    Response: We thank the commenter for their feedback. We will issue 
sub-regulatory guidance to help health centers understand how to take 
up the APCM bundled payments via updating multiple resources including 
the RHC and FQHC Medicare Benefit Policy Manual, MLN publications and 
the RHC and FQHC web pages.
    Comment: Some commenters requested that CMS monitor and evaluate 
the use of APCM services at RHCs and FQHCs to help reveal any potential 
barriers to uptake. These commenters state that they would appreciate 
CMS' diligence in monitoring RHCSs and FQHCs usage to inform whether 
future tweaks to APCM services would make them more accessible in rural 
settings.
    Response: We thank the comments for this recommendation and will 
take this into consideration as we evaluate APCM.
    After consideration of public comments, we are finalizing our 
proposal to require RHCs and FQHCs when furnishing APCM services to use 
the three newly created HCPCS G-codes created for the PFS paid at the 
PFS non-facility rate effective January 1, 2025, as proposed.
e. Request for Information--Aligning With Services Paid Under the PFS
    As we discuss in section III.B.2.a. of this final 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. 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

[[Page 98013]]

certain categories of beneficiaries. Therefore, under the PFS we have 
proposed new services over the years that practitioners billing under 
the PFS can be paid separately under the PFS. 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. Therefore, we have proposed payment policies for RHCs and FQHCs 
that complement the new services for care coordination under the PFS to 
align the RHC and FQHC resource cost for those services with payment.
    The increase in frequency of this complementary rulemaking has 
triggered us to consider operational efficiencies internally that we 
believe could result in more transparency and clarity for interested 
parties. Since RHCs and FQHCs are generally paid under encounter-based 
payment systems, we have not systematically analyzed all services paid 
under the PFS (nor do we analyze all new services proposed) to 
determine if they are included as a part of the visit versus are 
eligible for additional payment. Another reason that we do not analyze 
every code is because frequently codes created under the PFS for 
billing practitioners are to more appropriately account for resources 
paid under the PFS. Codes for these purposes are not applicable for 
RHCs and FQHCs since they are not paid under the PFS.
    Generally, for PFS services that are a part of the office visit, 
there is no separate payment under the RHC AIR or FQHC PPS payment 
methodologies. On the contrary, care coordination services where the 
focus is on care management, coordination, or certain activities needed 
to manage chronic illnesses or adapt to new models of care, we have 
allowed separate payment for RHCs and FQHCs.
    We solicited comment on how we can improve the transparency and 
predictability regarding which HCPCS codes are considered care 
coordination services. Our goal is to classify care coordination 
services on the PFS in a way that makes it automated in the downstream 
effect on RHCs and FQHCs. We stated that we believe establishing a 
streamlined policy regarding which services are separately paid for 
RHCs and FQHCs versus included as part of the visit is more 
transparent. In addition, a policy where codes are communicated and 
updated through subregulatory guidance may be more efficient.
    We received a few comments in response to our request for 
information about how we can improve transparency and predictability 
regarding which HCPCS codes are considered care coordination services.
    Comment: One commenter expressed their appreciation for our seeking 
comment on improving transparency and predictability regarding which 
codes are considered care coordination services but noted that CMS also 
did not propose to allow RHCs to bill for six new G codes associated 
with interprofessional behavioral health consultations. The commenter 
noted they believe there is a significant opportunity for this to be 
utilized in Rural Health Clinics (RHCs) as many of these providers 
integrate other specialty providers in their provision of comprehensive 
care. The commenter urged CMS to provide RHCs with the same 
opportunities to bill for these types of services that do not meet the 
traditional definition of a face-to-face encounter, in recognition of 
the broader set of services provided in the primary care setting. 
Another commenter suggested that that any services which are partially 
paid for under the PFS and partially paid under RHC or FQHC payment 
rates be considered care coordination and therefore should be 
reimbursed under one payment system. This commenter also urged CMS to 
choose one payment system and use it throughout Medicare and stated 
that having only one system for payment will lower overhead costs, and 
therefore, will save administrative time and money. The commenter also 
stated that practitioners are well aware that there are different 
payment systems and sometimes will be reimbursed in different ways, but 
that when there is a question as to which system is used, it results in 
wasted time trying to figure out which is the proper system, and then, 
if the wrong system is billed, there could be additional time spent 
trying to fix the mistakes that were made. Another commenter noted CMS 
could establish a clear classification system on the PFS and that this 
system should automatically translate the impact of these codes to RHCs 
and FQHCs. The commenter stated that by distinguishing services that 
are separately payable from those included in visit payments, CMS could 
provide greater clarity. The commenter agreed that a policy where codes 
are communicated and updated through subregulatory guidance may be more 
efficient.
    Response: We recognize that there are varying perspectives on how 
we can improve transparency and predictability regarding which HCPCS 
codes are considered care coordination services. We appreciate the 
depth of consideration different interested parties have offered in 
their comments as we continue to evaluate.
    Comment: Another commenter, who appreciated the opportunity to 
opine on our request for information expressed serious concerns 
regarding billing practices by RHCs who utilize providers to furnish 
services in non-rural areas, particularly in skilled nursing facilities 
(SNFs). The commenter stated that the Balanced Budget Act of 1997(BBA) 
required CMS to finalize location requirements to decertify non-rural 
RHCs, which CMS initially proposed in 2003 and 2008 but explained the 
2003 rule was past the statutory deadline and the 2008 rule was never 
finalized. This commenter expressed concern that, in the absence of 
location requirements, some RHCs have exploited this gap by continuing 
to operate in areas that are no longer rural or underserved, including 
in non-rural skilled nursing facilities (SNFs). The commenter urged CMS 
to examine and report on the billing practices of RHCs operating 
outside rural areas to understand the cost of reimbursing for RHC 
services, particularly SNF stays, that are billed in non-underserved or 
rural locations. The commenter stated that addressing these issues 
would benefit both the Medicare program by decreasing costs from paying 
higher RHC rates in urban locations and allow non-RHCs to compete when 
providing SNF services. The commenter further recommended that CMS 
consider regulatory changes that would limit RHCs from adding providers 
that primarily serve patients in non-rural settings.
    Response: We thank the commenter for this important feedback.
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, requires that the Secretary develop and implement payment

[[Page 98014]]

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 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 an RHC or FQHC practitioner. 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 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 allows RHCs and 
FQHCs to report and be paid for mental health visits furnished via 
real-time, telecommunication technology in the same way they currently 
do when these services are furnished in-person.
    In addition, we revised the regulation under Sec.  405.2463 to 
state that there must be an in-person mental health service furnished 
within 6 months prior to the furnishing of the telecommunications 
service and that an in-person mental health service (without the use of 
telecommunications technology) must be provided at least every 12 
months while the beneficiary is receiving services furnished via 
telecommunications technology for diagnosis, evaluation, or treatment 
of mental health disorders, unless, for a particular 12-month period, 
the physician or practitioner and patient agree that the risks and 
burdens outweigh the benefits associated with furnishing the in-person 
item or service, and the practitioner documents the reasons for this 
decision in the patient's medical record (86 FR 65210 and 65211).
    As discussed in the CY 2023 PFS final rule (87 FR 69738), the 
Consolidated Appropriations Act, 2022 (CAA, 2022) (Pub. L. 117-103, 
March 15, 2022) included the extension of several Medicare telehealth 
flexibilities established during the PHE for COVID-19 for a limited 
151-day period beginning on the first day after the end of the PHE. 
Specifically, Division P, Title III, section 304 of the CAA, 2022, 
delayed the in-person requirements for Medicare telehealth services for 
behavioral health and for mental health visits furnished by RHCs and 
FQHCs via telecommunications technology until the 152nd day after the 
end of the PHE for COVID-19. Therefore, in the CY 2023 PFS final rule 
(87 FR 69737), we revised the regulations under Sec. Sec.  405.2463 and 
405.2469 again to reflect these provisions.
    In the CY 2024 PFS final rule (88 FR 79065), we discussed that the 
CAA, 2023 (Pub. L. 117-328, December 29, 2022) further extended the 
Medicare telehealth flexibilities for a period beginning on the first 
day after the end of the PHE for COVID-19 and ending on December 31, 
2024, if the PHE ends prior to that date. Specifically related to RHCs 
and FQHCs, section 4113(c) of the CAA, 2023 amended section 1834(m)(8) 
of the Act to extend payment for RHC and FQHC services provided as 
Medicare telehealth services for the period beginning on the first day 
after the end of the COVID-19 PHE and ending on December 31, 2024, if 
the PHE ends prior to that date. We noted that payment continued to be 
made under the methodology established for Medicare telehealth services 
furnished by FQHCs and RHCs during the PHE, which is based on payment 
rates that are similar to the national average payment rates for 
comparable telehealth services under the PFS.
    We explained that section 4113(d) of the CAA, 2023 continues to 
delay the in-person requirements for Medicare telehealth services for 
behavioral health and for mental health visits furnished by RHCs and 
FQHCs via telecommunications technology. That is, for RHCs and FQHCs, 
in-person visits will not be required until January 1, 2025, or, if 
later, the first day after the end of the PHE for COVID-19. Therefore, 
we stated that we will continue to apply the delay of the in-person 
requirements under Medicare for mental health services furnished by 
RHCs and FQHCs via telecommunications technology. We noted that the PHE 
for COVID-19 under section 319 of the Public Health Service Act ended 
on May 11, 2023.\361\ Therefore, we revised the regulations under 
Sec. Sec.  405.2463 and 405.2469 again to reflect these provisions (88 
FR 79066 through 79067).
---------------------------------------------------------------------------

    \361\ https://www.hhs.gov/coronavirus/covid-19-public-health-emergency/index.html.
---------------------------------------------------------------------------

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.a. of this final 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.
(1) Proposal for CY 2025
    In the CY 2024 PFS proposed rule, 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

[[Page 98015]]

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 in 
regard to this policy.
    Comments provided were overall supportive of our proposal to 
continue to define ``immediate availability'' to include availability 
through virtual means, stating that it will benefit healthcare 
providers while greatly enhancing patient access to quality care, 
particularly in underserved areas. Commenters also noted that direct 
supervision has become increasingly challenging and the option to 
provide virtual direct supervision has enhanced the quality and 
provision of healthcare services beneficiaries have received in 
medically underserved, rural communities.
    We note that in section II.D.2.a. of this final rule, there is a 
proposal 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), 
but only for the following subset of incident-to services described 
under Sec.  410.26, (1) services furnished incident to a physician or 
other practitioner's service when provided by auxiliary personnel 
employed by the billing practitioner and working under their direct 
supervision, and for which the underlying HCPCS code has been assigned 
a Professional Component/Technical Component indicator of `5'; and (2) 
services described by CPT code 99211 (Office or other outpatient visit 
for the evaluation and management of an established patient that may 
not require the presence of a physician or other qualified health care 
professional). In addition, under the PFS we proposed for all other 
services required to be furnished under the direct supervision of the 
supervising physician or other practitioner, to continue to define 
``immediate availability'' to include real-time audio and visual 
interactive telecommunications technology only through December 31, 
2025.
    After evaluating the information gathered through the comment 
solicitation, we believe that we should maintain the current 
flexibility in RHCs and FQHCs as it continues to support access and 
preserve workforce capacity. We believe that there is value in allowing 
RHC and FQHC services to be furnished under direct supervision where 
virtual presence meets the definition of ``immediately available'' as 
status quo, so that we may further evaluate the services along with the 
analysis occurring for the remaining services that we are contemplating 
under the PFS. We noted that there may be nuances in the RHC and FQHC 
settings since generally payment is at the AIR or PPS rate and not at 
the individual service code level to carve out services limited/obvious 
services from other services. We could seek to establish a final policy 
in RHCs and FQHCs once a final policy is determined under the PFS, to 
avoid confusion since they are taking an incremental approach at the 
code level for CY 2025.
    Therefore, we proposed 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.
    Comment: Commenters supported this proposal. A commenter stated 
that requiring the supervising practitioner to be physically present 
would delay care in many instances.
    Response: After consideration of public comments, we are finalizing 
as proposed 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.
c. Services Furnished Through Telecommunications Technology
    As discussed above, section 3704 of the CARES Act directed the 
Secretary to establish payment for RHC and FQHC services 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 
COVID-19. 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. Therefore, 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. RHCs 
and FQHCs bill for these telehealth services using HCPCS code G2025.
    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 an RHC or FQHC practitioner. 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 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 allows RHCs and 
FQHCs to report and be paid for mental health visits furnished via 
real-time, telecommunication technology in the same way they currently 
do when these services are furnished in-person.
    The temporary authority under section 1834(m)(8) of the Act was 
extended by statute through the end of CY 2024, meaning that under 
current law and absent additional changes in regulation, RHCs and FQHCs 
could not continue to be paid under Medicare Part B for RHC and FQHC 
services (other than mental health visits) furnished as Medicare 
telehealth services after December 31, 2024.
(1) 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, have had to change how 
they furnish care in order 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 4 
years and

[[Page 98016]]

resuming payment solely for in-person, face-to-face medical visits 
after December 31, 2024, 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 in order 
to mitigate burden. Technologies used in this space and the quality of 
care associated with them continue to evolve. We believe that it would 
be prudent to allow time to engage with interested parties while we 
consider how to incorporate services furnished through 
telecommunications technology on a more permanent basis.
    For these reasons, we proposed, on a temporary basis, to allow 
payment for non-behavioral health visits (hereafter referred to in this 
discussion as ``medical visit services'') furnished via 
telecommunications technology. We proposed to facilitate payments using 
an approach that closely aligns with the mechanism we have used during 
the PHE and subsequent extensions that end on December 31, 2024. That 
is, 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 believed that we needed to propose a proxy that would 
represent such resources used when furnishing these services. 
Therefore, we proposed 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. 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 4 years and would not impact 
access to care for Medicare beneficiaries who currently benefit from 
these services while CMS contemplates next steps. We solicited comment 
on whether there may be other payment methodologies that may be a proxy 
for costs associated with medical visit services furnished via 
telecommunications technology and why those payment methodologies may 
be more appropriate than the rate based on a weighted average of the 
Medicare telehealth services paid under the PFS.
    We proposed to amend Sec.  405.2464 by adding new paragraph (g) to 
reflect our proposed payment policy for medical visit services 
furnished in RHCs and FQHCs via telecommunications technology for CY 
2025.
(2) Alternative Considered for Payment of Medical Visits Furnished Via 
Telecommunications 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 RHC and FQHC 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 temporarily continuing to pay for RHC and FQHC 
medical visit services furnished via telecommunication technologies in 
the same manner as we have done over the past several years would 
preserve the flexibility for RHCs and FQHCs to continue access to care, 
mitigate administrative burden, and mitigate potential program 
integrity concerns. However, we solicited comment on the alternative 
proposal we considered. That is, revising the definition of a medical 
visit to include interactive, real-time, audio/video telecommunications 
technology which would result in a uniform per-visit payment under the 
RHC AIR methodology or FQHC PPS.
    Comment: Commenters supported our proposal to pay for medical visit 
services furnished by RHCs and FQHCs via telecommunications technology 
for CY 2025, stating that it will benefit these healthcare providers 
while greatly enhancing patient access to quality care, particularly in 
underserved areas.
    Response: We appreciate the support of the commenters.
    Comment: Many commenters expressed a preference for our alternative 
considered, whereby we would change the definition of a visit to 
include interactive, real-time, audio/video telecommunication 
technology, resulting in a uniform per-visit payment under the RHC AIR 
methodology or FQHC PPS for medical visit services. Commenters stated 
that this approach would ensure that RHCs and FQHCs receive consistent 
and timely reimbursement for providing these services via 
telecommunications technology. One commenter asked CMS to elaborate on 
what we described as potential unintended consequences of adopting this 
approach, stating that there has been no widespread fraud, abuse, or 
other unintended consequence resulting from the changed definition of a 
mental health visit, so there is no logical reasoning on which to base 
the belief that changing the definition of a medical visit would have 
those negative results. According to this commenter, offering lower 
reimbursement to safety net providers through a crude special payment 
rule because it is just a continuation of current policy is not 
reducing administrative burden; rather it continues to limit safety net 
providers' ability to invest in these important technologies. The 
commenter stated that if there are program integrity concerns, CMS has 
the ability to monitor utilization of services delivered

[[Page 98017]]

using telecommunications technology through a simple modifier code, and 
address issues if they arise; however, they asserted that simply 
continuing the disparate policy is not an appropriate guardrail and 
continues to have the potential to limit access to care.
    Response: We recognize that under the current statute, RHCs and 
FQHCs will no longer provide their services as a distant site for 
Medicare telehealth services after the end of CY 2024. While further 
legislative extensions of Medicare telehealth flexibilities adopted 
during the PHE for COVID-19 are possible, we proposed an approach that 
would allow us to continue making payment for RHC and FQHC medical 
visit services provided via telecommunications technology as we have 
for several years during and after the PHE for COVID-19 while we 
consider the implications of incorporating payment for these services 
into the RHC AIR and FQHC PPS in the future.
    We note that before the PHE for COVID-19, we tended to presume that 
nearly all Medicare services that involve interaction between a 
practitioner and a patient are to be delivered in person in a face-to-
face encounter except, as in section 1834(m) of the Act, where the 
statute specifically addressed payment for service delivery via 
interactive telecommunications technology. As the use of 
telecommunications technology in health care delivery has become more 
sophisticated and prevalent, our views have been evolving. For example, 
in the context of opioid use disorder (OUD) treatment services by an 
Opioid Treatment Program (OTP), we explained that the requirements of 
section 1834(m) of the Act do not apply to these services because they 
are not furnished by a physician or other practitioner, but instead are 
furnished by the OTP; and no physician or practitioner can be paid 
separately for these services because payment is made through the 
bundled payment to the OTP (84 FR 62658, 62645). In light of our 
experience with the proliferation of telecommunications technology-
based services during the PHE for COVID-19, we have recognized that we 
could take a similar approach with RHC and FQHC services, as evidenced 
by the changes we made to our regulations in the CY 2022 PFS final rule 
for RHC and FQHC mental health visits provided via telecommunications 
technology, as well as our proposal in the CY 2025 PFS proposed rule 
for RHC and FQHC medical visit services.
    We believe our proposed approach allows us to ensure immediate 
access to care for beneficiaries currently relying on RHCs and FQHCs 
while we continue to monitor and analyze information made available to 
us in order to develop, propose, and finalize more permanent policy in 
future rulemaking, particularly given the potential for congressional 
action. We are therefore finalizing as proposed to continue to pay 
through CY 2025 for these services furnished by RHCs and FQHCs via 
telecommunications technology as they have been during and after the 
PHE through the end of CY 2024; however, we will continue to evaluate 
and may consider this issue again in future rulemaking.
    After consideration of public comments, we are finalizing as 
proposed to continue to make payment through CY 2025 for RHC and FQHC 
medical visit services furnished via telecommunications technology 
using the payment amount based on the average amount for all Medicare 
telehealth services paid under the PFS, weighted by volume.
d. In-Person Visit Requirements for Remote Mental Health Services 
Furnished by RHC and FQHCs
    Section 123 of the CAA, 2021 amended section 1834(m)(7) of the Act 
to require that a beneficiary must receive an in person, non-telehealth 
service from the physician or practitioner 6 months prior to initiation 
of the telehealth mental health services and direct the Secretary to 
establish an appropriate frequency for provision of subsequent periodic 
in person, non-telehealth services. As amended by section 4113(d)(1) of 
CAA, 2023 (Pub. L. 117-328), this requirement applies to all mental 
health services provided beginning on January 1, 2025.
    In the CY 2022 PFS final rule with comment (86 FR 65210), we 
revised the regulation under Sec.  405.2463 to apply this provision to 
RHCs and FQHCs, 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.
    As discussed in the CY 2023 PFS final rule (87 FR 69738), the CAA, 
2022 included the extension of a number of Medicare telehealth 
flexibilities established during the PHE for COVID-19 for a limited 
151-day period beginning on the first day after the end of the PHE. 
Division P, Title III, section 304 of the CAA, 2022, delayed the in-
person requirements under Medicare for mental health services furnished 
through telehealth under the PFS and for mental health visits furnished 
by RHCs and FQHCs via telecommunications technology until the 152nd day 
after the end of the PHE for COVID-19.
    The CAA, 2023 (Pub. L. 117-328, December 29, 2022) extended the 
Medicare telehealth flexibilities enacted in the CAA, 2022 for a period 
beginning on the first day after the end of the PHE for COVID-19 and 
ending on December 31, 2024, if the PHE ended prior to that date. While 
the CAA, 2021 only applied to the PFS, we implemented similar policies 
for RHCs, FQHCs, and hospital outpatient departments. As noted above, 
the in-person visit requirements are currently set to take effect for 
services furnished on or after January 1, 2025.
    However, given concerns from interested parties on the impact of 
enforcing these requirements after multiple years of delay, we proposed 
an additional extension. We proposed to 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.
    Comment: Commenters supported our proposal to continue to delay the 
in-person visit requirement for these services, stating that this 
requirement is unnecessary and a barrier to care. Commenters also 
requested that we permanently remove this requirement.
    Response: After consideration of public comments, we are finalizing 
our proposal to 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. We may 
consider an additional extension in future rulemaking.
4. Intensive Outpatient Program Services (IOP)
a. Background
    As we discussed in the CY 2024 OPPS final rule (88 FR 81838) 
section 4124 of Division FF of the CAA, 2023 established Medicare 
coverage for intensive outpatient program (IOP)

[[Page 98018]]

services furnished by a hospital to its outpatients, or by a community 
mental health center (CMHC), a FQHC or a RHC, as a distinct and 
organized intensive ambulatory treatment service offering less than 24-
hour daily care in a location other than an individual's home or 
inpatient or residential setting, effective January 1, 2024.
    IOP is a distinct and organized outpatient program of psychiatric 
services provided for individuals who have an acute mental illness, 
which includes, but is not limited to conditions such as depression, 
schizophrenia, and substance use disorders. We noted an IOP is thought 
to be less intensive than a partial hospitalization program (PHP).
    This new provision mandated several areas of policy to implement an 
IOP program, including scope of benefits and services, certification 
and plan of care requirements, and special payment rules for IOP 
services in RHCs and FQHCs, all of which are discussed in the CY2024 
OPPS final rule (88 FR 81838 through 81845). We made corresponding 
regulation changes for IOP services at Sec. Sec.  405.2400, 405.2401, 
405.2410, 405.2411, 405.2446, 405.2462, 405.2463, 405.2464, 405.2468, 
and 405.2469.
b. Update to Special Payment Rules for Intensive Outpatient Services
    As we discussed in the CY 2024 OPPS final rule (88 FR 81841), 
section 4124(c) of the CAA, 2023 further amended section 1834(o) of the 
Act and section 1834(y) of the Act, to provide special payment rules 
for both FQHCs and RHCs, respectively, for furnishing IOP services. 
Section 4124(c)(1) of the CAA, 2023 amended section 1834(o) of the Act 
to add a new paragraph (5)(A) to require that payment for IOP services 
furnished by FQHCs be equal to the amount that would have been paid 
under Medicare for IOP services had they been covered outpatient 
department services furnished by a hospital. In addition, section 
4124(c)(2) of the CAA, 2023 amended section 1834(y) of the Act to add a 
new paragraph (3)(A) to require that payment for IOP services furnished 
by RHCs be equal to the amount that would have been paid under Medicare 
for IOP services had they been covered outpatient department services 
furnished by a hospital.
    In the CY 2024 OPPS final rule (88 FR 81841), we provided a 
detailed discussion of the final CY 2024 payment rate methodology for 
IOP. CMS finalized two payment rates, a 3- and a 4- or more services 
per day, for IOP services for hospitals and CMHCs. However, for RHCs 
and FQHCs we established a 3-service per day payment rate. We stated 
that we believed it was appropriate to establish the payment rate where 
the utilization is typically structured to be days with 3 or fewer 
services and solicited comment on whether the hospital-based IOP 
payment rate for 4-service days would be appropriate for RHCs and 
FQHCs. Although we previously stated that we would review the data and 
consider a 4 or more services per day for future rulemaking, we 
considered it further. We believed that we should provide parity for 
IOP services across the various settings with site neutral payments 
while continuing to monitor access to these services. Therefore, we 
proposed to provide payment for 4 or more services per day in an RHC/
FQHC setting. Additionally, as required in section 4124(c)(2) of the 
CAA, 2023 we proposed to align with the 4 or more-services per day 
payment rate for hospital outpatient departments. As we stated with the 
3-services per day, the 4 or more services per day payment rates would 
also be updated annually.
    We received several comments on our proposal to provide payment for 
4 or more IOP services per day in an RHC/FQHC setting and align such 
payment with the 4 or more-services per day payment rate for hospital 
outpatient departments, which would be updated annually.
    The following is a summary of the comments we received and our 
responses.
    Comment: Many commenters were very supportive of our proposal to 
establish payment for 4 or more services per day in an RHC/FQHC setting 
and align such payment with the 4 or more services per day payment rate 
for hospital outpatient departments, which will be updated annually. 
One commenter stated that they supported and appreciated CMS' proposal 
to align payment rates with those of hospitals and community mental 
health centers, which the commenter believes will promote fairness and 
consistency in reimbursement for IOP services, regardless of the 
setting. A few commenters stated that this will provide parity and 
site-neutral payments for IOP services across different settings. Some 
commenters stated that they are hopeful that adding the 4 or more 
services per day will encourage rural uptake.
    Response: We agree with supporters that adding the 4 or more 
services per day payment for IOP service will promote fairness and 
consistency in reimbursement for IOP services and also believe that the 
additional payment will provide parity and site-neutral payments for 
IOP services.
    Comment: Although commenters on a whole support our proposal to 
establish a 4-service day payment for IOP services, a few also noted 
some concerns. One commenter noted that payment and recruiting staff 
are barriers to establishing IOP programs. Another commenter stated 
that the payment rate is not adequate for RHCs associated with a 
critical access hospital, but also hoped that allowing a 4-service day 
payment rate will encourage more uptake for IOP services.
    Response: Regarding concerns about the payment rate, we believe 
that establishing a 4 or more-service day payment will provide parity 
for IOP services across the various settings, with site neutral 
payments. As discussed in the CY 2024 OPPS final rule, 88 FR 81844, we 
finalized implementation of the special payment rules for IOP services 
furnished in RHCs and FQHCs. We explained that the payment rate 
determined for IOP for 3 services per day for hospital-based IOPs is 
the payment rate for IOP services furnished in RHCs. In other words, 
payment for IOP services furnished in RHCs would be based on the 
hospital-based rates and not the RHC AIR. We also explained that for 
IOP services furnished in FQHCs, the payment is based on the lesser of 
a FQHC's actual charges or the IOP determined rate. That is, payment 
for IOP services furnished in FQHCs would be based on the hospital-
based rate and not the FQHC PPS. In the CY 2025 PFS proposed rule, we 
proposed to provide payment for 4 or more services per day in an RHC/
FQHC setting, which is also based on the hospital-based payment rate 
for IOP services and not the RHC AIR or the FQHC PPS. The estimated for 
4 or more IOP services is $413.50.
    After consideration of public comments, we are finalizing our 
proposal to establish a payment for 4 or more services per day in an 
RHC/FQHC setting and as required in section 4124(c)(2) of the CAA, 
2023, aligning that payment with the 4 or more-services per day payment 
rate for hospital outpatient departments. These payment rates will be 
updated annually.
c. Technical Correction (Sec. Sec.  405.2410 and 405.2462)
    In the CY 2024 Hospital Outpatient Prospective Payment (OPPS) and 
Ambulatory Surgical Center (ASC) Payment Systems final rule with 
comment (88 FR 81844) we finalized revisions to Sec. Sec.  405.2410, 
405.2462, and 405.2464 in the regulations to reflect the payment amount 
for IOP services and

[[Page 98019]]

how the Medicare Part B deductible and coinsurance are applied in RHC's 
and FQHC's. For RHCs, the beneficiary is responsible for the Medicare 
Part B deductible and coinsurance amounts at an amount not to exceed 20 
percent of the clinic's reasonable charges for IOP services. For 
FQHC's, the beneficiary is responsible for a coinsurance amount of 20 
percent of the lesser of the FQHC's actual charge for the service or 
the IOP rate. We revised the regulatory requirements at Sec.  405.2410, 
``Application of Part B deductible and coinsurance'' and Sec.  
405.2462(j), ``Payment for RHC and FQHC Services'' to reflect how the 
Medicare Part B deductible and coinsurance are applied to IOP services.
    During a recent review of our regulations at Sec. Sec.  405.2410(c) 
and 405.2462(j), we noticed that both sections had errors. That is, 
Sec.  405.2410(c) does not reflect the correct policy that is 
applicable for beneficiary coinsurance when they receive IOP services 
in RHCs and FQHCs. With regard to the error at Sec.  405.2462(j), we 
inadvertently left language specific to RHCs in the introductory text 
when it should have been its own paragraph. Therefore, we proposed 
revisions to Sec.  405.2410 to reflect the correct policy applicable 
for beneficiary coinsurance as described above in the previous 
paragraph. We also proposed revisions to Sec.  405.2462(j) to 
accommodate the new paragraph (j)(1).
    The following is a summary of the comments we received and our 
responses.
    Comment: Many commenters were very supportive of our proposal to 
revise Sec.  405.2410(c) to correct policy applicable for beneficiary 
coinsurance. These commenters expressed their appreciation of the 
clarification. Commenters stated that this correction means that FQHC 
beneficiaries do not have to meet a deductible before Medicare begins 
to cover their services. They further stated that simplifying this 
structure ensures that health center patients can receive necessary 
behavioral health services without the barrier of high upfront costs, 
making it easier for them to seek timely care. Additionally, they 
stated that this change enhances affordability and predictability of 
the coinsurance amount and provides financial relief and certainty for 
beneficiaries, thereby further promoting health equity and access to 
essential services. We did not receive any comments related to Sec.  
405.4662(j).
    Response: We thank commenters for their support of our proposal to 
revise Sec.  405.2410(c) to reflect the correct policy applicable for 
beneficiary coinsurance.
    As we did not receive public comments on our proposed revisions to 
Sec.  405.2462(j) to accommodate the new paragraph (j)(1). Therefore, 
we are finalizing as proposed.
    After consideration of public comments, we are finalizing our 
proposal to revise Sec.  405.2410 to reflect the correct policy 
applicable for beneficiary coinsurance and to revise Sec.  405.2462(j) 
to accommodate the new paragraph (j)(1).
5. Payment for Preventive Vaccine Costs in RHCs and FQHCs
a. Background
    Section 1833(a)(3)(A) of the Act specifies that services described 
in section 1861(s)(10)(A)--pneumococcal, influenza and COVID-19 
vaccines and their administration--are exempt from the RHC and FQHC 
payment limit of 80 percent of reasonable costs. Therefore, payment for 
pneumococcal, influenza and COVID-19 vaccines and their administration 
in RHCs and FQHCs is governed by the statute at section 1833(a)(1)(B) 
of the Act, which requires payment at 100 percent of reasonable cost. 
For RHCs, this means we don't include costs associated with these 
vaccines and their administration in determining the AIR; and that such 
vaccines and administration are not subject to the payment limit. For 
FQHCs, these costs are not included under the FQHC PPS. Please see 
section III.H.2.c. of this final rule for more information on hepatitis 
B vaccines and their administration in RHCs and FQHCs.
    In the April 3, 1996 FQHC final rule (61 FR 14657), we codified at 
Sec.  405.2466(b)(1)(iv) that, for RHCs and FQHCs, payment for 
pneumococcal and influenza vaccines and their administration is 100 
percent of Medicare reasonable cost, which is paid as part of the 
annual reconciliation through the cost report. In the CY 2022 PFS final 
rule (86 FR 65207), we made conforming changes in that section to 
include the COVID-19 vaccine and its administration.
b. Revisions to Current Policy
    In the May 2, 2014 RHC/FQHC PPS final rule (79 FR 25449), we 
addressed commenters' recommendations that CMS apply a consistent 
approach to payment for Part B vaccines. One commenter specifically 
recommended that CMS allow RHCs and FQHCs to bill for Part B vaccines 
at the time of service, either with or without an encounter for a 
visit. The commenter stated that those bills could be paid using 
national Part B rates, to be followed by an annual reconciliation on 
the cost report between the payments and the reasonable costs of the 
vaccines and their administration. This commenter wished to reduce the 
time between vaccine administration and payment, and to enable the 
documentation on individual patient claims that these vaccines were 
furnished. Commenters generally asserted that streamlining Part B 
vaccine payment would help ensure broad vaccine access for Medicare 
beneficiaries.
    In response to these comments, we responded that we did not believe 
that any changes in our billing policies were necessary. We stated that 
RHCs and FQHCs are accustomed to reporting and receiving payment for 
the reasonable costs of Part B vaccines and their administration 
through the annual cost report, and we believed that an annual 
reconciliation between vaccine payments and reasonable costs would 
create an additional administrative burden for FQHCs and MACs. We also 
noted that as of January 1, 2011, FQHCs have been required to report 
pneumococcal and influenza vaccines and their administration on a 
patient claim with the appropriate HCPCS and revenue codes when 
furnished during a billable visit. Please note that this is not a 
requirement for RHCs.
    In the CY 2022 PFS final rule (86 FR 65207), in which we made 
conforming regulatory changes at Sec.  405.2466(b)(1)(iv) to include 
the COVID-19 vaccine, we received several comments regarding the timing 
of vaccine payments for RHCs and FQHCs. These comments echoed the 
sentiments expressed by the commenters on the same topic in the 2014 
final rule mentioned above, and while they were out of the scope of our 
proposals for CY 2022, we will elaborate on them here. These commenters 
expressed appreciation for measures taken by CMS in April 2021 to make 
lump-sum payments for COVID-19 vaccine administration available to RHCs 
and FQHCs in advance of cost report settlement, but commenters 
emphasized that those payments were only a temporary solution. 
Commenters suggested CMS to update the RHC and FQHC cost report to 
ensure adequate, permanent reimbursement for COVID-19 vaccines. 
Commenters added that RHCs and FQHCs have experienced challenges with 
burdensome reporting requirements and data collection, as well as slow 
distribution of payments from MACs. Another commenter stated that RHCs 
and FQHCs should not have to wait until settlement of cost report to

[[Page 98020]]

be reimbursed for other preventive vaccines, and that delayed payment 
may hinder them from immunizing Medicare beneficiaries.
    While we did not respond directly to those comments in the CY 2022 
PFS final rule, as they were out of scope of the policies that were 
finalized at the time, we did make clarifications regarding payment for 
preventive vaccines and their administration in the RHC and FQHC 
Frequently Asked Questions (FAQs) that accompanied the publication of 
the CY 2022 PFS final rule.\362\ In those FAQs, we clarified that the 
conforming change made to Sec.  405.2466(b)(1)(iv) to reflect coverage 
and payment for COVID-19 vaccines in RHCs and FQHCs did not reflect any 
other payment policy changes regarding payment for Part B vaccines and 
administration in those settings. We reiterated that RHCs and FQHCs are 
paid 100 percent of reasonable cost through their cost report for Part 
B vaccines and their administration. Since there is a gap in time from 
when costs are incurred in RHCs and FQHCs for furnishing vaccines and 
when payment is received, the Medicare Administrative Contractors 
(MACs) could provide early payments in the form of lump sum payments to 
RHCs and FQHCs in March of 2021 to facilitate COVID-19 vaccinations. 
RHCs and FQHCs can request additional lump sum payments from their MAC 
at any time.
---------------------------------------------------------------------------

    \362\ RHCs CY 2022 PFS final rule Fact Sheet: https://www.cms.gov/files/document/rhcs-pfs-faqs.pdf; FQHCs CY 2022 PFS 
Final Rule Fact Sheet: https://www.cms.gov/files/document/fqhcs-pfs-faqs.pdf.
---------------------------------------------------------------------------

    Since the publication of the CY 2022 PFS final rule, we have given 
additional consideration to the comments discussed above. During and 
since the COVID-19 PHE, we have especially promoted efforts aimed at 
facilitating increased access to vaccinations for both Medicare 
enrollees and all Americans. Vaccination promotion efforts also 
dovetail with CMS' overarching strategic priorities of expanding health 
care access and advancing health equity. For CY 2025, we have 
identified the issue of vaccination in RHCs and FQHCs as an area where 
payment policy can be updated to improve access to preventive vaccines 
for Medicare enrollees.
    In the CY 2025 PFS proposed rule (89 FR 61794), we proposed to 
allow RHCs and FQHCs to bill for the administration of Part B 
preventive vaccines at the time of service. Based on the policy changes 
found in sections III.M. and III.H.2.c. of this final rule, this 
revision in policy will include all four Part B preventive vaccines: 
pneumococcal, influenza, hepatitis B, and COVID-19 vaccines. These 
claims would initially be paid like other Part B vaccine and vaccine 
administration claims, whose payments are discussed at section III.H.1. 
of this final rule: vaccine products will be paid at 95 percent of 
their Average Wholesale Price (AWP), and vaccine administration will be 
paid according to the National Fee Schedule for Medicare Part B Vaccine 
Administration. The fee schedule's locality-adjusted payment rate files 
for CY 2024 can be found on the CMS Vaccine Pricing website at https://www.cms.gov/medicare/payment/all-fee-service-providers/medicare-part-b-drug-average-sales-price/vaccine-pricing. Payment rate files for 
influenza, pneumococcal and hepatitis B vaccine administration can be 
found under the ``Seasonal Flu Vaccine'' tab, and payment rate files 
for COVID-19 vaccines can be found under the ``COVID-19 Vaccines & 
Monoclonal Antibodies'' tab. The CY 2025 payment rates for Part B 
vaccine administration HCPCS codes G0008, G0009, G0010 and 90480, with 
the annual update applied for CY 2025, will be made available at the 
time of publication of the CY 2025 PFS final rule, and Tables XX and XX 
in section III.H.1.f. of this final rule provide the CY 2025 payment 
rates for those amounts.
    We also clarified that RHC or FQHC providers are eligible to bill 
HCPCS code M0201 for an in-home additional payment for Part B 
preventive vaccine administration, provided that a home visit meets all 
the requirements of both part 405, subpart X, for RHCs and FQHCs 
services provided in the home, and Sec.  410.152(h)(3)(iii) for the in-
home additional payment for Part B preventive vaccine administration. 
More information regarding the in-home additional payment can be found 
at section III.H.1.d of this final rule, and payment rates for M0201 
can be found together with Part B vaccine administration payment rates 
mentioned above.
    We emphasized that the statute at section 1833(a)(1)(B) of the Act 
requires that RHCs and FQHCs be paid at 100 percent of reasonable cost 
for Part B COVID-19 vaccines and their administration. Therefore, 
payments for these services received at the time they are furnished in 
RHCs and FQHCs will need to be annually reconciled with the facilities' 
actual vaccine and vaccine administration costs, including any in-home 
additional costs, on their cost reports. Due to the operational systems 
changes needed to facilitate payment through claims, we proposed that 
RHCs and FQHCs begin billing for preventive vaccines and their 
administration at the time of service, for dates of service beginning 
on or after July 1, 2025. This would allow ample time for CMS to 
release cost reporting instructions and subregulatory guidance with 
additional billing instructions for RHCs and FQHCs to bill Medicare 
Part B for preventive vaccines and their administration at the time of 
service.
    We believed that the proposal addressed the comments and requests 
of stakeholders who have suggested this payment approach over the last 
several years. We noted that this payment approach was mentioned in the 
Senate Appropriations Committee's ``Explanatory Statement For 
Departments Of Labor, Health And Human Services, And Education, And 
Related Agencies Appropriations Bill, 2021.'' \363\ That report 
referenced a December 2019 white paper by the National Association of 
Community Health Centers, which noted that ``FQHCs can face significant 
delays in reimbursement for influenza and pneumococcal vaccines.'' 
\364\ The Committee thus encouraged CMS to promote the ability of FQHCs 
to bill Part B directly for vaccinations at the time of service, with 
reconciliation of payments at the time of cost report settlement.
---------------------------------------------------------------------------

    \363\ https://www.appropriations.senate.gov/imo/media/doc/LHHSRept.pdf.
    \364\ https://www.nachc.org/wp-content/uploads/2023/10/adult-imm-fqhc-white-paper-11-01-2019.pdf.
---------------------------------------------------------------------------

    We solicited comment on these proposals. We mentioned that we would 
especially appreciate comments on the benefits of payments for vaccine 
costs billed at the time of service, weighed against the potential 
additional burdens of annual reconciliation of vaccine claims payments 
against actual vaccine costs.
    We received several public comments on the above proposals. The 
following is a summary of the comments we received and our responses.
    Comment: Commenters overwhelmingly supported our proposals to allow 
RHCs and FQHCs to bill for the administration of Part B preventive 
vaccines at the time of service. Commenters explained that health 
centers like RHCs and FQHCs serve as community hubs where patients can 
receive vaccinations, but that those facilities often operate on 
financially thin margins. They stated that timelier vaccine payments 
will allow RHCs and FQHCs to proactively stock and administer some 
vaccines and will also allow health centers to stock vaccines in other 
sites around the health center besides their pharmacy, which

[[Page 98021]]

will facilitate RHC and FQHC investment in developing robust 
vaccination programs for their patients. Other commenters appreciated 
that our proposal will generally alleviate cash flow issues for rural 
providers.
    Other commenters expressed that they appreciate that this proposal 
streamlines the payment of Part B vaccine claims across more health 
care settings, which will help minimize administrative burden and 
paperwork, increase the time physicians can spend with patients, 
simplify the vaccine billing process and reduce wait times for 
reimbursement. Some commenters specifically expressed support for our 
clarification that RHC or FQHC providers can bill for an in-home 
additional payment for Part B vaccine administration for eligible home 
visits. Another commenter stated that a policy allowing RHCs and FQHCs 
to bill for the administration of Part B preventive vaccines at the 
time of service outweighs any potential burden of annual reconciliation 
processes. One commenter appreciated that the proposal would be 
effective for dates of service on or after July 1, 2025, and they 
concurred with CMS that the additional time would give facilities more 
time to make necessary operational changes.
    Response: We thank commenters for partnering with CMS in our 
efforts to improve health access and equity, especially for those 
vulnerable populations that are served by RHCs and FQHCs. We agree that 
finalizing this proposal will assist RHCs and FQHCs in their operations 
and specifically in administering preventive vaccines to their 
patients. We look forward to continuing our work with all our partners 
to continue facilitating increased access to vaccinations for both 
Medicare enrollees and all Americans.
    Comment: Some commenters asked for additional clarifications 
regarding our proposed policies. Several commenters recommended that 
CMS keep in mind that, when releasing cost reporting instructions on 
the process of billing for Part B vaccines at the time of service, 
those payments must be reconciled to the FQHCs' reasonable costs during 
the Cost Reporting process. Another commenter encouraged CMS to issue 
and implement reporting instructions, subregulatory guidance, and 
operational system changes as expeditiously as possible to facilitate 
payment of these claims.
    Response: Both in the CY 2025 PFS proposed rule (89 FR 61794) and 
in our text above, we emphasized that the statute at section 
183B(a)(1)(b) of the Act requires that RHCs and FQHCs be paid at 100 
percent of reasonable cost for Part B vaccines and their 
administration, and therefore payments for Part B preventive vaccines 
and their administration that are received at the time they are 
furnished in RHCs and FQHCs will need to be annually reconciled with 
the facilities' actual vaccine and vaccine administration costs, 
including any in-home additional costs, on their cost reports. In the 
same paragraphs, we also expressly state our intent to release cost 
reporting instructions and subregulatory guidance before the July 1, 
2025 proposed effective date of this policy, which would contain 
additional billing instructions for RHCs and FQHCs to bill Medicare 
Part B for preventive vaccines and their administration at the time of 
service.
    Comment: A number of commenters requested updates and changes to 
cost reporting instructions and settlement methodology for vaccine 
costs in RHCs and FQHCs. They stated that the current cost reporting 
structure averages the costs of all vaccines administered in a 
facility, include those vaccines that are not recommended for the 
Medicare population, and thus the averaged cost as reported that does 
not accurately represent the true expense of RHCs' and FQHCs' vaccine 
acquisition costs. Commenters mentioned that some RHCs and FQHCs must 
pay Medicare back after receiving payments based on these cost 
reporting calculations. The commenters explained that some vaccines 
recommended for the Medicare population by the CDC's Advisory Committee 
on Immunization Practices (ACIP) may have a higher cost due to their 
higher antigen content or adjuvant, as compared to lower doses of the 
vaccines that are suited for other populations.\365\ One commenter 
stated that our proposal will not fix this underlying issue with RHC 
and FQHC vaccine costs. These commenters suggested that we change cost 
reporting instructions to have RHCs and FQHCs only submit costs for 
those vaccines administered to Medicare enrollees.
---------------------------------------------------------------------------

    \365\ https://www.cdc.gov/mmwr/volumes/71/wr/mm7104a1.htm?s_cid=mm7104a1_w.
---------------------------------------------------------------------------

    Response: We thank commenters for their feedback on these aspects 
of RHC and FQHC vaccine cost and payment. Based on the policies 
finalized in both this section and in section III.H. of the proposed 
rule, several RHC/FQHC cost report updates will be needed for CY 2025, 
including changes to address hepatitis B vaccine costs. We plan to take 
these comments into consideration as we make those cost report updates.
    Comment: One commenter objected to our proposal. This commenter 
directly addressed our request for comment on the benefits of payments 
for vaccine costs billed at the time of service, weighed against the 
potential additional burdens of annual reconciliation of vaccine claims 
payments against actual vaccine costs. The commenter stated that the 
proposal imposes an additional burden of tracking the initial vaccines 
payments, and then submitting vaccine costs again on the annual cost 
report in order to ensure reimbursement at 100 percent of reasonable 
costs. The commenter views the proposal as requiring additional work, 
but not providing additional reimbursement.
    Response: We thank this commenter for their feedback. We 
acknowledge that there is additional work involved for RHCs and FQHCs 
to both track payments received from vaccine administration claims, and 
also reconcile vaccine costs on their cost report. However, based on 
the overwhelming support received from a significant majority of other 
commenters on this proposal, several of whom say this policy will 
ultimately reduce burdens for providers, we are finalizing this policy 
as proposed.
    Comment: We received several comments that were out of the scope of 
our proposal. One commenter requested that we expand this proposal to 
combination vaccines that include a component that is covered and paid 
as a Part B preventive vaccine. Several commenters requested that CMS 
pay for an ``immunization-only visit'' with nurses and/or pharmacists 
outside of the FQHC PPS. Commenters stated that this would help improve 
immunization rates among underserved individuals who seek care at 
FQHCs. Commenters also asked that CMS permit RHCs and FQHCs to bill for 
vaccine counseling. Another commenter requested that CMS holistically 
review its policy on how FQHCs and RHCs can bill for vaccines across 
programs, including Medicare Part D and Medicaid, and that CMS to 
provide additional clarity on how FQHCs and RHCs can bill for Medicare 
Part D covered vaccines. One commenter suggested that CMS expand this 
proposal to all CDC recommended vaccines.
    Response: We thank commenters for their feedback. These comments 
are outside of the scope of our proposals that are to be finalized 
here. We plan to take these comments into consideration for further 
evaluation.
    We would like to include a clarification about Part D vaccinations 
in RHCs and FQHCs. While RHCs and FQHCs cannot currently bill Medicare 
directly for vaccines and vaccine administration outside of the

[[Page 98022]]

pneumococcal, influenza and COVID-19 vaccines, Medicare does cover and 
pay RHCs and FQHCs for other vaccines and their administration, as part 
of the FQHC PPS rate and the RHC AIR. Please see the discussions on 79 
FR 25449 of the 2014 RHC/FQHC PPS final rule regarding vaccine coverage 
and payment in RHCs and FQHCs, which elaborate on this point. Please 
also note that, based on our finalized policies at section III.H.2.c. 
of this final rule, effective January 1, 2025, Hepatitis B vaccines and 
their administration will be paid at reasonable cost in RHCs and FQHCs, 
and they will no longer be included in the RHC AIR or FQHC PPS rate. 
Please see that section for more information.
    After consideration of public comments, we are finalizing these 
policies as proposed. Effective for dates of service on or after July 
1, 2025, RHCs and FQHCs can bill for all four Part B preventive 
vaccines and their administration at the time of service. RHCs and 
FQHCs can bill HCPCS code M0201 for an in-home additional payment for 
Part B preventive vaccine administration, provided that a home visit 
meets all the requirements of both part 405, subpart X, for RHCs and 
FQHCs services provided in the home, and Sec.  410.152(h)(3)(iii) for 
the in-home additional payment for Part B preventive vaccine 
administration. Payments for these services received at the time they 
are furnished in RHCs and FQHCs will need to be annually reconciled 
with the facilities' actual vaccine and vaccine administration costs, 
including any in-home additional costs, on their cost reports. We plan 
to release additional guidance implementing these policies in advance 
of the effective date of July 1, 2025.
6. Productivity Standards
a. Background
    Productivity standards for RHCs were first established on March 1, 
1978 (43 FR 8260) and updated on December 1, 1982 (47 FR 54163 through 
54165), to help determine the average cost per patient for Medicare 
reimbursement in RHCs. These productivity screening guidelines were 
intended to identify situations where costs would not be allowed 
without acceptable justification by the clinic and limits on the amount 
of payment (57 FR 24967). Physicians, nurse practitioners (NPs), 
physician assistants (PAs), and certified nurse midwives (CNMs) are 
held to a minimum number of visits per full time employee (FTE), as 
discussed in section 80.4, chapter 13 of the Medicare Benefit Policy 
Manual. The productivity standards policy requires 4,200 visits per 
full-time equivalent (FTE) physician and 2,100 visits per FTE non-
physician practitioner (for example, nurse practitioner, physician 
assistant, or certified nurse midwife). Physician and non-physician 
practitioner productivity may be combined and if so, the number of 
visits per full-time equivalent team is 6,300. If actual visits are 
less than the productivity standards, the average cost per visit will 
be computed based on the productivity standards rather than actual 
visits, which would result in the cost per visit to be lower than if 
actual visits were used. In other words, if the current productivity 
standards are not met, the results would be a reduction in the cost per 
visit, which could negatively impact the RHC AIR and reduce payments. 
There are exceptions to the productivity standards that can be made 
based on individual circumstances that is at the discretion of the MAC. 
We note that these standards of 4,200 visits per FTE physician and 
2,100 visit per FTE nonphysician practitioner and 6,300 visits per 
combined FTE have not been updated since 1982. We also note similar 
requirements to contain costs in this way were not required in FQHCs or 
other settings paid on reasonable cost.
    Interested parties have requested that CMS re-evaluate or remove 
the productivity standards policy for RHCs because they believe that 
the environment today is very different than when the RHC benefit began 
and that the ``visit per FTE'' is too high for practitioners to meet 
and results in reducing the AIR. They also shared that the productivity 
standards matter even less now since the implementation of the CAA, 
2021 established payment limits for all RHCs.
    During the PHE for COVID-19, we issued a combination of emergency 
authority waivers, regulations, enforcement discretion, and 
subregulatory guidance to ensure and expand access to care and to give 
health care providers the flexibilities needed to help keep people 
safe. RHCs expressed concerns about how the productivity standards may 
impact them during the PHE. For example, many RHCs had trouble meeting 
the productivity standards due to a change in the way they staffed 
their clinics and billed for RHC services with increased 
telecommunications services. RHCs claimed that they were negatively 
impacted even more so than other health care settings because of these 
requirements. We have long standing guidance in the Medicare Benefit 
Policy Manual, chapter 13, section 80.4 that describes the MAC's role 
in providing flexibility to grant productivity exceptions to RHCs who 
experienced disruptions in staffing and services to minimize the burden 
on RHCs. During the PHE we reminded RHCs of the exception process in 
FAQs,\366\ and provided instructions to MACs to proactively reach out 
to RHCs reminding them of the exception process and to proactively 
grant exceptions as necessary.
---------------------------------------------------------------------------

    \366\ https://www.cms.gov/files/document/03092020-covid-19-faqs-508.pdf.
---------------------------------------------------------------------------

    Section 130 of the CAA, 2021 restructured the payment limits for 
RHCs beginning April 1, 2021. That is, independent RHCs, provider-based 
RHCs in a hospital with 50 or more beds, and RHCs enrolled under 
Medicare on or after January 1, 2021, will receive a prescribed 
national statutory payment limit per visit increase over an 8-year 
period for each year from 2021 through 2028. This provision also 
established payment limits for provider-based RHCs in a hospital with 
less than 50 beds. See the CY 2022 PFS final rule (86 FR 65199 through 
65202) for more detailed discussion.
    Since the CAA, 2021 restructured the payment limits for RHCs, and 
in some cases established payment limits for RHCs beginning April 1, 
2021, we believe that applying productivity standards may no longer be 
necessary. In the CY 2025 PFS NPRM, we stated that the productivity 
standards are outdated and redundant with the CAA, 2021 provisions and 
therefore, we proposed to remove productivity standards requirements.
    We received several comments on our proposal to remove the 
productivity standard for RHCs.
    Comment: All commenters are very supportive of our proposal to 
remove the productivity standard for RHCs. A few commenters stated that 
the productivity standards are outdated and redundant given the payment 
limits established in the CAA, 2021 provisions. Another commenter 
stated that reduced burdens and costs coupled with increased access to 
care can only serve to improve the services provided by these 
facilities as long as appropriate patient care standards and 
requirements continue to be met. Another commenter stated that they 
supported our proposal to remove the productivity standard because in 
practice, these productivity standards direct RHCs to lean heavily 
toward advanced practice provider (APP) coverage, due to the lower 
productivity threshold. This commenter further stated that in other 
cases, RHCs are attached to hospitals, which necessitates more 
physician coverage to

[[Page 98023]]

support the hospital services and in the end, this arbitrarily impacts 
RHC primary care clinic reimbursement. The commenter believes that 
penalizing RHCs for an arbitrary rule that forces providers to offer 
less services, is counterintuitive to the basic reasoning RHCs exist. 
Another commenter stated that the productivity standards make it 
difficult for physicians practicing at RHCs to provide the services 
their patients need because if they spend too much time treating more 
complex patients and do not reach the productivity standard as a 
result, then payment rates could be significantly reduced. The 
commenter further stated that they believe removing the productivity 
standard would empower physician-led care teams in RHCs to deliver more 
flexible, patient centered care that can better meet their patients' 
needs.
    One commenter stated that this change will require a cost report 
and calculation change and suggested that this change be effective for 
cost reporting periods ending after December 31, 2024. The commenter 
further stated that for RHCs that do not meet the guidelines for cost 
reporting periods that have not been final-settled (that is, without a 
Notice of Program Reimbursement) as of the publication date of the 
final rule, MACs should be instructed to apply a waiver during final 
settlement that would eliminate any application of the guidelines.
    Response: We agree that the productivity standard is outdated and 
that removing the productivity standard will eliminate redundancy given 
the payment limits established by the CAA, 2021. Regarding the comment 
suggesting that the change be effective for cost reporting periods 
ending after December 31, 2024, we agree. However, we do not agree with 
instructing MACs to apply a waiver during final settlement that would 
eliminate any application of the guidelines as we are striving to have 
all RHC fiscal year ends for this change be handled consistently.
    After consideration of public comments, we are finalizing our 
proposal to remove the productivity standard for RHCs as proposed with 
a clarification on timing; effective with cost reporting periods ending 
after December 31, 2024.
7. Rebasing of the FQHC Market Basket
a. Background
    Section 10501(i)(3)(A) of the Affordable Care Act added section 
1834(o) of the Act to establish a payment system for the costs of FQHC 
services under Medicare Part B based on prospectively set rates. In the 
Prospective Payment System (PPS) for FQHC final rule published in the 
May 2, 2014 Federal Register (79 FR 25436), we implemented a 
methodology and payment rates for the FQHC PPS. Beginning on October 1, 
2014, FQHCs began to transition to the FQHC PPS based on their cost 
reporting periods, and as of January 1, 2016, all FQHCs have been paid 
under the FQHC PPS.
    Section 1834(o)(2)(B)(ii) of the Act requires that the payment for 
the first year after the implementation year be increased by the 
percentage increase in the Medicare Economic Index (MEI). Therefore, in 
CY 2016, the FQHC PPS base payment rate was increased by the MEI. The 
MEI at that time was based on 2006 data from the American Medical 
Association (AMA) for self-employed physicians and was used in the PFS 
sustainable growth rate (SGR) formula to determine the conversion 
factor for physician service payments. (See the CY 2014 PFS final rule 
(78 FR 74264) for a complete discussion of the 2006-based MEI.) Section 
1834(o)(2)(B)(ii) of the Act also requires that beginning in CY 2017, 
the FQHC PPS base payment rate will be increased by the percentage 
increase in a market basket of FQHC goods and services, or if such an 
index is not available, by the percentage increase in the MEI.
    Beginning with CY 2017, FQHC PPS payments were updated using a 
2013-based market basket reflecting the operating and capital cost 
structures for freestanding FQHC facilities (hereafter referred to as 
the FQHC market basket). A complete discussion of the 2013-based FQHC 
market basket can be found in the CY 2017 PFS final rule (81 FR 80393 
through 80403). In the CY 2021 PFS final rule (85 FR 84699 through 
84710), we rebased and revised the FQHC market basket to reflect a 2017 
base year.
    For the CY 2025 PFS proposed rule, we proposed to rebase and revise 
the 2017-based FQHC market basket to reflect a 2022 base year, which 
would maintain our historical frequency of rebasing the market basket 
every 4 years. The proposed 2022-based FQHC market basket is primarily 
based on Medicare cost report data for FQHCs for 2022, which are for 
cost reporting periods beginning on and after October 1, 2021, and 
prior to October 1, 2022. We proposed to use data from cost reports 
beginning in FY 2022 because these data are the latest available 
complete set of Medicare cost report data for purposes of calculating 
cost weights for the FQHC market basket at the time of rulemaking.
    In the following discussion, we provide an overview of the proposed 
FQHC market basket, describe the methodologies for developing the 2022-
based FQHC market basket, and provide information on the proposed price 
proxies. We then present the CY 2025 FQHC market basket update based on 
the 2022-based FQHC market basket.
b. Overview of the 2022-Based FQHC Market Basket
    Similar to the 2017-based FQHC market basket, the proposed 2022-
based FQHC market basket is a fixed-weight, Laspeyres-type price index. 
A Laspeyres price index measures the change in price, over time, of the 
same mix of goods and services purchased in the base period. Any 
changes in the quantity or mix (that is, intensity) of goods and 
services purchased over time are not measured. The index itself is 
constructed using three steps. First, a base period is selected (we 
proposed to use 2022 as the base period) and total base period 
expenditures are estimated for a set of mutually exclusive and 
exhaustive expenditure categories, with the proportion of total costs 
that each category represents being calculated. These proportions are 
called cost weights. Second, each cost category is matched to an 
appropriate price or wage variable, referred to as a ``price proxy.'' 
In almost every instance, these price proxies are derived from publicly 
available statistical series that are published on a consistent 
schedule (preferably at least on a quarterly basis). Finally, the cost 
weight for each cost category is multiplied by the level of its 
respective price proxy. The sum of these products (that is, the cost 
weights multiplied by their price index levels) for all cost categories 
yields the composite index level of the market basket in a given 
period. Repeating this step for other periods produces a series of 
market basket index levels over time. Dividing an index level for a 
given period by an index level for an earlier period produces a rate of 
growth in the input price index over that timeframe. As previously 
noted, the market basket is described as a fixed-weight index because 
it represents the change in price over time of a constant mix (quantity 
and intensity) of goods and services needed to furnish FQHC services. 
The effects on total expenditures resulting from changes in the mix of 
goods and services purchased subsequent to the base period are not 
measured. For example, a FQHC hiring more nurse practitioners to 
accommodate the needs of patients would increase the volume of goods 
and services purchased by the FQHC but would not be factored into

[[Page 98024]]

the price change measured by a fixed-weight FQHC market basket. Only 
when the index is rebased would changes in the quantity and intensity 
be captured, with those changes being reflected in the cost weights. 
Therefore, we rebase the market basket periodically so that the cost 
weights reflect recent changes in the mix of goods and services that 
FQHCs purchase (FQHC inputs) to furnish care between base periods.
c. Development of the 2022-Based FQHC Market Basket Cost Categories and 
Weights
    We solicited public comments on our proposed methodology, discussed 
in this section of this rulemaking, for deriving the proposed 2022-
based FQHC market basket.
    We did not receive public comments on this methodology, and 
therefore, we are finalizing as proposed.
(1) Use of Medicare Cost Report Data
    The major types of costs underlying the proposed 2022-based FQHC 
market basket are derived from the Medicare cost reports (CMS Form 224-
14, OMB Control Number 0938-1298) for freestanding FQHCs. Specifically, 
we use the Medicare cost reports for eleven specific costs: FQHC 
Practitioner Wages and Salaries, FQHC Practitioner Employee Benefits, 
FQHC Practitioner Contract Labor, Clinical Staff Wages and Salaries, 
Clinical Staff Employee Benefits, Clinical Staff Contract Labor, Non-
Health Staff Compensation, Medical Supplies, Pharmaceuticals, Fixed 
Assets, and Movable Equipment. A residual category is then estimated 
and reflects all remaining costs not captured in the 11 types of costs 
identified previously (such as non-medical supplies and utilities).
    The resulting proposed 2022-based FQHC market basket cost weights 
reflect Medicare allowable costs. We proposed to define Medicare 
allowable costs centers for freestanding FQHC facilities as the 
expenses reported on: Worksheet A, lines 1 through 7, lines 9 through 
12, lines 23 through 36, and line 66. For the proposed 2022-based FQHC 
market basket, we proposed to include data from the cost center from 
Worksheet A, line 66 (Telehealth) as effective for CY 2022 since CMS 
finalized a proposal to revise the current regulatory language for RHC 
or FQHC mental health visits to include visits furnished using 
interactive, real-time telecommunications technology and for RHCs and 
FQHCs to report and be paid for mental health visits furnished via 
real-time, telecommunication technology in the same way they currently 
do when these services are furnished in-person (86 FR 65208 through 
62511). As done with the 2017-based FQHC market basket, we proposed to 
continue to exclude Professional Liability Insurance (PLI) costs from 
the total Medicare allowable costs because FQHCs that receive section 
330 grant funds also are eligible to apply for medical malpractice 
coverage under Federally Supported Health Centers Assistance Act 
(FSHCAA) of 1992 (Pub. L. 102-501) and FSHCAA of 1995 (Pub. L. 104-73 
amending section 224 of the Public Health Service Act).
    Later in this section, we explain in more detail how the costs for 
each of the 11 categories are derived. Prior to estimating any costs, 
we apply three basic edits. First, we only include the last submitted 
cost report so there is no double counting of a FQHC provider. Second, 
we exclude providers that have less than half a year of reported cost 
data; this edit excludes 175 FQHC providers for 2022. Finally, we 
remove any providers that did not report net direct patient care 
expenses on the FQHC cost report Worksheet A, line 37, column 7; this 
edit excludes 717 FQHC cost reports, or about 29 percent of FQHC 
providers. If a provider does not have reported costs, then we are 
unable to use that provider's costs to calculate cost weights. We 
encourage providers to report net direct patient care expenses when 
reporting the data. After the three edits, there are 1,713 remaining 
FQHC providers in the 2022 data set that we use to estimate cost 
expenditures for, or roughly two-thirds of the total FQHCs in the 
original Medicare cost report data set.
(a) FQHC Practitioner Wages and Salaries Costs
    A FQHC practitioner is defined as one of the following occupations: 
physicians; nurse practitioners (NPs); physician assistants (PAs); 
certified-nurse midwife (CNMs); clinical psychologist (CPs); and 
clinical social workers (CSWs). We proposed to calculate FQHC 
Practitioner Wages and Salaries Costs using three steps. First, we 
proposed to calculate FQHC Practitioner Compensation Costs as equal to 
the net expenses (that is, costs after reclassifications and 
adjustments) as reported on Worksheet A, column 7, lines 23, 25, 26, 
29, 30, and 31. These lines represent the total net costs (after 
reclassifications and adjustments) for physicians, PAs, NPs, CNMs, CPs, 
and CSWs.
    Second, we proposed to further divide the FQHC Practitioner 
Compensation Costs for these occupations into wages and salaries, 
employee benefits, and contract labor costs based on the ratios of 
practitioner wages and salaries, practitioner employee benefits, and 
practitioner contract labor costs to the sum of these three groups of 
costs. We do this by applying the ratios of practitioner wages and 
salaries, practitioner employee benefits, and practitioner contract 
labor to the net expense FQHC Practitioner Compensation Costs, and the 
determination of these ratios is described below. We proposed to derive 
the practitioner wages and salaries costs as the sum of direct care 
wages and salaries reported on Worksheet A, column 1, lines 23, 25, 26, 
29, 30, and 31. These lines represent the wages and salaries costs for 
physicians, PAs, NPs, CNMs, CPs, and CSWs. We proposed to derive the 
practitioner employee benefits costs for these occupations as the sum 
of costs reported on Worksheet S-3, part II, column 2, lines 2, 3, 4, 
7, 8, and 9. These lines represent the employee benefits costs for 
physicians, PAs, NPs, CNMs, CPs, and CSWs. We proposed to derive the 
practitioner contract labor costs for these occupations as the costs 
reported on Worksheet S-3, part II, column 1, lines 2, 3, 4, 7, 8, and 
9. These lines represent the contract labor costs for physicians, PAs, 
NPs, CNMs, CPs, and CSWs. This was the same method used to calculate 
the ratios to split the FQHC Practitioner Compensation Costs as was 
done for the 2017-based FQHC market basket. Approximately 56 percent of 
FQHCs that reported direct patient care wages and salaries costs also 
reported employee benefits costs data and approximately 99 percent of 
FQHCs that reported direct patient care wages and salaries costs also 
reported contract labor cost data on Worksheet S-3, part II for 2022. 
This is higher reporting than the percent of FQHCs reporting the same 
data compared to the 2017-based FQHC market basket, which had a 45 
percent and 66 percent reporting incidence for the 2017 cost report 
data. We are encouraged by this improvement in the data and continue to 
encourage all providers to report these data on the Medicare cost 
report.
    The final step in the process to derive the FQHC Practitioner Wages 
and Salaries costs is to apply the ratio of practitioner wages and 
salaries to the sum of practitioner wages and salaries costs, 
practitioner employee benefits costs, and practitioner contract labor 
costs times the FQHC Practitioner Compensation costs (representing the 
net expenses for each occupation as reported on Worksheet A column 7) 
as described above. This calculation is

[[Page 98025]]

done for each occupation individually (physicians, PAs, NPs, CNMs, CPs, 
and CSWs). The resulting proposed FQHC Practitioner Wages and Salaries 
costs are equal to the sum of each occupation's wages and salary costs. 
This is the same methodology that was used for the 2017-based FQHC 
market basket.
    As stated in the CY 2022 PFS final rule (86 FR 65209), effective 
for CY 2022 FQHC mental health visits furnished using interactive, 
real-time telecommunications technology are paid for at the same rate 
as other FQHC visits when these services are furnished in-person; 
therefore, we proposed to include telehealth wages and salaries costs 
in the FQHC Practitioner Wages and Salaries cost category. We proposed 
to derive telehealth wages and salaries by multiplying the net 
telehealth costs (as reported on Worksheet A, column 7, line 66) times 
the ratio of telehealth wages and salaries (as reported on Worksheet A, 
column 1, line 66) to the sum of telehealth costs (the sum of Worksheet 
A, column 1 and 2, line 66).
(b) FQHC Practitioner Employee Benefits Costs
    To calculate FQHC Practitioner Employee Benefits costs, we proposed 
to use a similar methodology as used to calculate the FQHC Practitioner 
Wages and Salaries costs. We proposed to apply the ratio of 
practitioner employee benefits as described above to the FQHC 
Practitioner Compensation costs (representing the net expenses for each 
occupation as reported on Worksheet A column 7) as defined in the 
section III.B.7.(c)(1)(a) of this final rule. This calculation is done 
for each occupation individually (physicians, PAs, NPs, CNMs, CPs, and 
CSWs). The FQHC Practitioner Employee Benefits costs are equal to the 
sum of each occupation's employee benefits costs. This is the same 
methodology that was used for the 2017-based FQHC market basket. As 
stated previously, effective for CY 2022, telehealth services are 
covered under the FQHC PPS; therefore, we proposed to also include in 
the FQHC Practitioner Employee Benefits the telehealth employee 
benefits. We proposed to estimate telehealth employee benefits by 
multiplying telehealth wages and salaries (as described in section 
III.B.7.(c)(1)(a)) of this final rule times the ratio of total direct 
patient care facility benefits (Worksheet S-3 part II, column 2, line 
1) to total facility direct patient care salaries (the sum of Worksheet 
A, columns 1 and 2, lines 23 and 25 through 36), which is estimated to 
be 21 percent on average. This ratio is referred to as the overall 
employee benefit share and represents the ratio of employee benefits to 
wages and salaries for all patient care costs reported by FQHCs.
(c) FQHC Practitioner Contract Labor Costs
    To calculate FQHC Practitioner Contract Labor Costs, we proposed to 
use a similar methodology as used to calculate FQHC Practitioner Wages 
and Salaries and FQHC Practitioner Employee Benefit Costs. We proposed 
to multiply the ratio of practitioner contract labor, as described 
above, by the FQHC Practitioner Compensation costs (representing the 
net expenses for each occupation as reported on Worksheet A column 7) 
as defined in section III.B.7.(c)(1)(a) of this final rule. This 
calculation is done for each occupation individually (physicians, PAs, 
NPs, CNMs, CPs, and CSWs). The FQHC Practitioner Contract Labor costs 
are equal to the sum of each occupation's contract labor costs plus all 
net expenses reported for Physicians Services Under Agreement from 
Worksheet A, column 7, line 24. This is the same methodology used for 
the 2017-based FQHC market basket.
(d) Clinical Staff Wages and Salaries Costs
    We proposed to calculate Clinical Staff Wages and Salaries Costs 
using three steps. First, we proposed to define Clinical Staff 
Compensation costs as the sum of net expenses (that is, costs after 
reclassifications and adjustments) as reported on Worksheet A, column 
7, lines 27, 28, 32, 33, 34, 35, and 36. Clinical Staff Compensation 
includes any health-related clinical staff who do not fall under the 
definition of a FQHC Practitioner. These lines represent the net 
expenses for visiting registered nurses (RNs), visiting licensed 
practical nurses (LPNs), laboratory technicians, registered dietician/
Certified DSMT/MNT educators, physical therapists (PTs), occupational 
therapists (OTs), and other allied health personnel.
    Second, we proposed to further divide the Clinical Staff 
Compensation costs for these occupations into wages and salaries, 
employee benefits, and contract labor costs based on the ratio of 
clinical staff wages and salaries, clinical staff employee benefits, 
and clinical staff contract labor costs to the sum of these three 
groups of costs. We do this by applying the ratio of clinical staff 
wages and salaries, clinical staff employee benefits, and clinical 
staff contract labor to the net expense Clinical Staff Compensation 
costs, and the determination of these ratios is described later in this 
section. We proposed to derive clinical staff wages and salaries costs 
as the sum of direct care cost salaries as reported on Worksheet A, 
column 1, lines 27, 28, 32, 33, 34, 35, and 36. These lines represent 
the wages and salaries costs for visiting RNs, visiting LPNs, 
laboratory technicians, registered dietician/Certified DSMT/MNT 
educators, PTs, OTs, and other allied health personnel. We proposed to 
derive the clinical staff employee benefits costs for these occupations 
as the sum of costs reported on Worksheet S-3, part II, column 2, lines 
5, 6, 10, 11, 12, 13, and 14. These lines represent the employee 
benefits costs for visiting RNs, visiting LPNs, laboratory technicians, 
registered dietician/Certified DSMT/MNT educators, PTs, OTs, and other 
allied health personnel. Similarly, we proposed to calculate clinical 
staff contract labor costs for these occupations as the costs reported 
on Worksheet S-3, part II, column 1, lines 5, 6, 10, 11, 12, 13, and 
14. These lines represent the contract labor costs for visiting RNs, 
visiting LPNs, laboratory technicians, registered dietician/Certified 
DSMT/MNT educators, PTs, OTs, and other allied health personnel. This 
was the same method used to calculate the ratios to split the Clinical 
Staff Compensation net expenses as was done for the 2017-based FQHC 
market basket.
    The final step in the process to derive the Clinical Staff Wages 
and Salaries costs is to apply the ratio of clinical staff wages and 
salaries calculated in the prior step to the Clinical Staff 
Compensation costs (representing the net expenses for each occupation 
as reported on Worksheet A column 7) as described above. This 
calculation is done for each occupation individually (visiting RNs, 
visiting LPNs, laboratory technicians, registered dietician/Certified 
DSMT/MNT educators, PTs, OTs, and other allied health personnel). The 
Clinical Staff Wages and Salaries costs is equal to the sum of each 
occupation's wages and salary costs. This is the same methodology that 
was used for the 2017-based FQHC market basket.
(e) Clinical Staff Employee Benefits Costs
    To calculate Clinical Staff Employee Benefit costs, we proposed to 
use a similar methodology as used to calculate the Clinical Staff Wages 
and Salaries costs. We proposed to multiply the ratio of clinical staff 
employee benefits, as described above by the Clinical Staff 
Compensation costs (representing the net expenses for each occupation 
as reported on Worksheet A

[[Page 98026]]

column 7) as defined in the section III.B.7.(c)(1)(d) of this final 
rule. This calculation is done for each occupation individually 
(visiting RNs, visiting LPNs, laboratory technicians, registered 
dietician/Certified DSMT/MNT educators, PTs, OTs, and other allied 
health personnel). The Clinical Staff Employee Benefits costs are equal 
to the sum of each occupation's Employee Benefits costs. This is the 
same methodology that was used for the 2017-based FQHC market basket.
(f) Clinical Staff Contract Labor Costs
    To calculate Clinical Staff Contract Labor costs, we proposed to 
use a similar methodology as used to calculate Clinical Staff Wages and 
Salaries Costs and Clinical Staff Benefit Costs. We proposed to 
multiply the ratio of clinical staff contract labor costs, as described 
above, by the Clinical Staff Compensation costs (representing the net 
expenses for each occupation as reported on Worksheet A column 7) as 
defined in the section III.B.7.(c)(1)(d) of this final rule. This 
calculation is done for each occupation individually (visiting RNs, 
visiting LPNs, laboratory technicians, registered dietician/Certified 
DSMT/MNT educators, PTs, OTs, and other allied health personnel). The 
Clinical Staff Contract Labor costs are equal to the sum of each 
occupation's contract labor costs. This is the same methodology that 
was used for the 2017-based FQHC market basket.
(g) Non-Health Staff Compensation Costs
    We proposed to define Non-Health Staff Compensation costs using net 
expenses (that is, costs after reclassifications and adjustments) as 
the estimated share of compensation costs from Worksheet A, column 7 
for lines 3, 4, 5, 6, 7, 9, 10, 11, and 12. These lines represent the 
net expenses for the employee benefits department, administrative & 
general services, plant operations & maintenance, janitorial, medical 
records, pharmacy, medical supplies, transportation, and other general 
services. Since the net expenses for the General Service Cost centers 
include both compensation and other costs, we estimate the share of net 
expenses for each general service cost center that reflects 
compensation costs. First, we estimate a share of non-health staff 
wages and salaries costs for each general service cost center as 
reported on Worksheet A, column 1 for lines 3, 4, 5, 6, 7, 9, 10, 11, 
and 12 divided by Worksheet A, column 1 and 2 for lines 3, 4, 5, 6, 7, 
9, 10, 11, and 12. Then, we multiply the Non-Health Staff net expenses 
(that is, costs after reclassifications and adjustments) by the non-
health staff wages and salaries share to derive estimated Non-Health 
Staff Wages and Salaries costs for each general service cost center 
(lines 3-7 and lines 9-12). Second, we estimate Non-Health Staff 
Employee Benefit costs by multiplying the Non-Health Staff Wages and 
Salaries costs (step one) by the overall employee benefit share as 
described in section III.B.7.(c)(1)(b) of this final rule, or 21 
percent. Finally, we sum the derived Non-Health Staff Wages and 
Salaries costs and the derived Non-Health Staff Employee Benefits costs 
for each general service cost center (lines 3-7 and lines 9-12) to 
calculate Non-Health Staff Compensation costs. This is the same 
methodology used for the 2017-based FQHC market basket.
(h) Pharmaceutical Costs
    We proposed to calculate Pharmaceutical costs as the non-
compensation costs for the Pharmacy cost center. We define this as 
Worksheet A, column 7, line 9 less derived pharmacy compensation costs. 
Derived pharmacy compensation costs are included in the Non-health 
Staff Compensation costs described in section III.B.7.(c)(1)(g) of this 
final rule. We note that the only pharmaceutical costs eligible for 
inclusion in the FQHC PPS market basket are those reported on line 9 of 
Worksheet A. These pharmaceutical costs would include only the costs of 
routine drugs (both prescription and over the counter), pharmacy 
supplies, and pharmacy services, provided incident to an FQHC visit. 
Other types of drugs and pharmacy supplies costs not included in this 
category are those reported on line 67 (drugs charged to patients), 
line 77 (retail pharmacy), line 48 (pneumococcal vaccine), and line 49 
(influenza vaccine, COVID-19, and monoclonal antibody products for 
treatment of COVID-19), as these costs are reimbursed to FQHC providers 
outside of the FQHC PPS payment. The derived pharmacy compensation 
costs are equal to the sum of the estimated pharmacy wages and salaries 
and pharmacy employee benefits costs. This is the same methodology used 
for the 2017-based FQHC market basket.
(i) Medical Supplies Costs
    We proposed to calculate Medical Supplies costs as the non-
compensation costs for the Medical Supplies costs center. We define 
this as Worksheet A, column 7, line 10 less derived medical supplies 
compensation costs. Derived medical supplies compensation costs are 
included in the Non-health Staff Compensation costs described in 
section III.B.7.(c)(1)(g) of this final rule. The derived medical 
supplies compensation costs are equal to the sum of the estimated 
medical supplies wages and salaries and medical supplies benefits 
costs. This is the same methodology used for the 2017-based FQHC market 
basket.
(j) Fixed Assets Costs
    We proposed to define Fixed Asset costs to be equal to costs 
reported on Worksheet A, line 1, column 7 of the Medicare cost report. 
This is the same methodology used for the 2017-based FQHC market 
basket.
(k) Movable Equipment Costs
    We proposed to define Movable Equipment costs to be equal to the 
capital costs as reported on Worksheet A, line 2, column 7. This is the 
same methodology used for the 2017-based FQHC market basket.
(2) Major Cost Category Computation
    After we derive costs for the major cost categories for each 
provider using the Medicare cost report data as previously described, 
we proposed to trim the data for outliers. For each of the 11 major 
cost categories, we proposed to divide the calculated costs for the 
category by total Medicare allowable costs calculated for the provider 
to obtain cost weights for the universe of FQHC providers after basic 
trims described in section III.B.7.(c) of this final rule. For the 
proposed 2022-based FQHC market basket, total Medicare allowable costs 
are equal to total net expenses (after reclassifications and 
adjustments) reported on: Worksheet A, column 7, for lines 1 through 7, 
lines 9 through 12; lines 23 through 36, and line 66. This is the same 
method used to derive total Medicare allowable costs for the 2017-based 
FQHC market basket with the only difference being that we now include 
the net expenses for line 66, telehealth because as previously 
described, effective for CY 2022 CMS finalized the policy for mental 
health visits furnished using interactive, real-time telecommunications 
technology to be paid in the same way they currently do when these 
services are furnished in-person (86 FR 65208 through 62511).
    For the FQHC Practitioner Wages and Salaries, FQHC Practitioner 
Employee Benefits, FQHC Practitioner Contract Labor, Clinical Staff 
Wages and Salaries, Clinical Staff Employee Benefits, Clinical Staff 
Contract Labor, Non-Health Staff Compensation, Pharmaceuticals, Medical 
Supplies, Fixed Assets, and Movable Equipment cost weights, after 
excluding cost weights that are less than or equal to zero, we proposed 
to then remove those

[[Page 98027]]

providers whose derived cost weights fall in the top and bottom 5 
percent of provider-specific derived cost weights to ensure the 
exclusion of outliers. A 5 percent trim is the standard trim applied to 
the mean cost weights in most CMS market baskets and is consistent with 
the trimming used in the 2017-based FQHC market basket. After the 
outliers have been excluded, we sum the costs for each category across 
all remaining providers. We proposed to then divide this by the sum of 
total Medicare allowable costs across all remaining providers to obtain 
a cost weight for the proposed 2022-based FQHC market basket for the 
given category. This trimming process is done for each cost weight 
separately.
    Finally, we proposed to calculate the residual ``All Other'' cost 
weight that reflects all remaining costs that are not captured in the 
11 major cost categories listed. Table 29 provides the resulting cost 
weights for these major cost categories derived from the Medicare cost 
reports.
    Table 29 displays the proposed 2022-based FQHC market basket cost 
weights compared to the 2017-based FQHC market basket cost weights.
[GRAPHIC] [TIFF OMITTED] TR09DE24.068

    As we did for the 2017-based FQHC market basket, we proposed to 
allocate the Contract Labor cost weight to the Wages and Salaries and 
Employee Benefits cost weights based on their relative proportions 
under the assumption that contract labor costs comprise both wages and 
salaries and employee benefits for both FQHC Practitioners and Clinical 
Staff. The contract labor allocation proportion for Wages and Salaries 
is equal to the Wages and Salaries cost weight as a percent of the sum 
of the Wages and Salaries cost weight and the Employee Benefits cost 
weight. This percentage based on the proposed 2022-based FQHC cost 
weights is 82.5 percent for FQHC practitioners and 80.8 percent for 
clinical staff. Therefore, we proposed to allocate 82.5 percent of the 
FQHC Practitioner Contract Labor cost weight to the FQHC Practitioner 
Wages and Salaries cost weight and 17.5 percent to the FQHC 
Practitioner Employee Benefits cost weight. Similarly, we proposed to 
allocate 80.8 percent of the Clinical Staff Contract Labor cost weight 
to the Clinical Staff Wages and Salaries cost weight and 19.2 percent 
to the Clinical Staff Employee Benefits cost weight. Table 30 shows the 
FQHC Practitioner and Clinical Staff Wages and Salaries and Employee 
Benefits proposed 2022-based cost weights after the contract labor cost 
weight has been allocated. Table 30 also includes the comparison of the 
weights to the 2017-based cost weights for the same categories.
[GRAPHIC] [TIFF OMITTED] TR09DE24.069


[[Page 98028]]


(3) Derivation of the Detailed Operating Cost Weights
    To further divide the ``All Other'' residual cost weight estimated 
from the 2022 Medicare cost report data into more detailed cost 
categories, we proposed to use the 2017 Benchmark Input-Output (I-O) 
``Use Tables/Before Redefinitions/Purchaser Value'' for NAICS 621100, 
Offices of Physicians, published by the Bureau of Economic Analysis 
(BEA). We noted that the BEA benchmark I-O data is used to further 
disaggregate residual costs in other CMS market baskets. Therefore, we 
noted that we believe the data from this industry are the most 
technically appropriate for disaggregation of the residual net expenses 
since both physician offices and FQHCs provide similar types of care. 
These data are publicly available at https://www.bea.gov/industry/input-output-accounts-data. For the 2017-based FQHC market basket, we 
used the 2012 Benchmark Input-Output (I-O) ``Use Tables/Before 
Redefinitions/Purchaser Value'' for NAICS 621100, Offices of 
Physicians, published by the BEA.
    The BEA Benchmark I-O data are scheduled for publication every 5 
years with the most recent data available for 2017. The 2017 Benchmark 
I-O data are derived from the 2017 Economic Census and are the building 
blocks for BEA's economic accounts. Therefore, they represent the most 
comprehensive and complete set of data on the economic processes or 
mechanisms by which output is produced and distributed.\367\ BEA also 
produces Annual I-O estimates. However, while based on a similar 
methodology, these estimates reflect less comprehensive and less 
detailed data sources and are subject to revision when benchmark data 
become available. Instead of using the less detailed Annual I-O data, 
we proposed to inflate the 2017 Benchmark I-O data forward to 2022 by 
applying the annual price changes from the respective price proxies to 
the appropriate market basket cost categories that are obtained from 
the 2017 Benchmark I-O data. We repeat this practice for each year. We 
then calculate the cost shares that each cost category represents of 
the 2017 data inflated to 2022. These resulting 2022 cost shares were 
applied to the ``All Other'' residual cost weight to obtain the 
detailed cost weights for the proposed 2022-based FQHC market basket. 
For example, the cost for Medical Equipment represents 7.8 percent of 
the sum of the ``All Other'' 2017 Benchmark I-O Offices of Physicians 
Expenditures inflated to 2022. Therefore, the proposed Medical 
Equipment cost weight represents 7.8 percent of the proposed 2022-based 
FQHC market basket's ``All Other'' cost category (18.7 percent), 
yielding a Medical Equipment cost weight of 1.5 percent in the proposed 
2022-based FQHC market basket (0.078 x 18.7 percent = 1.5 percent).
---------------------------------------------------------------------------

    \367\ http://www.bea.gov/papers/pdf/IOmanual_092906.pdf.
---------------------------------------------------------------------------

    Using this methodology, we proposed to derive six detailed FQHC 
market basket cost category weights from the proposed 2022-based FQHC 
market basket residual cost weight (18.7 percent). These categories 
are: (1) Utilities; (2) Medical Equipment; (3) Miscellaneous Products; 
(4) Professional, Scientific, and Technical Services; (5) 
Administrative and Facilities Support Services; and (6) All Other 
Services.
(4) 2022-Based FQHC Market Basket Cost Categories and Weights
    Table 31 shows the cost categories and cost weights for the 
proposed 2022-based FQHC market basket compared to the 2017-based FQHC 
market basket. The Total Compensation cost weight of 68.5 percent (sum 
of FQHC Practitioner Compensation, Clinical Staff Compensation, and 
Non-health Staff Compensation) calculated from the Medicare cost 
reports for the proposed 2022-based FQHC market basket is 4.1 
percentage points lower than the total compensation cost weight for the 
2017-based FQHC market basket (72.6 percent). The decrease in the 
compensation cost weight between the 2017-based and the proposed 2022-
based market basket is stemming from the decreasing FQHC Practitioner 
and Clinical Staff Compensation cost weights. The proposed 2022-based 
cost weights for FQHC Practitioner and Clinical Staff Compensation are 
5.3 percentage points lower compared to the 2017-based FQHC market 
basket, while the Non-Health Staff Compensation cost weight is 1.2 
percentage points higher. Analysis of the cost report data shows that 
the decline in the health-related compensation cost weights is stemming 
from a change in the mix of health-related workers from higher-paid to 
lower-paid occupations. Specifically, there has been a shift in full 
time equivalents (FTEs) from physicians to nurse practitioners and a 
shift from registered and licensed practical nurses to other allied 
health personnel. Additionally, the proposed 2022-based Pharmaceuticals 
cost weight, Non-Health Staff Compensation costs weight, and the 
Capital cost weight, are each roughly 1 percentage point higher than 
the cost weight in the 2017-based FQHC market basket.
    We noted that our analysis of the Medicare cost report data over 
time shows the general trends in these cost weights (particularly for 
the Total Compensation and Pharmaceuticals cost weights) began after 
2017 with about half of the cost weight changes occurring between 2017 
and 2019. Consistent with our historical frequency of rebasing the 
other CMS market baskets, we believe it is important to rebase the FQHC 
market basket every four to five years to reflect the more recent data 
and changing cost structure.

[[Page 98029]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.070

d. Selection of Price Proxies
    After developing the cost weights for the proposed 2022-based FQHC 
market basket, we selected the most appropriate wage and price proxies 
currently available to represent the rate of price change for each 
expenditure category. For most of the cost categories, we rely on using 
the price proxies based on U.S. Bureau of Labor Statistics (BLS) data, 
as they produce indexes that best meet the criteria of reliability, 
timeliness, availability, and relevance, and group them into one of the 
following BLS categories:
     Employment Cost Indexes. Employment Cost Indexes (ECIs) 
measure the rate of change in employment wage rates and employer costs 
for employee benefits per hour worked. These indexes are fixed-weight 
indexes and strictly measure the change in wage rates and employee 
benefits per hour. ECIs are superior to Average Hourly Earnings (AHE) 
as price proxies for input price indexes because they are not affected 
by shifts in occupation or industry mix, and because they measure pure 
price change and are available by both occupational group and by 
industry. The industry ECIs are based on the North American Industry 
Classification System (NAICS) and the occupational ECIs are based on 
the Standard Occupational Classification System (SOC).
     Producer Price Indexes. Producer Price Indexes (PPIs) 
measure the average change over time in the selling prices received by 
domestic producers for their output. The prices included in the PPI are 
from the first commercial transaction for many products and some 
services (https://www.bls.gov/ppi/).
     Consumer Price Indexes. Consumer Price Indexes (CPIs) 
measure the average change over time in the prices paid by urban 
consumers for a market basket of consumer goods and services (https://www.bls.gov/cpi/). CPIs are only used when the purchases are similar to 
those of retail consumers rather than purchases at the producer level, 
or if no appropriate PPIs are available.
    We evaluate the price proxies using the criteria of reliability, 
timeliness, availability, and relevance:
     Reliability. Reliability indicates that the index is based 
on valid statistical methods and has low sampling variability. Widely 
accepted statistical methods ensure that the data were collected and 
aggregated in a way that can be replicated. Low sampling variability is 
desirable because it indicates that the sample reflects the typical 
members of the population. (Sampling variability is variation that 
occurs by chance because only a sample was surveyed rather than the 
entire population.)
     Timeliness. Timeliness implies that the proxy is published 
regularly, preferably at least once a quarter. The market baskets are 
updated quarterly, and therefore, it is important for the underlying 
price proxies to be up-to-date, reflecting the most recent data 
available. We believe that using proxies that are published regularly 
(at least quarterly, whenever possible) helps to ensure that we are 
using the most recent data available to update the market basket. We 
strive to use publications that are disseminated frequently, because we 
believe that this is an

[[Page 98030]]

optimal way to stay abreast of the most current data available.
     Availability. Availability means that the proxy is 
publicly available. We prefer that our proxies are publicly available 
because this will help ensure that our market basket updates are as 
transparent to the public as possible. In addition, this enables the 
public to be able to obtain the price proxy data on a regular basis.
     Relevance. Relevance means that the proxy is applicable 
and representative of the cost category weight to which it is applied.
    The CPIs, PPIs, and ECIs that we have selected to use in the 
proposed 2022-based FQHC market basket meet these criteria. Therefore, 
we believe that they continue to be the best measures of price changes 
for the cost categories to which they would be applied.
    Table 32 lists all price proxies we proposed to use in the proposed 
2022-based FQHC market basket. Below is a detailed explanation of the 
price proxies we proposed for each cost category.
(1) Price Proxies for the 2022-Based FQHC Market Basket
(a) FQHC Practitioner Wages and Salaries
    We proposed to use the ECI for Wages and Salaries for Private 
Industry Workers in Professional and Related (BLS series code 
CIU2010000120000I) to measure price growth of this category. There is 
no specific ECI for physicians or FQHC Practitioners, and therefore, we 
proposed to use an index that is based on professionals that receive 
advanced training similar to those performing at the FQHC Practitioner 
level of care. This index is consistent with the price proxy used to 
measure wages and salaries inflation pressure for physicians own time 
in the Medicare Economic Index (MEI) and is based on the MEI technical 
panel recommendation from 2012 for more details see the CY 2014 PFS 
final rule (78 FR 74266 through 74271). Additionally, this is the same 
price proxy used for the FQHC Practitioner Wages and Salaries cost 
category in the 2017-based FQHC market basket (85 FR 84708).
(b) FQHC Practitioner Employee Benefits
    We proposed to use the ECI for Total Benefits for Private Industry 
Workers in Professional and Related to measure price growth of this 
category. This ECI is calculated using the ECI for Total Compensation 
for Private Industry Workers in Professional and Related (BLS series 
code CIU1016220000000I) and the relative importance of wages and 
salaries within total compensation. This is the same price proxy used 
for the FQHC Practitioner Employee Benefits cost category in the 2017-
based FQHC market basket (85 FR 84708).
(c) Clinical Staff Wages and Salaries
    We proposed to use the ECI for Wages and Salaries for all Civilian 
Workers in Health Care and Social Assistance (BLS series code 
CIU1026200000000I) to measure the price growth of this cost category. 
This cost category consists of wage and salary costs for Nurses, 
Laboratory Technicians, and all other healthcare staff not included in 
the FQHC Practitioner compensation categories. Based on the clinical 
staff composition of these workers, we believe that the ECI for health-
related workers is an appropriate proxy to measure wage and salary 
price pressures for these workers. This is the same price proxy used 
for the Clinical Staff Wages and Salaries cost category in the 2017-
based FQHC market basket (85 FR 84708).
(d) Clinical Staff Employee Benefits
    We proposed to use the ECI for Total Benefits for all Civilian 
Workers in Health Care and Social Assistance to measure price growth of 
this category. This ECI is calculated using the ECI for Total 
Compensation for all Civilian Workers in Health Care and Social 
Assistance (BLS series code CIU1016220000000I) and the relative 
importance of wages and salaries within total compensation. This is the 
same price proxy used for the Clinical Staff Employee Benefits cost 
category in the 2017-based FQHC market basket (85 FR 84708).
(e) Non-Health Staff Compensation
    We proposed to use the ECI for Total Compensation for Private 
Industry Workers in Office and Administrative Support (BLS series code 
CIU2010000220000I) to measure the price growth of this cost category. 
The Non-health Staff Compensation cost weight is predominately 
attributable to administrative, and facility type occupations, as 
reported in the data from the Medicare cost reports. This is the same 
price proxy used for the Non-Health Staff Compensation cost category in 
the 2017-based FQHC market basket (85 FR 84708).
(f) Pharmaceuticals
    We proposed to use the PPI Commodities for Pharmaceuticals for 
Human Use, Prescription (BLS series code WPUSI07003) to measure the 
price growth of this cost category. This price proxy is used to measure 
prices of Pharmaceuticals in other CMS market baskets, such as the 
2018-based Inpatient Prospective Payment System market basket and is 
the same price proxy used for the Pharmaceuticals cost category in the 
2017-based FQHC market basket (85 FR 84708).
(g) Utilities
    We proposed to use the CPI for Fuel and Utilities (BLS series code 
CUUR0000SAH2) to measure the price growth of this cost category. This 
is the same price proxy used for the Utilities cost category in the 
2017-based FQHC market basket (85 FR 84708).
(h) Medical Equipment
    We proposed to use the PPI Commodities for Surgical and Medical 
Instruments (BLS series code WPU1562) as the price proxy for this 
category. This is the same price proxy used for the Medical Equipment 
cost category in the 2017-based FQHC market basket (85 FR 84708).
(i) Medical Supplies
    We proposed to use a 50/50 blended index that comprises the PPI 
Commodities for Medical and Surgical Appliances and Supplies (BLS 
series code WPU156301) and the CPI-U for Medical Equipment and Supplies 
(BLS series code CUUR0000SEMG). The 50/50 blend is used in all market 
baskets where we do not have an accurate split available. We noted that 
we believe FQHCs purchase the types of supplies contained within these 
proxies, including such items as bandages, dressings, catheters, 
intravenous equipment, syringes, and other general disposable medical 
supplies, via wholesale purchase, as well as at the retail level. 
Consequently, we proposed to combine the two aforementioned indexes to 
reflect those modes of purchase. This is the same price proxy used for 
the Medical Supplies cost category in the 2017-based FQHC market basket 
(85 FR 84708 through 84709).
(j) Miscellaneous Products
    We proposed to use the CPI for All Items Less Food and Energy (BLS 
series code CUUR0000SA0L1E) to measure the price growth of this cost 
category. We believe that using the CPI for All Items Less Food and 
Energy is appropriate as it reflects a general level of inflation. This 
is the same price proxy used for the Miscellaneous cost category in the 
2017-based FQHC market basket (85 FR 84709).

[[Page 98031]]

(k) Professional, Scientific, and Technical Services
    We proposed to use the ECI for Total Compensation for Private 
Industry Workers in Professional, Scientific, and Technical Services 
(BLS series code CIU2015400000000I) to measure the price growth of this 
cost category. This is the same price proxy used for the Professional, 
Scientific, and Technical Services cost category in the 2017-based FQHC 
market basket (85 FR 84709).
(l) Administrative and Facilities Support Services
    We proposed to use the ECI Total Compensation for Private Industry 
Workers in Office and Administrative Support (BLS series code 
CIU2010000220000I) to measure the price growth of this cost category. 
This is the same price proxy used for the Administrative and Facilities 
Support Services cost category in the 2017-based FQHC market basket (85 
FR 84709).
(m) All Other Services
    We proposed to use the ECI for Total Compensation for Private 
Industry Workers in Service Occupations (BLS series code 
CIU2010000300000I) to measure the price growth of this cost category. 
This is the same price proxy used for the All Other Services cost 
category in the 2017-based FQHC market basket (85 FR 84709).
(n) Fixed Assets
    We proposed to use the PPI Industry for Lessors of Nonresidential 
Buildings (BLS series code PCU531120531120) to measure the price growth 
of this cost category (81 FR 80398). We believe this continues to be 
the most appropriate price proxy since fixed asset costs in FQHCs 
should reflect inflation for the rental and purchase of business office 
space. This is the same price proxy used for the Fixed Assets cost 
category in the 2017-based FQHC market basket (85 FR 84709).
(o) Movable Equipment
    We proposed to continue to use the PPI Commodities for Machinery 
and Equipment (BLS series code WPU11) to measure the price growth of 
this cost category as this cost category represents nonmedical movable 
equipment. This is the same price proxy used for the Movable Equipment 
cost category in the 2017-based FQHC market basket (85 FR 84709).
(2) Summary of Price Proxies of the 2022-Based FQHC Market Basket
    Table 32 shows the cost categories and associated price proxies for 
the proposed 2022-based FQHC market basket.
[GRAPHIC] [TIFF OMITTED] TR09DE24.071

    We solicited comments on our proposal to rebase and revise the FQHC 
market basket to reflect a 2022 base year.
    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: Several commenters supported our proposal to rebase and 
revise the FQHC market basket from a 2017 base year to a 2022 base year 
and supported the proposed market basket methodology and results. The 
commenters stated they appreciated CMS recognizing the financial 
challenges and using the 2022 cost report data to support the FQHC 
market basket. These commenters also stated their support that the 
proposed 2022-based market basket uses a fixed-weight, Laspeyres-type 
price index, which they stated will provide a reliable measure of price 
changes over time, and that this method coupled with the use of other 
reliable data sources ensures that the

[[Page 98032]]

market basket accurately reflects the cost trends that FQHCs 
experience. Finally, several commenters also stated their support for 
the proposal to include the costs related to telehealth services in the 
2022-based FQHC market basket, as it reflects the critical regulatory 
changes and the expansion of telehealth services that took place in 
2022.
    Response: We appreciate the commenters' support for the proposed 
rebasing of the FQHC market basket to reflect a 2022 base year that 
accounts for changes in the mix of goods and services purchased in 
providing FQHC services as well as the general methodological approach 
of using Medicare cost report data, a Laspeyres-type index formula, and 
the use of publicly available price proxies when available and 
appropriate.
    After consideration of public comments, we are finalizing the 
methodology for deriving the 2022-based FQHC market basket as proposed 
without modification effective with the CY 2025 FQHC PPS update.
e. CY 2025 Productivity-Adjusted Market Basket Update for FQHCs
    For CY 2025 (that is, January 1, 2025, through December 31, 2025), 
we proposed to use an estimate of the proposed 2022-based FQHC market 
basket to update payments to FQHCs based on the best available data. 
Consistent with CMS practice, we proposed to use the update based on 
the most recent historical data available at the time of publication of 
the final rule. For example, the final CY 2025 FQHC update is based on 
the four-quarter moving-average percent change of the 2022-based FQHC 
market basket through the second quarter of 2024 (based on the final 
rule's statutory publication schedule). At the time of the proposed 
rule, we did not have the second quarter of 2024 historical data, and 
therefore, we proposed to use the most recent projection available at 
the time. Consistent with CMS practice, we estimate the market basket 
update for the FQHC PPS based on the most recent forecast from IHS 
Global, Inc. (IGI). IGI is a nationally recognized economic and 
financial forecasting firm with which CMS contracts to forecast the 
components of the market baskets and total factor productivity (TFP).
    Based on IGI's third quarter 2024 forecast with historical data 
through the second quarter of 2024, the final 2022-based FQHC market 
basket increase factor for CY 2025 is 4.0 percent. For comparison, the 
2017-based FQHC market basket percentage increase is 4.1 percent for CY 
2025 based on IGI's third quarter 2024 forecast (with historical data 
through the second quarter of 2024). The difference between the CY 2025 
percentage increase using the 2017-based FQHC market basket and the 
2022-based FQHC market basket is due to the lower wages and salaries 
cost weight for FQHC Provider Wages and Salaries and Clinical Staff 
Wages and Salaries.
    Section 1834(o)(2)(B)(ii) of the Act describes the methods for 
determining updates to FQHC PPS payment. We have included a 
productivity adjustment to the FQHC PPS annual payment update since 
implementation of the FQHC PPS (81 FR 80393) and we proposed to 
continue to include a productivity adjustment to the proposed 2022-
based FQHC market basket. We proposed to use the most recent estimate 
of the 10-year moving average of changes in annual private nonfarm 
business (economy-wide) total factor productivity (TFP), which is the 
same measure of TFP applied to other CMS market basket updates 
including the MEI. The U.S. Department of Labor's Bureau of Labor 
Statistics (BLS) publishes the official measures of productivity for 
the U.S. economy. We note that previously the productivity estimates 
published by BLS was referred to as multifactor productivity. Beginning 
with the November 18, 2021, release of productivity data, BLS replaced 
the term ``multifactor productivity'' (MFP) with ``TFP.'' Please see 
https://www.bls.gov/productivity/data.htm for the BLS historical 
published TFP data. For the final FQHC market basket update, we 
proposed to use the most recent historical estimate of annual TFP as 
published by the BLS. Generally, the most recent historical TFP 
estimate is lagged two years from the payment year.
    Therefore, we proposed to use the 10-year moving average percent 
change in annual private nonfarm business TFP through 2023 as published 
by BLS in the CY 2025 FQHC market basket update. We note that TFP is 
derived by subtracting the contribution of labor and capital input 
growth from output growth. Since at the time of development of the 
proposed rule the measure of TFP for 2023 had not yet been published by 
BLS, we proposed to use IGI's first quarter 2024 forecast of TFP. A 
complete description of IGI's TFP projection methodology is available 
on the CMS website at https://www.cms.gov/data-research/statistics-trends-and-reports/medicare-program-rates-statistics/market-basket-research-and-information.
    Using IGI's first quarter 2024 forecast, the productivity 
adjustment for CY 2025 (the 10-year moving average of TFP for the 
period ending CY 2023) was projected to be 0.5 percent. Therefore, the 
proposed CY 2025 productivity-adjusted FQHC market basket update was 
3.5 percent, based on IGI's first quarter 2024 forecast. This reflected 
a 4.0 percent increase in the 2022-based FQHC market basket reduced by 
a 0.5 percentage point productivity adjustment. Finally, we proposed 
that the CY 2025 market basket update and the productivity adjustment 
would be updated to reflect the most recent historical data available 
for the final rule.
    For this final rule, as proposed, we are using the latest 
historical data for TFP as published by the BLS to determine the 
productivity adjustment. The 10-year moving average percent change in 
TFP for the period ending CY 2023 as published by BLS is 0.6 percent. 
Based on the latest historical data through the second quarter of 2024, 
the final 2022-based FQHC market basket percentage increase is 4.0 
percent. Therefore, the final CY 2025 productivity-adjusted FQHC market 
basket update is 3.4 percent (4.0 percent FQHC market basket percentage 
increase reduced by a 0.6 percentage point productivity adjustment).
8. Clarification for Dental Services Furnished in FQHCs
a. Payment for Dental Services Furnished in FQHCs
    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 42 CFR 411.15(i) similarly excludes payment for dental 
services except for inpatient hospital services in connection with 
dental services when hospitalization is required because of: (1) the 
individual's underlying medical condition and clinical status; or (2) 
the severity of the dental procedure.

[[Page 98033]]

    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).
    In the CY 2024 PFS final rule (88 FR 79038), we received comments 
requesting we provide payment for inextricably linked dental services 
in the FQHC setting. Commenters stated that it is critical that CMS 
consider FQHCs' unique Medicare payment structure and that CMS ensure 
that policy changes for FQHCs are analogous to any changes made under 
the PFS. Commenters noted that many FQHCs provide dental services on-
site, and health center patients could benefit from the payment 
policies for dental services inextricably linked to other covered 
services and suggested that the FQHC billing codes should be edited in 
tandem. Commenters further noted that ``physicians' services'' 
component of the Medicare FQHC benefit includes services furnished by 
dentists. Several commenters urged that the list of billable dental 
visit codes modified in the proposed rule be added to the list of codes 
that may be billed in the FQHC setting and requested that any expansion 
in codes recognized under the PFS for dental-related services also be 
applied to FQHCs. We acknowledged the commenters concerns and noted our 
intention to modify operational procedures in the FQHC setting to 
reflect the expansion of this PFS policy, including updates to billable 
code lists.
    In the CY 2025 PFS proposed rule, we agreed that RHC and FQHC 
Medicare beneficiaries could benefit from the payment policies 
established under the PFS for dental services that are inextricably 
linked to specific medical services. Dentists are defined as physicians 
in Medicare statute (42 CFR 491.2). Services furnished by physicians 
are billable visits in RHCs and FQHCs and they could bill for a face-
to-face, medically necessary visit furnished by a dentist within their 
scope of practice. Therefore, we clarified that dental services exactly 
as described in section II.J and furnished in an RHC or FQHC are RHC 
and FQHC visits and as such can be paid under the RHC AIR methodology 
or FQHC PPS.
    We would apply and operationalize the dental policies finalized in 
the CY 2023 and 2024 PFS final rules as applicable also to RHCs and 
FQHCs and update the FQHC qualifying visit list as appropriate. 
Consistent with the discussion in section II.J of this final rule, if 
an RHC or FQHC practitioner believes the dental services for which they 
submit Medicare claims are inextricably linked to a covered service, a 
modifier may be reported on an RHC or FQHC claim for payment purposes. 
The KX modifier would be reported on an RHC or FQHC claim to indicate 
that the service is medically necessary, and that the provider has 
included appropriate documentation in the medical record to support or 
justify the medical necessity of the service or item. We believe that 
usage of the KX modifier in the context of claims for dental services 
inextricably linked to covered services to indicate that the clinician 
attests that the service is medically necessary, and that the provider 
has included appropriate documentation is appropriate and will support 
claims processing and program integrity efforts.
    In addition, the GY modifier may be reported on a Medicare claim to 
indicate that a service is not covered because it is outside of the 
scope of Medicare coverage authorized by the statute. Denial modifiers 
should be used when physicians, practitioners, or suppliers want to 
indicate that the item or service is statutorily non-covered. Use of 
the GY modifier could support MAC efforts to adjudicate claims and 
remove from the claims processing pipeline those claims that do not 
require further processing.
    We intend to provide additional instruction and education through 
subregulatory guidance regarding the usage of the KX and GY modifiers 
on claims submitted for dental services inextricably linked to covered 
medical services.
    We clarified that when RHCs and FQHCs furnish dental services that 
align with the policies and operational requirements in the physician 
setting, we would consider those services to be a qualifying visit and 
the RHC would be paid at the RHC AIR methodology and the FQHC would be 
paid under the FQHC PPS.
b. Medical and Dental Visits Furnished on the Same Day
    If an RHC or FQHC patient has a medically-necessary face-to-face 
visit with an RHC or FQHC practitioner, and is then seen by another RHC 
or FQHC practitioner, including a specialist, for further evaluation of 
the same condition on the same day, or is then seen by another RHC or 
FQHC practitioner, including a specialist, for evaluation of a 
different condition on the same day, the multiple encounters would 
constitute a single RHC or FQHC visit and be payable as one visit 
regardless of the length or complexity of the visit, whether the second 
visit is a scheduled or unscheduled appointment, or whether the first 
visit is related or unrelated to the subsequent visit.
    If the RHC or FQHC patient suffers an illness or injury that 
requires additional diagnosis or treatment on the same day subsequent 
to the first visit, or has a medical and a mental health visit on the 
same day, or an RHC patient has an initial preventive physical exam 
(IPPE) and a separate medical and/or mental health visit on the same 
day, then the RHC or FQHC would be paid separately for each visit.
    We solicited comment on whether the multiple visits policy should 
apply to patients who have an encounter with an RHC or FQHC 
practitioner and a dentist on the same day or should a subsequent 
encounter with a dentist be considered an exception to this policy and 
be paid as a separate billable visit. We are interested in 
understanding when these situations could occur.
    We received several public comments on this proposal. The following 
is a summary of the comments we received.
    Comment: Commenters were very supportive of the clarification 
provided for dental services furnished in RHCs and FQHCs, that is RHCs 
and FQHCs would align with the PFS and adopt the policies and 
operational requirements proposed for dental services that are 
inextricably linked to, and substantially related and integral to the 
clinical success of, other covered services, and would be paid as a 
qualifying visit. Commenters stated expanding Medicare coverage of 
dental services furnished in RHCs and FQHCs would alleviate financial 
burden, make providing dental services more sustainable, ensure 
equitable access to care, and improve care coordination.
    Response: We thank commenters for their support of the 
clarification.
    Comment: One commenter encouraged CMS to clarify how this payment 
clarification will be implemented for RHCs and FQHCs and

[[Page 98034]]

partner with RHCs and FQHCs to implement the policy.
    Response: If an RHC or FQHC practitioner believes the dental 
services for which they submit Medicare claims are inextricably linked 
to a covered service, a modifier may be reported on an RHC or FQHC 
claim for payment purposes. The KX modifier would be reported on an RHC 
or FQHC claim to indicate that the service is medically necessary, and 
that the provider has included appropriate documentation in the medical 
record to support or justify the medical necessity of the service or 
item, and the dental service would be paid at the RHC AIR methodology 
or the FQHC PPS. We intend to provide additional instructions and 
education on the policy and billing requirements for dental services in 
subregulatory guidance.
    Comment: All of the commenters who responded to the comment 
solicitation believed that the exception to the multiple visit policy 
should apply to dental visits; that is, RHCs and FQHCs could bill for 
both a medical visit and a dental visit for a patient on the same day. 
Commenters noted applying the exception to dental services furnished in 
RHCs and FQHCs would align with the current exception for a medical 
visit and a behavioral health visit, and or IOP visit, enhance access 
to care, and minimize patient burden by reducing travel time, 
childcare, mobility issues and other logistical challenges. Commenters 
also noted that same day billing for medical and dental visits ensures 
accurate reimbursement, reflecting the actual time and resources 
invested in each patient encounter. One commenter expressed concerns 
that that if we constrained medical and dental visits to be payable as 
a single visit, regardless of the length or complexity, this may 
incentivize clinics to schedule patients for medical and dental visits 
on separate days and to ensure that integration is realized in the 
provision of patient care, FQHCs and RHCs should be incentivized to 
schedule medical and dental visits on the same day.
    Response: We appreciate the commenters feedback on the multiple 
visits policy. We agree with the commenters recommendation and will 
clarify in subregulatory guidance that RHCs and FQHCs can bill 
separately for dental services that are inextricably linked to other 
covered Medicare services on the same day a medical visit is furnished 
by an RHC or FQHC practitioner. We believe this clarification has the 
potential to increase access to dental services that are inextricably 
linked to other covered medical services in underserved areas and that 
this would help to demonstrate the value of dental services, especially 
in areas where the need for dental services is high and utilization is 
low.
    After consideration of public comments, we are finalizing as 
proposed our clarification that when RHCs and FQHCs furnish dental 
services that align with the policies and operational requirements in 
the physician setting, we would consider these services to be a 
qualifying visit, and they would be paid at the RHC AIR methodology or 
the FQHC PPS. We will issue additional instructions and education 
through subregulatory guidance on the policy and billing requirements 
for these services. We are also clarifying in subregulatory guidance 
that RHCs and FQHCs can bill separately for dental services that are 
inextricably linked to other covered services on the same day a medical 
visit is furnished by an RHC or FQHC practitioner.
9. ``Grandfathered'' Technical Refinement
a. Background
    We have conducted a review of our regulations and guidance to 
determine where preferred terms may be used. We found several sections 
in part 405, subpart X, that use the term ``grandfathered.'' For 
example, in Sec.  [thinsp]405.2462(f)(1) a ``grandfathered tribal 
FQHC'' is a FQHC that is operated by a tribe or tribal organization 
under the Indian Self-Determination and Education Assistance Act 
(ISDEAA); was billing as if it were provider-based to an IHS hospital 
on or before April 7, 2000, and is not currently operating as a 
provider-based department of an IHS hospital.
b. Technical Refinement
    We believe language in communication products should reflect and 
speak to the needs of people in the audience of focus. In an effort to 
represent an ongoing shift to non-stigmatizing language, we proposed to 
make a technical change to remove the term ``grandfathered'' from the 
regulation text in Sec. Sec.  405.2462, 405.2463, 405.2464, and 
405.2469 and replace it with ``historically excepted'' to describe a 
level of protection provided to certain tribal FQHCs that predates 
applicable restrictions.
    We received two public comments on this proposal. The following is 
a summary of the comments we received and our responses.
    Comment: Commenters were supportive of the technical change that 
would remove the term ``grandfathered'' from applicable regulation 
texts and replace it with ``historically excepted.''
    Response: We thank commenters for their support.
    After consideration of public comments, we are finalizing our 
proposal to make a technical change to remove the term 
``grandfathered'' from the regulation text in Sec. Sec.  405.2462, 
405.2463, 405.2464, and 405.2469 and replace it with ``historically 
excepted'' to describe a level of protection provided to certain tribal 
FQHCs that predates applicable restrictions.

C. Rural Health Clinic (RHC) and Federally Qualified Health Center 
(FQHC) Conditions for Certification and Conditions for Coverage (CfCs)

1. Background and Statutory Authority
    The Rural Health Clinic Services Act of 1977 (Pub. L. 95-210 
enacted December 13, 1977) amended the Act by enacting section 1861(aa) 
of the Act to extend Medicare and Medicaid entitlement and payment for 
outpatient services and emergency care services furnished at a rural 
health clinic (RHC) by physicians and certain other practitioners, and 
for services and supplies incidental to their services. Other 
practitioners include nurse practitioners and physician assistants, and 
subsequent legislation extended the definition of covered RHC services 
to include the services of clinical psychologists, clinical social 
workers, certified nurse midwives, marriage and family therapists, and 
mental health counselors.
    We have broad statutory authority to establish health and safety 
standards for most Medicare and Medicaid participating provider and 
supplier types. Section 1861(aa) of the Act authorizes the Secretary to 
establish the requirements that an RHC and Federally Qualified Health 
Center (FQHC) must meet to participate in the Medicare Program. As 
required by subparagraph (iv) of the flush material set out after 
section 1861(aa)(2)(K) of the Act, Medicare certified RHCs must not be 
a rehabilitation agency or a facility which is primarily for the care 
or treatment of mental diseases. These statutory requirements are 
codified in the regulations at 42 CFR part 491 in the Conditions for 
Conditions for Certification and Conditions for Coverage (CfCs). RHCs 
and FQHCs must meet these requirements to receive Medicare payment for 
services. These regulations are intended to protect the health and 
safety of patients receiving care from these facilities. We note that 
there are approximately 5,462 Medicare-

[[Page 98035]]

certified RHCs and 11,853 Medicare participating FQHCs.
2. Summary of the RHC and FQHC CfCs Proposed Provisions, Public 
Comments, and Responses to Comments
    In accordance with section 1861(aa) of the Act, Sec.  491.9, 
Provision of services, establishes the basic requirements for services 
RHCs and FQHCs must provide in accordance with applicable Federal, 
State, and local laws. This CfC also outlines patient care policies, 
including the development of written policies and the establishment of 
guidelines for medical management, record-keeping, and drug 
administration. Additionally, this section specifies the diagnostic, 
therapeutic, laboratory, and emergency services that RHCs and FQHCs 
must offer, as well as the necessary agreements or arrangements with 
other healthcare providers to furnish additional services not available 
onsite.
    Based on feedback from interested parties, including RHC providers 
and rural health associations, we identified a discrepancy between our 
guidance and the statute, and regulations. Specifically, interested 
parties questioned the language in the State Operations Manual Appendix 
G--Guidance for Surveyors: Rural Health Clinics (RHCs) as it relates to 
Sec.  491.9(a)(2). The guidance states that ``RHCs may not be primarily 
engaged in specialized services.'' \368\ The guidance goes on to state 
that, in this context, ``primarily engaged'' is determined by 
considering the total hours of an RHC's operation and whether a 
majority, that is, more than 50 percent, of those hours involve the 
provision of RHC services. Section 1861(aa)(2)(A) of the Act references 
an RHC being primarily engaged in ``furnishing to outpatients'' 
physician services and services furnished by a physician assistant or a 
nurse practitioner, clinical psychologist or by a clinical social 
worker, as cross-referenced by sections 1861(aa)(1)(A) and (B) of the 
Act. This is codified in the CfCs at Sec.  491.9(a)(2), requiring RHCs 
and FQHCs to be primarily engaged in ``providing outpatient health 
services.'' Historically we have enforced the standard that RHCs be 
primarily engaged in providing primary care services based on the 
policy included in the interpretive guidance.
---------------------------------------------------------------------------

    \368\ Centers for Medicare & Medicaid Services. (2020, February 
21). State Operations Manual Appendix G--Guidance for Surveyors: 
Rural Health Clinics (RHCs) (pp. 63-64). https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/som107ap_g_rhc.pdf.
---------------------------------------------------------------------------

a. Basic Requirements (Sec.  491.9(a))
    At Sec.  491.9(a)(2)(i), we proposed to explicitly require RHCs and 
FQHCs to provide primary care services. Under the proposal, RHCs and 
FQHCs would continue to be required to provide primary care services to 
their patient populations, but CMS would no longer determine or enforce 
the standard of RHCs ``being primarily engaged in furnishing primary 
care services'' and would no longer consider the total hours of an 
RHC's operation and whether a majority, that is, more than 50 percent, 
of those hours involve the provision of primary care services through 
the survey process. We note that under the authority of section 1865 of 
the Act, CMS determines compliance with the regulations using surveys 
conducted by a State survey agency, surveys conducted by accreditation 
organizations that have deeming authority for Medicare providers and 
suppliers, and self-attestation. CMS requires RHCs participating in 
Medicare to demonstrate and maintain compliance with the provisions 
included in 42 CFR part 491.
    We proposed this policy because we believe it provides RHCs with 
greater flexibility in the services, including specialty services, that 
they provide by no longer placing parameters on the amount of primary 
care services they provide.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses. Commenters 
included individuals from the RHC community (including RHCs), rural 
health associations, professional associations, State mental health 
associations, and health systems.
    Comment: Many commenters expressed their support for the proposal, 
particularly the flexibility in tailoring services to meet the unique 
needs of their patient populations and addressing shortages in access 
to specialty services in rural areas to reduce health disparities and 
improve health outcomes. Other commenters noted this proposal not only 
promotes more equitable access to medical services but also aligns 
better with the intent of the statute, decreases the burden for RHCs, 
and preserves access to primary care services. Some commenters shared 
their support for this proposed provision and our consideration of the 
mobility barriers individuals in rural areas face, noting the 
importance of having access to services near one's home and that this 
proposal may minimize unnecessary travel time one may face when 
accessing specialized services. Additionally, we received multiple 
comments stressing the importance of RHCs continuing to provide primary 
care services. However, one commenter recommended that CMS not consider 
internal medicine, pediatric medicine, and OB/GYN services to be 
outpatient specialty services and to define ``primary care services'' 
in alignment with 42 CFR part 5 Appendix A paragraph (B)(3)(a). Two 
commenters supported this proposal, noting that the proposal would 
remove the limitation on the total amount of behavioral health services 
RHCs can provide.
    Response: We appreciate the many comments noting support for this 
proposal and the feedback regarding the positive impacts on access to 
care that the proposal will support. While primary care services 
continue to be a critical aspect in addressing health disparities, we 
recognize that we also need to provide alternative rural points of 
access to specialty outpatient services, because more traditional 
points of access, such as hospitals in rural communities, may not be 
available. Many communities rely solely on RHCs to provide medical 
services, and this provision aims to reduce barriers to accessing high-
quality, comprehensive care.
    We appreciate the commenter's suggestion to use the criteria for 
determining whether there is a shortage of primary care practitioners, 
set out at 42 CFR part 5, Appendix A, paragraph (B)(3)(a), as a proxy 
for the amount of primary care services offered. This provision counts 
the number of M.D.s and D.O.s practicing in the categories of general 
or family practice, general internal medicine, pediatrics, and 
obstetrics and gynecology to determine areas having shortages of 
primary medical care professionals (under section 332(a)(1)(A) of the 
Public Health Services Act). However, we disagree with the suggestion. 
The Health Resources and Services Administration (HRSA) is responsible 
for determining whether a location is in a designated shortage area. As 
noted in the proposed rule (89 FR 61807), we use the phrase ``the entry 
point into the health care system'' in the RHC and FQHC CfCs at Sec.  
491.9(c)(1) to determine the services considered to be ``primary 
care.'' This standard is consistent with the language used in the Rural 
Emergency Hospital Conditions of Participation (CoPs) at Sec.  
485.524(a) ``Additional outpatient medical and health services'' and 
follows the Critical Access Hospital CoPs at Sec.  485.635(b)(1)(i) 
``Provision of services.'' Furthermore, the American Academy of Family 
Physicians (AAFP) defines primary care practice as follows:

[[Page 98036]]

``A primary care practice serves as the patient's entry point into the 
health care system and as the continuing focal point for all needed 
health care services.'' \369\ However, we do agree with the commenter 
that RHCs may offer internal medicine, pediatric medicine, and OB/GYN 
care and that the services that are considered primary care services 
(with the latter considered primary care services for women's health). 
We note that one goal of the revised language is to clarify that RHCs 
can and should provide services that focus on specific areas of 
medicine from specialists with advanced training and expertise in 
specific areas of medicine, and CMS will no longer determine if RHCs 
are ``primarily engaged'' in providing these services.
---------------------------------------------------------------------------

    \369\ Primary care. AAFP. (2019, December 12). https://www.aafp.org/about/policies/all/primary-care.html.
---------------------------------------------------------------------------

    Lastly, we note that this provision allows RHCs to provide 
behavioral health services similar to other services for diabetes, 
cardiovascular disease, and other common conditions. The new regulatory 
requirement that RHCs must provide primary care services does not 
remove the statutory requirement that RHCs cannot be a rehabilitation 
agency or a facility primarily for the care and treatment of mental 
diseases. We have not codified this statutory language in this final 
rule (see discussion below). Therefore, RHCs can provide services that 
focus on the needs of the community (including behavioral health 
services) as long as they also meet the primary care needs of their 
community.
    Comment: One commenter shared that this policy could facilitate 
additional rural specialized medical residency rotations, noting 
Congress' recent approval of 1,200 additional medical residency spots 
and the Biden-Harris Administration's commitment to expanding medical 
residency in rural areas. Another commenter noted this proposal could 
promote more coordinated, patient-centered care across specialties and 
ease concerns among physicians practicing within their scope. Several 
commenters noted that certain medical professionals such as 
pediatricians, geriatricians, allergists, obstetricians, 
rheumatologists, dermatologists, and endocrinologists are in high 
demand in rural areas, but patients have difficulty accessing certain 
professionals. One commenter stated this proposal will aid RHCs in 
forming partnerships with specialists to promote appropriate access to 
specialty medications and complex specialty care that may be beyond the 
scope of practice for many providers currently working in RHCs. The 
commenters also noted that having access to these specialists will also 
improve access to care to treat chronic conditions like diabetes and 
obesity.
    Response: Improving the health of rural communities is a top 
priority for the Biden-Harris Administration and CMS remains steadfast 
in our commitment to supporting access to care and ensure high quality 
and safe care. As highlighted by the commenter, efforts have been made 
to enhance the rural health workforce through specialized medical 
residency rotations, which RHCs can leverage more effectively with the 
flexibilities offered through this provision.
    Comment: Several commenters expressed concern that the revised 
language may unintentionally limit access to care in underserved areas. 
Specifically, the commenters noted that many FQHCs provide services 
that primarily consist of behavioral health services. Commenters note 
that FQHCs provide a broad range of services and often serve patients 
who may not have access to other healthcare settings. They noted that 
behavioral health services FQHCs provide is in response to community 
needs. Furthermore, these commenters shared that health centers provide 
care to over 2.7 million patients with mental health care needs and 
300,000 patients with substance use disorders.\370\ Further, in 2021 
health centers employed over 17,000 full-time behavioral health 
staff.\371\
---------------------------------------------------------------------------

    \370\ National Association of Community Health Centers. (2024). 
Community Health Centers: Providers, Partners and Employers of 
Choice. https://www.nachc.org/wp-content/uploads/2024/07/2024-2022-UDS-DATA-Community-Health-Center-Chartbook.pdf.
    \371\ National Association of Community Health Centers. (2023). 
Community Health Center Chartbook. https://www.nachc.org/wp-content/uploads/2023/04/Community-Health-Center-Chartbook-July-2023-2021UDS.pdf.
---------------------------------------------------------------------------

    Response: After consideration of the public comments and further 
consultation with HRSA regarding the potential for unintended 
consequences impacting FQHCs, we agree with commenters who stated that 
applying this provision to FQHCs may negatively impact patient health 
and safety. To participate in the Medicare program, FQHCs must be 
designated under HRSA's Health Center Program either as Health Center 
Program award recipients or as ``look-alikes.'' As part of this 
program, HRSA provides oversight to ensure that FQHCs and look-alike 
FQHCs provide services to meet the full spectrum of healthcare needs in 
the communities they serve, including primary care services. Section 
330 of the Public Health Service Act, 42 U.S.C. 254b, authorizes the 
Health Center Program. Under this authority, health centers provide 
required primary health services and additional health services 
necessary for the adequate support of primary health services to a 
population that is medically underserved or to a special medically 
underserved population by providing such services for all residents of 
the area served by the center. HRSA reviews compliance to ensure health 
centers provide primary care services during the initial application 
process and once an organization is a health center through 
organizational site visits that occur once every 3 years. We believe 
that withdrawing this proposal for FQHCs would not negatively impact 
patient care because there are safeguards in place to ensure that a 
standard of primary care services is provided in health centers. 
Conversely, under the authority of section 1865 of the Act, CMS is 
responsible for determining if a Medicare-certified RHC demonstrates 
and maintains compliance with the provisions included in 42 CFR part 
491. Given that HRSA provides oversight over FQHCs and CMS oversees 
RHCs, there are differences in how they assess compliance with the 
requirements. As a result, RHCs do not have the same safeguards in 
place. To preserve access to primary care services in communities 
served by RHCs, it is essential that each RHC provide some level of 
primary care services.
    Therefore, focusing this provision on RHCs and withdrawing the 
proposal as it would apply to FQHCs avoids the potential for limiting 
access to care while ensuring that RHCs and FQHCs provide a standard of 
primary care services.
    Final Rule Action: After consideration of public comments, we are 
finalizing this requirement as proposed for RHCs with a technical 
change to finalize at Sec.  491.9(a)(3) and with a modification to 
withdraw the proposal with respect to FQHCs. This revision will avoid 
the potential for limiting access to care while ensuring that RHCs and 
FQHCs provide a standard of primary care services.
    This revision will maintain access to primary health and behavioral 
health services furnished by FQHCs and remove the potential for 
unintended consequences this provision may impose on FQHCs.
b. Mental Diseases (Sec.  491.9(a)(2)(ii))
    To further clarify the requirements and the intent of the RHC 
program, we proposed at Sec.  491.9(a)(2)(ii) to codify the statutory 
requirement in subparagraph (iv) of the flush material set out after

[[Page 98037]]

section 1861(aa)(2)(K) of the Act that RHCs cannot be a rehabilitation 
agency or a facility primarily for the care and treatment of mental 
diseases. While this requirement is included at Sec.  491.2, 
Definitions--Rural health clinic or clinic, including this requirement 
the Provision of services CfC at Sec.  491.9(a)(2)(ii) as a separate 
standard more clearly cites the requirement and allows for a clearer 
evaluation of compliance with the specific requirement.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Some commenters supported the goal of our proposal to 
eliminate confusion regarding the types of services RHCs and FQHCs can 
provide by codifying the statutory requirement that RHCs cannot be a 
rehabilitation agency or a facility primarily for the care and 
treatment of mental diseases. Other commenters appreciated the 
discussion of the term ``mental disease'' and recognition that the term 
is outdated and can perpetuate stigma, noting that using language that 
includes both mental health and substance use disorders is important 
and consistent with terms used across fields of practice. A couple of 
commenters supported codifying this requirement as it protects primary 
care services in rural areas, and one commenter stated that this 
proposal would ensure appropriate payment for services furnished in an 
RHC.
    Conversely, many commenters opposed codifying this requirement 
noting that its explicit addition to the CfCs could further amplify 
confusion amongst providers by seemingly imposing additional 
restrictions on the types of services RHCs can furnish, preventing them 
from meeting the needs of the communities they serve. Commenters 
indicated that the proposal may disincentivize RHCs from delivering 
behavioral health services, inadvertently creating obstacles to 
accessing behavioral health services. To prevent unintended 
consequences and protect access to essential services, many commenters 
recommended that CMS instead define facilities that are primarily for 
the care and treatment of mental diseases, such as certified community 
behavioral health clinics (CCBHCs), community mental health centers 
(CMHCs), standalone opioid treatment programs (OTPs), psychiatric 
residential treatment facilities (PRTFs), or facilities that only 
provide intensive outpatient services. These commenters indicated that 
defining ``mental diseases'' and not basing it on the facility type 
would have the potential to limit access to behavioral health services 
provided in RHCs. If CMS did not accept this recommendation, one 
commenter recommended CMS use ``behavioral health conditions'' in the 
CfCs, and another commenter recommended including both ``mental health 
conditions'' and ``substance use disorders'' in the regulation text, 
similar to the regulations CMS has adopted for intensive outpatient 
(IOP) therapy. Furthermore, commenters provided suggestions on how CMS 
should survey for compliance with this provision. Some commenters 
believe that if RHCs provide primary care services, there should be no 
restrictions on the services they provide, urging the advancement of 
integrated behavioral health services in a primary care setting. These 
commenters believe RHCs can serve as an access point for behavioral 
health services and that rural health providers must be flexible to 
meet the unique needs of the patient population, as opposed to 
requiring that a percentage of services are of a specific type. Lastly, 
a few commenters expressed concerns that CMS imposed this requirement 
on FQHCs, noting that we do not have the statutory authority to do so.
    Response: We appreciate the overall feedback received from 
commenters on this proposal. We understand the various concerns raised 
by commenters regarding the unintended consequences that this proposal 
may impose on RHCs, such as impacting access to outpatient services, in 
particular behavioral health services. We expect RHCs to offer a range 
of primary health care services to ensure that patients receive the 
necessary care at the earliest possible point of contact. Our intention 
in codifying the statutory requirement was not to further restrict the 
current state of the health care environment or discourage the 
provision of RHC specialty services or behavioral health services. An 
RHC may offer such specialty services and behavioral health services to 
its patients in addition to the primary care services it already 
provides in accordance with the statute.
    As noted previously, while primary care services continue to be a 
critical aspect in addressing health disparities, we recognize that we 
also need to provide alternative rural points of access to specialty 
outpatient services. We recognize that many communities rely solely on 
RHCs to provide medical services, and our goal in proposing this 
provision was to provide clarity and reduce barriers to accessing high-
quality, comprehensive care, rather than imply that RHCs should 
restrict or limit the existing services they provide. We are 
withdrawing this proposal after considering public comments. This 
decision aligns with the HHS strategic goal to protect and strengthen 
equitable access to health care,\372\ We believe finalizing the 
standard at Sec.  491.9(a)(3), requiring RHCs to provide primary care 
services (discussed in the previous section), will support our goal of 
clarifying the services that RHCs may provide and safeguard access to 
primary care services while avoiding unintended consequences that may 
create barriers to accessing care.
---------------------------------------------------------------------------

    \372\ Assistant Secretary for Planning and Evaluation. U.S. 
Department of Health and Human Services. (2022). Strategic Goal 1: 
Protect and Strengthen Equitable Access to High Quality and 
Affordable Healthcare. https://www.hhs.gov/about/strategic-plan/2022-2026/goal-1/index.html.
---------------------------------------------------------------------------

    We appreciate the commenter's suggestion to include mental health 
conditions and substance use disorders in the regulation text; however, 
the IOP therapy provisions the commenter referred to are payment policy 
and not health and safety standards, such as those set forth in the 
CfCs. The CfCs set forth the minimum health and safety standards that 
facilities must comply with to participate in the Medicare and Medicaid 
programs, and do not impact the amount of payment for services.
    We thank the commenters who recommended that we define ``a facility 
that is primarily for the care and treatment of mental diseases'' as a 
facility type that primarily provides behavioral health services. As we 
noted, we have decided to withdraw the proposal, and therefore, this 
recommendation no longer applies.
    Final Rule Action: After consideration of public comments, we are 
withdrawing this proposal.
c. Laboratory (Sec.  491.9(c)(2))
    We proposed to remove hemoglobin and hematocrit (H&H) (Sec.  
491.9(c)(2)(ii)) from the listed laboratory services that RHCs must 
perform directly. Interested parties have expressed concerns with the 
existing laboratory requirements, citing the financial and physical 
burdens associated with maintaining laboratory tests equipment, as they 
are ordered infrequently. RHC providers have reported that the H&H 
laboratory test, in particular, is overly burdensome. RHCs report that 
when they order laboratory tests that the RHC cannot provide, such as a 
complete blood count (CBC), their patients are often sent to the 
nearest hospital that would have a full-service laboratory available to 
perform the test. In this example, a CBC contains an H&H, so there 
would be no need for the RHC to perform the H&H if the patient is 
getting a CBC completed

[[Page 98038]]

elsewhere. As a result, some RHCs located near hospitals or full-
service laboratories may not be utilizing their laboratory equipment 
and supplies, or they may be utilizing them on a limited basis.
    At Sec.  491.9(c)(2)(vi), we proposed to revise the language to 
``collection of patient specimens for transmittal to a certified 
laboratory for culturing.'' We proposed this revision in response to 
feedback from rural interested parties that this requirement does not 
reflect current clinical laboratory standards of practice and 
laboratory techniques for RHCs. Typically, RHCs are not performing 
primary culturing prior to sending specimens to a certified laboratory. 
Instead, RHCs collect specimens using appropriate collection and 
storage techniques and send them to a certified laboratory without 
initial culturing. Therefore, we proposed to update the language in 
this standard such that the laboratory services RHCs will be required 
to provide include the ``collection of patient specimens for 
transmittal to a certified laboratory for culturing.''
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: All commenters supported the proposed changes to remove 
the hemoglobin and hematocrit (H&H) requirement, as well as the 
proposed language update to the ``primary culturing'' requirement. 
Various organizations and entities expressed their support for the 
proposed change to remove H&H from the CfCs, emphasizing the outdated 
nature of the requirement, as these tests are usually ordered as part 
of a larger panel and are frequently referred to offsite laboratories. 
Commenters noted that removing this requirement would reduce compliance 
costs and unnecessary equipment and supplies, thereby improving 
efficiency and patient care.
    Response: We thank the commenters for their responses and believe 
it is important that the requirements reflect current clinical 
laboratory standards of practice and laboratory techniques.
    Comment: One commenter noted that the removal of H&H from the list 
of required lab services would impact access to this laboratory test. 
The commenter referenced the preamble in which we explained that RHCs 
can still choose to maintain the equipment and supplies to provide H&H 
testing on-site to meet the needs of their patients, and because of 
this, the larger RHC community is not concerned with this provision 
impacting access to this test. Furthermore, in the proposed rule, we 
solicited comments on how removing H&H from the CfCs would impact 
access to this test. Additionally, we requested comments on data, 
evidence, and experience related to laboratory services in RHCs, as 
well as alternative lab services RHCs should provide to meet the needs 
of their communities. One commenter, in response to this request, cited 
that according to their data, 82 percent of RHCs indicated that the lab 
requirement for the ``examination of stool specimens for occult blood'' 
was no longer frequently ordered or considered the best clinical 
practice. Therefore, it was no longer necessary to be included in the 
required labs that RHCs must provide.
    Response: There are a few types of fecal occult blood tests (FOBT) 
used for screening for blood in the stool prior to performing a 
colonoscopy for colon cancer detection. FOBTs are less invasive than 
receiving a colonoscopy and can be performed in the office or at home. 
The national guidelines, including those of the US Preventive Services 
Task Force (USPSTF) and American Cancer Society, explicitly specify 
that colorectal cancer (CRC) screening using FOBT should be done at 
home.373 374 However, FOBTs only detect blood in stool, and 
a colonoscopy would need to be done to find the source of the bleeding 
if the test result is positive, though FOBTs are limited by false-
positive results.375 376 Based on the current national 
standards, we are revising the proposal to remove the examination of 
stool specimens for occult blood from the list of required labs for 
RHCs.
---------------------------------------------------------------------------

    \373\ US Preventive Services Task Force, Bibbins-Domingo, K., 
Grossman, D.C., Curry, S.J., Davidson, K.W., Epling, J.W., Jr, 
Garc[iacute]a, F.A.R., Gillman, M.W., Harper, D.M., Kemper, A.R., 
Krist, A.H., Kurth, A.E., Landefeld, C.S., Mangione, C.M., Owens, 
D.K., Phillips, W.R., Phipps, M.G., Pignone, M.P., & Siu, A.L. 
(2016). Screening for Colorectal Cancer: U.S. Preventive Services 
Task Force Recommendation Statement. JAMA, 315(23), 2564-2575. 
https://doi.org/10.1001/jama.2016.5989.
    \374\ Smith, R.A., Andrews, K.S., Brooks, D., Fedewa, S.A., 
Manassaram-Baptiste, D., Saslow, D., Brawley, O.W., & Wender, R.C. 
(2018). Cancer screening in the United States, 2018: A review of 
current American Cancer Society guidelines and current issues in 
cancer screening. CA: a cancer journal for clinicians, 68(4), 297-
316. https://doi.org/10.3322/caac.21446.
    \375\ Mayo Foundation for Medical Education and Research. (2024, 
July 12). Fecal occult blood test. Mayo Clinic. https://
www.mayoclinic.org/tests-procedures/fecal-occult-blood-test/about/
pac-
20394112#:~:text=The%20test%20isn't%20always,present%20but%20is%20not
%20detected.
    \376\ Ko[sacute]cielniak-Merak, B., Radosavljevi[cacute], B., 
Zaj[aogon]c, A., & Tomasik, P.J. (2018, December). Faecal Occult 
Blood Point-of-care tests. Journal of gastrointestinal cancer. 
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6208834/.
---------------------------------------------------------------------------

    We would like to reiterate that Sec.  491.9(d)(1)(iii) requires 
RHCs to provide prompt access to a Medicare or Medicaid participating 
provider or supplier that can furnish an H&H laboratory test and any 
additional and specialized diagnostic and laboratory services the RHC 
is not equipped to perform. Additionally, this proposal does not 
prevent RHCs from providing tests not listed in Sec.  491.9. An RHC is 
free to provide tests consistent with its CLIA certification and can 
choose a higher level CLIA certification than the certificate of waiver 
if it wishes to provide tests of higher complexity and comply with all 
CLIA requirements.
    Final Rule Action: After consideration of public comments, we are 
finalizing this provision with modification by also removing the 
current requirement that RHCs directly provide ``examination of stool 
specimens for occult blood.''
d. Comments Outside the Scope of This Rulemaking
    Comment: One commenter acknowledged the steps CMS has taken to 
extend telehealth flexibilities for RHCs and FQHCs but recommends that 
CMS utilize digital health technologies in every way possible to 
efficiently improve health outcomes and avoid unnecessary in-person 
requirements.
    Another commenter urged CMS to make permanent the flexibilities 
issued during the COVID-19 Public Health Emergency related to medical 
supervision of nurse practitioners in rural and underserved 
communities. They emphasized the importance of these flexibilities for 
RHCs and FQHCs located in areas where workforce shortages persist, and 
this change aligns with statutory requirements for non-physician 
directed clinics.
    Another commenter recommended that the statutory definition of a 
``rural health clinic'' include marriage and family therapists and 
mental health counselors.
    Response: We appreciate these comments; however, they are outside 
the scope of this rule. CMS does not have the authority to change the 
statute as this is done through an act of Congress.

D. Clinical Laboratory Fee Schedule: Revised Data Reporting Period and 
Phase-In of Payment Reductions

1. Background on the Clinical Laboratory Fee Schedule
    Prior to January 1, 2018, Medicare paid for clinical diagnostic 
laboratory tests (CDLTs) on the Clinical Laboratory

[[Page 98039]]

Fee Schedule (CLFS) under section 1833(a), (b), and (h) of the Act. 
Under the previous payment system, CDLTs were paid based on the lesser 
of: (1) the amount billed; (2) the local fee schedule amount 
established by the Medicare Administrative Contractor (MAC); or (3) a 
national limitation amount (NLA), which is a percentage of the median 
of all the local fee schedule amounts (or 100 percent of the median for 
new tests furnished on or after January 1, 2001). In practice, most 
tests were paid at the NLA. Under the previous payment system, the CLFS 
amounts were updated for inflation based on the percentage change in 
the Consumer Price Index for All Urban Consumers (CPI-U) and reduced by 
a productivity adjustment and other statutory adjustments but were not 
otherwise updated or changed. Coinsurance and deductibles generally do 
not apply to CDLTs paid under the CLFS.
    Section 1834A of the Act, as established by section 216(a) of the 
Protecting Access to Medicare Act of 2014 (PAMA), required significant 
changes to how Medicare pays for CDLTs under the CLFS. A final rule 
entitled ``Medicare Clinical Diagnostic Laboratory Tests Payment 
System'' (CLFS final rule), which appeared in the Federal Register on 
June 23, 2016 (81 FR 41036), implemented section 1834A of the Act at 42 
CFR part 414, subpart G.
    Under the CLFS final rule, ``reporting entities'' must report to 
CMS during a ``data reporting period'' ``applicable information'' 
collected during a ``data collection period'' for their component 
``applicable laboratories.'' The first data collection period occurred 
from January 1, 2016, through June 30, 2016. The first data reporting 
period occurred from January 1, 2017, through March 31, 2017. On March 
30, 2017, we announced a 60-day period of enforcement discretion for 
the application of the Secretary's potential assessment of civil 
monetary penalties for failure to report applicable information with 
respect to the initial data reporting period.\377\
---------------------------------------------------------------------------

    \377\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ClinicalLabFeeSched/Downloads/2017-March-Announcement.pdf.
---------------------------------------------------------------------------

    In the CY 2018 PFS proposed rule (82 FR 34089 through 34090), we 
solicited public comments from applicable laboratories and reporting 
entities to better understand the applicable laboratories' experiences 
with data reporting, data collection, and other compliance requirements 
for the first data collection and reporting periods. We discussed these 
comments in the CY 2018 PFS final rule (82 FR 53181 through 53182) and 
stated that we would consider the comments for potential future 
rulemaking or guidance.
    As part of the CY 2019 Medicare PFS rulemaking, we finalized two 
changes to the definition of ``applicable laboratory'' at Sec.  414.502 
(see 83 FR 59667 through 59681, 60074; 83 FR 35849 through 35850, 35855 
through 35862). First, we excluded Medicare Advantage plan payments 
under Part C from the denominator of the Medicare revenues threshold 
calculation to broaden the types of laboratories qualifying as an 
applicable laboratory. Second, consistent with our goal of obtaining a 
broader representation of laboratories that could potentially qualify 
as an applicable laboratory and report data, we also amended the 
definition of applicable laboratory to include hospital outreach 
laboratories that bill Medicare Part B using the CMS-1450 14x Type of 
Bill.
2. Payment Requirements for Clinical Diagnostic Laboratory Tests
    In general, under section 1834A of the Act, the payment amount for 
each CDLT on the CLFS furnished beginning January 1, 2018, is based on 
the applicable information collected during the data collection period 
and reported to CMS during the data reporting period and is equal to 
the weighted median of the private payor rates for the test. The 
weighted median is calculated by arraying the distribution of all 
private payor rates, weighted by the volume for each payor and each 
laboratory. The payment amounts established under the CLFS are not 
subject to any other adjustment, such as geographic, budget neutrality, 
or annual update, as required by section 1834A(b)(4)(B) of the Act. 
Additionally, section 1834A(b)(3) of the Act, implemented at Sec.  
414.507(d), provides for a phase-in of payment reductions, limiting the 
amounts the CLFS rates for each CDLT (that is not a new advanced 
diagnostic laboratory test (ADLT) or new CDLT) can be reduced as 
compared to the payment rates for the preceding year. Under the 
original provisions enacted by section 216(a) of PAMA, for the first 3 
years after implementation (CY 2018 through CY 2020), the reduction 
could not be more than 10 percent per year. For the next 3 years after 
implementation (CY 2021 through CY 2023), section 216(a) of PAMA stated 
that the reduction could not be more than 15 percent per year. Under 
sections 1834A(a)(1) and (b) of the Act, as enacted by PAMA, for CDLTs 
that are not ADLTs, the data collection period, data reporting period, 
and payment rate update were to occur every 3 years. As such, the 
second data collection period for CDLTs that are not ADLTs occurred 
from January 1, 2019, through June 30, 2019, and the next data 
reporting period was originally scheduled to take place from January 1, 
2020, through March 31, 2020, with the next update to the Medicare 
payment rates for those tests based on that reported applicable 
information scheduled to take effect on January 1, 2021.
    Section 216(a) of PAMA established a new subcategory of CDLTs known 
as ADLTs, with separate reporting and payment requirements under 
section 1834A of the Act. The definition of an ADLT is set forth in 
section 1834A(d)(5) of the Act and implemented at Sec.  414.502. 
Generally, under section 1834A(d) of the Act, the Medicare payment rate 
for a new ADLT is equal to its actual list charge during an initial 
period of 3 calendar quarters. After the new ADLT initial period, ADLTs 
are paid using the same methodology based on the weighted median of 
private payor rates as other CDLTs. However, under section 1834A(d)(3) 
of the Act, updates to the Medicare payment rates for ADLTs occur 
annually instead of every 3 years.
    Additional information on the private payor rate-based CLFS is 
detailed in the CLFS final rule, which implemented section 1834A of the 
Act as required by PAMA (81 FR 41036 through 41101), and this 
information is also available on the CMS website.\378\
---------------------------------------------------------------------------

    \378\ https://www.cms.gov/medicare/payment/fee-schedules/clinical-laboratory-fee-schedule-clfs/pama-educational-resources.
---------------------------------------------------------------------------

3. Previous Statutory Revisions to the Data Reporting Period and Phase-
In of Payment Reductions
    Beginning in 2019, Congress passed a series of legislation to 
modify the statutory requirements for the data reporting period and 
phase-in of payment reductions under the CLFS. First, section 105(a)(1) 
of the Further Consolidated Appropriations Act, 2020 (FCAA) (Pub. L. 
116-94, December 20, 2019) amended the data reporting requirements in 
section 1834A(a) of the Act to delay the next data reporting period for 
CDLTs that are not ADLTs by 1 year so that data reporting would be 
required during the period of January 1, 2021, through March 31, 2021, 
instead of January 1, 2020, through March 30, 2020. The 3-year data 
reporting cycle for CDLTs that are not ADLTs would resume after that 
data reporting period. Section 105(a)(1) of the FCAA also specified 
that the data collection period that applied to the data reporting 
period

[[Page 98040]]

of January 1, 2021, through March 30, 2021, would be the period of 
January 1, 2019, through June 30, 2019, which was the same data 
collection period that would have applied absent the amendments. In 
addition, section 105(a)(2) of the FCAA amended section 1834A(b)(3) of 
the Act regarding the phase-in of payment reductions to provide that 
payments may not be reduced by more than 10 percent as compared to the 
amount established for the preceding year through CY 2020, and for CYs 
2021 through 2023, payment may not be reduced by more than 15 percent 
as compared to the amount established for the preceding year. These 
statutory changes were consistent with our regulations implementing the 
private payor rate-based CLFS at Sec.  414.507(d) (81 FR 41036).
    Subsequently, section 3718 of the Coronavirus Aid, Relief, and 
Economic Security Act, 2020 (CARES Act) (Pub. L. 116-136, March 27, 
2020) further amended the data reporting requirements for CDLTs that 
are not ADLTs and the phase-in of payment reductions under the CLFS. 
Specifically, section 3718(a) of the CARES Act amended section 
1834A(a)(1)(B) of the Act to delay the next data reporting period for 
CDLTs that are not ADLTs by one additional year, to require data 
reporting during the period of January 1, 2022, through March 31, 2022. 
The CARES Act did not modify the data collection period that applied to 
the next data reporting period for these tests. Thus, under section 
1834A(a)(4)(B) of the Act, as amended by section 105(a)(1) of the FCAA, 
the next data reporting period for CDLTs that are not ADLTs would have 
been based on the data collection period of January 1, 2019, through 
June 30, 2019.
    Section 3718(b) of the CARES Act further amended the provisions in 
section 1834A(b)(3) of the Act regarding the phase-in of payment 
reductions under the CLFS. First, it extended the statutory phase-in of 
payment reductions resulting from private payor rate implementation by 
an additional year, that is, through CY 2024 instead of CY 2023. It 
further amended section 1834A(b)(3)(B)(ii) of the Act to specify that 
the applicable percent for CY 2021 is 0 percent, meaning that the 
payment amount determined for a CDLT for CY 2021 shall not result in 
any reduction in payment as compared to the payment amount for that 
test for CY 2020. Section 3718(b) of the CARES Act further amended 
section 1834A(b)(3)(B)(iii) of the Act to state that the applicable 
percent of 15 percent would apply for CYs 2022 through 2024, instead of 
CYs 2021 through 2023. In the CY 2021 PFS rulemaking (85 FR 50210 
through 50211; 85 FR 84693 through 84694), in accordance with section 
105(a) of the FCAA and section 3718 of the CARES Act, we proposed and 
finalized conforming changes to the data reporting and payment 
requirements at 42 CFR part 414, subpart G.
    Section 4 of the Protecting Medicare and American Farmers from 
Sequester Cuts Act (PMAFSCA) (Pub. L. 117-71, December 10, 2021) made 
additional revisions to the CLFS requirements for the next data 
reporting period for CDLTs that are not ADLTs and to the phase-in of 
payment reductions under section 1834A of the Act. Specifically, 
section 4(b) of PMAFSCA amended the data reporting requirements in 
section 1834A(a) of the Act to delay the next data reporting period for 
CDLTs that are not ADLTs by 1 year, so that data reporting would be 
required during the period of January 1, 2023, through March 31, 2023. 
The 3-year data reporting cycle for CDLTs that are not ADLTs would 
resume after that data reporting period. As amended by section 4 of 
PMAFSCA, section 1834A(a)(1)(B) of the Act provided that in the case of 
reporting with respect to CDLTs that are not ADLTs, the Secretary shall 
revise the reporting period under subparagraph (A) such that--(i) no 
reporting is required during the period beginning January 1, 2020, and 
ending December 31, 2022; (ii) reporting is required during the period 
beginning January 1, 2023, and ending March 31, 2023; and (iii) 
reporting is required every 3 years after the period described in 
clause (ii).
    Section 4 of PMAFSCA did not modify the data collection period that 
applies to the next data reporting period for these tests. Thus, under 
section 1834A(a)(4)(B) of the Act, as amended by section 105(a)(1) of 
the FCAA, the next data reporting period for CDLTs that are not ADLTs 
(January 1, 2023, through March 31, 2023) would continue to be based on 
the data collection period of January 1, 2019, through June 30, 2019, 
as defined in Sec.  414.502.
    Section 4 of PMAFSCA further amended the provisions in section 
1834A(b)(3) of the Act regarding the phase-in of payment reductions 
under the CLFS. First, it extended the statutory phase-in of payment 
reductions resulting from private payor rate implementation by an 
additional year, that is, through CY 2025. It further amended section 
1834A(b)(3)(B)(ii) of the Act to specify that the applicable percent 
for each of CY 2021 and 2022 is 0 percent, meaning that the payment 
amount determined for a CDLT for CY 2021 and 2022 shall not result in 
any reduction in payment as compared to the payment amount for that 
test for CY 2020. Section 4(a) of PMAFSCA further amended section 
1834A(b)(3)(B)(iii) of the Act to state that the applicable percent of 
15 percent would apply for CYs 2023 through 2025, instead of CYs 2022 
through 2024. In the CY 2023 PFS rulemaking (87 FR 46068 through 46070; 
87 FR 69741 through 69744, 70225), in accordance with section 4 of 
PMAFSCA, we proposed and finalized conforming changes to the data 
reporting and payment requirements at 42 CFR part 414, subpart G.
    Section 4114 of the Consolidated Appropriations Act, 2023 (CAA, 
2023) (Pub. L. 117-328, December 29, 2022) made further revisions to 
the CLFS requirements for the next data reporting period for CDLTs that 
are not ADLTs and to the phase-in of payment reductions under section 
1834A of the Act. Specifically, section 4114(b) of the CAA, 2023 
amended the data reporting requirements in section 1834A(a)(1)(B) of 
the Act to delay the next data reporting period for CDLTs that are not 
ADLTs by 1 year, so that data reporting would be required during the 
period of January 1, 2024, through March 31, 2024, instead of the data 
reporting period of January 1, 2023, through March 31, 2023. The 3-year 
data reporting cycle for CDLTs that are not ADLTs would resume after 
that data reporting period. As amended by section 4114(b) of the CAA, 
2023, section 1834A(a)(1)(B) of the Act now provides that in the case 
of reporting with respect to CDLTs that are not ADLTs, the Secretary 
shall revise the reporting period under subparagraph (A) such that--(i) 
no reporting is required during the period beginning January 1, 2020, 
and ending December 31, 2023; (ii) reporting is required during the 
period beginning January 1, 2024, and ending March 31, 2024; and (iii) 
reporting is required every 3 years after the period described in 
clause (ii).
    Section 4114 of the CAA, 2023 did not modify the data collection 
period that applies to the next data reporting period for CDLTs. Thus, 
under section 1834A(a)(4)(B) of the Act, the next data reporting period 
for CDLTs that are not ADLTs (January 1, 2024, through March 31, 2024) 
would continue to be based on the data collection period of January 1, 
2019, through June 30, 2019, as reflected in the definitions of data 
collection period and data reporting period at Sec.  414.502.
    Section 4114(a) of the CAA, 2023 further amended the provisions in

[[Page 98041]]

section 1834A(b)(3) of the Act regarding the phase-in of payment 
reductions under the CLFS. First, it extended the statutory phase-in of 
payment reductions resulting from private payor rate implementation by 
an additional year, that is, through CY 2026. It further amended 
section 1834A(b)(3)(B)(ii) of the Act to specify that the applicable 
percent for CY 2023 is 0 percent, meaning that the payment amount 
determined for a CDLT for CY 2023 shall not result in any reduction in 
payment as compared to the payment amount for that test for CY 2022. 
Section 4114(a) of the CAA, 2023 further amended section 
1834A(b)(3)(B)(iii) of the Act to state that the applicable percent of 
15 percent will apply for CYs 2024 through 2026, instead of CYs 2023 
through 2025. In the CY 2024 PFS rulemaking (88 FR 79083 through 79087; 
88 FR 79531), in accordance with section 4114 of the CAA, 2023, we 
proposed and finalized conforming changes to the data reporting and 
payment requirements at 42 CFR part 414, subpart G.
4. Additional Statutory Revisions to the Data Reporting Period and 
Phase-In of Payment Reductions
    On November 17, 2023, section 502 of the Further Continuing 
Appropriations and Other Extensions Act, 2024 (Pub. L. 118-22) (FCAOEA, 
2024) was passed and delayed data reporting requirements for CDLTs that 
are not ADLTs, and it also delayed the phase-in of payment reductions 
under the CLFS from private payor rate implementation under section 
1834A of the Act. Specifically, section 502(b) of the FCAOEA, 2024 
amended the data reporting requirements in section 1834A(a)(1)(B) of 
the Act to delay the next data reporting period for CDLTs that are not 
ADLTs by 1 year, so that data reporting would be required during the 
period of January 1, 2025, through March 31, 2025, instead of the data 
reporting period of January 1, 2024, through March 31, 2024. The 3-year 
data reporting cycle for CDLTs that are not ADLTs would resume after 
that data reporting period. As amended by section 502(b) of the FCAOEA, 
2024, section 1834A(a)(1)(B) of the Act provided that in the case of 
reporting with respect to CDLTs that are not ADLTs, the Secretary shall 
revise the reporting period under subparagraph (A) such that--(i) no 
reporting is required during the period beginning January 1, 2020, and 
ending December 31, 2024; (ii) reporting is required during the period 
beginning January 1, 2025, and ending March 31, 2025; and (iii) 
reporting is required every 3 years after the period described in 
clause (ii).
    Section 502 of the FCAOEA, 2024 did not modify the data collection 
period that applies to the next data reporting period for these tests. 
Thus, under section 1834A(a)(4)(B) of the Act, the next data reporting 
period for CDLTs that are not ADLTs (January 1, 2025, through March 31, 
2025) would continue to be based on the data collection period of 
January 1, 2019, through June 30, 2019, as reflected in the definitions 
of data collection period and data reporting period at Sec.  414.502.
    Section 502(a) of the FCAOEA, 2024 further amended the provisions 
in section 1834A(b)(3) of the Act regarding the phase-in of payment 
reductions under the CLFS. First, it extended the statutory phase-in of 
payment reductions resulting from private payor rate implementation by 
an additional year, that is, through CY 2027. It further amended 
section 1834A(b)(3)(B)(ii) of the Act to specify that the applicable 
percent for CY 2024 is 0 percent, meaning that the payment amount 
determined for a CDLT for CY 2024 shall not result in any reduction in 
payment as compared to the payment amount for that test for CY 2023. 
Section 502(a) of the FCAOEA, 2024 further amended section 
1834A(b)(3)(B)(iii) of the Act to state that the applicable percent of 
15 percent will apply for CYs 2025 through 2027.
    As a result of the statutory revisions under the FCAA, CARES Act, 
PMAFSCA, the CAA, 2023, and the FCAOEA, 2024, there have only been two 
data collection periods for CDLTs that are not ADLTs to date. The first 
data collection period for these tests occurred from January 1, 2016, 
through June 30, 2016, and the second occurred from January 1, 2019, 
through June 30, 2019. Thus far, there has been only one data reporting 
period for these tests, which took place from January 1, 2017, through 
March 31, 2017. We have established CLFS payment rates for these tests 
using the methodology established in PAMA only one time, effective 
January 1, 2018, based on the applicable information collected by 
applicable laboratories during the 2016 data collection period and 
reported to CMS during the 2017 data reporting period.
    Additionally, we have applied the phase-in of payment reductions 
for the first 3 years of PAMA implementation, CY 2018 through CY 2020, 
whereby reduction of payment rates could not be more than 10 percent 
per year as compared to the amount established the prior year. However, 
the phase-in of payment reductions set forth in PAMA for years 4 
through 6 after PAMA implementation, whereby payment cannot exceed 15 
percent per year as compared to the amount established the prior year, 
has not yet occurred.
5. Proposed Conforming Regulatory Changes
    In accordance with section 502 of the FCAOEA, 2024, we proposed to 
make conforming changes to the data reporting and payment requirements 
at 42 CFR part 414, subpart G. Specifically, we proposed to revise the 
definitions of both the ``data collection period'' and ``data reporting 
period'' at Sec.  414.502 to specify that for the data reporting period 
of January 1, 2025, through March 31, 2025, the data collection period 
is January 1, 2019, through June 30, 2019. We also proposed to revise 
Sec.  414.504(a)(1) to indicate that initially, data reporting begins 
January 1, 2017, and is required every 3 years beginning January 2025. 
In addition, we proposed to make conforming changes to our requirements 
for the phase-in of payment reductions to reflect the amendments in 
section 502(a) of the FCAOEA, 2024. Specifically, we proposed to revise 
Sec.  414.507(d) to indicate that for CY 2024, payment may not be 
reduced by more than 0.0 percent as compared to the amount established 
for CY 2023, and for CYs 2025 through 2027, payment may not be reduced 
by more than 15 percent as compared to the amount established for the 
preceding year.
    We noted that the CYs 2024 and 2025 CLFS payment rates for CDLTs 
that are not ADLTs are based on applicable information collected in the 
data collection period of January 1, 2016, through June 30, 2016. We 
also stated that under current law, the CLFS payment rates for CY 2026 
through CY 2028 would be based on applicable information collected 
during the data collection period of January 1, 2019, through June 30, 
2019, and reported to CMS during the data reporting period of January 
1, 2025, through March 31, 2025.
    We received a few public comments on our proposals to conform the 
regulatory text at 42 CFR part 414, subpart G to FCAOEA, 2024. However, 
the Continuing Appropriations and Extensions Act, 2025 (CAEA, 2025) 
(Pub. L. 118-83) was passed on September 26, 2024, after the 
publication of the proposed rule and close of the comment period. 
Section 221 of that law delayed data reporting requirements for CDLTs 
that are not ADLTs as well as the phase-in of payment reductions under 
the CLFS from private payor rate implementation

[[Page 98042]]

under section 1834A of the Act. Specifically, as amended by section 
221(b), section 1834A(1)(B) of the Act now provides that, in the case 
of reporting with respect to CDLTs that are not ADLTs, the Secretary 
shall revise the reporting period under subparagraph (A) such that: (i) 
no reporting is required during the period beginning January 1, 2020, 
and ending December 31, 2025; (ii) reporting is required during the 
period beginning January 1, 2026, and ending March 31, 2026; and (iii) 
reporting is required every 3 years after the period described in 
subparagraph (ii). Essentially, data reporting will now be required 
during the period of January 1, 2026, through March 31, 2026, instead 
of January 1, 2025, through March 31, 2025. The 3-year data reporting 
cycle for CDLTs that are not ADLTs will resume after that data 
reporting period.
    Section 221 of the CAEA, 2025 does not modify the data collection 
period that applies to the next data reporting period for these tests. 
Thus, under section 1834A(a)(4)(B) of the Act, the next data reporting 
period for CDLTs that are not ADLTs (January 1, 2026, through March 31, 
2026) will continue to be based on the data collection period of 
January 1, 2019, through June 30, 2019.
    Section 221(a) of the CAEA, 2025 further amends provisions in 
section 1834A(b)(3) of the Act pertaining to the phase-in of payment 
reductions under the CLFS. First, it extends the statutory phase-in of 
payment reductions resulting from private payor rate implementation by 
an additional year, that is, through CY 2028. It further amends section 
1834A(b)(3)(B)(ii) of the Act to specify that the applicable percent 
for CY 2025 is 0 percent, meaning that the payment amount determined 
for a CDLT for CY 2025 shall not result in any reduction in payment as 
compared to the payment amount for that test for CY 2024. Finally, 
section 221(a) further amends section 1834A(b)(3)(B)(iii) of the Act to 
specify that the applicable percent of 15 percent will apply for CYs 
2026 through 2028.
    The following is a summary of the comments we received and our 
responses.
    Comment: Commenters agreed with the proposed conforming regulatory 
changes pursuant to the FCAOEA, 2024 and understood that this action is 
necessary.
    Response: We appreciate the commenters' support for these 
regulatory changes that reflect the statutory revisions required by 
section 502 of the FCAOEA, 2024. As noted above, section 221 of the 
CAEA, 2025 was passed on September 26, 2024. We believe it is necessary 
to reflect conforming regulatory text changes pursuant to section 221 
of the CAEA, 2025 rather than those we included in the proposed rule 
that would have conformed to section 502 of the FCAOEA, 2024. Section 
221 of the CAEA, 2025 is prescriptive, leaving us no room for 
interpretation and, as such, is self-implementing. We direct readers to 
the end of this section for a description of the conforming regulation 
text changes to 42 CFR part 414, subpart G.
    Comment: One commenter expressed concerns over the data collection 
period (January 1, 2019, through June 30, 2019) that would be utilized 
for the data reporting period specified in the FCAOEA, 2024 (January 1, 
2025, through March 31, 2025). The commenter noted that private payer 
rates from CY 2019 are severely outdated as the information will be 
more than 5 years old by the time it is collected and analyzed by CMS. 
The commenter also expressed concern that the reported data will 
include codes that are no longer valid and will be missing data on 
codes that have been created since 2019.
    Response: We note that section 502 of the FCAOEA, 2024 and the more 
recent amendments in section 221 of the CAEA, 2025 did not modify the 
data collection period at section 1834A(a)(4)(B) of the Act that 
applies to the next data reporting period for CDLTs that are not ADLTs. 
Therefore, the next data reporting period for CDLTs that are not ADLTs 
(January 1, 2026, through March 31, 2026) will continue to be based on 
the data collection period of January 1, 2019, through June 30, 2019, 
as defined in Sec.  414.502. Because this requirement is statutorily 
prescribed, we are unable to modify the data collection period. We 
acknowledge the commenter's concern regarding missing data on 
laboratory HCPCS codes that have been created since 2019 and note that 
on average over 100 new codes are created each year.
    Comment: One commenter suggested that CMS should conduct aggressive 
outreach to hospital outreach laboratories and other applicable 
laboratories that need information and assistance to meet their 
obligation to report applicable information to CMS, per section 
1834A(a)(1)(A) of the Act, and also recommended we send a letter to 
each independent laboratory and physician office laboratory that 
qualified as an ``applicable laboratory'' in the 2016 data collection 
period but that failed to submit applicable information during the 2017 
data reporting period, reminding each of its obligation to determine 
whether it meets the definition now and, if so, to report applicable 
information in the next data reporting period, or be subject civil 
monetary penalties. This commenter also stated that CMS should use its 
authority to impose a civil monetary penalty of up to $10,000 per day 
on an applicable laboratory for each failure to report or each 
misrepresentation or omission of applicable information and state 
publicly our intention to audit applicable laboratories and to impose 
penalties, when warranted, in order to signal to all applicable 
laboratories that reporting is not voluntary--it is mandatory.
    Response: We appreciate the commenter's recommendations related to 
outreach for data reporting. Obtaining applicable information from 
applicable laboratories as required by section 1834A of the Act is 
necessary to enable us to establish payment rates for CDLTs, and 
outreach and education activities for applicable laboratories play an 
important role in achieving this objective. Accordingly, we regularly 
update the CMS website and have leveraged different media platforms to 
disseminate various educational materials and other resources to 
prepare applicable laboratories for data reporting and inform them of 
changes to reporting requirements. For example, we have released a 
video \379\ on how to determine if a laboratory is an applicable 
laboratory. We have also conducted two direct mailings to independent 
and hospital laboratories. Overall, CMS shares the commenter's interest 
in ensuring all applicable laboratories have the educational resources 
needed to report accurate and complete data to inform payment rates 
under the CLFS, and we may consider the submitted recommendations for 
upcoming data reporting periods.
---------------------------------------------------------------------------

    \379\ https://youtu.be/c3eiPYeRA_U.
---------------------------------------------------------------------------

    Additionally, regarding the comments on CMPs, we note that section 
1834A(a)(9)(A) of the Act authorizes the Secretary to apply a CMP in 
cases where the Secretary determines that an applicable laboratory has 
failed to report or made a misrepresentation or omission in reporting 
applicable information under section 1834A(a) of the Act for a CDLT. In 
these cases, the Secretary may apply a CMP in an amount of up to 
$10,000 per day for each failure to report or each such 
misrepresentation or omission. We codified this provision in our 
regulations at Sec.  414.504(e). As we previously stated in the CLFS 
final rule,

[[Page 98043]]

which implemented section 216(a) of PAMA (81 FR 41069), in situations 
where our review reveals that the data submitted is incomplete or 
incorrect, we will assess whether a CMP should be applied, and if so, 
determine the appropriate amount based on the specific circumstances.
    Comment: One commenter conveyed concerns over the phase-in of 
payment reductions to CLFS payment amounts that would be required to 
resume in CY 2025. Specifically, the commenter was concerned about 
access to care and quality of care issues for nursing home patients 
resulting from payment cuts to some clinical laboratory services of up 
to 15 percent per year. The commenter explained that patients in 
nursing facilities typically have a complex array of post-acute and 
chronic conditions that frequently require clinical laboratory services 
to identify new conditions or to monitor the beneficiary's reaction to 
specific care interventions. According to the commenter, the majority 
of clinical laboratory services for nursing facility residents are 
furnished by outside laboratories that drive to the facility and obtain 
the needed specimen bedside, or the resident must face the costs and 
disruptions to their daily life and sometimes interrupted 
rehabilitation care in order to be transported to a hospital or 
clinical laboratory to obtain needed laboratory services. The commenter 
expressed concern that access to these services may be disrupted, or 
the beneficiary might be required to travel further to obtain clinical 
laboratory services if nearby laboratories close or consolidate due to 
significantly reduced reimbursement. Another commenter strongly 
encouraged CMS to work with Congress to find a better solution to 
setting laboratory rates. The commenter asserted that the current 
process of collecting data from laboratories is administratively 
burdensome, and setting CLFS rates based on the median private payor 
rates (which the commenter believes are most likely rates from large 
national laboratories that are able to accept low rates in exchange for 
large volumes of laboratory tests) results in financial harm to small, 
independent laboratories. Another commenter called for payment for 
laboratory tests to be sufficient to cover the costs associated with 
providing these necessary tests to patients and as such, opposed 
federal mandates that require private-sector reporting of CDLT data.
    Response: We appreciate hearing from commenters on these issues and 
their concerns related to the phase-in of payments reductions, 
laboratory payment rates and reporting burden under the CLFS. 
Nevertheless, we note that the phase-in of payment reductions, 
applicable information reporting, and subsequent determination of 
payment rates are required under section 1834A of the Act, and any 
changes would require Congressional action.
    In consideration of these public comments, and subsequent 
amendments made in section 221 of the CAEA, 2025 that amended the 
requirements we proposed to reflect in regulation per section 502 of 
the FCAOEA, 2024, we are finalizing the self-implementing conforming 
changes to the data reporting and phase-in of payment reductions at 42 
CFR part 414, subpart G in accordance with section 221 of the CAEA, 
2025. Specifically, we are revising the definitions of both the ``data 
collection period'' and ``data reporting period'' at Sec.  414.502 to 
specify that for the data reporting period of January 1, 2026, through 
March 31, 2026, the data collection period is January 1, 2019, through 
June 30, 2019. We are also finalizing revisions to Sec.  414.504(a)(1) 
to indicate that initially, data reporting begins January 1, 2017, and 
is required every 3 years beginning January 1, 2026. Finally, related 
to the requirements for the phase-in of payment reductions we are 
revising Sec.  414.507(d) to indicate that for CY 2024 and CY 2025, 
payment may not be reduced by more than 0.0 percent as compared to the 
amount established for CY 2023 and 2024 respectively, and for CYs 2026 
through 2028, payment may not be reduced by more than 15 percent as 
compared to the amount established for the preceding year.
    We note that the CYs 2025 and 2026 CLFS payment rates for CDLTs 
that are not ADLTs are based on applicable information collected in the 
data collection period of January 1, 2016, through June 30, 2016. Under 
current law, the CLFS payment rates for CY 2027 through CY 2029 will be 
based on applicable information collected during the data collection 
period of January 1, 2019, through June 30, 2019, and reported to CMS 
during the data reporting period of January 1, 2026, through March 31, 
2026.

E. Medicare Diabetes Prevention Program (MDPP)

    The Centers for Medicare & Medicaid Services' (CMS) Medicare 
Diabetes Prevention Program Expanded Model (hereafter, ``MDPP'' or 
``MDPP expanded model'') is an evidence-based behavioral intervention 
that aims to prevent or delay the onset of type 2 diabetes for eligible 
Medicare beneficiaries diagnosed with prediabetes. MDPP is an expansion 
in duration and scope of the Diabetes Prevention Program (DPP) model 
test, which was initially tested by CMS through a Round One Health Care 
Innovation Award (2012-2016).\380\ MDPP was established in 2017 as an 
``additional preventive service,'' \381\ covered by Medicare and not 
subject to beneficiary cost-sharing, in addition to being available 
once per lifetime to eligible beneficiaries. To facilitate delivery of 
MDPP in a non-clinical community setting (to align with the certified 
DPP model tested by The CMS Innovation Center), CMS created a new MDPP 
supplier type through rulemaking in the CY 2017 PFS final rule (81 FR 
80471), in addition to requiring organizations that wish to participate 
in MDPP to enroll in Medicare separately, even if they are already 
enrolled in Medicare for other purposes.
---------------------------------------------------------------------------

    \380\ The Health Care Innovation Awards funds awards to 
organizations that implemented the most compelling new ideas to 
deliver better health, improved care, and lower costs to people 
enrolled in Medicare, Medicaid and Children's Health Insurance 
Program (CHIP), particularly those with the highest health care 
needs. The CMS Innovation Center announced the first batch of 
awardees for the Health Care Innovation Awards on May 8, 2012, and 
the second (final) batch on June 15, 2012. For more, see https://www.cms.gov/priorities/innovation/innovation-models/health-care-innovation-awards.
    \381\ 42 CFR 410.64--Additional preventive services.
---------------------------------------------------------------------------

    MDPP is a non-pharmacological behavioral intervention consisting of 
up to 22 intensive sessions furnished over 12 months by a trained Coach 
who provides training on topics that include long-term dietary change, 
increased physical activity, and behavior change strategies for weight 
control and diabetes risk reduction. MDPP sessions must be one hour in 
length and adhere to a Centers for Disease Control and Prevention (CDC) 
approved National Diabetes Prevention Recognition Program (National 
DPP) curriculum.\382\ The primary goal of the MDPP expanded model is to 
help Medicare beneficiaries reduce their risk for developing type 2 
diabetes by achieving at least 5 percent weight loss from the first 
core session (81 FR 80465).
---------------------------------------------------------------------------

    \382\ https://www.cdc.gov/diabetes/prevention/resources/curriculum.html.
---------------------------------------------------------------------------

    Eligible organizations seeking to furnish MDPP began enrolling in 
Medicare as MDPP suppliers on January 1, 2018, and began furnishing 
MDPP on April 1, 2018. As of May 13, 2024, there were 301 approved MDPP 
suppliers.\383\ The most recent MDPP evaluation report, reflected that 
between April 2018 and December 31, 2021, 4,848 Medicare beneficiaries 
participated in MDPP, including 2,325 FFS

[[Page 98044]]

beneficiaries and 2,523 MA beneficiaries.\384\ Through the Diabetes 
Prevention Recognition Program (DPRP), CDC administers a national 
quality assurance program recognizing eligible organizations that 
furnish the National DPP through its evidence based DPRP 
Standards,\385\ which are updated every 3 years. The CDC established 
the DPRP in 2012 and possesses significant experience assessing the 
quality of program delivery by organizations throughout the United 
States, applying a comprehensive set of national quality standards. For 
further information on the DPP model test,\386\ the CDC's National 
DPP,\387\ and DPRP Standards,\388\ please refer to the CY 2017 (81 FR 
80471) and CY 2018 PFS (82 FR 52976) final rules and related websites.
---------------------------------------------------------------------------

    \383\ Medicare Provider Enrollment, Chain, and Ownership System 
(PECOS). Unpublished data.
    \384\ RTI International. Evaluation of the Medicare Diabetes 
Prevention Program. November 2022. https://www.cms.gov/priorities/innovation/data-and-reports/2022/mdpp-2ndannevalrpt.
    \385\ Centers for Disease Control and Prevention Diabetes 
Prevention Recognition Program. Standards and Operating Procedures. 
Requirements for CDC Recognition. June 2024. https://nationaldppcsc.cdc.gov/s/article/DPRP-Standards-and-Operating-Procedures.
    \386\ Health Care Innovation Awards. https://www.cms.gov/priorities/innovation/innovation-models/health-care-innovation-awards.
    \387\ https://www.cdc.gov/diabetes/prevention/index.html.
    \388\ https://www.cdc.gov/diabetes/prevention/pdf/dprp-standards.pdf.
---------------------------------------------------------------------------

    The Public Health Emergency (PHE) for COVID-19 prompted changes to 
allow virtual delivery of the MDPP, among other changes (85 FR 84830 
through 84841). Changes to MDPP in the CY 2024 PFS final rule (88 FR 
78818) included a simplified payment structure to allow for fee-for-
service (FFS) payments for beneficiary attendance while retaining the 
performance-based payments for diabetes risk reduction (that is, weight 
loss). Beginning January 1, 2024, payments are made to an MDPP supplier 
if an MDPP beneficiary attends any core session in the first 6 months 
or core maintenance session in the second 6 months, allowing payment 
for up to 22 sessions in a 12-month timeframe. The CY 2024 PFS final 
rule also extended certain PHE flexibilities, including the option to 
deliver some or all MDPP sessions via distance learning and for 
beneficiaries to virtually self-report weight for MDPP distance 
learning sessions, until December 31, 2027 (88 FR 79241).
    CDC released the 2024 DPRP Standards \389\ to replace the 2021 DPRP 
Standards in June 2024. To align MDPP with the 2024 CDC DPRP Standards, 
we proposed conforming changes to align with CDC delivery modes. These 
changes are expected to reduce administrative burden, ensure compliance 
with existing MDPP regulations, and streamline data reporting for MDPP 
suppliers. In this final rule, we also proposed an additional option 
for self-reporting weight in an MDPP distance learning session, 
removing the MDPP bridge payment, and making minor edits to align 
current rule language pertaining to MDPP with previous rulemaking.
---------------------------------------------------------------------------

    \389\ Centers for Disease Control and Prevention Diabetes 
Prevention Recognition Program. Standards and Operating Procedures. 
Requirements for CDC Recognition. June 2024. https://nationaldppcsc.cdc.gov/s/article/DPRP-Standards-and-Operating-Procedures.
---------------------------------------------------------------------------

1. Changes to Sec.  410.79 by Amending Paragraphs (b) and (d)(1)
    We established MDPP as an expanded model in 2018 based on a Health 
Care Innovation Award (HCIA) to the National Young Men's Christian 
Association (YMCA) of the USA (Y-USA), who tested the CDC's National 
DPP in the Medicare population through their network of YMCAs in 
multiple U.S. markets (DPP model test).\390\ The DPP model test 
successfully met statutory criteria for model expansion,\391\ 
demonstrating 5 percent weight loss from their starting weight by 
participants (a key metric of the program's success) along with 
statistically significant reductions in Medicare spending, emergency 
department (ED) visits, and inpatient stays.\392\ The MDPP expanded 
model was implemented through the rulemaking process in two phases, in 
the CY 2017 PFS (81 FR 80459 through 80483) and CY 2018 PFS final rules 
(82 FR 53234 through 53339).
---------------------------------------------------------------------------

    \390\ L. Hinnant, S. Razi, R. Lewis, A. Sun, M. Alva, T. Hoerger 
et al., Evaluation of the Health Care Innovation Awards: Community 
Resource Planning, Prevention, and Monitoring, Annual Report 2015. 
RTI International. March 2016; https://www.cms.gov/priorities/innovation/files/reports/hcia-ymcadpp-evalrpt.pdf.
    \391\ Paul Spitalnic. Certification of Medicare Diabetes 
Prevention Program. Mar. 14, 2016. https://www.cms.gov/Research-Statistics-Data-and-Systems/Research/ActuarialStudies/Downloads/Diabetes-Prevention-Certification-2016-03-14.pdf.
    \392\ Rojas Smith. L., Amico, P., Hoerger, T.J., Jacobs, S., 
Payne. J., & Renaud, J.: Evaluation of the Health Care Innovation 
Awards: Community Resource Planning, Prevention, and Monitoring 
Third Annual Report Addendum--August 2017 https://downloads.cms.gov/files/cmmi/hcia-crppm-thirdannrptaddendum.pdf (pp. 858-914).
---------------------------------------------------------------------------

    MDPP went into effect in 2018, with supplier enrollment starting 
January 1, 2018, and beneficiary enrollment starting April 1, 2018 (82 
FR 53237). After nearly 6 years of implementation, through the CY 2024 
PFS final rule, we finalized updates to MDPP based on lessons learned 
since the expanded model's launch, including updates to definitions and 
the core services period and extended the flexibilities allowed under 
the PHE for COVID-19 for a period of 4 years (88 FR 79241).
    This year we proposed to make conforming changes to Sec.  
410.79(b), Conditions of Coverage, to align with the 2024 CDC DPRP 
Standards.\393\ In the CY 2018 PFS final rule, we stated our intention 
to align MDPP with CDC DPRP Standards whenever possible (82 FR 53245). 
Several commenters encouraged CMS to consider adopting the same 
definitions for MDPP as CDC uses for the National DPP, including 
distance learning, online, and combination modalities to better align 
MDPP and the National DPP. Commenters indicated that the addition of 
definitions that are consistent with the CDC's definitions will reduce 
confusion about MDPP (88 FR 79247). To increase this alignment, we 
worked closely with CDC to update the National DPP and MDPP for CY 2024 
final rule (88 FR 79240 through 79256), as well as the 2024 DPRP 
Standards.\394\ We agree in aligning terminology where applicable.
---------------------------------------------------------------------------

    \393\ Centers for Disease Control and Prevention Diabetes 
Prevention Recognition Program. Standards and Operating Procedures. 
Requirements for CDC Recognition. June 2024. https://nationaldppcsc.cdc.gov/s/article/DPRP-Standards-and-Operating-Procedures.
    \394\ Centers for Disease Control and Prevention Diabetes 
Prevention Recognition Program. Standards and Operating Procedures. 
Requirements for CDC Recognition. June 2024. https://nationaldppcsc.cdc.gov/s/article/DPRP-Standards-and-Operating-Procedures.
---------------------------------------------------------------------------

    The CY 2024 PFS final rule introduced and defined ``distance 
learning'' and ``combination delivery'' for MDPP and provided a 
definition for ``online delivery'' (88 FR 79243). The 2024 CDC DPRP 
Standards include the following delivery modes with definitions: ``in-
person,'' ``distance learning (live),'' ``in-person with a distance 
learning component,'' ``online (non-live),'' and ``combination with an 
online component.'' \395\ These delivery modes also serve as 
organization codes for CDC DPRP recognition. Through this final rule, 
we proposed to amend Sec.  410.79(b) to add a new term for MDPP, ``in-
person with a distance learning component,'' defined as ``MDPP sessions 
that are delivered in person by trained Coaches where participants have 
the option of attending sessions via MDPP distance learning. These 
sessions must be furnished in a manner

[[Page 98045]]

consistent with DPRP Standards for in-person and distance learning 
sessions.'' The following examples of an acceptable delivery model for 
the ``in-person with a distance learning component'' delivery mode are 
provided in the 2024 CDC DPRP Standards: a combination of in-person and 
distance learning during the core (first 6 months) and core maintenance 
(second 6 months) phases; some participants within a cohort using the 
in-person delivery mode and some participants using the distance 
learning delivery mode; or participants choosing from session to 
session which mode (in-person or distance learning) they wish to 
use.\396\
---------------------------------------------------------------------------

    \395\ Centers for Disease Control and Prevention Diabetes 
Prevention Recognition Program. Standards and Operating Procedures. 
Requirements for CDC Recognition. June 2024. https://nationaldppcsc.cdc.gov/s/article/DPRP-Standards-and-Operating-Procedures.
    \396\ Centers for Disease Control and Prevention Diabetes 
Prevention Recognition Program. Standards and Operating Procedures. 
Requirements for CDC Recognition. June 2024. https://nationaldppcsc.cdc.gov/s/article/DPRP-Standards-and-Operating-Procedures.
---------------------------------------------------------------------------

    To further align with 2024 CDC DPRP Standards, we also proposed to 
add a new term at Sec.  410.79(b), ``combination with an online 
component,'' defined as ``sessions that are delivered as a combination 
of online (non-live) with in-person or distance learning. These 
sessions must be furnished in a manner consistent with the DPRP 
Standards for the modality being used.'' Furthermore, we proposed to 
remove the ``combination delivery'' term from Sec.  410.79(b), which 
was added in the CY 2024 PFS final rule (88 FR 79241) and is defined as 
``MDPP sessions that are delivered by trained Coaches and are furnished 
in a manner consistent with the DPRP Standards for distance learning 
and in-person sessions for each individual participant.'' We believe 
that the MDPP ``combination delivery'' term and definition are no 
longer needed with the addition of ``in-person with a distance learning 
component,'' which includes any combination of in-person and distance 
learning sessions.
    Lastly, we proposed to modify the current term and definition for 
``online delivery'' at Sec.  410.79(b), also added by the CY 2024 PFS 
final rule (88 FR 79241), to align with the 2024 CDC DPRP 
Standards.\397\ First, we proposed to update the term from ``online 
delivery'' to ``online'' to align with both the MDPP ``distance 
learning'' term and CDC DPRP ``online (non-live)'' term. We proposed to 
revise the definition for the MDPP ``online'' delivery mode to provide 
that sessions that are delivered one hundred percent (100%) through the 
internet via phone, tablet, or laptop in an asynchronous (non-live) 
classroom where participants are experiencing the content on their own 
time without a live (including non-artificial intelligence (AI) Coach 
teaching the content. These sessions must be furnished in a manner 
consistent with the DPRP Standards for online sessions. Live Coach 
interaction must be offered to each participant during weeks when the 
participant has engaged with content. Emails and text messages can 
count toward the requirement for live Coach interaction if there is bi-
directional communication between the Coach and participant. Chat bots 
and AI forums do not count as live Coach interaction. This modified 
definition adds the term ``non-live'' and further clarifies that Chat 
bots and AI forums do not constitute live interaction.
---------------------------------------------------------------------------

    \397\ Centers for Disease Control and Prevention Diabetes 
Prevention Recognition Program. Standards and Operating Procedures. 
Requirements for CDC Recognition. June 2024. https://nationaldppcsc.cdc.gov/s/article/DPRP-Standards-and-Operating-Procedures.
---------------------------------------------------------------------------

    In summary, we are revising the ``online'' definition and adding 
the ``combination with an online component'' term and definition to 
help align terminology between MDPP and DPRP and prevent confusion 
about acceptable CDC delivery modes for MDPP. We are confirming that 
only MDPP ``in-person,'' ``distance learning,'' and ``in-person with a 
distance learning component'' delivery modes, can be used during the 
extension of the flexibilities allowed under the PHE for COVID-19, as 
finalized in the CY 2024 PFS final rule (88 FR 79241), not ``online'' 
nor ``combination with an online component'' delivery modes.
    Furthermore, in the CY 2021 PFS final rule, we established that 
virtual sessions performed under flexibilities finalized in that rule 
could only be performed by MDPP suppliers who offered in-person 
services (85 FR 84830). For the MDPP Extended flexibilities period, we 
finalized in the CY 2024 PFS final rule to limit virtual delivery to 
the CDC DPRP definition of ``distance learning'' (88 FR 79243). We 
stated that the MDPP Extended flexibilities do not include online 
delivery (or asynchronous virtual), as defined in the CDC DPRP 
Standards through the ``online'' modality, including virtual make-up 
sessions (88 FR 79244). A make-up session in MDPP was described in CY 
2018 PFS final rule (82 FR 53241) and at Sec.  410.79(a) as ``a core 
session or a core maintenance session furnished to an MDPP beneficiary 
when the MDPP beneficiary misses a regularly scheduled core session or 
core maintenance session.'' The 2024 CDC DPRP Standards allow for 
National DPP make-up sessions to be furnished using any delivery mode, 
including online.\398\ In alignment with the CY 2024 final rule, we are 
proposing to amend Sec.  410.79(d)(1) to clarify that MDPP make-up 
sessions can only be furnished using the modalities permitted by the CY 
2024 final rule for MDPP sessions: distance learning and in-person 
delivery (88 FR 79243 through 79246). Specifically, we proposed to add 
the following: ``MDPP make-up sessions may only use in-person or 
distance learning delivery.''
---------------------------------------------------------------------------

    \398\ Centers for Disease Control and Prevention Diabetes 
Prevention Recognition Program. Standards and Operating Procedures. 
Requirements for CDC Recognition. June 2024. https://nationaldppcsc.cdc.gov/s/article/DPRP-Standards-and-Operating-Procedures.
---------------------------------------------------------------------------

    We proposed to amend Sec.  410.79(b) and (d)(1) and solicited 
comment on these proposals.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters were generally supportive of the proposed 
policy, with support received for aligning conditions of coverage with 
the 2024 CDC DPRP Standards definitions. Commenters universally 
supported aligning conditions of coverage with the 2024 CDC DPRP 
Standards definitions (e.g., distance learning, online delivery, and 
in-person with a distance learning component). Many commenters stated 
that these terms will allow suppliers to streamline data reporting to 
the CDC's Diabetes Prevention Recognition Program (DPRP). Some 
commenters provided recommendations to allow virtual-only providers to 
offer MDPP asynchronously. Some commenters also suggested that CMS 
remove the once in a lifetime use of MDPP.
    Response: We have responded to previous public comments requesting 
that CMS allow asynchronous delivery of MDPP and virtual-only providers 
to offer MDPP in previous rules (85 FR 84472, 84831). The MDPP expanded 
model was certified as an in-person program and allowing for virtual-
only delivery is outside of the model's certification. Virtual-only 
providers include those that deliver the National DPP services solely 
by distance learning or online delivery. Although ``telehealth'' is 
included in CDC's definition of distance learning, CMS stated in the CY 
2017 PFS final rule (82 FR 52976, 53235) that MDPP services delivered 
via a telecommunications system or other remote technologies do not 
qualify as telehealth services. Additionally, we have stated that 
through utilizing distance learning, participants may still interact 
with their

[[Page 98046]]

Coach and other participants in their cohort in real-time, allowing for 
relationship building and peer support, unlike online delivery which is 
delivered asynchronously (88 FR 79244). CMS is currently allowing an 
exception to the once per lifetime requirement for MDPP beneficiaries 
to restart their MDPP program if their services were interrupted by the 
PHE for COVID-19 (85 FR 19230, 19283). After consideration of public 
comments regarding the proposed changes to amend Sec.  410.79(b) and 
(d)(1), we are finalizing as proposed and will continue to monitor use 
of this flexibility to approximate the demand for beneficiaries to 
restart their program for other reasons.
2. Changes to Sec.  410.79(e)(3)(iii)
    As part of MDPP's Emergency Policy finalized in the CY 2021 PFS 
final rule, we allowed for virtual weight collection (88 FR 79249). We 
summarized our policies for alternatives to the requirement for in-
person weight collection at Alternatives to the requirement for in-
person weight measurement (Sec.  410.79(e)(3)(iii)), which permit an 
MDPP supplier to obtain weight measurements for MDPP beneficiaries for 
the baseline weight and any weight loss-based performance achievement 
goals in the following manner: (1) via digital technology, such as 
scales that transmit weights securely via wireless or cellular 
transmission; or (2) via self-reported weight measurements from the at-
home digital scale of the MDPP beneficiary (88 FR 79243). We stated 
that self-reported weights must be obtained during live, synchronous 
online video technology, such as video chatting or video conferencing, 
wherein the MDPP Coach observes the beneficiary weighing themselves and 
views the weight indicated on the at-home digital scale. Alternatively, 
the MDPP beneficiary may self-report their weight by submitting to the 
MDPP supplier a date-stamped photo or video recording of the 
beneficiary's weight, with the beneficiary visible in their home. The 
photo or video must clearly document the weight of the MDPP beneficiary 
as it appears on the digital scale on the date associated with the 
billable MDPP session. This flexibility has allowed suppliers to bill 
for MDPP beneficiaries achieving weight loss performance goals.
    Overall, commenters on the proposed MDPP Extended flexibilities in 
the CY 2024 PFS rule were very supportive of CMS continuing to allow 
virtual weight collection (88 FR 79240 through 79256). However, we 
received several comments regarding barriers suppliers experienced 
relating to virtual weight collection during the PHE for COVID-19. For 
example, several commenters recommended that CMS no longer require 
date-stamped photos to document the self-reported beneficiary weights 
(88 FR 79249). The commenters also reported that many of their 
beneficiaries are unable to take a picture while standing on their home 
scales due to risk of injury and physical health limitations. 
Commenters stated that this risk has prevented organizations from 
submitting claims accurately, since they have several participants who 
live alone and attend sessions via distance learning (88 FR 79249). We 
acknowledged in our responses to these comments that some MDPP 
beneficiaries may lack the technology or capacity to provide a date-
stamped photograph to document their body weight measurements. We 
stated that in situations in which beneficiaries may be unable to self-
report their weight according to the MDPP conditions of coverage, 
suppliers may want to consider collecting weight measurements from the 
MDPP beneficiary in person.
    We have continued to hear from MDPP suppliers and interested 
parties that the requirement to submit a photo with both the 
beneficiary's weight on the scale and the beneficiary visible is not 
physically possible. This problem has become even more relevant in CY 
2024 as suppliers continue to expand distance learning to help reach 
beneficiaries in rural and underserved areas, sometimes across state 
lines. We previously responded that for situations in which 
beneficiaries may be unable to self-report their weight according to 
the MDPP conditions of coverage, suppliers may want to consider 
collecting weight measurements from the MDPP beneficiary in person (88 
FR 79249). However, this may not be a practical option for 
beneficiaries who have chosen distance learning based on not living 
within driving distance from an MDPP supplier location. Therefore, we 
proposed revising Sec.  410.79(e)(3)(iii)(C) to provide that self-
reported weights must be obtained during live, synchronous online video 
technology, such as video chatting or video conferencing, wherein the 
MDPP Coach observes the beneficiary weighing themselves and views the 
weight indicated on the at-home digital scale, or the MDPP supplier 
receives 2 (two) date-stamped photos or a video recording of the 
beneficiary's weight, with the beneficiary visible on the scale, 
submitted by the MDPP beneficiary to the MDPP supplier. Photo or video 
must clearly document the weight of the MDPP beneficiary as it appears 
on their digital scale on the date associated with the billable MDPP 
session. If choosing to submit 2 photos, one photo must show the 
beneficiary's weight on the digital scale, the second photo must show 
the beneficiary visible in their home, and both photos must be date-
stamped. Similar to options in paragraphs (e)(3)(iii)(A) and (B) in 
Sec.  410.79, this revised option in paragraph (e)(30(iii)(C) is only 
available for MDPP beneficiaries reporting their weight for an MDPP 
distance learning session. We are continuing to require the date-stamp 
on both photos to ensure program integrity in the virtual setting. We 
proposed to amend Sec.  410.79(e)(3)(iii).
    We solicited comments on these proposals.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Similar to comments from previous rules (FR 88 79249, 88 
FR 78818), commenters expressed concern about the burden of requiring a 
date-stamped photo of weight on the lifestyle coaches, suppliers, and 
beneficiaries due to technology difficulties and/or inexperience, risk 
of injury, and HIPAA compliance for photo storage. Some commenters 
suggested further guidance on what constitutes a date-stamped photo, 
suggesting that CMS allow for metadata to count toward the requirement, 
and that CMS further align with CDC 2024 DPRP Standards to allow for 
weight self-attestation in which participants may self-report weight 
without photo or video evidence. While many commenters supported the 
new option to allow 2 photos instead of just 1 to self-report weight in 
an MDPP distance learning session, some commenters misinterpreted the 
proposed regulatory language, commenting that CMS was requiring 2 
photos instead of 1, thus doubling the amount of photo collection.
    Response: After consideration of public comments, we are revising 
the regulation text in the final rule to reflect that beneficiaries can 
choose to submit one or two (2) photos for self-reporting weight for an 
MDPP distance learning session. If a beneficiary is able to capture 
both themself and their weight on the digital scale in one photo, then 
they can choose to submit only one photo, or they can choose to submit 
two photos (one showing their weight on the scale and one showing them 
visible in their home), if this is more convenient. Our intention was 
to add flexibility in

[[Page 98047]]

self-reporting of weight for MDPP distance learning sessions, not to 
limit it. The new regulation text we are finalizing through the CY 2025 
PFS specifies ``(C) Self-reported weight measurements from the at-home 
digital scale of the MDPP beneficiary. Self-reported weights must be 
obtained during live, synchronous online video technology, such as 
video chatting or video conferencing, wherein the MDPP Coach observes 
the beneficiary weighing themselves and views the weight indicated on 
the at-home digital scale, or the MDPP supplier receives one or 2 (two) 
date-stamped photo(s) or a video recording of the beneficiary's weight, 
with the beneficiary visible on the scale, submitted by the MDPP 
beneficiary to the MDPP supplier. Photo or video must clearly document 
the weight of the MDPP beneficiary as it appears on their digital scale 
on the date associated with the billable MDPP session. If choosing to 
submit one photo, this photo must show the beneficiary's weight on the 
scale with the beneficiary visible in their home. If choosing to submit 
2 photos, one photo must show the beneficiary's weight on the digital 
scale, and a second photo must show the beneficiary visible in their 
home. All photos must be date-stamped.''
    Additionally, regarding the comments requesting that photo metadata 
be used for the required date-stamp for self-reporting weight during an 
MDPP distance learning session, at this time we are not further 
defining what constitutes a date stamp for the purpose of MDPP videos 
and photos under this regulation. CMS relies on MDPP suppliers to 
ensure a reasonable and reliable indication of the date connected to a 
picture or video. A physical date on the photo or video would satisfy 
this requirement, however, CMS also recognizes that in some cases a 
technological solution may meet these criteria.
    Regarding the National DPP self-attestation of weight, self-
reporting of weight was added to MDPP as a flexibility during the PHE 
(85 FR 19230, 19283). The submission of video or photos remains 
necessary to ensure program integrity in MDPP. We acknowledge that some 
MDPP beneficiaries may lack the technology or capacity to provide a 
date-stamped photograph to document their body weight measurements. In 
situations in which beneficiaries may be unable to self-report their 
weight according to the MDPP conditions of coverage, suppliers may 
consider collecting weight measurements from the MDPP beneficiary in-
person.
    Lastly, we finalized in the CY 2021 PFS final rule that the 
flexibilities under Sec.  410.79(e)(3)(iii) and (iv) would only apply 
only to MDPP suppliers that have and maintain CDC DPRP ``in-person'' 
recognition (85 FR 84830 and 84831). In the CY 2024 PFS final rule, we 
extended flexibilities allowed during the PHE for COVID-19 or 4 years, 
or through December 31, 2027 (88 FR 79241). We also confirmed that that 
the Extended flexibilities would continue to only apply to MDPP 
suppliers that have and maintain CDC DPRP ``in-person'' recognition, 
and that virtual only suppliers were not permitted to furnish the Set 
of MDPP services because MDPP beneficiaries may elect to return to in-
person services, and MDPP suppliers need to be able to accommodate 
their request (88 FR 79248).
    To reduce confusion as MDPP suppliers transition to the new CDC 
DPRP recognition for ``in-person with a distance learning component,'' 
we are clarifying that MDPP suppliers can have and maintain either 
CDC's ``in-person'' or the new ``in-person with a distance learning 
component'' CDC DPRP code. The 2024 CDC DPRP Standards, implemented in 
June 2024, introduced and defined the new ``in-person with a distance 
learning component'' modality and associated code.\399\ This new 
modality and code for recognition include a combination of in-person 
and distance learning delivery, which are both modalities currently 
permitted until December 31, 2027 (88 FR 79241). The new MDPP term and 
definition for ``in person with a distance learning component'' that we 
are proposing to align with the 2024 CDC DPRP Standards will replace 
the current MDPP ``combination delivery'' term, which we proposed to 
remove in this rulemaking. Aligning terminology for delivery of MDPP 
that involves a combination of in-person and distance learning delivery 
with the 2024 CDC DPRP Standards would reduce administrative burden to 
MDPP suppliers and allow them to streamline CDC DPRP data submission 
(that is, they will not have to submit data for two CDC organization 
codes). MDPP suppliers will not be required to switch to this new code 
if they already have an in-person code; it is only being made available 
for their convenience.
---------------------------------------------------------------------------

    \399\ Centers for Disease Control and Prevention Diabetes 
Prevention Recognition Program. Standards and Operating Procedures. 
Requirements for CDC Recognition. June 2024. https://nationaldppcsc.cdc.gov/s/article/DPRP-Standards-and-Operating-Procedures.
---------------------------------------------------------------------------

3. Changes to Sec.  414.84(a), (c), (d), and (e)
    We further proposed to amend Sec.  414.84(a), (d), and (e) to 
remove the MDPP bridge payment. This payment is no longer necessary in 
MDPP's CY 2024 FFS payment structure for attendance and could introduce 
the potential for fraud, waste, or abuse.
    The CY 2017 PFS final rule confirmed that a beneficiary may change 
MDPP suppliers at any time (81 FR 80470). The MDPP bridge payment was 
introduced in the CY 2018 PFS final rule at Sec.  414.84(a) and is 
defined as follows: ``Bridge payment means a one-time payment to an 
MDPP supplier for furnishing its first MDPP session to an MDPP 
beneficiary who has previously received one or more MDPP services from 
a different MDPP supplier'' (81 FR 80470). The CY 2018 PFS final rule 
specified that an MDPP supplier that had previously been paid either a 
bridge payment or a performance payment for an MDPP beneficiary was not 
eligible to be paid a bridge payment for that beneficiary, along with 
other conditions. An MDPP supplier may only receive one bridge payment 
per MDPP beneficiary, however, there is no limit on how many MDPP 
suppliers can receive a bridge payment for the same beneficiary (82 FR 
53361).
    The CY 2018 PFS final rule also noted that the MDPP bridge payment 
was intended to be similar (that is, the same amount) to the payment 
for the first core session furnished by the previous supplier and would 
be received only if the subsequent supplier did not furnish the first 
core session to the MDPP beneficiary (82 FR 53361). In the performance-
based payment structure, the bridge payment was intended to prevent 
scenarios where subsequent MDPP suppliers would receive no payment for 
sessions furnished to MDPP beneficiaries who changed suppliers during 
the MDPP services period in the absence of the bridge payment. We 
stated that the bridge payment was not intended to be a performance 
payment; rather, it would account for the financial risk a subsequent 
MDPP supplier took on by furnishing services to a beneficiary changing 
MDPP suppliers during the MDPP services period (82 FR 53293). However, 
such risk is not applicable in an FFS payment structure.
    Along with the performance payments for weight loss, the MDPP 
bridge payment was retained in the CY 2024 Fee Schedule for MDPP (88 FR 
79252). Currently, a subsequent MDPP supplier can receive both an 
attendance payment and a bridge payment for the first session attended 
by an MDPP beneficiary who switches suppliers. For

[[Page 98048]]

example, in CY 2024, if a beneficiary changed suppliers on MDPP session 
8, the subsequent supplier could receive both the attendance payment 
for session 8 ($25) and the bridge payment ($25). The bridge payment 
for this beneficiary could only be received by this supplier once, but 
if the beneficiary changed suppliers again (for example, on session 
17), the new (second) subsequent supplier could also receive the bridge 
payment in addition to the payment for session 17 ($25). This could 
continue as many times as the beneficiary changed suppliers until they 
have the maximum of 22 sessions paid, across all suppliers, with no 
maximum on the total number of bridge payments. In the CY 2018 PFS 
final rule, we noted some program integrity risk that organizations 
could coordinate to bill multiple bridge payments that would ultimately 
increase total MDPP payments to separately enrolled MDPP suppliers to 
serve the financial interests of the umbrella organization. This 
scenario could occur if MDPP suppliers systematically encouraged 
beneficiaries to change suppliers for the purpose of being paid the 
bridge payment (82 FR 53294). Due to these reasons, we propose to amend 
Sec.  414.84(a), (d), and (e) to remove reference to, and requirements 
of the MDPP bridge payment. Per our Regulatory Impact Analysis, we 
expect removal of the MDPP bridge payment to be budget neutral for the 
Medicare program. We solicited comment on these proposals, and the 
comments are addressed below.
    Additionally, at Sec.  414.84(c), facilitate Medicare 
Administrative Contractors (MACs) in processing claims for same day 
make-up sessions in MDPP, we proposed to require MDPP suppliers to 
append an existing claim modifier to any claim for G9886 or G9887 that 
indicates a make-up session that was held on the same day as a 
regularly scheduled MDPP session. The CY 2018 PFS final rule permits an 
MDPP beneficiary to have one make-up session on the same day as a 
regularly scheduled session and for a beneficiary to have one make-up 
session per week (82 FR 53360), consistent with CDC DPRP 
Standards.\400\ In the CY 2024 PFS final rule, we stated that we wanted 
to encourage suppliers to schedule make-up sessions on days other than 
the same day of a regularly scheduled session to avoid claims being 
rejected or denied under the new CY 2024 FFS payment schedule and to 
allow beneficiaries to receive the benefit as intended by having access 
to the full 12 months MDPP service period to build the skills needed to 
reduce their risk for diabetes (88 FR 79250).
---------------------------------------------------------------------------

    \400\ Centers for Disease Control and Prevention Diabetes 
Prevention Recognition Program. Standards and Operating Procedures. 
Requirements for CDC Recognition. June 2024. https://nationaldppcsc.cdc.gov/s/article/DPRP-Standards-and-Operating-Procedures.
---------------------------------------------------------------------------

    However, since then, we have heard from MDPP suppliers that same 
day make-up sessions are an essential flexibility that assist an MDPP 
beneficiary in staying on track with the curriculum and their cohort 
after an MDPP beneficiary needs to miss a regularly scheduled session. 
To help prevent potential claim rejections for duplicate services, we 
proposed to require MDPP suppliers to append a modifier to the 
applicable G-code for the second session held on the same day as a 
regularly scheduled MDPP session. Specifically, we proposed to add 
Sec.  414.84(c)(4), which states that ``Current Procedural Terminology 
(CPT) Modifier 79 (repeat services by same physician) must be appended 
to any claim for G9886 or G9887 to identify an MDPP make-up session 
that was held on the same day as a regularly scheduled MDPP session.'' 
We believe this new requirement would contribute minimal additional 
complexity to the payment structure while creating a flexibility that 
would have value for the program, particularly for beneficiaries in the 
core phase of MDPP who may not have transportation to 2 in-person 
sessions in one week or have the flexibility to make time on more than 
one day per week for a distance learning session. Additionally, we 
believe the existing limitation on one make-up session per week would 
be sufficient to ensure program benefit because whether the make-up 
session is held on the same day or the next day would likely have 
minimal impact on program duration and intensity. To clarify, we 
proposed that the CPT Modifier 79 would only need to be appended to the 
HCPCS code (G9886 or G9887) that identifies the session that included 
content from a previously held session that serves as a makeup session 
for the session the MDPP beneficiary missed, which was held on the same 
day as a regularly scheduled MDPP session. This modifier would not need 
to be included on claims for make-up sessions held on different days 
than regularly scheduled MDPP sessions.
    Lastly, with the removal of Sec.  414.84(d), we proposed to amend 
the current Sec.  414.84(e) to be the new Sec.  414.84(d). We also 
removed from the new Sec.  414.84(d) the reference to updating the MDPP 
bridge payment, as the bridge payment has been proposed to be removed 
from this CY 2025 Physician Fee Schedule rulemaking.
    We solicited comments on these proposals.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters were all supportive of the proposed policies to 
remove the MDPP bridge payment and to allow Medicare Administrative 
Contractors (MACs) to process claims for an MDPP make-up session held 
on the same day as a regularly scheduled session. Many commenters noted 
these changes will reduce administrative burden, allow suppliers to 
streamline data reporting, and increase beneficiary flexibilities. 
Specifically, many commenters stated that same-day makeup sessions will 
allow MDPP suppliers to streamline data reporting to the CDC and 
alleviate participant burden by accommodating beneficiaries without 
access to transportation for multiple program classes within one week.
    Response: After consideration of public comments, we are finalizing 
the changes to the provision to remove the MDPP bridge payment as 
proposed. To allow MACs to process claims for MDPP make-up sessions 
held on the same day as a regularly scheduled session, we are 
finalizing with a technical correction to change CPT modifier 79 to CPT 
modifier 76. We proposed to add Sec.  414.84(c)(4), which states that 
``Current Procedural Terminology (CPT) Modifier 79 (repeat services by 
same physician) must be appended to any claim for G9886 or G9887 to 
identify an MDPP make-up session that was held on the same day as a 
regularly scheduled MDPP session.'' Upon further review of modifier 79 
and the associated description, we are making a technical correction to 
finalize in Sec.  414.84(c)(4) that Modifier 76 (repeat services by 
same physician) to be appended to any claim for G9886 or G9887 to 
identify an MDPP make-up session that was held on the same day as a 
regularly scheduled MDPP session.
4. Aligning Language With Previous Rulemaking in Sec. Sec.  410.79, 
424.205, and 414.84
    We proposed minor edits throughout Sec. Sec.  410.79, 424.205, and 
414.84 to update outdated references and align with previous rulemaking 
pertaining to MDPP terminology, payment structure, and requirements. 
This includes updating references to the performance-based payments for 
attendance and ongoing maintenance sessions, which were both removed 
from the 2024 MDPP Fee Schedule by the CY 2024 PFS final rule (88 FR 
79252), as well as including

[[Page 98049]]

the clarification that suppliers can offer MDPP sessions via distance 
learning, a flexibility extended by the CY 2024 PFS final rule (88 FR 
79241), where applicable.
    At Sec.  410.79(b), we proposed to update the definition for the 
``Set of MDPP services'' to remove the reference to ``ongoing 
maintenance'' sessions. All references to and requirements for the MDPP 
``ongoing maintenance'' phase were removed by the CY 2024 PFS finale 
rule (88 FR 79256). We are revising this definition to read: ``Set of 
MDPP services means the series of MDPP sessions, composed of core 
sessions and core maintenance sessions, and subject to paragraph (c)(3) 
of this section offered over the course of the MDPP services period.''
    We also proposed Sec.  410.79(e)(3)(iv)(F)(3) to state that no more 
than 12 virtual sessions offered monthly during the ongoing maintenance 
session intervals, months 13 through 24 for beneficiaries enrolled 
before January 1, 2022.
    This proposed revision adds the date that the CY 2022 PFS final 
rule was effective, which is the date when no more MDPP beneficiaries 
could enroll in ongoing maintenance sessions (86 FR 65317).
    At Sec.  410.79(e)(3)(v)(F)(2), we proposed to remove the reference 
to weight measurement at an ongoing maintenance session, so the 
paragraph provides that for an MDPP beneficiary who began receiving the 
Set of MDPP services on or after January 1, 2021, has suspended 
services during an applicable 1135 waiver event, the MDPP supplier must 
use the baseline weight recorded at the beneficiary's first core 
session.
    At Sec.  424.205(c)(10), we proposed revision to specify in-person 
and distance learning delivery for MDPP core and core maintenance 
sessions, to provide that, except as allowed under Sec.  424.205(d)(8), 
the MDPP supplier must offer an MDPP beneficiary no fewer than all of 
the following:
     16 in-person or distance learning core sessions no more 
frequently than weekly for the first 6 months of the MDPP services 
period, which begins on the date of attendance at the first such core 
session.
     1 in-person or distance learning core maintenance session 
each month during months 7 through 12 (6 months total) of the MDPP 
services period.
    At Sec.  424.205(f)(1)(ii), we propose to remove reference to the 
HICN, as Medicare is now using Medicare Beneficiary Identifiers 
(MBIs),\401\ to state: Basic beneficiary information for each MDPP 
beneficiary in attendance, including but not limited to beneficiary 
name, MBI, and age.
---------------------------------------------------------------------------

    \401\ https://www.cms.gov/training-education/partner-outreach-resources/new-medicare-card/medical-beneficiary-identifiers-mbis.
---------------------------------------------------------------------------

    At Sec.  424.205(f)(2)(i), we proposed to replace ``whether a core 
session, a core maintenance session, an in-person make-up session, or a 
virtual make-up session'' with the two currently permitted types of 
sessions (that is, in-person and distance learning), to state: 
Documentation of the type of session (in-person or distance learning).
    At Sec.  424.205(f)(5), we proposed to remove the references to the 
MDPP performance-based payments for attendance in paragraphs (f)(5)(i) 
and (ii) because these payments were removed in the CY 2024 Fee 
Schedule for MDPP (88 FR 79252). In their place, we are adding 
references to the performance payment for the required minimum 5 
percent weight loss (82 FR 53289). We also proposed to correct the 
references to Sec.  414.84(b), and also to remove the reference to the 
ongoing maintenance sessions from Sec.  424.205(f)(5)(iv).
    At Sec.  414.84(b)(1), we proposed to clarify that the performance 
payment for the required minimum weight loss is made for 5 percent 
weight loss, as reflected in the CY 2024 Fee Schedule (88 FR 79252), 
and can be made for a distance learning, as well as an in-person MDPP 
session, as allowed by the PHE for COVID-19 flexibilities (85 FR 84830 
through 84841) and their extension (88 FR 79241). Performance Goal 1 
provides that it achieves the required minimum 5-percent weight loss. 
We make a performance payment to an MDPP supplier for an MDPP 
beneficiary who achieves the required minimum weight loss as measured 
in-person or during a distance learning session during a core session 
or core maintenance session furnished by that supplier.
    Similarly, we proposed to revise Sec.  414.84(b)(2) for 9 percent 
weight loss. Performance Goal 2 provides that it achieves 9-percent 
weight loss. We make a performance payment to an MDPP supplier for an 
MDPP beneficiary who achieves at least a 9-percent weight loss as 
measured in-person or in a distance learning session during a core 
session or core maintenance session furnished by that supplier.
    We solicited comments on these proposals.
    We did not receive public comments on these provisions, and 
therefore, we are finalizing as proposed.

F. Modifications Related to Medicare Coverage for Opioid Use Disorder 
(OUD) Treatment Services Furnished by Opioid Treatment Programs (OTPs)

1. Background
    Section 2005 of the Substance Use-Disorder Prevention that Promotes 
Opioid Recovery and Treatment (SUPPORT) for Patients and Communities 
Act (SUPPORT Act) (Pub. L. 115-271, October 24, 2018) established a new 
Medicare Part B benefit for OUD treatment services furnished by OTPs 
during an episode of care beginning on or after January 1, 2020. In the 
CY 2020 PFS final rule (84 FR 62630 through 62677 and 84 FR 62919 
through 62926), we implemented Medicare coverage and provider 
enrollment requirements and established a methodology for determining 
the bundled payments for episodes of care for the treatment of OUD 
furnished by OTPs. We also established in the CY 2020 PFS final rule 
new codes and finalized bundled payments for weekly episodes of care 
that include methadone, oral buprenorphine, implantable buprenorphine, 
injectable buprenorphine or naltrexone, and non-drug episodes of care, 
as well as add-on codes for intake and periodic assessments, take-home 
dosages for methadone and oral buprenorphine, and additional 
counseling.
    Since the CY 2020 PFS final rule, we have made several refinements 
and expansions to services covered under the Medicare OTP benefit. 
Specifically, we adopted new add-on codes for take home supplies of 
nasal naloxone and injectable naloxone (85 FR 84683 through 84692) in 
the CY 2021 PFS final rule, and a new add-on code and payment for a 
higher dose of nasal naloxone (86 FR 65340 and 65341) in the CY 2022 
PFS final rule. We have also finalized various telecommunications 
flexibilities, including: to allow OTPs to furnish individual and group 
therapy and substance use counseling via two-way interactive audio-
video telecommunications (84 FR 62630 through 62677 and 84 FR 62919 
through 62926) in the CY 2020 PFS final rule, and via audio-only 
telephone calls when audio-video telecommunications are not available 
to the beneficiary (86 FR 65342) in the CY 2022 PFS final rule; to 
allow the OTP intake add-on code to be furnished via two-way 
interactive audio-video telecommunications when billed for the 
initiation of treatment with buprenorphine, and via audio-only 
telecommunications when audio-video telecommunications are not 
available to

[[Page 98050]]

the beneficiary, to the extent that these technologies are authorized 
by the Drug Enforcement Administration (DEA) and the Substance Abuse 
and Mental Health Services Administration (SAMHSA) at the time the 
service is furnished (87 FR 69775 through 69777) in the CY 2024 final 
rule; and to allow periodic assessments to be furnished via two-way 
interactive audio-video telecommunications as clinically appropriate 
(85 FR 84690) in the CY 2021 final rule. OTPs may furnish these 
aforementioned services via telecommunications systems provided all 
other applicable requirements are met. Additionally, for the purposes 
of the geographic adjustment, we have clarified, in the CY 2023 final 
rule, that services furnished via OTP mobile units will be treated as 
if the services were furnished in the physical location of the OTP for 
purposes of determining payments to OTPs under the Medicare OTP bundled 
payment codes and/or add-on codes, as long as services are medically 
reasonable and necessary and comply with SAMHSA and DEA guidance (87 FR 
69768 through 69777). Lastly, we have made a few changes to various 
pricing methodologies under the OTP benefit in the 2023 PFS final rule, 
including: revising our methodology for pricing the drug component of 
the methadone weekly bundle and the add-on code for take-home supplies 
of methadone by using the Producer Price Index (PPI) for 
Pharmaceuticals for Human Use (Prescription) to better reflect the 
changes in methadone costs for OTPs over time (87 FR 69768 through 
69777); and modifying the payment rate for individual therapy in the 
non-drug component of the bundled payment to base the payment rate on 
the rate for longer therapy sessions that better account for the 
greater severity of needs for patients with an OUD (87 FR 69768 through 
69777).
    More recently, for CY 2024, we made further modifications and 
expansions to covered services for the treatment of OUD by OTPs. In the 
CY 2024 PFS final rule (88 FR 79089 through 79093), we finalized an 
extension to allow periodic assessments to be furnished audio-only 
through the end of CY 2024 when video is not available to the extent 
that use of audio-only communications technology is permitted under the 
applicable SAMHSA and DEA requirements at the time the service is 
furnished, and all other applicable requirements are met. In the CY 
2024 PFS final rule, we noted that extending these flexibilities 
another year would allow CMS time to further consider this issue, 
including whether periodic assessments should continue to be furnished 
using audio-only communication technology following the end of CY 2024. 
Lastly, in the CY 2024 Outpatient Prospective Payment System (OPPS) 
final rule (88 FR 81845 through 81858), we finalized an add-on code for 
intensive outpatient program (IOP) services furnished by OTPs for the 
treatment of OUD and added a new paragraph (ix) in the definition of 
``Opioid disorder treatment service'' at Sec.  410.67(b) to describe 
such services. We stated that Medicare would pay for IOP services 
provided by OTPs if each service is medically reasonable and necessary 
and not duplicative of any service paid for under any bundled payments 
billed for an episode of care in a given week, and other applicable 
requirements are met. We believe that payment for IOP services will 
improve continuity of care between different treatment settings and 
levels of care, and further promote health equity for Medicare 
beneficiaries that may face barriers to accessing treatment, such as 
racial/ethnic minorities and/or beneficiaries aged 65 or older. We 
continue to monitor utilization of OUD treatment services furnished by 
OTPs to ensure that Medicare beneficiaries have appropriate access to 
care. For CY 2025, we proposed several modifications to the policies 
governing Medicare coverage and payment for OUD treatment services 
furnished by OTPs.
2. Telecommunication Flexibilities for Periodic Assessments and 
Initiation of Treatment With Methadone
    We have finalized several flexibilities for OTPs regarding the use 
of telecommunications, both during the Public Health Emergency (PHE) 
for the Coronavirus Disease 2019 (COVID-19) and outside of the PHE. In 
the CY 2020 PFS final rule, we finalized a policy allowing OTPs to 
furnish substance use counseling and individual and group therapy via 
two-way interactive audio-video communication technology. In the 
interim final rule with comment period (IFC) entitled ``Medicare and 
Medicaid Programs: Policy and Regulatory Revisions in Response to the 
COVID-19 Public Health Emergency,'' which appeared in the April 6, 2020 
Federal Register (85 FR 19258), we revised paragraphs (iii) and (iv) in 
the definition of opioid use disorder treatment service at Sec.  
410.67(b) on an interim final basis to allow the therapy and counseling 
portions of the weekly bundles, as well as the add-on code for 
additional counseling or therapy, to be furnished using audio-only 
telephone calls rather than via two-way interactive audio-video 
communication technology during the PHE for the COVID-19 if 
beneficiaries do not have access to two-way audio-video communications 
technology, provided all other applicable requirements are met. In the 
CY 2022 PFS final rule (86 FR 65341 through 65343), we finalized that 
after the conclusion of the PHE for COVID-19, OTPs are permitted to 
furnish substance use counseling and individual and group therapy via 
audio-only telephone calls when audio and video communication 
technology is not available to the beneficiary. As we explained in the 
CY 2022 PFS final rule (86 FR 65342), we interpret the requirement that 
audio/video technology is ``not available to the beneficiary'' to 
include circumstances in which the beneficiary is not capable of or has 
not consented to the use of devices that permit a two-way, audio/video 
interaction because in each of these instances audio/video 
communication technology is not able to be used in furnishing services 
to the beneficiary. In the CY 2023 PFS final rule (87 FR 69775 through 
69777), we further extended telecommunication flexibilities for the 
initiation of treatment with buprenorphine outside of the PHE for 
COVID-19 in paragraph (vi) in the definition of opioid use disorder 
treatment service at Sec.  410.67(b). Specifically, we allowed the OTP 
intake add-on code to be furnished via two-way, audio-video 
communications technology when billed for the initiation of treatment 
with buprenorphine, to the extent that the use of audio-video 
telecommunications technology to initiate treatment with buprenorphine 
is authorized by DEA and SAMHSA at the time the service is furnished. 
We also permitted the use of audio-only communication technology to 
initiate treatment with buprenorphine in cases where audio-video 
technology is not available to the beneficiary, provided all other 
applicable requirements are met.
a. Allowing Periodic Assessments To Be Furnished Via Audio-Only 
Telecommunications on a Permanent Basis
    In recent years, we have finalized several telecommunication 
flexibilities for periodic assessments furnished by OTPs. In the IFC 
entitled ``Medicare and Medicaid Programs, Basic Health Program, and 
Exchanges; Additional Policy and Regulatory Revisions in Response to 
the COVID-19 Public Health Emergency and Delay of Certain Reporting 
Requirements for the Skilled Nursing Facility Quality Reporting 
Program,'' which appeared in the May 8, 2020 Federal Register (85 FR 
27558), we revised paragraph (vii) in the definition of ``Opioid use 
disorder treatment

[[Page 98051]]

service'' at Sec.  410.67(b) on an interim final basis to allow 
periodic assessments to be furnished during the PHE for COVID-19 via 
two-way interactive audio-video telecommunication technology and, in 
cases where beneficiaries do not have access to two-way audio-video 
communication technology, to permit the periodic assessments to be 
furnished using audio-only telephone calls rather than via two-way 
interactive audio-video communication technology, provided all other 
applicable requirements are met. In the CY 2021 PFS final rule (85 FR 
84690), we finalized our proposal to revise paragraph (vii) in the 
definition of ``Opioid use disorder treatment service'' at Sec.  
410.67(b) to provide that periodic assessments (HCPCS code G2077) must 
be furnished during a face-to-face encounter, which includes services 
furnished via two-way interactive audio-video communication technology, 
as clinically appropriate, provided all other applicable requirements 
are met, on a permanent basis.
    Furthermore, in the CY 2023 PFS proposed rule (87 FR 46093), we 
sought comment on whether we should allow periodic assessments to 
continue to be furnished using audio-only communication technology 
following the end of the PHE for COVID-19 for patients who are 
receiving treatment via buprenorphine, and if this flexibility should 
also continue to apply to patients receiving methadone or naltrexone. 
In response, several commenters advocated for CMS to continue to allow 
periodic assessments to be furnished audio-only when video is not 
available after the end of the PHE. Commenters highlighted that 
allowing audio-only flexibilities would further promote health equity 
for individuals who are economically disadvantaged, live in rural 
areas, are members of racial and ethnic minorities, lack access to 
reliable broadband or internet access, or do not possess devices with 
video capability. Commenters also indicated that periodic assessments 
are no less complex than intake/initial assessments, and thus are 
equally appropriate for audio-video and audio-only care, and that 
permitting audio-only flexibilities would allow an opportunity for both 
the provider and patient to jointly determine that the patient would 
individually benefit from telehealth services. After considering these 
comments, we determined that it would be appropriate to allow periodic 
assessments to be furnished audio-only when video is not available 
through the end of CY 2023, to the extent that it is authorized by 
SAMHSA and DEA at the time the service is furnished and, in a manner 
consistent with all applicable requirements. We stated our belief that 
this modification would allow continued beneficiary access to these 
services for the duration of CY 2023 in the event the PHE terminated 
before the end of 2023 and that it would also grant additional time for 
CMS to further consider telecommunication flexibilities associated with 
periodic assessments.
    Moreover, section 4113 of Division FF, Title IV, Subtitle A of the 
Consolidated Appropriations Act, 2023 (CAA, 2023) (Pub. L. 117-328, 
December 29, 2022) extended the telehealth flexibilities enacted in the 
Consolidated Appropriations Act, 2022 (CAA, 2022) (Pub. L. 117-103, 
March 15, 2022). Specifically, it amended sections 1834(m), 1834(o), 
and 1834(y) of the Act to delay the requirement for an in-person visit 
prior to furnishing certain mental health services via 
telecommunications technology by physicians and other practitioners, 
Rural Health Clinics (RHCs), and Federally Qualified Health Centers 
(FQHCs) until dates of service on or after January 1, 2025, if the PHE 
for COVID-19 had ended prior to that date. Additionally, it extended 
the flexibilities that were available during the PHE that allowed for 
certain Medicare telehealth services defined in section 
1834(m)(4)(F)(i) of the Act to be furnished via an audio-only 
telecommunications system through December 31, 2024, if the PHE for 
COVID-19 had ended prior to that date. The PHE for COVID-19, which was 
declared under section 319 of the Public Health Service Act, expired at 
the end of the day on May 11, 2023, so the aforementioned flexibilities 
were extended through the end of CY 2024.
    To better align coverage for periodic assessments furnished by OTPs 
with the telehealth flexibilities described in section 4113 of the CAA, 
2023 for other settings under Medicare, in the CY 2024 PFS final rule 
(88 FR 79089 through 79093; 79528), we finalized extending the audio-
only flexibilities for periodic assessments furnished by OTPs through 
the end of CY 2024 in paragraph (vii) in the definition of Opioid use 
disorder treatment service at Sec.  410.67(b). We finalized to allow 
periodic assessments to be furnished audio-only when video is not 
available to the extent that use of audio-only communications 
technology is permitted under the applicable SAMHSA and DEA 
requirements at the time the service is furnished, and all other 
applicable requirements are met. In submitted comments supporting the 
proposal, commenters reiterated evidence showing that audio-only 
telehealth encounters are more prominent among individuals who are 
older, Black, Hispanic, American Indian/Alaska Native, Spanish-
speaking, living in areas with low broadband access, low-income, and 
with public insurance, suggesting that the proposal would have positive 
health equity implications for these populations.\402\ Several other 
commenters raised that audio-only flexibilities are important since 
many underserved populations may experience challenges in partaking in 
video-based telehealth services, due to not possessing the needed 
technological proficiencies to operate video-based services, not having 
a caregiver able to assist them with appointments, feeling discomfort 
with the use of video, and because of the cost of high-speed internet 
and data required for video technologies. Several other commenters 
shared evidence that audio-only visits produce many of the same 
benefits as video-based visits,\403\ and that patients often report 
that audio-only visits left them feeling supported and with greater 
privacy, provided increased access to behavioral health professionals, 
and helped reduce transportation barriers.\404\ Lastly, a large number 
of commenters requested that CMS make the extension for audio-only 
periodic assessments permanent beyond CY 2024. Commenters stated that 
extending this policy permanently would retain a beneficiary's right to 
decide with their provider how best to receive their care

[[Page 98052]]

and would curtail existing barriers that Medicare beneficiaries with an 
OUD may face in accessing care. In response to these comments that 
requested indefinitely extending these audio-only flexibilities for 
periodic assessments, CMS stated that extending these flexibilities for 
one additional year at the time would allow the agency time to further 
examine the issue, including to understand if a permanent extension 
would be appropriate for patients who are receiving treatment via 
buprenorphine, methadone, and/or naltrexone at OTPs, and whether proper 
safeguards are in place so these services can be delivered in a way 
that would not diminish safety or quality of care for Medicare 
beneficiaries with an OUD.
---------------------------------------------------------------------------

    \402\ J.A. Rodriguez et al., ``Differences in the Use of 
Telephone and Video Telemedicine Visits During the COVID-19 
Pandemic,'' The American Journal of Managed Care 27, no. 1 (2021), 
https://www.ajmc.com/view/differences-in-the-use-of-telephone-and-video-telemedicine-visits-during-the-covid-19-pandemic; R.P. Pierce 
and J.J. Stevermer, ``Disparities in Use of Telehealth at the Onset 
of the COVID-19 Public Health Emergency,'' Journal of Telemedicine 
and Telecare (2020): 1-7, https://doi.org/10.1177/1357633X20963893; 
J.E. Chang et al., ``Patient Characteristics Associated with Phone 
Versus Video Telemedicine Visits for Substance Use Treatment During 
COVID-19,'' J Addict Med 16, no. 6 (2022): 659-65; C. Shoff, T-C 
Yang, B.A. Shaw, ``Trends in Opioid Use Disorder Among Older Adults: 
Analyzing Medicare Data, 2013-2018,'' American Journal of Preventive 
Medicine 60, no.6 (2021): 850-855, https://doi.org/10.1016/j.amepre.2021.01.010.
    \403\ Danila, M.I., Sun, D., Jackson, L.E., Cutter, G., Jackson, 
E.A., Ford, E.W., DeLaney, E., Mudano, A., Foster, P.J., Rosas, G., 
Melnick, J.A, Curtis, J.R., & Saag, K.G. (2022, November). 
``Satisfaction with modes of telemedicine delivery during COVID-19: 
A randomized, single-blind, parallel group, noninferiority trial.'' 
The American Journal of the Medical Sciences, 364 (5).
    \404\ Kang A.W., Walton M., Hoadley A., DelaCuesta C., Hurley 
L., Martin R. ``Patient Experiences with the Transition to Telephone 
Counseling during the COVID-19 Pandemic.'' Healthcare (Basel). 
2021;9(6):663. Published 2021 Jun 2. doi:10.3390/healthcare9060663.
---------------------------------------------------------------------------

    We continue to monitor the services provided under the OTP benefit 
to ensure flexibilities for OUD treatment services are consistent with 
flexibilities authorized in other settings under Medicare, as medically 
reasonable and necessary for the diagnosis and treatment of OUD. In the 
CY 2022 PFS final rule, we revised the regulatory definition of 
``interactive telecommunications system'' at Sec.  410.78(a)(3) for 
Medicare Telehealth services paid under the PFS beyond the termination 
of the PHE for COVID-19 to allow for inclusion of audio-only services 
under certain circumstances. Specifically, we redefined ``interactive 
telecommunications system'' to include audio-only communications 
technology when used for telehealth services for the diagnosis, 
evaluation, or treatment of mental health disorders furnished to a 
patient in their home. We also finalized to limit payment for audio-
only services to services furnished by a physician or practitioner that 
has the technical capability at the time of the service to use two-way 
audio-video telecommunications, but where the patient is not capable 
of, or does not consent to, the use video technology for the service, 
and the patient is located at their home at the time of service. 
Lastly, we clarified that SUD services are considered mental health 
services for purposes of the expanded definition of ``interactive 
telecommunications system'' to include audio-only services under Sec.  
410.78(a)(3). In short, these flexibilities and policy clarifications 
that permit audio-only telecommunication flexibilities for the 
treatment of a SUD, which can include an OUD, already exist under other 
payment systems in Medicare.
    Therefore, to better align coverage for periodic assessments 
furnished by OTPs with other telehealth services furnished under the 
PFS for the diagnosis, evaluation, or treatment of a mental health 
disorder including SUDs, and in response to many supportive comments 
received in response to the CY 2024 PFS proposed rule that advocated 
for allowing OTPs to furnish periodic assessments via audio-only 
telecommunications on a permanent basis, in the CY 2025 PFS proposed 
rule we proposed to allow OTPs to furnish periodic assessments using 
audio-only communications technology when video is not available on a 
permanent basis beginning January 1, 2025. Under this proposal, we 
would allow periodic assessments to be furnished via audio-only when 
video is not available to the extent that use of audio-only 
communications technology is permitted under the applicable SAMHSA and 
DEA requirements at the time the service is furnished, and all other 
applicable requirements are met.
    We believe permanently extending this flexibility would 
meaningfully promote access to care for the Medicare population, as 
supported by our analysis of claims data showing the proportion of 
telephonic audio-only visits increases with the age of the patient, 
with 17-percent of visits delivered via audio-only interaction for 
patients 41-60 years of age, 30-percent for patients 61 to 80 years of 
age, and 47 percent of visits for patients over 81 years of age.\405\ 
Evidence further reveals that Medicare beneficiaries who are older than 
65 years old, racial/ethnic minorities, dual-enrollees in Medicare and 
Medicaid, or living in rural areas, or who experience low broadband 
access, low-income, and/or for whom English in not their primary 
language, are more likely to be offered and use audio-only telemedicine 
services than audio-video services.\406\ Other evidence also suggests 
that while Tribal populations, including American Indian and Alaska 
Natives, have the highest rates of OUD prevalence among Medicare 
beneficiaries, one-third of these populations do not have adequate 
access to high-speed broadband and continue to rely on audio-only 
visits.\407\ Telemedicine flexibilities have been shown to be feasible 
and effective for rural patients with an OUD with data supporting that 
telemedicine flexibilities have helped improve treatment retention in 
OUD treatment, especially for rural patients who are older and covered 
by Medicare.\408\ Lastly, these audio-only flexibilities would be 
meaningful for OTPs and their patients because telehealth services have 
become widely used among SUD treatment facilities as regular service 
offerings. During the COVID-19 pandemic, SUD treatment facilities 
increased telemedicine offerings by 143 percent, and as of 2021, almost 
60 percent of SUD treatment facilities offer telehealth.\409\ Now, 
telephone-based (that is, audio-only) therapy provided by SUD programs 
has been found to be one of the most common modes of telehealth for 
treatment of OUD.\410\ Given the prevalence of audio-only modalities of 
care for the treatment of OUD, permanently extending this flexibility 
could help prevent disruptions to care in OTP settings that may 
regularly provide periodic assessments via audio-only telehealth to 
Medicare beneficiaries. For these reasons, we believe a permanent 
extension would be appropriate for patients who are receiving 
buprenorphine, methadone, and/or naltrexone at OTPs, and that proper 
safeguards are in place so these services can be delivered in a way 
that would not diminish safety or quality of care for Medicare 
beneficiaries with an OUD.
---------------------------------------------------------------------------

    \405\ Lee, G., & Stewart, K. (n.d.). ``2021 Medicare coverage 
and payment for audio only services (Telephone e/m).'' AAMC. https://www.aamc.org/media/55296/download.
    \406\ Rodriguez, J.A., Betancourt, J.R., Sequist, T.D., & 
Ganguli, I. (2021). ``Differences in the use of telephone and video 
telemedicine visits during the COVID-19 pandemic.'' The American 
Journal of Managed Care, 27(1), 21-26. https://doi.org/10.37765/ajmc.2021.88573; Koma, W., Cubanski, J., & Published, T.N. (2021, 
May 19). ``Medicare and telehealth: Coverage and use during the 
covid-19 pandemic and options for the future.'' KFF. https://www.kff.org/medicare/issue-brief/medicare-and-telehealth-coverage-and-use-during-the-covid-19-pandemic-and-options-for-the-future/; 
Benjenk, I., Franzini, L., Roby, D., & Chen, J. (2021). 
``Disparities in Audio-Only Telemedicine use among Medicare 
beneficiaries during the coronavirus disease 2019 pandemic.'' 
Medical Care, 59(11), 1014. https://doi.org/10.1097/MLR.0000000000001631.
    \407\ Federal Communications Commission. (2020). ``2020 
Broadband Deployment Report'' (FCC 20-50). https://docs.fcc.gov/public/attachments/FCC-20-50A1.pdf; Centers for Medicare and 
Medicaid Services, Division of Tribal Affairs. (n.d.). Telehealth 
and COVID-19. https://www.cms.gov/files/document/aian-telehealthwebinar.pdf; Shoff, C., Yang, T.C., & Shaw, B.A. (2021). 
``Trends in opioid use disorder among older adults: Analyzing 
Medicare data, 2013-2018.'' American Journal of Preventive Medicine, 
60(6), 850-855. https://doi.org/10.1016/j.amepre.2021.01.010.
    \408\ Lira, M.C., Jimes, C., & Coffey, M.J. (2023). ``Retention 
in telehealth treatment for opioid use disorder among rural 
populations: A retrospective cohort study.'' Telemedicine Journal 
and E-Health, 29(12), 1890-1896. https://doi.org/10.1089/tmj.2023.0044.
    \409\ Cantor, J., McBain, R.K., Kofner, A., Hanson, R., Stein, 
B.D., & Yu, H. (2022). ``Telehealth adoption by mental health and 
substance use disorder treatment facilities in the covid-19 
pandemic.'' Psychiatric Services (Washington, DC), 73(4), 411-417. 
https://doi.org/10.1176/appi.ps.202100191.
    \410\ Hughes, P.M., Verrastro, G., Fusco, C.W., Wilson, C.G., & 
Ostrach, B. (2021). ``An examination of telehealth policy impacts on 
initial rural opioid use disorder treatment patterns during the 
COVID-19 pandemic.'' The Journal of Rural Health, 37(3), 467-472. 
https://doi.org/10.1111/jrh.12570.

---------------------------------------------------------------------------

[[Page 98053]]

    Accordingly, we proposed to revise paragraph (vii) of the 
definition of ``Opioid treatment services'' at Sec.  410.67(b) of the 
regulations to remove the references to the ``Public Health Emergency, 
as defined in Sec.  400.200 of this chapter'' and ``through the end of 
CY 2024,'' in order to reflect that this flexibility would be 
implemented on a permanent basis. We would continue to state that ``in 
cases where a beneficiary does not have access to two-way audio-video 
communications technology, periodic assessments can be furnished using 
audio-only telephone calls if all other applicable requirements are 
met.'' We solicited comments on this proposal to permanently extend 
this audio-only flexibility for periodic assessments. We received many 
public comments on our proposal to allow OTPs to furnish periodic 
assessments using audio-only communications technology when video is 
not available on a permanent basis beginning January 1, 2025. These 
public comments and our responses to these comments are addressed in 
the section below.
    Comment: We received many comments in support of this proposal. 
Commenters stated that making this flexibility permanent would 
significantly expand access to care, especially for patients living in 
rural regions, racial or ethnic minorities, tribal populations, 
individuals for whom English is a secondary language, older Medicare 
beneficiaries, and dual enrollees in Medicare and Medicaid. Commenters 
also shared that audio-only telecommunication is often the most 
accessible form of communication for patients with limited access to 
high-speed broadband internet service, those with lower incomes, 
individuals with unstable housing, and individuals who lack access to 
necessary video equipment or do not possess the skills to effectively 
operate video equipment. Commenters affirmed that beneficiary access to 
OUD treatment during the COVID-19 PHE increased due to 
telecommunication flexibilities, especially in remote and underserved 
communities, demonstrating the need to permanently extend the policy. A 
few commenters further noted that patients have grown accustomed to 
accessing services via audio-only telecommunications, and thus, 
discontinuing the flexibility could disrupt treatment, negatively 
affect treatment outcomes, and lead to withdrawal symptoms and 
recurrent opioid use. Other commenters agreed with CMS that audio-only 
services could be delivered by OTPs in a manner that would not diminish 
safety or quality of care. Commenters also mentioned that this 
flexibility would expand options for the modality in which to receive 
treatment and further promote provider and patient collaborative 
decision-making to ensure the patient's needs are met. Lastly, one 
commenter noted that if OTPs are concerned about issues that may arise 
during a patient's periodic assessment, then they could ask the patient 
to be seen in person.
    Response: We appreciate commenters' overwhelming support of our 
proposal to permanently allow OTPs to furnish periodic assessments 
using audio-only telecommunications beginning January 1, 2025. We agree 
that finalizing this flexibility on a permanent basis will 
significantly expand access to care, improve patient outcomes while 
maintaining quality and safety of care, and allow a modality of 
treatment to be selected to sufficiently meet the needs of the patient.
    Comment: One commenter recommended that CMS create a modifier that 
OTPs may append to claims when OTPs furnish audio-only periodic 
assessments, since it would allow CMS to track the use of audio-only 
telecommunications and better evaluate patient outcomes associated with 
the flexibility.
    Response: We thank the commenter for this suggestion. We note that 
CMS did create modifiers for OTPs to append to claims when billing for 
OUD treatment services that were furnished via telecommunications 
technology. Specifically, after the conclusion of the COVID-19 PHE, 
which ended on May 11, 2023, CMS stated in section 30.5 of Chapter 39 
of the Medicare Claims Processing Manual that we expect ``OTPs to add 
Modifier 93 (Synchronous telemedicine service rendered via telephone or 
other real-time interactive audio-only telecommunications system) to 
the claim for counseling and therapy provided via audio-only 
telecommunications using HCPCS code G2080, as well as for intake 
activities and periodic assessments furnished using audio-only 
communication technology.'' We also stated that we expect OTPs to ``add 
Modifier 95 (Synchronous Telemedicine Service Rendered via Real-Time 
Interactive Audio and Video Telecommunications System) to the claim for 
counseling and therapy provided via audio-video telecommunications 
using HCPCS code G2080, as well as for intake activities and periodic 
assessments furnished using audio and video communication technology.'' 
Thus, OTPs should append Modifier 93 to claims for OUD treatment 
services furnished via telecommunications, including for audio-only 
periodic assessments.
    Comment: One commenter urged CMS to not restrict audio-only 
flexibilities for periodic assessments to specific circumstances, such 
as when video technology is unavailable to the patient and provider or 
when the patient does not consent to the use of video technology. The 
commenter further stated that restricting audio-only flexibilities to 
cases where only patients lack access to video-based technologies (and 
not also providers), overlooks scenarios where providers might also 
face limitations (for example, in emergency situations). The commenter 
said that it is essential to allow both providers and patients the 
flexibility to determine the most appropriate modality for their care, 
without imposing restrictive conditions. Therefore, the commenter 
requested that CMS delete the language, ``in cases where a beneficiary 
does not have access to two-way audio video communications'' within 
paragraph (vii) in the definition of Opioid use disorder treatment 
service at Sec.  410.67(b) in order to be more inclusive of providers 
and to not impose restrictions on when audio-only communication 
technologies are permissible.
    Response: We appreciate the commenters' feedback. We understand 
that there could be limited circumstances where a provider is unable to 
access audio-video communications technology. However, we believe that 
allowing audio-only communications technology in situations where a 
patient does not have access to two-way audio-video communications 
technology is critical to safeguarding the medical needs of the patient 
and ensuring that an appropriate modality of care is selected for the 
patient's condition and circumstance. We do not believe it would be 
appropriate if audio-only periodic assessments are performed on the 
basis that the provider does not have access to audio-video 
communications technology if the audio-only modality of care does not 
benefit the patient or the treatment of their condition. We believe 
that OTPs should possess the technical capability at the time the 
service is furnished to use an interactive telecommunications system 
(that is, with audio-only and audio-video capabilities) to ensure 
telecommunication services are a comparable and appropriate substitute 
for services that would ordinarily be provided in person. CMS continues 
to maintain that allowing audio-only periodic assessments in cases 
where a beneficiary does not have access to two-

[[Page 98054]]

way audio-video communications achieves the balance of ensuring 
beneficiaries still have access to care while still maintaining proper 
safeguards so services can be delivered in a way that would not 
diminish the safety or quality of care for Medicare beneficiaries with 
an OUD.
    Comment: A few commenters encouraged CMS to work with other federal 
partners to align and clarify telemedicine regulations for OUD 
treatment policies. Some commenters also raised the importance of the 
DEA revising their regulations to clarify post-pandemic rules on 
telemedicine flexibilities for the prescription of controlled 
medications (for example, medications for opioid use disorder) ahead of 
the flexibilities expiring at the end of the year, in order to prevent 
disruptions in care.\411\
---------------------------------------------------------------------------

    \411\ https://telehealth.hhs.gov/providers/telehealth-policy/prescribing-controlled-substances-via-telehealth.
---------------------------------------------------------------------------

    Response: CMS shares the commenters' interest in ensuring the 
consistency of policies that span across HHS and other agencies. We 
continue to work with other agencies on these matters, including SAMHSA 
and the DEA, to ensure high-quality care is accessible to program 
beneficiaries and that OTPs receive adequate communication and program 
guidance on various policies across agencies.
    After consideration of public comments, we are finalizing our 
proposal to permanently allow OTPs to furnish periodic assessments via 
audio-only telecommunications beginning January 1, 2025, so long as all 
applicable requirements are met, and the use of these technologies are 
permitted under the applicable SAMHSA and DEA requirements at the time 
the services are furnished. We are revising paragraph (vii) of the 
definition of ``Opioid use disorder treatment service'' at Sec.  
410.67(b) of the regulations to remove the references to the ``Public 
Health Emergency, as defined in Sec.  400.200 of this chapter'' and 
``through the end of CY 2024,'' in order to reflect that this 
flexibility will be implemented on a permanent basis. We will continue 
to state that ``in cases where a beneficiary does not have access to 
two-way audio-video communications technology, periodic assessments can 
be furnished using audio-only telephone calls if all other applicable 
requirements are met.''
b. Use of Audio-Visual Telecommunications for Initiation of Treatment 
With Methadone
    Prior to the PHE for COVID-19, the Ryan Haight Online Pharmacy 
Consumer Protection Act of 2008 (Pub. L. 110-425) amended the 
Controlled Substances Act and instructed the DEA to issue regulations 
that required healthcare providers to conduct an in-person examination 
in the presence of a practitioner prior to prescribing controlled 
substances (for example, methadone, buprenorphine, etc.) to patients, 
with certain exceptions. These statutory provisions prevented the 
distribution and dispensing of controlled substances by means of the 
internet without at least one in-person medical evaluation before 
writing a prescription. Similarly, SAMHSA regulations under 42 CFR 
8.12(f)(2) have historically required a complete physical evaluation 
before a patient begins treatment at an OTP. However, after the 
declaration of the PHE for COVID-19, the DEA and SAMHSA jointly issued 
flexibilities for prescribing of controlled substances via telehealth 
to ensure patient therapies would remain accessible. Consequently, OTPs 
were exempted from the requirement to perform an in-person physical 
evaluation for any patient who would be treated by the OTP with 
buprenorphine if a program physician, primary care physician, or an 
authorized healthcare professional under the supervision of a program 
physician, determines that an adequate evaluation of the patient can be 
accomplished via telehealth through an audio-video or audio-only 
evaluation.\412\ At the time, this exemption applied exclusively to 
patients with an OUD being treated at an OTP with buprenorphine, and it 
did not apply to new patients initiating treatment with methadone. This 
meant that new OTP patients starting treatment with methadone would 
need to still receive an in-person physical evaluation prior to the OTP 
prescribing methadone. Accordingly, in the CY 2023 PFS final rule (87 
FR 69775 through 69777), we revised the regulation in paragraph (vi) of 
the definition of ``Opioid use disorder treatment services'' at Sec.  
410.67(b) to allow the OTP intake add-on code to be furnished via two-
way audio-video communications technology when billed for the 
initiation of treatment with buprenorphine, to the extent that the use 
of audio-video telecommunications technology to initiate treatment with 
buprenorphine is authorized by DEA and SAMHSA at the time the service 
is furnished. CMS also permitted the use of audio-only communication 
technology to initiate treatment with buprenorphine in cases where 
audio-video technology is not available to the beneficiary in the CY 
2023 PFS final rule (87 FR 69775 through 69777). We stated that section 
1834(m)(7) of the Act allows telehealth services for the treatment of a 
diagnosed SUD or co-occurring mental health disorder to be furnished to 
individuals at any telehealth originating site, including in a 
patient's home, and that some codes describing new patient office/
outpatient visits are already under the Medicare Telehealth list (CPT 
codes 99202 through 99205). Therefore, we believed that these changes 
for the initiation of treatment with buprenorphine via audio-only or 
audio-video telecommunications would also be consistent with existing 
flexibilities under the PFS. Consistent with SAMHSA and DEA 
requirements at the time of CY 2023 PFS rulemaking, we also noted that 
this exemption applied exclusively to OTP patients treated with 
buprenorphine and did not apply to new patients treated with methadone. 
Notably, SAMHSA recently finalized and codified this flexibility at 
Sec.  8.12(f)(2)(v)(B),\413\ so that OTPs may use audio-visual or 
audio-only platforms when evaluating patients who are being admitted 
for treatment at the OTP with schedule III medications (such as 
buprenorphine) on a permanent basis.
---------------------------------------------------------------------------

    \412\ https://www.deadiversion.usdoj.gov/GDP/(DEA-DC-
022)(DEA068)%20DEA%20SAMHSA%20buprenorphine%20telemedicine%20%20(Fina
l)%20+Esign.pdf; https://www.samhsa.gov/medications-substance-use-disorders/statutes-regulations-guidelines/buprenorphine-at-opioid-treatment-programs.
    \413\ 89 FR 7528, February 2, 2024 (https://www.federalregister.gov/documents/2024/02/02/2024-01693/medications-for-the-treatment-of-opioid-use-disorder).
---------------------------------------------------------------------------

    Furthermore, in their recent final rule published in the Federal 
Register in February of 2024 (89 FR 7528), SAMHSA made updates to full 
examination requirements for initiation of treatment with methadone at 
Sec.  8.12(f)(2)(v)(A). Specifically, SAMHSA made revisions to allow 
for audio-visual telehealth initiation for any new patient who will be 
treated by the OTP with methadone if a practitioner or primary care 
provider determines that an adequate evaluation of the patient can be 
accomplished via an audio-visual telehealth platform. When audio-visual 
technologies are not available or their use is not feasible for a 
patient, it is acceptable to use audio-only devices, but only when the 
patient is in the presence of a licensed practitioner who is registered 
to prescribe (including dispense) controlled medications. In finalizing 
this new flexibility, SAMHSA reasoned that ``evidence underlying the 
initiation of buprenorphine using

[[Page 98055]]

telehealth also is applicable to the treatment of OUD with methadone, 
and warrants expanding access to methadone therapy by applying some of 
the buprenorphine in-person examination flexibilities to treatment with 
methadone in OTPs (89 FR 7533).'' \414\ SAMHSA also noted that video-
based telehealth was overwhelmingly supported by commenters for medical 
intake, periodic medical assessments, and methadone or buprenorphine 
initiation by OTP practitioners. SAMHSA did not extend the flexibility 
to allow the use of audio-only telehealth platforms in assessing new 
patients who will be treated by the OTP with methadone due to safety 
considerations, as they stated ``methadone, in comparison to 
buprenorphine, holds a higher risk profile for sedation in patients 
presenting with mild somnolence which may be easier to identify through 
an audio-visual telehealth platform (89 FR 7533).'' \415\ However, 
SAMHSA did finalize specific exceptions that would facilitate audio-
only initiation of methadone via telehealth. Pursuant to Sec.  
8.12(f)(2)(v)(A), when audio-visual technologies are not available or 
their use is not feasible for a patient, it is acceptable to use audio-
only devices, but only when the patient is in the presence of a 
licensed practitioner who is registered to prescribe (including 
dispense) controlled medications (89 FR 7539). The licensed 
practitioner would need to be present in the same room as the patient 
and be available to conduct the visual component of the examination, 
which would be required to satisfy the requirement for telehealth 
initiation of treatment with methadone which is through an audio-visual 
examination. These new flexibilities to allow new patients to initiate 
treatment with methadone via audio-visual telehealth is significant, as 
the majority of patients who are being treated at an OTP receive 
methadone.\416\ Methadone is used to treat those with a confirmed 
diagnosis of OUD, and is a synthetic opioid agonist that eliminates 
withdrawal symptoms and relieves drug cravings by acting on opioid 
receptors in the brain.\417\ Methadone has been associated with 
reducing the risk of drug overdose, opioid-related acute care, all-
cause mortality, and opioid-related mortality.\418\ It has also been 
shown to retain patients in treatment, reduce consequences of injection 
drug use such as HIV/Hepatitis C transmission, and contribute to 
quality of life improvements for patients.\419\ However, many barriers 
currently exist for patients seeking to receive methadone treatment. 
Currently, only SAMHSA-certified OTPs can dispense and administer 
methadone for the treatment of OUD as provided under section 303(g)(1) 
of the Controlled Substances Act (21 U.S.C. 823(g)(1)) and 42 CFR part 
8. This often means that daily travel might be necessary if it is 
determined that the risks of giving take-home doses outweigh the 
benefits, unless patients are eligible to receive take-home doses after 
meeting certain conditions. Most adults in methadone treatment report 
at least one barrier to accessing treatment, including lack of reliable 
transportation, distance from home to treatment, and work schedule 
conflicts.\420\ Frequent travel to an OTP also disproportionately 
impacts rural residents who already face lower odds of finding an OTP 
in their area, and therefore, must spend nearly 2-5 times the amount of 
average drive time to access the closest OTP compared to their urban 
counterparts.\421\ Research has also shown that the number of missed 
doses of methadone increases for residents living longer distances from 
an OTP. Additionally, people living with disabilities are less likely 
to receive MOUDs, and some data also shows that many SUD treatment 
programs are not physically accessible for these populations.\422\ The 
existence of these physical barriers to accessing methadone and 
treatment at OTP facilities, especially among historically underserved 
populations, warrants additional considerations to the extent that 
telehealth flexibilities can mitigate these barriers to accessing care, 
as long as these flexibilities are medically appropriate and reasonable 
for the diagnosis and treatment of OUD.
---------------------------------------------------------------------------

    \414\ Chan, B., Bougatsos, C., Priest, K.C., McCarty, D., 
Grusing, S., & Chou, R. (2022). ``Opioid treatment programs, 
telemedicine and COVID-19: A scoping review.'' Substance Abuse, 
43(1), 539-546. https://doi.org/10.1080/08897077.2021.1967836.
    \415\ https://www.govinfo.gov/content/pkg/FR-2024-02-02/pdf/2024-01693.pdf.
    \416\ American Association for the Treatment of Opioid 
Dependence, National Association of State Alcohol and Drug Abuse 
Directors, & Opioid Response Network. (2022). ``Technical Brief: 
Census of Opioid Treatment Programs.'' https://nasadad.org/wp-content/uploads/2022/12/OTP-Patient-Census-Technical-Brief-Final-for-Release.pdf.
    \417\ National Institute on Drug Abuse. (2021, December). ``How 
do medications to treat opioid use disorder work?'' https://nida.nih.gov/publications/research-reports/medications-to-treat-opioid-addiction/how-do-medications-to-treat-opioid-addiction-work.
    \418\ Wakeman, S.E., Larochelle, M.R., Ameli, O., Chaisson, 
C.E., McPheeters, J.T., Crown, W.H., Azocar, F., & Sanghavi, D.M. 
(2020). ``Comparative effectiveness of different treatment pathways 
for opioid use disorder.'' JAMA Network Open, 3(2), e1920622. 
https://doi.org/10.1001/jamanetworkopen.2019.20622; Sordo, L., 
Barrio, G., Bravo, M.J., Indave, B.I., Degenhardt, L., Wiessing, L., 
Ferri, M., & Pastor-Barriuso, R. (2017). ``Mortality risk during and 
after opioid substitution treatment: Systematic review and meta-
analysis of cohort studies.'' The BMJ, 357, j1550. https://doi.org/10.1136/bmj.j1550; Larochelle, M.R., Bernson, D., Land, T., Stopka, 
T.J., Wang, N., Xuan, Z., Bagley, S.M., Liebschutz, J.M., & Walley, 
A.Y. (2018). ``Medication for opioid use disorder after nonfatal 
opioid overdose and association with mortality: A cohort study.'' 
Annals of Internal Medicine, 169(3), 137. https://doi.org/10.7326/M17-3107.
    \419\ Mattick, R.P., Breen, C., Kimber, J., & Davoli, M. (2009). 
``Methadone maintenance therapy versus no opioid replacement therapy 
for opioid dependence.'' Cochrane Database of Systematic Reviews, 3. 
https://doi.org/10.1002/14651858.CD002209.pub2; Bruce, R.D. (2010). 
``Methadone as HIV prevention: High volume methadone sites to 
decrease HIV incidence rates in resource limited settings. The 
International Journal on Drug Policy, 21(2), 122-124. https://doi.org/10.1016/j.drugpo.2009.10.004; Alavian, S.M., Mirahmadizadeh, 
A., Javanbakht, M., Keshtkaran, A., Heidari, A., Mashayekhi, A., 
Salimi, S., & Hadian, M. (2013). ``Effectiveness of methadone 
maintenance treatment in prevention of hepatitis c virus 
transmission among injecting drug users.'' Hepatitis Monthly, 13(8), 
e12411. https://doi.org/10.5812/hepatmon.12411; Carlsen, S.E.L., 
Lunde, L.H., & Torsheim, T. (2019). ``Predictors of quality of life 
of patients in opioid maintenance treatment in the first year in 
treatment.'' Cogent Psychology, 6(1), 1565624. https://doi.org/10.1080/23311908.2019.1565624.
    \420\ Pasman, E., Kollin, R., Broman, M., Lee, G., Agius, E., 
Lister, J.J., Brown, S., & Resko, S.M. (2022). ``Cumulative barriers 
to retention in methadone treatment among adults from rural and 
small urban communities.'' Addiction Science & Clinical Practice, 
17(1), 1-10. https://doi.org/10.1186/s13722-022-00316-3.
    \421\ Calcaterra, S.L., Bach, P., Chadi, A., Chadi, N., Kimmel, 
S.D., Morford, K.L., Roy, P., & Samet, J.H. (2019). ``Methadone 
matters: What the United States can learn from the global effort to 
treat opioid addiction.'' Journal of General Internal Medicine, 
34(6), 1039-1042. https://doi.org/10.1007/s11606-018-4801-3; Jehan, 
S., Zahnd, W.E., Wooten, N.R., & Seay, K.D. (2024). ``Geographic 
variation in availability of opioid treatment programs across U.S. 
communities.'' Journal of Addictive Diseases, 42(2), 136-146. 
https://doi.org/10.1080/10550887.2023.2165869.
    \422\ Thomas, C.P., Stewart, M.T., Ledingham, E., Adams, R.S., 
Panas, L., & Reif, S. (2023). ``Quality of opioid use disorder 
treatment for persons with and without disabling conditions.'' JAMA 
Network Open, 6(3), e232052. https://doi.org/10.1001/jamanetworkopen.2023.2052; West, S.L. (2007). ``The accessibility of 
substance abuse treatment facilities in the United States for 
persons with disabilities.'' Journal of Substance Abuse Treatment, 
33(1), 1-5. https://doi.org/10.1016/j.jsat.2006.11.001.
---------------------------------------------------------------------------

    To be consistent with SAMHSA's reforms to telehealth flexibilities 
for initiation of treatment with methadone at Sec.  8.12(f)(2)(B)(v), 
past conforming regulations under the Medicare OTP benefit to allow 
telecommunication flexibilities for initiation of treatment with 
buprenorphine, and to contribute towards efforts to reduce barriers in 
accessing care for Medicare beneficiaries seeking treatment with 
methadone, we proposed to make similar telecommunication flexibilities 
under the Medicare OTP benefit in the

[[Page 98056]]

CY 2025 PFS proposed rule. Specifically, we proposed to allow the OTP 
intake add-on code (HCPCS code G2076) to be furnished via two-way 
audio-video communications technology when billed for the initiation of 
treatment with methadone, to the extent that the use of audio-video 
telecommunications technology to initiate treatment with methadone is 
authorized by DEA and SAMHSA at the time the service is furnished. We 
noted that under this proposal, the initiation of treatment with 
methadone using telecommunications technology would be considered an 
intake activity for purposes of paragraph (vi) of the definition of 
``Opioid use disorder treatment services'' at Sec.  410.67(b) only to 
the extent that the use of such telecommunications technology is 
permitted under the applicable DEA and SAMHSA regulations and guidance 
at the time the services are furnished. However, we did not propose to 
extend the flexibility to allow the use of audio-only 
telecommunications for intake activities described in paragraph (vi) of 
the definition of ``Opioid use disorder treatment services'' at Sec.  
410.67(b) for initiation of treatment with methadone, as these 
flexibilities are not currently permitted by SAMHSA and the DEA. We 
recognized that methadone is characterized as a schedule II controlled 
substance, which means that it still has higher potential for misuse 
with potential physical dependence.\423\ Unlike buprenorphine that is a 
schedule III controlled substance, methadone is a full agonist and does 
not have a ``ceiling effect,'' which provides more protective overdose 
factors when taking additional doses of the drug.\424\ Thus, use of 
audio-visual telecommunications for initiation of treatment with 
methadone would balance potential safety concerns associated with 
methadone, such as its higher potential for misuse and risk for 
sedation in patients presenting with mild somnolence which may be 
easier to identify via a audio-visual telehealth platform, while still 
allowing patients the flexibility of initiating treatment via (audio-
visual) telehealth at an OTP. However, CMS continues to defer to SAMHSA 
guidance on the use of audio-only telecommunications for initiation of 
treatment with methadone pursuant to Sec.  8.12(f)(2)(v)(A), which 
allows a specific exception to allow for the use of audio-only devices 
when the patient is in the presence of a licensed practitioner who is 
registered to prescribe (including dispense) controlled medications, 
and when audio-visual technologies are not available or their use is 
not feasible for a patient (89 FR 7539). Accordingly, we proposed to 
allow the intake add-on code to be billed for audio-only 
telecommunications for initiation of treatment with methadone if these 
specific exceptions are met, consistent with SAMHSA guidance at Sec.  
8.12(f)(2)(v)(A).
---------------------------------------------------------------------------

    \423\ https://www.dea.gov/drug-information/drug-scheduling.
    \424\ Whelan, P.J., & Remski, K. (2012). ``Buprenorphine vs 
methadone treatment: A review of evidence in both developed and 
developing worlds.'' Journal of Neurosciences in Rural Practice, 
3(1), 45-50. https://doi.org/10.4103/0976-3147.91934.
---------------------------------------------------------------------------

    We believed that this proposal would meaningfully improve access to 
care, promote positive health outcomes, and advance health equity among 
Medicare beneficiaries. Data indicate that expanded use of telehealth 
and flexibilities for the provision of MOUD during the COVID-19 
pandemic was associated with improved care retention and a reduction in 
medically treated overdoses among Medicare beneficiaries.\425\ 
Similarly, telehealth initiation for buprenorphine to treat OUD was 
associated with improved treatment retention in a subset of U.S 
States.\426\ Other research has not found significant differences in 
clinical severity and complexity markers (for example, OUD-related 
emergency department visits) between patients receiving telemedicine 
inductions into treatment versus in-person examinations,\427\ 
suggesting that quality of care can be maintained through initiation of 
treatments via telehealth. Thus, many of these benefits associated with 
telehealth flexibilities for initiating treatment with other MOUDs can 
be potentially replicated by allowing initiation of treatment with 
methadone via audio-visual telecommunications. Additionally, we 
believed this proposal would meaningfully impact health equity. 
Individuals from Black, American Indian and Alaska Native, and Hispanic 
populations are significantly less likely to initiate treatment for a 
SUD, as well as individuals from economically disadvantaged 
communities.\428\ Despite these disparities, during the COVID-19 
pandemic, the odds of initiating treatment for a SUD increased for most 
age, race, ethnicity, and socioeconomic status subgroups, which may 
have been explained by increases in treatment initiation occurring 
through telehealth.\429\ Thus, promoting flexibilities for 
telecommunication modalities of treatment initiation in regards to 
methadone may provide additional options for accessing treatment, 
especially for populations who often experience barriers in beginning 
treatment. Lastly, we believed this proposal was in alignment with the 
HHS Overdose Prevention Strategy, which aims to broaden access to 
evidence-based care that increases willingness to engage and remain in 
treatment.\430\ Similarly, we believed this proposal would further the 
goals of the National Drug Control Strategy, which strives to expand 
policies that improve SUD treatment engagement by lowering various 
barriers to enter and participate in treatment, such as through 
telemedicine treatment initiation.\431\
---------------------------------------------------------------------------

    \425\ Jones, C.M., Shoff, C., Hodges, K., Blanco, C., Losby, 
J.L., Ling, S.M., & Compton, W.M. (2022). ``Receipt of telehealth 
services, receipt and retention of medications for opioid use 
disorder, and medically treated overdose among Medicare 
beneficiaries before and during the covid-19 pandemic.'' JAMA 
Psychiatry, 79(10), 981-992. https://doi.org/10.1001/jamapsychiatry.2022.2284.
    \426\ Hammerslag, L.R., Mack, A., Chandler, R.K., Fanucchi, 
L.C., Feaster, D.J., LaRochelle, M.R., Lofwall, M.R., Nau, M., 
Villani, J., Walsh, S.L., Westgate, P.M., Slavova, S., & Talbert, 
J.C. (2023). ``Telemedicine buprenorphine initiation and retention 
in opioid use disorder treatment for Medicaid enrollees.'' JAMA 
Network Open, 6(10), e2336914. https://doi.org/10.1001/jamanetworkopen.2023.36914.
    \427\ Barsky, B.A., Busch, A.B., Patel, S.Y., Mehrotra, A., & 
Huskamp, H.A. (2022). ``Use of telemedicine for buprenorphine 
inductions in patients with commercial insurance or Medicare 
advantage.'' JAMA Network Open, 5(1), e2142531. https://doi.org/10.1001/jamanetworkopen.2021.42531.
    \428\ Acevedo, A., Panas, L., Garnick, D., Acevedo-Garcia, D., 
Miles, J., Ritter, G., & Campbell, K. (2018). ``Disparities in the 
treatment of substance use disorders: Does where you live matter?'' 
The Journal of Behavioral Health Services & Research, 45(4), 533-
549. https://doi.org/10.1007/s11414-018-9586-y.
    \429\ Palzes, V.A., Chi, F.W., Metz, V.E., Sterling, S., Asyyed, 
A., Ridout, K.K., & Campbell, C.I. (2023). ``Overall and telehealth 
addiction treatment utilization by age, race, ethnicity, and 
socioeconomic status in California after covid-19 policy changes.'' 
JAMA Health Forum, 4(5), e231018. https://doi.org/10.1001/jamahealthforum.2023.1018.
    \430\ https://www.hhs.gov/overdose-prevention/.
    \431\ https://www.whitehouse.gov/wp-content/uploads/2022/04/National-Drug-Control-2022Strategy.pdf.
---------------------------------------------------------------------------

    Accordingly, we proposed to revise the regulations for intake 
activities at paragraph (vi) within the definition of ``Opioid use 
disorder treatment service'' at Sec.  410.67(b). We proposed to add a 
new paragraph (vi)(A) within the description of intake activities to 
separately list flexibilities for intake activities furnished via 
communications technology, and we proposed to add and reserve a new 
paragraph (vi)(B). We proposed to move the language related to the 
existing flexibilities for the initiation of treatment with 
buprenorphine to paragraph (vi)(A)(1). Additionally, in the definition 
of ``Opioid use disorder treatment service''

[[Page 98057]]

at Sec.  410.67(b), we proposed to codify telecommunications 
flexibilities for initiation of treatment with methadone at paragraph 
(vi)(A)(2). Specifically, we proposed that services to initiate 
treatment with methadone may be furnished via two-way interactive 
audio-video communication technology, as clinically appropriate, and in 
compliance with all applicable requirements, if an OTP determines that 
an adequate evaluation of the patient can be accomplished through 
audio-video communication technology. We received public comments on 
our proposal to allow the OTP intake add-on code (HCPCS code G2076) to 
be furnished via two-way audio-video communications technology when 
billed for the initiation of treatment with methadone if the OTP 
determines that an adequate evaluation of the patient can be 
accomplished via an audio-visual telehealth platform.
    The following is a summary of the comments we received and our 
responses.
    Comment: We received many comments in strong support of this 
proposal. Commenters expressed that providing the flexibility to 
initiate methadone treatment via audio-video telecommunications would 
improve access to care, advance health equity, and encourage positive 
health outcomes. Commenters shared that many individuals face 
geographic or social challenges to engaging in OUD treatment, and 
others may have an immediate need for treatment with methadone but face 
barriers to initiating treatment due to the need to coordinate 
transportation, childcare, work schedules, or other complicating 
factors. Commenters further added that this flexibility would assist in 
reducing barriers to care since it would limit the need for patients to 
travel to and from appointments when initiating treatment with 
methadone, which is a difficulty faced by many individuals from rural 
communities and other underserved populations. A few commenters noted 
that this telecommunications flexibility is needed, as OTPs are one of 
the few settings where beneficiaries can receive this medication. 
Multiple commenters agreed with CMS on the necessity of requiring 
audio-video telecommunications when initiating treatment with 
methadone. Specifically, commenters concurred that methadone is 
distinct from buprenorphine, given both its risk for sedation and 
complex pharmacokinetics. For these reasons, commenters stated that 
utilizing audio-visual telecommunications for methadone treatment 
initiation would address potential safety concerns by allowing the OTP 
to monitor the patients via audio-video telecommunications technology, 
while still increasing access to care and maintaining care quality.
    Response: We thank commenters for their support of this proposal.
    Comment: One commenter stated that while they believe extending the 
COVID-19 PHE telecommunications flexibilities is important as they are 
approaching expiration, they do not believe that controlled substances 
should be prescribed without an initial in-person visit.
    Response: We agree that there could be limited instances where it 
may not be appropriate for an OTP to initiate treatment with methadone 
via audio-visual communication technology for a particular patient 
without an in-person visit. However, as we stated in the proposed rule, 
existing evidence has demonstrated that initiating OUD treatment via 
audio-visual communications technology can be done in a manner that 
maintains quality of care and safety for patients. For example, some 
research has not found significant differences in clinical outcomes 
(for example, OUD-related emergency department visits or severity of an 
OUD) between patients receiving telemedicine inductions into treatment 
versus in-person examinations, suggesting that telemedicine inductions 
to OUD treatment can serve as an appropriate substitute for in-person 
visits in many cases.\432\ Furthermore, we believe limiting the use of 
audio-video telecommunication technology to instances where an OTP 
determines that an adequate evaluation of the patient can be 
accomplished via an audio-video platform requires the OTP to evaluate 
on an individual basis if audio-video communication technology is an 
appropriate modality for initiating methadone treatment. We note that 
our proposal to allow OTPs to initiate methadone treatment via audio-
video communication technology was meant to be a flexibility and not a 
requirement, meaning that we intended OTPs could still choose to see 
the patient in person instead. Lastly, CMS defers to program 
requirements established by SAMHSA and the DEA concerning when these 
communication technology services can be furnished before they can be 
billed for under the Medicare OTP benefit, including program 
requirements relating to initiation of MOUD through various forms of 
telecommunications and in-person visit requirements.
---------------------------------------------------------------------------

    \432\ Barsky, B.A., Busch, A.B., Patel, S.Y., Mehrotra, A., & 
Huskamp, H.A. (2022). ``Use of telemedicine for buprenorphine 
inductions in patients with commercial insurance or Medicare 
advantage.'' JAMA Network Open, 5(1), e2142531. https://doi.org/10.1001/jamanetworkopen.2021.42531.
---------------------------------------------------------------------------

    Comment: A few commenters, including some representing tribal 
populations, requested that CMS consider extending flexibilities to 
allow initiation of treatment with methadone via audio-only 
telecommunications. One commenter asked the agency to evaluate the 
evidence and appropriateness of enabling audio-only treatment 
initiation of methadone, including by partnering with external research 
organizations to assess this topic, improve parity in flexibilities for 
buprenorphine and methadone, and reduce stigma around methadone. This 
same commenter suggested that CMS should consider in the interim, 
implementing waivers for individual cases where an audio-only 
telecommunications evaluation of the patient is the only means that a 
patient can access services, or where there is an insufficient supply 
of OTP providers in the area to prescribe or dispense methadone.
    Response: We appreciate the feedback shared by commenters. We agree 
that it is important to continue to monitor and evaluate the evidence 
of the appropriateness of various telecommunication flexibilities 
furnished in the OTP setting. In proposing to allow initiation of 
treatment with methadone utilizing audio-video telecommunications if an 
OTP determines that an adequate evaluation of the patient can be 
accomplished via an audio-video platform, we considered the existing 
evidence based on safety and quality of these assessments conducted via 
telecommunications platforms, including potentially via audio-only 
telecommunications. As we stated in the proposed rule (89 FR 61822), 
methadone is characterized as a schedule II-controlled substance, which 
means that it has higher potential for misuse with potential physical 
dependence, thus there are potential safety concerns associated with 
conducting these type of assessments through audio-only platforms.\433\ 
Additionally, CMS believes it is important to ensure telecommunication 
flexibilities allowed in OTP settings are consistent with existing 
guidance by SAMHSA and the DEA to ensure the health and safety of 
Medicare beneficiaries. As we stated in the discussion above, SAMHSA 
allows a specific exception to the use of audio-only initiation of 
treatment with

[[Page 98058]]

methadone pursuant to Sec.  8.12(f)(2)(v)(A), which allows for the use 
of audio-only devices when the patient is in the presence of a licensed 
practitioner who is registered to prescribe (including dispense) 
controlled medications, and when audio-visual technologies are not 
available or their use is not feasible for a patient (89 FR 7539). If 
these specific exceptions are met, CMS will allow the intake add-on 
code to be billed for audio-only telecommunications for initiation of 
treatment with methadone consistent with SAMHSA requirements at Sec.  
8.12(f)(2)(v)(A). CMS believes in the importance of expanding access to 
services under the OTP benefit and will continue to collaborate with 
Federal partners to continually monitor these various telecommunication 
flexibilities and propose updates in future rulemaking as appropriate.
---------------------------------------------------------------------------

    \433\ 4https://www.dea.gov/drug-information/drug-scheduling.
---------------------------------------------------------------------------

    After consideration of public comments, we are finalizing our 
proposal to allow the OTP intake add-on code (HCPCS code G2076) to be 
furnished via two-way audio-video communications technology when billed 
for the initiation of treatment with methadone, to the extent that the 
use of audio-video telecommunications technology to initiate treatment 
with methadone is authorized by DEA and SAMHSA at the time the service 
is furnished, and if the OTP determines that an adequate evaluation of 
the patient can be accomplished via audio-video communication 
technology. We are finalizing our revisions to intake activities within 
the definition of ``opioid use disorder treatment service'' at Sec.  
410.67(b) by adding new paragraphs (vi)(A) and (vi)(B) within the 
description of intake activities at paragraph (vi). We are moving the 
language related to the existing flexibilities for the initiation of 
treatment with buprenorphine to paragraph (vi)(A)(1) to separately list 
flexibilities for intake activities furnished via communications 
technology. In the definition of ``opioid use disorder treatment 
service'' at Sec.  410.67(b), we are codifying telecommunications 
flexibilities for initiation of treatment with methadone at paragraph 
(vi)(A)(2). Specifically, we are codifying that services to initiate 
treatment with methadone may be furnished via two-way interactive 
audio-video communication technology, as clinically appropriate, and in 
compliance with all applicable requirements, if an OTP determines that 
an adequate evaluation of the patient can be accomplished through 
audio-video communication technology. We are reserving new paragraph 
(vi)(B).
3. Reforms to 42 CFR Part 8
    In the CY 2020 PFS final rule, we implemented payment and coverage 
for opioid use disorder treatment services, including services such as 
substance use counseling by a professional to the extent authorized 
under State law to furnish such services, individual and group therapy 
with a physician, psychologist (or other mental health professional to 
the extent authorized under State law), and other items and services 
that the Secretary determines are appropriate (but in no event to 
include meals or transportation), as authorized by section 1861 of the 
Act (84 FR 62630 through 62677 and 84 FR 62919 through 62926). 
Consequently, we included these services within the definition of OUD 
treatment services at Sec.  410.67(b) and incorporated payment for 
these services as part of the non-drug component at Sec.  
410.67(d)(2)(ii). We also created an add-on code described by HCPCS 
code G2080 to reflect an additional 30 minutes of counseling or 
individual or group therapy provided in a week. We further finalized 
additional adjustments to the bundled payment for an episode of care, 
such as intake activities and periodic assessments. At the time, we 
noted that both initial and periodic assessments are required under 
SAMHSA regulations, and that they were integral services for the 
establishment and maintenance of OUD treatment for a beneficiary at an 
OTP (84 FR 62634). We codified definitions of these services within the 
definition of OUD treatment services at Sec.  410.67(b); at paragraph 
(vi), we stated that intake activities include initial medical 
examination services required under Sec.  8.12(f)(2), and initial 
assessment services required under Sec.  8.12(f)(4); at paragraph (vii) 
we stated that periodic assessment services include those required 
under Sec.  8.12(f)(4). Services under Sec.  8.12(f) are required 
services as part of Federal opioid treatment standards for OTPs, as 
regulated by SAMHSA. Accordingly, we created HCPCS code G2076 [Intake 
activities, including initial medical examination that is a complete, 
fully documented physical evaluation and initial assessment conducted 
by a program physician or a primary care physician, or an authorized 
healthcare professional under the supervision of a program physician or 
qualified personnel that includes preparation of a treatment plan that 
includes the patient's short-term goals and the tasks the patient must 
perform to complete the short-term goals; the patient's requirements 
for education, vocational rehabilitation, and employment; and the 
medical, psycho-social, economic, legal, or other supportive services 
that a patient needs, conducted by qualified personnel (provision of 
the services by a Medicare-enrolled Opioid Treatment Program); List 
separately in addition to code for primary procedure], and code G2077 
[Periodic assessment; assessing periodically by qualified personnel to 
determine the most appropriate combination of services and treatment 
(provision of the services by a Medicare-enrolled Opioid Treatment 
Program); List separately in addition to code for primary procedure] in 
order to have a mechanism to make payment under Medicare to OTPs for 
these required services. In the CY 2021 and CY 2022 PFS final rules (85 
FR 84682 through 84690; 86 FR 65338 through 65341), we also established 
payment for take-home supplies of naloxone and overdose education 
furnished in conjunction with providing an opioid antagonist 
medication.
    Additionally, in the CY 2020 PFS final rule, we codified 
requirements specified in the section 1861(jjj)(2) of the Act for OTPs. 
Specifically, we defined an ``opioid treatment program'' at Sec.  
410.67(b) as an entity that is an OTP as defined in Sec.  8.2 (or any 
successor regulation) that meets the applicable requirements for an 
OTP. For an OTP to participate and receive payment under the Medicare 
program, the OTP must be enrolled in Medicare under section 1866(j) of 
the Act, have in effect a certification by SAMHSA for such a program, 
and be accredited by an accrediting body approved by SAMHSA. Lastly, an 
OTP must meet additional conditions as the Secretary may find necessary 
to ensure the health and safety of individuals being furnished services 
under such program and the effective and efficient furnishing of such 
services.
    Recently, SAMHSA issued a new final rule (89 FR 7528), which made 
significant reforms to 42 CFR part 8, governing requirements for OTPs 
in providing medications for the treatment of OUD and many other 
services. The rule provides significant refinements, as 42 CFR part 8 
was originally published over 21 years ago, by reflecting new paradigms 
of care for OUD that have become increasingly patient-centered and 
evidence-based. The regulatory reforms for opioid treatment standards 
reflect an understanding that OUD is a chronic disease that 
necessitates respective patient-centered care, and to be successful, 
treatment interventions should be individualized and include harm 
reduction and recovery support

[[Page 98059]]

services, among other services.\434\ Consequently, SAMHSA redefined 
comprehensive treatment at Sec.  8.2 to specify that comprehensive 
treatment at OTPs includes ``the continued use of MOUD provided in 
conjunction with an individualized range of appropriate harm reduction, 
medical, behavioral health, and recovery support services.'' At the 
same time, SAMHSA constructed a new definition of harm reduction 
services at Sec.  8.2 to specify that harm reduction ``refers to 
practical and legal evidence-based strategies, including: overdose 
education; testing and intervention for infectious diseases, including 
counseling and risk mitigation activities forming part of a 
comprehensive, integrated approach to address human immunodeficiency 
virus (HIV), viral hepatitis, sexually transmitted infections, and 
bacterial and fungal infections; distribution of opioid overdose 
reversal medications; linkage to other public health services; and 
connecting those who have expressed interest in additional support to 
peer services.'' Harm reduction approaches are especially important to 
reduce certain health and safety issues associated with drug use 
through care that is intended to be free of stigma and centered on the 
needs of people who use drugs. Decades of research have shown that harm 
reduction strategies provide significant benefits in preventing drug 
overdose deaths and transmission of infectious diseases among those who 
use drugs, educate individuals and community members about reducing the 
negative consequences associated with drug use, and link individuals to 
SUD treatment and other recovery resources.\435\ Harm reduction is also 
a crucial component of the HHS Overdose Prevention Strategy, which aims 
to promote evidence-based harm reduction services, including those that 
are integrated within healthcare delivery, and to expand sustainable 
funding strategies for harm reduction services.\436\ Besides defining 
harm reduction, SAMHSA also finalized a new definition for ``recovery 
support services'' at Sec.  8.2, which includes definitions for 
``recovery,'' and ``recovery support services.'' Specifically, 
``recovery'' is defined as ``the process of change through which people 
improve their health and wellness, live self-directed lives, and strive 
to reach their full potential.'' ``Recovery support services'' ``can 
include, but are not limited to, community-based recovery housing, peer 
recovery support services, social support, linkage to and coordination 
among allied service providers and a full range of human services that 
facilitate recovery and wellness contributing to an improved quality of 
life. The services extend the continuum of care by strengthening and 
complementing substance use disorder (SUD) treatment interventions in 
different settings and stages.'' Recovery support services are a vital 
part SUD treatment, as they take into account the relapsing and chronic 
nature of SUD, and emphasize the need for continuous care to keep 
individuals engaged in treatment, especially along different stages of 
recovery.\437\ Recovery support services are also a component of the 
HHS Overdose Prevention Strategy, which recognizes that treatment alone 
may not be enough to support long-term recovery, and that enabling 
access to quality integrated and coordinated recovery support services 
is important to prevent drug overdoses.\438\
---------------------------------------------------------------------------

    \434\ 89 FR 7528, February 2, 2024 (https://www.federalregister.gov/documents/2024/02/02/2024-01693/medications-for-the-treatment-of-opioid-use-disorder).
    \435\ https://www.cdc.gov/overdose-prevention/php/od2a/harm-reduction.html. https://nida.nih.gov/research-topics/harm-reduction.
    \436\ https://www.hhs.gov/overdose-prevention/harm-reduction.
    \437\ Stanojlovi[cacute], M., & Davidson, L. (2021). ``Targeting 
the barriers in the substance use disorder continuum of care with 
peer recovery support.'' Substance Abuse: Research and Treatment, 
15, 117822182097698. https://doi.org/10.1177/1178221820976988; 
https://www.samhsa.gov/find-help/recovery.
    \438\ https://www.hhs.gov/overdose-prevention/recovery-support.
---------------------------------------------------------------------------

    Furthermore, SAMHSA made updates to existing definitions that 
include some of the services currently covered under the Medicare OTP 
benefit. For example, a psychoeducational service element was added to 
the definition of counseling services at Sec.  8.12(f)(5), so that both 
counseling and psychoeducational services would also include harm 
reduction education and recovery-oriented counseling. New guidelines on 
counseling related to preventing exposure to and transmission of 
various infectious diseases were also added. As part of these services, 
at Sec.  8.12(f)(5)(iii), OTPs also must continue to provide directly, 
or through referral to adequate and reasonably accessible community 
resources, vocational training, education, and employment services for 
patients who request such services or for whom these needs have been 
identified and mutually agreed-upon as beneficial by the patient and 
program staff. Notably, SAMHSA also made updates to their descriptions 
of initial and periodic assessment activities at Sec.  8.12(f)(4), 
which initially informed the definitions of intake activities and 
periodic assessments in the definition of ``OUD treatment services'' at 
Sec.  410.67(b) and the creation of codes describing these services 
(HCPCS codes G2076 and G2077) when CMS first implemented the Medicare 
OTP benefit in the CY 2020 PFS final rule. When introducing these 
changes in their proposed rule in December 2022 (87 FR 77330), SAMHSA 
noted that ``changes to the initial and periodic medical services 
sections are intended to promote key issues for OTP medical 
practitioners and the OTP multi-disciplinary team to address with a 
patient as part of treatment. This includes areas that may increase the 
risk of a patient leaving care prematurely, such as unmet mental health 
or other disability, medical and oral health needs, the need for 
culturally supportive care that addresses race, ethnicity, sexual 
orientation, religion or gender identity, and social determinants of 
health, such as housing and transportation, that may pose barriers to 
treatment engagement, or harm reduction and recovery support service 
needs.'' SAMHSA's new changes to the definition of initial assessments 
now include more patient-centered language to ensure that care provided 
is consistent with the patient's needs and self-identified goals for 
treatment and recovery, while promoting shared decision making between 
the OTP practitioner and patient to create individualized care plans. 
SAMHSA's revisions to initial assessments reflect the need for care 
plans to include the patient's goals and mutually agreed-upon actions 
for the patient to meet those goals, and new references are added for 
harm reduction interventions and recovery support services to be 
included as components of care plans if a patient needs and wishes to 
pursue these services. For example, patient-centered care plans 
developed during initial assessments may reflect a ``patient's goals 
and mutually agreed-upon actions for the patient to meet those goals, 
including harm reduction interventions; the patient's needs and goals 
in the areas of education, vocational training, and employment; and the 
medical and psychiatric, psychosocial, economic, legal, housing, and 
other recovery support services that a patient needs and wishes to 
pursue (89 FR 7558).'' Lastly, regarding periodic assessment services 
at Sec.  8.12(f)(4)(ii), SAMHSA requires that these examinations should 
occur not less than one time each year and be conducted by an OTP 
practitioner. The periodic physical examination should include review 
of MOUD dosing,

[[Page 98060]]

treatment response, other SUD treatment needs, responses and patient-
identified goals, and other relevant physical and psychiatric treatment 
needs and goals. The periodic physical examination should be documented 
in the patient's clinical record.
    As a whole, SAMHSA'S regulatory changes largely reflect significant 
changes in evidence-based practice and towards patient-centered care in 
the treatment of OUD that have occurred in the past couple of decades, 
including considerations of the need to address unmet health related 
social needs (HRSN) that impose barriers on a patient's ability to 
initiate, engage, and remain in treatment, including in areas of 
education, employment, and housing as well as in harm reduction 
strategies that decrease the negative consequences associated with a 
patient's use or abuse of opioids, and recovery support services that 
address the chronic nature of OUD and the need for supports across the 
full continuum of care.
    In addition to these reforms to opioid treatment standards at 42 
CFR part 8 codified by SAMHSA, there have been recent activities under 
the Medicare in the PFS, and through other CMS programs, that have 
addressed the social determinants of health (SDOH), which often affect 
the diagnosis and treatment of a patient's medical problem. Healthy 
People 2030, which is a 10-year HHS initiative to identify public 
health priorities that help individuals, organizations, and communities 
across the U.S improve health and well-being,\439\ defines the SDOH, as 
the ``conditions in the environments where people are born, live, 
learn, work, play, worship, and age that affect a wide range of health, 
functioning, and quality-of-life outcomes and risks.'' \440\ SDOH 
include many domains that largely impact health, including economic 
stability, education, healthcare, the neighborhood and built 
environment, and social and community context. Some studies have 
estimated that SDOH can affect as much as 50 percent of the variation 
in health outcomes compared to clinical care impacting only 20 
percent.\441\ For example, individuals with a higher income have been 
found to exhibit lower mortality, higher life expectancy, and slower 
declines in physical mobility; individuals who lack insurance are less 
likely to obtain necessary medical care and prescription medications; 
and, food insecurity is associated with higher rates of birth defects, 
cognitive problems, hospitalization rates, asthma, and behavioral 
health problems.\442\ Moreover, SDOH act as structural and contextual 
factors that shape the conditions impacting health, and their unequal 
distribution impacts the development of HRSNs at the individual level, 
which refer to an individual's needs that might include housing, 
healthy foods, transportation, financial assistance, etc. An inability 
to address these HRSNs put individuals at a higher risk for 
exacerbating health conditions, and it is a major driver of health 
inequities.\443\ Health equity is the attainment of the highest level 
of health for all people, where everyone has a fair and just 
opportunity to attain their optimal health regardless of race, 
ethnicity, disability, sexual orientation, gender identity, 
socioeconomic status, geography, preferred language, or other factors 
that affect access to care and health outcomes, which is complicated by 
SDOH such as poverty, unequal access to healthcare, lack of education 
or employment, stigma, and discrimination.\444\ Therefore, in light of 
decades of research showing that these upstream factors drive health 
outcomes, and evidence suggesting interventions in healthcare settings 
that address social needs can improve the treatment of an individual's 
condition, CMS recently finalized coding and payment for SDOH risk 
assessments in the CY 2024 PFS final rule (88 FR 78932). HCPCS code 
G0136 describes SDOH risk assessments (Administration of a 
standardized, evidence-based Social Determinants of Health Risk 
Assessment, 5-15 minutes, not more often than every 6 months) that may 
be billed when practitioners spend time and resources assessing HRSNs 
that interfere with the practitioner's ability to diagnose or treat the 
patient. These assessments, which may also be provided during a 
behavioral health visit, are often administered as part of an 
assessment of patient histories, risk, and in informing medical 
decision-making around the care and treatment of the disease or 
illness. They are often accomplished through the use of a standardized 
evidence-based tool that include the domains of food insecurity, 
housing insecurity, transportation needs, and utility difficulties. 
Besides establishing standalone payment for SDOH risk assessments, in 
the CY 2024 PFS final rule, CMS also created coding and payment for 
community health integration (CHI) (HCPCS codes G0019 & G0022) and 
principal illness navigation services (PIN) (HCPCS codes G0023, G0024, 
G0140, and G0146). Both CHI and PIN services include: performing a 
person-centered assessment to better understand the patient's life 
story, coordinating care coordination between different providers and 
care settings, contextualizing health education, building patient self-
advocacy skills, assisting the patient with health system navigation, 
facilitating behavioral change, providing social and emotional support, 
and facilitating access to community-based social services (for 
example, housing, utilities, transportation, food assistance) to 
address unmet SDOH needs. The services described by the CHI codes 
address unmet SDOH needs that affect the diagnosis and treatment of the 
patient's medical problems. PIN services focus on Medicare 
beneficiaries diagnosed with high-risk conditions (for example, 
dementia, HIV/AIDS, and cancer) in order to identify and connect them 
with appropriate clinical and support resources.
---------------------------------------------------------------------------

    \439\ https://health.gov/healthypeople/
about#:~:text=What%20is%20Healthy%20People%202030,over%20the%20first%
204%20decades.
    \440\ https://health.gov/healthypeople/priority-areas/social-determinants-health.
    \441\ Whitman, A., Chapell, A., Aysola, V., Zuckerman, R., & 
Sommers, B. (2022). ``Addressing Social Determinants of Health: 
Examples of Successful Evidence-Based Strategies and Current Federal 
Efforts'' (ASPE, Office of Health Policy HP-2022-12). https://aspe.hhs.gov/sites/default/files/documents/e2b650cd64cf84aae8ff0fae7474af82/SDOH-Evidence-Review.pdf; Hood, 
C.M., Gennuso, K.P., Swain, G.R., & Catlin, B.B. (2016). ``County 
health rankings: Relationships between determinant factors and 
health outcomes.'' American Journal of Preventive Medicine, 50(2), 
129-135. https://doi.org/10.1016/j.amepre.2015.08.024.
    \442\ National Academies of Sciences, E., Medicine, N.A. of, 
Nursing 2020-2030, C. on the F. of, Flaubert, J.L., Menestrel, S.L., 
Williams, D.R., & Wakefield, M.K. (2021). ``Social determinants of 
health and health equity. In The Future of Nursing 2020-2030: 
Charting a Path to Achieve Health Equity.'' National Academies Press 
(U.S.). https://www.ncbi.nlm.nih.gov/books/NBK573923/.
    \443\ Whitman, A., Chapell, A., Aysola, V., Zuckerman, R., & 
Sommers, B. (2022). ``Addressing Social Determinants of Health: 
Examples of Successful Evidence-Based Strategies and Current Federal 
Efforts'' (ASPE, Office of Health Policy HP-2022-12). https://aspe.hhs.gov/sites/default/files/documents/e2b650cd64cf84aae8ff0fae7474af82/SDOH-Evidence-Review.pdf; https://www.whitehouse.gov/wp-content/uploads/2023/11/SDOH-Playbook-3.pdf.
    \444\ https://www.cms.gov/pillar/health-equity.
---------------------------------------------------------------------------

    Moreover, many of these aforementioned services, including harm 
reduction interventions, recovery support services, addressing HRSN, 
and facilitating access to community-based social services to address 
these needs, ordinarily occur in OTP settings. In 2022, approximately 
92 percent of OTP facilities offered various recovery support services, 
including peer support (59.6 percent), assistance locating housing for 
clients (75.0 percent), employment counseling (49.5 percent),

[[Page 98061]]

and assistance helping patients obtain social services (81.2 percent). 
The majority of OTPs also offered various types of harm reduction 
services, including testing for various types of infectious diseases 
(>55 percent), health education (>77 percent), and naloxone and 
overdose education (92.3 percent). Many OTPs also conduct community 
outreach services to those in need of OUD treatment (76.1 percent) and 
case management services (87.8 percent).\445\ Additionally, as part of 
initial and periodic assessment services at Sec.  8.12(f)(4), OTPs must 
designate in the care plan a patient's needs and goals in the areas of 
harm reduction interventions, education, vocational training, and 
employment, along with the medical and psychiatric, psychosocial, 
economic, legal, housing, and other recovery support services that a 
patient needs and wishes to pursue, which all reflect consideration to 
various HRSN. The new definitions of harm reduction and recovery 
support services at Sec.  8.2 are also inclusive of activities that 
involve linkage to and coordination with providers that address a full 
range of human and public health services to facilitate recovery and 
wellness for a SUD. Lastly, in the CY 2020 PFS final rule we responded 
to public comments pertaining to the above-mentioned activities. 
Specifically, several commenters stated that OTPs often provide case 
management and/or care management services and requested that CMS 
consider reimbursing for these services either as part of the standard 
bundle or as an adjustment to the bundled payment, as applicable. A few 
commenters stated that OTPs serve as a fixed point of responsibility in 
the provision of whole person-centered care and improving health 
outcomes through collaborative arrangements with health care providers 
outside of the OTP and that the goal of care management is to reduce 
health care costs, specifically preventable hospital admissions, 
readmissions, and avoidable emergency room visits. The commenters also 
stated in the CY 2020 final rule that OTP staff also help patients with 
accessing food benefits, housing, and employment searches, which are 
critical components for sustained recovery, as part of the goal of 
complete case management (84 FR 62648). At the time, CMS stated that we 
would consider making payment for these types of care management 
activities in future rulemaking, including activities whereby OTPs 
collaborate with providers outside the OTPs to help patients access 
social services. We believed it was appropriate to work with OTPs to 
better understand how these services are furnished in an OTP setting, 
as well as to continue to look at data on specific items and services 
that may fit within the scope of OUD treatment services.
---------------------------------------------------------------------------

    \445\ Table SU17b: Substance use treatment facilities, by 
services provided and facility type: Number and column percent, 
2022: https://www.samhsa.gov/data/sites/default/files/reports/rpt42714/NSUMHSS-Annual-Detailed-Tables-22.pdf.
---------------------------------------------------------------------------

a. Payment for Social Determinants of Health Risk Assessments
    The recent refinements to initial assessments under Sec.  
8.12(f)(4)(i) likely necessitate additional resource costs for OTPs to 
comply with the opioid treatment standards for assessing various SDOHs 
(for example, education, vocational training, employment, economic, 
legal, housing, etc.) that impact a patient's HRSNs, and to identify a 
patient's goals for harm reduction interventions and needs for recovery 
support services as they relate to the treatment of an OUD. We 
recognize that the paradigm for OUD treatment and care has evolved 
rapidly since the implementation of the Medicare OTP benefit in CY 
2020, and that providers have increasingly incorporated interventions 
to address HRSNs that increase the risk of a patient leaving OUD 
treatment prematurely or that pose barriers to treatment engagement. We 
additionally acknowledge that coding already exists under the PFS that 
accounts for the resources involved in conducting these types of 
assessments. For these reasons, in the CY 2025 PFS proposed rule we 
proposed to establish payment for SDOH risk assessments as part of 
intake activities within OUD treatment services, as long as these 
assessments are medically reasonable and necessary for the diagnosis or 
treatment of an OUD, and OTPs have a reason to believe unmet HRSNs or 
the need for harm reduction intervention or recovery support services 
identified during such an assessment could interfere with the OTP's 
ability to diagnose or treat the patient's OUD. As previously stated, 
the SDOH include broad structural and contextual domains that may 
impact health (for example, economic stability, education, healthcare, 
neighborhood and built environment, and social and community context) 
and the development of HRSNs at the individual-level (for example, 
housing and utilities assistance, transportation assistance, financial 
assistance, healthy foods, personal safety, employment, recovery 
support and harm reduction services). We understand that there are 
multiple standardized, evidence-based SDOH risk-assessment tools 
utilized across the healthcare system that are structured to assess a 
patient across various SDOH domains.\446\ If an OTP furnishes SDOH risk 
assessments as part of initial assessments under Sec.  8.12(f)(4)(i), 
we would expect that the assessment tools used would allow the OTP to 
identify more specific individual-level HRSNs as part of the care plan, 
including giving consideration to potential harm reduction and recovery 
support services needs.
---------------------------------------------------------------------------

    \446\ https://prapare.org/wp-content/uploads/2021/10/What-is-PRAPARE_2.1.21-1.pdf; https://www.cms.gov/priorities/innovation/media/document/ahcm-screeningtool-companion.
---------------------------------------------------------------------------

    Specifically, we proposed to update the payment rate for intake 
activities described by HCPCS code G2076 by adding in the value of the 
non-facility rate for SDOH risk assessments described by HCPCS code 
(G0136). We believe HCPCS code G0136 may serve as a reasonable proxy to 
reflect the value and resources required for the type of assessment 
service activities that OTPs are required to provide according to 
SAMHSA requirements under Sec.  8.12(f)(4)(i), including an assessment 
to identify a patient's unmet HRSNs or the need for harm reduction 
intervention and recovery support services that are critical to the 
treatment of an OUD. We understand that OTPs have been involved in 
collaborative agreements with organizations who address HRSNs and offer 
various recovery support services (84 FR 62648), and we believe that 
for OTPs to appropriately identify these types of organizations that 
target a specific need, identifying these HRSNs as part of SDOH risk 
assessments is likely needed prior to engaging in activities to 
coordinate service delivery. However, we solicited comment on whether 
these types of SDOH assessments ordinarily complement the type of 
community coordination activities that OTPs perform.
    Establishing payment to account for SDOH risk assessments as part 
of intake activities under the OTP benefit is important, as unmet HRSNs 
identified as part of such assessments significantly impact outcomes 
for OUD treatment. Evidence shows that healthcare providers who screen 
for SDOH in their settings have found that patients who screen positive 
for a HRSN were significantly more likely to have a history of 
substance use or mental illness compared to patients who did not have 
an HRSN.\447\ For example, one

[[Page 98062]]

review found that between 50 to 90 percent of patients in publicly 
funded OTPs were unemployed, and that older adults identified to have 
misused opioids were 22-percent less likely to be employed.\448\ 
Patients with an OUD are also more likely to have a lower educational 
attainment, encounter financial hardship, and housing instability.\449\ 
Even more, food insecurity has been indicated to be a strong predictor 
of prescription opioid misuse and abuse.\450\ The SDOH and their 
contribution to unmet HRSNs have also heavily impacted the rates of 
drug overdoses. For example, one study examined 28 different SDOH 
measures that collectively explained 89-percent of the variance in 
drug-overdose mortality across States.\451\ Housing insecurity, in 
particular, negatively affects the population with an OUD, as this risk 
factor has been increasing over time among those seeking treatment with 
an OUD.\452\ One analysis conducted by the State of Massachusetts has 
revealed alarming evidence that the risk of death from an opioid 
overdose is 30-times higher for those who have experienced 
homelessness.\453\ Lower median household income and unemployment have 
also been associated with an increase in opioid death rates.\454\ 
Moreover, unmet HRSNs have also hampered access to treatment among 
Medicare beneficiaries with a SUD, as evidence has shown that among 
Medicare beneficiaries with an SUD who were not receiving treatment, 
one-third reported financial barriers and one-fifth reported logistical 
barriers such as lack of access to transportation as rationales for not 
receiving treatment.\455\ Lastly, many of these SDOH factors have 
impaired treatment retention and completion rates. Those with lower 
levels of educational attainment and who are unemployed are less likely 
to complete SUD treatment, and individuals who are experiencing 
homelessness are significantly less likely to remain in treatment.\456\ 
Therefore, screening for the SDOH and identifying these unmet HRSNs as 
part of intake assessments may help OTPs link patients with an 
identified social need to appropriate resources that can impact the 
diagnosis of an OUD or address barriers to treating an OUD.
---------------------------------------------------------------------------

    \447\ Chukmaitov, A., Dahman, B., Garland, S.L., Dow, A., 
Parsons, P.L., Harris, K.A., & Sheppard, V.B. (2022). ``Addressing 
social risk factors in the inpatient setting: Initial findings from 
a screening and referral pilot at an urban safety-net academic 
medical center in Virginia, USA.'' Preventive Medicine Reports, 29, 
101935. https://doi.org/10.1016/j.pmedr.2022.101935.
    \448\ Zanis, D.A., & Coviello, D. (2001). ``A case study of 
employment case management with chronically unemployed methadone 
maintained clients.'' Journal of Psychoactive Drugs, 33(1), 67-73. 
https://doi.org/10.1080/02791072.2001.10400470; Albright, D.L., 
Johnson, K., Laha-Walsh, K., McDaniel, J., & McIntosh, S. (2021). 
``Social determinants of opioid use among patients in rural primary 
care settings.'' Social Work in Public Health, 36(6), 723-731. 
https://doi.org/10.1080/19371918.2021.1939831.
    \449\ Albright, D.L., Johnson, K., Laha-Walsh, K., McDaniel, J., 
& McIntosh, S. (2021). ``Social determinants of opioid use among 
patients in rural primary care settings.'' Social Work in Public 
Health, 36(6), 723-731. https://doi.org/10.1080/19371918.2021.1939831; Arsene, C., Na, L., Patel, P., Vaidya, V., 
Williamson, A.A., & Singh, S. (2023). ``The importance of social 
risk factors for patients diagnosed with opioid use disorder.'' 
Journal of the American Pharmacists Association, 63(3), 925-932. 
https://doi.org/10.1016/j.japh.2023.02.016.
    \450\ Men, F., Fischer, B., Urquia, M.L., & Tarasuk, V. (2021). 
``Food insecurity, chronic pain, and use of prescription opioids.'' 
SSM--Population Health, 14, 100768. https://doi.org/10.1016/j.ssmph.2021.100768.
    \451\ Cesare, N., Lines, L.M., Chandler, R., Gibson, E.B., 
Vickers-Smith, R., Jackson, R., Bazzi, A.R., Goddard-Eckrich, D., 
Sabounchi, N., Chisolm, D.J., Vandergrift, N., & Oga, E. (2024). 
``Development and validation of a community-level social 
determinants of health index for drug overdose deaths in the HEALing 
Communities Study.'' Journal of Substance Use and Addiction 
Treatment, 157, 209186. https://doi.org/10.1016/j.josat.2023.209186.
    \452\ Sulley, S., & Ndanga, M. (n.d.). ``Inpatient opioid use 
disorder and social determinants of health: A nationwide analysis of 
the national inpatient sample (2012-2014 and 2016-2017).'' Cureus, 
12(11), e11311. https://doi.org/10.7759/cureus.11311.
    \453\ https://www.mass.gov/files/documents/2017/08/31/legislative-report-chapter-55-aug-2017.pdf.
    \454\ Rangachari, P., Govindarajan, A., Mehta, R., Seehusen, D., 
& Rethemeyer, R.K. (2022). ``The relationship between Social 
Determinants of Health (Sdoh) and death from cardiovascular disease 
or opioid use in counties across the United States (2009-2018).'' 
BMC Public Health, 22(1), 236. https://doi.org/10.1186/s12889-022-12653-8; Hollingsworth, A., Ruhm, C.J., & Simon, K. (2017). 
Macroeconomic conditions and opioid abuse (Working Paper 23192). 
National Bureau of Economic Research. https://doi.org/10.3386/w23192.
    \455\ Parish, W.J., Mark, T.L., Weber, E.M., & Steinberg, D.G. 
(2022). ``Substance use disorders among Medicare beneficiaries: 
Prevalence, mental and physical comorbidities, and treatment 
barriers.'' American Journal of Preventive Medicine, 63(2), 225-232. 
https://doi.org/10.1016/j.amepre.2022.01.021.
    \456\ Mennis, J., & Stahler, G.J. (2016). Racial and ethnic 
disparities in outpatient substance use disorder treatment episode 
completion for different substances. Journal of Substance Abuse 
Treatment, 63, 25-33. https://doi.org/10.1016/j.jsat.2015.12.007; 
Gaeta Gazzola, M., Carmichael, I.D., Christian, N.J., Zheng, X., 
Madden, L.M., & Barry, D.T. (2023). ``A national study of 
homelessness, social determinants of health, and treatment 
engagement among outpatient medication for opioid use disorder-
seeking individuals in the United States.'' Substance Abuse, 44(1-
2), 62-72. https://doi.org/10.1177/0889707723116729.
---------------------------------------------------------------------------

    As previously stated, we proposed to update the adjustment to the 
bundled payment for an episode of care for intake activities (G2076) by 
adding in the value of the non-facility rate for SDOH risk assessments 
(G0136: Administration of a standardized, evidence-based Social 
Determinants of Health Risk Assessment, 5-15 minutes, not more often 
than every 6 months), which is currently assigned a non-facility rate 
of $18.66 under the PFS. At the time of ratesetting during the CY 2025 
PFS proposed rule, the CY 2024 payment rate for the intake add-on code 
(G0276) was $201.73 and adding the value of a crosswalk to the CY 2024 
non-facility rate of $18.66 resulted in a payment rate of approximately 
$220.39. We stated that we believed that incorporating the value of 
G0136 into the intake activities adjustment would be the most 
appropriate, as we believe assessment activities related to SDOH are 
more likely to occur during intake assessments when a new patient is 
admitted to an OTP. SAMHSA treatment guidelines recommend that during 
initial screenings, OTPs should identify barriers and medical and 
psychosocial risk-factors that may hinder a patient's ability to meet 
treatment requirements, including co-occurring health conditions, and 
vocational, legal, financial, transportation, and family concerns.\457\ 
We noted that intake activities (G2076) should only be billed for new 
patients (that is, patients starting treatment at the OTP), and since 
SDOH risk assessments would be bundled into the code describing intake 
activities, this billing requirement would similarly apply. However, we 
solicited comment on the frequency with which these SDOH risk 
assessments occur, and whether it would be more appropriate if these 
assessments occur when OTPs furnish periodic assessments described by 
HCPCS code G2077.
---------------------------------------------------------------------------

    \457\ SAMHSA. (2012). Medication-assisted treatment for opioid 
addiction in opioid treatment programs. https://www.ncbi.nlm.nih.gov/books/NBK64164/pdf/Bookshelf_NBK64164.pdf.
---------------------------------------------------------------------------

    When OTPs bill the intake add-on code (G2076), we did not propose 
to require that OTPs performed SDOH risk assessments in a specific 
manner, but rather that OTPs continued to perform initial assessment 
services consistent with SAMHSA certification requirements at Sec.  
8.12(f)(4)(i) that already largely reflect these type of SDOH risk 
assessment activities; and, that OTPs abided by other applicable 
requirements under the Medicare OTP benefit at Sec.  410.67, including 
those listed in the definition of intake activities at paragraph (vi) 
within the definition of ``OUD treatment service'' at Sec.  410.67(b). 
This also means that for the purposes of Medicare payment, if SDOH risk 
assessments are furnished, they must be related to the diagnosis or 
treatment of OUD, and any HRSNs identified through SDOH risk 
assessments performed should be documented in the patient's medical

[[Page 98063]]

record to indicate how assessing and addressing the HRSN relates to the 
treatment and diagnosis of an OUD. We reiterate that our proposal to 
incorporate the value of HCPCS code G0136 into the OTP intake add-on 
code (G2076) is meant to serve as a reasonable proxy to reflect the 
value and resources of the type of initial assessment service 
activities that OTPs are required to provide under SAMHSA requirements, 
which now include more specific updates to a patient's care plan with 
considerations of a patient's goals related to harm reduction 
interventions, needs for recovery support services, and other HRSNs. 
However, if OTPs utilize SDOH risk assessments during intake 
activities, CMS did not propose to require OTPs to utilize a specific 
type of SDOH risk assessment tool, consistent with similar existing 
requirements under the PFS for these services. If OTPs do furnish these 
assessment services, CMS encourages OTPs to adopt evidence-based, 
validated tools that are already available (such as the CMS Accountable 
Health Communities tool, the Protocol for Responding to and Assessing 
Patients Assets, Risks and Experiences (PRAPARE), and instruments 
identified for Medicare Advantage Special Needs Population Health Risk 
Assessment); \458\ that include the domains of food insecurity, housing 
insecurity, transportation needs, and utility difficulties, and that 
can be furnished in a manner appropriate for the patient's educational, 
developmental, and health literacy level, and that are culturally and 
linguistically appropriate. We understand that there is not a national 
consensus around one specific tool, and OTPs should choose the tool 
that fits their needs and allows them to appropriately detect unmet 
HRSNs, as well as other needs for harm reduction interventions and 
recovery support services that are integral to the treatment of an OUD.
---------------------------------------------------------------------------

    \458\ https://innovation.cms.gov/files/worksheets/ahcm-screeningtool.pdf; https://www.nachc.org/research-and-data/prapare/; 
CMS-10825.
---------------------------------------------------------------------------

    Lastly, in light of these proposed changes, we proposed to revise 
the current descriptor for the intake add-on code for consistency with 
revisions to Sec.  8.12(f)(4)(i) and to reflect furnishing an SDOH risk 
assessment: G2076 (Intake activities, including initial medical 
examination that is a complete, fully documented physical evaluation 
and initial assessment conducted by a program physician or a primary 
care physician, or an authorized healthcare professional under the 
supervision of a program physician or qualified personnel that includes 
preparation of a care plan, which may be informed by administration of 
a standardized, evidence-based Social Determinants of Health Risk 
Assessment to identify unmet health-related social needs, and that 
includes the patient's goals and mutually agreed-upon actions for the 
patient to meet those goals, including harm reduction interventions; 
the patient's needs and goals in the areas of education, vocational 
training, and employment; and the medical and psychiatric, 
psychosocial, economic, legal, housing, and other recovery support 
services that a patient needs and wishes to pursue, conducted by 
qualified personnel (provision of the services by a Medicare-enrolled 
Opioid Treatment Program); List separately in addition to each primary 
code).
    We received many public comments from a variety of interested 
parties on this proposal to establish payment for SDOH risk assessments 
as part of intake activities within OUD treatment services to support 
activities at an OTP that identify a patient's unmet HRSNs or the need 
and interest for harm reduction interventions and recovery support 
services that are critical to the treatment of an OUD. The following is 
a summary of the comments we received and our responses.
    Comment: We received many comments that supported our proposal to 
establish payment for intake activities to account for SDOH risk 
assessments that allow an OTP to identify unmet HRSNs that could 
interfere with the OTP's ability to diagnose or treat the patient's 
OUD. Commenters agreed that recent regulatory reforms to OUD treatment 
finalized by SAMHSA necessitate additional resources for OTPs to 
implement the new changes. Commenters stated that improving the 
valuation of intake activities by accounting for SDOH risk assessments 
would align with new paradigms of whole-person-centered care for OUD 
treatment. Commenters noted that the proposed update would help OTPs 
address key issues during intake activities that increase the risk of a 
patient leaving OUD treatment prematurely or that pose barriers to 
treatment engagement and allow an OTP to identify appropriate harm 
reduction interventions, recovery support service needs, or other 
supports to address unmet HRSNs. Commenters also noted that some 
accrediting organizations require HRSNs to be assessed as part of a 
patient's initial assessment, and that establishing payment for intake 
activities to account for these assessments may further incentivize 
these assessments as a standard practice at OTP intakes. One commenter 
agreed with CMS' proposal not to require a specific SDOH risk 
assessment screening tool if an OTP conducts these assessments during 
intake activities, but rather to provide OTPs the discretion to select 
the most appropriate and evidence-based, validated tool.
    Furthermore, commenters believe that these proposed updates would 
help promote health equity while improving the quality of treatment 
provided at OTPs. Commenters shared that beneficiaries with an OUD may 
experience greater disparities in accessing safe housing, 
transportation, education, and job training, and are more likely to 
have limited financial resources, difficulty accessing medical care, 
underemployment, and underinsurance. Thus, interventions designed to 
address these needs could reduce barriers to seeking care, improving 
health outcomes, and increasing the likelihood of treatment success.
    Response: We appreciate these comments that validate the need to 
update intake activities to account for SDOH risk assessments to 
promote new paradigms of care for OUD treatment, as well as to allow 
OTPs to effectively address key issues that increase the risk of a 
patient prematurely leaving OUD treatment or that create barriers to 
engaging in OUD treatment.
    Comment: One commenter encouraged CMS to make SDOH risk assessments 
optional as part of intake activities for both the OTP and beneficiary. 
The commenter reasoned that there may be some circumstances that 
prevent OTPs from being able to administer an SDOH risk assessment 
during intake activities, such as a patient being under the influence 
or unable to answer questions.
    Response: We agree with the commenter that there could be 
circumstances that impact OTPs being able to effectively assess the 
patient and perform an SDOH risk assessment. However, OTPs must perform 
initial assessment services consistent with SAMHSA certification 
requirements at Sec.  8.12(f)(4)(i) that already largely reflect these 
types of SDOH risk assessment activities. In the proposed rule, we did 
not propose to require that OTPs perform SDOH risk assessments in a 
specific manner. (89 FR 61828) We understand that there are various 
types of validated SDOH risk assessment tools available that OTPs may 
use to conduct these assessments, and OTPs are best suited to evaluate 
when and how to appropriately conduct these assessments after 
considering clinical

[[Page 98064]]

and situational circumstances of the patient.
    Comment: One commenter mentioned that the code descriptor for the 
current SDOH risk assessment code (G0136) is based on assessments 
between 5-15 minutes that are not more often than every 6 months 
(G0136: Administration of a standardized, evidence-based Social 
Determinants of Health Risk Assessment, 5-15 minutes, not more often 
than every 6 months). This commenter requested that we confirm the 
frequency for which this type of SDOH risk assessment could be billed 
in OTP settings, including whether it is permissible to bill for intake 
activities each time these SDOH risk assessments are furnished.
    Response: We appreciate this question. Intake activities (HCPCS 
code G2076) may only be billed for new patients (that is, patients 
starting treatment at the OTP), and since SDOH risk assessments would 
be bundled into the code describing intake activities, this billing 
requirement would similarly apply. Thus, an OTP is not permitted to 
bill multiple intake activities via HCPCS code G2076 for existing 
patients.
    Comment: One commenter stated that they did not believe CMS' 
proposed revision to the code descriptor for intake activities was 
appropriate, that is, HCPCS code G2076 (Intake activities, including 
initial medical examination that is a complete, fully documented 
physical evaluation and initial assessment conducted by a program 
physician or a primary care physician, or an authorized healthcare 
professional under the supervision of a program physician or qualified 
personnel that includes preparation of a care plan, which may be 
informed by administration of a standardized, evidence-based Social 
Determinants of Health Risk Assessment to identify unmet health-related 
social needs, and that includes the patient's goals and mutually 
agreed-upon actions for the patient to meet those goals, including harm 
reduction interventions; the patient's needs and goals in the areas of 
education, vocational training, and employment; and the medical and 
psychiatric, psychosocial, economic, legal, housing, and other recovery 
support services that a patient needs and wishes to pursue, conducted 
by qualified personnel (provision of the services by a Medicare-
enrolled Opioid Treatment Program); List separately in addition to code 
for primary procedure). The commenter highlighted that the language in 
the descriptor referring to initial medical examination and initial 
assessments specifies that these services are conducted by ``a program 
physician or a primary care physician, or an authorized healthcare 
professional under the supervision of a program physician or qualified 
personnel.'' The commenter added that this specific language has been 
removed in SAMHSA's regulations at Sec.  8.12(f)(2)(i) after the recent 
final rule, so the current code descriptor language is not in alignment 
with new regulatory requirements. Instead, the commenter requested that 
CMS update the code descriptor with current regulatory language that 
utilizes an ``appropriately licensed practitioner.''
    Response: We appreciate the comment raising this important 
discrepancy. We agree that it is important for the code descriptor 
language to reflect current regulatory requirements for OTPs under 42 
CFR part 8. Accordingly, we are finalizing a revision to the code 
descriptor of HCPCS code G2076 to be more inclusive to other types of 
professionals who may conduct these assessments in an OTP setting, as 
follows: (Intake activities, including initial medical examination that 
is conducted by an appropriately licensed practitioner and preparation 
of a care plan, which may be informed by administration of a 
standardized, evidence-based Social Determinants of Health Risk 
Assessment to identify unmet health-related social needs, and that 
includes the patient's goals and mutually agreed-upon actions for the 
patient to meet those goals, including harm reduction interventions; 
the patient's needs and goals in the areas of education, vocational 
training, and employment; and the medical and psychiatric, 
psychosocial, economic, legal, housing, and other recovery support 
services that a patient needs and wishes to pursue, conducted by an 
appropriately licensed/credentialed personnel (provision of the 
services by a Medicare-enrolled Opioid Treatment Program); List 
separately in addition to each primary code).
    Comment: A few commenters requested that CMS clarify the types of 
healthcare professionals who may receive payment for furnishing SDOH 
risk assessments during intake activities at OTPs. For example, 
commenters noted that clinical social workers, counselors, and nurses 
are often involved in assessment processes for identifying SDOH needs.
    Response: In the CY 2025 PFS proposed rule, we did not propose to 
limit the types of professionals that can provide these aforementioned 
services. If OTPs furnish SDOH risk assessments during intake 
activities, they must continue to furnish these services consistent 
with SAMHSA certification requirements at Sec.  8.12(f)(4)(i), which 
currently reflect that these initial assessment services may be 
furnished by ``appropriately licensed/credentialed personnel.''
    Comment: One commenter requested that CMS clarify if SDOH risk 
assessment services can be billed in connection with discharge in OTP 
programs.
    Response: There is no current coding under the Medicare OTP benefit 
that describes discharge planning or services, and we did not propose 
to include payment for SDOH risk assessments in connection with these 
types of services. We appreciate the commenter's question and may 
consider this topic for future rulemaking.
    Comment: One commenter asked CMS to clarify whether these payment 
updates will have an impact on budget neutrality and urged CMS to not 
subject these payment updates to budget neutrality limitations to avoid 
potential financial impacts on the broader healthcare system.
    Response: Although CMS typically includes proposals for 
modifications related to Medicare coverage for OUD treatment services 
furnished by OTPs within annual PFS rules, we note that the Medicare 
OTP benefit is wholly separate from services paid under the PFS and 
physician services, and for which payment is made under section 1848 of 
the Act, and is not subject to budget neutrality rules or limitations.
    Comment: One commenter requested that the agency avoid payment 
conditions that require services to be medically reasonable and 
necessary prior to billing under the Medicare program, and to instead 
defer to the judgment of healthcare professionals.
    Response: In general, the Medicare statute at section 1862(a)(1)(A) 
prohibits payment for items and services under Part A and Part B that 
are not reasonable and necessary for the diagnosis or treatment of an 
illness or injury or to improve the functioning of a malformed body 
member. Although Congress has made some exceptions for some services, 
Congress has not made an exception for OUD treatment services. Thus, 
while we appreciate the commenter's suggestion, we are not adopting it. 
OUD treatment services furnished under the OTP benefit must be 
medically reasonable and necessary for the treatment of an OUD in order 
to be paid under Medicare Part B.
    Comment: Multiple commenters stated that establishing payment for 
SDOH risk assessments should not just be limited to intake activities. 
Commenters highlighted several concerns, including: there may be

[[Page 98065]]

circumstances preventing OTPs from administering SDOH screenings at 
intake; patients may not be willing to answer sensitive SDOH questions 
at the time of intake since it takes time for patients to establish 
trust with their providers before sharing any treatment barriers they 
may face; intake activities in OTP settings involve a mix of multiple 
assessments and medical evaluations that are time-intensive, so 
additional assessments furnished may require multiple treatment 
sessions to complete; and the recovery process for patients with an OUD 
is rarely linear, and patients with an OUD often face changes in their 
SDOHs throughout treatment, including in economic circumstances, 
housing, and employment, which require the OTP to continuously reassess 
unmet HRSNs and update care plans. In raising these concerns, 
commenters recommended that CMS modify the frequency for which SDOH 
risk assessments could be billed. One commenter requested that CMS 
create separate coding to allow billing for additional SDOH 
reassessments if needed. Other commenters specifically asked that CMS 
also add the value of the SDOH risk assessment code (HCPCS code G0136) 
to the existing periodic assessments code (HCPCS code G2077) under the 
Medicare OTP benefit.
    Response: We thank the commenters for these comments. CMS 
understands that OUD is a chronic condition, and that recovery is an 
ongoing, long-term process that may necessitate various supports across 
different stages of the continuum of care. While we proposed that OTPs 
would account for SDOH risk assessments as part of intake activities, 
we specifically sought comments on the frequency with which SDOH risk 
assessments occur and whether it would be more appropriate if those 
assessments occurred when OTPs furnish periodic assessments described 
by HCPCS code G2077 (89 FR 61827 through 61828). At the time of 
drafting the proposed rule, CMS did not have enough information to 
understand the extent to which SDOH risk assessments are performed 
following intake activities. However, we recognized that patients with 
an OUD are at a higher risk for having unmet HRSNs, including housing 
instability, financial hardship, food insecurity, unemployment, and 
lack of access to transportation.\459\ In response to the proposed 
rule, commenters affirmed that these unmet HRSNs often require OTPs to 
continuously reassess a patient's unmet HRSNs and the needs for various 
harm reduction interventions and peer recovery supports throughout the 
duration of treatment in order to reduce potential barriers that may 
limit the likelihood of a patient's treatment success. Additionally, in 
the proposed rule, CMS did not initially consider various circumstances 
that may prevent an OTP from being able to perform SDOH risk 
assessments at intake, which commenters highlighted. These various 
circumstances include a patient not being able to answer sensitive SDOH 
questions at the beginning of treatment due to a lack of trust with 
their provider, or an OTP not being able to assess a patient who is 
under the influence. CMS was also made aware by commenters that these 
types of assessments take additional time and, in some cases, cannot be 
completed in full at the time of intake. Thus, we are persuaded by 
commenters that multiple SDOH risk assessments may be needed to address 
unmet HRSNs that impact OUD treatment outcomes when a patient is being 
treated at an OTP, so these types of assessments should not be limited 
to only intake activities that are payable under the Medicare OTP 
benefit for new patients. Therefore, we believe it is appropriate to 
finalize payment for SDOH risk assessments during periodic assessments 
in addition to intake activities. We note that when SAMHSA introduced 
changes to 42 CFR part 8, they intended also for changes to periodic 
assessments to promote key issues for OTPs to address with a patient as 
part of treatment, including ``areas that may increase the risk of a 
patient leaving care prematurely, such as unmet mental health or other 
disability, medical and oral health needs, the need for culturally 
supportive care that addresses race, ethnicity, sexual orientation, 
religion or gender identity, and social determinants of health, such as 
housing and transportation, that may pose barriers to treatment 
engagement, or harm reduction and recovery support service needs.'' (87 
FR 77341) SAMHSA requires that periodic assessment services at Sec.  
8.12(f)(4)(ii) ``should occur not less than one time each year and be 
conducted by an OTP practitioner. The periodic physical examination 
should include a review of MOUD dosing, treatment response, other 
substance use disorder treatment needs, responses and patient-
identified goals, and other relevant physical and psychiatric treatment 
needs and goals.'' CMS understands that periodic assessments often 
build upon and adjust the care plan initially developed during intake 
activities, which may reflect various SDOH, harm reduction, and 
recovery support service needs. Therefore, consistent with the feedback 
shared by commenters, we believe it is appropriate to also update 
payment for periodic assessments (HCPCS code G2077) by adding in the 
value of the non-facility rate for SDOH risk assessments described by 
HCPCS code (G0136). We believe that this update will reflect additional 
activities undertaken by OTPs to continuously reassess unmet HRSNs or 
the need for harm reduction interventions and recovery support services 
throughout various lengths of treatment and that are critical to the 
treatment of an OUD. Accordingly, we are also finalizing a revision to 
the code descriptor for periodic assessments to reflect furnishing an 
SDOH risk assessment and to reflect current regulatory requirements for 
periodic assessments furnished by OTPs under Sec.  8.12(f)(4)(ii): 
G2076 (Periodic assessment; assessing periodically by an OTP 
practitioner and includes a review of MOUD dosing, treatment response, 
other substance use disorder treatment needs, responses and patient-
identified goals, and other relevant physical and psychiatric treatment 
needs and goals; assessment may be informed by administration of a 
standardized, evidence-based Social Determinants of Health Risk 
Assessment to identify unmet health-related social needs, or the need 
and interest for harm reduction interventions and recovery support 
services (provision of the services by a Medicare-enrolled Opioid 
Treatment Program); List separately in addition to each primary code). 
By adding the valuation of SDOH risk assessments into the code for 
periodic assessments, we are clarifying that this does not require OTPs 
to perform SDOH risk assessments during periodic assessments or in a 
specific manner or duration. Rather, as with intake activities, this 
valuation is similarly intended to serve as a proxy to reflect the 
additional effort needed by OTPs in line with new SAMHSA reforms. We 
continue to expect that OTPs perform periodic assessments consistent 
with SAMHSA certification requirements at Sec.  8.12(f)(4)(ii).
---------------------------------------------------------------------------

    \459\ https://doi.org/10.1016/j.pmedr.2022.101935; https://doi.org/10.1080/19371918.2021.1939831; https://doi.org/10.1016/j.japh.2023.02.016; https://doi.org/10.1016/j.ssmph.2021.100768.
---------------------------------------------------------------------------

    After consideration of public comments, we are finalizing our 
proposal to update the payment rate for intake activities (HCPCS code 
G2076) by adding in the value of the non-facility rate for SDOH risk 
assessments (G0136). We are also updating the payment rate for periodic 
assessments (HCPCS code G2077) by adding in the value of the

[[Page 98066]]

non-facility rate for SDOH risk assessments (G0136). We believe these 
updates are needed to reflect the value and resources of initial and 
periodic assessment activities required by OTPs to identify a patient's 
unmet HRSNs or the need for harm reduction intervention and recovery 
support services while remaining consistent with SAMHSA requirements at 
Sec.  8.12(f)(4). The current CY 2024 non-facility rate for G0136 is 
$18.97, and this amount will be added to the current CY 2024 payment 
rates for the intake add-on code ($201.73) and periodic assessments 
add-on code ($123.96) for approximate final payment rates of $220.70 
(HCPCS code G2076) and $142.93 (HCPCS code G2077), respectively, and 
updated by the MEI and GAF. The final CY 2025 OTP payment rates will be 
posted on the CMS website after publication of this final rule.\460\ We 
reiterate that intake activities, periodic assessments, and SDOH risk 
assessments conducted during intake and periodic assessments must 
continue to relate to the diagnosis or treatment of an OUD and be 
consistent with SAMHSA requirements under Sec.  8.12(f)(4). In 
addition, we expect that any unmet HRSNs identified through SDOH risk 
assessments performed should be documented in the patient's medical 
record to indicate how assessing and addressing the HRSN relates to the 
treatment and diagnosis of an OUD.
---------------------------------------------------------------------------

    \460\ https://www.cms.gov/medicare/payment/opioid-treatment-program/billing-payment.
---------------------------------------------------------------------------

b. Request for Information on Payment for Coordinated Care and 
Referrals to Community-Based Organizations That Address Unmet Health-
Related Social Needs, Provide Harm Reduction Services, and/or Provide 
Recovery Support Services
    In the discussion above, we noted that SAMHSA's recent reforms to 
42 CFR part 8 finalized new definitions for harm reduction and recovery 
support services, which are included as components of the type of 
services that OTPs may provide. Some examples of harm reduction 
strategies include overdose education, distribution of opioid overdose 
reversal medications, and linkage to other public health services. 
Recovery support services can include, but are not limited to, 
community-based recovery housing, social support, and linkage to and 
coordination among allied service providers and a full range of human 
services that facilitate recovery and wellness. Under the Medicare OTP 
benefit, we have already established payment for some of these 
services, including take-home supplies of opioid antagonist medications 
for emergency treatment of known or suspected opioid overdose (for 
example, naloxone), overdose education furnished in conjunction with 
opioid antagonist medications, and social support via group therapy. 
However, we do not currently have specific coding for activities that 
OTPs may conduct to coordinate care and make referrals or ``link'' to 
community-based organizations (CBOs) that help facilitate a patient's 
needs and goals related to harm reduction and recovery support 
services, as well as to address unmet HRSNs. We understand that a 
referral is an important aspect of following up on unmet HRSNs 
identified during an initial assessment service and/or SDOH risk 
assessment so that a patient can be connected to resources or services 
that may help address their unmet HRSN that interferes with treatment 
of their OUD. Additionally, we have received previous comments that 
OTPs often have collaborative agreements with providers outside of the 
OTP. For these reasons, we solicited comment to understand how OTPs are 
currently coordinating care and making referrals to CBOs that address 
unmet HRSNs, provide harm reduction services, and/or provide recovery 
support services.
    Some evidence has indicated that providers who coordinate care with 
CBOs to address HRSNs (for example, housing, transportation, care 
management, etc.) can positively influence health outcomes,\461\ and 
that SUD treatment facilities establishing relationships with 
community-based peer support services, educational and employment 
agencies, housing agencies, and other organizations have been able to 
better support a patient's engagement in SUD treatment.\462\ 
Additionally, harm reduction organizations, including syringe service 
programs, function as important facilitators of entry to treatment, as 
individuals who partake in these programs are five times more likely to 
enter treatment, more likely to remain engaged in treatment, and more 
likely to reduce their injection drug use.\463\ Additionally, recovery 
support services, such as those linking individuals in SUD treatment 
who are also experiencing homelessness with supportive or transitional 
housing, have resulted in improved uptake of behavioral health visits; 
\464\ and, recovery support services facilitated by peers who have 
recovered from a SUD have been shown to reduce relapse rates, improve 
treatment retention, enhance the provider and patient relationship, and 
boost overall treatment experience.\465\ Therefore, there is evidence 
to suggest that linkage to these types of community-based resources may 
contribute to improved outcomes related to OUD treatment; however, we 
solicited comment on additional evidence that demonstrates how this 
type of services would directly help OTPs address the diagnosis or 
treatment of an OUD. CMS would also be interested in additional 
evidence describing how these community-based resources and 
coordination of these services with MOUD provided by OTPs would impact 
access to treatment for Medicare beneficiaries who may face barriers in 
accessing treatment, such as those who are residents of rural areas, 
racial/ethnic minorities, living with a disability, dual-enrollees in 
Medicare and Medicaid, and low-income, or other populations who may 
face barriers in accessing treatment. Additionally, we sought 
information on the types of entities, service providers, and 
organizations that OTPs may interact with on a regular basis to address 
a patient's unmet HRSNs and needs or goals related to harm reduction 
and recovery support services. For example, we sought to understand if 
these entities would typically include housing or transportation 
agencies, local support groups, syringe service programs, non-profits 
that provide financial assistance, etc. We sought information on the 
types

[[Page 98067]]

of collaborative arrangements that OTPs typically have with these CBOs, 
including how frequently (for example, weekly, monthly, annually, etc.) 
OTPs coordinate care or make referrals to these CBOs for patients with 
an OUD, the types of circumstances that warrant an OTP interacting with 
these CBOs, and the workflows originating from the initial SDOH 
assessment to identify these HRSNs to a beneficiary successfully 
receiving referred services. We also expressed interest in learning to 
what extent some of these programs are already integrated into OTP 
settings.
---------------------------------------------------------------------------

    \461\ McCarthy, D., Lewis, C., Horstman, C., Bryan, A., & Shah, 
T. (2022). ``Guide to Evidence for Health-Related Social Needs 
Interventions: 2022 Update'' [ROI Calculator for Partnerships to 
Address the Social Determinants of Health]. The Commonwealth Fund. 
https://www.commonwealthfund.org/sites/default/files/2022-09/ROI_calculator_evidence_review_2022_update_Sept_2022.pdf.
    \462\ O'Brien, P., Crable, E., Fullerton, C., & Hughey, L. 
(2019). ``Best Practices and Barriers to Engaging People with 
Substance Use Disorders in Treatment.'' ASPE. https://aspe.hhs.gov/sites/default/files/private/pdf/260791/BestSUD.pdf f.
    \463\ Hagan, H., McGough, J.P., Thiede, H., Hopkins, S., Duchin, 
J., & Alexander, E.R. (2000). ``Reduced injection frequency and 
increased entry and retention in drug treatment associated with 
needle-exchange participation in Seattle drug injectors.'' Journal 
of Substance Abuse Treatment, 19(3), 247-252. https://doi.org/10.1016/s0740-5472(00)00104-5.
    \464\ Brennan, K., Buggs, K., Zuckerman, P., Muyeba, S., Henry, 
A., Gettens, J., & Kunte, P. (2020). ``The Preventive Effect of 
Housing First on Health Care Utilization and Costs among Chronically 
Homeless Individuals.'' https://www.bluecrossmafoundation.org/sites/g/files/csphws2101/files/2020-12/Housing%20First_summary_Final.pdf.
    \465\ Reif, S., Braude, L., Lyman, D.R., Dougherty, R.H., 
Daniels, A.S., Ghose, S.S., Salim, O., & Delphin-Rittmon, M.E. 
(2014). ``Peer recovery support for individuals with substance use 
disorders: Assessing the evidence.'' Psychiatric Services, 65(7), 
853-861. https://doi.org/10.1176/appi.ps.201400047.
---------------------------------------------------------------------------

    Moreover, we stated we were also interested in learning when these 
coordinated activities and/or referrals occur in the process of 
furnishing care to a beneficiary. For example, a component of SAMHSA's 
new revised standards for MOUD treatment under counseling and 
psychoeducational services at Sec.  8.12(f)(5)(iii) suggests that OTPs 
must provide directly, or through referral to adequate and reasonably 
accessible community resources, vocational training, education, and 
employment services for patients who request such services or for whom 
these needs have been identified and mutually agreed upon as beneficial 
by the patient and program staff. Thus, we solicited comment on whether 
these coordination and referral services typically occur during SUD 
counseling session services, or if they may occur during initial or 
periodic assessments, therapy sessions, or as part of other services. 
We also expressed interest in understanding if, when billing for intake 
activities (G2076), periodic assessments (G2077), additional therapy/
counseling (G2080), and/or the non-drug component code (G2074) under 
the Medicare OTP benefit, OTPs are already accounting for these 
coordinated care and referral services as part of those codes.
    We also stated that we are interested in additional information 
related to payment for these types of coordinated care or referral 
services. Specifically, we solicited comment on the resource costs that 
OTPs must expend to coordinate or make referrals to community-based 
services that address HRSNs, harm reduction, or recovery support needs. 
We mentioned that we were also interested in learning whether there is 
existing coding that properly describes these types of coordinated care 
or referral services, or whether there are elements to these types of 
services that are unique to OTPs and require new coding. We solicited 
comment on if any of the following codes below may describe the type of 
coordinated care or referral activities that OTPs may provide, or if 
there are other codes that more precisely match the type of coordinated 
care or referral activities at OTPs: community health integration 
(G0019 & G0022), principal illness navigation (G0023, G0024, G0140, 
G0146), chronic care management (99437, 99439, 99490, 99491), complex 
chronic care management (99487, 99489), principal care management 
(99424, 99425, 99426, 99427), or other codes, including any other 
relevant codes used by other payers.
    Lastly, we sought information on whether OTPs already receive 
funding for these types of coordinated care or referral services from 
other public or private sources, and if additional payment would be 
duplicative or unnecessary. We mentioned we were interested in 
learning, for example, if OTPs already receive State or Federal grants 
for these types of activities (for example, the SAMHSA Harm Reduction 
Grant Program, Rural Communities Opioid Response Program, State Opioid 
Response Grants, Building Communities of Recovery, Substance Use 
Prevention, Treatment, and Recovery Services Block Grant, etc.).\466\ 
Additionally, we stated that we would like to understand if OTPs 
already receive payment from States who might already cover these 
services under State Medicaid programs, including through section 1115 
waiver demonstrations and delivery system reform incentive payments, 
State plan amendments, managed care contracts, or other service 
benefits and payment arrangements,\467\ and if new coding under the 
Medicare OTP benefit may unintentionally supplant coverage for dually 
eligible beneficiaries. We solicited comment by the public on these 
questions and issues to better understand activities that OTPs conduct 
to coordinate care and make referrals to CBOs that address unmet 
health-related social needs, provide harm reduction services, and/or 
provide recovery support services.
---------------------------------------------------------------------------

    \466\ https://www.samhsa.gov/grants/grant-announcements/sp-22-001; https://grants.hrsa.gov/2010/Web2External/Interface/FundingCycle/ExternalView.aspx?fCycleID=af0c3bac-6d99-4314-ab7b-c1602e6c471c; https://www.samhsa.gov/grants/grants-dashboard; 
https://nashp.org/funding-options-for-states/.
    \467\ Artiga, S., & Published, E.H. (2018, May 10). ``Beyond 
health care: The role of social determinants in promoting health and 
health equity.'' KFF. https://www.kff.org/racial-equity-and-health-policy/issue-brief/beyond-health-care-the-role-of-social-determinants-in-promoting-health-and-health-equity/; https://www.health.ny.gov/diseases/aids/consumers/prevention/medicaid_harm_reduction.htm.
---------------------------------------------------------------------------

    We received many public comments on this request for information to 
understand how OTPs are currently coordinating care and making 
referrals to CBOs that address unmet HRSNs, provide harm reduction 
services, and/or provide recovery support services. The section below 
includes a summary of the comments we received related to this topic 
and our responses.
    Comment: Commenters submitted an abundance of information on 
coordinated care and referral services within OTP settings, including 
the types of service provider entities in the community OTPs interact 
with, examples of operational processes in OTP settings related to 
these activities, the types of referral services OTPs refer patients 
to, potential resource costs associated with rendering coordinated care 
and referral services, current public and private funding mechanisms 
for these activities, and existing coding that may appropriately 
describe these activities in OTP settings.
    Commenters shared that providing services and supports to address 
unmet HRSNs, harm reduction intervention needs and/or recovery support 
services needs are vital elements of treatment and recovery, and that 
these integral activities should be meaningfully incorporated into the 
Medicare OTP benefit. One commenter encouraged CMS to work with other 
HHS agencies, community organizations, and patients with an OUD to 
implement more payment and coverage policies, consistent with the HHS 
Overdose Prevention Strategy, SAMHSA's Harm Reduction Framework, and 
the National Drug Control Strategy.\468\
---------------------------------------------------------------------------

    \468\ https://www.hhs.gov/overdose-prevention/; https://www.samhsa.gov/sites/default/files/harm-reduction-framework.pdf; 
www.whitehouse.gov/wp-content/uploads/2022/04/National-Drug-Control-2022Strategy.pdf.
---------------------------------------------------------------------------

    Commenters described the various types of entities OTPs typically 
coordinate with or provide referrals to such as local recovery 
community organizations, State and residential programs, recovery 
houses, certified community behavioral health centers (CCBHCs), food 
pantries and distribution programs, job training programs, community 
support specialists, and peer recovery support specialists. Commenters 
mentioned that OTPs often have memorandums of understanding with these 
types of service providers. For example, a few commenters noted that 
Missouri requires OTPs to hire or coordinate with community support 
specialists who function as system navigators, care coordinators, or 
case managers to ensure patients receive services they are referred to. 
Additional commenters communicated that by licensing regulations, 
Massachusetts requires OTPs to maintain qualified service

[[Page 98068]]

organization agreements with a wide variety of healthcare and social 
service providers, and to outline referral pathways in these agreements 
to ensure SDOH needs identified by the OTP can be addressed by the 
appropriate community-based organization. One commenter stated that for 
over 8 years, OTPs in South Carolina have leveraged a Screening, Brief 
Intervention, and Referral to Treatment (SBIRT) online system where 
community-based referrals are regularly tracked and monitored. A few 
commenters added that beginning July 1, 2024, CCBHCs are required to 
partner with OTPs in their service areas, and often these healthcare 
organizations help facilitate access to supportive housing programs for 
patients. Many commenters also shared that in some cases, OTPs may 
refer patients who both are receiving treatment with methadone and 
require higher levels of care to recovery centers, which may offer 
additional supports including if a patient has additional SUD 
diagnoses. Some commenters also raised that peer recovery specialists 
often interact with OTPs and assist patients on their treatment 
journeys by providing peer support, connecting the patient with 
resources in the community, or helping the patient navigate various 
care options.
    Commenters furthered shared when coordination and referral services 
occur in OTP settings. Specifically, OTPs routinely perform 
coordination of care and referral and linkage services, and these 
activities could occur when an unmet HRSN is identified during an 
initial assessment, individual counseling session, case management 
visit, or medical examination. Commenters shared the types of frequent 
services that OTPs refer patients to: overdose prevention education, 
legal assistance, housing, nutrition, primary care, vocational, 
education, employment, and services to address or treat co-occurring 
HIV, viral hepatitis, and STIs.
    Furthermore, regarding payment and funding for these coordinated 
care and referral services, commenters mentioned that many OTPs don't 
necessarily have all the resources to implement these services to their 
full extent due to lack of infrastructure and relevant information 
technologies, administrative burden, and the availability of community 
resources. Commenters stated that some OTPs have used grant funds or 
opioid settlement money to fund these types of activities, but that 
these funding sources are not as stable as direct payment for OUD 
treatment services under the Medicare program. Other commenters noted 
that some underserved communities may not have easy access to private 
(for example, private health insurers, charitable foundations, etc.) or 
public funding sources (for example, State or Federal grants, State 
Medicaid programs, etc.) to fill this gap in payment for coordinated 
care and referral services. A few commenters also stated that although 
some State Medicaid programs may offer coverage for case management 
services, in most cases OTPs are not reimbursed for these types of 
coordination or referral services they furnish to Medicare 
beneficiaries. Commenters further added that if OTPs received payment 
through Medicare, they would have the capacity to expand the breadth of 
these services and hire additional full-time staff. Many commenters 
specified the types of coding that would be appropriate to characterize 
coordinated care or referral activities in OTP settings, including 
community health integration (CHI) services (HCPCS codes G0019 and 
G0022) and/or Principal Illness Navigation (PIN) services (HCPCS codes 
G0023, G0024, G0140, and G0146). A few commenters encouraged CMS to 
focus on payment for case management services or peer recovery support 
services.
    Response: We appreciate information submitted by commenters, which 
offered an abundance of detail as to how coordinated care and referral 
services are provided in OTP settings. We are persuaded by commenters 
that these types of services have been integrated into OTP settings for 
a long period of time, are critical to the treatment of an OUD and a 
patient's recovery and warrant additional payment under the Medicare 
OTP benefit. As we stated in the proposed rule (89 FR 61826), we 
recognize that OTPs often directly provide, or provide referrals to, 
services related to harm reduction interventions, recovery support 
services, addressing HRSNs, and facilitate access to community-based 
social services. For example, data collected by SAMHSA in 2022 
indicated approximately 92 percent of OTP facilities offered various 
recovery support services, including peer support (59.6 percent), 
assistance locating housing for clients (75.0 percent), employment 
counseling (49.5 percent), and assistance helping patients obtain 
social services (81.2 percent).\469\ Public comments in response to the 
implementing final rule (CY 2020 PFS final rule) stated OTPs often 
provide various coordinated care services, possess collaborative 
arrangements with healthcare providers outside of the OTP, and help 
patients with accessing food benefits, housing, and employment 
searches, which are critical components for sustained recovery (84 FR 
62648). Altogether, CMS believes that we now have enough information to 
establish coding and payment for coordinated care and referral 
activities as well as for patient navigational and peer recovery 
support services in this final rule. We believe establishing payment 
for these services will further efforts to enhance access to MOUD 
treatment and recovery services among Medicare beneficiaries with an 
OUD, and align services covered under the Medicare OTP benefit with 
current paradigms of whole-person centered care for MOUD treatment. We 
also believe expansion of these services is important to ensure 
consistency across the Medicare program in the types of benefits that 
are accessible to Medicare beneficiaries in different care settings and 
allow OTPs to receive additional payment to implement new SAMHSA 
reforms to MOUD treatment.
---------------------------------------------------------------------------

    \469\ Table SU17b: Substance use treatment facilities, by 
services provided and facility type: Number and column percent, 
2022: https://www.samhsa.gov/data/sites/default/files/reports/rpt42714/NSUMHSS-Annual-Detailed-Tables-22.pdf.
---------------------------------------------------------------------------

    Based on the comments received, we believe that community health 
integration services (CHI), principal illness navigation services 
(PIN), and principal illness navigation services--peer support (PIN-PS) 
are consistent with services ordinarily provided in OTP settings to 
coordinate care or referrals to community-based organizations, in 
addition to navigational or peer recovery support services. CHI 
services, described by HCPCS G-codes G0019 and G0022, focus on 
providing tailored support to help address unmet HRSNs that 
significantly limit a provider's ability to diagnose or treat the 
patient. Some of these services include: coordinating receipt of needed 
services from health care providers, health care facilities, and 
community-based service providers; coordination of care transitions 
between and among other health care providers and settings; following 
up with a patient after an emergency department visit or discharge from 
a health care facility; and facilitating access to community-based 
social services to address unmet HRSN (for example, housing, utilities, 
transportation, food assistance) to address the SDOH need(s). We are 
finalizing creation of a new code for coordinated care and/or referral 
services (G0534) that is based on a crosswalk to the CY 2024 PFS non-
facility rate of the community health integration base HCPCS code G0019 
(Community health integration services performed by

[[Page 98069]]

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 
social determinants of health (SDOH) need(s) that significantly limit 
the ability to diagnose or treat problem(s) addressed in an initiating 
visit), but divided by two to represent each additional 30 minutes of 
services furnished (CY 2024 PFS non-facility rate of G0019 = $80.56 and 
divided by two = $40.28). We believe that basing HCPCS code G0534 on 
each additional 30 minutes of services furnished would allow for a 
smaller unit of billing (30 minutes versus 60 minutes per calendar 
month for HCPCS code G0019), which would lower the time threshold 
needed to bill for coordinated care and/or referral services as CMS 
learns how often these services are furnished in OTP settings. 
Additionally, basing HCPCS code G0534 on each additional 30 minutes of 
services for coordinated care and/or referral activities may allow 
these services to be more easily billed alongside the weekly bundled 
payments for an episode of care due to the smaller time increments. It 
may further reduce administrative burden through billing simplification 
via one HCPCS G-code, rather than creating two separate codes for 
coordinated care and referral activities based on the two CHI codes 
under the PFS for 60 minutes per calendar month (G0019) and each 
additional 30 minutes thereafter (G0022). Moreover, we expect OTPs to 
furnish services coded with G0534 (Coordinated care and/or referral 
services, such as to adequate and accessible community resources to 
address unmet health-related social needs, including harm reduction 
interventions and recovery support services a patient needs and wishes 
to pursue, which significantly limit the ability to diagnose or treat 
an opioid use disorder; each additional 30 minutes of services 
(provision of the services by a Medicare-enrolled Opioid Treatment 
Program); List separately in addition to each primary code) when an OTP 
coordinates care or provides referral or linkage services to adequate 
and accessible community resources or community-based organizations 
that address a patient's identified unmet HRSN, or need and interest 
for harm reduction interventions and recovery support services, which 
may limit the ability of an OTP to diagnose or treat a patient's OUD. 
These community-based organizations may include, but are not limited 
to, harm reduction organizations, peer support organizations, housing 
agencies, job training programs, recovery centers, food assistance or 
distribution programs, residential programs, and educational services. 
Accordingly, we are finalizing a revision to the definition of an 
opioid use disorder treatment service at Sec.  410.67(b) by adding 
paragraph (x) to account for these type of ``coordinated care and/or 
referral services, provided by an OTP to link a beneficiary with 
community resources to address unmet health-related social needs or the 
need and interest for harm reduction interventions and recovery support 
services that significantly limit the ability to diagnose or treat a 
patient's opioid use disorder.'' We are also revising Sec.  
410.67(d)(4)(i) by adding paragraph (G) to specify that for the 
``coordinated care and/or referral services described in paragraph (x) 
of the definition of OUD treatment service at Sec.  410.67(b), an 
adjustment will be made when each additional 30 minutes of these 
services are furnished,'' to the bundled payment.
    Moreover, PIN services, described by HCPCS G-codes G0023 and G0024, 
and PIN-PS services, described by G0140 and G0146, are similar to CHI, 
but do not necessarily require a patient to have an unmet HRSN before 
services are furnished. PIN and PIN-PS are more focused on helping 
patients with a serious high-risk condition (for example, substance use 
disorder) navigate the health care system and guiding them through 
their course of care. PIN-PS services are slightly distinct from PIN 
services in that these services are often facilitated by peer support 
specialists who directly assist patients in helping to navigate various 
health system and social sector interactions, whereas navigators may 
serve as a more direct point of contact on behalf of the patient. We 
are finalizing the creation of a new code for patient navigational 
services (HCPCS code G0535) that is based on a crosswalk to the CY 2024 
PFS non-facility rate of the principal illness navigation base HCPCS 
code G0023 (Principal illness navigation services by certified or 
trained auxiliary personnel under the direction of a physician or other 
practitioner, including a patient navigator; 60 minutes per calendar 
month, in the following activities), but divided by two to represent 
each additional 30 minutes of services furnished (CY 2024 PFS non-
facility rate of HCPCS code G0023 = $80.56 and divided by two = 
$40.28). We are basing HCPCS code G0535 on each additional 30 minutes 
of services for similar reasons to why we are finalizing each 
additional 30 minutes of service for HCPCS code G0534, that is, 
administrative simplification for providers, to lower the billing 
threshold, to more easily be billed alongside the weekly bundled 
payment for an episode of care, and to be consistent with the payment 
approach for HCPCS code G0534.) We expect OTPs to bill for HCPCS code 
G0535 (Patient navigational services, provided directly or by referral; 
including helping the patient to navigate health systems and identify 
care providers and supportive services, to build patient self-advocacy 
and communication skills with care providers, and to promote patient-
driven action plans and goals; each additional 30 minutes of services 
(provision of the services by a Medicare-enrolled Opioid Treatment 
Program); List separately in addition to each primary code) when an OTP 
provides directly or by referral to patient navigational services that 
help the patient with an OUD navigate multiple settings of care, 
including by identifying care providers or recovery supportive 
services, communicating with other health care or social service 
providers and securing appointments for patients, building patient 
self-advocacy and communication skills, and facilitating patient-driven 
goal-setting and action plans for MOUD treatment and recovery. We 
believe patient navigational services may be best suited for situations 
in which the navigator may serve as a more direct point of contact for 
the patient. Additionally, we are finalizing the creation of a new code 
for peer recovery support services (HCPCS code G0536) that is based on 
a crosswalk to the CY 2024 PFS non-facility rate of the principal 
illness navigation--peer support base code HCPCS code 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, 
in the following activities) but divided by two to represent each 
additional 30 minutes of services furnished (CY 2024 PFS non-facility 
rate of HCPCS code G0140 = $80.56 and divided by two = $40.28). We are 
basing HCPCS code G0536 on each additional 30 minutes of services for 
similar reasons to why we are finalizing each additional 30 minutes of 
service for G0534 and G0535, that is, administrative simplification for 
providers, to lower the billing threshold, to more easily be billed 
alongside the weekly bundled payment for an episode of care, and to be 
consistent with the

[[Page 98070]]

payment approach for HCPCS codes G0534 and G0535. We expect OTPs to 
bill for HCPCS code G0536 (Peer recovery support services, provided 
directly or by referral; including leveraging knowledge of condition or 
lived experience to provide support, mentorship, or inspiration to meet 
OUD treatment and recovery goals; conducting a person-centered 
interview to understand the patient's life story, strengths, needs, 
goals, preferences, and desired outcomes; developing and proposing 
strategies to help meet person-centered treatment goals; assisting the 
patient in locating or navigating recovery support services; each 
additional 30 minutes of services (provision of the services by a 
Medicare-enrolled Opioid Treatment Program); List separately in 
addition to each primary code) when individuals either with knowledge 
of an OUD, or with lived experience of an OUD, provide support, 
coaching, mentorship, or inspiration to patients with an OUD to meet 
various MOUD treatment and recovery goals. Peer recovery support 
specialists may help: Medicare beneficiaries with an OUD to stay 
engaged in treatment at an OTP; connect patients with other peer 
support networks or recovery services in the community; conduct 
interviews of the patient to understand their background, needs, and 
goals, and then propose or strategize means for accomplishing such 
treatment and recovery goals; and more. Accordingly, we are finalizing 
a revision to the definition of opioid use disorder treatment service 
at Sec.  410.67(b) by adding paragraph (xi) to account for ``patient 
navigational services and/or peer recovery support services, when 
provided directly by an OTP or through referral, in order to assist 
patients with an OUD in navigating the health system and accessing 
supportive services, and/or to provide support in meeting patient-
driven OUD treatment and recovery goals.'' We are also adding new 
paragraph (H) to Sec.  410.67(d)(4)(i) to specify that we are making an 
adjustment to the bundled payment for patient navigational services 
and/or peer recovery support services when each additional 30 minutes 
of these services are furnished.
    Furthermore, we are revising Sec.  410.67(d)(4)(ii) and (iii) to 
update the adjustment to the bundled payment for coordinated care and/
or referral services (G0534), and patient navigational services (G0535) 
and/or peer recovery support services (G0536) by the GAF and MEI, 
respectively, consistent with other adjustments to the bundled payment.
    Moreover, we encourage OTPs to engage in discussions with patients 
regarding coordinated care and/or referral services, patient 
navigational services, and/or peer recovery support services prior to 
furnishing and billing for these services under the Medicare OTP 
benefit. We believe these discussions are important to ensure patients 
are aware of and agree with these services being furnished, to provide 
information to patients regarding these services and their benefits, 
and so that these services are furnished in a manner that is patient-
centered and consistent with a patient's OUD treatment and recovery 
goals. We expect OTPs to document in the patient's medical record how 
coordinated care and/or referral services, patient navigational 
services, and/or peer recovery support services relate to the treatment 
and diagnosis of an OUD. Like other services provided under the 
Medicare OTP benefit, we are not limiting the types of professionals 
that can provide these services to those professionals who are able to 
bill Medicare directly. However, professionals who render these 
services (coordinated care/referral services, patient navigational 
services, and peer recovery support services) within or external to OTP 
settings must be authorized under State law, including by licensure, 
certification, and/or training, for these services prior to furnishing 
them to Medicare beneficiaries. We further note that only OTPs may 
continue to bill directly for OUD treatment services furnished via the 
bundled payment and adjustments to the bundled payment, including these 
new codes (HCPCS codes G0534, G0535, and G0536). Additionally, all 
services provided to Medicare beneficiaries under the OTP benefit must 
be medically reasonable and necessary and related to the treatment of 
an OUD. We similarly expect for coordinated care and/or referral 
services, patient navigational services, and/or peer recovery support 
services to be medically reasonable and necessary and related to the 
treatment of an OUD. Thus, OTPs should document in the patient's care 
plan how these services relate to the diagnosis or treatment of an OUD 
prior to billing Medicare for these services. At this time, we are not 
finalizing limitations to how frequently these services may be 
furnished, so as to not hinder access as we gather more information on 
how these services will be utilized under the OTP benefit. We 
understand that the number of minutes needed for these services may 
vary greatly depending on the needs and condition of the patient with 
an OUD. Given the addition of these new codes under the Medicare OTP 
benefit, CMS remains open to feedback from the public on the 
implementation and utilization of these codes; therefore, we will 
continue to consider additional refinements as needed via future 
rulemaking to ensure Medicare beneficiaries have appropriate access to 
these services to meet MOUD treatment and recovery needs.
4. Payment for New FDA-Approved Opioid Agonist and Antagonist 
Medications
    Section 1861(jjj)(1)(A) of the Act establishes Medicare payment for 
opioid agonist and antagonist treatment medications (including oral, 
injected, or implanted versions) that are approved by the Food and Drug 
Administration under section 505 of the Federal Food, Drug, and 
Cosmetic Act (FFDCA) for use in the treatment of OUD and as part of OUD 
treatment services under the OTP benefit. Additionally, section 
1834(w)(2) of the Act granted CMS the authority to establish multiple 
bundled payments in stating that the Secretary may implement this 
subsection through one or more bundles based on the type of medication 
provided (such as buprenorphine, methadone, naltrexone, or a new 
innovative drug), the frequency of services, the scope of services 
furnished, characteristics of the individuals furnished such services, 
or other factors as the Secretary determine appropriate. In the CY 2020 
PFS final rule, we finalized basing the OTP bundled payments, in part, 
on the type of medication used for treatment that reflect those drugs 
currently approved by the FDA under section 505 of the FFDCA for use in 
treatment of OUD. Accordingly, at Sec.  410.67(d)(1) we specified that 
CMS would establish categories of bundled payments for OTPs for an 
episode of care, including categories for each type of opioid agonist 
and antagonist treatment medication, a category for medications not 
otherwise specified, and a category for episodes of care in which no 
medication is provided. At Sec.  410.67(d)(2) we finalized that the 
bundled payment amounts for an episode of care would be based on both a 
drug and non-drug component, and we codified the payment methodology 
for determining these components. At Sec.  410.67(d)(4), we described 
various adjustments that could be made to the bundled payment. Since 
the implementation of the Medicare OTP benefit on January 1, 2020, we 
have established bundled payments and/or add-on codes for the following

[[Page 98071]]

medications: methadone (HCPCS codes G2067 & G2078), oral buprenorphine 
(HCPCS codes G2068 & G2079), injectable buprenorphine (HCPCS code 
G2069), buprenorphine implants (HCPCS codes G2070 through G2072), 
naltrexone (HCPCS code G2073), nasal naloxone (HCPCS codes G2215 & 
G1028), injectable naloxone (HCPCS code G2216), and medication not 
otherwise specified (HCPCS code G2075) (for new FDA-approved opioid 
agonist or antagonist medications for OUD treatment that is not 
specified in one of our existing codes). In the CY 2025 PFS proposed 
rule, we proposed new payment for injectable buprenorphine and 
nalmefene hydrochloride products furnished by OTPs.
a. Coding and Payment for a New Nalmefene Hydrochloride Product
    In May of 2023, the FDA approved the first nalmefene hydrochloride 
(nalmefene) nasal spray (under the brand name Opvee[supreg]), which is 
indicated for the emergency treatment of known or suspected opioid 
overdose induced by natural or synthetic opioids. This is the first FDA 
approval of a nasal spray for nalmefene hydrochloride for health care 
and community use, and it is intended for immediate administration as 
emergency therapy in settings where opioids may be present. Nalmefene 
acts as an opioid receptor antagonist and when administered quickly, it 
can reverse the effects of an opioid overdose including respiratory 
depression, sedation, and low blood pressure.\470\ Newly approved 
Opvee[supreg] delivers 2.7 milligrams (mg) of nalmefene in a single 
spray into the nasal cavity. After the first dose is administered, if 
the patient does not respond, or responds and there is a recurrence of 
respiratory depression, additional doses of the Opvee[supreg] nasal 
spray may be administered with an additional spray every 2 to 5 minutes 
until emergency medical assistance arrives.\471\ Compared to naloxone 
which has a half-life of approximately 2 hours and also rapidly 
reverses the effects of an opioid overdose, nalmefene has a half-life 
of 11 hours which means that it remains in the body much longer than 
other overdose reversal drugs.\472\ The rise of dangerous synthetic 
opioids, such as fentanyl and its analogs (for example, carfentanil, 
acetylfentanyl, furanylfentanyl) have made it increasingly important to 
increase the types of opioid overdose reversal agents available to 
respond to the possibility of an opioid overdose.
---------------------------------------------------------------------------

    \470\ https://www.fda.gov/news-events/press-announcements/fda-approves-prescription-nasal-spray-reverse-opioid-overdose.
    \471\ https://www.accessdata.fda.gov/drugsatfda_docs/label/2023/217470Orig1s000.pdf.
    \472\ Harris, E. (2023). ``FDA approves nalmefene, a longer-
lasting opioid reversal nasal spray.'' JAMA, 329(23), 2012. https://doi.org/10.1001/jama.2023.9608.
---------------------------------------------------------------------------

    In the CY 2021 PFS final rule (85 FR 84683 through 84692), we 
adopted new add-on codes for take-home supplies of nasal naloxone 
(HCPCS code G2215) and injectable naloxone (HCPCS code G2216). 
Additionally, we used our discretionary authority in section 
1861(jjj)(1)(F) of the Act (which generally authorizes us to include as 
an OTP treatment service other items and services we determine are 
appropriate) to extend the definition of OUD treatment services to 
include short-acting opioid antagonist medications for the emergency 
treatment of known or suspected opioid overdose, such as naloxone, and 
overdose education furnished in conjunction with opioid antagonist 
medication. We also established an adjustment at Sec.  
410.67(d)(4)(i)(E) to the weekly bundled payments when the OTP 
furnishes take-home supplies of these medications. This adjustment 
includes both a drug component and a non-drug component for overdose 
education. The payment methodology for the drug component of the 
adjustment was finalized at Sec.  410.67(d)(2)(i) and is updated 
annually using the most recent data available at the time of 
ratesetting. The amount of the non-drug component of the adjustment, 
which includes overdose education, is based on the CY 2020 Medicare 
payment rate for CPT code 96161 (Administration of caregiver focused 
health risk assessment instrument (e.g., depression inventory) for the 
benefit of the patient, with scoring and documentation, per 
standardized instrument). We also finalized that any payment to an OTP 
for naloxone would be duplicative if a claim for the same medication is 
separately paid under Medicare Part B or Part D for the same 
beneficiary on the same date of service, and that we would recoup any 
duplicative payment made to an OTP for naloxone.
    Furthermore, in the CY 2022 PFS final rule (86 FR 65340 and 65341), 
we established a new add-on code and payment for a higher dose of nasal 
naloxone (G0128). We also finalized that the adjustment includes take-
home supplies of opioid antagonist medications in the list of items for 
which the non-drug component will be geographically adjusted using the 
Geographic Adjustment Factor (GAF) and the payment amount will be 
updated annually by the growth in the Medicare Economic Index (MEI). 
Lastly, we revised our regulations at Sec.  410.67(d)(5) to state 
explicitly that payments for medications that are delivered, 
administered or dispensed to a beneficiary as part of an adjustment to 
the bundled payment are considered a duplicative payment if a claim for 
delivery, administration or dispensing of the same medication(s) for 
the same beneficiary on the same date of service was also separately 
paid under Medicare Part B or Part D. We clarified that this revision 
would apply not only to duplicative payments for take-home supplies of 
naloxone, but also to duplicative payments for additional take-home 
supplies of other medications that are made under Sec.  
410.67(d)(4)(i)(D).
    In light of a novel nalmefene product, Opvee[supreg], receiving FDA 
approval as an opioid antagonist medication for the emergency treatment 
of known or suspected opioid overdose, we proposed to make payment for 
this new drug under the Medicare OTP benefit in the CY 2025 PFS 
proposed rule. Expanding access to overdose reversal medications, such 
as nalmefene, is a critical component to confronting the opioid crisis. 
The number of drug overdose deaths involving prescription opioids was 
nearly 330 percent higher in 2022 than in 1999; however, deaths 
involving prescription opioids has decreased in recent years. From May 
2023 through April 2024, there were approximately 75,000 predicted 
opioid overdose deaths in the US, and nearly 92 percent of opioid-
involved deaths involved synthetic opioids other than methadone (mainly 
illegally-made fentanyl and fentanyl analogs such as acetylfentanyl, 
furanylfentanyl, and carfentanil).\473\
---------------------------------------------------------------------------

    \473\ Ahmad FB, Cisewski JA, Rossen LM, Sutton P. Provisional 
drug overdose death counts. National Center for Health Statistics. 
2024.
---------------------------------------------------------------------------

    These increasing rates of drug overdose deaths over the past few 
decades have also been seen among the Medicare-eligible population with 
adults aged 65 and over experiencing the largest percentage increase 
(28 percent) in drug overdose deaths rates between 2020 and 2021,\474\ 
and the rate of drug overdose deaths involving synthetic opioids among 
this age group increased by over 53 percent in only one year (between 
2019 and 2020).\475\ Over 50,000 Medicare Part D beneficiaries were 
estimated to have experienced an opioid overdose in 2021, and the 
number of these beneficiaries receiving

[[Page 98072]]

naloxone has grown.\476\ Not only has the opioid crisis impacted the 
Medicare-eligible population, but health disparities in drug overdose 
deaths have persisted. Non-Hispanic Black men aged 65 and over have 
experienced drug overdose death rates that are more than four times 
higher than Hispanics and non-Hispanic whites.\477\ In addition, death 
rates from drug overdoses among people aged 65 and over have increased 
at faster rates for men than women.\478\ Expanding access to overdose 
reversal medications is important, including for populations at a 
greater risk for drug overdose, as overdose reversal medications have 
been regarded as an evidence-based strategy to help individuals quickly 
respond to an overdose to reduce drug overdose deaths, and increase 
survival rates.\479\ Lastly, we believe this proposal to pay for 
nalmefene nasal spray under the OTP benefit would further the 
objectives of the HHS Overdose Prevention Strategy and the National 
Drug Control Strategy, which both aim to widen availability and access 
to opioid overdose reversal treatments.\480\
---------------------------------------------------------------------------

    \474\ https://www.cdc.gov/nchs/products/databriefs/db457.htm.
    \475\ https://blogs.cdc.gov/nchs/2023/06/30/7408/.
    \476\ https://oig.hhs.gov/oei/reports/OEI-02-22-00390.pdf.
    \477\ https://www.cdc.gov/nchs/products/databriefs/db455.htm.
    \478\ https://blogs.cdc.gov/nchs/2022/11/30/7193/.
    \479\ https://www.cdc.gov/drugoverdose/pdf/pubs/2018-evidence-based-strategies.pdf.
    \480\ https://www.hhs.gov/overdose-prevention/; https://www.whitehouse.gov/wp-content/uploads/2022/04/National-Drug-Control-2022Strategy.pdf.
---------------------------------------------------------------------------

    Section 1861(jjj)(1)(A) of the Act recognizes opioid agonist and 
antagonist treatment medications (including oral, injected, or 
implanted versions) that are approved by the FDA under section 505 of 
the FFDCA for the use in treatment of OUD, but nalmefene is not on the 
list of drugs for the treatment of OUD.\481\ When CMS first finalized 
payment for nasal and injectable naloxone under the OTP benefit in the 
CY 2021 PFS final rule (85 FR 84682 through 84689 and 85026 through 
85027), we used our discretionary authority under section 
1861(jjj)(1)(F) of the Act to finalize and extend the definition of OUD 
treatment services to include short acting opioid antagonist 
medications (for example, naloxone) that are approved by the FDA under 
section 505 of the FFDCA for the emergency treatment of known or 
suspected opioid overdose. Since nalmefene nasal spray was approved by 
the FDA under section 505(b)(1) authority,\482\ and is an opioid 
antagonist and on the list of overdose reversal drugs approved by the 
FDA,\483\ we believe nalmefene is consistent with our definition of OUD 
treatment service at Sec.  410.67(d), which describes opioid antagonist 
medications that are approved by the FDA under section 505 of the FFDCA 
for the emergency treatment of known or suspected opioid overdose at 
paragraph (viii). Therefore, we believe it was appropriate to propose 
new payment for nalmefene as it would align with existing authority 
under Sec.  410.67(b) that recognizes opioid antagonist medications 
which treat known or suspected opioid overdose as an OUD treatment 
service.
---------------------------------------------------------------------------

    \481\ https://www.fda.gov/drugs/information-drug-class/information-about-medication-assisted-treatment-mat.
    \482\ https://www.fda.gov/media/171605/download.
    \483\ https://www.fda.gov/drugs/postmarket-drug-safety-information-patients-and-providers/information-about-naloxone-and-nalmefene.
---------------------------------------------------------------------------

    We proposed to create a new adjustment to the bundled payment for 
nalmefene hydrochloride nasal spray described by GOTP1 [Take-home 
supply of nasal nalmefene hydrochloride; one carton of two, 2.7 mg per 
0.1 mL nasal sprays (provision of the services by a Medicare-enrolled 
Opioid Treatment Program); (List separately in addition to each primary 
code)]. We proposed to price this new add-on code based on the 
established methodology under the OTP benefit for determining the 
adjustment for take-home supplies of opioid antagonist medications at 
Sec.  410.67(d)(4)(i)(E). This adjustment would include both a drug 
component and a non-drug component. The amount of the drug component 
would be determined using the methodology for pricing the drug 
component of an episode of care at Sec.  410.67(d)(2)(i), which tends 
to use average sales price (ASP) data when available (with certain 
exceptions). Accordingly, consistent with the approach used to price 
the drug component for nasal naloxone (HCPCS code G2215 & G1028), we 
proposed to apply the ASP payment methodology set forth in section 
1847A of the Act to determine the payment for the new naloxone 
hydrochloride nasal spray product, except that payment amounts would 
not include any add-on percentages if either ASP or wholesale 
acquisition cost (WAC) is used. As stated in the CY 2021 PFS final rule 
(85 FR 84685), we continue to believe that using ASP provides a 
transparent and public benchmark for manufacturers' actual pricing as 
it reflects the manufacturers' actual sales prices to all purchasers 
(with limited exceptions as noted in section 1847A(c)(2) of the Act) 
and is the only pricing methodology that includes off-invoice rebates 
and discounts as described in section 1847A(c)(3) of the Act. 
Therefore, we believe ASP to be the most market-based approach to set 
drug prices, including for the new nalmefene nasal spray. As we stated 
in the CY 2020 PFS final rule, we also continue to believe that 
limiting the payment amount to 100-percent of the volume-weighted ASP 
for a HCPCS code will incentivize the use of the most clinically 
appropriate drug for a given patient (84 FR 62651 through 62656). We 
understand that many OTPs purchase medications directly from 
manufacturers, thereby limiting the markup from distribution channels.
    Furthermore, as stated in the CY 2020 PFS final rule (84 FR 62650), 
we usually use the typical maintenance dose to calculate the drug 
component for the OTP benefit. As part of determining a payment rate 
for the proposed bundles for OUD treatment services, a dosage of the 
applicable medication is often selected to calculate the costs of the 
drug component of the bundle. According to the prescribing information 
for Opvee[supreg], each unit-dose nasal spray device delivers 2.7 mg of 
nalmefene in 0.1 mL.\484\ Each unit-dose device contains a single dose 
of nalmefene and cannot be reused. Each carton contains two unit-dose 
nasal spray devices to allow for an additional repeat dose if needed. 
Thus, we proposed to price the drug component of the code for nalmefene 
nasal spray based on an assumption of a typical dosage for this new 
product to be a carton containing two 2.7-mg nasal sprays. We would, 
therefore, multiply the payment amount of 100-percent of the ASP for 
each unit-dose nasal spray containing 2.7 mg of nalmefene by two to 
reflect a carton of two nasal spray devices. We sought comment on 
whether this amount (a carton of two 2.7-mg nasal sprays) reflects the 
typical maintenance dosage for this drug when administered. The ASP+0 
for Opvee[supreg] for sales in the fourth quarter of 2023 is $92.033, 
which reflects a carton of two 2.7-mg nasal sprays and would be used to 
price the drug component of GOTP1.
---------------------------------------------------------------------------

    \484\ https://www.accessdata.fda.gov/drugsatfda_docs/label/2023/217470Orig1s000.pdf.
---------------------------------------------------------------------------

    Additionally, consistent with the methodology established in Sec.  
410.67(d)(4)(i)(E), we proposed to include a non-drug component for 
GOTP1 that would include payment for overdose education. Overdose 
education is an important component of overdose prevention and includes 
educating patients and caregivers on how to recognize respiratory 
depression, the signs and symptoms of a possible opioid overdose, how 
to administer overdose reversal medications, and the importance of 
calling 911 or getting emergency medical help right away,

[[Page 98073]]

even after the overdose reversal medication is administered.\485\ 
Additionally, overdose education paired with distribution of overdose 
reversal medications has been found to be effective in improving 
knowledge about opioid overdose, improving attitudes toward using 
overdose reversal medications, training individuals to safely and 
effectively manage overdoses, and reducing opioid-related 
mortality.\486\ For these reasons, we proposed to include a non-drug 
component to GOTP1 based on the CY 2020 Medicare payment rate for CPT 
code 96161 (Administration of caregiver-focused health risk assessment 
instrument (e.g., depression inventory) for the benefit of the patient, 
with scoring and documentation, per standardized instrument) and 
updated to reflect the MEI updates that have been applied since that 
time. This is consistent with the payment methodology for naloxone and 
the language in Sec.  410.67(d)(4)(i)(E). In addition, the language at 
Sec.  410.67(d)(4)(ii) currently states that the non-drug component of 
the adjustments for take-home supplies of opioid antagonist medications 
will be geographically adjusted using the geographic adjustment factor 
described in Sec.  414.26. Separately, Sec.  410.67(d)(4)(iii) states 
that the non-drug component of the adjustments for take-home supplies 
of opioid antagonist medications will be updated annually using the 
Medicare Economic Index described in Sec.  405.504. Since we proposed 
to establish payment for nasal nalmefene through an adjustment to the 
bundled payment, and since the drug is also considered an opioid 
antagonist medication, we also proposed to update the non-drug 
component for the adjustment of GOTP1 annually based on the GAF and 
MEI.
---------------------------------------------------------------------------

    \485\ https://www.fda.gov/media/140360/download#.
    \486\ Razaghizad, A., Windle, S.B., Filion, K.B., Gore, G., 
Kudrina, I., Paraskevopoulos, E., Kimmelman, J., Martel, M.O., & 
Eisenberg, M.J. (2021). ``The effect of overdose education and 
naloxone distribution: An umbrella review of systematic reviews.'' 
American Journal of Public Health, 111(8), e1-e12. https://doi.org/10.2105/AJPH.2021.306306.
---------------------------------------------------------------------------

    Furthermore, consistent with our established criteria for opioid 
antagonist medications at Sec.  410.67(d)(4)(i)(E), we also proposed to 
limit payment for nasal nalmefene to one add-on code (GOTP1) every 30 
days. However, we believe that access to the drug should not be limited 
when it is medically reasonable and necessary as part of the treatment 
for OUD and known or suspected opioid overdose. Therefore, similar to 
flexibilities established for frequency limits for naloxone, we 
proposed to allow exceptions to this limit in the case where the 
beneficiary overdoses and uses the initial supply of nalmefene 
dispensed by the OTP to the extent that it is medically reasonable and 
necessary to furnish additional nalmefene. We noted that section 
1862(a)(1)(A) of the Act requires that for payment to be made for most 
Part A and Part B services furnished to Medicare beneficiaries, those 
services must be reasonable and necessary for the diagnosis or 
treatment of illness or injury or to improve the malfunctioning of a 
malformed body member. If an additional supply of nasal nalmefene is 
needed within 30 days of the original supply being provided, we 
proposed that OTPs must document in the medical record the reason for 
the exception. Moreover, section 1834(w)(1) of the Act, added by 
section 2005(c) of the SUPPORT Act, requires the Secretary to ensure, 
as determined appropriate by the Secretary, that no duplicative 
payments are made under Medicare Part B or Part D for items and 
services furnished by an OTP. Similar to naloxone, we recognized that 
nalmefene may also be appropriately available to beneficiaries through 
other Medicare benefits, including under Medicare Part D. At Sec.  
410.67(d)(5), we define duplicative payment to involve circumstances 
when medications are delivered, administered or dispensed to a 
beneficiary are paid as part of the OTP bundled payment, and where the 
delivery, administration or dispensing of the same medication (that is, 
same drug, dosage and formulation) is also separately paid under 
Medicare Part B or Part D for the same beneficiary on the same date of 
service. Consistent with Sec.  410.67(d)(5), we proposed that CMS 
recoup duplicative payments made to an OTP for nalmefene. We expect 
that if the OTP provides reasonable and necessary medications for an 
OUD as part of an episode of care, the OTP will take measures to ensure 
that there is no claim for payment for these drugs other than as part 
of the OTP bundled payments. Thus, nalmefene billed by an OTP as an 
add-on to the bundled payment should not be reported to or paid under a 
Medicare Part D plan.
    We solicited comments related to this proposal to establish an 
adjustment to the bundled payment for nasal nalmefene (Opvee[supreg]) 
GOTP1 [Take-home supply of nasal nalmefene hydrochloride; one carton of 
two, 2.7 mg per 0.1 mL nasal sprays (provision of the services by a 
Medicare-enrolled Opioid Treatment Program); (List separately in 
addition to each primary code)], as well as comments related to 
applicable requirements and criteria for billing this code. We received 
public comments on this proposal. The following is a summary of the 
comments we received and our responses.
    Comment: Many commenters supported our proposal to establish 
payment for nasal nalmefene. Commenters expressed that this policy 
would expand access to a new innovative treatment for reducing the risk 
of harm and death from opioid overdoses, and that the high potency of 
drugs in the nation's drug supply necessitates multiple doses of 
effective medications, like nalmefene, to treat patients. One commenter 
shared evidence from a computer-based simulated model study conducted 
by the drug manufacturer of Opvee[supreg], where nalmefene nasal spray 
was found to predict a substantially greater reduction in the incidence 
of cardiac arrest compared to nasal naloxone following a synthetic 
opioid overdose.\487\ A few commenters stated that they supported both 
the proposed coding and payment methodology for the add-on code of 
take-home supplies of nalmefene nasal spray, as it would be consistent 
with pricing provisions in section 1847A of the Act and CMS's method 
for pricing similar opioid antagonist medications under the Medicare 
OTP benefit.
---------------------------------------------------------------------------

    \487\ https://www.frontiersin.org/journals/psychiatry/articles/10.3389/fpsyt.2024.1399803/full.
---------------------------------------------------------------------------

    Response: We thank commenters for their support of this proposal.
    Comment: One commenter provided information on the typical dose of 
nalmefene hydrochloride: one spray by intranasal administration, and in 
the event a patient relapses into respiratory depression, an additional 
dose would be given of a new nasal spray.
    Response: We thank the commenter for this information. In the 
proposed rule, we noted that each unit-dose nasal spray device contains 
a single dose of nalmefene, which is consistent with the information 
submitted by the commenter. Each carton contains two 2.7-mg unit-dose 
nasal spray devices of nalmefene, and we proposed to price the drug 
component of placeholder code GOTP1 based on a typical dosage, which we 
assumed is one carton containing two doses.
    Comment: One commenter asked CMS to consider any interaction this 
proposal, to establish an add-on payment for take-home supplies of 
nalmefene, may have on treatments currently covered under Medicare Part 
D.

[[Page 98074]]

    Response: We appreciate the commenter raising this important 
question. We recognize that nalmefene nasal spray may be available by 
prescription through Medicare Part D. CMS does not seek to influence 
whether a Medicare beneficiary receives access to this emergency 
medication through either Medicare Part B or D. However, section 
1834(w)(1) of the Act, added by section 2005(c) of the SUPPORT Act, 
requires the Secretary to ensure, as determined appropriate by the 
Secretary, that no duplicative payments are made under Medicare Part B 
or Part D for items and services furnished by an OTP. Consistent with 
Medicare OTP regulations at Sec.  410.67(d)(5), a medication (for 
example, nalmefene nasal spray) would be duplicative if separately paid 
under Medicare Part B or Part D for the same beneficiary on the same 
date of service. CMS expects that if the OTP provides reasonable and 
necessary medications for an OUD as part of an episode of care, the OTP 
will take measures to ensure that there is no claim for payment for 
these drugs other than as part of the OTP bundled payments. Thus, GOTP1 
billed by an OTP as an add-on to the bundled payment for take-home 
supplies of nalmefene nasal spray should not be reported to or paid 
under a Medicare Part D plan.
    After consideration of public comments, we are finalizing our 
proposal to create a new adjustment to the bundled payment for 
nalmefene nasal spray described by HCPCS code G0532 (previously 
placeholder code GOTP1) [Take-home supply of nasal nalmefene 
hydrochloride; one carton of two, 2.7 mg per 0.1 mL nasal sprays 
(provision of the services by a Medicare-enrolled Opioid Treatment 
Program); (List separately in addition to each primary code)], based on 
the payment methodology for determining the adjustment for take-home 
supplies of opioid antagonist medications at Sec.  410.67(d)(4)(i)(E). 
The amount of the drug component will be determined using the 
methodology for pricing the drug component of an episode of care at 
Sec.  410.67(d)(2)(i), which uses ASP data when available (with certain 
exceptions). We are also including payment for overdose education 
within the non-drug component, consistent with the methodology 
established in Sec.  410.67(d)(4)(i)(E). The non-drug component will be 
annually updated based on the GAF and MEI. Lastly, we are limiting 
billing G0532 to once every 30 days and finalizing that CMS will recoup 
duplicative payments made to an OTP for nalmefene, such as if the 
medication is billed for the same Medicare beneficiary through Part B 
or Part D on the same date of service.
b. Coding and Payment for New Injectable Buprenorphine Product
    Another medication for the treatment of OUD for which the Secretary 
may establish payment is buprenorphine, which is a partial opioid 
agonist that is FDA approved to treat OUD. Buprenorphine is a schedule 
III substance, meaning it has low to moderate potential for physical 
dependence.\488\ When taken as prescribed, it can diminish the effects 
of opioid withdrawal symptoms and cravings.\489\ In the CY 2020 PFS 
final rule (84 FR 62630 through 62677 and 84 FR 62919 through 62926), 
we established a weekly bundled payment under the Medicare OTP benefit 
for injectable buprenorphine (HCPCS G2069: Medication assisted 
treatment, buprenorphine (injectable); weekly bundle including 
dispensing and/or administration, substance use counseling, individual 
and group therapy, and toxicology testing if performed (provision of 
the services by a Medicare-enrolled Opioid Treatment Program)). CMS 
also established payment for other formulations of buprenorphine, 
including weekly bundles for oral buprenorphine (G0268), buprenorphine 
implants (G2070 through G2072), and take-home supplies of oral 
buprenorphine (G2079), as well as other medications like methadone and 
naltrexone. At Sec.  410.67(d)(2), we codified that the bundled payment 
for episodes of care in which a medication is provided will consist of 
a payment for a drug component, reflecting payment for the applicable 
FDA-approved opioid agonist or antagonist medication in the patient's 
treatment plan, and a non-drug component, reflecting payment for all 
other OUD treatment services reflected in the patient's treatment plan 
(including dispensing/administration of the medication, if applicable). 
The payments for the drug component and non-drug component are added 
together to create the bundled payment amount. In the CY 2020 PFS final 
rule, we finalized a payment methodology for the drug component related 
to implantable and injectable medications at Sec.  410.67(d)(2)(i)(A), 
which applied to the bundled payment for injectable buprenorphine 
(G2069).
---------------------------------------------------------------------------

    \488\ https://www.dea.gov/drug-information/drug-scheduling.
    \489\ National Academies of Sciences, Engineering, and Medicine. 
(2019). ``The effectiveness of medication-based treatment for opioid 
use disorder.'' In M. Mancher & A.I. Leshner (Eds.), Medications for 
Opioid Use Disorder Save Lives. National Academies Press (U.S.). 
https://www.ncbi.nlm.nih.gov/books/NBK541393/.
---------------------------------------------------------------------------

    For implantable and injectable medications paid under the OTP 
benefit, the payment is determined using the methodology set forth in 
section 1847A of the Act, except that the payment amount must be 100 
percent of the ASP, if ASP is used; and the payment must be 100 percent 
of the WAC, if WAC is used. We also stated in the CY 2020 PFS final 
rule that the typical maintenance dose to calculate the drug component 
for payment under the OTP benefit, as dosing for some, but not all, of 
the drugs varies considerably (84 FR 62650). As part of determining a 
payment rate for the proposed bundles for OUD treatment services, a 
dosage of the applicable medication must be selected to calculate the 
costs of the drug component of the bundle. In the CY 2020 PFS final 
rule, we finalized using a 100 mg monthly dose for the extended-release 
buprenorphine injection to use as the typical or average maintenance 
dose to calculate the drug component of the bundle for injectable 
buprenorphine (G2069). At the time of ratesetting for the CY 2020 PFS 
rule, the only injectable extended-release buprenorphine drug available 
and approved by the FDA under section 505 of the FFDCA for the 
treatment of OUD was Sublocade[supreg]; \490\ and, the drug component 
for the bundle was based on a crosswalk to its respective HCPCS codes 
Q9991 (Buprenorphine XR 100 mg or less) and Q9992 (Buprenorphine XR 
over 100 mg) using the methodology set forth in section 1874A of the 
Act, except that the payment amount was 100-percent of the ASP. In the 
CY 2020 PFS final rule, we noted that the HCPCS codes for extended-
release buprenorphine injection had the same payment rate, thus we did 
not believe it was necessary to establish a second typical maintenance 
dose to calculate the payment rate for the drug. For the non-drug 
component of the weekly bundle for injectable buprenorphine (G2069), we 
finalized that in addition to services for substance use counseling, 
individual and group therapy, and toxicology testing, we would include 
the Medicare non-facility rate for administration of an injection in 
our determination of the payment rate based on CPT code 96372 
(Therapeutic, prophylactic, or diagnostic injection (specify substance 
or drug); subcutaneous or intramuscular).
---------------------------------------------------------------------------

    \490\ https://www.accessdata.fda.gov/drugsatfda_docs/label/2018/209819s001lbl.pdf.
---------------------------------------------------------------------------

    In May of 2023, the FDA approved a new drug application (NDA) under 
section 505(b)(2) of the FFDCA for

[[Page 98075]]

another extended-release buprenorphine injection (Brixadi[supreg]) for 
subcutaneous use to treat moderate to severe OUD.\491\ Clinical data 
suggest that Brixadi[supreg] likely contributes to high rates of 
treatment retention, reductions in opioid withdrawal and cravings, and 
fewer levels of illicit opioid use.\492\ Brixadi[supreg] is available 
as a weekly injection (containing 50 mg of buprenorphine per mL) that 
can be used in patients who have started treatment with a single dose 
of a transmucosal buprenorphine product or who are already being 
treated with buprenorphine-containing products, and a monthly injection 
(containing 356 mg of buprenorphine per mL) for patients already being 
treated with buprenorphine. The weekly and monthly formulations of the 
drug are available at varying doses, including lower doses that may be 
appropriate for those who do not tolerate higher doses of extended-
release buprenorphine that are currently available.\493\ The weekly 
doses are 8 mg, 16 mg, 24 mg, and 32 mg, and should be administered in 
7-day intervals; and the monthly doses are 64 mg, 96 mg, and 128 mg, 
and should be administered in 28-day intervals.\494\
---------------------------------------------------------------------------

    \491\ https://www.fda.gov/news-events/press-announcements/fda-approves-new-buprenorphine-treatment-option-opioid-use-disorder.
    \492\ Frost, M., Bailey, G.L., Lintzeris, N., Strang, J., 
Dunlop, A., Nunes, E.V., Jansen, J.B., Frey, L.C., Weber, B., Haber, 
P., Oosman, S., Kim, S., & Tiberg, F. (2019). ``Long[hyphen]term 
safety of a weekly and monthly subcutaneous buprenorphine depot in 
the treatment of adult out[hyphen]patients with opioid use 
disorder.'' Addiction, 114(8), 1416-1426. https://doi.org/10.1111/add.14636.
    \493\ https://www.fda.gov/news-events/press-announcements/fda-approves-new-buprenorphine-treatment-option-opioid-use-disorder.
    \494\ https://www.accessdata.fda.gov/drugsatfda_docs/label/2023/210136Orig1s000lbl.pdf.
---------------------------------------------------------------------------

    Buprenorphine is associated with decreasing the risk for overdose, 
opioid-related mortality, and all-cause mortality.\495\ Data also shows 
that buprenorphine helps retain individuals in treatment, lowers 
illicit opioid use, and reduces drug-related behaviors that increase 
the risk for HIV transmission.\496\ In particular, long-acting (for 
example, extended-release) injectable forms of buprenorphine have been 
shown to promote adherence to treatment while reducing the need for 
daily dosing, and to enhance patient-reported outcomes through 
improvements in quality of life, accessibility, social relationships, 
participation in employment, more flexible personal and professional 
schedules, and other treatment satisfaction measures.\497\ Finally, a 
large percentage of Medicare beneficiaries with an OUD continue to face 
challenges in accessing medication, especially enrollees who are older, 
female, and who identify as racial/ethnic minorities.\498\ The most 
common reasons for not receiving SUD treatment include financial 
barriers in affordability and coverage.\499\ Establishing coverage and 
payment for a new medication to treat OUD may provide more MOUD 
treatment options, reduce financial barriers to accessing medication, 
and aid health equity efforts among Medicare beneficiaries. 
Accordingly, for these reasons and because sections 1861(s)(2), 
1861(jjj)(1)(A), and 1833(a)(1) of the Act provide that the Secretary 
is to provide coverage and payment for OUD treatment services including 
opioid agonist and antagonist medications that are FDA approved for use 
in the treatment of OUD, in the CY 2025 PFS proposed rule we proposed 
to establish payment for the weekly and monthly formulations for this 
new FDA-approved injectable buprenorphine product which we believe 
would further efforts to address the opioid crisis and expand access to 
evidence-based treatment for OUD.
---------------------------------------------------------------------------

    \495\ Larochelle, M.R., Bernson, D., Land, T., Stopka, T.J., 
Wang, N., Xuan, Z., Bagley, S.M., Liebschutz, J.M., & Walley, A.Y. 
(2018). ``Medication for opioid use disorder after nonfatal opioid 
overdose and association with mortality: A cohort study.'' Annals of 
Internal Medicine, 169(3), 137. https://doi.org/10.7326/M17-3107; 
Wakeman, S.E., Larochelle, M.R., Ameli, O., Chaisson, C.E., 
McPheeters, J.T., Crown, W.H., Azocar, F., & Sanghavi, D.M. (2020). 
``Comparative effectiveness of different treatment pathways for 
opioid use disorder.'' JAMA Network Open, 3(2), e1920622. https://doi.org/10.1001/jamanetworkopen.2019.20622.
    \496\ Shulman, M., Wai, J.M., & Nunes, E.V. (2019). 
Buprenorphine treatment for opioid use disorder: An overview. CNS 
Drugs, 33(6), 567-580. https://doi.org/10.1007/s40263-019-00637-z; 
Thomas, C.P., Fullerton, C.A., Kim, M., Montejano, L., Lyman, D.R., 
Dougherty, R.H., Daniels, A.S., Ghose, S.S., & Delphin-Rittmon, M.E. 
(2014). Medication-assisted treatment with buprenorphine: Assessing 
the evidence. Psychiatric Services (Washington, DC), 65(2), 158-170. 
https://doi.org/10.1176/appi.ps.201300256; Gowing, L., Farrell, 
M.F., Bornemann, R., Sullivan, L.E., & Ali, R. (2011). Oral 
substitution treatment of injecting opioid users for prevention of 
HIV infection. The Cochrane Database of Systematic Reviews, 8, 
CD004145. https://doi.org/10.1002/14651858.CD004145.pub4.
    \497\ Maremmani, I., Dematteis, M., Gorzelanczyk, E.J., Mugelli, 
A., Walcher, S., & Torrens, M. (2023). Long-acting buprenorphine 
formulations as a new strategy for the treatment of opioid use 
disorder. Journal of Clinical Medicine, 12(17), 5575. https://doi.org/10.3390/jcm12175575; Farrell, M., Shahbazi, J., Byrne, M., 
Grebely, J., Lintzeris, N., Chambers, M., Larance, B., Ali, R., 
Nielsen, S., Dunlop, A., Dore, G.J., McDonough, M., Montebello, M., 
Nicholas, T., Weiss, R., Rodgers, C., Cook, J., & Degenhardt, L. 
(2022). Outcomes of a single-arm implementation trial of extended-
release subcutaneous buprenorphine depot injections in people with 
opioid dependence. International Journal of Drug Policy, 100, 
103492. https://doi.org/10.1016/j.drugpo.2021.103492; Lintzeris, N., 
Dunlop, A.J., Haber, P.S., Lubman, D.I., Graham, R., Hutchinson, S., 
Arunogiri, S., Hayes, V., Hjelmstr[ouml]m, P., Svedberg, A., 
Peterson, S., & Tiberg, F. (2021). Patient-reported outcomes of 
treatment of opioid dependence with weekly and monthly subcutaneous 
depot vs daily sublingual buprenorphine: A randomized clinical 
trial. JAMA Network Open, 4(5), e219041.https://doi.org/10.1001/jamanetworkopen.2021.9041; Martin, E., Maher, H., McKeon, G., 
Patterson, S., Blake, J., & Chen, K.Y. (2022). Long-acting 
injectable buprenorphine for opioid use disorder: A systematic 
review of impact of use on social determinants of health. Journal of 
Substance Abuse Treatment, 139, 108776. T=https://doi.org/10.1016/j.jsat.2022.108776.
    \498\ https://oig.hhs.gov/oei/reports/OEI-02-23-00250.pdf.
    \499\ Parish, W.J., Mark, T.L., Weber, E.M., & Steinberg, D.G. 
(2022). Substance use disorders among Medicare beneficiaries: 
Prevalence, mental and physical comorbidities, and treatment 
barriers. American Journal of Preventive Medicine, 63(2), 225-232. 
https://doi.org/10.1016/j.amepre.2022.01.021.
---------------------------------------------------------------------------

    We proposed to establish two different payments: one for weekly 
injectable buprenorphine weekly and one for monthly injectable 
buprenorphine. To establish payment for the weekly and monthly 
formulations, we proposed to use the existing payment methodology for 
implantable and injectable medications codified at Sec.  
410.67(d)(2)(i)(A). This regulation specifies that payment is 
determined using the methodology set forth in section 1847A of the Act, 
except that the payment amount must be 100 percent of the ASP, if ASP 
is used; and the payment must be 100 percent of the WAC, if WAC is 
used.
    Payment limits \500\ for most drugs and biologicals separately 
payable under Medicare Part B are determined using the methodology in 
section 1847A of the Act, and in many cases, payment is based on the 
ASP plus a statutorily mandated 6 percent add-on. Most drugs payable 
under Part B are paid under the ``incident to'' benefit under section 
1861(s)(2) of the Act, which includes drugs and biologicals not usually 
self-administered by the patient. The ASP payment limit determined 
under section 1847A of the Act reflects a volume-weighted ASP for all 
national drug codes (NDCs) that are assigned to a HCPCS code. The ASP 
is calculated quarterly using manufacturer-submitted data on sales to 
all purchasers (with limited exceptions as articulated in section 
1847A(c)(2) of the Act, such as for sales at nominal charge and sales 
exempt from best price) with manufacturers' rebates, discounts, and

[[Page 98076]]

price concessions reflected in the manufacturer's determination of ASP.
---------------------------------------------------------------------------

    \500\ In general, CMS establishes a single, national payment 
limit to Medicare Administrative Contractors (MACs) for payment of 
some Part B-covered drugs and biologicals whose payment is 
determined based on the methodology described in section 1847A of 
the Act. CMS provides an ASP pricing file to MACs, which is updated 
quarterly. https://www.cms.gov/medicare/payment/part-b-drugs/asp-pricing-files.
---------------------------------------------------------------------------

    Paragraphs (4)(A) and (6) of sections 1847A(b) of the Act require 
that the Medicare Part B payment limit for a single-source drug or 
biological be determined using all of the NDCs assigned to it. Section 
1847A(b)(5) of the Act further states that the payment limit shall be 
determined without regard to any special packaging, labeling, or 
identifiers on the dosage form or product or package. In 2007, CMS 
issued a program instruction,\501\ as permitted under section 
1847A(c)(5)(C) of the Act, stating that the payment limit for a single 
source drug or biological will be based on the pricing information for 
products produced or distributed under the applicable FDA approval 
(such as a New Drug Application (NDA) or Biologics License Application 
(BLA)). Therefore, all versions of a single source drug or biological 
product (or NDCs) marketed under the same FDA approval number (for 
example, NDA or BLA, including supplements) are considered the same 
drug or biological for purposes of payments made under section 1847A of 
the Act and are crosswalked to the same billing and payment code.
---------------------------------------------------------------------------

    \501\ https://www.cms.gov/Medicare/Coding/MedHCPCSGenInfo/Downloads/051807_coding_annoucement.pdf.
---------------------------------------------------------------------------

    In the CY 2025 PFS proposed rule, we stated that we continue to 
believe that use of ASP provides a transparent and public benchmark for 
manufacturers' pricing as it reflects the manufacturers' actual sales 
prices to all purchasers (with limited exceptions) and is the only 
pricing methodology that includes off invoice rebates and discounts as 
described in section 1847A(c)(3) of the Act. Additionally, since many 
other injectable drugs are paid for under Medicare part B through the 
ASP payment methodology in 1847A, we presume that this methodology is 
appropriate for pricing Brixadi[supreg]. We also proposed to limit the 
payment amount to 100-percent of ASP without a 6-percent add-on 
percentage since, as we have previously noted, it is our understanding 
that many OTPs purchase directly from drug manufacturers, thereby 
limiting the markup from distribution channels.
    As we stated in our discussion above, we use the typical or average 
maintenance dose of a drug to determine the drug costs for each of the 
bundles. In the CY 2020 PFS final rule, we noted that there are often 
variations in the dosage and frequency of administration of 
medications, but that ``payment based on the typical dose means that, 
across the Medicare beneficiaries served by the OTP, the payment amount 
should be reasonable and represent the average costs incurred in 
furnishing the drug component of the OUD treatment services.'' (84 FR 
62650). Therefore, in the CY 2020 PFS final rule, we finalized using 
the typical maintenance dose to establish the drug costs for each of 
the bundles as our approach to addressing variable dosing of 
medications. (84 FR 62650).
    In the CY 2020 PFS final rule, we finalized a 100 mg monthly dose 
for the extended-release buprenorphine injection as the typical 
maintenance dose, which we used to calculate the drug component of the 
weekly bundle for injectable buprenorphine (G2069). At the time, we did 
not establish a second typical maintenance dose because both HCPCS 
codes for the extended release buprenorphine injection, that is, 
Sublocade[supreg] [Q9991 (Buprenorphine XR 100 mg or less) and Q9992 
(Buprenorphine XR over 100 mg)] had the same payment limit because, as 
explained above in this section, all NDCs marketed under the same FDA 
approval number are considered the same drug or biological for purposes 
of payments made under section 1847A of the Act and are crosswalked to 
the same billing and payment code. The weekly and monthly formulations 
of Brixadi[supreg] are described by HCPCS codes J0577 (Injection, 
buprenorphine extended release (brixadi), less than or equal to 7 days 
of therapy) and J0578 (Injection, buprenorphine extended release 
(brixadi), greater than 7 days and up to 28 days of therapy). In the 
same manner as Sublocade[supreg], and as explained in the coding 
announcement for HCPCS codes J0577 and J0578,\502\ because all versions 
of a single source drug or biological product (or NDCs) marketed under 
the same FDA approval number are considered the same drug or biological 
for purposes of payments made under section 1847A of the Act, the 
payment limits for both J0577 and J0578 are calculated using all the 
NDCs marketed under the applicable FDA approval. However, since the 
dose descriptions for these codes are based on days of therapy (and not 
a measurement of the amount of drug, like per 1 mg, as is the case with 
Sublocade[supreg]), the ASP+0 for the two codes are different; ASP+0 
for J0577 is $381.213 and ASP+0 for J0578 is $1524.855, based on sales 
from the fourth calendar quarter of 2023. Therefore, we stated in the 
CY 2025 PFS proposed rule that we do not believe it is appropriate to 
bundle the weekly and monthly formulations into a single bundled 
payment since, unlike Sublocade[supreg], Brixadi[supreg] formulations 
have different payment limits, and pricing them under the same bundle 
would not adequately represent the average costs incurred in furnishing 
these different formulations in an OTP setting. Additionally, creating 
a single bundled payment rate that does not reflect the type and cost 
of the drug used could result in access issues for beneficiaries, 
especially if the bundled payment amount for one drug significantly 
drops and unintentionally incentivizes treatment towards a drug with a 
higher bundled payment amount.
---------------------------------------------------------------------------

    \502\ https://www.cms.gov/files/document/2023-hcpcs-application-summary-quarter-4-2023-drugs-and-biologicals-updated-03/04/2024.pdf.
---------------------------------------------------------------------------

    In establishing the two different payments for the weekly and 
monthly injectable buprenorphine formulations, first, we proposed to 
crosswalk the monthly formulation of Brixadi[supreg] (J0578: Injection, 
buprenorphine extended release (brixadi), greater than 7 days and up to 
28 days of therapy) to the drug component of our existing bundled 
payment for injectable buprenorphine described by HCPCS code G2069 
(Medication assisted treatment, buprenorphine (injectable); weekly 
bundle including dispensing and/or administration, substance use 
counseling, individual and group therapy, and toxicology testing if 
performed (provision of the services by a Medicare-enrolled Opioid 
Treatment Program). We proposed to average the ASP+0 of 
Sublocade[supreg] and ASP+0 of monthly Brixadi[supreg] by adding their 
two ASP+0 payment amounts together and dividing the sum by two, to 
update the payment for the drug component of HCPCS code G2069. We 
believe including the average of the ASP+0 of Sublocade[supreg] and 
Brixadi[supreg] in the drug component of G2069 rather than the sum of 
their respective individual ASPs is appropriate because we do not 
expect that a beneficiary would receive two different types of 
buprenorphine monthly medication injections simultaneously from an OTP 
(for example, both Sublocade[supreg] and Brixadi[supreg] during the 
same episode of care and date of service). We believe that averaging 
the price of the two types of buprenorphine monthly medication 
injections would be appropriate because the individual payment limits 
for each of the drug codes (Q9991, Q9992, and J0578) would both be 
informed by ASP data and comparable as they would be priced by the same 
ASP payment methodology (ASP+0). We also noted that bundling the 
monthly formulation of Brixadi[supreg] into the existing HCPCS code 
(G2069) for injectable

[[Page 98077]]

buprenorphine will be appropriate and no more administratively complex 
for OTPs since G2069 is already billed on a monthly basis; 
Sublocade[supreg], which is already reflected in the drug component of 
G2069 is administered on a monthly basis to beneficiaries as would be 
the monthly formulation of Brixadi[supreg], so OTPs could continue to 
bill G2069 once each month when either monthly Brixadi[supreg] or 
Sublocade[supreg] is administered, as appropriate.\503\
---------------------------------------------------------------------------

    \503\ https://www.accessdata.fda.gov/drugsatfda_docs/label/2018/209819s001lbl.pdf.
---------------------------------------------------------------------------

    Additionally, the average typical dose of G2069 is 100mg of 
buprenorphine administered monthly, as finalized in the CY 2020 PFS 
final rule (84 FR 62651). The monthly formulations of Brixadi[supreg] 
can range from 64 mg, to 96 mg, to 128 mg. The median of these 
different doses for the monthly formulation of Brixadi[supreg] (96 mg) 
would approximate the average typical dose of the current injectable 
buprenorphine bundle (100 mg). We note that the different monthly doses 
of Brixadi[supreg] are assigned to the same HCPCS code J0578 
(Injection, buprenorphine extended release (brixadi), greater than 7 
days and up to 28 days of therapy) and have the same payment limit 
regardless of the monthly dose (64 mg, 96 mg, or 128 mg), so selecting 
a typical dose of monthly Brixadi[supreg] to potentially adjust the 
drug component of G2069 would not meaningfully change the payment rate. 
Therefore, we did not propose to establish an average typical dose 
different than 100 mg for injectable buprenorphine administered on a 
monthly basis for purposes of calculating the drug component under the 
OTP benefit, though we solicited comment on whether this average 
typical dose (100 mg) is close to the dose for the monthly formulation 
of Brixadi[supreg] that patients receive on average.
    In all, we believe that bundling the monthly formulation of 
Brixadi[supreg] into our current injectable buprenorphine coding under 
the OTP benefit will be appropriate for several reasons, including: the 
costs for furnishing these drugs, as shown by similar ASP+0 amounts for 
monthly Brixadi[supreg] (J0578) and the two HCPCS codes for 
Sublocade[supreg] (Q9991 and Q9992) ($1524.855 and $1768.775, 
respectively, are comparable based on sales from the fourth calendar 
quarter of 2023); the average maintenance dosage for Sublocade[supreg] 
(100 mg) is comparable to the median monthly dosage for Brixadi 
[supreg] (96 mg) and; both drugs have similar frequencies and costs of 
administration (on a monthly basis) with a fee paid to the OTP for one 
administration of an injection once a month. We stated that we believe 
that our proposed payment methodology would be consistent with section 
1834(w)(2) of the Act, which allows the Secretary to implement bundled 
payments for OUD treatment services with considerations to the type of 
medication provided and the frequency of the services, and thus permit 
multiple bundles that represent injectable buprenorphine (proposed 
GOTP2 and G2069) and the frequency with which injectable buprenorphine 
is administered (weekly versus monthly). We proposed to still calculate 
the non-drug component of HCPCS code G2069 consistent with the 
methodology we use to calculate the non-drug component, which is 
specified at Sec.  410.67(d)(2)(ii). We proposed to change the code 
descriptor for HCPCS code G2069 to take out references to a ``weekly 
bundle'' to make it clear that the code is to be billed on a monthly 
basis. Specifically, we proposed to revise the code descriptor to state 
the following: HCPCS code G2069 (Medication assisted treatment, 
buprenorphine (injectable) administered on a monthly basis; bundle 
including dispensing and/or administration, substance use counseling, 
individual and group therapy, and toxicology testing if performed 
(provision of the services by a Medicare-enrolled Opioid Treatment 
Program)). Lastly, consistent with current guidance in Chapter 39 of 
the Medicare Claims Processing Manual, we will still expect that HCPCS 
code G2069 ``would be billed for the week during which the injection 
was administered and that HCPCS code G2074, which describes a bundle 
not including the drug, will billed during any subsequent weeks that at 
least one non-drug service is furnished until the injection is 
administered again, at which time HCPCS code G2069 would be billed 
again for that week.'' \504\
---------------------------------------------------------------------------

    \504\ https://www.cms.gov/files/document/chapter-39-opioid-treatment-programs-otps.pdf.
---------------------------------------------------------------------------

    For the weekly injectable buprenorphine, we proposed to calculate a 
new bundled payment described by GOTP2 (Medication assisted treatment, 
buprenorphine (injectable) administered on a weekly basis; weekly 
bundle including dispensing and/or administration, substance use 
counseling, individual and group therapy, and toxicology testing if 
performed (provision of the services by a Medicare-enrolled Opioid 
Treatment Program). For the drug component of HCPCS code GOTP2, we 
proposed to base the payment on a crosswalk to the weekly formulation 
described by HCPCS code J0577 (Injection, buprenorphine extended 
release (brixadi), less than or equal to 7 days of therapy), which 
would also be based on the payment methodology specified at Sec.  
410.67(d)(2)(i)(A) for implantable and injectable medications, 
consistent with the existing monthly injectable buprenorphine bundle. 
We believe that establishing a separate weekly bundled payment 
reflecting the weekly formulation of Brixadi[supreg] would more 
appropriately pay for the subset of beneficiaries who receive less than 
a monthly dosage of injectable buprenorphine on average, or who choose 
to discontinue treatment for the drug before the end of the month. 
Additionally, establishing a separate weekly bundled payment would 
contribute to stabilizing the payment of the drug component for the 
monthly bundle of injectable buprenorphine (G2069) since the ASP+0 for 
weekly Brixadi[supreg] costs less than the payment for the drug 
component of G2069 ($381.213 April 2024 ASP+0, based on sales from the 
fourth calendar quarter of 2023 versus $1,780.167 for the CY 2024 
payment rate of the drug component of G2069) and may decrease payment 
after the weekly Brixadi is averaged into the drug component of 
G2069[supreg]. Establishing a separate weekly bundled payment is also 
more appropriate because weekly injectable buprenorphine requires more 
frequent administration costs than monthly injectable buprenorphine 
(weekly Brixadi[supreg] must be injected at least once every 7 days 
compared to once a month for Sublocade[supreg] and monthly 
Brixadi[supreg]). Thus, a different bundle for weekly injectable 
burpeorphine may more closely reflect the costs incurred by OTPs. 
Furthermore, as noted above in this section, different weekly doses are 
assigned to the same HCPCS code J0577 (Injection, buprenorphine 
extended release (brixadi), less than or equal to 7 days of therapy) 
and have the same payment limit regardless of the weekly dose. 
Therefore, we did not believe it was appropriate to propose an average 
typical dose for the weekly formulation of Brixadi[supreg] for purposes 
of calculating the drug component of GOTP2 under the OTP benefit.
    Second, we proposed to also establish payment for the non-drug 
component of GOTP2 consistent with the methodology utilized for the 
monthly bundle of injectable buprenorphine (G2069). Specifically, we 
stated we will continue to pay for substance use counseling, individual 
and group therapy, and toxicology testing that are included in the non-
drug components for each of the

[[Page 98078]]

bundled payments reflecting an episode of care, but will include the 
Medicare non-facility rate for administration of an injection in our 
determination of the non-drug component payment rate based on CPT code 
96372 (Therapeutic, prophylactic, or diagnostic injection (specify 
substance or drug); subcutaneous or intramuscular). Consistent with the 
payment amounts for the non-drug component of other bundled payments 
for an episode of care, we also proposed to continue to update the 
value of this non-drug component for GOTP2 by the GAF as described in 
Sec.  410.67(d)(4)(ii), and by the MEI as described in Sec.  
410.67(d)(4)(iii).
    We solicited comments on these proposals to establish payment for 
the weekly and monthly formulations of the new injectable buprenorphine 
drug. We received public comments on these proposals. The following is 
a summary of the comments we received and our responses.
    Comment: Multiple commenters supported CMS' efforts to expand 
access to a new, innovative injectable buprenorphine product for MOUD 
treatment and stated it would bolster efforts to combat the opioid 
epidemic. Multiple commenters also expressed support for CMS' proposed 
payment approach to create a new weekly bundled payment code to reflect 
the weekly formulation of Brixadi[supreg], and to update the existing 
bundled payment for monthly injectable buprenorphine to account for the 
monthly formulation of Brixadi[supreg].
    Response: We appreciate commenters' support of this proposal.
    Comment: One commenter recommended that CMS develop an expedited 
pathway separate from the annual rulemaking cycle to allow for more 
timely payment decisions of new drugs as they become available.
    Response: We appreciate this commenter's feedback. CMS supports 
efforts to provide Medicare beneficiaries with timely access to 
important medications, including for the treatment of an OUD. We note 
that in the CY 2020 PFS final rule (84 FR 62643), we finalized coding 
to provide payment for new FDA-approved opioid agonist and antagonist 
treatment medications to treat OUD. Specifically, we created a 
medication not otherwise specified (NOS) code (HCPCS code G2075) in the 
scenario where an OTP furnishes MOUD treatment using a new FDA-approved 
opioid agonist or antagonist that is not specified by one of our 
existing codes. In Chapter 39, section 30.4, of the Medicare Claims 
Processing Manual, we describe the payment methodology for how the drug 
component may be priced for medications that are not otherwise 
specified. OTPs should consider billing HCPCS code G2075 for new FDA-
approved opioid agonist or antagonist medications that are not 
specified by one of our existing codes, as long as they are medically 
reasonable and necessary, and all applicable requirements are met. 
However, we note that HCPCS code G2075 may not always apply to 
medications that are adjustments to the OTP bundle payment, such as 
unspecified, take-home doses of opioid overdose reversal medications 
that are not typically furnished on a weekly basis during an episode of 
care. We may consider this topic for future rulemaking.
    Comment: One commenter asked CMS to consider any interaction this 
proposal, to establish payment for the weekly and monthly formulations 
of Brixadi[supreg], may have on treatments currently covered under 
Medicare Part D.
    Response: We appreciate the commenter raising this important 
question. We note that injectable buprenorphine can only be given if 
administered by an authorized healthcare provider.\505\ Therefore, it 
is not available for self-administration and prescription through the 
Medicare Part D benefit.
---------------------------------------------------------------------------

    \505\ https://www.accessdata.fda.gov/drugsatfda_docs/label/2023/210136Orig1s000lbl.pdf.
---------------------------------------------------------------------------

    Comment: One commenter advised CMS not to identify specific 
pharmaceutical brands when discussing the payment methodology in the 
final rule.
    Response: We thank the commenter for this feedback. We note that 
the brand names of nalmefene hydrochloride (Opvee[supreg]) and 
injectable buprenorphine (Brixadi[supreg]) were specified to adequately 
estimate pricing of the drug component for proposed new codes GOTP1, 
GOTP2, and updating the existing bundled payment for monthly injectable 
buprenorphine (HCPCS code G2069). Brixadi[supreg] was also utilized in 
the payment methodology in order to distinguish this drug from another 
type of injectable buprenorphine: Sublocade[supreg]. The code 
descriptors for these aforementioned codes include the generic name 
instead of the brand name for these medications, so that they may be 
inclusive of comparable drugs in the future. Moreover, payment for 
these codes is made directly to the OTP for furnishing MOUD treatment 
instead of the drug manufacturer.
    Comment: One commenter did not support our proposed monthly payment 
methodology for Brixadi[supreg] of adding the payment limits of 
Brixadi[supreg] and Sublocade[supreg] together under the same drug 
component in the existing monthly bundled payment (HCPCS code G2069) 
for injectable buprenorphine and averaging their two ASP+0 values. The 
commenter reasoned that separate bundled payments for each product are 
needed under the Medicare OTP benefit because Sublocade[supreg] and 
Brixadi[supreg] are clinically different due to several factors, 
including that the medications are not interchangeable, they have 
pharmacokinetic differences (for example, 2.46 ng/mL trough 
concentration for Sublocade[supreg] 100mg versus 2.0 ng/mL for 
Brixadi[supreg] 96mg), differences in minimum time between monthly 
dosing (26 days for Sublocade[supreg] versus 28 days for monthly 
Brixadi[supreg]), and differences in buprenorphine half-lives (19-26 
days for Sublocade[supreg] versus 43-60 days for Brixadi[supreg]). The 
commenter added that section 1834(w)(2) of the Act allows the Secretary 
to make one or more bundles based on a variety of criteria, including 
by ``other factors as the Secretary determine appropriate,'' which may 
allow CMS the flexibility to create multiple bundled payments for 
injectable buprenorphine. The commenter noted that if the payment rate 
of the existing bundled payment for monthly injectable buprenorphine 
were to decrease, then it may incentivize OTPs to prescribe one type of 
medication over the other based on the medication with the higher 
financial return. The commenter expressed concern that such incentive 
could inadvertently influence an OTPs' ability to prescribe the most 
suitable medication for a patient's needs.
    Response: We appreciate the commenter's concerns regarding the 
payment methodology for monthly injectable buprenorphine. We agree with 
the commenter that there are certain clinical differences in the drugs 
and that section 1834(w)(2) of the Act supports the Secretary in making 
multiple bundled payments under the OTP benefit based on a variety of 
factors. However, we do not believe that monthly Brixadi[supreg] and 
Sublocade[supreg] are significantly clinically different from each 
other to support creating a separate bundled payment for monthly 
Brixadi[supreg]. For example, while there are slight differences in the 
minimum days between maintenance doses and the half-lives of the two 
drugs, the FDA-approved labeling of both Brixadi[supreg] and 
Sublocade[supreg] specifies the same monthly interval for maintenance 
doses, and both can convert patients who require a

[[Page 98079]]

maximum transmucosal buprenorphine dose of 24mg.\506\ Additionally, 
since both drugs at maintenance doses reach plasma concentrations 
within the 2-3 ng/mL range of buprenorphine--identified as effective 
for reducing illicit opioid use \507\--we disagree with the commenter's 
suggestion that a higher concentration closer to 3 ng/mL is required to 
achieve a positive clinical outcome, which is measured using tools such 
as the Clinical Opiate Withdrawal Scale and Visual Analog Scale for 
craving.\508\ Furthermore, in the CY 2020 PFS final rule, we finalized 
five medication categories [methadone (oral), buprenorphine (oral), 
buprenorphine (injection), buprenorphine (implant), and naltrexone 
(injection)] ``to represent the distinct types of covered OTP 
medications currently on the market based on primary active ingredient, 
method of administration, and cost.'' (84 FR 62642) Accordingly, 
monthly Brixadi[supreg] and Sublocade[supreg] have the same primary 
active ingredients (buprenorphine), methods of administration (by 
monthly injection), and comparable costs (April 2024 ASP+0: $1524.855 
and $1768.775, based on sales from the fourth calendar quarter of 2023, 
and payment for administration of one monthly injection that would be 
included in the non-drug component). In the CY 2020 PFS final rule, we 
also stated that we believe ``these categories of bundled payments 
strike a reasonable balance between recognizing the variable costs of 
these medications and the statutory requirement to make a bundled 
payment for OTP services.'' (84 FR 62642) Therefore, we don't believe 
the variable payment amounts for these two drugs would necessitate 
creating separate bundled payments. Although we proposed to create a 
separate weekly bundled payment for weekly injectable buprenorphine, we 
believed this is necessary due to the differences in the frequency of 
administration (weekly injections), and costs due to a lower ASP+0 
($381.214 April 2024 ASP+0, based on sales from the fourth calendar 
quarter of 2023) that would impact the drug component of the bundle, 
and the need for additional administration costs for multiple weekly 
injections that would also impact the non-drug component of the bundle.
---------------------------------------------------------------------------

    \506\ https://www.sublocade.com/Content/pdf/prescribing-information.pdf; https://www.brixadi.com/pdfs/brixadi-prescribing-information.pdf.
    \507\ Jones AK, Ngaimisi E, Gopalakrishnan M, Young MA, Laffont 
CM. Population Pharmacokinetics of a Monthly Buprenorphine Depot 
Injection for the Treatment of Opioid Use Disorder: A Combined 
Analysis of Phase II and Phase III Trials. Clin Pharmacokinet. 2021 
Apr;60(4):527-540.
    \508\ Wesson, D.R., & Ling, W. (2003). The Clinical Opiate 
Withdrawal Scale (COWS). J Psychoactive Drugs, 35(2), 253-9 https://pubmed.ncbi.nlm.nih.gov/12924748/; Hayes, M.H.S. and Patterson, D.G. 
(1921) Experimental development of the graphic rating method. 
Psychological Bulletin, 18, 98-99.
---------------------------------------------------------------------------

    Nevertheless, CMS agrees with the commenter that it is essential to 
promote access to MOUDs, and we believe that a payment for monthly 
buprenorphine injections that better reflects market conditions for 
these products would more accurately represent costs incurred by OTPs 
in providing this service. Therefore, instead of averaging each 
product's ASP+0 to calculate the drug component as proposed, we will 
calculate it using a volume-weighted ASP of all NDCs for both products 
using the calculation described in section 1847A(b)(6) of the Act. This 
approach better reflects the utilization of drugs in clinical practice 
since it accounts for the sales volume of each NDC for both products.
    Based on the data used for the October 2024 ASP pricing file (that 
is, sales from the second calendar quarter of 2024), the drug component 
of the bundle for monthly injectable buprenorphine using the proposed 
calculation would be approximately $1,726.26. However, volume-weighting 
the ASP for all the NDCs crosswalked to HCPCS codes for monthly 
Brixadi[supreg] and Sublocade[supreg] would increase the payment of the 
drug component to approximately $1,797.29. Since calculating the drug 
component using the volume-weighted ASP of all NDCs crosswalked to both 
HCPCS codes better reflects actual utilization of the products, we are 
instead using this approach to price the drug component of the existing 
bundled payment for monthly injectable buprenorphine (HCPCS code 
G2069). We believe this revised payment approach will address the 
commenter's concerns due to the increased payment amount, which more 
closely reflects the market variables, including the volume of sales in 
each calendar quarter. We will continue to monitor utilization of each 
of the bundled payments for weekly and monthly injectable buprenorphine 
to ensure Medicare beneficiaries continue to have access to these 
medications, and propose additional refinements as needed through 
future rulemaking.
    After consideration of public comments, we are finalizing our 
proposal to establish coding and payment for the weekly and monthly 
injectable buprenorphine. We will continue to use the payment 
methodology for implantable and injectable medications at Sec.  
410.67(d)(2)(i)(A) for the monthly and weekly injectable buprenorphine. 
We also are not finalizing a typical maintenance dose to establish the 
drug costs for these bundles since the doses under each formulation of 
Brixadi (weekly 8 mg, 16 mg, 24 mg, and 32mg; monthly: 64 mg, 96 mg, 
and 128 mg) have the same payment limit regardless of the dose. We are 
crosswalking the NDCs crosswalked to J0578 (Injection, buprenorphine 
extended release (brixadi), greater than 7 days and up to 28 days of 
therapy) to the drug component of our existing bundled payment for 
injectable buprenorphine described by HCPCS code G2069 and calculating 
the drug component using a volume-weighted ASP of all NDCs crosswalked 
to HCPCS codes J0578 and Q9991 (which are the same NDCs crosswalked to 
HCPCS code Q9992). OTPs could continue to bill HCPCS code G2069 
(Medication assisted treatment, buprenorphine (injectable) administered 
on a monthly basis; bundle including dispensing and/or administration, 
substance use counseling, individual and group therapy, and toxicology 
testing if performed (provision of the services by a Medicare-enrolled 
Opioid Treatment Program) once each month when either monthly 
Brixadi[supreg] or Sublocade[supreg] is administered, as appropriate. 
We are also establishing a separate weekly bundled payment to reflect 
the cost of furnishing weekly injectable buprenorphine described by 
HCPCS code G0533 (previously placeholder code GOTP2) (G0533: Medication 
assisted treatment, buprenorphine (injectable) administered on a weekly 
basis; weekly bundle including dispensing and/or administration, 
substance use counseling, individual and group therapy, and toxicology 
testing if performed (provision of the services by a Medicare-enrolled 
Opioid Treatment Program). Lastly, we will apply the GAF as described 
in Sec.  410.67(d)(4)(ii), and MEI as described in Sec.  
410.67(d)(4)(iii), to the non-drug component for this code.
5. Clarification to Require an Opioid Use Disorder Diagnosis on Claims 
for OUD Treatment Services
    Section 1861(s)(2)(HH) of the Act, as amended by section 2005 of 
the SUPPORT Act, implemented Medicare coverage for ``opioid use 
disorder treatment services.'' Section 1861(jjj)(1) of the Act 
describes opioid use disorder treatment services as items and services 
that are furnished by an opioid treatment program for the treatment of 
opioid use disorder. Section 1834 of the

[[Page 98080]]

Act specifies payments to OTPs for providing opioid use disorder 
treatment services. We interpreted these statutory provisions to mean 
that services paid to OTPs under Medicare Part B must be for the 
treatment of opioid use disorder. Consequently, at Sec.  410.67(a) we 
reflect that those statutory provisions provide for coverage and 
payment to OTPs for OUD treatment services, which we define at Sec.  
410.67(b).
    In August of 2023, an Office of Inspector General (OIG) report (A-
09-22-03005) found that Medicare made over $1.3 million in payments to 
70 OTPs for OUD treatment services that were claimed without an OUD 
diagnosis.\509\ Of the claims paid without an OUD diagnosis code, 39 
percent were for alcohol dependence, uncomplicated (F1020), 7 percent 
were for cocaine dependence, uncomplicated (F1420), and 5 percent were 
for generalized anxiety disorder (F411). As a result of these findings, 
OIG recommended that CMS ``develop billing requirements for OTPs to 
include OUD diagnosis codes on claims for OUD treatment services to 
indicate that enrollees have OUD diagnoses and consider working with 
MACs to implement a system edit to ensure that OTP payments are made 
for enrollees only when OUD diagnosis codes are included on claims.'' 
OIG also stated that ``requiring OTPs to include OUD diagnosis codes on 
claims could be a way for CMS to monitor whether OTPs furnished OUD 
treatment services to enrollees who had an OUD.'' In our response to 
the OIG report, we raised that the lack of an OUD diagnosis code on a 
claim is not conclusive evidence of an improper claim because an OUD 
diagnosis code is not required for payment when an OTP submits a claim 
for OUD treatment services. However, we agreed to explore ways to 
educate providers about including an OUD diagnosis on claims.
---------------------------------------------------------------------------

    \509\ https://oig.hhs.gov/oas/reports/region9/92203005.asp.
---------------------------------------------------------------------------

    We continue to monitor claims paid by Medicare to OTPs for 
furnishing OUD treatment services, including for potential fraud and 
abuse. In analyzing our claims data at the beginning of CY 2024, we 
found data indicating that the majority of claims paid to OTPs have an 
OUD diagnosis code appended, meaning that only a small number of OTPs 
do not append an OUD diagnosis code to claims. However, we do intend to 
ensure that payments made to OTPs are in alignment with statutory 
requirements, which is that payments made must be for services 
furnished for the treatment of an OUD.
    Therefore, in the CY 2025 PFS proposed rule, we clarified that all 
claims submitted to Medicare, on Form CMS-1450 for institutional 
providers, and on Form CMS-1500 for professional providers, or the 
electronic equivalents, under the OTP benefit must include an OUD 
diagnosis. These diagnosis codes must apply to HCPCS G-codes 
representing both the bundled payments (G2067 through G2075) and add-on 
codes to the bundled payments (G2076-G2080, G2215-G2216, G1028, and 
G0137). Applicable diagnosis codes for an OUD that must be submitted on 
claims include ICD-10-CM codes in the F11 range for ``disorders related 
or resulting from abuse or misuse of opioids.'' \510\ We plan to issue 
additional guidance on appending these diagnosis codes to claims. We 
believe clarifying these billing requirements is consistent with CMS's 
strategic pillars to be a responsible steward of public funds,\511\ and 
that these requirements are consistent with statutory provisions under 
sections 1861(s)(2)(HH), 1861(jjj)(1), and 1834 of the Act.
---------------------------------------------------------------------------

    \510\ https://www.icd10data.com/ICD10CM/Codes/F01-F99/F10-F19/F11-.
    \511\ https://www.cms.gov/about-cms/what-we-do/cms-strategic-plan.
---------------------------------------------------------------------------

    We received a few public comments related to this OUD ICD-10-CM 
diagnosis code billing clarification. The following is a summary of the 
comments we received on this topic and our responses.
    Comment: A few commenters were pleased that CMS clarified billing 
requirements for OTPs in accordance with statutory requirements. One 
commenter agreed with the clarification since OTP physicians must 
affirm an OUD diagnosis prior to initiating treatment or developing a 
care plan for the patient. Another commenter raised that permitting 
providers to deliver OUD treatment services without a sufficient OUD 
diagnosis could influence treatment and recovery outcomes.
    Response: We appreciate commenters' support regarding this billing 
clarification on claims for OUD treatment services. CMS will continue 
to educate OTPs on appending an OUD diagnosis to claims and update sub-
regulatory guidance accordingly to ensure proper submission of claims 
that are in alignment with statutory requirements.
    Comment: One commenter requested that CMS consider the population 
of patients who may receive opioid antagonist and/or agonist 
medications for chronic pain management. The commenter explained that 
some patients may receive a high dose of opioids for chronic pain, and 
naloxone may be given to these individuals for safety reasons. Another 
commenter raised that some medications prescribed by OTPs are approved 
to treat other conditions, including an alcohol use disorder, and 
requested that CMS add an alcohol use disorder diagnosis code to the 
list of acceptable diagnosis codes for claims submitted under the OTP 
benefit.
    Response: We appreciate the feedback from these commenters. We 
understand how OTPs may treat patients with multiple diagnoses and 
various treatment needs, and those diagnosis codes may also be 
reflected on claims as OTPs should be coding appropriately per ICD-10-
CM diagnosis coding guidelines. However, as stated in the discussion 
above, services paid to OTPs under Medicare Part B must be for the 
treatment of OUD, consistent with statutory provisions under sections 
1861(s)(2)(HH), 1861(jjj)(1), and 1834 of the Act.
    Finally, we received comments on several topics that were outside 
the scope of the proposed rule, and we've included a summary of those 
comments.
    Comment: Out-of-scope comments included the following: a request 
that CMS develop an add-on code for contingency management services in 
OTPs for individuals with a stimulant use disorder; expanding services 
under the OTP benefit to include pain management services treated by 
certified athletic trainers and MOUD treatment provided by pharmacists 
in various settings; revising the Medicare OTP bundled payment 
structure to allow for more flexibility as it relates to take-home 
doses and counseling services; establishing coding for remote 
therapeutic monitoring services, which may include remotely observed 
take-home methadone dosing, along with coding for FDA-approved medical 
devices that prevent overdoses and reduce opioid withdrawal symptoms; 
issuing a clarification so that OTPs can bill Medicare for primary care 
services; modifying the definition of toxicology testing in the non-
drug component of the bundled payments under the OTP benefit to exclude 
definitive testing; revising the update factor for the non-drug 
component of the bundled payments under the OTP benefit to use the 
inpatient prospective payment system market basket rather than the MEI; 
instructing Medicare Advantage plans to cover OTP services without 
prior authorization, primary care referral requirements, or copayments/
coinsurance; creating a rural add-on payment to be applied to the non-
drug component of the bundled payments

[[Page 98081]]

under the OTP benefit to attend to low-population density areas that 
face health professional shortages; and, promulgating regulations to 
create protections for patients with an OUD who are seeking admission 
to skilled nursing facilities.
    Response: While some of these comments are either outside of our 
statutory authority and/or out of scope for this final rule because 
they do not relate to the specific proposals included in the proposed 
rule, we appreciate the feedback and may consider these recommendations 
for future rulemaking.

G. Medicare Shared Savings Program

1. Executive Summary and Background
a. Purpose
    Eligible groups of providers and suppliers, including physicians, 
hospitals, and other healthcare providers, may participate in the 
Medicare Shared Savings Program (Shared Savings Program) by forming or 
joining an accountable care organization (ACO) and in so doing agree to 
become accountable for the total cost and quality of care provided 
under Traditional Medicare to an assigned population of Medicare fee-
for-service (FFS) beneficiaries. Under the Shared Savings Program, 
providers and suppliers that participate in an ACO continue to receive 
Traditional Medicare FFS payments under Parts A and B, and the ACO may 
be eligible to receive a shared savings payment if it meets specified 
quality and savings requirements, and in some instances may be required 
to share in losses if it increases health care spending.
    As of January 1, 2024, the Shared Savings Program has 480 ACOs with 
over 634,000 health care providers and organizations providing care to 
over 10.8 million assigned beneficiaries, making it the largest value-
based care program in the country.512 513 The policy changes 
to the Shared Savings Program finalized in the CY 2023 PFS final rule 
(87 FR 69777 through 69979) and CY 2024 PFS final rule (88 FR 79093 
through 79232) are expected to grow participation in the program and 
increase the number of beneficiaries assigned to ACOs by up to four 
million in the next 10 years (that is, between 2024-2034).\514\ These 
policies are expected to drive growth in participation, particularly in 
rural and underserved areas, promote equity, and advance alignment 
across accountable care initiatives, and are central to achieving CMS' 
goal of having 100 percent of people with Traditional Medicare in a 
care relationship with accountability for quality and total cost of 
care by 2030.\515\ Of note, 19 newly formed ACOs in the Shared Savings 
Program are participating in a new, permanent payment option beginning 
in 2024 that is enabling these ACOs to receive more than $20 million in 
advance investment payments (AIPs) for caring for underserved 
communities.\516\ ACOs are now delivering care to people with 
Traditional Medicare in 9,032 Federally Qualified Health Centers, Rural 
Health Clinics, and critical access hospitals, an increase of 27 
percent from 2023.\517\
---------------------------------------------------------------------------

    \512\ Refer to CMS, Shared Savings Program Fast Facts--As of 
January 1, 2024, available at https://www.cms.gov/files/document/2024-shared-savings-program-fast-facts.pdf.
    \513\ See CMS Press Release, ``Participation Continues to Grow 
in CMS' Accountable Care Organization Initiatives in 2024'', January 
29, 2024, available at https://www.cms.gov/newsroom/press-releases/participation-continues-grow-cms-accountable-care-organization-initiatives-2024.
    \514\ Refer to 87 FR 69889. See also, CMS Press Release, ``CMS 
Announces Increase in 2023 in Organizations and Beneficiaries 
Benefiting from Coordinated Care in Accountable Care Relationship'', 
January 17, 2023, available at https://www.cms.gov/newsroom/press-releases/cms-announces-increase-2023-organizations-and-beneficiaries-benefiting-coordinated-care-accountable.
    \515\ For a description of CMS' strategic vision and objectives, 
see Seshamani M, Fowler E, Brooks-LaSure C. ``Building On The CMS 
Strategic Vision: Working Together For A Stronger Medicare''. Health 
Affairs. January 11, 2022. Available athttps://
www.healthaffairs.org/content/forefront/building-cms-strategic-vision-working-together-stronger-medicare. See also, CMS, Innovation 
Center Strategy Refresh, available at https://innovation.cms.gov/strategic-direction-whitepaper (Innovation Center Strategic 
Objective 1: Drive Accountable Care, pages 13-17).
    \516\ Refer to CMS Press Release, ``Participation Continues to 
Grow in CMS' Accountable Care Organization Initiatives in 2024'', 
January 29, 2024, available at https://www.cms.gov/newsroom/press-releases/participation-continues-grow-cms-accountable-care-organization-initiatives-2024.
    \517\ Ibid.
---------------------------------------------------------------------------

    To further advance Medicare's value-based care strategy of growth, 
alignment, and equity, and to allow for timely improvements to program 
policies and operations, we proposed changes to the Shared Savings 
Program as described in section III.G. of the CY 2025 PFS proposed rule 
(89 FR 61837 through 61924). We sought public comments which we 
summarize and respond to in sections III.G.2. through III.G.8. of this 
final rule. We proposed changes to the quality performance standard, 
benchmarks and other quality reporting requirements that aim to align 
the quality measures that Shared Savings Program ACOs would be required 
to report as part of the proposed APM Performance Pathway (APP) Plus 
measure set with the quality measures under the Adult Universal 
Foundation measure set that would be incrementally incorporated into 
the APP Plus quality measure set beginning in performance years 2025, 
and to prioritize the eCQM collection type as the gold standard 
collection type that underlies CMS' Digital Quality Measurement 
Strategic Roadmap while using Medicare CQMs as the transition step on 
our building block approach for ACOs' progress to adopt digital quality 
measurement.
    Further, we proposed to establish a new ``prepaid shared savings'' 
option for eligible ACOs with a history of earning shared savings, to 
assist these ACOs with cash flow and encourage investments that would 
aid beneficiaries, such as investments in direct beneficiary services, 
staffing, or healthcare infrastructure. We proposed refinements to 
advance investment payment policies to allow ACOs receiving advance 
investment payments to voluntarily terminate from the payment option 
while remaining in the Shared Savings Program, and to specify that if 
CMS terminates an ACO's participation agreement, the ACO must repay any 
outstanding advance investment payments it received.
    We proposed modifications to the Shared Savings Program's financial 
methodology including to (1) ensure the benchmarking methodology 
includes sufficient incentive for ACOs serving underserved communities 
\518\ to enter and remain in the program through the application of a 
proposed health equity benchmark adjustment, (2) specify a calculation 
methodology to account for the impact of improper payments in 
recalculating expenditures and payment amounts used in Shared Savings 
Program financial calculations, upon reopening a payment determination 
pursuant to Sec.  425.315(a), (3) establish a methodology for excluding 
payment amounts for HCPCS and CPT codes exhibiting significant, 
anomalous, and highly suspect (SAHS) billing activity during CY 2024 or 
subsequent calendar years that warrant adjustment, and (4) make 
technical changes to provide clarity on the methodology for capping the 
ACO's risk score growth and

[[Page 98082]]

regional risk score growth. Additionally, we solicited comments on 
financial arrangements that could allow for higher risk and potential 
reward under a revised ENHANCED track within the Shared Savings 
Program, including the designs of and trade-offs between financial 
model features.
---------------------------------------------------------------------------

    \518\ As described in the CMS Framework for Health Equity and 
consistent with Executive Order 13985 on Advancing Racial Equity and 
Support for Underserved Communities Through the Federal Government 
(86 FR 7009), the term ``underserved communities'' refers to 
populations sharing a particular characteristic, including 
geographic communities that have been systematically denied a full 
opportunity to participate in aspects of economic, social, and civic 
life, as exemplified in the definition of ``equity.'' See for 
example CMS Framework for Health Equity 2022-2032, available at 
https://www.cms.gov/files/document/cms-framework-health-equity-2022.pdf.
---------------------------------------------------------------------------

    We proposed changes to other program areas. We proposed changes in 
connection with Shared Savings Program eligibility requirements and 
application procedures, to permit continued participation by ACOs whose 
number of assigned beneficiaries falls below 5,000 during their 
agreement period, and to update provisions of the Shared Savings 
Program regulations on application procedures to reflect the latest 
approach Antitrust Agencies (the Department of Justice and the Federal 
Trade Commission \519\) use to evaluate ACOs and enforce the antitrust 
laws. We proposed changes to the Shared Savings Program beneficiary 
assignment methodology, to revise the definition of primary care 
services to align with payment policy proposals described elsewhere in 
the CY 2025 PFS proposed rule, and to broaden the existing exception to 
the program's voluntary alignment policy to allow for beneficiaries to 
be claims-based assigned to entities participating in certain disease- 
or condition-specific CMS Innovation Center ACO models notwithstanding 
their voluntary alignment to a Shared Savings Program ACO. We also 
proposed modifications to the beneficiary information notification 
requirements.
---------------------------------------------------------------------------

    \519\ Refer to Withdrawn Final Policy Statement, ``Statement of 
Antitrust Enforcement Policy Regarding Accountable Care 
Organizations Participating in the Medicare Shared Savings 
Program,'' available at https://www.justice.gov/sites/default/files/atr/legacy/2011/10/20/276458.pdf. See also, FTC Press Release, 
``Federal Trade Commission Withdraws Health Care Enforcement Policy 
Statements'', July 14, 2023, available at https://www.ftc.gov/news-events/news/press-releases/2023/07/federal-trade-commission-withdraws-health-care-enforcement-policy-statements.
---------------------------------------------------------------------------

b. Statutory and Regulatory Background on the Shared Savings Program
    On March 23, 2010, the Patient Protection and Affordable Care Act 
(Pub. L. 111-148) was enacted, followed by enactment of the Health Care 
and Education Reconciliation Act of 2010 (Pub. L. 111-152) on March 30, 
2010, which amended certain provisions of the Patient Protection and 
Affordable Care Act (hereinafter collectively referred to as ``the 
Affordable Care Act''). Section 3022 of the Affordable Care Act amended 
Title XVIII of the Act (42 U.S.C. 1395 et seq.) by adding section 1899 
of the Act to establish the Medicare Shared Savings Program to 
facilitate coordination and cooperation among healthcare providers to 
improve the quality of care for Medicare FFS beneficiaries and reduce 
the rate of growth in expenditures under Medicare Parts A and B. (See 
42 U.S.C. 1395jjj.)
    Section 1899 of the Act has been amended through subsequent 
legislation. The requirements for assignment of Medicare FFS 
beneficiaries to ACOs participating under the program were amended by 
the 21st Century Cures Act (the CURES Act) (Pub. L. 114-255). The 
Bipartisan Budget Act of 2018 (Pub. L. 115-123), further amended 
section 1899 of the Act to provide for the following: expanded use of 
telehealth services by physicians or practitioners participating in an 
applicable ACO to furnish services to prospectively assigned 
beneficiaries; greater flexibility in the assignment of Medicare FFS 
beneficiaries to ACOs by allowing ACOs in tracks under retrospective 
beneficiary assignment a choice of prospective assignment for the 
agreement period; permitting Medicare FFS beneficiaries to voluntarily 
identify an ACO professional as their primary care provider and 
requiring that such beneficiaries be notified of the ability to make 
and change such identification, and mandating that any such voluntary 
identification will supersede claims-based assignment; and allowing 
ACOs under certain two-sided models to establish CMS-approved 
beneficiary incentive programs.
    The Shared Savings Program regulations are codified at 42 CFR part 
425. The final rule establishing the Shared Savings Program appeared in 
the November 2, 2011 Federal Register (Medicare Program; Medicare 
Shared Savings Program: Accountable Care Organizations; final rule (76 
FR 67802) (hereinafter referred to as the ``November 2011 final 
rule'')). A subsequent update to the program rules appeared in the June 
9, 2015 Federal Register (Medicare Program; Medicare Shared Savings 
Program: Accountable Care Organizations; final rule (80 FR 32692) 
(hereinafter referred to as the ``June 2015 final rule'')). The final 
rule entitled ``Medicare Program; Medicare Shared Savings Program; 
Accountable Care Organizations--Revised Benchmark Rebasing Methodology, 
Facilitating Transition to Performance-Based Risk, and Administrative 
Finality of Financial Calculations,'' which addressed changes related 
to the program's financial benchmark methodology, appeared in the June 
10, 2016 Federal Register (81 FR 37950) (hereinafter referred to as the 
``June 2016 final rule''). A final rule, ``Medicare Program; Revisions 
to Payment Policies Under the Physician Fee Schedule and Other 
Revisions to Part B for CY 2019; Medicare Shared Savings Program 
Requirements; Quality Payment Program; Medicaid Promoting 
Interoperability Program; Quality Payment Program--Extreme and 
Uncontrollable Circumstance Policy for the 2019 MIPS Payment Year; 
Provisions From the Medicare Shared Savings Program--Accountable Care 
Organizations--Pathways to Success; and Expanding the Use of Telehealth 
Services for the Treatment of Opioid Use Disorder Under the Substance 
Use-Disorder Prevention That Promotes Opioid Recovery and Treatment 
(SUPPORT) for Patients and Communities Act,'' appeared in the November 
23, 2018 Federal Register (83 FR 59452) (hereinafter referred to as the 
``November 2018 final rule'' or the ``CY 2019 PFS final rule''). In the 
November 2018 final rule, we finalized a voluntary 6-month extension 
for existing ACOs whose participation agreements would otherwise expire 
on December 31, 2018; allowed beneficiaries greater flexibility in 
designating their primary care provider and in the use of that 
designation for purposes of assigning the beneficiary to an ACO if the 
clinician they align with is participating in an ACO; revised the 
definition of primary care services used in beneficiary assignment; 
provided relief for ACOs and their clinicians impacted by extreme and 
uncontrollable circumstances in performance year 2018 and subsequent 
years; established a new Certified Electronic Health Record Technology 
(CEHRT) use threshold requirement; and reduced the Shared Savings 
Program quality measure set from 31 to 23 measures (83 FR 59940 through 
59990 and 59707 through 59715).
    A final rule redesigning the Shared Savings Program appeared in the 
December 31, 2018 Federal Register (Medicare Program: Medicare Shared 
Savings Program; Accountable Care Organizations--Pathways to Success 
and Uncontrollable Circumstances Policies for Performance Year 2017; 
final rule (83 FR 67816) (hereinafter referred to as the ``December 
2018 final rule'')). In the December 2018 final rule, we finalized a 
number of policies for the Shared Savings Program, including a redesign 
of the participation options available under the program to encourage 
ACOs to transition to two-sided models; new tools to support 
coordination of care across settings and strengthen beneficiary 
engagement; and

[[Page 98083]]

revisions to ensure rigorous benchmarking.
    In the interim final rule with comment period (IFC) entitled 
``Medicare and Medicaid Programs; Policy and Regulatory Revisions in 
Response to the COVID-19 Public Health Emergency,'' which was effective 
on the March 31, 2020 date of display and appeared in the April 6, 2020 
Federal Register (85 FR 19230), we removed the restriction that 
prevented the application of the Shared Savings Program extreme and 
uncontrollable circumstances policy for disasters that occur during the 
quality reporting period if the reporting period is extended to offer 
relief under the Shared Savings Program to all ACOs that may be unable 
to completely and accurately report quality data for 2019 due to the 
PHE for COVID-19 (85 FR 19267 and 19268).
    In the IFC entitled ``Medicare and Medicaid Programs; Basic Health 
Program, and Exchanges; Additional Policy and Regulatory Revisions in 
Response to the COVID-19 Public Health Emergency and Delay of Certain 
Reporting Requirements for the Skilled Nursing Facility Quality 
Reporting Program,'' which was effective on May 8, 2020, and appeared 
in the May 8, 2020 Federal Register (85 FR 27573 through 27587) 
(hereinafter referred to as the ``May 8, 2020 COVID-19 IFC''), we 
modified Shared Savings Program policies to: (1) allow ACOs whose 
agreement periods expired on December 31, 2020, the option to extend 
their existing agreement period by 1-year, and allow ACOs in the BASIC 
track's glide path the option to elect to maintain their current level 
of participation for performance year 2021; (2) adjust program 
calculations to remove payment amounts for episodes of care for 
treatment of COVID-19; and (3) expand the definition of primary care 
services for purposes of determining beneficiary assignment to include 
telehealth codes for virtual check-ins, e-visits, and telephonic 
communication. We also clarified the applicability of the program's 
extreme and uncontrollable circumstances policy to mitigate shared 
losses for the period of the PHE for COVID-19 starting in January 2020.
    We have also made use of the annual CY PFS rules to address quality 
reporting for the Shared Savings Program and certain other issues. For 
summaries of certain policies finalized in prior PFS rules, refer to 
the CY 2020 PFS proposed rule (84 FR 40705), the CY 2021 PFS final rule 
(85 FR 84717), the CY 2022 PFS final rule (86 FR 65253 and 65254), the 
CY 2023 PFS final rule (87 FR 69779 and 69780), and the CY 2024 PFS 
final rule (88 FR 79094 and 79095). In the CY 2024 PFS final rule (88 
FR 79093 through 79232), we finalized changes to Shared Savings Program 
policies, including to: continue to move ACOs toward digital 
measurement of quality by revising the quality performance standard and 
reporting requirements under the APP within the Quality Payment Program 
(QPP); add a third step to the step-wise beneficiary assignment 
methodology under which we use an expanded period of time to identify 
whether a beneficiary has met the requirement for having received a 
primary care service from a physician who is an ACO professional in the 
ACO to allow additional beneficiaries to be eligible for assignment, as 
well as related changes to how we identify assignable beneficiaries 
used in certain Shared Savings Program calculations; update the 
definition of primary care services used for purposes of beneficiary 
assignment to remain consistent with billing and coding guidelines; 
refine the financial benchmarking methodology for ACOs in agreement 
periods beginning on January 1, 2024, and in subsequent years to (1) 
cap the risk score growth in an ACO's regional service area when 
calculating regional trends used to update the historical benchmark at 
the time of financial reconciliation for symmetry with the cap on ACO 
risk score growth, (2) apply the same CMS-HCC risk adjustment 
methodology applicable to the calendar year corresponding to the 
performance year in calculating risk scores for Medicare FFS 
beneficiaries for each benchmark year, (3) further mitigate the impact 
of the negative regional adjustment on the benchmark to encourage 
participation by ACOs caring for medically complex, high-cost 
beneficiaries, and (4) specify the circumstances in which CMS would 
recalculate the prior savings adjustment for changes in values used in 
benchmark calculations due to compliance action taken to address 
avoidance of at-risk beneficiaries, or as a result of the issuance of a 
revised initial determination of financial performance for a previous 
performance year following a reopening of ACO shared savings and shared 
losses calculations; refine our policies for the newly established 
advance investment payments (AIP); make updates to other programmatic 
areas including the program's eligibility requirements; and make timely 
technical changes to the regulations for clarity and consistency. 
Further, we also summarized comments received in response to a comment 
solicitation on potential future developments to Shared Savings Program 
policies, including incorporating a track with higher risk and 
potential reward than the ENHANCED track.
    In a proposed rule entitled ``Medicare Program: Mitigating the 
Impact of Significant, Anomalous, and Highly Suspect Billing Activity 
on Medicare Shared Savings Program Financial Calculations in Calendar 
Year 2023,'' which appeared in the July 3, 2024 Federal Register (89 FR 
55168) (hereinafter referred to as the ``SAHS billing activity proposed 
rule''), we proposed an approach to address the SAHS billing activity 
CMS identified for CY 2023 to protect the accuracy, fairness, and 
integrity of Shared Savings Program financial calculations. We 
finalized our proposals in a final rule entitled ``Medicare Program: 
Mitigating the Impact of Significant, Anomalous, and Highly Suspect 
Billing Activity on Medicare Shared Savings Program Financial 
Calculations in Calendar Year 2023,'' which was effective on October 
15, 2024, and appeared in the September 27, 2024 Federal Register (89 
FR 79152) (hereinafter referred to as the ``SAHS billing activity final 
rule'').
    Policies applicable to Shared Savings Program ACOs for purposes of 
quality reporting for other programs have also continued to evolve 
based on changes in the statute. For instance, the Medicare Access and 
CHIP Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10) established 
the Quality Payment Program. In the CY 2017 Quality Payment Program 
final rule with comment period (81 FR 77008), we established 
regulations for the MIPS and Advanced APMs and related policies 
applicable to eligible clinicians who participate in APMs, including 
the Shared Savings Program. We have also made updates to policies under 
the Quality Payment Program through the annual CY PFS rules.
c. Summary of Shared Savings Program Provisions
    In sections III.G.2. through III.G.8. of this final rule, we 
summarize and respond to public comments received on the proposed 
modifications to the Shared Savings Program's policies discussed in 
section III.G. of the CY 2025 PFS proposed rule (89 FR 61837 through 
61924). Some commenters' suggestions for modifications to Shared 
Savings Program policies went beyond the scope of the proposals 
discussed in section III.G. of the CY 2025 PFS proposed rule and will 
not be addressed in this section of this final rule. As a general 
summary, we are finalizing the

[[Page 98084]]

following changes to Shared Savings Program policies to:
     Update Shared Savings Program eligibility requirements and 
application procedures, including the following (section III.G.2 of 
this final rule):
    ++ Update compliance obligations for the requirement that ACOs 
maintain at least 5,000 assigned beneficiaries by the end of the 
performance year specified by CMS in its request for a CAP (section 
III.G.2.b of this final rule).
    ++ Revise the requirement that newly formed ACOs must agree to 
allow CMS to share a copy of their application with the Antitrust 
Agencies (section III.G.2.c of this final rule).
     Revise the policies for determining beneficiary 
assignment, including the following (section III.G.3 of this final 
rule):
    ++ Update the definition of primary care services used in 
beneficiary assignment at Sec.  [thinsp]425.400(c) (section III.G.3.a 
of this final rule).
    ++ Revise the Shared Savings Program regulations to broaden a 
limited exception to the program's voluntary alignment policy and allow 
a voluntarily aligned Shared Savings Program beneficiary to be claims-
based assigned to an entity participating in a disease- or condition-
specific CMS Innovation Center model when that model uses claims-based 
assignment that is based on primary care and/or other services and the 
Secretary has determined that a waiver is necessary solely for purposes 
of testing the model, in order for beneficiaries with certain diseases 
or conditions to benefit from the focused attention and care 
coordination related to the disease or condition that an entity 
participating in such a model can offer (section III.G.3.b of this 
final rule).
     Revise the quality reporting and the quality performance 
standard requirements, including the following (section III.G.4. of 
this final rule):
    ++ Require Shared Savings Program ACOs to report the APP Plus 
quality measure set (section III.G.4.b.(2)(a) of this final rule).
    ++ Focus the collection types available to Shared Savings Program 
ACOs for reporting the APP Plus quality measure set to eCQMs and 
Medicare CQMs by performance year 2027 (section III.G.4.b.(2)(b) of 
this final rule). Specifically, we are finalizing that:
    --For performance years 2025 and 2026, ACOs will be required to 
report the APP Plus quality measure set using the eCQM/MIPS CQM/
Medicare CQM collection type or a combination of these collection 
types.
    --For performance year 2027 and any subsequent performance years, 
ACOs will be required to report the APP Plus quality measure set using 
the eCQM/Medicare CQM collection type or a combination of these 
collection types.
    ++ Shared Savings Program ACOs that report the APP Plus quality 
measure set and MIPS eligible clinicians, groups, and APM Entities that 
choose to report the APP Plus quality measure set, will be required to 
report on all required measures in the APP Plus quality measure set, as 
applicable (section III.G.4.c.(2)(a) of this final rule).
    ++ Establish a Complex Organization Adjustment for Virtual Groups 
and APM Entities, including Shared Savings Program ACOs, when reporting 
eCQMs (section III.G.4.c.(2)(b) of this final rule).
    ++ Score Medicare CQMs using flat benchmarks in their first two 
performance periods in MIPS (section III.G.4.c.(2)(c) of this final 
rule).
    ++ Extend the eCQM/MIPS CQM reporting incentive for meeting the 
Shared Savings Program quality performance standard to performance 
years 2025 and 2026 and extend the eCQM reporting incentive for 
performance year 2027 and subsequent performance years (section 
III.G.4.d of this final rule).
     Allow eligible ACOs to receive prepaid shared savings 
(section III.G.5 of this final rule).
     Refine AIP policies, including the following (section 
III.G.6 of this final rule):
    ++ Allow ACOs receiving advance investment payments to voluntarily 
terminate from the payment option while remaining in the Shared Savings 
Program (section III.G.6.a of this final rule).
    ++ Codify a policy for recouping advance investment payments from 
ACOs whose participation agreements are terminated by CMS (section 
III.G.6.b of this final rule).
     Revise the policies on the Shared Savings Program's 
financial methodology, including the following (section III.G.7 of this 
final rule):
    ++ Apply a health equity benchmark adjustment (HEBA) which would 
adjust upward an ACO's historical benchmark, based on the number of 
beneficiaries they serve who are dually eligible or enrolled in the 
Medicare Part D and receive the Low-Income Subsidy (LIS).\520\ This 
will encourage and sustain participation by ACOs serving underserved 
populations that do not benefit from existing benchmark adjustments for 
regional efficiency or from generating prior savings (section III.G.7.b 
of this final rule).
---------------------------------------------------------------------------

    \520\ The low-income subsidy helps people with Medicare pay for 
prescription drugs and lowers the costs of Medicare prescription 
drug coverage. For more information about the LIS, refer to https://www.cms.gov/Medicare/Prescription-Drug-Coverage/LimitedIncomeandResources. We note that we work with our partners to 
find and enroll people who may qualify for the LIS. For brevity, in 
section III.G. of this final rule, we sometimes refer to 
beneficiaries enrolled in the Medicare Part D LIS.
---------------------------------------------------------------------------

    ++ Establish a calculation methodology to account for the impact of 
improper payments in recalculating expenditures and payment amounts 
used in Shared Savings Program financial calculations upon reopening a 
payment determination pursuant to Sec.  425.315(a) (section III.G.7.c 
of this final rule).
    ++ Establish an approach to identify SAHS billing activity 
occurring in CY 2024 or subsequent calendar years, and specify 
approaches to mitigating the impact of the SAHS billing activity on 
Shared Savings Program financial calculations in CY 2024 or subsequent 
calendar years. Under this approach we will exclude payment amounts 
from expenditure and revenue calculations for the relevant calendar 
year for which the SAHS billing activity is identified, as well as from 
historical benchmarks used to reconcile the ACO for a performance year 
corresponding to the calendar year for which the SAHS billing activity 
is identified (section III.G.7.d of this final rule).
    ++ Make technical changes in provisions of the Shared Savings 
Program regulations on financial calculations, to align and clarify the 
language used to describe weights applied to the growth in ACO and 
regional risk scores for each Medicare enrollment type, as part of the 
calculation for capping ACO and regional risk score growth, 
respectively. The weight for a given enrollment type will be equal to 
the product of the ACO's historical benchmark expenditures after the 
application of any adjustment applied under Sec.  425.652(a)(8) of the 
regulations (that is, the regional adjustment, prior savings adjustment 
or HEBA, or no adjustment) for that enrollment type and the ACO's 
performance year assigned beneficiary person years for that enrollment 
type (section III.G.7.f of this final rule).
     Modify beneficiary notification requirements, including 
the following (section III.G.8 of this final rule):
    ++ ACOs must provide the follow-up beneficiary communication no 
later than 180 days after the date that the ACO provided the 
standardized written notice to the beneficiary (section III.G.8.a of 
this final rule).
    ++ For ACOs that select preliminary prospective assignment with

[[Page 98085]]

retrospective reconciliation, limit the distribution of the 
standardized written beneficiary information notification to 
beneficiaries who are more likely to be assigned to the ACO, when 
compared to the beneficiaries who must receive the written notification 
under current regulations (section III.G.8.b of this final rule).
    In addition, in the CY 2025 PFS proposed rule, we solicited 
comments on establishing a higher risk and reward participation option 
than the current ENHANCED track, as discussed in section III.G.7.e of 
this final rule.
    Taken together, the policies we are adopting for the Shared Savings 
Program in this final rule are anticipated to improve ACOs' incentives 
to join the program and continue participating in future years and earn 
shared savings. The provisions are projected to reduce program spending 
by $200 million in total over the 10-year period 2025 through 2034. 
These changes will support the goals outlined in the CY 2023 PFS final 
rule (87 FR 69777 through 69978) and CY 2024 PFS final rule (88 FR 
79093 through 79232) for growing the program, with a particular focus 
on including underserved communities.
    Certain policies, including both existing policies and new policies 
adopted in this final rule, rely upon the authority granted in section 
1899(i)(3) of the Act to use other payment models that the Secretary 
determines will improve the quality and efficiency of items and 
services furnished under the Medicare program, and that do not result 
in program expenditures greater than those that would result under the 
statutory payment model. The following policies require the use of our 
authority under section 1899(i) of the Act: allowing eligible ACOs to 
receive prepaid shared savings, as described in section III.G.5 of this 
final rule; using a calculation methodology to account for the impact 
of improper payments in recalculating expenditures and payment amounts 
for certain Shared Savings Program financial calculations, upon 
reopening an ACO's payment determination and issuing a revised initial 
determination pursuant to Sec.  425.315(a), as described in section 
III.G.7.c of this final rule; using a methodology for certain Shared 
Savings Program financial calculations to mitigate the impact of SAHS 
billing activity occurring in CY 2024 or subsequent calendar years, as 
described in section III.G.7.d of this final rule; and making technical 
changes to the provision describing how we calculate the weights 
applied when capping growth in regional risk scores as part of the 
regional component of the three-way blended benchmark update factor, as 
described in section III.G.7.f of this final rule. As described in the 
Regulatory Impact Analysis in section VI. and elsewhere in this final 
rule, these changes to our payment methodology are expected to improve 
the quality and efficiency of care and are not expected to result in a 
situation in which the payment methodology under the Shared Savings 
Program, including all policies adopted under the authority of section 
1899(i) of the Act, results in more spending under the program than 
would have resulted under the statutory payment methodology in section 
1899(d) of the Act. We will continue to reexamine this projection in 
the future to ensure that the requirement under section 1899(i)(3)(B) 
of the Act that an alternative payment model not result in additional 
program expenditures continues to be satisfied. In the event that we 
later determine that the payment model that includes policies 
established under section 1899(i)(3) of the Act no longer meets this 
requirement, we would undertake additional notice and comment 
rulemaking to make adjustments to the payment model to assure continued 
compliance with the statutory requirements.
2. Eligibility Requirements and Application Procedures
a. Overview
    In the CY 2025 PFS proposed rule (89 FR 61842 through 61843), we 
proposed two modifications to the Shared Savings Program eligibility 
and application procedures that will be implemented for performance 
years beginning on or after January 1, 2025. Specifically, we proposed 
the following, which are discussed in more detail in sections (b) and 
(c) below:
     Sunset the requirement after January 1, 2025, at Sec.  
425.110(b)(2) that CMS terminates the participation agreement and the 
ACO is not eligible to share in savings for that performance year if 
the ACO's assigned population is not at least 5,000 by the end of the 
performance year specified by CMS in its request for a Corrective 
Action Plan (CAP); and
     Revise the antitrust language in the application 
procedures at Sec. Sec.  425.202(a)(3) and 425.224(a)(3) for the Shared 
Savings Program.
b. Monitoring Compliance With the Requirement That ACOs Maintain at 
Least 5,000 Assigned Beneficiaries
    Section 1899(b)(2)(D) of the Act requires participating ACOs to 
include primary care ACO professionals that are sufficient for the 
number of Medicare FFS beneficiaries assigned to the ACO and that at a 
minimum, the ACO shall have at least 5,000 such beneficiaries assigned 
to it. In the November 2011 final rule (76 FR 67808), in alignment with 
the statutory requirement at section 1899(b)(2)(D) of the Act, CMS 
established that, at a minimum, an ACO shall have at least 5,000 such 
beneficiaries assigned to it to be eligible to participate in the 
Shared Savings Program under Sec.  425.110. We described the importance 
of maintaining at least 5,000 assigned beneficiaries with respect to 
both eligibility of the ACO to participate in the program and the 
statistical stability for purposes of calculating per capita 
expenditures and assessing financial and quality performance. We noted, 
however, that we understood circumstances may change during the 
agreement period, and that an ACO's assigned population may vary 
accordingly.
    To enforce program requirements under Sec.  425.110, while still 
recognizing that variations may occur for an ACO's assigned population, 
CMS generally issues a warning notice and requests the ACO submit a CAP 
should the ACO's assigned population fall below 5,000 beneficiaries. 
Few ACOs have had a beneficiary population that fell below 5,000. 
Between calendar year 2020 and 2023, based on the program's compliance 
monitoring review, 24 ACOs have been below this assignment threshold at 
the start of one or more performance years within an agreement period, 
which led CMS to issue compliance actions. Approximately 55 percent of 
these ACOs opted to voluntarily terminate ahead of the CAP deadline 
imposed by CMS, while approximately 40 percent were able to increase 
their beneficiary assignment over the threshold and remain in the 
program. Given additional time, more ACOs likely would be able to 
increase their beneficiary assignment, keeping more beneficiaries in 
accountable care relationships, and maintain their participation in the 
Shared Savings Program.
    Separately, we had established a policy in the December 2018 final 
rule (83 FR 67925) providing for an ACO to select the Minimum Savings 
Rate (MSR)/Minimum Loss Rate (MLR) that CMS would use when performing 
shared savings and shared losses calculations for the ACO. As we have 
previously discussed, the MSR/MLR protects against an ACO earning 
shared savings or being liable for shared losses when the change in 
expenditures represents normal, or random, variation

[[Page 98086]]

rather than an actual change in performance (see, for example, 83 FR 
67923 through 67926).
    In the December 2018 final rule (83 FR 67925 through 67929), we 
revised Sec.  425.110(b) to provide for the use of a variable MSR/MLR 
when performing shared savings and shared losses calculations if an 
ACO's assigned beneficiary population fell below 5,000 for the 
performance year regardless of whether the ACO had previously selected 
a fixed or variable MSR/MLR. This policy protects the statistical 
stability of the program's expenditure calculations. As an ACO's 
assigned beneficiary population decreases, variability in the 
population's expenditures increases. We thus expressed concern that the 
reduction in the size of the ACO's assigned beneficiary population 
would cause shared savings payments made to the ACO to not reflect true 
cost savings, but normal expenditure fluctuations (83 FR 67926). The 
use of a variable MSR/MLR thus made it more difficult for an ACO under 
performance-based risk that falls below the 5,000-beneficiary threshold 
to earn shared savings or be responsible for shared losses to ensure 
that the savings or losses reflected the ACO's actual performance and 
not merely statistical noise. This policy provided additional 
protection to the Medicare Trust Funds and greater protection for ACOs 
against owing shared losses.
    As described above, an ACO's failure to maintain at least 5,000 
assigned beneficiaries may result in compliance actions, up to and 
including termination of the ACO from the Shared Savings Program. When 
originally developed, this program policy was intended in part to 
protect both CMS and the ACO from variability in the expenditure 
calculations caused by a small assigned beneficiary population. With 
the MSR and MLR adjustments finalized in the December 2018 final rule, 
we developed protections against issues with the benchmark calculation 
for ACOs with fewer assigned beneficiaries, which provide adequate 
protection against variability in the short term. The MSR and MLR 
sliding scale varies based on the number of beneficiaries assigned to 
the ACO from 1 up to 60,000. Currently, this adjustment to the MSR/MLR 
protects both CMS and the ACO from inappropriate over or underpayments, 
reducing the financial risk of allowing ACOs to continue to participate 
in the Shared Savings Program if they experience a reduction in 
assigned beneficiaries.
    In light of the effectiveness of the variable MSR/MLR policy 
described above, we proposed to sunset the requirement at Sec.  
425.110(b)(2) that CMS will terminate an ACO's participation agreement 
and determine that an ACO is not eligible to share in savings for that 
performance year if an ACO's assigned population is not at least 5,000 
by the end of the performance year specified by CMS in its request for 
a CAP. Specifically, we proposed to revise Sec.  425.110(b)(2) to limit 
its application to performance years starting before January 1, 2025. 
Thus, for performance years beginning on or after January 1, 2025, if 
the ACO's assigned population is not at least 5,000 by the end of the 
performance year specified by CMS in its request for a CAP, CMS will 
not be required to terminate the participation agreement. (Refer to 89 
FR 61842.)
    This proposal will not modify the requirement at Sec.  425.110(a), 
which implements the statutory requirement at section 1899(b)(2)(D) of 
the Act that ACOs have 5,000 beneficiaries at critical points in CMS's 
determination of the ACO's eligibility to participate in the Shared 
Savings Program, including: at the time of application in order to be 
eligible for the Shared Savings Program, and at any point when an ACO 
elects to renew its participation in the program. As discussed in the 
November 2011 final rule (76 RF 67808), CMS has found ``[a] minimum 
threshold is important with respect to both the eligibility of the ACO 
to participate in the program and to the statistical stability for 
purposes of calculating per capita expenditures and assessing quality 
performance.'' A 5,000 beneficiary minimum, paired with a variable MSR/
MLR, enables ACOs to have their work of improving beneficiary care best 
reflected in their financial performance and shared savings results. 
Additionally, we will retain Sec.  425.110(b), which states that an ACO 
may be subject to actions under Sec. Sec.  425.216 and 425.218 if its 
assigned population falls below 5,000 at any time during the 
performance year. This proposed approach provides CMS with additional 
flexibility in the compliance actions that we take in working with ACOs 
to help them return to the 5,000 beneficiary threshold.
    The proposed modification aligns with CMS's broader goals to expand 
the number of beneficiaries in accountable care relationships. We 
anticipated this flexibility would provide ACOs with additional time 
and opportunities to recruit additional providers and suppliers to 
increase their assigned beneficiary population rather than being 
required to exit the Shared Savings Program due to their beneficiary 
attribution. We solicited comment on this proposal. This proposed 
change would be effective beginning on January 1, 2025.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters expressed support in response to this proposal. 
These commenters appreciated the additional flexibility this change 
allows ACOs and agree that it will increase ACO, provider, and supplier 
retention in the program.
    Response: We agree with commenters that this will provide 
additional flexibility for ACO participants.
    Comment: Several commenters provided additional suggestions for 
CMS's consideration. These included a recommendation that CMS consider 
factors outside of an ACO's control when determining compliance 
actions, such as geographic location or serving an underserved 
population, which commenters suggested can lead to fluctuations in 
their assigned beneficiary population. Additional commenters suggested 
that CMS consider offering additional levels of flexibility beyond this 
modification, including grace periods, additional resources for ACOs 
with ``significant challenges,'' or gradual enforcement of this 
threshold requirement for new or small ACOs. One commenter suggests 
that low-revenue ACOs receive a 1-year extension on their agreement 
renewals to meet the 5,000 beneficiary threshold.
    Response: We agree that it is appropriate to consider ACOs' 
individual circumstances when determining compliance actions. This 
proposed policy gives CMS more flexibility in determining appropriate 
compliance actions for individual ACOs and providing additional 
resources or flexibilities to ACOs in this area is not appropriate at 
this time. CMS is required to ensure that ACOs have at least 5,000 
assigned beneficiaries to be eligible to participate in the Shared 
Savings Program by section 1899(b)(2)(D) of the Act, and therefore is 
unable to offer extensions to ACOs who are unable to meet that 
requirement at the start of any agreement period. Our policy provides 
ACOs and CMS with an appropriate amount of flexibility while complying 
with our statutory requirements. After consideration of public 
comments, we are finalizing our proposal, without modification, to 
amend Sec.  425.110(b)(2) to sunset the requirement after January 1, 
2025, that CMS must terminate the participation agreement and the ACO 
is not eligible to share in savings for that performance year if the 
ACO's assigned population is not at least 5,000 by the end of the

[[Page 98087]]

performance year specified by CMS in its request for a CAP. ACOs will 
still be required to meet the requirement of 5,000 assigned 
beneficiaries when they renew for a new agreement period.
c. Update Antitrust Language
    Section 425.202(a)(3) requires that ACOs that are newly formed 
after March 23, 2010, agree to allow CMS to share a copy of their 
application with the Antitrust Agencies (the Federal Trade Commission 
(FTC) and the Department of Justice (DOJ), as defined in the Statement 
of Antitrust Enforcement Policy Regarding Accountable Care 
Organizations Participating in the Medicare Shared Savings Program). 
This policy has been in effect since the enactment of the November 2011 
final rule (76 FR 67822). We stated at the time that this policy was in 
the public interest to harmonize the eligibility criteria for ACOs that 
wished to participate in the Shared Savings Program with similar 
antitrust criteria on clinical integration, because competition among 
ACOs was expected to have significant benefits for Medicare 
beneficiaries.
    In 2023, both the DOJ and the FTC withdrew the outdated Antitrust 
Enforcement Policy Statement because the policy no longer served its 
intended purpose of providing useful guidance to market 
participants.\521\ Instead, both Antitrust Agencies have stated that 
they will continue to vigorously enforce the antitrust laws in the 
health care markets by evaluating mergers and conduct that harm 
competition on a case-by-case basis.
---------------------------------------------------------------------------

    \521\ U.S. Department of Justice, Press Release, Justice 
Department Withdraws Outdated Enforcement Policy Statements (Feb. 3, 
2023), available at https://www.justice.gov/opa/pr/justice-department-withdraws-outdated-enforcement-policy-statements; Federal 
Trade Commission, Press Release, Federal Trade Commission Withdraws 
Health Care Enforcement Policy Statements (July 14, 2023), available 
at https://www.ftc.gov/news-events/news/press-releases/2023/07/federal-trade-commission-withdraws-health-care-enforcement-policy-statements.
---------------------------------------------------------------------------

    As a result, in the CY 2025 PFS proposed rule (89 FR 61843) we 
proposed to modify the Shared Savings Program eligibility requirements 
that will be implemented on January 1, 2025, by removing the reference 
to the Antitrust Enforcement Policy Statement in Sec.  425.202(a)(3), 
and also in Sec.  425.224(a)(3). This proposal aligns the Shared 
Savings Program with the Antitrust Agencies' decisions to withdraw the 
Antitrust Enforcement Policy Statement. We proposed to edit Sec.  
425.202(a)(3) to state, ``An ACO that seeks to participate in the 
Shared Savings Program must agree that CMS can share a copy of their 
application with the Antitrust Agencies.'' Similarly, we proposed to 
edit Sec.  425.224(a)(3) to state, ``An ACO that seeks to enter a new 
participation agreement under the Shared Savings Program must agree 
that CMS can share a copy of its application with the Antitrust 
Agencies.'' We also plan to remove guidance from the Shared Savings 
Program website detailing how an ACO could calculate their share of 
services in each applicable Primary Service Area (PSA), as described in 
the Antitrust Policy Statement, as this is no longer useful to ACOs.
    In the CY 2025 PFS proposed rule (89 FR 61843) we explained that, 
as we stated in earlier rulemaking (76 FR 67842), we intend to 
coordinate closely with the Antitrust Agencies throughout the 
application process and the operation of the Shared Savings Program to 
ensure there are no detrimental impacts to competition. We will share 
application and participation information including aggregate claims 
data regarding allowed charges and fee-for-service payments for all 
ACOs accepted in the Shared Savings Program, with the Antitrust 
Agencies needed to further any investigations or support their 
enforcement of the antitrust laws.
    We solicited comment on this proposal. This proposed change would 
be effective beginning on January 1, 2025.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters agreed with this proposal and noted it improved 
clarity following the withdrawal of the Antitrust Policy Statement.
    Response: We agree with commenters. After consideration of public 
comments, we are finalizing without modification the proposed changes 
to Sec.  425.202(a)(3) and Sec.  425.224(a)(3), to remove the reference 
to the Antitrust Policy Statement from provisions on application 
procedures.
3. Beneficiary Assignment Methodology
a. Revisions to the Definition of Primary Care Services
(1) Background
    Section 1899(c)(1) of the Act, as amended by the CURES Act and the 
Bipartisan Budget Act of 2018, provides that for performance years 
beginning on or after January 1, 2019, the Secretary shall assign 
beneficiaries to an ACO based on their utilization of primary care 
services provided by a physician who is an ACO professional and all 
services furnished by Rural Health Clinics (RHCs) and Federally 
Qualified Health Centers (FQHCs). However, the statute does not specify 
a list of services considered to be primary care services for purposes 
of beneficiary assignment.
    In the November 2011 final rule (76 FR 67853), we established the 
initial list of services, identified by Current Procedural Terminology 
(CPT) and Healthcare Common Procedure Coding System (HCPCS) codes, that 
we considered to be primary care services. In that final rule, we 
indicated that we intended to monitor CPT and HCPCS codes and would 
consider making changes to the definition of primary care services to 
add or delete codes used to identify primary care services if there 
were sufficient evidence that revisions were warranted. We have updated 
the list of primary care service codes in subsequent rulemaking (refer 
to 80 FR 32746 through 32748; 80 FR 71270 through 71273; 82 FR 53212 
and 53213; 83 FR 59964 through 59968; 85 FR 27582 through 27586; 85 FR 
84747 through 84756; 85 FR 84785 through 84793; 86 FR 65273 through 
65279; 87 FR 69821 through 69825; 88 FR 79163 through 79174) to reflect 
additions or modifications to the codes that have been recognized for 
payment under the PFS and to incorporate other changes to the 
definition of primary care services for purposes of the Shared Savings 
Program. For the performance year beginning on January 1, 2024, and 
subsequent performance years, we defined primary care services for 
purposes of assigning beneficiaries to ACOs under Sec.  425.402 in 
Sec.  425.400(c)(1)(viii).
(2) Revisions
    As described in the CY 2025 PFS proposed rule (89 FR 61844 through 
61851), based on feedback from ACOs and our further review of the HCPCS 
and CPT codes that are currently recognized for payment under the PFS 
or that we proposed to recognize for payment starting in CY 2025, we 
stated that we believe it would be appropriate to amend the definition 
of primary care services used in the Shared Savings Program assignment 
methodology to include certain additional codes for the performance 
year starting on January 1, 2025, and subsequent performance years, in 
order to remain consistent with billing and coding under the PFS.
    We proposed to specify a revised definition of primary care 
services used for assignment in a new provision of the Shared Savings 
Program regulations at Sec.  425.400(c)(1)(ix) to include the list of 
HCPCS and CPT codes specified in Sec.  425.400(c)(1)(viii), as well as 
the

[[Page 98088]]

following additions: (1) Safety Planning Interventions (HCPCS code 
GSPI1) when the base code is also a primary care service code, if 
finalized under Medicare FFS payment policy; (2) Post-Discharge 
Telephonic Follow-up Contacts Intervention (HCPCS code GFCI1), if 
finalized under Medicare FFS payment policy; (3) Virtual Check-in 
Service (CPT code 9X091), if finalized under Medicare FFS payment 
policy; (4) Advanced Primary Care Management Services (HCPCS GPCM1, 
GPCM2, and GPCM3), if finalized under Medicare FFS payment policy; (5) 
Cardiovascular Risk Assessment and Risk Management Services (HCPCS 
codes GCDRA and GCDRM), if finalized under Medicare FFS payment policy; 
(6) Interprofessional Consultation Services (CPT codes 99446, 99447, 
99448, 99449, 99451, 99452); (7) Direct Care Caregiver Training 
Services (HCPCS codes GCTD1, GCTD2 and GCTD3), if finalized under 
Medicare FFS payment policy; and (8) Individual Behavior Management/
Modification Caregiver Training Services (HCPCS codes GCTB1 and GCTB2), 
if finalized under Medicare FFS payment policy.
    We proposed that the new provision at Sec.  425.400(c)(1)(ix) would 
be applicable for use in determining beneficiary assignment for the 
performance year starting on January 1, 2025, and subsequent 
performance years.
    The following provides additional information about the CPT and 
HCPCS codes that we proposed to add to the definition of primary care 
services used for purposes of beneficiary assignment:
     Safety Planning Interventions (SPI) (HCPCS code GSPI1 
(Safety planning interventions, including assisting the patient in the 
identification of the following personalized elements of a safety plan: 
recognizing warning signs of an impending suicidal crisis; employing 
internal coping strategies; utilizing social contacts and social 
settings as a means of distraction from suicidal thoughts; utilizing 
family members, significant others, caregivers, and/or friends to help 
resolve the crisis; contacting mental health professionals or agencies; 
and making the environment safe; (List separately in addition to an E/M 
visit or psychotherapy)): In the CY 2025 PFS proposed rule (89 FR 
61741), we proposed under the PFS to create an add-on G-code that would 
be billed along with an E/M visit or psychotherapy visit when safety 
planning interventions are personally performed by the billing 
practitioner in a variety of settings. Safety planning interventions 
involve a person working with a clinician to develop a personalized 
list of coping strategies and sources of support that the person could 
use in the event of experiencing thoughts of harm to themselves or 
others. This is not a suicide risk assessment, but rather, an 
intervention provided to people determined to have elevated risk. 
Safety planning interventions have also been used to reduce the risk of 
suicide. The basic components of a safety plan include the following: 
(1) recognizing warning signs of an impending suicidal crisis or 
actions that increase the risk of overdose; (2) employing internal 
coping strategies; (3) utilizing social contacts and social settings as 
a means of distraction from suicidal thoughts and/or taking steps to 
reduce the risk of suicide; (4) utilizing family members or friends to 
help resolve the crisis; (5) contacting mental health professionals, 
crisis services, or agencies; and (6) making the environment safe, 
including restricting access to lethal means, if applicable.
    Refer to section II.I of this final rule for detailed, technical 
discussion regarding the finalized description, payment, and 
utilization of this HCPCS code.
    In the CY 2019 PFS final rule (83 FR 59965 through 59966), we 
finalized the addition of prolonged evaluation and management or 
psychotherapy service(s) beyond the typical service time of the primary 
procedure (CPT codes 99354 and 99355) to the definition of primary care 
services used for purposes of assignment because these two codes are 
``add-on codes'' that describe additional resource components of a 
broader service furnished in the office or other outpatient setting 
that are not accounted for in the valuation of the base codes. For the 
same reason, in the proposed rule we stated that we believe it would be 
appropriate to also include HCPCS code GSPI1, if finalized under 
Medicare FFS policy since GSPI1 is being proposed as an add-on service 
to an E/M or psychotherapy visit. Evaluation and management visits are 
included in the definition of primary care services used for purposes 
of assignment and so we stated that we believe it would be appropriate 
to also include GSPI1, when billed with an E/M visit, in the definition 
of primary care services used for purposes of assignment to assign 
beneficiaries more accurately to ACOs participating in the Shared 
Savings Program. We further believe the services billed under this code 
reflect the types of services we expect primary care providers to 
provide in order to improve continuity of care. Including Safety 
Planning Intervention services in the definition of primary care 
services used for purposes of assignment would also align with the CMS 
Behavioral Health Strategy (https://www.cms.gov/cms-behavioral-health-strategy), the mission of which is to ensure that high-quality 
behavioral health services and supports are accessible to Medicare 
beneficiaries.
    We note that, as proposed, HCPCS code GSPI1 could also be billed 
with psychotherapy services, which are not considered for purposes of 
beneficiary assignment under Sec.  425.400(c). Therefore, we proposed 
to include the allowed charges for HCPCS code GSPI1, for purposes of 
assigning beneficiaries to ACOs, only when billed with a service which 
is also included in the definition of primary care services.
     Post-Discharge Telephonic Follow-up Contacts Intervention 
(FCI) (HCPCS code GFCI1: Post discharge telephonic follow-up contacts 
performed in conjunction with a discharge from the emergency department 
for behavioral health or other crisis encounter, per calendar month). 
In the CY 2025 PFS proposed rule (89 FR 61741 through 61742), we 
described FCI as a specific protocol of services for individuals with 
suicide risk involving a series of telephone contacts between a 
provider and person in the weeks and sometimes months following 
discharge from the emergency department and other relevant care 
settings, that occurs when the person is in the community and is 
designed to reduce the risk of subsequent adverse outcomes. FCI calls 
are typically 10-20 minutes in duration and aim to encourage use of the 
Safety Plan (as needed in a crisis) and updating it to optimize 
effectiveness, expressing psychosocial support, and helping to 
facilitate engagement in any indicated follow-up care and services. We 
proposed to create a monthly billing code to describe the specific 
protocols involved in furnishing post-discharge telephonic follow-up 
contacts that are performed in conjunction with a discharge from the 
emergency department for a crisis encounter, as a bundled service 
describing four calls in a month, each lasting between 10-20 minutes. 
We proposed to price this service based on a direct crosswalk to CPT 
code 99426 (Principal care management; first 30 minutes of clinical 
staff time directed by a physician or other qualified healthcare 
professional) because we stated that we believe the work would be 
similar in nature and intensity.
    Refer to section II.I. of this final rule for detailed, technical 
discussion regarding the finalized description,

[[Page 98089]]

payment, and utilization of this HCPCS code.
    These services are similar to TCM services (CPT codes 99495 and 
99496), which are included in the definition of primary care services 
used for purposes of assignment under Sec.  425.400(c), in that these 
services help eligible people transition back to a community setting 
after a stay at certain facility types like TCM. Similar to the 
rationale described December 2014 proposed rule (79 FR 72792) and later 
finalized in the June 2015 final rule (80 FR 32746 through 32748) where 
we finalized the inclusion of TCM services in the definition of primary 
care services used for purposes of assignment, providing separate 
payment for the work of community physicians and practitioners in 
treating a patient following discharge from a hospital or nursing 
facility would ensure better continuity of care for these patients and 
help reduce avoidable readmissions. Therefore, in the CY 2025 PFS 
proposed rule (89 FR 61845), we stated that FCI services should also be 
included in the definition of primary care services used for 
beneficiary assignment since FCI services are designed to assist in the 
transition from the emergency department into the community. We stated 
that we believe the services billed under this code reflect the types 
of services we expect primary care providers to provide in order to 
improve care coordination and care management. Thus, we stated that we 
believe that FCI services should also be included.
    Further, in determining the recommended pricing for HCPCS code 
GFCI1, we recommended pricing this service based on a direct crosswalk 
to Principal Care Management (PCM) service (CPT code 99426) because we 
stated that we believe the work would be similar in nature, as well as 
time and intensity. In the CY 2021 PFS final rule (85 FR 84749), we 
finalized the inclusion of HCPCS codes G2064 and G2065 in the 
definition of primary care services used for purposes of assignment 
since we expect that most services billed under these codes will be 
billed by specialists who are focused on managing patients with a 
single complex chronic condition requiring substantial care management. 
These HCPCS codes were replaced by CPT codes 99424, 99425, 99426, and 
99427 in the CY 2022 PFS final rule (86 FR 65275). PCM services (CPT 
codes 99424, 99425, 99426, and 99427 and HCPCS codes G2064 and G2065) 
are included in the definition of primary care services used for 
purposes of assignment and since FCI services are similar in nature, 
time, and intensity to PCM services, we stated that we believe it would 
be appropriate to include these services in the definition of primary 
care services used for purposes of assignment. Including FCI services 
in the definition of primary care services used for purposes of 
assignment would also align with the CMS Behavioral Health Strategy as 
the FCI services are designed to support beneficiaries with follow-up 
care related to suicide risk.
     Virtual Check-in Service (CPT code 9X091):
    ++ CPT code 9X091 (Brief communication technology-based service 
(e.g., virtual check-in) by a physician or other qualified health care 
professional who can report evaluation and management services, 
provided to an established patient, not originating from a related 
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, 5-10 minutes of 
medical discussion).
    The CPT Editorial Panel established a new CPT code 9X091 describing 
a brief virtual check-in encounter that is intended to evaluate the 
need for a more extensive visit. The code descriptor for CPT code 9X091 
mirrors that of existing HCPCS code G2012 (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; 5-10 minutes of medical 
discussion) and, per the CPT Editorial Panel materials, is intended to 
replace that code. HCPCS code G2012 is included in the Shared Savings 
Program definition of primary care services used for purposes of 
assignment.
    In the CY 2025 PFS proposed rule (89 FR 61651 through 61654), we 
proposed separate payment for CPT code 9X091. Because the code 
description for CPT code 9X091 mirrors HCPCS code G2012 and because, 
per CPT Editorial Panel materials, CPT code 9X091 is intended to 
replace HCPCS code G2012, we proposed to make CPT code 9X091 separately 
payable under Medicare. We note we proposed to delete HCPCS code G2012 
for purposes of Medicare PFS payment policy, however, HCPCS code G2012 
will continue to be included in the definition of primary care services 
used for purposes of assignment, consistent with how deleted CPT and 
HCPCS codes have been handled historically and to allow for consistency 
with calculating historical benchmarks.
    We proposed that we would include CPT code 9X091 in the definition 
of primary care services used for purposes of assignment as the code 
description of brief communication technology-based service mirrors the 
description of HCPCS code G2012, which is included in the definition of 
primary care services used for purposes of assignment since these 
services are furnished to established patients by physicians or 
qualified health care professionals that can report E/M services in 
lieu of an in person primary care visit (85 FR 84753). Since CPT code 
9X091 is a direct replacement of HCPCS code G2012, 9X091 would be 
included in the definition of primary care services used for purposes 
of assignment, under proposed Sec.  425.400(c)(1)(ix)(C). In the CY 
2022 PFS final rule (86 FR 65277 through 65279), we finalized a policy 
wherein we will incorporate into the definition of primary care 
services a permanent CPT code when it directly replaces another CPT 
code or a temporary HCPCS code (for example, a G-code) that is already 
included in the definition of primary care services for purposes of 
determining beneficiary assignment under the Shared Savings Program. 
Additionally, CPT code 9X091, per the CPT Editorial Panel materials, is 
intended to be reported instead of HCPCS code G2012, which is already 
included in the definition of primary care services used for purposes 
of assignment. We further believe the services billed under this code 
reflect the types of services we expect primary care providers to 
provide in order to improve care coordination and care management.
    We explained that this approach would help to ensure the 
appropriate identification of primary care services used in the Shared 
Savings Program's assignment methodology by allowing for the immediate 
inclusion of replacement CPT codes in the determination of beneficiary 
assignment and lead to continuity in the assignment of beneficiaries 
receiving those services based on current coding (89 FR 61845). This 
continuity would improve predictability for ACOs, while also increasing 
the consistency of care coordination for their assigned beneficiaries. 
We further finalized that such replacement codes would be incorporated 
into the definition of the primary care services for purposes of 
determining beneficiary assignment for the performance year, when the 
assignment window for a benchmark or performance year (as defined in

[[Page 98090]]

Sec.  425.20) includes any day on or after the effective date of the 
replacement code for payment purposes under FFS Medicare. CPT code 
9X091 has an effective date of January 1, 2025. Refer to section II.E 
of this final rule for detailed, technical discussion regarding the 
finalized description, payment, and utilization of this CPT code.
     Advanced Primary Care Management (HCPCS codes GPCM1, 
GPCM2, and GPCM3);
    (1) HCPCS code GPCM1: (Advanced primary care management services 
provided by clinical staff and directed by a physician or other 
qualified health care professional who is responsible for all primary 
care and serves as the continuing focal point for all needed health 
care services, per calendar month, with the following elements, as 
appropriate:
     Consent;
    ++ Inform the patient regarding availability of the service; that 
only one practitioner can furnish and be paid for the service during a 
calendar month; of the right to stop the services at any time 
(effective at the end of the calendar month); and that cost sharing may 
apply.
    ++ Document in patient's medical record that consent was obtained.
     Initiation during a qualifying visit for new patients or 
patients not seen within 3 years;
     Provide 24/7 access for urgent needs to care team/
practitioners, including providing patients/caregivers with a way to 
contact health care professionals in the practice to discuss urgent 
needs regardless of the time of day or day of week;
     Continuity of care with a designated member of the care 
team with whom the patient is able to schedule successive routine 
appointments;
     Deliver care in alternative ways to traditional office 
visits to best meet the patient's needs, such as home visits, and/or 
expanded hours;
     Overall comprehensive care management;
    ++ Systematic needs assessment (medical and psychosocial).
    ++ System-based approaches to ensure receipt of preventive 
services.
    ++ Medication reconciliation, management and oversight of self-
management.
     Development, implementation, revision, and maintenance of 
an electronic patient-centered comprehensive care plan;
    ++ Care plan is available timely within and outside the billing 
practice as appropriate to individuals involved in the beneficiary's 
care, can be routinely accessed and updated by care team/practitioner, 
and copy of care plan to patient/caregiver.
     Coordination of care transitions between and among health 
care providers and settings, including referrals to other clinicians 
and follow-up after an emergency department visit and discharges from 
hospitals, skilled nursing facilities or other health care facilities 
as applicable;
    ++ Ensure timely exchange of electronic health information with 
other practitioners and providers to support continuity of care.
    ++ Ensure timely follow-up communication (direct contact, 
telephone, electronic) with the patient and/or caregiver after an 
emergency department visit and discharges from hospitals, skilled 
nursing facilities, or other health care facilities, within 7 calendar 
days of discharge, as clinically indicated.
     Ongoing communication and coordinating receipt of needed 
services from practitioners, home- and community-based service 
providers, community-based social service providers, hospitals, and 
skilled nursing facilities (or other health care facilities), and 
document communication regarding the patient's psychosocial strengths 
and needs, functional deficits, goals, preferences, and desired 
outcomes, including cultural and linguistic factors, in the patient's 
medical record;
     Enhanced opportunities for the beneficiary and any 
caregiver to communicate with the care team/practitioner regarding the 
beneficiary's care through the use of asynchronous non-face-to-face 
consultation methods other than telephone, such as secure messaging, 
email, internet, or patient portal, and other communication-technology 
based services, including remote evaluation of pre-recorded patient 
information and interprofessional telephone/internet/EHR referral 
service(s), to maintain ongoing communication with patients, as 
appropriate;
    ++ Ensure access to patient-initiated digital communications that 
require a clinical decision, such as virtual check-ins and digital 
online assessment and management and E/M visits (or e-visits).
     Analyze patient population data to identify gaps in care 
and offer additional interventions, as appropriate;
     Risk stratify the practice population based on defined 
diagnoses, claims, or other electronic data to identify and target 
services to patients;
     Be assessed through performance measurement of primary 
care quality, total cost of care, and meaningful use of Certified EHR 
Technology.
    (2) HCPCS code GPCM2 (Advanced primary care management services for 
a patient with multiple (two or more) chronic conditions expected to 
last at least 12 months, or until the death of the patient, which place 
the patient at significant risk of death, acute exacerbation/
decompensation, or functional decline, provided by clinical staff and 
directed by a physician or other qualified health care professional who 
is responsible for all primary care and serves as the continuing focal 
point for all needed health care services, per calendar month, with the 
elements included in GPCM1, as appropriate), and
    (3) HCPCS code GPCM3 (Advanced primary care management services for 
a patient who is a Qualified Medicare Beneficiary with multiple (two or 
more) chronic conditions expected to last at least 12 months, or until 
the death of the patient, which place the patient at significant risk 
of death, acute exacerbation/decompensation, or functional decline, 
provided by clinical staff and directed by a physician or other 
qualified health care professional who is responsible for all primary 
care and serves as the continuing focal point for all needed health 
care services, per calendar month, with the elements included in GPCM1, 
as appropriate).
    In the CY 2025 PFS proposed rule (89 FR 61698 through 61725), we 
proposed to establish coding and make payment under the PFS for a newly 
defined set of APCM services as described and defined by three HCPCS 
codes (GPCM1, GPCM2, and GPCM3) to recognize the resource costs 
associated with furnishing services using an ``advanced primary care 
approach'' supported by a team-based care structure under the PFS. 
Delivery of care using an advanced primary care model involves 
restructuring of the primary care team, which includes the billing 
practitioner and the auxiliary personnel under their general 
supervision, within practices. This restructuring creates several 
advantages for patients, and provides more broad accessibility and 
alternative methods for patients to communicate with their care team/
practitioner about their care outside of in-person visits (for example, 
virtual, asynchronous interactions, such as online chat), which can 
lead to more timely and efficient identification of, and responses to, 
health care needs (for example, practitioners can route patients to the 
optimal clinician and setting--to a synchronous visit, an asynchronous 
chat, or a direct referral to the optimal site of care). Practitioners 
using an advanced primary care delivery model can more easily 
collaborate across

[[Page 98091]]

clinical disciplines through remote interprofessional consultations 
with specialists, as well as standardize condition management into 
evidence-based clinical workflows, which allow for closed-loop follow-
up and more real-time management for patients with acute or evolving 
complex issues, partner on complex decisions, and personalize their 
patients' care plans.
    Specifically, we proposed (89 FR 62011) to adopt specific coding 
and payment policies for APCM services for use by practitioners who are 
providing services under this specific model of advanced primary care, 
when the practitioner is the continuing focal point for all needed 
health care services and responsible for all primary care services.
    Providing care using an advanced primary care delivery model 
involves resource costs associated with maintaining certain practice 
capabilities and continuous readiness and monitoring activities to 
support a team-based approach to care, where significant resources are 
used on virtual, asynchronous patient interactions, collaboration 
across clinical disciplines, and real-time management of patients with 
acute and complex concerns that are not fully recognized or paid for by 
the existing care management codes. As the delivery of primary care has 
evolved to embrace advanced primary care more fully, in the proposed 
rule we stated that we believe that it is prudent to now adopt specific 
coding and payment policies to better recognize the resources involved 
in care management under an advanced primary care delivery model.
    We seek to ensure that the APCM codes would fully and appropriately 
capture the care management and CTBS services that are characteristic 
of the changes in medical practice toward advanced primary care, as 
demonstrated in select CMS Innovation Center models. As we do for CCM 
and PCM services, we proposed to require for APCM services that the 
practitioner provide an initiating visit and obtain beneficiary consent 
(see section II.G.2.c.(1) and II.G.2.c.(2) of the proposed rule). We 
proposed to incorporate as elements of APCM services ``Management of 
Care Transitions'' and ``Enhanced Communications Opportunities.'' For 
the ``Management of Care Transitions'' APCM service element, we 
proposed to specify timely follow-up during care transitions (see 
section II.G.2.c.(6) of the proposed rule). For the ``Enhanced 
Communications Opportunities'' APCM service element, we proposed to 
incorporate digital access through CTBS services, such as virtual 
check-ins and remote evaluation of images, to maintain ongoing 
communication with the patient (see section II.G.2.c.(8) of the 
proposed rule). We also proposed to specify for APCM services the 
practice-level characteristics and capabilities that we stated that we 
believe to be inherent to, and necessarily present when a practitioner 
is providing covered services using, the ``advanced primary care'' 
model. Included in the service descriptors for GPCM1, GPCM2, and GPCM3 
are proposed practice-level capabilities that reflect care delivery 
using an advanced primary care model that focused around 24/7 access 
and continuity of care (see section II.G.2.c.(3) of the proposed rule), 
patient population-level management (see section II.G.2.c.(9) of the 
final rule), and performance measurement (see section II.G.2.c.(10) of 
the final rule). We stated that we believe these practice capabilities 
are indicative of, and necessary to, care delivery using the advanced 
primary care model.
    Refer to section II.G. of this final for detailed, technical 
discussion regarding the proposed description, payment and utilization 
of these HCPCS codes as well as information about requirements for 
billing providers participating in ACOs.
    As described in section II.G. of this final rule, HCPCS codes GPCM1 
through GPCM3 would describe APCM services furnished per calendar 
month, following the initial qualifying visit (see section II.G.2.c.(1) 
of this final rule for more on the initiating visit). Physicians and 
NPPs, including nurse practitioners (NPs), physician assistants (PAs), 
certified nurse midwives (CNMs) and clinical nurse specialists (CNSs), 
could bill for APCM services. As we described in more detail in section 
II.G.2.c. of this final rule, within the code descriptors for GPCM1, 
GPCM2, and GPCM3, we included the elements of the scope of service for 
APCM as well as the capabilities and requirements that we stated that 
we believed to be inherent to care delivery by the practitioner using 
an advanced primary care model, and necessary to fully furnish and, 
therefore, bill for APCM services.
    We proposed that the practitioner who bills for APCM services must 
intend to be responsible for the patient's primary care and serve as 
the continuing focal point for all needed health care services. We 
anticipated that most practitioners furnishing APCM services would be 
managing all the patient's health care services over the month and have 
either already been providing ongoing care for the patient or have the 
intention of being responsible for the patient's primary care and 
serving as the continuing focal point for all of the patient's health 
care services. As detailed in sections II.G.2.b. through II.G.2.d. of 
this final rule, this proposed coding and payment would incorporate 
elements of several specific, existing care management and 
communication technology-based services (CTBS) into a bundle of 
services that reflects the essential elements of the delivery of 
advanced primary care, for payment under the PFS starting in 2025.
    These new codes are designed to bundle the individual utilization 
of codes that are already included in the definition of primary care 
services used for purposes of assignment, specifically CCM (CPT codes 
99437, 99487, 99489, 99490, 99491, and 99439 and HCPCS codes G0506 and 
G2058), PCM (CPT codes 99424, 99425, 99426, and 99427 and HCPCS codes 
G2064 and G2065), TCM (CPT codes 99495 and 99496), remote evaluation of 
patient videos/images (HCPCS code G2010), and virtual check-in and e-
visits (HCPCS codes G2012 and G2252). These new codes also bundle IPC 
(CPT Codes 99446, 99447, 99448, 99449, 99451, 99452), which we proposed 
to include in the definition of primary care services used for purposes 
of assignment. Further, as proposed, this new APCM bundle represents a 
broader application of advanced primary care and incorporates elements 
included in care management and CTBS services. We stated that we 
believe the services billed under these codes reflect the types of 
services we expect primary care providers to provide in order to 
improve care coordination and care management and so it would be 
appropriate to include HCPCS codes GPCM1, GPCM2, and GPCM3 in the 
definition of primary care services used for purposes of assignment 
since these HCPCS codes bundle services furnished under CPT and HCPCS 
codes already included in the definition of primary care services used 
for purposes of assignment.
    As we explained in the proposed rule (89 FR 61703), we anticipated 
that these codes would mostly be used by primary care specialties, such 
as general medicine, geriatric medicine, family medicine, internal 
medicine, and pediatrics, or in some instances, certain specialists 
functioning as primary care practitioners--for example, an OB/GYN or a 
cardiologist. Since primary care specialties, such as general medicine, 
geriatric medicine, family medicine, internal medicine, and pediatrics 
are primary care physicians (as defined in Sec.  425.20) and OB/GYN or 
a cardiologist are two of the specialty designations (as described in 
Sec.  425.402(c)) used for purposes of assignment we stated that we 
believe it would be appropriate to include HCPCS codes GPCM1, GPCM2,

[[Page 98092]]

and GPCM3 in the definition of primary care services used for purposes 
of assignment. Inclusion of these APCM services in the definition of 
primary care services used for purposes of assignment would also 
strengthen and invest in primary care in alignment with the goals of 
the U.S. Department of Health and Human Services (HHS) Initiative to 
Strengthen Primary Care.\522\ We also believe that updating the 
definition of primary care services used for purposes of assignment to 
include the APCM bundle would increase the accuracy of assignment based 
on the provision of primary care.
---------------------------------------------------------------------------

    \522\ Refer to U.S. Department of Health and Human Services, 
Issue Brief: HHS is Taking Action to Strengthen Primary Care 
(November 7, 2023), available at https://www.hhs.gov/sites/default/files/primary-care-issue-brief.pdf.
---------------------------------------------------------------------------

     Cardiovascular Risk Assessment and Risk Management--
    ++ Cardiovascular Disease Risk Assessment HCPCS code GCDRA 
(Administration of a standardized, evidence-based Atherosclerotic 
Cardiovascular Disease (ASCVD) Risk Assessment for patients with ASCVD 
risk factors on the same date as an E/M visit, 5-15 minutes, not more 
often than every 12 months): As described in the CY 2025 PFS proposed 
rule (89 FR 61727 through 61731), we proposed a new stand-alone HCPCS 
code, GCDRA, to identify and value the work involved in administering 
an ASCVD risk assessment when medically reasonable and necessary in 
relation to an E/M visit. Atherosclerotic Cardiovascular Disease 
(ASCVD) Risk Assessment refers to a review of the individual's 
demographic factors, modifiable risk factors for CVD, and risk 
enhancers for CVD.
    We proposed that the ASCVD risk assessment must be furnished by the 
practitioner on the same date they furnish an E/M visit, as the ASCVD 
risk assessment would be reasonable and necessary when used to inform 
the patient's diagnosis, and treatment plan established during the 
visit. ASCVD risk assessment is reasonable and necessary for a patient 
who has at least one predisposing condition to cardiovascular disease 
that may put them at increased risk for future ASCVD diagnosis.
    ++ Atherosclerotic Cardiovascular Disease Prevention Risk 
Management Services HCPCS code GCDRM (Atherosclerotic Cardiovascular 
Disease (ASCVD) risk management services with the following required 
elements: patient is without a current diagnosis of ASCVD, but is 
determined to be at medium or high risk for CVD (15 percent 
in the next 10 years) as previously determined by the ASCVD risk 
assessment; ASCVD-Specific care plan established, implemented, revised, 
or monitored that addresses risk factors and risk enhancers and must 
incorporate shared decision-making between the practitioner and the 
patient; clinical staff time directed by physician or other qualified 
health care professional; per calendar month). As described in section 
II.G of this final rule, over the past several years, we have worked to 
develop payment mechanisms under the PFS to improve the accuracy of 
valuation and payment for the services furnished by physicians and 
other healthcare professionals, especially in the context of evolving 
changes in medical practice using evidence-based models of care, such 
as the Million Hearts[supreg] model. We proposed to establish a G-code, 
GCDRM, for ASCVD risk management services which refers to the 
development, implementation, and monitoring of individualized care 
plans for reducing cardiovascular risk, including shared decision-
making and the use of the ``ABCS'' of cardiovascular risk reduction, as 
well as counseling and monitoring to improve diet and exercise.
    We stated that we believe that ASCVD risk management services 
include continuous care and coordination to reduce or eliminate further 
elevation of ASCVD risk over time, and potentially prevent the 
development of future cardiovascular disease diagnoses or first-time 
heart attacks or strokes. Physicians and Non-Physician Practitioners 
(NPPs) who can furnish E/M services could bill for ASCVD risk 
management services. In the proposed rule, we explained that we 
anticipated that ASCVD risk management services would ordinarily be 
provided by clinical staff incident to the professional services of the 
billing practitioner in accordance with Sec.  410.26. We proposed that 
ASCVD risk management 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.
    Refer to section II.G of this final rule for detailed, technical 
discussion regarding the proposed description, payment and utilization 
of HCPCS codes GCDRA and GCDRM.
    Because HCPCS codes GCDRA and GCDRM are proposed to be care 
management services similar to CCM (CPT codes 99437, 99439, 99487, 
99489, 99490, and 99491) which are included in the Shared Savings 
Program definition of primary care services used for purposes of 
assignment, we explained in the proposed rule that we believed it would 
be consistent and appropriate to include GCDRA and GCDRM in the 
definition of primary care services used for purposes of assignment. In 
earlier rulemaking, we finalized the inclusion of CCM CPT codes 99487, 
99489, 99490, and 99491 (codes for chronic care management) in the 
definition of primary care services for the Shared Savings Program. 
Refer to the June 2015 final rule (80 FR 32746 through 32748), CY 2018 
PFS final rule (82 FR 53212 through 53213), and CY 2021 PFS final rule 
(85 FR 84749 through 84750 and 84754). ``Complex'' CCM services (CPT 
codes 99487 and 99489) and ``non-complex'' CCM services (CPT codes 
99490 and 99491) share a common set of service elements, including the 
following: (1) Initiating visit, (2) structured recording of patient 
information using certified electronic health record technology (EHR), 
(3) 24/7 access to physicians or other qualified health care 
professionals or clinical staff and continuity of care, (4) 
comprehensive care management including systematic assessment of the 
patient's medical, functional, and psychosocial needs, (5) 
comprehensive care plan including a comprehensive care plan for all 
health issues with particular focus on the chronic conditions being 
managed, and (6) management of care transitions.
    Elements of care management services include: (1) an initial visit, 
which can be an E/M service, Annual Wellness Visit (AWV) or initial 
preventive physical exam (IPPE or ``Welcome to Medicare''); (2) 
continuity of care with a designated practitioner; (3) comprehensive 
care management; (4) comprehensive care plan; (5) management of care 
transitions; and (6) care coordination. In the November 2011 final rule 
(76 FR 67852 through 67853), we finalized the inclusion of E/M 
services, the AWV, and the IPPE since those services align the 
definition of primary care services used in the Shared Savings Program 
with the definition of primary care services included in section 5501 
of the Affordable Care Act. Because care management, E/M services, the 
AWV, and the IPPE are all included in the definition of primary care 
services used for purposes of assignment, in the proposed rule (89 FR 
61848), we stated that we believe GCDRA and GCDRM reflect the types of 
services we expect primary care providers to provide in order to 
improve care coordination and care management. Additionally, GCDRA and 
GCDRM are care and risk management services that include

[[Page 98093]]

elements of continuous and coordinated care, which the Shared Savings 
Program is intended to promote.
     Interprofessional Consultation (IPC) (CPT codes 99446, 
99447, 99448, 99449, 99451, 99452): In the CY 2019 PFS final rule (83 
FR 59489), CMS finalized six codes:
    ++ 99446 (Interprofessional telephone/internet assessment and 
management service provided by a consultative physician including a 
verbal and written report to the patient's treating/requesting 
physician or other qualified health care professional; 5-10 minutes of 
medical consultative discussion and review);
    ++ 99447 (Interprofessional telephone/internet assessment and 
management service provided by a consultative physician including a 
verbal and written report to the patient's treating/requesting 
physician or other qualified health care professional; 11-20 minutes of 
medical consultative discussion and review);
    ++ 99448 (Interprofessional telephone/internet assessment and 
management service provided by a consultative physician including a 
verbal and written report to the patient's treating/requesting 
physician or other qualified health care professional; 21-30 minutes of 
medical consultative discussion and review);
    ++ 99449 (Interprofessional telephone/internet assessment and 
management service provided by a consultative physician including a 
verbal and written report to the patient's treating/requesting 
physician or other qualified health care professional; 31 minutes or 
more of medical consultative discussion and review);
    ++ 99451 (Interprofessional telephone/internet/electronic health 
record assessment and management service provided by a consultative 
physician including a written report to the patient's treating/
requesting physician or other qualified health care professional, 5 or 
more minutes of medical consultative time); and
    ++ 99452 (Interprofessional telephone/internet/electronic health 
record referral service(s) provided by a treating/requesting physician 
or qualified health care professional, 30 minutes).
    These CPT codes describe assessment and management services 
conducted through telephone, internet, or electronic health record 
consultations furnished when a patient's treating physician or other 
qualified healthcare professional requests the opinion and/or treatment 
advice of a consulting physician or qualified healthcare professional 
with specific specialty expertise to assist with the diagnosis and/or 
management of the patient's problem without the need for the patient's 
face-to-face, in-person contact with the consulting physician or 
qualified healthcare professional. In the CY 2025 PFS proposed rule (89 
FR 61745), we stated that we believe that payment for these 
interprofessional consultations performed via communications technology 
such as telephone or internet is consistent with our ongoing efforts to 
recognize and reflect medical practice trends in primary care and 
patient-centered care management within the PFS. Accordingly, because 
these CPT codes 99446, 99447, 99448, 99449, 99451, and 99452 recognize 
and reflect medical practice trends in primary care and patient-
centered care, we continue to believe they should be included in the 
definition of primary care services used for purposes of assignment.
    Beginning in the CY 2012 PFS proposed rule (76 FR 42793), we 
recognized the changing focus in medical practice toward managing 
patients' chronic conditions, many of which particularly challenge the 
Medicare population, including heart disease, diabetes, respiratory 
disease, breast cancer, allergies, Alzheimer's disease, and factors 
associated with obesity. Current E/M coding does not adequately reflect 
the changes that have occurred in medical practice, and the activities 
and resource costs associated with the treatment of these complex 
patients in the primary care setting In the years since 2012, we have 
acknowledged the shift in medical practice away from an episodic 
treatment-based approach to one that involves comprehensive patient-
centered care management, and have taken steps through rulemaking to 
better reflect that approach in payment under the PFS. In the CY 2013 
PFS final rule (77 FR 68979), we established new codes to pay 
separately for TCM services. Next, in the CY 2015 PFS final rule (79 FR 
67715), we finalized new coding and separate payment beginning in CY 
2015 for CCM services provided by clinical staff. In the CY 2017 PFS 
final rule (81 FR 80225), we established separate payment for complex 
CCM services, an add-on code to the visit during which CCM is initiated 
to reflect the work of the billing practitioner in assessing the 
beneficiary and establishing the CCM care plan and established separate 
payment for Behavioral Health Integration (BHI) services (81 FR 80226 
through 80227). As part of this shift in medical practice, and with the 
proliferation of team-based approaches to care that are often 
facilitated by electronic medical record technology, we stated that we 
believe that making separate payment for interprofessional 
consultations undertaken for the benefit of treating a patient would 
contribute to payment accuracy for primary care and care management 
services. Refer to the CY 2019 PFS final rule (83 FR 59489) for 
detailed, technical discussion regarding the description, payment and 
utilization of these CPT codes.
    Since the services associated with CPT codes 99446, 99447, 99448, 
99449, 99451, and 99452 include TCM, CCM, and BHI services, which are 
included in our definition of primary care services and are included in 
the proposed APCM bundle that we proposed to be included in the 
definition of primary care services used for purposes of assignment, we 
explained in the proposed rule that we believe that the services 
associated with CPT codes 99446, 99447, 99448, 99449, 99451, and 99452 
should be included in the definition of primary care services for 
purposes of assignment. We additionally stated that we believe the 
services billed under this code reflect the types of services we expect 
primary care providers to provide in order to improve care coordination 
and care management. These IPC services were also designed to reimburse 
for comprehensive patient-centered care management and primary care, 
which the Shared Savings Program is intended to promote.
     Direct Care Caregiver Training Services (HCPCS codes 
GCTD1, GCTD2, and GCTD3): GCTD1 (Caregiver training in direct care 
strategies and techniques to support care for patients with an ongoing 
condition or illness and to reduce complications (including, but not 
limited to, techniques to prevent decubitus ulcer formation, wound 
dressing changes, and infection control) (without the patient present), 
face-to-face; initial 30 minutes)), GCTD2 (Caregiver training in direct 
care strategies and techniques to support care for patients with an 
ongoing condition or illness and to reduce complications (including, 
but not limited to, techniques to prevent decubitus ulcer formation, 
wound dressing changes, and infection control) (without the patient 
present), face-to-face; each additional 15 minutes (List separately in 
addition to code for primary service) (Use GCTD2 in conjunction with 
GCTD1)), and GCTD3 (Group caregiver training in direct care strategies 
and techniques to support care for patients with an ongoing condition 
or illness and to reduce

[[Page 98094]]

complications including, but not limited to, techniques to prevent 
decubitus ulcer formation, wound dressing changes, and infection 
control) (without the patient present), face-to-face with multiple sets 
of caregivers). In the CY 2025 PFS proposed rule (89 FR 61666 through 
61667) we proposed to establish new coding and payment for caregiver 
training services (CTS) for direct care services and supports. The 
topics of training could include, but would not be limited to, 
techniques to prevent decubitus ulcer formation, wound dressing 
changes, and infection control. Refer to section II.E. of this final 
rule for detailed, technical discussion regarding the proposed 
description, payment, and utilization of this HCPCS code.
    Unlike other caregiver training codes that are currently paid under 
the PFS, the caregiver training codes for direct care services and 
support focus on specific clinical skills aimed at the caregiver 
effectuating hands-on treatment, reducing complications, and monitoring 
the patient. Like other codes describing caregiver training services, 
these proposed new codes would reflect the training furnished to a 
caregiver, in tandem with the diagnostic and treatment services 
furnished directly to the patient, in strategies and specific 
activities to assist the patient to carry out the treatment plan. In 
the proposed rule (89 FR 61666), we explained that we believe that CTS 
may be reasonable and necessary when they are integral to a patient's 
overall treatment and furnished after the treatment plan is 
established. The CTS themselves need to be congruent with the treatment 
plan and designed to effectuate the desired patient outcomes. Direct 
care training for caregivers of Medicare beneficiaries should be 
directly relevant to the person-centered treatment plan for the patient 
in order for the services to be considered reasonable and necessary 
under the Medicare program. We stated that we believe that since CTS 
may be integral to a patient's overall treatment and furnished after 
the treatment plan is established, these services should be included in 
the definition of primary care services for purposes of beneficiary 
assignment in support of the Shared Savings Program's goal to promote 
coordinated, high-quality care to an ACO's assigned beneficiaries. In 
the CY 2024 PFS final rule (88 FR 79168 through 79169), we finalized 
the inclusion of other caregiver training services (CPT codes 96202, 
96203, 97550, 97551, and 97552) in the definition of primary care 
services used for purposes of assignment in the Shared Savings Program. 
These new caregiver training services codes (HCPCS GCTD1, GCTD2, and 
GCTD3) are similar to the caregiver training services currently 
included in the Shared Savings Program definition of primary care 
services in that these codes allow treating practitioners to report the 
training furnished to a caregiver, in tandem with the diagnostic and 
treatment services furnished directly to the patient, in strategies and 
specific activities to assist the patient to carry out the treatment 
plan. In the proposed rule, we stated that we also believed the 
services billed under these codes reflect the types of services we 
expect primary care providers to provide in order to improve care 
coordination and care management.
     Individual Behavior Management/Modification Caregiver 
Training Services (HCPCS codes GCTB1 and GCTB2): GCTB1 (Caregiver 
training in behavior management/modification for caregiver(s) of a 
patient with a mental or physical health diagnosis, administered by 
physician or other qualified health care professional (without the 
patient present), face-to-face; initial 30 minutes) and GCTB2 
(Caregiver training in behavior management/modification for 
caregiver(s) of a patient with a mental or physical health diagnosis, 
administered by physician or other qualified health care professional 
(without the patient present), face-to-face; each additional 15 minutes 
(List separately in addition to code for primary service) (Use GCTB2 in 
conjunction with GCTB1)). In the CY 2025 PFS proposed rule (89 FR 61667 
through 61668), we proposed to establish new coding and payment for 
caregiver behavior management and modification training that could be 
furnished to the caregiver(s) of an individual patient. Behavior 
management/modification training for caregivers of Medicare 
beneficiaries should be directly relevant to the person-centered 
treatment plan for the patient in order for the services to be 
considered reasonable and necessary under the Medicare program. Each 
training activity should be clearly identified and documented in the 
treatment plan. All other policies and procedures surrounding CPT 96202 
and 96203 would also apply to these services (88 FR 78914 through 
78920). Refer to section II.E. of this final rule for detailed, 
technical discussion regarding the proposed description, payment and 
utilization of this HCPCS code.
    We explained in the proposed rule that we believe that, since CTS 
may be reasonable and necessary when they are integral to a patient's 
overall treatment and furnished after the treatment plan is established 
especially in the case of medical treatment scenarios where assistance 
by the caregiver receiving the CTS is necessary to ensure a successful 
treatment outcome for the patient (for example when the patient cannot 
follow through with the treatment plan for themselves), these services 
should be included in the definition of primary care services for 
purposes of beneficiary assignment in support of the Shared Savings 
Program's goal to promote coordinated, high quality care to an ACO's 
assigned beneficiaries. In the CY 2024 PFS final rule (88 FR 79168 
through 79169), we finalized the inclusion of other caregiver training 
services (CPT codes 96202, 96203, 97550, 97551, and 97552) in the 
definition of primary care services used for purposes of assignment in 
the Shared Savings Program. These new caregiver training services codes 
(HCPCS codes GCTD1, GCTD2, GCTD3, GCTB1, and GCTB2) are similar to the 
caregiver training services currently included in the Shared Savings 
Program definition of primary care services in that these codes allow 
treating practitioners to report the training furnished to a caregiver, 
in tandem with the diagnostic and treatment services furnished directly 
to the patient, in strategies and specific activities to assist the 
patient to carry out the treatment plan, which is integral to care 
coordination. We also stated in the proposed rule that we believe the 
services billed under these codes reflect the types of services we 
expect primary care providers to provide in order to improve care 
coordination and care management.
    As part of this revised definition of primary care services used 
for assigning beneficiaries under Sec.  [thinsp]425.402, we proposed to 
incorporate a provision in Sec.  425.400(c)(1)(ix)(C), specifying that 
the primary care service codes for purposes of assigning beneficiaries 
include a CPT code identified by CMS that directly replaces a CPT code 
specified in Sec.  [thinsp]425.400(c)(1)(ix)(A) or a HCPCS code 
specified in Sec.  [thinsp]425.400(c)(1)(ix)(B), when the assignment 
window or expanded assignment window (as defined in Sec.  
[thinsp]425.20) for a benchmark or performance year includes any day on 
or after the effective date of the replacement code for payment 
purposes under FFS Medicare.
    We solicited comments on these proposed changes to the definition 
of primary care services used for assigning beneficiaries under Sec.  
425.400(c)(1)(ix) to Shared Savings Program ACOs for the performance 
year starting on January 1, 2025, and subsequent performance

[[Page 98095]]

years. We solicited comments on any other existing HCPCS or CPT codes 
and new HCPCS or CPT codes proposed in the proposed rule that we should 
consider adding to the definition of primary care services for purposes 
of assignment in future rulemaking.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters supported CMS's proposed revisions to the 
definition of primary care services, noting that they would capture 
more of the services rendered by primary care physicians to Medicare 
beneficiaries and increase participation in the Shared Savings Program. 
Commenters stated that the additional service codes proposed by CMS in 
the proposed rule support the delivery of comprehensive, coordinated, 
whole-person care and are reflective of other primary care services CMS 
has used to assign beneficiaries to ACOs. One commenter supported the 
proposed additions to the definition of primary care services that are 
provided in conjunction with office/outpatient E/M services, other 
preventive services, and care management services currently included in 
the definition of primary care services used for purposes of assignment 
under (Sec.  [thinsp]425.400(c)).
    Response: We agree with commenters who stated that the proposed 
revisions to the definition of primary care services will capture more 
of the services rendered by primary care providers and increase 
participation in the Shared Savings Program. We also agree that use of 
these additional services for purposes of assignment would support the 
delivery of comprehensive, coordinated, whole-person care.
    Comment: A couple of commenters urged CMS to continue to monitor 
the impact of expanding the definition of primary care services to 
include the additional PFS codes on beneficiary assignment. They 
suggested that as part of this monitoring, CMS should identify any 
patterns in population types and characteristics that may be captured 
by the additional codes and evaluate the effect that the additions to 
the definition may have on beneficiary assignment. One commenter 
recommended that CMS use claims data on current codes used for 
beneficiary assignment to confirm those claims are truly primary care 
service claims. The same commenter contended that codes that are 
infrequently billed by primary care providers associated with ACOs 
should be removed from the definition of primary care services used for 
purposes of assignment.
    Response: As a ``pre-step'' in the claims-based assignment process, 
CMS identifies all beneficiaries who had at least one primary care 
service with a physician who is an ACO professional in the ACO and who 
is a primary care physician as defined under Sec.  [thinsp]425.20 or 
who has one of the primary specialty designations specified in Sec.  
[thinsp]425.402(c). See Sec.  425.402(b)(1), (b)(2), and (b)(3). Under 
claims-based assignment, CMS assigns beneficiaries to ACOs through 
either one of two steps. Under Step 1, CMS assigns a beneficiary to a 
Shared Savings Program ACO when the beneficiary receives more primary 
care services (measured by Medicare-allowed charges) furnished by 
primary care physicians, nurse practitioners, physician assistants, and 
clinical nurse specialists in the participating ACO than from the same 
type of providers at any other Shared Savings Program ACO, non-ACO CMS 
Certification Number (CCN), or non-ACO individual or group Taxpayer 
Identification Number (TIN). See Sec.  425.402(b)(3). Step 2 only 
applies to assignable beneficiaries who have not had a primary care 
service rendered by any primary care physician, nurse practitioner, 
physician assistant, or clinical nurse specialist, either inside the 
ACO or outside the ACO, and were therefore not assigned as part of Step 
1. See Sec.  425.402(b)(4). CMS assigns a beneficiary to a Shared 
Savings Program ACO under step 2 when the beneficiary receives more 
primary care services (measured by Medicare-allowed charges) furnished 
by physicians who are ACO professionals with specialty designations as 
specified in Sec.  [thinsp]425.402(c) in the participating ACO than 
from the same type of providers at any other Shared Savings Program 
ACO, non-ACO CCN, or non-ACO individual or group TIN. See Sec.  
425.402(b)(4).
    Beginning with PY 2025, Step 3 will utilize the expanded window for 
assignment to identify additional beneficiaries for assignment among 
Medicare FFS beneficiaries who were not identified under the existing 
pre-step. (Refer to 88 FR 52444 through 52446.) Specifically, step 3 
will identify all such beneficiaries not identified by the pre-step 
criterion specified in Sec.  [thinsp]425.402(b)(1), who also meet the 
following criteria:
    (1) Received at least one primary care service with a non-physician 
ACO professional (NP, PA, or CNS) in the ACO during the applicable 12-
month assignment window.
    (2) Received at least one primary care service with a physician who 
is an ACO professional in the ACO and who is a primary care physician 
as defined under Sec.  [thinsp]425.20 or who has one of the primary 
specialty designations included in Sec.  [thinsp]425.402(c) during the 
applicable 24-month expanded window for assignment. See Sec.  
425.402(b)(5).
    As we have previously explained in rulemaking (see, for example, 76 
FR 67853 through 67855; see also 80 FR 32748 and 32754), the step-wise 
assignment methodology maintains the statutory requirement to conduct 
claims-based beneficiary assignment based on beneficiaries' utilization 
of physician primary care services, recognizing the necessary and 
appropriate role of certain specialists in providing primary care 
services, such as in areas with primary care physician shortages. 
Additionally, we noted in the June 2015 final rule (80 FR 32750), that 
we expect that specialist physicians often take the role of primary 
care physicians in the overall treatment of beneficiaries with certain 
chronic conditions, and such patterns are captured in step 2 in the 
current assignment methodology. Further, if services billed under these 
codes are provided by specialists not considered for purposes of 
beneficiary assignment, then the services will not be considered in 
beneficiary assignment.
    We will monitor the billing and utilization of the current primary 
care service codes used for purposes of beneficiary assignment, and 
other codes, to ensure that the Shared Savings Program considers 
appropriate billing codes for purposes of beneficiary assignment. If 
monitoring shows that the inclusion of service codes in the definition 
of primary care services used for beneficiary assignment is not 
appropriate, we will address that issue in future notice and comment 
rulemaking.
    Comment: One commenter expressed concern about using the direct 
caregiver training service code for purposes of assignment, because it 
can be used by a wide range of providers across various settings. 
Another commenter disagreed with adding the proposed GSPI1 (safety 
planning intervention services), the interprofessional consultation 
service codes (CPT codes 99446, 99447, 99448, 99449, 99451, 99452), and 
other codes that are not ``predominantly primary care services'' to the 
definition of primary care service codes used for purposes of 
assignment. This commenter stated that many of those service codes 
correspond almost exclusively to specialist, non-primary care services 
(``in some cases by design'') and thus does not believe the 
aforementioned codes reflect the provision of primary care. The 
commenter also stated that add-on codes should not be used for 
assignment

[[Page 98096]]

``because they are not distinct from the base code and would 
inappropriately weight the encounter.'' Another commenter stated that 
they did not support the inclusion of the interprofessional 
consultation codes, except for 99452, as they are usually performed by 
neurologists, cardiologists, internal medicine sub-specialties, and 
NPs/PAs (whose specialty affiliation is unknown).
    Response: Regarding the inclusion of direct caregiver services, in 
section II.E of this final rule, we clarify for commenters that 
Caregiver Training Services (CTS) will be covered and paid under the 
physician fee schedule (PFS) when furnished personally by physicians 
and nonphysician practitioners who are authorized under an ``incident 
to'' provision under their statutory benefit category. Additionally, 
CTS are covered and paid to physicians and certain nonphysician 
practitioners under the PFS when provided by auxiliary personnel (as 
defined in program regulations at Sec.  410.26(a)(1)) when all the 
``incident to'' requirements are met. Since these services are covered 
and paid under the physician fee schedule (PFS) when furnished 
personally by physicians and nonphysician practitioners who are 
authorized under an ``incident to'' provision under their statutory 
benefit category, and since CTS may be integral to a patient's overall 
treatment and furnished after the treatment plan is established, we 
continue to believe it is appropriate to include them in the definition 
of primary care services used for purposes of assignment.
    With regard to the comment opposed to the inclusion of these 
services in the definition of primary care services because they can be 
furnished in a variety of settings, although these services may be 
furnished in a variety of settings, we continue to believe it is 
appropriate to include them in the definition of primary care used for 
purposes of assignment when they are furnished by a physician or 
nonphysician practitioner who is an ACO professional given that both 
primary care providers and specialists provide care in a variety of 
settings. The safety planning intervention HCPCS code, GSPI1, is being 
finalized as HCPCS G0560 and as a standalone service in Section II.I of 
this final rule. Even though the payment policy for this HCPCS code is 
being finalized with modifications, we continue to believe the services 
billed under this code reflect the types of primary care services we 
expect primary care providers to provide related to continuity of care. 
This code reflects important enhancements to support improvement and 
integration of care provided for beneficiaries receiving behavioral 
health treatment from primary care providers. Including safety planning 
intervention services (HCPCS G0560) in the definition of primary care 
services used for purposes of assignment also aligns with the CMS 
Behavioral Health Strategy, the mission of which is to ensure that 
high-quality behavioral health services and supports are accessible to 
Medicare beneficiaries.
    It is not clear which services the commenter referred to as ``other 
codes that are not predominantly primary care services'' and so we are 
not persuaded by this comment. Additionally, as part of the Shared 
Savings Program step-wise assignment methodology, according to Sec.  
425.400(a), CMS employs the step-wise assignment methodology described 
in Sec.  425.402 and Sec.  425.404 a Medicare FFS beneficiary is 
assigned to an ACO if the--(A) beneficiary meets the eligibility 
criteria under Sec.  425.401(a); and (B) beneficiary's utilization of 
primary care services meets the criteria established under the 
assignment methodology described in Sec.  425.402 and Sec.  425.404, 
which includes specialist physicians that take the role of primary care 
physicians in the overall treatment of beneficiaries with certain 
chronic conditions (see 80 FR 32750). Although these services may be 
furnished in a variety of settings, we continue to believe it is 
appropriate to include them in the definition of primary care used for 
purposes of assignment when they are furnished by physician or 
nonphysician practitioner who is an ACO professional. As a result, and 
as explained in prior rulemaking (88 FR 79170), we believe the 
assignment methodology minimizes the potential for a beneficiary to be 
assigned based on specialty care.
    Regarding the comment that add-on codes are not distinct from the 
base code and would inappropriately weight the encounter, we believe 
that including add on services in determining where a beneficiary has 
received the plurality of primary care services in step 1 of the 
assignment methodology helps ensure that a beneficiary is assigned to 
the ACO whose ACO participants are actually providing the plurality of 
primary care for that beneficiary, and thus, should be responsible for 
managing the patient's overall care, or is not assigned to any ACO if 
the plurality of the beneficiary's primary care is furnished by 
practitioners in a non-ACO entity (see, for example, 80 FR 32748).
    We are persuaded by comments that oppose the addition of 
interprofessional consultation services to the definition of primary 
care services used for purposes of assignment, except for CPT code 
99452. As part of the CY 2019 PFS final rule (83 FR 59489 through 
59491), we finalized interprofessional consultation services codes that 
differentiate between primary care and consultative practitioners, 
which support payment both to the treating, requesting (primary care) 
practitioner (CPT code 99452) and the receiving, consultative 
specialist (CPT codes 99446-99449 and 99451), who engage in electronic 
consults. As a result, some practitioners have already become 
accustomed to providing and billing for these services. We agree with 
the commenter that, of the set of CPT codes included in the 
interprofessional consultation services category, only 99452 should be 
included in the definition of primary care services for purposes of 
assignment because the other services in this category are furnished by 
consultative providers, not the beneficiaries' primary care provider. 
While some of specialties performing these consultative services may be 
included in the list of specialties used in steps 2 and 3 of our 
claims-based assignment methodology, when these specialties furnish the 
services described by CPT codes 99456, 99457, 99448, 99449, and 99451, 
they are furnishing these services in a consultative role at the 
request of the patient's treating/requesting physician or other 
qualified health care professional, not in a primary care role. If CPT 
codes 99456, 99457, 99448, 99449, and 99451 were included in the 
definition of primary care services used for purposes of assignment, it 
could lead to inappropriate assignment based on the furnishing of 
consultative visits, not primary care. In reviewing utilization of CPT 
code 99452, we found that 43.6.percent of the services were furnished 
by physicians included in the step 1 of assignment and almost 43.3 
percent were furnished by non-physician practitioners or specialists 
included in step 2. In the final policies described in section II.G of 
this final rule, we are finalizing interprofessional consultation code 
99452 as part of the APCM service.
    Comment: We also received feedback on our solicitation for 
additional modifications to the primary care service codes used for 
purposes of beneficiary assignment. One commenter supports the policy 
proposed but not finalized in the CY 2024 PFS final rule (88 FR 79164) 
to revise the definition of primary care services to include RPM CPT 
codes 99457 and 99458, which builds on support provided for digital 
health in (for example, adding HCPCS

[[Page 98097]]

codes G2012 and G2252 codes for virtual check-ins). Another commenter 
recommended that CMS utilize the nursing facility as a key site of 
primary care and account for it in our beneficiary assignment 
methodology to ``facilitate greater partnership between ACOs and 
nursing facility staff and mitigate issues in misalignment which occurs 
when new institutionalized beneficiaries are misaligned to their 
historic community based primary care providers.'' Another commenter 
opposed the inclusion of caregiver training service codes (97550-
97552), which were finalized in the CY 2024 PFS final rule (88 FR 
79168), as 2024 is the first year they were in the CPT book and there 
are no claims data available on these codes.
    Response: We appreciate this feedback and will consider it in 
future rulemaking. Regarding the comment suggesting that CMS use the 
nursing facility as a key site of primary care and account for it in 
our beneficiary assignment methodology, the Shared Savings Program has 
several participating ACOs that have large institutional populations or 
high-need, high-cost beneficiaries that receive home based primary care 
assigned beneficiary populations and we do consider primary care 
services provided in the nursing facility for purposes of assignment in 
the Shared Savings Program. With regard to the opposition to the 
inclusion of caregiver training service codes 97550-97552, we continue 
to believe that their inclusion is appropriate for the reasons 
explained in the CY 2024 PFS final rule (88 FR 79168 through 79169).
    After consideration of public comments, we are finalizing our 
proposal with modifications.
    We are finalizing a revised definition of primary care services in 
a new provision of the Shared Savings Program regulations at Sec.  
[thinsp]425.400(c)(1)(ix) to include the list of HCPCS and CPT codes 
specified in Sec.  [thinsp]425.400(c)(1)(viii) along with the following 
additions: CPT codes 99452 and 9X091 (which is being finalized as 
98016); and HCPCS codes GFCI1 (which is being finalized as G0544), 
GSPI1 (which is being finalized as G0560), GPCM1, GPCM2, and GPCM3 
(which are being finalized as G0556, G0557, and G0558, respectively), 
GCDRA and GCDRM (which are being finalized as G0537 and G0538, 
respectively), GCTD1, GCTD2 and GCTD3 (which are being finalized as 
G0541, G0542, and G0543, respectively), and GCTB1 and GCTB2 (which are 
being finalized as G0539 and G0540, respectively), as discussed in the 
preceding paragraphs.
    We are not finalizing our proposal to include CPT codes 99446, 
99447, 99448, 99449, and 99451. We are additionally not finalizing that 
GSPI1 will only be considered a primary care service when billed with a 
base code that is also a primary care service. This is because the 
payment policy finalized in section II.I of this final rule regards 
this HCPCS code as a standalone service. We are finalizing as proposed 
that the new provision at Sec.  [thinsp]425.400(c)(1)(ix), which will 
be applicable for use in determining beneficiary assignment for the 
performance year starting on January 1, 2025, and subsequent 
performance years.
    The code descriptions for HCPCS codes GPCM1, GPCM2, GPCM3 (G0556, 
G0557, and G0558, respectively), GCDRA, and GCDRM (G0537 and G0538, 
respectively) are being finalized with revisions in section II.G of 
this final rule.
    Further, the text of the proposed regulations in the CY 2025 PFS 
proposed rule (89 FR 62221 through 62222) included a proposed technical 
modification (to the introductory text in Sec.  425.400(c)(1)(viii), to 
limit the applicability of this provision to the performance year 
starting on January 1, 2024) that was not described in preamble. This 
change is necessary so that we can effectuate Sec.  425.400(c)(1)(ix) 
as explained in the proposed rule and its regulatory text: to apply for 
the performance year starting on January 1, 2025, and subsequent 
performance years. We received no comments addressing the proposed 
technical modification to Sec.  425.400(c)(1)(viii), and we are 
finalizing this change without modification.
    b. Revisions to Criteria for ACO Models to Waive Shared Savings 
Program Statutory Requirements Giving Precedence for Assignment based 
on Beneficiary Voluntary Alignment
(1) Background
    Section 50331 of the Bipartisan Budget Act of 2018 amended section 
1899(c) of the Act to add a new paragraph (2)(B) that requires the 
Secretary, for performance year 2018 and each subsequent performance 
year, to permit a Medicare FFS beneficiary to voluntarily identify an 
ACO professional as the primary care provider of the beneficiary for 
purposes of assigning such beneficiary to an ACO. A voluntary 
identification by a Medicare FFS beneficiary under this provision 
supersedes any claims-based assignment. In earlier rulemaking (81 FR 
80501 through 80510 and 83 FR 59959 through 59964), CMS finalized 
modifications to the Shared Savings Program regulations at Sec.  
425.402(e) to implement the statutory requirements governing voluntary 
alignment.
    In the November 2018 final rule (83 FR 59959 through 59964), we 
finalized changes to the beneficiary voluntary alignment policies 
(refer to Sec.  425.402(e)) to revise the requirements previously 
established for the voluntary alignment process. We explained that it 
could be appropriate, in limited circumstances, to align a beneficiary 
to an entity participating in certain specialty and disease-specific 
CMS Innovation Center models to test a new system of payment and 
service delivery that CMS believes will lead to better health outcomes 
for Medicare beneficiaries while lowering costs to Medicare Parts A and 
B. Additionally, we explained that it could be difficult for the CMS 
Innovation Center to conduct a viable test of a specialty or disease-
specific model, if we were to require that beneficiaries who previously 
designated an ACO professional as their primary clinician remain 
assigned to the Shared Savings Program ACO under all circumstances. We 
applied this exception for the Comprehensive ESRD Care (CEC) model, 
which assigned beneficiaries to entities participating in the model 
through the beneficiaries' first treatment at a participating dialysis 
facility.
    Currently, under Sec.  425.402(e)(2)(ii)(D), we will not assign a 
beneficiary who has voluntarily identified a Shared Savings Program ACO 
professional to a Shared Savings Program ACO when the beneficiary is 
also eligible for claims-based assignment to an entity participating in 
a model tested or expanded under section 1115A of the Act under which 
claims-based assignment is based solely on claims for services other 
than primary care services and for which there has been a determination 
by the Secretary that a waiver under section 1115A(d)(1) of the Act of 
the requirement in section 1899(c)(2)(B) of the Act is necessary solely 
for purposes of testing the model.
(2) Revisions
    As discussed in the CY 2025 PFS proposed rule (89 FR 61851 through 
61853), since finalization of this limited exception to the Shared 
Savings Program's voluntary alignment policy, disease-specific CMS 
Innovation Center models have been developed that use claims for both 
primary care services and services other than primary care in 
determining claims-based assignment to entities participating in these 
models. In the proposed rule, we explained that we believed it would be 
appropriate to propose to broaden this limited exception and allow a 
voluntarily

[[Page 98098]]

aligned Shared Savings Program beneficiary to be claims-based assigned 
to an entity participating in a disease- or condition-specific CMS 
Innovation Center model when that model uses claims-based assignment 
that is based on primary care and/or other services. Disease- or 
condition-specific CMS Innovation Center models are designed to support 
condition management, coordination, and services for patients that have 
a specific disease or condition that often requires coordination of 
care across specialties and settings. For example, the CMS Innovation 
Center has tested disease- and condition-based episode payment models, 
such as those focused on oncology and kidney disease.\523\ Doing so 
would help beneficiaries with certain diseases or conditions benefit 
from the focused attention and care coordination related to the disease 
or condition that an entity participating in such a model could 
provide. In the proposed rule, we stated we would identify models for 
which the exception would apply in our Shared Savings and Losses and 
Assignment Methodology and Quality Performance Specifications document, 
which is located on the Shared Savings Program website, https://www.cms.gov/medicare/payment/fee-for-service-providers/shared-savings-program-ssp-acos. We stated that this proposed expanded exception would 
be applicable to beneficiaries assigned to entities participating in 
CMS Innovation Center models under which assignment is based solely on 
(1) claims for primary care and/or other services related to treatment 
of one or more specific diseases or conditions targeted by the model, 
or (2) claims for services other than primary care services, when the 
Secretary has determined that a waiver is necessary solely for purposes 
of testing the model.
---------------------------------------------------------------------------

    \523\ Refer to Innovation Models website: https://www.cms.gov/priorities/innovation/models#views=models&cat=disease-specific%20&%20episode-based%20models.
---------------------------------------------------------------------------

    An example of a CMS Innovation Center model whose assigned 
beneficiaries may be impacted by the proposed expanded exception is the 
Kidney Care Choices (KCC) model,\524\ which is designed to help health 
care providers reduce the cost and improve the quality of care for 
patients with late-stage chronic kidney disease and ESRD. The KCC model 
builds on the previous CEC model \525\ by adding strong financial 
incentives for health care providers to manage the care for Medicare 
beneficiaries with chronic kidney disease (CKD) stage 4 and ESRD, to 
delay the onset of dialysis and to incentivize kidney transplantation. 
Under the CEC model, the CMS Innovation Center worked with groups of 
health care providers, dialysis facilities, and other suppliers 
involved in the care of ESRD beneficiaries to improve the coordination 
and quality of care that these individuals received. We determined that 
an ESRD beneficiary, who was otherwise eligible for assignment to an 
entity participating in the CEC model, could benefit from the focused 
attention on and increased care coordination for their ESRD available 
under the CEC model. As described above, we created a narrow exception 
to the general policy that a beneficiary who had voluntarily aligned to 
a Shared Savings Program ACO professional would supersede their 
alignment to a CMS Innovation Center model. Specifically, we did not 
assign a beneficiary to the ACO when the beneficiary was also eligible 
for alignment to an entity participating in the CEC model.
---------------------------------------------------------------------------

    \524\ Refer to https://www.cms.gov/priorities/innovation/innovation-models/kidney-care-choices-kcc-model.
    \525\ Refer to https://www.cms.gov/priorities/innovation/innovation-models/comprehensive-esrd-care.
---------------------------------------------------------------------------

    KCC is more complex than CEC and is designed to capture multiple 
care relationships and uses a mix of E/M codes for alignment of 
beneficiaries with CKD and managing clinician Monthly Capitation 
Payments for aligning ESRD beneficiaries. The existing exception is not 
applicable to KCC in part because claims for primary care and other 
services related to the treatment of one or more specific diseases or 
conditions targeted by the model (chronic kidney disease (CKD) stage 4 
and ESRD) are considered as part of the model's beneficiary alignment 
methodology, which takes into consideration where a beneficiary 
receives the majority of their kidney care as well as the beneficiary's 
diagnosis of CKD stages 4 or ESRD receiving maintenance dialysis. KCC's 
alignment methodology could align beneficiaries receiving primary care 
services that are also considered for Shared Savings Program assignment 
if furnished and billed under one of the HCPCS/CPT codes included in 
Sec.  425.400(c) by ACO professionals who are primary care physicians, 
physicians with one of the primary specialty designations in Sec.  
425.402(c), NPs, PAs, and/or CNSs. In the proposed rule, we noted that 
outpatient/office E/M services are included in Sec.  425.400(c) and 
that nephrology is one of the primary specialty designations under 
Sec.  425.402(c) so we anticipated that, if this proposal is finalized, 
most, if not all, beneficiaries who voluntarily align to a physician 
that participates in a Shared Savings Program ACO and meet the KCC 
alignment criteria would be claims-based align to the KCC model, 
assuming there is a determination by the Secretary that waiver of the 
requirement in section 1899(c)(2)(B) of the Act is necessary solely for 
purposes of testing the model.
    As discussed in the CY 2025 PFS proposed rule (89 FR 61851 through 
61853), we proposed expanding upon current Shared Savings Program 
regulations to broaden the existing exception to the program's 
voluntary alignment policy, which would allow the exception to apply to 
beneficiaries assigned to entities in a CMS Innovation Center model 
under which claims-based assignment is based solely on (1) claims for 
primary care and/or other services related to treatment of one or more 
specific diseases or conditions targeted by the model, or (2) claims 
for services other than primary care services, and for which there has 
been a determination by the Secretary that waiver of the requirement in 
section 1899(c)(2)(B) of the Act is necessary for purposes of testing 
the model.
    Under the proposed revisions, if a beneficiary voluntarily aligns 
to a Shared Savings Program ACO under Sec.  425.402(e), we would not 
assign the beneficiary to that Shared Savings Program ACO when the 
beneficiary is also eligible for claims-based assignment to an entity 
participating in a model tested or expanded under section 1115A of the 
Act under which claims-based assignment is based solely on (1) claims 
for primary care and/or other services related to treatment of one or 
more specific diseases or conditions targeted by the model or (2) 
claims for services other than primary care service, and for which 
there has been a determination by the Secretary that waiver of the 
requirement in section 1899(c)(2)(B) of the Act is necessary for 
purposes of testing the model. We would not supersede voluntary 
alignment for CMS Innovation Center models that are not designed to 
target a specific disease or condition, such as ACO REACH. While ACO 
REACH contains design features for organizations serving high needs 
beneficiaries, it is designed more broadly, and not for beneficiaries 
with a specific disease or condition. Such models do not target a 
specific disease or condition. Therefore, a beneficiary's claims-based 
assignment to an entity participating in such a model would not 
supersede their voluntary alignment to

[[Page 98099]]

a Shared Savings Program ACO under our proposal.
    For example, under the KCC model, alignment is based on where a 
beneficiary receives the majority of their nephrology services and/or 
dialysis management services. Claims for those kidney care services 
could include claims for services that, under the Shared Savings 
Program's claims-based assignment policies, would lead a beneficiary to 
be assigned to a Shared Savings Program ACO. Since under the KCC model, 
claims-based assignment is based solely on claims for primary care and/
or other services (kidney care services) related to the treatment of 
one or more specific diseases or conditions targeted by the model 
(chronic kidney disease (CKD) stage 4 and ESRD), our proposed exception 
would apply and a beneficiary who voluntarily aligned to a Shared 
Savings Program ACO and who received kidney care services from an 
entity participating in the KCC model would nonetheless be claims-based 
assigned to the KCC model, if there is a determination by the Secretary 
that waiver of the requirement in section 1899(c)(2)(B) of the Act is 
necessary solely for purposes of testing the KCC model. This proposed 
expansion of the voluntary alignment exception would support assignment 
of beneficiaries to entities participating in CMS Innovation Center 
models, which would reduce barriers for the CMS Innovation Center to 
conduct viable tests of disease-or condition-specific models and 
thereby improve access to high-quality, value-based specialty care, 
such as that provided by an entity participating in a model focused on 
diabetes care or care provided by specific specialists, such as 
cardiologists or gastroenterologists.
    This proposal would also support CMS's goals of improving patient 
care, lowering costs, and better aligning payment systems to promote 
patient-centered practices through accountable and value-based care. We 
continue to believe that specific subpopulations of Medicare 
beneficiaries who are otherwise eligible for assignment to an entity 
participating in a disease or condition-specific CMS Innovation Center 
model, but who may not be captured by Sec.  425.402(e)(2)(ii)(D) 
because their models consider primary care services for purposes of 
assignment, could benefit from the focused attention and increased care 
coordination offered by an entity participating in a disease or 
condition-specific model. Application of this exception would require a 
determination from the Secretary to waive the voluntary alignment 
provision.
    Under this proposal, if a beneficiary designated an ACO 
professional participating in a Shared Savings Program ACO as the 
physician or practitioner they consider responsible for coordinating 
their overall care (that is, their primary clinician), but the 
beneficiary is also eligible for assignment to an entity participating 
in a model tested or expanded under section 1115A of the Act under 
which claims-based assignment is based solely on (1) claims for primary 
care and/or other services related to treatment of one or more specific 
diseases or conditions targeted by the model, or (2) claims for 
services other than primary care services, and for which there has been 
a determination that a waiver of the requirement in section 
1899(c)(2)(B) of the Act is necessary solely for purposes of testing 
the model, the CMS Innovation Center or its designee would notify the 
beneficiary of their assignment to an entity participating in the 
model. Additionally, although such a beneficiary may still voluntarily 
identify an ACO professional participating in a Shared Savings Program 
ACO as their primary clinician and seek care from any clinician, the 
beneficiary would not be assigned to a Shared Savings Program ACO even 
if the designated primary clinician is an ACO professional in a Shared 
Savings Program ACO.
    For PY 2024, there are approximately 152,000 beneficiaries with a 
primary clinician selection who is a Shared Savings Program ACO 
professional as defined at Sec.  425.20, and approximately 83,000 are 
voluntarily aligned to a Shared Savings Program ACO after meeting all 
the assignment eligibility criteria as described at Sec.  425.401(a). 
Overall, this represents an exceedingly small share of the overall 
Shared Savings Program assigned beneficiary population, currently 10.8 
million \526\ beneficiaries. Additionally, simulating our proposed 
Sec.  425.402(e)(2)(ii)(D) using PY 2024 data, less than 1 percent 
(703) of beneficiaries who are voluntarily aligned to a Shared Savings 
Program ACO would instead be claims-based assigned to an entity 
participating in a CMS Innovation Center model.
---------------------------------------------------------------------------

    \526\ Refer to https://www.cms.gov/files/document/2024-shared-savings-program-fast-facts.pdf.
---------------------------------------------------------------------------

    The benefit of allowing beneficiaries who voluntarily align to a 
Shared Savings Program ACO to be claims-based assigned to an entity 
participating in a CMS Innovation Center tailored to the needs of their 
specific disease or condition far outweighs any cost to the Shared 
Savings Program. The impact of assigning these beneficiaries to an 
entity participating in a CMS Innovation Center model notwithstanding 
their voluntary designation would be minimal because so few 
beneficiaries would be impacted by this proposed expansion of the 
exception (for PY 2024, less than 1 percent of all beneficiaries who 
voluntarily align to a Shared Savings Program ACO). As explained in the 
proposed rule, this proposal would enable us to better test CMS 
Innovation Center models and ultimately improve health outcomes for 
Medicare beneficiaries with the specific diseases and conditions 
targeted by CMS Innovation Center models. We also recognize the 
importance of continuing to allow beneficiaries to voluntarily identify 
an ACO professional as their primary clinician for purposes of 
assignment to a Shared Savings Program ACO, and we reiterate that, 
based on PY 2024 data, this proposal would impact very few 
beneficiaries who voluntarily align to Shared Savings Program ACOs 
(less than 1 percent of all such beneficiaries). Beneficiaries who 
voluntarily align to a Shared Savings Program ACO but are, under our 
proposal, ultimately claims-based assigned to an entity participating 
in a CMS Innovation Center model would be notified of this in 
accordance with the CMS Innovation Center model's participation 
agreement. We proposed to apply these modifications to our policies 
under the Shared Savings Program regarding voluntary alignment 
beginning for performance year 2025, and subsequent performance years. 
We proposed to incorporate these new requirements into new regulations 
at Sec.  425.402(e)(2)(iii). We solicited comments on this proposal.
    Accordingly, since the new proposed provisions Sec.  
425.402(e)(2)(iii) would supersede the existing provisions at Sec.  
425.402(e)(2)(ii) for performance year 2025 and subsequent performance 
years, we proposed to revise the introductory text at Sec.  
425.402(e)(2)(ii) to designate that provision's applicability for 
performance years starting on January 1, 2019, through 2024.
    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: Several commentors supported our proposal to expand the 
voluntary alignment waiver and indicated that the proposal would 
streamline model attribution and allow for those beneficiaries 
voluntarily aligned to a Shared Savings Program ACO to be more easily 
assigned to entities participating in other non-ACO value-based care 
models. Other commentors stated that if this proposal

[[Page 98100]]

is finalized, CMS should provide additional clarification in this final 
rule around the limitations for when this proposal would be applied and 
propose any future expansions of the voluntary alignment waiver outside 
of the contexts of oncology and nephrology through rulemaking.
    Response: CMS agrees that assigning beneficiaries to entities 
participating in disease- and condition-specific models, has great 
potential to improve outcomes for those beneficiaries, particularly for 
beneficiaries who may benefit from specialized ESRD and cancer care.
    The use of this expanded voluntary alignment waiver will be 
limited: if a beneficiary designated an ACO professional participating 
in a Shared Savings Program ACO as the physician or practitioner they 
consider responsible for coordinating their overall care (that is, 
their primary clinician), but the beneficiary is also eligible for 
assignment to an entity participating in a model tested or expanded 
under section 1115A of the Act under which claims-based assignment is 
based solely on (1) claims for primary care and/or other services 
related to treatment of one or more specific diseases or conditions 
targeted by the model, or (2) claims for services other than primary 
care services, and for which there has been a determination that a 
waiver of the requirement in section 1899(c)(2)(B) of the Act is 
necessary solely for purposes of testing the model, the CMS Innovation 
Center or its designee will notify the beneficiary of their assignment 
to an entity participating in the model. Application of this waiver 
will be announced by the Innovation Center. As we explained in the 
proposed rule, this proposed policy is designed to be responsive to 
innovations in disease- and condition-specific models, will be applied 
narrowly, and will have a limited impact on beneficiaries that are 
voluntarily aligned to a Shared Savings Program ACO. We refer 
commenters to discussion in the CY 2025 PFS proposed rule (89 FR 61851 
through 61853) and earlier in this section of this final rule for 
additional details on how this policy will be applied and its 
anticipated limited impact. CMS plans to issue guidance and communicate 
with ACOs and interested parties about these topics, including when the 
waiver will be applicable to a disease- or condition-specific model.
    In the future, if we determined that it would be appropriate to 
further modify our voluntary alignment waiver policy, we would do so 
through notice-and-comment rulemaking.
    Comment: Most commentors expressed opposition to the proposed 
changes to expand the voluntary alignment waiver. Commenters stated 
that the Shared Savings Program, ``a proven model that benefits all 
parties, patients foremost, and exists `perpetually,' is more 
consistent and has demonstrated efficacy,'' whereas Innovation Center 
Models are temporary and such programs terminate or ``may fall out of 
favor''. Several commenters explained that pulling beneficiaries out of 
the Shared Savings Program and putting them into a time-limited model 
goes against the principles of accountable care by ``carving up 
accountability'' and works against CMS's longstanding efforts to grow 
the Shared Savings Program. Several other commentors cited voluntary 
alignment as the ``gold standard'' for beneficiary assignment, noting 
that if a beneficiary voluntarily aligns themselves to their primary 
clinician, that should take precedence over claims-based assignment, 
even if that beneficiary could benefit from the specialized care that 
an entity participating in a disease- or condition-specific model can 
offer. Numerous commentors expressed opposition to the policy on the 
grounds that it ``weakens voluntary alignment.'' Another commentor 
noted that ``prioritizing assignment for administrative reasons'' might 
disproportionately (negatively) affect beneficiaries from marginalized 
or underserved populations, who may have fewer options in selecting 
healthcare providers or face ``additional barriers in accessing 
preferred care settings.''
    Response: CMS seeks to continuously improve beneficiary care and 
outcomes. Beneficiaries from marginalized and underserved populations 
face obstacles to receiving quality and efficient care and several 
policies finalized in this rule, including the prepaid shared savings 
option and Health Equity Benchmark Adjustment, are designed to support 
ACO efforts to provide quality and efficient care to these populations.
    The success of the Shared Savings Program notwithstanding, we 
explained in the CY 2025 PFS proposed rule (89 FR 61852) that targeting 
a subset of beneficiaries with specific diseases or conditions who 
received care from entities participating in certain disease- or 
condition-specific models and allowing them to more easily align to 
those entities will lead to better care and outcomes. We refer readers 
to our discussion on this subject in the proposed rule (89 FR 61852). 
In addition, as explained in greater detail in the proposed rule (89 FR 
61851 through 61853) and based on our simulation of the impact of 
proposed Sec.  425.402(e)(2)(ii)(D) using PY 2024 data, while 
Innovation Center Models are, by their nature, time-limited, but the 
models themselves have informed, and continue to inform, permanent 
Medicare policies, including Shared Savings Program policies (for 
example, the SNF 3-day Rule Waiver, AIP, and HEBA).
    We also do not believe that the proposed expansion of the voluntary 
alignment waiver is an ``administrative'' change, as it will result in 
CMS assigning beneficiaries to entities participating in the models 
that can most appropriately care for their specific disease or 
condition (refer to 89 FR 61853). We are not clear why this commenter 
believes this proposal would be considered administrative as opposed to 
programmatic.
    We additionally do not believe that this expansion will result in a 
negative impact on beneficiaries. To the contrary, for the reasons 
stated in the proposed rule (89 FR 61853), we continue to believe that 
the specific subpopulations of Medicare beneficiaries who are otherwise 
eligible for assignment to an entity participating in a disease- or 
condition-specific CMS Innovation Center model, but who may not be 
captured by Sec.  425.402(e)(2)(ii)(D) because their models consider 
primary care services for purposes of assignment, could benefit from 
the focused attention and increased care coordination offered by an 
entity participating in a disease- or condition-specific model. We also 
recognize the importance of continuing to allow beneficiaries to 
voluntarily identify an ACO professional as their primary clinician for 
purposes of assignment to a Shared Savings Program ACO, and we 
reiterate that, based on PY 2024 data, this policy will impact very few 
beneficiaries who voluntarily align to Shared Savings Program ACOs 
(less than 1 percent of all such beneficiaries). We also note that this 
policy does not undermine beneficiary choice in any way because 
beneficiaries may continue to receive care at providers of their 
choosing.
    We reiterate that application of this broadened voluntary alignment 
waiver policy will be limited to beneficiaries assigned to entities in 
a CMS Innovation Center model under which claims-based assignment is 
based solely on (1) claims for primary care and/or other services 
related to treatment of one or more specific diseases or conditions 
targeted by the model, or (2) claims for services other than primary 
care services, and for which there has been a determination

[[Page 98101]]

by the Secretary that waiver of the requirement in section 
1899(c)(2)(B) of the Act is necessary for purposes of testing the 
model. The application of this policy will not supersede voluntary 
alignment for CMS Innovation Center models that are not designed to 
target a specific disease or condition, such as the ACO REACH Model. 
While the ACO REACH Model contains design features for organizations 
serving high needs beneficiaries, it was designed more broadly, and not 
for beneficiaries with a specific disease or condition. It therefore 
does not target a specific disease or condition, and a beneficiary's 
claims-based assignment to an entity participating in such a model will 
not supersede their voluntary alignment to a Shared Savings Program ACO 
under this policy.
    After consideration of public comments, we are finalizing our 
proposal to add new Sec.  425.402(e)(2)(iii) as proposed, to allow the 
voluntary alignment exception to apply to beneficiaries assigned to 
entities in a CMS Innovation Center model under which claims-based 
assignment is based solely on (1) claims for primary care and/or other 
services related to treatment of one or more specific diseases or 
conditions targeted by the model, or (2) claims for services other than 
primary care services, and for which there has been a determination by 
the Secretary that waiver of the requirement in section 1899(c)(2)(B) 
of the Act is necessary for purposes of testing the model. However, we 
are finalizing technical modifications to the phrasing and the proposed 
structure Sec.  425.402(e)(2)(iii)(D) for clarity and consistency with 
our intended meaning. Specifically, we are finalizing modifications to 
clarify that a condition of the applicability of the exception is the 
determination by the Secretary that waiver of the requirement in 
section 1899(c)(2)(B) of the Act is necessary solely for purposes of 
testing the model (as specified in Sec.  425.402(e)(2)(iii)(D)(2)), in 
addition to claims-based assignment for the model being based on either 
(i) claims for primary care and/or other services related to treatment 
of one or more specific diseases or conditions targeted by the model, 
or (ii) claims for services other than primary care services (as 
specified in Sec.  425.402(e)(2)(iii)(D)(1)). Absent these technical 
modifications, the provision on the waiver of the requirement in 
section 1899(c)(2)(B) of the Act could be read as applying only in the 
case of models with claim-based assignment based on claims for services 
other than primary care services. We are also finalizing our proposal 
to revise the introductory text at Sec.  425.402(e)(2)(ii) to designate 
that provision's applicability for performance years starting on 
January 1, 2019, through 2024.
4. Quality Performance Standard & Other Reporting Requirements
a. Background
    Section 1899(b)(3)(C) of the Act states that the Secretary shall 
establish quality performance standards to assess the quality of care 
furnished by ACOs and seek to improve the quality of care furnished by 
ACOs over time by specifying higher standards, new measures, or both 
for purposes of assessing such quality of care. As we stated in the 
November 2011 final rule establishing the Shared Savings Program (76 FR 
67872), our principal goal in selecting quality measures for ACOs has 
been to identify measures of success in the delivery of high-quality 
health care at the individual and population levels. In the November 
2011 final rule, we established a quality measure set spanning four 
domains: patient experience of care and wherever practicable, caregiver 
experience of care, care coordination/patient safety, preventative 
health, and at-risk population (76 FR 67872 through 67891). We have 
subsequently updated the measures that comprise the quality performance 
measure set for the Shared Savings Program through rulemaking in the CY 
2015, 2016, 2017, 2019, 2021, 2023, and 2024 PFS final rules (79 FR 
67907 through 67921, 80 FR 71263 through 71268, 81 FR 80484 through 
80489, 83 FR 59708 through 59715, 87 FR 69860 through 69863, and 88 FR 
79112 through 79114, respectively).
b. Requiring Shared Savings Program ACOs To Report the Alternative 
Payment Model (APM) Performance Pathway (APP) Plus Quality Measure Set
(1) Background
    In the CY 2021 PFS final rule, we finalized modifications to the 
Shared Savings Program quality reporting requirements and quality 
performance standard for performance year 2021 and subsequent 
performance years (85 FR 84720 through 84743). For performance year 
2021 and subsequent years, ACOs are required to report quality data via 
the APP codified at Sec.  414.1367. Pursuant to policies finalized 
under the CY 2022 and CY 2023 PFS (86 FR 65685; 87 FR 69858), to meet 
the quality performance standard under the Shared Savings Program 
through performance year 2024, ACOs must report the APP quality measure 
set, through which they: (1) must report either the ten CMS Web 
Interface measures or the three electronic clinical quality measures 
(eCQMs)/Merit-based Incentive Payment System (MIPS) clinical quality 
measures (CQMs); and (2) must administer the Consumer Assessment of 
Healthcare Providers and Systems (CAHPS) for MIPS survey. In the CY 
2024 PFS final rule, we established the Medicare Clinical Quality 
Measures for Accountable Care Organizations participating in the 
Medicare Shared Savings Program (Medicare CQMs) as a new collection 
type for Shared Savings Program ACOs reporting the APP quality measure 
set for performance year 2024 and subsequent performance years (88 FR 
79107). In performance year 2024, Shared Savings Program ACOs have the 
option to report on Medicare CQMs, which are reported on an ACO's 
eligible Medicare fee-for-service beneficiaries, instead of an ACO's 
all payer/all patient population. Medicare CQMs are aligned with MIPS 
standards for data completeness as described at 414.1340, measure 
benchmarking as described at 414.1380(b)(1)(ii) and scoring as 
described at 414.1367 (88 FR 79099 and 88 FR 79108). In the CY 2024 PFS 
final rule, we stated that Medicare CQMs would serve as a transition 
collection type to help some ACOs build the infrastructure, skills, 
knowledge, and expertise necessary to report all payer/all patient 
eCQMs/MIPS CQMs and support ACOs in the transition to all payer/all 
patient quality measure reporting (88 FR 79097 through 79098). Since 
the CY 2021 PFS final rule was issued, ACOs and other interested 
parties have continued to express concerns about requiring ACOs to 
report all payer/all patient eCQMs/MIPS CQMs due to the cost of 
purchasing and implementing a system wide infrastructure to aggregate 
data from multiple ACO participant taxpayer identification numbers 
(TINs) and varying electronic health record (EHR) systems (86 FR 
65257). In the CY 2022 PFS final rule, commenters supported our 
acknowledgement of the complexity of the transition to all payer/all 
patient eCQMs/MIPS CQMs (86 FR 65259). In public comments on the CY 
2023 PFS proposed rule, some commenters expressed multiple concerns 
regarding the requirement to report all payer/all patient eCQMs/MIPS 
CQMs beginning in performance year 2025, such as issues related to 
meeting all payer data requirements, data completeness requirements, 
data aggregation and deduplication issues, and

[[Page 98102]]

interoperability issues among different EHRs (87 FR 69837).
    Some ACOs face continued difficulties in aggregating data on the 
three all payer/all patient eCQMs/MIPS CQMs that are part of the 
existing APP quality measure set. The Shared Savings Program continues 
to receive feedback from ACOs and other stakeholders about the 
difficulties with reporting on the three all payer/all patient eCQMs/
MIPS CQMs and meeting data management requirements given their muti-
practice/multi EHR structure. Additionally, we continue to receive 
feedback on the challenges of aggregating data due to the health 
information technology (IT) infrastructure in use by ACOs and the 
current state of interoperability. Building on our goal to provide 
technical support to ACOs and help ACOs build the skills necessary to 
aggregate and match patient data to report all payer/all patient eCQMs/
MIPS CQMs, in December 2022, we hosted a webinar to support ACOs in the 
transition to reporting all payer/all patient eCQMs/MIPS CQMs and 
released a guidance document on the topic. Resources from the 
``Reporting MIPS CQMs and eCQMs in the APM Performance Pathway'' 
webinar are available at https://youtu.be/LDrpoGnnRQs. The guidance 
document, entitled ``Medicare Shared Savings Program: Reporting MIPS 
CQMs and eCQMs in the Alternative Payment Model Performance Pathway 
(APP)'' is available in the Quality Payment Program Resource Library at 
https://qpp-cm-prod-content.s3.amazonaws.com/uploads/2179/APP%20Guidance%20Document%20for%20ACOs.pdf. Over the past two years, we 
have learned that there are complexities and hurdles concerning ACOs 
adopting the all payer/all patient collection types; as a result, the 
widespread adoption of the all payer/all patient collection types 
require further time and support. For example, our internal data 
indicate that in performance year 2021, 12 out of 475 ACOs reported 
eCQMs/MIPS CQMs under the APP, while 37 out of 482 ACOs reported eCQMs/
MIPS CQMs in performance year 2022.\527\ Submission data for 
performance year 2023 indicate that 72 out of 456 ACOs reported eCQMs/
MIPS CQMs under the APP. Further, we have come to understand that 
additional maturation processes are needed to support large, complex 
organizations like ACOs that participate in the Shared Savings Program 
to fully and equitably participate in the all payer/all patient 
collection types.
---------------------------------------------------------------------------

    \527\ Counts based on internal analysis of ACOs' quality 
reporting in performance years 2021 and 2022.
---------------------------------------------------------------------------

    CMS' goal, as stated in the CY 2024 PFS final rule, is to support 
ACOs in the adoption of all payer/all patient measures (88 FR 79098). 
In that rule, we described our intention to monitor the reporting of 
quality data utilizing the Medicare CQM collection type, which would 
include assessing if any Medicare CQMs qualify as topped out as 
described at Sec.  [thinsp]414.1380(b)(1)(iv) (88 FR 79098). We also 
noted that, ``[s]eparately, we may specify higher standards, new 
measures, or both--up to and including proposing to sunset the Medicare 
CQM collection type in future rulemaking--to ensure that Medicare CQMs 
conform to the intent of section 1899(b)(3)(C) of the Act and the 
priorities established in the CMS National Quality Strategy'' (88 FR 
79098).
    Under the goals of the CMS National Quality Strategy to improve the 
quality and safety of healthcare for everyone, CMS is implementing a 
building-block approach and aligning the measures used to establish the 
Shared Savings Program quality performance standard with the Universal 
Foundation of quality measures and streamlining quality measures across 
CMS quality programs for measuring primary care clinician performance 
in the adult and pediatric populations.\528\ In the CY 2024 PFS 
proposed rule, we stated that ``we intend to propose future policies 
aligning the APP [quality] measure set for Shared Savings Program ACOs 
with the quality measures under the `Universal Foundation' beginning in 
performance year 2025'' (88 FR 52423). A few commenters were supportive 
of aligning the APP quality measure set with the Universal Foundation 
measures, while other commenters were opposed. Several commenters urged 
CMS to first test measures before making them required for the Shared 
Savings Program and scored for Shared Savings Program ACOs. Shared 
Savings Program ACOs were also concerned about balancing the alignment 
of the Universal Foundation measures with efforts to reduce 
administrative burden, potential growth in the number of measures 
Shared Savings Program ACOs would have to report, and implementing 
multiple substantive changes applicable to Shared Savings Program ACOs 
in performance year 2025. In the CY 2024 PFS final rule, we stated that 
we will take the comments under consideration in future rulemaking, as 
we evaluate the impact of aligning the APP quality measure set with the 
Universal Foundation measures (88 FR 79114).
---------------------------------------------------------------------------

    \528\ Centers for Medicare & Medicaid Services (2024). CMS 
National Quality Strategy. Accessed June 24, 2024. https://www.cms.gov/medicare/quality/meaningful-measures-initiative/cms-quality-strategy.
---------------------------------------------------------------------------

(2) Revisions
(a) Requiring Shared Savings Program ACOs To Report the APP Plus 
Quality Measure Set
    In section IV.A.4.c.(2) of the CY 2025 PFS proposed rule (89 FR 
62023 through 62024), we proposed to create the APP Plus quality 
measure set to align with the Adult Universal Foundation measures. Out 
of the ten Adult Universal Foundation measures, five of the measures 
are already in the APP quality measure set for performance year 2025 
under policies finalized in the CY 2024 PFS final rule (88 FR 79112 
through 79113). There is one measure--Clinician and Clinician Group 
Risk-standardized Hospital Admission Rates for Patients with Multiple 
Chronic Conditions (Measure # 484)--in the APP quality measure set that 
is not an Adult Universal Foundation measure, resulting in a total of 
six measures that are in the APP quality measure set.
    Under the approach we proposed in the CY 2025 PFS proposed rule, 
the APP Plus quality measure set would incrementally grow to comprise 
of eleven measures, consisting of the six measures in the existing APP 
quality measure set and five newly proposed measures from the Adult 
Universal Foundation measure set that would be incrementally 
incorporated into the APP Plus quality measure set over performance 
years 2025 through 2028. The proposed new measures and the timeline for 
incorporating the measures into the APP Plus quality measure set are 
described in section IV.A.4.c.(3) of the CY 2025 PFS proposed rule and 
below. In section IV.A.4.c.(2) of the CY 2025 PFS proposed rule, we 
discussed how the APP Plus quality measure set would be an optional 
measure set for APP reporters. For performance year 2025 and subsequent 
performance years, we proposed to require Shared Savings Program ACOs 
to report the APP Plus quality measure set as proposed in section 
III.G.4.b.(2)(a) of the CY 2025 PFS proposed rule (89 FR 61854 through 
61855). Consequently, the APP quality measure set would no longer be 
available for reporting by Shared Savings Program ACOs beginning in 
performance year 2025. Our proposal would align the quality measures 
that Shared Savings Program ACOs would be required to report with the 
quality measures under the Adult Universal

[[Page 98103]]

Foundation measure set incrementally beginning in performance year 
2025.
    Creating alignment with the Adult Universal Foundation measure set 
would better align the quality measures reported by Shared Savings 
Program ACOs with the Medicaid Core Sets and the Marketplace Quality 
Rating System, which have previously adopted the quality measures in 
the Universal Foundation.\529\ As discussed in section IV.A.4.c.(2) of 
the CY 2025 PFS proposed rule, alignment of quality measures across CMS 
programs allows practitioners to better focus their quality efforts, 
reduce administrative burden, and drive digital transformation and 
stratification of a focused quality measure set to assess impact on 
disparities.\530\ Our proposed alignment with the Adult Universal 
Foundation measure set would also better align the quality measures 
reported by Shared Savings Program ACOs with the Value in Primary Care 
MIPS Value Pathway (MVP), which contains the same Adult Universal 
Foundation measures. This may create a smoother transition for 
clinicians from MIPS to the Shared Savings Program. Alignment would 
allow clinicians moving into Shared Savings Program ACOs to leverage 
their familiarity and experience with the Adult Universal Foundation 
quality measures among primary care clinicians participating in this 
MVP as they transition to reporting the APP Plus quality measure set in 
the Shared Savings Program. Experience and familiarity with the same 
quality measures, redesigned care processes, and quality improvement 
activities that are commonplace in ACOs would streamline the pathway 
for clinicians to join ACOs in the future and is consistent with our 
goal to have all beneficiaries in an accountable care relationship by 
2030.
---------------------------------------------------------------------------

    \529\ Jacobs D, Schreiber M, Seshamani M, Tsai D, Fowler E, 
Fleisher L. Aligning Quality Measures across CMS--The Universal 
Foundation. New England Journal of Medicine, February 1, 2023, 
available at https://www.nejm.org/doi/full/10.1056/NEJMp2215539.
    \530\ Jacobs D, et al., Update On The Medicare Value-Based Care 
Strategy: Alignment, Growth, Equity. Health Affairs Forefront (March 
14, 2024), available at https://www.healthaffairs.org/content/forefront/update-medicare-value-based-care-strategy-alignment-growth-equity.
---------------------------------------------------------------------------

    Section 1899(b)(3)(C) of the Act requires CMS to seek to improve 
the quality of care furnished by ACOs over time by specifying higher 
standards, new measures, or both for purposes of assessing such quality 
of care. In the November 2011 final rule, we finalized 33 quality 
measures for use in establishing the quality performance standard 
measure set for ACOs: including 22 measures that were actively reported 
by ACOs via the Group Practice Reporting Option (GPRO) Web Interface 
(76 FR 67889). As we stated in the November 2011 final rule 
establishing the Shared Savings Program, our principal goal in 
selecting quality measures for ACOs has been to identify measures of 
success in the delivery of high-quality health care at the individual 
and population levels, with a focus on outcomes (76 FR 67872). As we 
sought to improve the quality of care furnished by ACOs over time, we 
have subsequently updated this measure set through rulemaking in the CY 
2015, 2016, 2017, 2019, 2021, and 2023 PFS final rules (79 FR 67907 
through 67921, 80 FR 71263 through 71268, 81 FR 80484 through 80489, 83 
FR 59707 through 59715, 85 FR 84720 through 84734, and 87 FR 69860 
through 69763, respectively). We have also sometimes increased the 
number of measures reported by ACOs through rulemaking. For example, in 
the CY 2016 PFS final rule, we increased the Shared Savings Program 
quality measure set from 33 total measures to 34 total measures (80 FR 
71265). In the CY 2016 PFS final rule, we noted that since the November 
2011 Shared Savings Program final rule, we have continued to review the 
quality measures used for the Shared Savings Program to ensure that 
they are up to date with current clinical practice and aligned with 
other CMS quality reporting programs (80 FR 71264). Also, through 
rulemaking, we sometimes reduced the number of measures reported by 
ACOs. For example, in the CY 2019 PFS final rule, we finalized policies 
which reduced the Shared Savings Program quality performance measure 
set to 23 measures in PY 2019 (83 FR 59715). In developing our 
proposals in the CY 2019 PFS final rule, we stated that we considered 
the agency's efforts to streamline quality measures, reduce regulatory 
burden, and promote innovation as part of broader CMS initiatives (83 
FR 59711). In the CY 2021 PFS final rule, we again reduced the total 
number of measures that ACOs must report (85 FR 84733). Specifically, 
through the adoption of the APP quality measure set, we reduced the 
total number of measures from 23 to either 6 or 13 measures (depending 
on the ACO's chosen reporting option) for PY 2021 (85 FR 84723).
    Our proposal to require Shared Savings Program ACOs to report the 
APP Plus quality measure set would increase the number of measures 
reported by ACOs that currently report the APP quality measure set 
using the eCQM/MIPS CQM collection types from three measures in 
performance year 2024 to five measures in performance year 2025. For 
Shared Savings Program ACOs that report quality through the CMS Web 
Interface collection type, our proposal to adopt the APP Plus quality 
measure set would decrease the number of measures reported from ten 
measures in performance year 2024 to eight measures in performance year 
2025 after the CMS Web Interface sunsets. While we acknowledged in our 
proposal that the increased number of quality measures for ACOs that 
currently report the eCQM/MIPS CQM collection types may be an increased 
burden for those ACOs, we also stated that our proposal to phase-in the 
expansion of the APP Plus quality measure set between performance years 
2025 and 2028 should help to minimize the impact of increased burden 
associated with reporting additional measures. The option for ACOs to 
report Medicare CQMs, which are MIPS CQMs that are reported on an ACO's 
fee-for-service population, may also alleviate the reporting burden for 
ACOs that report Medicare CQMs by focusing an ACO's patient matching 
and data aggregation efforts only on an ACO's eligible Medicare fee-
for-service population. Additionally, we stated that we believe that 
the benefits of scoring an increased number of measures may offset the 
increased burden that some ACOs may face in adopting the additional 
measures. For example, as the number of measures in the measure set 
increases, the individual weight of each measure on the ACO's quality 
performance score decreases. Each measure in a six-measure set would 
account for roughly 16.67 percent of an ACO's MIPS Quality performance 
category score while each measure in an eight-measure set would account 
for 12.5 percent of an ACO's MIPS Quality performance category score. 
The scoring of more measures, in concert with the scoring policies 
proposed in sections IV.A.4.f.(1)(b)(iii) and IV.A.4.f.(1)(c)(i) of the 
CY 2025 PFS proposed rule (89 FR 62080 through 62083), may result in 
improved quality performance scores for the ACOs as each individual 
measure carries less weight.
    The proposed APP Plus quality measure sets for Shared Savings 
Program ACOs for performance year 2025, performance years 2026 and 
2027, and performance year 2028 and subsequent performance years are 
displayed in Tables 34, 35, and 36, respectively, of the CY 2025 PFS 
proposed rule (89 FR 61866 through 61868). Under our proposal, there 
would be eight quality measures (five

[[Page 98104]]

eCQMs/Medicare CQMs, two administrative claims measures, and the CAHPS 
for MIPS Survey measure) in the APP Plus quality measure set for Shared 
Savings Program ACOs in performance year 2025 (Table 34), nine quality 
measures (six eCQMs/Medicare CQMs, two administrative claims measures, 
and the CAHPS for MIPS Survey measure) in performance years 2026 and 
2027 (Table 35), and 11 quality measures (eight eCQMs/Medicare CQMs, 
two administrative claims measures, and the CAHPS for MIPS Survey 
measure) in performance year 2028 and subsequent performance years 
(Table 36). In our proposal, we noted our intent to update the APP Plus 
quality measure set as new measures are added to or removed from the 
Adult Universal Foundation measure set in the future.
    We solicited comments on our proposal to require Shared Savings 
Program ACOs to report the APP Plus quality measure set for performance 
year 2025 and subsequent performance years to meet the Shared Savings 
Program's quality performance standard. The following is a summary of 
comments received in response to our proposal and our responses. For 
comments and our responses related to the proposal to establish the APP 
Plus quality measure set and the timeline for incorporating quality 
measures into it, please see section IV.A.4.c.(2) of this final rule. 
As described in section IV.A.4.c.(2), we are finalizing with 
modification the phase-in schedule for incorporating measures into the 
APP Plus quality measure set, which affects when Shared Savings Program 
ACOs will first be required to report certain measures.
    Comment: Several commenters supported our proposal to require 
Shared Savings Program ACOs to report the APP Plus quality measure set 
beginning in performance year 2025. These commenters applauded CMS' 
efforts to align a standardized set of quality measures across APMs and 
other Medicare programs, promoting greater efficiency in quality 
measure reporting by reducing burden associated with monitoring, 
collecting, and reporting quality measure data for multiple quality 
programs and enabling more meaningful longitudinal and comparative 
analysis of measures. One commenter stated that the proposal supports 
the strategic missions of interoperability, population health 
promotion, and health equity. Another commenter stated that the 
proposal will help increase participation in ACOs and enable ACOs to 
focus more on underserved populations.
    Other commenters, while opposing the required reporting by Shared 
Savings Program ACOs of the proposed APP Plus quality measure set, for 
reasons summarized elsewhere in this section of this final rule, 
nevertheless stated their support for the broader goal of optimizing 
quality reporting and moving in the direction of ``low-burden, high-
value measurement'', or the idea of aligning measures across quality 
programs with the Universal Foundation.
    Response: We thank commenters for their support. We agree with 
commenters about the importance of streamlining quality reporting 
across CMS programs through alignment with the Universal Foundation 
measure set, which identifies a set of key quality measures for use 
where relevant throughout CMS programs. We further agree with 
commenters that aligning a standardized set of quality measures across 
Medicare programs will advance population health promotion, health 
equity, and interoperability, yield more meaningful analysis of quality 
measures, and reduce burden to increase time spent on patient care and 
improvement activities.
    We are finalizing our proposal to require Shared Savings Program 
ACOs to report the APP Plus quality measure set for performance year 
2025 and subsequent performance years to meet the Shared Savings 
Program's quality performance standard. For a discussion of proposals 
and finalized policies, including any modifications, related to the 
establishment of the APP Plus quality measure set and the phase-in 
schedule for incorporating measures into the APP Plus quality measure 
set, see section IV.A.4.c.(2) of this final rule.
    Comment: Many commenters expressed reservations about the 
requirement that Shared Savings Program ACOs report the APP Plus 
quality measure set to meet the Shared Savings Program's quality 
performance standard. Multiple commenters stated that reporting the APP 
Plus quality measure set would increase reporting burden for ACOs and 
could discourage providers from adopting accountable care models. One 
commenter noted that an important benefit to participating in the 
Shared Savings Program has been reporting the APP quality measure set, 
which is a more concise, prioritized set of quality measures as 
compared to the quality measures available in traditional MIPS. Several 
commenters suggested that the APP Plus quality measure set's expanded 
size as compared to the existing APP quality measure set would be 
``untenable'' for ACOs to report, at this time. Some of the commenters 
expressing these reservations urged CMS not to finalize the proposal.
    Response: We acknowledge the commenters' concerns about our 
proposal to require Shared Savings Program ACOs to report the APP Plus 
quality measure set. We recognize that ACOs may perceive this larger 
quality measure set as an increased burden, even with the phase-in 
schedule we proposed for incorporating measures into the APP Plus 
quality measure set. As discussed in section IV.A.4.c.(2) of this final 
rule, when fully expanded, the APP Plus quality measure set will 
comprise of 11 measures, ten of which are also Adult Universal 
Foundation quality measures, as compared to the existing APP quality 
measure set's six measures. However, when we proposed to establish the 
APP Plus quality measure set, we did so with the goal of leveraging the 
Adult Universal Foundation of quality measures to align quality 
measures used across CMS programs and initiatives. By requiring Shared 
Savings Program ACOs to report the APP Plus quality measure set, there 
will be greater alignment of quality measures reported by Shared 
Savings Program ACOs with the Medicaid Core Sets and the Marketplace 
Quality Rating System, which have previously adopted the quality 
measures in the Universal Foundation, and also better alignment between 
the quality measures reported by Shared Savings Program ACOs with the 
Value in Primary Care MIPS Value Pathway (MVP), which contains the same 
Universal Foundation measures (89 FR 61854 through 61855). 
Additionally, there will be greater alignment of quality measures 
reported by Shared Savings Program ACOs with the Medicare Advantage and 
Part D Star Ratings, which is moving towards the Universal Foundation. 
Because it remains our goal to align quality measures across CMS 
program and initiatives, we are finalizing our proposal to require 
Shared Savings Program ACOs to report the APP Plus quality measure set 
for performance year 2025 and subsequent performance years.
    In this final rule, we are finalizing several policies that aim to 
address commenters' concerns about increased burden and that 
incentivize and support ACOs reporting the APP Plus quality measure 
set. Specifically, as discussed in section IV.A.4.c.(2) of this final 
rule, we are finalizing with modification the phase-in schedule for 
incorporating measures into the APP Plus quality measure set. We are 
also finalizing with modification our proposal to extend the eCQM 
reporting incentive to support ACOs in meeting the Shared Savings

[[Page 98105]]

Program quality performance standard as described in section III.G.4.d 
of this final rule. We are also finalizing to extend this reporting 
incentive to ACOs reporting MIPS CQMs in performance years 2025 and 
2026. We are finalizing as proposed the Complex Organization Adjustment 
beginning in the CY 2025 performance period/2027 MIPS payment year to 
account for the organizational complexities faced by Virtual Groups and 
APM Entities, including Shared Savings Program ACOs, when reporting 
eCQMs as described in section IV.A.4.f.(1)(b)(iii) of this final rule 
in recognition of commenters' concerns regarding increased burden and 
to incentivize ACOs to report eCQMs and support their transition to 
digital quality measurement. Furthermore, as described in section 
IV.A.4.f.(1)(c)(i) of this final rule, we are finalizing our policy to 
score measures in the Medicare CQM collection type using flat 
benchmarks for their first two performance periods in MIPS beginning in 
the CY 2025 performance period/2027 MIPS payment year. The use of flat 
benchmarks may allow ACOs with high scores to earn maximum or near 
maximum measure achievement points while allowing room for quality 
improvement and rewarding that improvement in subsequent years. Use of 
flat benchmarks also helps to ensure that ACOs with high quality 
performance on a measure are not penalized as low performers.
    Comment: Some commenters stated that small independent practices 
and specialty practices are often unable to participate or continue to 
participate in the Shared Savings Program due to the technical and 
financial burden associated with the adoption of new technologies 
required to meet reporting requirements. Several commenters requested 
that CMS consider adding exceptions or exclusions for small practices 
and certain specialties and/or altering data completeness requirements 
to address ongoing challenges and allow for ACOs to be successful in 
reporting eCQMs, MIPS CQMs, and Medicare CQMs. These commenters noted 
that exceptions and exclusions already apply in MIPS for other 
performance categories and could easily be applied to ACOs reporting 
eCQMs, MIPS CQMs, and Medicare CQMs, and that making these changes in 
the Shared Savings Program could allow ACOs to maintain participation 
among small and specialty practices that cannot comply with these 
changes without undue costs and burdens.
    Response: We recognize that reporting eCQMs can be particularly 
challenging for ACOs with small practice participants, particularly 
those who need to obtain data from multiple practices with different 
EHR systems. We are committed to supporting Shared Savings Program ACOs 
with small practice participants in their transition to digital quality 
measure reporting, and in the CY 2024 PFS final rule, we finalized for 
performance year 2024 and subsequent performance years the Medicare CQM 
collection type as a transitional reporting option for Shared Savings 
Program ACOs (88 FR 79107) that we believe may provide a more 
supportive option with more flexibility in reporting given the data 
completeness. In the CY 2024 PFS proposed rule (88 FR 52420), we stated 
that we recognized that Medicare CQMs might not be the most suitable 
collection type for some ACOs, particularly ACOs with a single-EHR 
platform, a high proportion of primary care practices, and/or ACOs 
composed of participants with experience reporting all payer/all 
patient measures in traditional MIPS (88 FR 79098). To that end, we 
have also provided technical guidance (updated for each performance 
year), entitled Medicare Shared Savings Program: Reporting MIPS CQMs 
and eCQMs in the Alternative Payment Model Performance Pathway (APP) 
which is posted in the QPP Resource Library at https://qpp-cm-prod-content.s3.amazonaws.com/uploads/2179/APP%20Guidance%20Document%20for%20ACOs.pdf, that recognizes the unique 
challenges facing ACOs and provides guidance on how to address patient 
matching across multiple EHR systems as a way to transition ACOs to all 
payer/patient quality measure reporting. We will continue to monitor 
challenges facing ACOs including those with small practices along with 
the ability of their electronic health record systems to collect and 
generate data necessary to successfully transition and report eCQMs and 
may make additional adjustments to address these challenges in future 
rulemaking.
    Comment: A few commenters noted challenges with reporting that may 
cause some ACOs to narrow their Participant Lists, including removing 
specialists, which will result in fewer Medicare patients in an 
accountable care relationship, counter to CMS' goal to have 100 percent 
of Original Medicare beneficiaries in an accountable care relationship 
by 2030.
    Response: We recognize the challenges associated with reporting the 
measures. We have provided support and incentives where appropriate 
that we believe address many of the challenges for broad inclusion of 
specialists. We believe that the broader quality strategy and expansion 
of Centers for Medicare and Medicaid Innovation models will continue to 
allow CMS to achieve our stated goals and that ACOs following the CMS 
dQM Strategic Roadmap will be able to expand and grow their 
capabilities over time.
    Comment: Some commenters suggested that CMS introduce the new 
measures into the APP Plus quality measure set in a pay-for-reporting 
format for at least one year.
    Response: The Shared Savings Program sunset its pay-for-reporting 
policy in performance year 2020 (85 FR 84724). As such, we will not 
apply pay for reporting to new measures in the APP Plus quality measure 
set. In addition, neither MIPS nor the APP provides for pay-for-
reporting. Separately, we did not propose a pay-for-reporting policy 
when we proposed to require Shared Savings Program ACOs to report the 
APP Plus quality measure set and therefore consider these comments to 
be out of scope.
    After consideration of public comments received, we are finalizing 
our proposal that, for performance year 2025 and subsequent performance 
years, Shared Savings Program ACOs will be required to report the APP 
Plus quality measure set, as specified in amendments to Sec. Sec.  
425.508 and 425.510 (as described in section III.G.4.b.(2)(a) of this 
final rule). Shared Savings Program ACOs will be required to report on 
and will be scored on all applicable quality measures in the APP Plus 
quality measure set according to modified phase-in schedule for 
incorporating measures into the APP Plus quality measure set as 
discussed in section IV.A.4.c.(2) of this final rule. The final APP 
Plus quality measure set for Shared Savings Program ACOs, for 
performance year 2025 and subsequent performance years, is specified in 
Tables 39 through Table 42 of this final rule. The existing APP quality 
measure set will no longer be available for reporting by Shared Savings 
Program ACOs beginning in performance year 2025.
(b) Collection Types Available for Shared Savings Program ACOs 
Reporting the APP Plus Quality Measure Set
    Along with our proposal to require Shared Savings Program ACOs to 
report the APP Plus quality measure set, in the CY 2025 PFS proposed 
rule, we proposed to streamline the collection types available for 
Shared Savings Program ACOs reporting the APP Plus quality measure set 
to the eCQM and

[[Page 98106]]

Medicare CQM collection types for performance year 2025 and subsequent 
performance years (89 FR 61856 through 61857). We also stated that our 
proposal to establish the APP Plus quality measure set to align with 
the Adult Universal Foundation measure set should aim to prioritize the 
eCQM collection type--the gold standard collection type that underlies 
the Digital Quality Measurement (dQM) Strategic Roadmap (available at 
https://ecqi.healthit.gov/sites/default/files/CMSdQMStrategicRoadmap_032822.pdf)--and use Medicare CQMs as the 
transition step on our building-block approach for ACOs' progress to 
adopt digital quality measurement (89 FR 61838). We sought to reduce 
burden on ACOs as they adopt eCQMs for quality measure reporting by 
using a phased-in approach to expand the APP Plus quality measure set 
between performance years 2025 and 2028 (89 FR 61856). We noted that we 
would continue to provide the Medicare CQM reporting option as ACOs 
increase their experience and overcome their challenges with reporting 
all payer/all patient measures. As discussed more fully below, we 
proposed not including the MIPS CQM collection type for Shared Savings 
Program ACOs reporting the APP Plus quality measure set to focus ACOs' 
efforts on the implementation of the APP Plus quality measure set, 
while continuing to encourage the adoption of eCQMs. We stated that our 
proposed approach would recognize the investments ACOs have made to 
report eCQMs and their benefits (that is, more efficient data 
collection, real time provider feedback, and less burden through the 
use of digital data) and allow ACOs that have invested in eCQMs to 
continue on that track and align with long term goals of digital 
quality measurement.\531\
---------------------------------------------------------------------------

    \531\ Centers for Medicare & Medicaid Services (2023). 
Electronic Clinical Quality Measure Basics (eCQM 101). Accessed June 
24, 2024. https://ecqi.healthit.gov/sites/default/files/eCQM-Basics-508.pdf.
---------------------------------------------------------------------------

    Since Medicare CQMs are MIPS CQMs that are reported on an ACO's 
eligible Medicare fee-for-service population, ACOs that have invested 
in the infrastructure to report MIPS CQMs would be able to report 
Medicare CQMs on a subset of their all payer/all patient population. 
Furthermore, as noted in the CY 2024 PFS final rule, Medicare CQMs 
address ACO concerns regarding the difficulty of matching and 
aggregating patient data across multiple EHR systems (88 FR 79106). 
Medicare CQMs also provide a transition path and alternative for ACOs 
that have difficulty reporting patient data by limiting the 
beneficiaries for which an ACO must match and aggregate data to only 
the ACO's eligible Medicare fee-for-service beneficiaries, instead of 
their all payer/all patient population (88 FR 79106). As a logical next 
step in the reporting of digital quality measures, this population is 
larger than the sample currently used in the CMS Web Interface, but not 
as large as the all payer/all patient population that must be reported 
for an eCQM or MIPS CQM (88 FR 79106).
    As we stated in the CY 2025 PFS proposed rule, we aim to fully 
transition to digital quality measurement in CMS quality reporting and 
value-based purchasing programs, and we are working to convert current 
eCQMs to the Fast Healthcare Interoperability Resources (FHIR) standard 
(86 FR 65379). Including eCQMs as a collection type for Shared Savings 
Program ACOs reporting the APP Plus quality measure set aligns with our 
goal to transition to digital quality measurement including the 
alignment and development of FHIR standards and tools for eCQM 
reporting in the CMS dQM Strategic Roadmap. We noted numerous benefits 
to using eCQMs, including their use of electronic standards that reduce 
the burden of manual extraction and reporting for measured entities, 
their use of clinical data to assess the outcomes of treatment by 
measured entities, and their fostering of access to real-time data for 
point of care quality improvement and decision support.\532\ 
Furthermore, eCQMs align with the Meaningful Measures Framework 2.0 
goal of improving quality reporting efficiency by transitioning to 
digital quality measures.\533\ In addition, a recent study highlighted 
the resource intensity of quality reporting, underscoring the high cost 
of claims-based measures relative to others and recommended that policy 
makers shift to electronic metrics to ``optimize resources spent in the 
overall pursuit of higher quality.'' \534\ For these reasons, and to 
continue encouraging ACOs on their progress to adopt digital quality 
measurement, we are not modifying the availability of eCQMs as a 
collection type for ACOs that reported the APP quality measure set by 
including eCQMs as a collection type in the APP Plus quality measure 
set in performance year 2025 and subsequent performance years. In 
section III.G.7.e. of the CY 2025 PFS proposed rule, we solicited 
comment on a higher risk, higher reward track for Shared Savings 
Program ACOs participating in the ENHANCED track. In this request for 
information, we solicited comment on questions relevant to our long-
term goals of supporting ACOs in their transition to reporting all 
payer/all patient quality measures: How should a revised ENHANCED track 
with higher risk and potential reward also require additional 
accountability for quality? Should ACOs in this revised track be 
required to report all payer/all patient quality measures?
---------------------------------------------------------------------------

    \532\ eCQI Resource Center (2024). Get Started with eCQMs. 
https://ecqi.healthit.gov/ecqms.
    \533\ Centers for Medicare & Medicaid Services (2024). 
Meaningful Measures 2.0: Moving to Measure Prioritization and 
Modernization. https://www.cms.gov/medicare/quality/meaningful-measures-initiative/meaningful-measures-20.
    \534\ Saraswathula, A., et al., The Volume and Cost of Quality 
Metric Reporting. JAMA (June 6, 2023), available at https://jamanetwork.com/journals/jama/fullarticle/2805705.
---------------------------------------------------------------------------

    In the CY 2024 PFS final rule, we stated that ``Medicare CQMs are 
intended to serve as a transition to all payer/all patient reporting 
and not as a permanent collection type. We acknowledge that ACOs are at 
different stages of readiness to adopt all payer/all patient measures, 
and we intend for Medicare CQMs to be available to ACOs during their 
transition to all payer/all patient reporting'' (88 FR 79106). We also 
stated that ``[w]e expect that the sunsetting of the Medicare CQM 
collection type may be paced with the uptake of FHIR Application 
Programming Interface (API) technology, but this will be assessed on 
industry readiness and CMS requirements'' (88 FR 79106). Specifically, 
we anticipated that the increased use of FHIR API technology for 
quality data exchange and aggregation would facilitate ACOs' reporting 
of eCQMs and thus increase their uptake of them. Future advancements in 
the use of FHIR API technology to share quality data and its uptake 
among Shared Savings Program ACOs may accelerate our future plans to 
sunset Medicare CQMs. As discussed earlier in this section of the final 
rule, we proposed to streamline the collection types available for 
Shared Savings Program ACOs reporting the APP Plus quality measure set 
to the eCQM and Medicare CQM collection types for performance year 2025 
and subsequent performance years and use Medicare CQMs as the 
transition step on our building-block approach for ACOs' progress to 
adopt digital quality measurement (89 FR 61856 through 61857). As we 
continue to support ACOs in fully and equitably participating in all 
payer/all patient collection types with our proposed creation of the 
APP Plus quality measure set, our commitment to monitor ACOs' reporting 
of quality data using Medicare CQMs and to assess

[[Page 98107]]

their appropriateness as a collection type remains the same.
    As we stated in the CY 2024 PFS final rule, ACOs that include or 
are composed solely of FQHCs or RHCs must report quality data on behalf 
of the FQHCs or RHCs that participate in the ACO. To clarify, while 
FQHCs and RHCs that provide services that are billed exclusively under 
FQHC or RHC payment methodologies are exempt from reporting traditional 
MIPS, FQHCs and RHCs that participate in APMs, such as the Shared 
Savings Program, are considered APM Entity groups as described at Sec.  
414.1370 (88 FR 79099). If our proposal is finalized, FQHCs and RHCs 
that participate in Shared Savings Program ACOs would have to report 
the APP Plus quality measure set through their ACO for performance year 
2025 and subsequent performance years.
    We solicited comments on our proposal to streamline collection 
types for Shared Savings Program ACOs to report the APP Plus quality 
measures through Medicare CQMs and/or eCQMs. The following is a summary 
of the public comments we received and our responses.
    Comment: Many commenters expressed concern with the proposal to 
eliminate the MIPS CQM collection type for Shared Savings Program ACOs 
beginning in performance year 2025. These commenters stated that 
eliminating the MIPS CQM collection type would cause administrative 
burden, disparate electronic health records, and reporting challenges 
with the submission of the all payer/all patient eCQM collection type. 
Several commenters noted that their efforts and resources would need to 
focus on determining the best reporting approaches at the expense of 
innovations that support patients. Many commenters encouraged CMS to 
consider extending the availability of the MIPS CQM collection type for 
Shared Savings Program ACOs and requested that the collection type 
remain available for an additional one to three years. Some commenters 
stressed the challenges related to loss of prior investments made in 
preparing to report or actively reporting MIPS CQMs. Several of these 
commenters stated that having limited notice from CMS that the MIPS CQM 
collection type would not be available to Shared Savings Program ACOs 
reporting the APP Plus quality measure set provides ACOs with only a 
few months to pivot to another option if the proposal not to include 
MIPS CQMs in the APP Plus quality measure set is finalized.
    A few commenters requested that the CMS Web Interface reporting 
option remain available until the Medicare CQM specification and 
patient reporting requirements are made clear, including benchmarks. 
Several commenters suggested making all reporting options available 
until CMS tests eCQM, MIPS CQM, Medicare CQM, and digital quality 
measure (dQM) reporting. One commenter objected to the exclusion of the 
MIPS CQM collection type from the APP Plus quality measure set and 
stated MIPS CQMs allow ACOs to leverage multiple data sources beyond 
just EMR data, including claims data, as an important component to 
ensuring the accuracy and completeness of data reported.
    Response: We acknowledge commenters' feedback regarding the 
challenges associated with not having MIPS CQM available to ACOs as a 
collection type for reporting the APP Plus quality measure set. We 
agree with commenters that additional time is needed for ACOs who have 
invested in MIPS CQMs to transition to eCQMs. Having MIPS CQMs as a 
reporting option will allow ACOs to gain experience with all payer 
quality measure data collection and reporting before MIPS CQMs are 
phased out as a collection type for Shared Savings Program ACOs. We are 
aware that some Shared Savings ACOs have already contracted with 
vendors for the MIPS CQM collection type at their own expense and that 
for these ACOs additional time to transition to the eCQM collection 
type is desirable. We also understand that the MIPS CQM collection type 
allows ACOs to leverage multiple data sources beyond just EMR data, 
thereby allowing for improved accuracy and completeness of data 
submitted with this collection type.
    For these reasons, we will provide Shared Savings Program ACOs with 
the option to use the MIPS CQM collection type for two additional 
performance years (i.e., performance years 2025 and 2026) when 
reporting the APP Plus quality measure set, as finalized at 
IV.A.4.c.(2) of this final rule. We believe that making the MIPS CQM 
collection type available for ACOs for two additional performance years 
would fairly balance investments ACOs have already made with and CMS' 
long-term goals of digital quality measurement.
    In response to suggestions that all collection types, including the 
CMS Web Interface, remain available to Shared Savings Program ACOs in 
the APP until CMS tests eCQM, MIPS CQM, and Medicare CQM reporting, we 
note that all these collection types are available in performance year 
2024. The collection types available to ACOs reporting the APP Plus 
quality measure set for performance year 2025 and subsequent years that 
we are finalizing in this final rule recognize the need for some ACOs 
to build the infrastructure, skills, knowledge, and expertise necessary 
to report all payer/all patient measures while incentivizing ACOs to 
transition to eCQMs. However, we will continue to monitor the uptake of 
collection types by ACOs in the coming years. We note that we finalized 
the sunsetting of the CMS Web Interface in the CY 2021 PFS final rule 
(85 FR 84722), giving ACOs and other interested parties multiple 
performance years to prepare for the sunsetting of the CMS Web 
Interface.
    Comment: Several commenters expressed concern that the Medicare CQM 
collection type is technologically and methodologically complex and 
distinct from the MIPS CQM collection type in several ways that pose 
additional challenges and burdens for Shared Savings Program ACOs.
    Response: As stated in the CY 2024 PFS final rule, a Medicare CQM 
is essentially a MIPS CQM reported by an ACO under the APP on only the 
ACO's Medicare FFS beneficiaries, instead of its all payer/all patient 
population (88 FR 79098). ACOs with the infrastructure to report MIPS 
CQMs can readily transition to report Medicare CQMs. While we continue 
to believe that Medicare CQMs are a valuable transition step on our 
building-block approach for Shared Savings Program ACOs' progress to 
adopt digital quality measurement, under the policies we are finalizing 
in this section of this final rule, Shared Savings Program ACOs would 
continue to have the option to report the APP Plus quality measures 
using the MIPS CQM collection type for performance years 2025 and 2026. 
We believe this additional time will further allow ACOs to address 
challenges and burdens they may face when reporting Medicare CQMs. 
Therefore, for performance years 2025 and 2026, Shared Savings Program 
ACOs that report the APP Plus quality measure set will have the option 
to use any of the following collection types or a combination thereof, 
as applicable: Medicare CQM, MIPS CQM and eCQM.
    Comment: We received numerous comments from interested parties 
expressing concern about the length of time the Medicare CQM collection 
type will remain available to Shared Savings Program ACOs reporting the 
APP Plus quality measure set. Some of those commenters recommended that 
CMS make the Medicare CQM reporting option permanent for the 
foreseeable future. Several of these commenters noted that, because of 
the uncertainty

[[Page 98108]]

surrounding the timeline for sunsetting the Medicare CQM collection 
type, Shared Savings Program ACOs and EHR vendors are reluctant to 
invest time and resources in an option that may be eliminated with 
little to no warning.
    Response: In response to comments that ACOs and EHR vendors are 
reluctant to invest time and resources in a new reporting option, we 
want to reiterate our commitment to the CMS National Quality Strategy 
and the adoption of digital quality measurement. We anticipate that 
ACOs and their vendors will adopt Medicare CQMs to the extent that it 
is helpful within the timelines provided in this section of this final 
rule.
    Regarding commenters who requested that we make Medicare CQMs a 
permanent collection type, we note that from the inception of the 
Medicare CQM collection type beginning in performance year 2024, we 
intend for the Medicare CQM collection type to serve as a transition 
collection type to help ACOs build the infrastructure, skills, 
knowledge, and expertise necessary to report all payer/all patient 
measures (88 FR 79097 through 79098). In addition, as we stated in the 
CY 2025 PFS proposed rule, we believe that our policy to establish the 
APP Plus quality measure set to align with the Adult Universal 
Foundation measure set should also aim to prioritize the eCQM 
collection type and the use of the Medicare CQM collection type is a 
transition step on our building-block approach for ACOs' progress to 
adopt digital quality measurement (89 FR 61838). We note in this final 
rule that the sunsetting of Medicare CQMs would take place no sooner 
than five years from now, when we anticipate there is widespread uptake 
of FHIR API technology. While FHIR technology is employed in other 
components of digital health information, we note that we would assess 
the uptake of FHIR API technology for quality reporting in alignment 
with the CMS Digital Quality Measurement Strategic Roadmap, 
specifically, Domain 3: Optimize Data Aggregation. In particular, CMS 
would assess whether ACOs broadly have developed capabilities to 
efficiently leverage FHIR API technology to aggregate quality reporting 
data and patient-centered measurement and are reporting eCQMs.\535\
    Comment: Many commenters expressed concern with CMS' goal to 
require all Shared Savings Program ACOs to use the all payer/all 
patient eCQM collection type to report quality measures. For example, 
several commenters cited time and resource concerns, including cost, 
challenges specific to small and specialty practices, data and vendor-
related challenges such as data aggregation and de-duplication, and a 
lack of standardization across electronic health record (EHR) vendor 
systems for the capture of and reporting on eCQM data elements. 
Commenters also stated that adoption of the eCQM collection type and 
reporting on all payer/all patient data requires ACOs to tailor data 
extracts and uploads across systems, which places considerable 
financial and administrative burden on ACOs and could require them to 
contract with additional vendors to be able to report eCQMs. For 
example, one commenter indicated their current vendor cannot support 
the de-duplication of data for all payers and stated they were 
concerned that resources and finances would go toward building and 
implementing eCQMs in the present while CMS may require reporting on 
other measures and artificial intelligence-enabled technology in the 
future. Few commenters noted further challenges with EHR certifications 
and vendors adopting new collection types and measures.
    Response: In response to comments that were concerned with the 
transition to eCQMs, citing cost, time and resource concerns, 
challenges specific to small and specialty practices and similar 
comments related to the financial and administrative burden with 
adopting eCQMs, we note that we are finalizing a number of policies in 
this final rule to support ACOs in their transition to digital quality 
measurement. Specifically, we are finalizing the eCQM reporting 
incentive to performance year 2025 and subsequent performance years, 
and we are also extending the reporting incentive to MIPS CQMs for 
performance years 2025 and 2026, to support ACOs in meeting the Shared 
Savings Program quality performance standard as described in section 
III.G.4.d of this final rule. We are also finalizing the Complex 
Organization Adjustment beginning in the CY 2025 performance period/
2027 MIPS payment year to account for the organizational complexities 
faced by Virtual Groups and APM Entities, including Shared Savings 
Program ACOs, when reporting eCQMs as described in section 
IV.A.4.f.(1)(b)(iii) of this final rule. In addition to policies 
finalized in this final rule, we also refer readers to our discussion 
in section III.G.4.b(2)(a) of this final rule of previously finalized 
policies that support ACOs during the transition to digital quality 
measurement.
    In response to concerns about data and vendor-related challenges 
such as data aggregation and de-duplication, and a lack of 
standardization across EHR vendor systems for the capture of and 
reporting on eCQM data elements, we direct readers to our guidance on 
reporting eCQMs/MIPS CQMs discussed earlier in this section of this 
final rule that recognizes challenges with patient matching and data 
aggregation. Specifically, for concerns related to de-duplication, we 
encourage ACOs and their vendors to consider using our DedupliFHIR 
open-source data deduplication and record matching tool. The project 
includes a backend library and a front-end desktop application that can 
be downloaded from the DedupliFHIR GitHub repository at https://github.com/DSACMS/dedupliFHIR. We also encourage ACOs and their vendors 
to participate in our regular QCDR and Qualified Registry support calls 
and Learning System Webinars and to submit questions to the Quality 
Payment Program help desk, as needed. Additionally, for ACOs with 
significant EHR vendor concerns, when issues of potential noncompliance 
with certification requirements are unresolvable, we note that ONC has 
provided a complaint process for certified products available to the 
public at https://www.healthit.gov/topic/certified-health-it-complaint-process.
    In response to the recommendation that CMS revisit EHR vendor 
certification requirements to establish technology support for APP Plus 
quality measures that allow for data aggregation across systems, we 
note that most clinical information is digitized, accessible, and 
shareable due to several technology and policy advances making 
interoperable, electronic health record systems widely available. The 
CURES Act applied the law to healthcare providers, health IT developers 
of certified health IT, and health information exchanges (HIEs)/health 
information networks (HINs).\536\ We encourage ACOs to work with their 
vendors, as appropriate, to report the APP Plus quality measure set and 
invest in the technology and services necessary to prepare and 
successfully report. CMS also understands that despite the resources 
made available to ACOs, there continue to be challenges in reporting 
eCQMs, and CMS is committed to working with ACOs to address barriers 
over time. We also note that we anticipate that the transition to all-
payer eCQMs would take place no sooner than 5 years from now, giving 
CMS and

[[Page 98109]]

ACOs additional time to work through these challenges.
---------------------------------------------------------------------------

    \536\ Assistant Secretary for Technology Policy/Office of the 
National Coordinator for Health IT (2024). Information Blocking. 
https://www.healthit.gov/topic/information-blocking.
---------------------------------------------------------------------------

    Comment: One commenter stated that there are gaps in digital 
literacy within medical offices and, as a result, the extraction of 
meaningful data is a challenge. Commenters were also concerned that 
small practices and low-revenue ACOs, whose participants are drawn more 
heavily from small ambulatory, primary care practices and specialty 
practices will be the least likely to successfully adopt the eCQM 
collection type, and that adoption of the eCQM collection type 
contradicts the exception CMS granted to small practices and others 
with automatic reweighting of the Promoting Interoperability and CEHRT-
use requirements in ACOs.
    Another commenter explained that reporting MIPS CQMs serves as a 
``temporary accommodation'' to mitigate concerns about reporting all 
patient data among community-based specialty practices participating in 
ACOs. The commenter explained that specialty practices that are 
participating in an ACO with a hospital system may experience 
competitive concerns when they are expected to share patient details 
with the ACO for purposes of quality reporting, such as the case where 
a community-based oncology clinic is in direct competition with 
hospital-based infusions.
    Response: As detailed at Sec.  425.116(a)(5), each ACO's 
Participant Agreement describes how the opportunity to receive shared 
savings or other financial arrangements will encourage the ACO 
participant to adhere to the quality assurance and improvement program 
and evidence-based medicine guidelines established by the ACO. 
Moreover, as detailed at Sec.  425.308(b)(4)(ii), ACOs are required to 
publicly report the total proportion of shared savings invested in 
infrastructure, redesigned care processes and other resources required 
to support the three-part aim goals of better health for populations, 
better care for individuals and lower growth in expenditures, including 
the proportion distributed among ACO participants. As such, it is 
appropriate for ACOs to reinvest shared savings as a means to comply 
with Shared Savings Program requirements and required processes, 
including to support their ACO participants with tasks such as digital 
literacy within medical offices, the utilization of structured data 
fields, and the extraction of meaningful data.
    We disagree with comments that small practices and low-revenue ACOs 
are the least likely to successfully adopt the eCQM collection type. To 
the contrary, we note that an internal analysis of the performance year 
2023 quality data submissions indicates similar patterns of eCQM/MIPS 
CQM adoption across practices of varying sizes and ACOs with varying 
revenue types. Of the ACOs reporting eCQMs in performance year 2023, 54 
percent were low-revenue.
    In response to the comment that adoption of eCQMs contradicts the 
exception CMS granted to small practices and others with automatic 
reweighting of the Promoting Interoperability and CEHRT requirements in 
ACOs, we note that MIPS makes a distinction between performance 
categories, that is quality, Promoting Interoperability, improvement 
activities, and cost. Some exclusions are specific to the performance 
category and codified by statute. While there is an automatic 
reweighting of the MIPS Promoting Interoperability performance category 
for those with Special Status as defined at 42 CFR 414.1305, including 
for the small practice designation, there is no automatic reweighting 
of the MIPS Quality performance category or exception for small 
practices. It is also important to note that MIPS eligible clinicians 
are required to report MIPS unless otherwise excluded or exempt using 
eCQMs or MIPS CQMs. The Shared Savings Program is a voluntary program 
and providers, including small practices, are not required to 
participate in a Shared Savings Program ACO. A Shared Savings Program 
ACO must report quality data on behalf of the eligible clinicians who 
bill under the TIN of the ACO participant for purposes of the MIPS 
quality performance category. As described at 42 CFR 414.1390(b) MIPS 
eligible clinicians and groups must submit data that are true, 
accurate, and complete. 42 CFR 425.510(c) applies these requirements to 
the Shared Savings Program ACOs. As such, they are not permitted to 
omit or exclude ACO participants, ACO providers/suppliers, or ACO 
professionals from the ACO's quality data submissions.
    In response to the comment about situations where sharing patient 
details through quality reporting may impact specialty clinics in terms 
of competition with a hospital, when both entities are participating 
together in an ACO, we note that while entities may be using the MIPS 
CQM collection type to limit disclosure of patient data that would 
otherwise be needed for eCQM reporting, we are not persuaded, based on 
the circumstances described, that this would be a reason to further 
extend use of the MIPS CQM collection type beyond the extension being 
finalized. We further note that ACOs are groups of doctors, hospitals, 
and other health care providers, that come together voluntarily to give 
coordinated high-quality care to the Medicare patients they serve. We 
reiterate the importance of ACO providers/suppliers and ACO 
participants working together, within an ACO, to meet the goals of the 
Shared Savings Program and comply with program requirements, including 
quality reporting requirements. However, we recognize that under 
certain circumstances, ACOs may raise competitive concerns. HHS and CMS 
will coordinate closely with the Antitrust Agencies throughout the 
application process and the operation of the Shared Savings Program 
ACOs to ensure there are no detrimental impacts to competition. 
Further, in the CY 2022 PFS final rule, we stated our belief that the 
disclosure of all-payer data to CMS as required by Sec.  414.1340(a) 
would be permitted by the HIPAA Privacy Rule under the provision that 
permits disclosures of PHI as ``required by law'' (86 FR 65258). We 
refer readers to our discussion of the disclosure of all-payer data to 
CMS at 86 FR 65258.
    Comment: A few commenters stated that the transition to eCQMs, 
which requires reporting on an ACO's entire payer mix, will put ACOs 
with higher proportions of underserved non-Medicare patients at a 
disadvantage. One of these commenters speculated that ACOs with higher 
underserved populations who report eCQMs will see lower performance on 
certain metrics for reasons beyond the control of the ACO and urged CMS 
to consider the financial and administrative burdens that these ACOs 
face to sustain Shared Savings Program participation.
    Response: All payer/all patient measures are valuable measures 
because they reflect the quality of care provided across all of a 
provider's patients and are consistent with CMS' health equity goals. 
All payer measures are broadly used across Medicare quality payment and 
quality reporting programs, including in MIPS (Sec.  414.1305 (defining 
``collection type'' to include eCQMs)). Nonetheless, we acknowledge 
that there may be instances when ACOs have lower performance reporting 
all payer/all patient eCQMs. In IV.A.4.f.(1)(b)(iii) of this final 
rule, we are finalizing the Complex Organization Adjustment beginning 
in the CY 2025 performance period/2027 MIPS payment year to account for 
the organizational complexities faced by Virtual Groups and APM 
Entities, including Shared Savings Program ACOs, when reporting eCQMs. 
Specifically, a Virtual Group

[[Page 98110]]

and an APM Entity will receive one measure achievement point for each 
submitted eCQM that meets the case minimum requirement at Sec.  
414.1380(b)(1)(iii) and the data completeness requirement at Sec.  
414.1340 as described in section IV.A.4.f.(1)(b)(iii) of this final 
rule. Adding one point for each reported eCQM would provide ACOs that 
serve higher proportions of underserved populations and report eCQMs 
with an upward adjustment of the MIPS Quality performance category 
score.
    Further, in the CY 2023 PFS final rule, we discussed concerns that 
the quality performance standard and the quality performance measures 
did not adequately assess the quality of care provided by ACOs with 
clinicians who serve a high proportion of underserved individuals (87 
FR 69839). As a result, we finalized the health equity adjustment 
beginning in performance year 2023 and subsequent performance years to 
upwardly adjust the MIPS Quality performance category score for ACOs 
that report quality measures using the eCQM/MIPS CQM collection types, 
are high performing on quality, and serve a higher proportion of 
underserved beneficiaries (87 FR 69838). In performance year 2023, out 
of all the ACOs that reported eCQMs/MIPS CQMs and met data completeness 
requirements, approximately 39 percent of ACOs earned health equity 
adjustment bonus points, and an average of 3.54 bonus points (out of 
10) were added to eligible ACOs' quality scores. We will continue to 
evaluate whether ACOs serving higher underserved populations are being 
disproportionately disadvantaged through all-payer collection, which 
may inform future rulemaking.
    Comment: Several commenters remarked on technical aspects of 
reporting Medicare CQMs as a collection type including patient 
identification and vendor support.
    Response: While these comments are out of scope for this final 
rule, we acknowledge commenters' concerns identifying patients and 
operationalizing Medicare CQMs. We note that ACOs have the option to 
report the APP quality measure set using the Medicare CQM collection 
type in 2024, and as finalized in this section of the final rule, they 
will also have the option to report the APP Plus quality measure set 
using the Medicare CQM collection type in performance years 2025 and 
2026. We will continue to support and provide guidance to ACOs 
reporting Medicare CQMs consistent with measure specifications.
    We further direct readers to our guidance on the submission of 
Medicare CQMs. Specifically, the 2024 Medicare CQM Checklist for Shared 
Savings Program Accountable Care Organizations which is posted in the 
QPP Resource Library at https://qpp-cm-prod-content.s3.amazonaws.com/uploads/2679/2024SSPACOMedicareCQMChecklist.pdf for resources and 
support in reporting eCQMs, MIPS CQMs, and Medicare CQMs. We also 
encourage ACOs and their vendors to participate in our monthly QCDR and 
Qualified Registry support calls, Learning System Webinars and to 
submit questions to the Shared Savings Program helpdesk via ACO-MS, as 
needed.
    Comment: A few commenters shared feedback on technical aspects of 
QRDA files that are beyond the scope of this rule. Specifically, a 
commenter stated that CMS should allow for the use of mature QRDA-III 
files rather than requiring the use of less mature, resource intensive 
QRDA-I files. Another commenter noted that EHR system they work with 
has struggled to produce a QRDA-I file which makes eCQM and Medicare 
CQM reporting an enormous challenge and causes their organizations to 
divert already limited resources to constantly evolving digital quality 
reporting requirements.
    Response: While these comments are out of scope for this rule, we 
acknowledge the commenters' feedback regarding the complexity of ACOs 
using QRDA files. We will continue to monitor ACO quality reporting and 
support ACOs through guidance as well as working to understand concerns 
and challenges by working with the CMS QRDA Work Group to reduce 
burden, better inform interested parties, and reduce complexity where 
possible. Technical comments and responses around QRDAs are also 
accessible to the public via the ONC Jira website at https://oncprojectracking.healthit.gov/support/projects/QRDA/summary.
    Comment: Some commenters expressed concerns about issues that were 
not related to our proposals in the proposed rule. We received several 
comments related to the previously finalized requirement that Shared 
Savings Program ACOs report the MIPS Promoting Interoperability 
performance category in performance 2025 and subsequent performance 
years as described at Sec.  425.507. One commenter agreed that digital 
quality measurement is the goal and that ACOs are uniquely qualified to 
assist practices with needed upgrades in technology, but added their 
perspective that these policies are too aggressive and ignore the 
upcoming changes on the horizon that will require additional 
investment. Another commenter expressed that the policies result in 
substantial burden for physician practices with no clear positive 
impact on information exchange. Commenters expressed the concern that 
the policies will force ACOs and other APM Entities to omit practices 
that they are not convinced can meet both requirements, which will 
hinder, not help, CEHRT adoption and APM participation.
    Response: We did not propose any changes to these previously 
finalized policies in the CY 2025 PFS proposed rule, and therefore, 
these comments are considered to be out of scope. However, we recently 
released additional guidance for ACOs to address questions on Promoting 
Interoperability reporting requirements at https://www.cms.gov/files/document/frequently-asked-questions-shared-savings-program-requirement-report-objectives-and-measures-mips.pdf; we are continuing to monitor 
the impact of these policies, and we are exploring how to address 
concerns raised by ACOs and other interested parties. We may revisit 
the Shared Savings Program MIPS Promoting Interoperability reporting 
requirement in future rulemaking to provide a less burdensome pathway 
for Shared Savings Program ACOs to meet the APM certified electronic 
health record technology (CEHRT) requirements that is consistent with 
our goal to gain additional insight and transparency into CEHRT use by 
APMs and level the playing field between Advanced APMs and APMs.
    For reasons we discussed above in this section, we agree more time 
is needed before sunsetting MIPS CQMs as a collection type for Shared 
Savings Program ACOs given ACOs may have already contracted with 
vendors for this collection type. Including MIPS CQMs as a collection 
type for an additional two years would allow ACOs time to build the 
necessary infrastructure to transition to eCQM and Medicare CQM 
reporting in performance year 2027. Therefore, we are finalizing that 
MIPS CQM will be an available collection type for Shared Savings 
Program ACOs reporting the APP Plus quality measure set in performance 
years 2025 and 2026. We also stated that Medicare CQMs are a valuable 
transition step on our building block approach, and the sunsetting of 
Medicare CQMs would take place no sooner than five years from now, when 
we anticipate there is widespread uptake of FHIR API technology. While 
FHIR technology is employed in other components of digital health 
information, we note that

[[Page 98111]]

we would assess the uptake of FHIR API technology for quality reporting 
in alignment with the CMS Digital Quality Measurement Strategic 
Roadmap, specifically, Domain 3: Optimize Data Aggregation. In 
particular, CMS would assess whether ACOs broadly have developed 
capabilities to efficiently leverage FHIR API technology to aggregate 
quality reporting data and successfully report eCQMs.
    Because we are finalizing inclusion of MIPS CQM as a collection 
type available to Shared Savings Program ACOs reporting the APP Plus 
quality measure set in performance years 2025 and 2026, in section 
III.G.4.d of this final rule, we are also extending the reporting 
incentive to ACOs reporting MIPS CQMs in performance years 2025 and 
2026 to support ACOs in meeting the Shared Savings Program quality 
performance standard for sharing in savings at the maximum rate under 
its track.
(3) Changes to Regulation Text
    As discussed in section III.G.4.b.(2)(a) of the CY 2025 PFS 
proposed rule, for performance year 2025 and subsequent performance 
years, we proposed to require Shared Savings Program ACOs to report the 
APP Plus quality measure set as proposed in section IV.A.4.c.(3) of the 
CY 2025 PFS proposed rule. The APP Plus quality measure set would 
comprise of 11 measures, consisting of six measures from the existing 
APP quality measure set and five additional measures from the Adult 
Universal Foundation measure set not already included in the existing 
APP quality measure set that would be incrementally incorporated into 
the APP Plus quality measure set over performance years 2025 through 
2028. We also proposed to focus the collection types available to 
Shared Savings Program ACOs for reporting the APP Plus quality measure 
set to eCQMs and Medicare CQMs (89 FR 61856 through 61857). We refer 
readers to sections IV.A.4.c, IV.A.4.e.(1)(b)(i), IV.A.4.f.(1)(b)(iii), 
and IV.A.4.f.(1)(c)(i). of the CY 2025 PFS proposed rule for changes to 
42 CFR part 414. We proposed conforming changes to 42 CFR part 425 as 
described below (see also 89 FR 61857 through 618578):
     We proposed to sunset the requirement that ACOs must 
submit quality data via the APP to satisfactorily report on behalf of 
the eligible clinicians who bill under the TIN of an ACO participant 
for purposes of the MIPS Quality performance category of the Quality 
Payment Program, and to revise Sec.  425.508(b) to indicate that the 
requirement will be applicable for performance years beginning in 
2021--2024. We also proposed to replace the phrase ``Alternative 
Payment Model Performance Pathway (APP)'' with the phrase ``APM 
Performance Pathway (APP)'' to conform with the phrase used at Sec.  
414.1367.
     We proposed to add a new paragraph (c) at Sec.  425.508 to 
establish that, for performance years beginning on or after January 1, 
2025, ACOs must submit quality data via the APM Performance Pathway 
(APP) on the quality measures contained in the APP Plus quality measure 
set established under Sec.  414.1367 to satisfactorily report on behalf 
of the eligible clinicians who bill under the TIN of an ACO participant 
for purposes of the MIPS Quality performance category of the Quality 
Payment Program.
     We proposed to revise the section heading at Sec.  425.510 
to ``Application of the APM Performance Pathway (APP) quality measure 
set or the APP Plus quality measure set (as applicable) to Shared 
Savings Program ACOs for performance years beginning on or after 
January 1, 2021.''
     We proposed to sunset the requirement that ACOs must 
report quality data on the APP quality measure set according to the 
method of submission established by CMS and to revise Sec.  425.510(b). 
We proposed to add a new paragraph (b)(1) at Sec.  425.510 to indicate 
that the requirement will be applicable for performance years beginning 
in 2021 through 2024.
     We proposed to add a new paragraph (b)(2) at Sec.  425.510 
to establish that, for performance years beginning on or after January 
1, 2025, ACOs must report quality data on the APP Plus quality measure 
set established under Sec.  414.1367, according to the submission 
method established by CMS.
     We proposed to revise Sec.  425.512(a)(2)(iii) to 
establish that, for performance year 2025 and subsequent performance 
years, an ACO in the first performance year of the ACO's first 
agreement period under the Shared Savings Program will meet the quality 
performance standard if the ACO reports the APP Plus quality measure 
set and meets the data completeness requirement on all eCQMs/Medicare 
CQMs, and the CAHPS for MIPS survey (except as specified in Sec.  
414.1380(b)(1)(vii)(B)), and receives a MIPS Quality performance 
category score for the applicable performance year.
     We proposed to revise the introductory paragraph (a)(5)(i) 
to Sec.  425.512 to read as follows: ``Except as specified in 
paragraphs (a)(2) and (7) of this section, CMS designates the quality 
performance standard as:''.
     We proposed to revise the introductory paragraph 
(a)(5)(i)(A) to read as follows: ``For performance year 2024, the ACO 
reporting quality data on the APP quality measure set established under 
Sec.  414.1367 of this subchapter, according to the method of 
submission established by CMS and--''.
     We proposed to revise the introductory paragraph 
(a)(5)(i)(B) to read as follows: ``For performance year 2025 and 
subsequent performance years, the ACO reporting quality data on the APP 
Plus quality measure set established under Sec.  414.1367 of this 
subchapter, according to the method of submission established by CMS 
and--''.
     We proposed to add a new paragraph (a)(5)(ii)(A) to Sec.  
425.512 to indicate that an ACO will meet the alternative quality 
performance standard for performance year 2024 if the ACO reports 
quality data on the APP quality measure set established under Sec.  
414.1367 according to the method of submission established by CMS and 
achieves a quality performance score equivalent to or higher than the 
10th percentile of the performance benchmark on at least one of the 
four outcome measures in the APP quality measure set.
     We proposed to add a new paragraph (a)(5)(ii)(B) to Sec.  
425.512 to establish that an ACO will meet the alternative quality 
performance standard for performance year 2025 and subsequent years if 
the ACO reports the quality data on the APP Plus quality measure set 
established under Sec.  414.1367 according to the method of submission 
established by CMS and achieves a quality performance score equivalent 
to or higher than the 10th percentile of the performance benchmark on 
at least one of the four outcome measures in the APP Plus quality 
measure set.
     We proposed to revise Sec.  425.512(a)(5)(iii)(B) to 
indicate that for performance year 2025 and subsequent performance 
years, an ACO will not meet the quality performance standard or the 
alternative quality performance standard if the ACO does not report any 
of the eCQMs/Medicare CQMs in the APP Plus quality measure set and does 
not administer a CAHPS for MIPS survey (except as specified in Sec.  
414.1380(b)(1)(vii)(B)).
     We proposed to revise Sec.  425.512(a)(7) introductory 
text and (a)(7)(i) and proposed to add new paragraphs (a)(7)(i)(A) and 
(B) to indicate for performance year 2024, we will use the higher of 
the ACO's health equity adjusted Quality performance

[[Page 98112]]

category score or the equivalent of the 40th percentile MIPS Quality 
performance category score when an ACO reports all of the required 
measures, meeting the data completeness requirement for each measure in 
the APP quality measure set and receiving a MIPS Quality performance 
category score and the ACO meets either of the following:
    ++ The ACO's total available measure achievement points used to 
calculate the ACO's MIPS Quality performance category score are reduced 
under Sec.  414.1380(b)(1)(vii)(A).
    ++ At least one of the eCQMs/MIPS CQMs/Medicare CQMs does not have 
a benchmark as described at Sec.  414.1380(b)(1)(i)(A).
     We proposed to revise Sec.  425.512(a)(7)(ii) and proposed 
to add new paragraphs (a)(7)(ii)(A) and (B) to indicate for performance 
year 2025 and subsequent performance years, an ACO will receive the 
higher of the ACO's health equity adjusted quality performance category 
score or the equivalent of the 40th percentile MIPS Quality performance 
category score when an ACO reports all of the required measures in the 
APP Plus quality measure set, meeting the data completeness requirement 
for each measure in the APP Plus quality measure set, and receiving a 
MIPS Quality performance category score, and the ACO meets either of 
the following:
    ++ The ACO's total available measure achievement points used to 
calculate the ACO's MIPS Quality performance category score are reduced 
under Sec.  414.1380(b)(1)(vii)(A).
    ++ At least one of the eCQMs/Medicare CQMs does not have a 
benchmark as described at Sec.  414.1380(b)(1)(i)(A).
     We proposed to revise Sec.  425.512(b)(1) and (2) and 
(b)(4)(i) by removing the phrase ``APP measure set'' and replacing with 
the phrase ``APP quality measure set'' to align naming conventions for 
the two quality measure sets within the APP: the APP quality measure 
set and the APP Plus quality measure set.
     We proposed to revise Sec.  425.512(b)(1) to update a 
renumbered cross reference.
     We proposed to revise the heading for Sec.  425.512(b)(2) 
by removing the phrase ``and subsequent performance years.''
     We proposed to renumber the current paragraph (b)(3) of 
Sec.  425.512 to paragraph (b)(4) and revise the cross references 
therein to reflect this renumbering.
     We proposed to add a new paragraph (b)(3) to Sec.  425.512 
to establish for performance year 2025 and subsequent performance years 
that for an ACO that reports all of the eCQMs/Medicare CQMs in the APP 
Plus quality measure set, meeting the data completeness requirement for 
all of the eCQMs/Medicare CQMs, and administers the CAHPS for MIPS 
survey (except as specified in Sec.  414.1380(b)(1)(vii)(B)), CMS 
calculates the ACO's health equity adjusted quality performance score 
as the sum of the ACO's MIPS Quality performance category score for all 
measures in the APP Plus quality measure set and the ACO's health 
equity adjustment bonus points. The sum of these values may not exceed 
100 percent.
     We proposed to renumber the current paragraph (b)(4) of 
Sec.  425.512 to paragraph (b)(5) and revise the cross references 
therein to reflect this renumbering.
     We proposed to revise renumbered Sec.  415.512(b)(5)(iv) 
to add reference to new paragraph (c)(3)(iv).
     We proposed to revise Sec.  425.512(c)(3) introductory 
text by removing the phrase ``via the APP'' and adding in its place the 
phrase ``on the APP quality measure set or APP Plus quality measure set 
(as applicable)''.
     We proposed to revise Sec.  425.512(c)(3)(iii) by removing 
the phrase ``and subsequent performance years'' after ``For performance 
year 2024''.
     We proposed to add new paragraph (c)(3)(iv) to Sec.  
425.512 to establish for performance year 2025 and subsequent 
performance years, if CMS determines the ACO meets the requirements of 
the Extreme and Uncontrollable Circumstances policy and the ACO reports 
the APP Plus quality measure set, meets the data completeness 
requirement, and receives a MIPS Quality performance category score, 
CMS will calculate the ACO's quality score as the higher of the ACO's 
health equity adjusted quality performance score or the equivalent of 
the 40th percentile MIPS Quality performance category score across all 
MIPS Quality performance category scores, excluding entities/providers 
eligible for facility-based scoring, for the relevant performance year.
    After consideration of public comments received and for reasons 
discussed elsewhere in this final rule, we are finalizing our proposed 
regulation text changes as follows:
     We are finalizing as proposed to sunset the requirement 
that ACOs must submit quality data via the APP to satisfactorily report 
on behalf of the eligible clinicians who bill under the TIN of an ACO 
participant for purposes of the MIPS Quality performance category of 
the Quality Payment Program, and to revise Sec.  425.508(b) to indicate 
that the requirement will be applicable for performance years beginning 
in 2021-2024. We are also finalizing to replace the phrase 
``Alternative Payment Model Performance Pathway (APP)'' with the phrase 
``APM Performance Pathway (APP)'' to conform with the phrase used at 
Sec.  414.1367.
     We are finalizing as proposed to add a new paragraph (c) 
at Sec.  425.508 to establish that, for performance years beginning on 
or after January 1, 2025, ACOs must submit quality data via the APM 
Performance Pathway (APP) on the quality measures contained in the APP 
Plus quality measure set established under Sec.  414.1367 to 
satisfactorily report on behalf of the eligible clinicians who bill 
under the TIN of an ACO participant for purposes of the MIPS Quality 
performance category of the Quality Payment Program.
     We are finalizing as proposed to revise the section 
heading at Sec.  425.510 to ``Application of the APM Performance 
Pathway (APP) quality measure set or the APP Plus quality measure set 
(as applicable) to Shared Savings Program ACOs for performance years 
beginning on or after January 1, 2021.''
     We are finalizing as proposed to sunset the requirement 
that ACOs must report quality data on the APP quality measure set 
according to the method of submission established by CMS and to revise 
Sec.  425.510(b). We added a new paragraph (b)(1) at Sec.  425.510 to 
indicate that the requirement will be applicable for performance years 
beginning in 2021 through 2024.
     We are finalizing as proposed to add a new paragraph 
(b)(2) at Sec.  425.510 to establish that, for performance years 
beginning on or after January 1, 2025, ACOs must report quality data on 
the APP Plus quality measure set established under Sec.  414.1367, 
according to the submission method established by CMS.
     We are finalizing with modifications revisions to Sec.  
425.512(a)(2)(iii) to establish that, for performance years 2025 and 
2026, an ACO in the first performance year of the ACO's first agreement 
period under the Shared Savings Program will meet the quality 
performance standard if the ACO reports the APP Plus quality measure 
set and meets the data completeness requirement on all eCQMs/MIPS CQMs/
Medicare CQMs, and the CAHPS for MIPS survey (except as specified in 
Sec.  414.1380(b)(1)(vii)(B)),

[[Page 98113]]

and receives a MIPS Quality performance category score for the 
applicable performance year.
     Due to the modifications to Sec.  425.512(a)(2)(iii) 
above, we are also finalizing to add a new paragraph (iv) at Sec.  
425.512(a)(2) to establish that, for performance years 2027 and 
subsequent performance years, an ACO in the first performance year of 
the ACO's first agreement period under the Shared Savings Program will 
meet the quality performance standard if the ACO reports the APP Plus 
quality measure set and meets the data completeness requirement on all 
eCQMs/Medicare CQMs, and the CAHPS for MIPS survey (except as specified 
in Sec.  414.1380(b)(1)(vii)(B)), and receives a MIPS Quality 
performance category score for the applicable performance year.
     We are finalizing as proposed to revise the introductory 
paragraph (a)(5)(i) to Sec.  425.512 to read as follows: ``Except as 
specified in paragraphs (a)(2) and (7) of this section, CMS designates 
the quality performance standard as:''.
     We finalizing as proposed to revise the introductory 
paragraph (a)(5)(i)(A) to read as follows: ``For performance year 2024, 
the ACO reporting quality data on the APP quality measure set 
established under Sec.  414.1367 of this subchapter, according to the 
method of submission established by CMS and--''.
     We are finalizing with modifications revisions to the 
introductory paragraph (a)(5)(i)(B) to read as follows: ``For 
performance years 2025 and 2026, the ACO reporting quality data on the 
APP Plus quality measure set established under Sec.  414.1367 of this 
subchapter, according to the method of submission established by CMS 
and--''.
     Due to the modifications to Sec.  425.512(a)(5)(i)(B) 
above, we are adding new paragraph (a)(5)(i)(C) to Sec.  425.512 to 
read as follows: ``For performance year 2027 and subsequent performance 
years, the ACO reporting quality data on the APP Plus quality measure 
set established under Sec.  414.1367 of this subchapter, according to 
the method of submission established by CMS and--''.
     We are also finalizing to add new paragraphs 
(a)(5)(i)(C)(1) and (a)(5)(i)(C)(2) to indicate that an ACO will meet 
quality performance standard for performance year 2027 and subsequent 
years if it (1) achieves a health equity adjusted quality performance 
score that is equivalent to or higher than the 40th percentile across 
all MIPS Quality performance category scores, excluding entities/
providers eligible for facility-based scoring or (2) reports all of the 
eCQMs in the APP Plus quality measure set applicable for a performance 
year, meeting the data completeness requirement at Sec.  414.1340 of 
this subchapter for all eCQMs, and achieving a quality performance 
score equivalent to or higher than the 10th percentile of the 
performance benchmark on at least one of the four outcome measures in 
the APP Plus quality measure set and a quality performance score 
equivalent to or higher than the 40th percentile of the performance 
benchmark on at least one of the remaining measures in the APP Plus 
quality measure set.
     We are finalizing as proposed to add a new paragraph 
(a)(5)(ii)(A) to Sec.  425.512 to indicate that an ACO will meet the 
alternative quality performance standard for performance year 2024 if 
the ACO reports quality data on the APP quality measure set established 
under Sec.  414.1367 according to the method of submission established 
by CMS and achieves a quality performance score equivalent to or higher 
than the 10th percentile of the performance benchmark on at least one 
of the four outcome measures in the APP quality measure set.
     We are finalizing as proposed to add a new paragraph 
(a)(5)(ii)(B) to Sec.  425.512 to establish that an ACO will meet the 
alternative quality performance standard for performance year 2025 and 
subsequent years if the ACO reports the quality data on the APP Plus 
quality measure set established under Sec.  414.1367 according to the 
method of submission established by CMS and achieves a quality 
performance score equivalent to or higher than the 10th percentile of 
the performance benchmark on at least one of the outcome measures in 
the APP Plus quality measure set.
     We are finalizing with modification revisions to Sec.  
425.512(a)(5)(iii)(B) to indicate that for performance years 2025 and 
2026, an ACO will not meet the quality performance standard or the 
alternative quality performance standard if the ACO does not report any 
of the eCQMs/MIPS CQMs/Medicare CQMs in the APP Plus quality measure 
set and does not administer a CAHPS for MIPS survey (except as 
specified in Sec.  414.1380(b)(1)(vii)(B)).
     Due to the modifications to Sec.  425.512(a)(5)(iii)(B) 
above, we are also finalizing to add a new paragraph (a)(5)(iii)(C) to 
Sec.  425.512 to indicate that for performance year 2027 and subsequent 
performance years, an ACO will not meet the quality performance 
standard or the alternative quality performance standard if the ACO 
does not report any of the eCQMs/Medicare CQMs in the APP Plus quality 
measure set and does not administer a CAHPS for MIPS survey (except as 
specified in Sec.  414.1380(b)(1)(vii)(B) of this subchapter).
     We are finalizing to add a descriptive heading 
(``Facility-based scoring'') to Sec.  425.512(a)(7) to more accurately 
describe the policy at paragraph (a)(7). This change was proposed in 
the revised and republished regulation text (see 89 FR 62223) but not 
noted in the preamble of the CY 2025 PFS proposed rule. We are 
finalizing the heading to read as follows: ``Shared Savings Program 
Scoring Policy for Excluded APP Measures and APP Measures That Lack a 
Benchmark.''
     We are finalizing with minor wording modifications 
revisions to Sec.  425.512(a)(7) introductory text. We are also 
finalizing as proposed to revise (a)(7)(i) and to add new paragraphs 
(a)(7)(i)(A) and (B) to indicate for performance year 2024, we will use 
the higher of the ACO's health equity adjusted quality performance 
score or the equivalent of the 40th percentile MIPS Quality performance 
category score when an ACO reports all of the required measures, 
meeting the data completeness requirement for each measure in the APP 
quality measure set and receiving a MIPS Quality performance category 
score and the ACO meets either of the following:
    ++ The ACO's total available measure achievement points used to 
calculate the ACO's MIPS Quality performance category score is reduced 
under Sec.  414.1380(b)(1)(vii)(A).
    ++ At least one of the eCQMs/MIPS CQMs/Medicare CQMs does not have 
a benchmark as described at Sec.  414.1380(b)(1)(i)(A).
     We are finalizing with minor wording modifications to 
revise Sec.  425.512(a)(7)(ii) and add new paragraphs (a)(7)(ii)(A) and 
(B) to indicate for performance year 2025 and subsequent performance 
years, an ACO will receive the higher of the ACO's health equity 
adjusted quality performance score or the equivalent of the 40th 
percentile MIPS Quality performance category score when an ACO reports 
all of the required measures in the APP Plus quality measure set, 
meeting the data completeness requirement for each measure in the APP 
Plus quality measure set, and receiving a MIPS Quality performance 
category score, and the ACO meets either of the following:
    ++ The ACO's total available measure achievement points used to 
calculate the ACO's MIPS Quality performance category score is reduced 
under Sec.  414.1380(b)(1)(vii)(A).

[[Page 98114]]

    ++ At least one of the required measures in the APP Plus quality 
measure set does not have a benchmark as described at Sec.  
414.1380(b)(1)(i)(A).
     We are finalizing as proposed to revise Sec.  
425.512(b)(1) and (2) and (b)(4)(i) by removing the phrase ``APP 
measure set'' and replacing with the phrase ``APP quality measure set'' 
to align naming conventions for the two quality measure sets within the 
APP: the APP quality measure set and the APP Plus quality measure set.
     We are finalizing as proposed revisions to Sec.  
425.512(b)(1) to update a renumbered cross reference.
     We are finalizing as proposed to revise the heading for 
Sec.  425.512(b)(2) by removing the phrase ``and subsequent performance 
years.''
     We are finalizing as proposed to renumber the current 
paragraph (b)(3) of Sec.  425.512 to paragraph (b)(4) and to revise the 
cross references therein to reflect this renumbering.
     In the CY 2025 PFS proposed rule, we inadvertently omitted 
to propose a technical revision to Sec.  425.512(b)(4)(i), which 
currently states, ``For each measure in the APP quality measure set, 
CMS groups an ACO's performance into the top, middle, or bottom third 
of ACO measure performers by reporting mechanism'' (emphasis added). 
The revision would align the text of this section with our adoption of 
the APP Plus quality measure set for performance year 2025 and 
subsequent performance years. We are finalizing a revision to paragraph 
(b)(4)(i) to indicate that for each measure that an ACO is required to 
report for the applicable performance year, CMS groups an ACO's 
performance into the top, middle, or bottom third of ACO measure 
performers by reporting mechanism.
     We are finalizing with modifications to add a new 
paragraph (b)(3) to Sec.  425.512 to establish for performance year 
2025 and subsequent performance years that for an ACO that reports all 
of the required measures in the APP Plus quality measure set, meeting 
the data completeness requirement for all of the required measures in 
the APP Plus quality measure set, and administers the CAHPS for MIPS 
survey (except as specified in Sec.  414.1380(b)(1)(vii)(B)), CMS 
calculates the ACO's health equity adjusted quality performance score 
as the sum of the ACO's MIPS Quality performance category score for all 
measures in the APP Plus quality measure set and the ACO's health 
equity adjustment bonus points. The sum of these values may not exceed 
100 percent.
     We are finalizing as proposed to renumber the current 
paragraph (b)(4) of Sec.  425.512 to paragraph (b)(5) and to revise the 
cross references therein to reflect this renumbering.
     We are finalizing as proposed to revise the renumbered 
Sec.  415.512(b)(5)(iv) to add reference to new paragraph (c)(3)(iv).
     We are finalizing to add descriptive headings to 
redesignated paragraphs Sec.  425.512(b)(4) and (b)(5). These changes 
were proposed in the revised and republished regulation text (see 89 FR 
62222 through 62224) but not noted in the preamble of the CY 2025 PFS 
proposed rule.
     We are finalizing as proposed to revise Sec.  
425.512(c)(3) introductory text by removing the phrase ``via the APP'' 
and adding in its place the phrase ``on the APP quality measure set or 
APP Plus quality measure set (as applicable)''.
     We are finalizing as proposed to revise Sec.  
425.512(c)(3)(iii) by removing the phrase ``and subsequent performance 
years'' after ``For performance year 2024''.
     We are finalizing as proposed to add new paragraph 
(c)(3)(iv) to Sec.  425.512 to establish for performance year 2025 and 
subsequent performance years, if CMS determines the ACO meets the 
requirements of the Extreme and Uncontrollable Circumstances policy and 
the ACO reports the APP Plus quality measure set, meets the data 
completeness requirement, and receives a MIPS Quality performance 
category score, we will calculate the ACO's quality score as the higher 
of the ACO's health equity adjusted quality performance score or the 
equivalent of the 40th percentile MIPS Quality performance category 
score across all MIPS Quality performance category scores, excluding 
entities/providers eligible for facility-based scoring, for the 
relevant performance year.
c. Changes to the Methodology for Calculating the MIPS Quality 
Performance Category Score for Shared Savings Program ACOs Reporting 
the APP Plus Quality Measure Set
(1) Background
    Consistent with the authority to establish the quality reporting 
and other reporting requirements for the Medicare Shared Savings 
Program set forth in section 1899(b)(3) of the Act and the statutory 
requirements for the Quality Payment Program set forth in section 
1848(q) and (r) of the Act for MIPS and section 1833(z) of the Act for 
Advanced APMs, since the Shared Savings Program's alignment with the 
APP in performance year 2021, MIPS eligible clinicians identified on 
the Participation List or Affiliated Practitioner List of an APM Entity 
participating in a MIPS APM--including ACOs that participate in the 
Medicare Shared Savings Program--that report data via the APP have been 
scored according to the APP scoring methodology described at Sec.  
414.1367. The MIPS Quality performance category score is calculated 
according to the APP scoring methodology at Sec.  414.1367(c)(1) (85 FR 
84864). Under the waiver authority at section 1115A(d)(1) of the Act 
for CMS Innovation Center APMs and at section 1899(f) of the Act for 
the Medicare Shared Savings Program, the Cost performance category 
weight is zero percent as described at Sec.  414.1367(c)(2) (85 FR 
84864) for MIPS eligible clinicians that report via the APP. As noted 
in section 1848(q)(5)(C)(ii) of the Act, a MIPS eligible clinician in 
an APM for a performance period automatically earns a minimum score of 
one half of the highest potential score for the MIPS Improvement 
activities category for their participation in an APM for the 
performance period. These baseline scores are automatically applied to 
the MIPS Improvement activities performance category score for MIPS 
eligible clinician in an APM--including ACOs that participate in the 
Medicare Shared Savings Program--that report via the APP as described 
at Sec.  414.1367(c)(3) (85 FR 84865). The Promoting Interoperability 
performance category under the APP is reported and calculated in the 
same manner described at Sec.  414.1375 (85 FR 84865).
    As described in the CY 2021 PFS final rule, we waived the 
requirement to weight each MIPS performance category as described in 
section 1848(q)(5)(E) of the Act using the waiver authority in section 
1899(f) of the Act for Medicare Shared Savings Program for MIPS 
eligible clinicians that report via the APP--including ACOs that 
participate in the Medicare Shared Savings Program (85 FR 84865). The 
performance category weights used to calculate the final score for a 
MIPS eligible clinician who is scored through the APP at Sec.  
414.1367(d)(1) are:
     Quality: 50 percent.
     Cost: 0 percent.
     Improvement Activities: 20 percent.
     Promoting Interoperability: 30 percent.
    Additionally, in the CY 2021 PFS final rule, we also stated that 
under the authority provided in section 1848(q)(5)(F) of the Act, it 
may become necessary to reweight one or more performance categories (85 
FR 84866). As described at Sec.  414.1367(d)(2), if CMS determines, in 
accordance with

[[Page 98115]]

Sec.  414.1380(c)(2), that a different scoring weight should be 
assigned to the Quality or Promoting Interoperability performance 
category, CMS will redistribute the performance category weights as 
follows:
     If CMS reweights the Quality performance category to 0 
percent: Promoting Interoperability performance category is reweighted 
to 75 percent, and Improvement activities performance category is 
reweighted to 25 percent.
     If CMS reweights the Promoting Interoperability 
performance category to 0 percent: Quality performance category is 
reweighted to 75 percent, and Improvement activities performance 
category is reweighted to 25 percent.
    Lastly, as codified at Sec.  414.1367(e), final scoring for APM 
participants reporting to MIPS through the APP--including ACOs that 
participate in the Medicare Shared Savings Program--would follow the 
same methodology as established for MIPS generally at Sec.  414.1380 
(85 FR 84866).
    In performance year 2024, ACOs are scored on either the three 
eCQMs/MIPS CQMs/Medicare CQMs or the ten CMS Web Interface measures, 
the CAHPS for MIPS survey, and two administrative claims-based 
measures. Under this methodology, an ACO's MIPS Quality performance 
category score is calculated according to MIPS scoring rules for the 
Quality performance category established at Sec.  414.1380(b)(1) with 
exceptions for (1) measures that do not have a benchmark or do not meet 
the case minimum requirement and (2) measures that are identified as 
topped out. Specifically, each submitted measure that does not have a 
benchmark or does not meet the case minimum requirement is excluded 
from an ACO's total measure achievement points (numerator) and total 
available measure achievement points (denominator). Additionally, any 
measure that is identified as topped out is not subject to the scoring 
cap described at Sec.  414.1380(b)(1)(iv). Under current APP scoring 
rules, each required measure of the APP quality measure set that is not 
submitted by an ACO via the APP receives zero measure achievement 
points.
(2) Revisions
(a) Establishing the Data Submission Criteria for the APP Plus Quality 
Measure Set
    As discussed in section IV.A.4.e.(1)(b)(i) of the CY 2025 PFS 
proposed rule, for the APP Plus quality measure set, we proposed that 
Shared Savings Program ACOs that report the APP Plus quality measure 
set and MIPS eligible clinicians, groups, and APM Entities that choose 
to report the APP Plus quality measure set, will be required to report 
on all measures in the APP Plus quality measure set, as applicable (89 
FR 61859). Specifically, in Sec.  414.1335(b), we proposed to establish 
the data submission criteria for the APP Plus quality measure set, 
which would require the reporting of all measures within the APP Plus 
quality measure set, except for administrative claims-based quality 
measures.\537\
---------------------------------------------------------------------------

    \537\ As described at Sec.  414.1325(a)(2)(i), there are no data 
submission requirements for administrative claims-based quality 
measures as performance on such measures is calculated by CMS using 
administrative claims data, which includes claims submitted with 
dates of service during the applicable performance period that are 
processed no later than 60 days following the close of the 
applicable performance period.
---------------------------------------------------------------------------

    The MIPS Quality performance category score is calculated according 
to the APP scoring methodology at Sec.  414.1367(c)(1) (85 FR 84864 
through 85 FR 84865). As such, an ACO's MIPS Quality performance 
category score is calculated according to MIPS scoring rules for the 
Quality performance category established at Sec.  414.1380(b)(1) with 
exceptions for (1) measures that do not have a benchmark or do not meet 
the case minimum requirement and (2) measures that are identified as 
topped out. Consistent with our proposal described above, under Sec.  
414.1380(b)(1), for performance year 2025 and subsequent performance 
years, ACOs would be scored on all required measures in the APP Plus 
quality measure set.
    In the CY 2025 PFS proposed rule, we proposed that the policies 
related to MIPS performance category scoring in the APP at Sec.  
414.1367(c) would apply to Shared Savings Program ACOs that report the 
APP Plus quality measure set for the purpose of meeting the Shared 
Savings Program's quality performance standard (89 FR 61859).\538\ 
Specifically, we proposed that the APP scoring policies at Sec.  
414.1367(c)(1) for the calculation of the ACO's MIPS Quality 
performance category, Sec.  414.1367(c)(2) for the calculation of an 
ACO's MIPS Cost performance category, Sec.  414.1367(c)(3) for the 
calculation of an ACO's MIPS Improvement activities performance 
category, and Sec.  414.1367(c)(4) for the calculation of an ACO's MIPS 
Promoting Interoperability performance category would apply to ACOs 
that report the APP Plus quality measure set in performance year 2025 
and subsequent performance years (89 FR 61859). Additionally, we 
proposed that the performance category weights described in Sec.  
414.1367(d) and methodology used to calculate the final score described 
in Sec.  414.1367(e) would apply to Shared Savings Program ACOs that 
report the APP Plus quality measure set in performance year 2025 and 
subsequent performance years (89 FR 61859).
---------------------------------------------------------------------------

    \538\ This discussion describes standards under the APP, which 
are applicable to APM Entities. We refer throughout to ACOs in lieu 
of APM Entities as we are discussing the application of APP 
standards to ACOs participating in the Shared Savings Program, and 
thus ACOs are the sole relevant type of APM Entity.
---------------------------------------------------------------------------

    In the CY 2025 PFS proposed rule (89 FR 61859), we stated that if 
our proposals are finalized, then in performance year 2025, ACOs would 
be scored on the required eight measures in the APP Plus quality 
measure set: five eCQMs/Medicare CQMs, the CAHPS for MIPS survey, and 
two administrative claims-based measures. In performance years 2026 and 
2027, ACOs would be scored on the required nine measures: six eCQMs/
Medicare CQMs, the CAHPS for MIPS survey, and two administrative 
claims-based measures. In performance year 2028 and subsequent 
performance years, ACOs would be scored on the required eleven 
measures: eight eCQMs/Medicare CQMs, the CAHPS for MIPS survey, and two 
administrative claims-based measures. We referred readers to Tables 34, 
35, and 36 in the CY 2025 PFS proposed rule for additional detail on 
the required measures in each performance year. We also referred 
readers to section IV.A.4.e.(1)(b)(i) of the CY 2025 PFS proposed rule 
for a discussion of our proposal to establish the data submission 
criteria for the APP Plus quality measure set, specifically the 
proposal to require the reporting of all measures within the APP Plus 
quality measure set.
    We solicited comments on this proposal. The following is a summary 
of the public comments we received on this proposal and our responses. 
Many of the commenters expressing concern with our proposal shared 
those concerns in the context of our proposal to require Shared Savings 
Program ACOs to report the APP Plus measure set. To the extent that 
those comments overlap with regard to the burden associated with APP 
Plus quality measure set, those comments and our responses are captured 
in section III.G.4.b(2)(a) of this final rule.
    Comment: We received one comment in support of our proposals 
related to MIPS performance category scoring in the APP that would 
apply to Shared Savings Program ACOs that report the APP Plus quality 
measure set for the purpose of meeting the Shared Savings Program's 
quality performance standard. However, this commenter and others 
expressed reservations about the

[[Page 98116]]

proposal to require Shared Savings Program ACOs to report all measures 
in the APP Plus measure set for purposes of meeting the quality 
reporting standard.
    Response: We thank the commenter for supporting our proposal. As 
discussed in section IV.A.4.e.(1)(b)(i) of this final rule, we are 
finalizing as proposed that, for the APP Plus quality measure set, 
Shared Savings Program ACOs that report the APP Plus quality measure 
set and MIPS eligible clinicians, groups, and APM Entities that choose 
to report the APP Plus quality measure set, will be required to report 
on all measures in the APP Plus quality measure set, as applicable. 
Specifically, in Sec.  414.1335(b), we are finalizing to establish the 
data submission criteria for the APP Plus quality measure set, which 
would require the reporting of all measures within the APP Plus quality 
measure set, except for administrative claims-based quality measures. 
Under Sec.  414.1380(b)(1), for performance year 2025 and subsequent 
performance years, ACOs would be scored on all required measures in the 
APP Plus quality measure set.
    We refer readers to section IV.A.4.e.(1)(b)(i) of this final rule 
for a discussion of our final policy to establish the data submission 
criteria for the APP Plus quality measure set, specifically the 
proposal to require the reporting of all measures within the APP Plus 
quality measure set. We are finalizing as proposed that the policies 
related to MIPS performance category scoring in the APP at Sec.  
414.1367(c) will apply to Shared Savings Program ACOs that report the 
APP Plus quality measure set for the purpose of meeting the Shared 
Savings Program's quality performance standard. Specifically, we are 
finalizing that the APP scoring policies at Sec.  414.1367(c)(1) for 
the calculation of the ACO's MIPS Quality performance category, Sec.  
414.1367(c)(2) for the calculation of an ACO's MIPS Cost performance 
category, Sec.  414.1367(c)(3) for the calculation of an ACO's MIPS 
Improvement activities performance category, and Sec.  414.1367(c)(4) 
for the calculation of an ACO's MIPS Promoting Interoperability 
performance category will apply to ACOs that report the APP Plus 
quality measure set in performance year 2025 and subsequent performance 
years. Additionally, we are finalizing that Sec.  414.1367(d) for the 
performance category weights and Sec.  414.1367(e) for the calculation 
of the final score will apply to Shared Savings Program ACOs that 
report the APP Plus quality measure set in performance year 2025 and 
subsequent performance years.
    Based on the policies finalized in section III.G.4.b.(2)(b) of this 
final rule, in performance year 2025, ACOs will be scored on the 
required six measures in the APP Plus quality measure set: four eCQMs/
MIPS CQMs/Medicare CQMs, the CAHPS for MIPS survey, and one 
administrative claims-based measure. In performance year 2026, ACOs 
will be scored on the required eight measures: five eCQMs/MIPS CQMs/
Medicare CQMs, the CAHPS for MIPS survey, and two administrative 
claims-based measures. In performance year 2027, ACOs will be scored on 
the required nine measures: six eCQMs/Medicare CQMs, the CAHPS for MIPS 
survey, and two administrative claims-based measures. Beginning with 
performance year 2028 or the performance year that is one year after 
the eCQM specifications become available for Quality ID: 487 Screening 
for Social Drivers of Health and Quality ID: 493 Adult Immunization 
Status, whichever is later, ACOs will be scored on the required eleven 
measures: eight eCQMs/Medicare CQMs, the CAHPS for MIPS survey, and two 
administrative claims-based measures. For Quality ID: 487 Screening for 
Social Drivers of Health or Quality ID: 493 Adult Immunization Status 
to be incorporated into the APP Plus quality measure set in performance 
year 2028, the eCQM specification for the measure must be published on 
the eCQI resource center by May 2027, and the measure would be required 
to be reported by ACOs in early 2029. We refer readers to Tables 38, 
39, 40, and 41 in section III.G.4.f of this final rule for additional 
detail on the required measures in each performance year.
(b) Establishing a Complex Organization Adjustment for Virtual Groups 
and APM Entities
    To account for the organizational complexities faced by Virtual 
Groups and APM Entities, including Shared Savings Program ACOs, when 
reporting eCQMs, in section IV.A.4.f.(1)(b)(iii) of the CY 2025 PFS 
proposed rule, we proposed to establish a Complex Organization 
Adjustment beginning in the CY 2025 performance period/2027 MIPS 
payment year (89 FR 61859). A Virtual Group and an APM Entity would 
receive one measure achievement point for each submitted eCQM that 
meets the case minimum requirement at Sec.  414.1380(b)(1)(iii) and the 
data completeness requirement at Sec.  414.1340. Each reported eCQM may 
not score more than 10 measure achievement points and the total 
achievement points (numerator) may not exceed the total available 
measure achievement points (denominator) for the quality performance 
category. The Complex Organization Adjustment for a Virtual Group or 
APM Entity may not exceed 10 percent of the total available measure 
achievement points in the quality performance category. The adjustment 
would be added for each measure submitted at the individual measure 
level.
    Since Shared Savings Program ACOs are APM Entities, this proposal 
would be applicable to Shared Savings Program ACOs reporting the APP 
Plus quality measure set beginning in performance year 2025. We refer 
readers to section IV.A.4.f.(1)(b)(iii) of the CY 2025 PFS proposed 
rule for discussion of our proposal to establish the Complex 
Organization Adjustment for Virtual Groups and APM Entities (89 FR 
62080 through 62083). Under our proposal as described in section 
III.G.4.f of the CY 2025 PFS proposed rule, the APP Plus quality 
measure set for Shared Savings Program ACOs would include eight 
measures (five eCQMs/Medicare CQMs, two administrative claims measures, 
and the CAHPS for MIPS Survey measure) in performance year 2025 (Table 
34); nine measures (six eCQMs/Medicare CQMs, two administrative claims 
measures, and the CAHPS for MIPS Survey measure) in performance years 
2026 and 2027 (Table 35); and eleven measures (eight eCQMs/Medicare 
CQMs, two administrative claims measures, and the CAHPS for MIPS Survey 
measure) in performance years 2028 and subsequent performance years 
(Table 36).
    We solicited public comment on the proposal to implement a Complex 
Organization Adjustment for Virtual Groups and APM Entities, including 
ACOs in the Shared Savings Program. We refer readers to section 
IV.A.4.f.(1)(b)(iii) of this final rule for summaries of the comments 
and our responses.
    As discussed in section IV.A.4.f.(1)(b)(iii) of this final rule, we 
are finalizing as proposed our proposal to establish a Complex 
Organization Adjustment beginning in the CY 2025 performance period/
2027 MIPS payment year to account for the organizational complexities 
faced by Virtual Groups and APM Entities, including Shared Savings 
Program ACOs, when reporting eCQMs. A Virtual Group and an APM Entity 
will receive one measure achievement point for each submitted eCQM that 
meets the case minimum requirement at Sec.  414.1380(b)(1)(iii) and the 
data completeness requirement at Sec.  414.1340. Each reported eCQM may 
not score

[[Page 98117]]

more than 10 measure achievement points and the total achievement 
points (numerator) may not exceed the total available measure 
achievement points (denominator) for the quality performance category. 
The Complex Organization Adjustment for a Virtual Group or APM Entity 
may not exceed 10 percent of the total available measure achievement 
points in the quality performance category. The adjustment will be 
added for each measure submitted at the individual measure level. Since 
Shared Savings Program ACOs are APM Entities, this policy will be 
applicable to Shared Savings Program ACOs reporting the APP Plus 
quality measure set beginning in performance year 2025. We refer 
readers to section IV.A.4.f.(1)(b)(iii) of this final rule for 
discussion of our policy to establish the Complex Organization 
Adjustment for Virtual Groups and APM Entities.
    As the Adult Universal Foundation measures are phased into the APP 
Plus quality measure set, ACOs that participate in the Shared Savings 
Program will be required to report on a larger measure set relative to 
other eCQM reporters. Under our policy finalized in section III.G.4.f 
of this final rule, the APP Plus quality measure set for Shared Savings 
Program ACOs will include six measures (four eCQMs/MIPS CQMs/Medicare 
CQMs, one administrative claims-based measure, and the CAHPS for MIPS 
Survey measure) in performance year 2025 (Table 39); eight measures 
(five eCQMs/MIPS CQMs/Medicare CQMs, two administrative claims-based 
measures, and the CAHPS for MIPS Survey measure) in performance years 
2026 (Table 40); nine measures (six eCQMs/Medicare CQMs, two 
administrative claims-based measures, and the CAHPS for MIPS Survey 
measure) in performance years 2027 (Table 41); and eleven measures 
(eight eCQMs/Medicare CQMs, two administrative claims-based measures, 
and the CAHPS for MIPS Survey measure) beginning with performance year 
2028 or the performance year that is one year after the eCQM 
specifications become available for Quality ID: 487 Screening for 
Social Drivers of Health and Quality ID: 493 Adult Immunization Status, 
whichever is later (Table 42).
(c) Scoring Shared Savings Program ACOs Reporting Medicare CQMs Using 
Flat Benchmarks
    In the CY 2024 PFS final rule, we finalized our proposal to 
establish new benchmarks for scoring ACOs on the Medicare CQMs under 
MIPS in alignment with MIPS benchmarking policies (88 FR 79110). As 
historical Medicare CQM data would not be available, we finalized that 
for performance years 2024 and 2025, we will score Medicare CQMs using 
performance period benchmarks. We also finalized that, for performance 
year 2026 and subsequent performance years, when baseline period data 
are available to establish historical benchmarks in a manner that is 
consistent with the MIPS benchmarking policies at Sec.  
414.1380(b)(1)(ii), we will score Medicare CQMs using historical 
benchmarks.
    A few commenters noted in our proposal in the CY 2024 PFS proposed 
rule (88 FR 79109 through 79110) their concern about ACOs being 
compared only to other ACOs that report Medicare CQMs since the 
Medicare CQMs would be available only to Shared Savings Program ACOs. 
One commenter stated their preference to have their quality performance 
compared to all other participants on these measures, while another 
commenter stated that CMS should stop measuring ACOs against each other 
and instead measure ACOs on a national standard so that all ACOs can 
pass and do not lose out on savings due to arbitrary quality decile cut 
points. In our response to these comments, we stated that given that 
benchmarks are specific to each collection type and that we proposed to 
establish Medicare CQMs as a new collection type for only Shared 
Savings Program ACOs, only ACO data will be available to benchmark 
Medicare CQMs. Additionally, the health equity adjustment would be 
applicable to Medicare CQMs for purposes of determining shared savings 
payments/losses. The application of the health equity adjustment would 
help improve performance when ACOs deliver high quality care to 
underserved patient populations. For these reasons, we stated in the CY 
2025 PFS proposed rule that it is appropriate to establish benchmarks 
for Medicare CQMs that are consistent with MIPS benchmarking policies 
(89 FR 61860). ACOs that prefer to be compared to clinicians at large 
may do so by reporting eCQMs or MIPS CQMs, for which CMS calculates a 
benchmark using data reported by MIPS eligible clinicians reporting 
under the chosen collection type.
    In performance year 2022, ACOs had a higher average performance on 
quality measures they were required to report in order to share in 
savings compared to other similarly sized clinician groups not in the 
Shared Savings Program.\539\ This includes statistically significant 
higher performance for quality measures related to diabetes and blood 
pressure control; breast cancer and colorectal cancer screening; 
tobacco screening and smoking cessation; and depression screening and 
follow-up.\540\ In shifting to Medicare CQMs, ACO performance would be 
benchmarked against other ACOs only reporting Medicare CQMs. Since ACOs 
are high performers relative to comparably sized MIPS groups, 
benchmarking Medicare CQMs using only ACO data would lower some ACOs' 
MIPS measure achievement points on those measures. In other words, 
high-performing ACOs could earn lower measure achievement points 
relative to comparable MIPS groups because the Medicare CQM 
benchmarking pool is comprised of higher-than-average performance data-
in effect, creating a ``tournament approach'' to scoring Medicare CQMs 
wherein ACOs must compete with other ACOs to earn measure achievement 
points. As we stated in the CY 2025 PFS proposed rule, this could be 
particularly disadvantageous for ACOs that serve a high proportion of 
underserved populations because, while ACOs that report eCQMs and/or 
Medicare CQMs and serve a high proportion of underserved populations 
are eligible for health equity adjustment points, ACOs must score in 
the top or middle thirds of ACO measure performers to earn health 
equity adjustment points (89 FR 61860).
---------------------------------------------------------------------------

    \539\ Centers for Medicare & Medicaid Services (2023). Medicare 
Shared Savings Program Saves Medicare More Than $1.8 Billion in 2022 
and Continues to Deliver High-quality Care. [Press release]. https://www.cms.gov/newsroom/press-releases/medicare-shared-savings-program-saves-medicare-more-18-billion-2022-and-continues-deliver-high.
    \540\ Id.
---------------------------------------------------------------------------

    As described in section III.G.4.b.(2)(b) of the CY 2025 PFS 
proposed rule, for performance year 2025 and subsequent performance 
years, we proposed to streamline the collection types available for 
Shared Savings Program ACOs reporting the APP Plus quality measure set 
to the eCQM and Medicare CQM collection types (89 FR 61860). Therefore, 
as discussed in section IV.A.4.f.(1)(c)(i) of the CY 2025 PFS proposed 
rule, we proposed to add Sec.  414.1380(b)(1)(ii)(F) to state that 
beginning in the CY 2025 performance period/2027 MIPS payment year, 
measures of the Medicare CQM collection type would be scored using flat 
benchmarks for their first two performance periods in MIPS (89 FR 
61860). Our proposal in section IV.A.4.f.(1)(c)(i) of the CY 2025 PFS 
proposed rule would expand the use of flat benchmarks to Medicare CQMs 
in

[[Page 98118]]

their first two performance periods in MIPS (89 FR 61860). The use of 
flat benchmarks would allow ACOs with high scores to earn maximum or 
near maximum achievement points while allowing room for quality 
improvement and rewarding that improvement in subsequent years. Use of 
flat benchmarks also helps to ensure that ACOs with high quality 
performance on a measure are not penalized as low performers. As 
discussed in section IV.A.4.f.(1)(c)(i) of the CY 2025 PFS proposed 
rule, we proposed to add Sec.  414.1380(b)(1)(ii)(F) to incorporate 
this proposal (89 FR 61860). The use of historical benchmarks, when 
data are available, is consistent with MIPS benchmarking policies at 
Sec.  414.1380(b)(1)(ii), allow ACOs to know benchmarks prior to start 
of the performance year, and create opportunities for improvement.
    Table 30 in the CY 2025 PFS proposed rule (89 FR 61861), which is 
the same as the following Table 33, lists the Medicare CQMs in the APP 
Plus quality measure set that would be eligible for flat benchmarks in 
performance year 2025 through performance year 2029 under our proposal.
[GRAPHIC] [TIFF OMITTED] TR09DE24.072

    As discussed in the CY 2025 PFS proposed rule, a quality 
performance benchmark is the performance rate an ACO must achieve to 
earn the corresponding quality points for each measure (89 FR 61861). 
Flat benchmarks assign a performance rate range to each decile. In flat 
benchmarks for non-inverse measures, any performance rate at or above 
90 percent would be in the top decile; any performance rate between 80 
percent and 89.99 percent would be in the second highest decile, and so 
on. For inverse measures, this would be reversed--any performance rate 
at or below 10 percent would be in the top decile; any performance rate 
between 10.01 percent and 20 percent would be in the second highest 
decile, and so on. The number of measure achievement points received 
for each measure is determined based on the applicable benchmark decile 
category and the percentile distribution.
    For non-inverse measures, better quality performance is indicated 
by a higher performance rate. For example, Quality #: 001 Controlling 
High Blood Pressure is a non-inverse measure that measures the 
percentage of patients 18-85 years of age who had a diagnosis of 
hypertension and whose blood pressure was adequately controlled (<140/
90 mmHg) during the measurement period. Better quality performance on 
this measure is demonstrated by having a higher percentage of patients 
whose blood pressure was adequately controlled. Table 31 in the CY 2025 
PFS proposed rule (89 FR 61861), which is the same as the following 
Table 34, lists the flat benchmarks for a non-inverse Medicare CQM 
under our proposal described in section IV.A.4.f.(1)(c)(i) of the CY 
2025 PFS proposed rule.
[GRAPHIC] [TIFF OMITTED] TR09DE24.073

    For example, if an ACO reports a non-inverse Medicare CQM in its 
first two performance periods in MIPS in performance year 2025 and 
earns a performance rate of 55.25 percent, then the ACO would score in 
the 6th decile on that measure.
    For inverse measures, better quality performance is indicated by a 
lower performance rate. This is reflected in flat benchmark such that 
lower quality performance rates are found in higher deciles. For 
example, Quality #: 001

[[Page 98119]]

Diabetes: Hemoglobin A1c (HbA1c) Poor Control (>9%) is an inverse 
quality measure that measures the percentage of patients 18-75 years of 
age with diabetes who had hemoglobin A1c >9.0 percent during the 
measurement period. Better quality performance on this measure is 
demonstrated by having a lower percentage of patients whose HbA1c was 
>9.0 percent. Table 32 in the CY 2025 PFS proposed rule (89 FR 61862), 
which is the same as the following Table 35, lists the flat benchmarks 
for an inverse Medicare CQM under our proposal described in section 
IV.A.4.f.(1)(c)(i) of the CY 2025 PFS proposed rule.
[GRAPHIC] [TIFF OMITTED] TR09DE24.074

    For example, if an ACO reports an inverse Medicare CQM in its first 
two performance periods in MIPS in performance year 2025 and earns a 
performance rate of 12.25 percent, then the ACO would score in the 9th 
decile on that measure. In performance year 2025, Quality #: 001 
Diabetes: Hemoglobin A1c (HbA1c) Poor Control (>9%) is the only inverse 
Medicare CQM.
    There are scoring scenarios in which ACOs would earn higher measure 
achievement points under flat benchmarks compared to those they would 
earn under performance period benchmarks. Most notable are scenarios in 
which ACOs have a tight distribution of performance rates on a measure. 
For example, a non-inverse measure for which a performance rate of 
90.00 percent is in the 8th decile. In this example, an ACO that 
reported a performance rate of 90.00 percent would be scored in the 8th 
decile when the hypothetical performance period benchmark is applied. 
Using the flat benchmarks described in Table 34 of this final rule, an 
ACO that reported a performance rate of 90.00 percent would be scored 
in the 10th decile, resulting in greater measure achievement points 
than under the hypothetical performance period benchmarks described in 
this example. For more details on the calculation of measure 
achievement points, we refer readers to the ``APM Performance Pathway 
(APP) Toolkit'' which is updated for each performance year and posted 
in the QPP Resource Library.
    We solicited comment on our proposal to score ACOs reporting 
Medicare CQMs using flat benchmarks in their first two performance 
periods in MIPS. The following is a summary of the comments we received 
and our responses.
    Comment: Many commenters supported our proposal to score ACOs 
reporting Medicare CQMs using flat benchmarks. Commenters noted that 
flat benchmarks will make Medicare CQM scoring more predictable and is 
fair. One commenter noted that flat benchmarks would allow ACOs with 
high scores to earn maximum or near maximum achievement points while 
allowing room for quality improvement and rewarding that improvement in 
subsequent years. Another commenter stated that flat benchmarks would 
avoid ``tournament'' approach that is typically found in a group of 
high performers and allow the opportunity for improvements without 
penalizing high performers.
    One commenter supported flat benchmarking for the first two 
performance years for Medicare CQMs and stated that it will be a 
difficult transition for ACOs to progress from the CMS Web Interface 
attestation method to CQM/eCQM reporting and sees that Medicare CQM 
flat benchmarking will remove uncertainty from ACO attestation to 
Medicare CQMs as they will no longer have to rely on benchmarking based 
upon the performance year.
    Response: We thank commenters for their support of our proposal. As 
discussed in section IV.A.4.f.(1)(c)(i) of this final rule, we are 
finalizing our proposal with modification to add Sec.  
414.1380(b)(1)(ii)(F) to state that beginning in the CY 2025 
performance period/2027 MIPS payment year, measures of the Medicare CQM 
collection type would be scored using flat benchmarks for their first 
two performance periods in MIPS. As we stated in the CY 2025 PFS 
proposed rule (89 FR 61860), the use of flat benchmarks would allow 
ACOs with high scores to earn maximum or near maximum achievement 
points while allowing room for quality improvement and rewarding that 
improvement in subsequent years and would also help to ensure that ACOs 
with high quality performance on a measure are not penalized as low 
performers.
    Comment: One commenter appreciated the proposal to refine Medicare 
CQMs away from the retrospective curve, but expressed concern that the 
proposed benchmarks are still too high. The commenter stated that the 
proposed percentiles would still result in many ACOs falling below the 
40th percentile and losing savings when in the accurate sample 
methodology, they would have succeeded. The commenter recommended that 
CMS create an adjustment factor to the percentiles based on the 
experienced drop in eCQMs, MIPS CQMs, and Medicare CQMs reported in 
2023 and

[[Page 98120]]

2024 compared to Web Interface reporting. The commenter also stated 
that their testing shows a drop in accuracy for Medicare CQMs that will 
cost ACOs millions of dollars in shared savings and noted that while 
they appreciate CMS' proposals in this area, CMS should adjust 
benchmarks to account for the observed drop in accuracy.
    Response: We thank the commenter for their feedback. As described 
in our proposal, there are scoring scenarios in which ACOs would earn 
higher measure achievement points under flat benchmarks compared to 
those they would earn under performance period benchmarks (89 FR 
61862). Most notable are scenarios in which ACOs have a tight 
distribution of performance rates on a measure. For example, a non-
inverse measure for which a performance rate of 90.00 percent is in the 
8th decile. In this example, an ACO that reported a performance rate of 
90.00 percent would be scored in the 8th decile when the hypothetical 
performance period benchmark is applied. Using the flat benchmarks 
described in Table 34 of this final rule, an ACO that reported a 
performance rate of 90.00 percent would be scored in the 10th decile, 
resulting in greater measure achievement points than under the 
hypothetical performance period benchmarks described in this example, 
which would have resulted in a score in the 8th decile.
    In response to the commenter's suggestion that CMS create an 
adjustment factor to the percentiles based on the experienced drop in 
eCQMs, MIPS CQMs, and Medicare CQMs reported in 2023 and 2024 compared 
to CMS Web Interface reporting, we note that section 1899(b)(3)(C) of 
the Act directs that the Secretary shall establish quality performance 
standards to assess the quality of care furnished by ACOs and seek to 
improve the quality of care furnished by ACOs over time by specifying 
higher standards, new measures, or both for purposes of assessing such 
quality of care. Applying an adjustment factor to downwardly adjust 
benchmarks across collection types is not consistent with our intent to 
improve quality of care furnished by ACOs over time. Additionally, 
consistent with the goal of supporting ACOs in their transition to all 
payer/all patient eCQMs/MIPS CQMs, in the CY 2024 PFS final rule, we 
finalized that ACOs that report Medicare CQMs would be eligible for the 
health equity adjustment to their quality performance category score 
when calculating shared savings payments (88 FR 79110). The health 
equity adjustment upwardly adjusts the MIPS quality performance score 
for ACOs that report eCQMs/MIPS CQMs/Medicare CQMs, are high performing 
on quality, and serve a higher proportion of underserved beneficiaries.
    Comment: Many commenters recommended that flat benchmarks for 
Medicare CQM be made permanent rather than for two years because ACOs 
are high performers compared to non-ACO MIPS clinicians and only 
comparing ACOs against each other will make benchmarks very high and 
more difficult to achieve. One commenter recommended that CMS consider 
extending the flat benchmark scoring policies for Medicare CQMs beyond 
each measure's first two performance periods.
    Response: In response to comments that flat benchmarks be applied 
to Medicare CQMs permanently or beyond the first two performance 
periods, we believe that the baseline period data, which will be 
available to establish historical benchmarks is consistent with MIPS 
benchmarking policies at Sec.  414.1380(b)(1)(ii). As we stated in the 
CY 2025 PFS proposed rule (89 FR 61860), the use of historical 
benchmarks, when data are available, allow ACOs to know benchmarks 
prior to start of the performance year and create opportunities for 
improvement. Also, as discussed in the CY 2024 PFS final rule, since 
Medicare CQMs would be subject to MIPS scoring policies, the 
application of MIPS benchmarking policies to Medicare CQMs is both 
logical and necessary for implementation of the new collection type (88 
FR 79180).
    Comment: Several commenters requested clarification on whether flat 
benchmarks will apply to Medicare CQMs retroactively for the 2024 
performance year. Some commenters recommended that CMS retroactively 
apply this policy for the 2024 performance period. Another commenter 
recommended the use of flat benchmarks for performance years 2024 and 
2025 since historical Medicare CQM data will not be available until 
2026.
    Response: We did not propose to retroactively apply flat benchmarks 
to Medicare CQMs in performance year 2024. Shared Savings Program ACOs 
will have the option to report quality data via the APP using the CMS 
Web Interface or eCQM/MIPS CQM/Medicare CQM collection types in 
performance year 2024. The option to report using one or more of four 
collection types in performance year 2024 will allow ACOs to select the 
submission method that is most appropriate and advantageous for their 
situation and technological capabilities. For performance year 2024, we 
will score Medicare CQMs using performance period benchmarks as 
finalized in the CY 2024 PFS final rule (88 FR 79110).
    We note in section III.G.4.b.(2)(b) of this final rule that, after 
considering public comments, we are finalizing with modification our 
proposal to not include the MIPS CQM collection type for Shared Savings 
Program ACOs reporting the APP Plus quality measure set. Specifically, 
we are finalizing the inclusion of MIPS CQM collection type for ACOs 
reporting the APP Plus quality measure set for performance years 2025 
and 2026. The MIPS collection type will not be available for ACOs 
reporting the APP Plus quality measure set beginning in performance 
year 2027. We recognize flat benchmarks may provide more assurance to 
ACOs than the extension of the MIPS CQMs and as such, after considering 
public comments, we are finalizing in section IV.A.4.f.(1)(c)(i) of 
this final rule that, beginning in the CY 2025 performance period/2027 
MIPS payment year, measures of the Medicare CQM collection type will be 
scored using flat benchmarks for their first two performance periods in 
MIPS.
    Comment: Many commenters recommended that CMS release performance 
data on Medicare CQMs publicly for ACOs to better understand 
performance.
    Response: The Shared Savings Program releases performance year ACO-
level financial and quality performance data annually on https://data.cms.gov. We anticipate updating the public use files with Medicare 
CQM performance data when the data are available.
    After consideration of public comments and as discussed in section 
IV.A.4.f.(1)(c)(i) of this final rule, we are finalizing as proposed to 
add Sec.  414.1380(b)(1)(ii)(F) to state that beginning in the CY 2025 
performance period/2027 MIPS payment year, measures of the Medicare CQM 
collection type would be scored using flat benchmarks for their first 
two performance periods in MIPS.
    Table 36 lists the Medicare CQMs in the APP Plus quality measure 
set that will be eligible for flat benchmarks beginning in performance 
year 2025 through performance year 2028, or the performance year that 
is one year after the eCQM specifications become available for Quality 
#: 487 Screening for Social Drivers of Health and Quality #: 493 Adult 
Immunization Status, whichever is later, under the policies being 
finalized in this final rule.

[[Page 98121]]

Medicare CQM versions of Quality #: 001 Diabetes: Hemoglobin A1c 
(HbA1c) Poor Control (>9%), Quality #: 134 Preventive Care and 
Screening: Screening for Depression and Follow-up Plan, and Quality #: 
236 Controlling High Blood Pressure will be scored using a flat 
benchmark in performance years 2025. Medicare CQM version of Quality #: 
112 Breast Cancer Screening will be scored using a flat benchmark in 
performance years 2025 and 2026. Medicare CQM version of Quality #: 113 
Colorectal Cancer Screening will be scored using a flat benchmark in 
performance years 2026 and 2027. Medicare CQM version of Quality #: 305 
Initiation and Engagement of Substance Use Disorder Treatment will be 
scored using a flat benchmark in performance years 2027 and 2028. 
Quality #: 487 Screening for Social Drivers of Health and Quality #: 
493 Adult Immunization Status will be eligible for flat benchmarks for 
two years beginning with performance year 2028 or the performance year 
that is one year after the eCQM specifications become available for 
these measures, whichever is later.
[GRAPHIC] [TIFF OMITTED] TR09DE24.075

    We are also finalizing as proposed (1) the flat benchmarks, as 
listed in Table 31 of the CY 2025 PFS proposed rule (89 FR 61861) and 
Table 34 of this final rule, for a non-inverse Medicare CQM, and (2) 
the flat benchmarks, as listed in Table 32 of the CY 2025 PFS proposed 
rule (89 FR 61862) and Table 35 of this final rule, for an inverse 
Medicare CQM under our final policy described in section 
IV.A.4.f.(1)(c)(i) of this final rule.
(3) Changes to Regulation Text
    As discussed in sections III.G.4.c.(2)(a), III.G.4.c.(2)(b), and 
III.G.4.c.(2)(c) of the CY 2025 PFS proposed rule (89 FR 61858 through 
61862), we proposed to establish scoring rules to calculate the MIPS 
Quality performance category score for ACOs reporting the APP Plus 
quality measure set for performance year 2025 and subsequent 
performance years. We stated that we believe that these proposed 
scoring rules would incentivize the reporting of eCQMs in the APP Plus 
quality measure set while continuing to support ACOs that report 
Medicare CQMs as they build the infrastructure, skills, knowledge, and 
expertise necessary to aggregate patient data to report digital quality 
measures. We are finalizing these policies as proposed. We refer 
readers to sections IV.A.4.e.(1)(b)(i), IV.A.4.f.(1)(b)(iii), and 
IV.A.4.f.(1)(c)(i) of this final rule for changes to the regulation 
text at 42 CFR part 414.
d. Extending the eCQM Reporting Incentive for Meeting the Shared 
Savings Program Quality Performance Standard
(1) Background
    In the CY 2023 PFS final rule, we extended the incentive for 
reporting eCQMs/MIPS CQMs through performance year 2024 to align with 
the timeline for sunsetting of the CMS Web Interface reporting option 
and to allow ACOs an additional year to gauge their performance on the 
eCQMs/MIPS CQMs before full reporting of the measures are required 
beginning in performance year 2025 (87 FR 69836 through 69838). We 
originally adopted this incentive in the CY 2022 PFS final rule to 
encourage ACOs to begin the transition to eCQM/MIPS CQM reporting in 
performance years 2022 and 2023 (86 FR 65269). We finalized an update 
to the incentive for performance year 2024 such that:
     If an ACO reports the three eCQMs/MIPS CQMs, meets the 
data completeness requirement at Sec.  414.1340 and the case minimum 
requirement at Sec.  414.1380 for all three eCQMs/MIPS CQMs, and:
     Achieves a quality performance score equivalent to or 
higher than the 10th percentile of the performance benchmark on at 
least one of the four outcome measures in the APP measure set and;
     Achieves a quality performance score equivalent to or 
higher than the 40th percentile of the performance benchmark on at 
least one of the remaining five measures in the APP measure set, the 
ACO will meet the quality performance standard used to determine 
eligibility for shared savings and to avoid maximum shared losses, if 
applicable.
    We received a few comments on our proposal in the CY 2023 PFS 
proposed rule to extend the incentive for reporting eCQMs/MIPS CQMs 
through performance year 2024 suggesting that we extend the incentive 
beyond 2024 to facilitate the national shift towards eCQMs. In our 
response in the CY 2023 PFS final rule (87 FR 69836), we stated that 
``We are not extending the incentive beyond performance year 2024 at 
this time because this policy is intended to align with the timeline 
for sunsetting of the CMS Web Interface reporting option at the end of 
performance year 2024. We will continue to monitor the impact of this 
policy as we gain more experience with ACOs reporting eCQMs/MIPS CQMs 
and may revisit the policy in future rulemaking.''
(2) Revisions
    We are committed to continuing to support ACOs in the transition to 
the use of the all payer/all patient eCQM collection type for quality 
measure reporting and to digital quality measurement reporting. As 
described in section III.G.4.b.(2)(a) of the CY 2025 PFS proposed rule, 
for performance year 2025 and subsequent performance years, we proposed 
to require Shared Savings Program ACOs to report the APP Plus quality 
measure set as proposed in section IV.A.4.c.(3) of CY 2025 PFS proposed 
rule (89 FR 61862). We stated that the APP Plus quality measure set 
would incrementally grow to comprise

[[Page 98122]]

of 11 measures, consisting of six measures from the existing APP 
quality measure set and five additional measures from the Adult 
Universal Foundation measure set not already included in the existing 
APP quality measure set, and would be incrementally incorporated into 
the APP Plus quality measure between the CY 2025 performance period/
2027 MIPS payment year and CY 2028 performance period/2030 MIPS payment 
year. We also proposed to focus the collection types available to 
Shared Savings Program ACOs for reporting the APP Plus quality measure 
set to all payer/all patient eCQMs and Medicare CQMs (while not making 
available the MIPS CQM as an available collection type for Shared 
Savings Program ACOs under the APP Plus quality measure set) (89 FR 
61863).
    As discussed in the CY 2025 PFS proposed rule, the Shared Savings 
Program continues to hear from ACOs and other interested parties about 
the challenges with reporting on all payer/all patient measures and 
meeting data management requirements given their muti-practice/multi 
EHR structure, the challenges to aggregate data with the health IT 
infrastructure in use by ACOs and current state of interoperability (89 
FR 61863). Shared Savings Program quality reporting data over the past 
two performance years indicate that ACOs have been slow to report 
eCQMs. In performance year 2021, 5 of 475 ACOs reported eCQMs under the 
APP. In performance year 2022, among ACOs that reported quality data 
under the APP, 24 out of 482 reported eCQMs with 7 of these ACOs 
reporting a combination of eCQMs and MIPS CQMs.\541\ We encourage ACOs, 
especially those ACOs serving large, underserved populations, to 
leverage interoperability and digital data more fully and to more 
quickly transition to eCQMs. As such, we proposed to extend the eCQM 
reporting incentive to performance year 2025 and subsequent performance 
years to support ACOs in meeting the Shared Savings Program quality 
performance standard for sharing in savings at the maximum rate under 
its track (89 FR 61863).
---------------------------------------------------------------------------

    \541\ Counts based on internal analysis of ACOs' quality 
reporting in performance year 2022 and 2021.
---------------------------------------------------------------------------

    Specifically, we proposed that for performance year 2025 and 
subsequent performance years, an ACO will meet the quality performance 
standard used to determine eligibility for maximum shared savings and 
to avoid maximum shared losses, if applicable:
     If the ACO reports all of the eCQMs in the APP Plus 
quality measure set applicable for a performance year, meeting the data 
completeness requirement at Sec.  414.1340 for all eCQMs, and;
     Achieves a quality performance score equivalent to or 
higher than the 10th percentile of the performance benchmark on at 
least one of the four outcome measures in the APP Plus quality measure 
set, and;
     Achieves a quality performance score equivalent to or 
higher than the 40th percentile of the performance benchmark on at 
least one of the remaining measures in the APP Plus quality measure 
set.
    As proposed, the eCQM reporting incentive would apply only to those 
ACOs that report all quality measures in the APP Plus quality measure 
set that have eCQM collection type for an applicable performance year 
and meet the data completeness requirement for all such measures. Under 
the proposal, the reporting incentive would not apply to ACOs that 
report the APP Plus quality measure set using a combination of eCQMs/
Medicare CQMs or report only Medicare CQMs. We stated that we would 
further assess the need for the eCQM reporting incentive in the future 
as ACOs continue the transition to adopting the eCQM collection type 
and may make refinements as needed in future rulemaking. We included 
the available collection types for each measure in the APP Plus quality 
measure set for performance year 2025, performance years 2026 and 2027, 
and performance year 2028 and subsequent performance years, which are 
displayed in Tables 34, 35, and 36 of the CY 2025 PFS proposed rule, 
respectively (89 FR 61866 through 61868). We included the measure type 
in these tables for each measure in the APP Plus quality measure set to 
provide ACOs with a list of the outcome measures for purposes of 
identifying outcome measures that qualify for the eCQM reporting 
incentive.
    We solicited comments on our proposal to extend the eCQM reporting 
incentive to performance year 2025 and subsequent performance years. 
The following is a summary of the comments we received and our 
responses.
    Comment: We received several comments in support of our proposal to 
extend the eCQM reporting incentive. These commenters agreed that 
extending the eCQM reporting incentive will encourage Shared Savings 
Program ACOs to transition to using all payer/all patient MIPS CQM and 
eCQM collection types for quality measure reporting and to digital 
quality measurement reporting. One commenter stated that extending the 
incentive would help to mitigate some challenges related to the 
adoption of the MIPS CQM and eCQM collection types. Another commenter 
noted that it allowed for a more gradual adoption of the eCQM 
framework.
    Response: We thank commenters for their support.
    Comment: Some commenters were concerned that the reporting 
incentive does not fully offset the costs and challenges faced by ACOs 
in adopting all payer/all patient collection types. One commenter 
suggested that Shared Savings Program ACOs would be unable to take 
advantage of the reporting incentive due to infrastructure problems 
encountered when reporting quality measures using the eCQM collection 
type. One commenter was concerned that ACOs comprised of independent, 
resource limited provider groups practicing in nontraditional settings 
would not be able to take advantage of the incentive and suggested that 
incremental incentives for the partial reporting of eCQMs over the 
course of three or more years is a more realistic motivator to change 
quality reporting behavior.
    Response: We acknowledge the commenters' concerns regarding the 
challenges that ACOs face in building infrastructure to meet data 
management and eCQM reporting requirements. Our stated intent for the 
MIPS CQM and eCQM reporting incentive, which we first finalized in the 
CY 2022 PFS final rule (86 FR 65269), was to encourage ACOs to begin 
the transition to the use of eCQM and MIPS CQM collection types when 
reporting quality measures. We note that in performance year 2023, all 
ACOs that successfully reported eCQMs/MIPS CQMs met the criteria for 
the eCQM/MIPS CQM reporting incentive and thus met the Shared Savings 
Program's quality performance standard.
    For performance year 2025 and subsequent performance years, we are 
finalizing that an ACO will meet the quality performance standard used 
to determine eligibility for maximum shared savings and to avoid 
maximum shared losses, if applicable: If the ACO reports all of the 
eCQMs/MIPS CQMs in the APP Plus quality measure set applicable for a 
performance year, meeting the MIPS data completeness requirement for 
all eCQMs/MIPS CQMs; achieves a quality performance score equivalent to 
or higher than the 10th percentile of the performance benchmark on at 
least one of the outcome measures in the APP Plus quality measure set; 
and achieves a quality performance score equivalent to

[[Page 98123]]

or higher than the 40th percentile of the performance benchmark on at 
least one of the remaining measures in the APP Plus quality measure 
set.
    We believe that the increased number of quality measures that will 
be phased into the APP Plus quality measure set over time will afford 
ACOs expanded opportunities to satisfy the reporting incentive 
criteria. For instance, the number of eCQMs/MIPS CQMs in the APP Plus 
quality measure set will increase from four in performance year 2025 to 
five in performance year 2026. Once MIPS CQMs are removed from the APP 
Plus quality measure set in performance year 2027, the number of eCQMs 
in the APP Plus quality measure set will increase from five to six in 
performance year 2027. Once all of the eCQMs are incorporated into the 
APP Plus quality measure set, there will be 8 eCQMs. For these reasons, 
we believe that the eCQM/MIPS CQM reporting incentive incentives and 
supports ACOs to surmount commenters' eCQM challenges. We also believe 
that several of our other finalized policies address the concerns that 
interested parties mentioned regarding these challenges. In particular, 
we are finalizing in section III.G.4.b.(2)(b) of this final rule to 
make available the MIPS CQM collection type for Shared Savings Program 
ACOs reporting the APP Plus quality measure set for performance years 
2025 and 2026. We disagree with the commenter's suggestion that 
incremental incentives over three or more years for the partial 
reporting of eCQMs are the best approach to incentivize eCQM reporting. 
We note that ACOs that are not yet ready to report eCQMs may report 
quality via other collection types. For instance, ACOs may report via 
the CMS Web Interface or the MIPS CQM/Medicare CQM collection types in 
performance year 2024, the MIPS CQM/Medicare CQM collection types in 
performance years 2025 and 2026, and the Medicare CQM collection types 
in performance year 2027 and subsequent performance years.
    Comment: Several commenters suggested that the eCQM reporting 
incentive apply to Shared Savings Program ACOs that report quality 
measures using any collection type or a combination of the Medicare 
CQM, MIPS CQM and eCQM collection types.
    Response: As discussed in section III.G.4.b.(2)(b) of this final 
rule, we are finalizing our original proposal with modification to make 
MIPS CQMs available as a collection type for ACOs reporting the APP 
Plus quality measure set for two additional years (that is, performance 
years 2025 and 2026). We originally adopted the reporting incentive in 
the CY 2022 PFS final rule to encourage ACOs to begin the transition to 
eCQM/MIPS CQM reporting in performance years 2022 and 2023 (86 FR 
65269). In the CY 2023 PFS final rule, we extended the incentive for 
reporting eCQMs/MIPS CQMs through performance year 2024 to align with 
the timeline for sunsetting of the CMS Web Interface reporting option 
and to allow ACOs an additional year to gauge their performance on the 
eCQMs/MIPS CQMs before full reporting of the measures are required 
beginning in performance year 2025 (87 FR 69836 through 69838).
    In order to continue to align the reporting incentive with the MIPS 
CQM collection type, we believe that it would be appropriate to extend 
the reporting incentive to ACOs reporting MIPS CQMs in performance 
years 2025 and 2026, similar to how the reporting incentive has applied 
to ACOs reporting MIPS CQMs between performance years 2022 and 2024. 
However, we are declining to modify our proposal to apply the reporting 
incentive to Shared Savings Program ACOs that use the Medicare CQM 
collection type to report quality measures. As we previously stated in 
the CY 2024 PFS final rule ``the incentive is for all payer/all patient 
eCQM/MIPS CQM reporting. Since Medicare CQMs would include only 
Medicare FFS beneficiaries, Medicare CQMs are not a form of all payer/
all patient reporting. As such, they are not included in the eCQM/MIPS 
CQM reporting incentive'' (88 FR 79105).
    Regarding the application of the reporting incentive to Medicare 
CQMs, we stated in the CY 2024 PFS final rule (88 FR 79105) that ``[a]s 
stated in the CY 2024 PFS proposed rule (88 FR 52423), we did not 
propose to add Medicare CQMs to the eCQM/MIPS CQM reporting incentive 
described at Sec.  425.512(a)(5)(i)(A)(2) for performance year 2024. 
The incentive is for all payer/all patient eCQM/MIPS CQM reporting. 
Since Medicare CQMs would include only Medicare FFS beneficiaries, 
Medicare CQMs are not a form of all payer/all patient reporting. As 
such, they are not included in the eCQM/MIPS CQM reporting incentive.'' 
We note that the alternative quality performance standard and the 
health equity adjustment, both of which we finalized in the CY 2023 PFS 
final rule (87 FR 69831 and 69838, respectively), would be applicable 
to ACOs that report Medicare CQMs when those ACOs are otherwise 
eligible for scaled savings/losses.
    Comment: One commenter suggested that the threshold for the 
incentive should require use of the eCQM collection type for reporting 
at least 3 of the 4 quality measures with this collection type in the 
proposed APP Plus quality measure set for the 2025 performance year.
    Response: We previously heard from ACOs and other interested 
parties that the components of implementing an interoperable system are 
the same regardless of the number of quality measures reported using 
the MIPS CQM and/or eCQM collection types (86 FR 65260). As such, we 
are declining to modify the reporting incentive criteria to require the 
use of the eCQM collection type for reporting at least 3 of the 4 
quality measures with this collection type in the proposed APP Plus 
quality measure set for the 2025 performance year.
    After consideration of public comments, we are finalizing our 
proposal to extend the reporting incentive to ACOs reporting eCQMs in 
performance year 2025 and subsequent performance years. We are also 
finalizing to extend this reporting incentive to ACOs reporting MIPS 
CQMs in performance years 2025 and 2026 to further support ACOs in 
meeting the Shared Savings Program quality performance standard for 
sharing in savings at the maximum rate under its track.
(3) Changes to Regulation Text
    In the CY 2025 PFS proposed rule, we proposed to extend the eCQM 
reporting incentive to performance year 2025 and subsequent performance 
years to support ACOs in meeting the Shared Savings Program quality 
performance standard for sharing in savings at the maximum rate under 
its track (89 FR 61863).
    Specifically, we proposed that for performance year 2025 and 
subsequent performance years, an ACO will meet the quality performance 
standard used to determine eligibility for maximum shared savings and 
to avoid maximum shared losses, if applicable:
     If the ACO reports all of the eCQMs in the APP Plus 
quality measure set applicable for a performance year, meeting the data 
completeness requirement at Sec.  414.1340 for all eCQMs, and;
     Achieves a quality performance score equivalent to or 
higher than the 10th percentile of the performance benchmark on at 
least one of the four outcome measures in the APP Plus quality measure 
set, and;
     Achieves a quality performance score equivalent to or 
higher than the 40th percentile of the performance benchmark on at 
least one of the

[[Page 98124]]

remaining measures in the APP Plus quality measure set.
    We proposed to add paragraphs (a)(5)(i)(B)(1) and (2) to Sec.  
425.512 to incorporate our proposal to extend the eCQM reporting 
incentive to performance year 2025 and subsequent performance years 
into the regulation text (89 FR 61863).
    We are finalizing our proposal with modifications. Specifically, 
for performance years 2025 and 2026, an ACO will meet the quality 
performance standard used to determine eligibility for maximum shared 
savings and to avoid maximum shared losses, if applicable:
     If the ACO reports all of the eCQMs/MIPS CQMs in the APP 
Plus quality measure set applicable for a performance year, meeting the 
data completeness requirement at Sec.  414.1340 for all eCQMs/MIPS 
CQMs, and;
     Achieves a quality performance score equivalent to or 
higher than the 10th percentile of the performance benchmark on at 
least one of the outcome measures in the APP Plus quality measure set, 
and;
     Achieves a quality performance score equivalent to or 
higher than the 40th percentile of the performance benchmark on at 
least one of the remaining measures in the APP Plus quality measure 
set.
    Additionally, we are finalizing that, for performance year 2027 and 
subsequent performance years, an ACO will meet the quality performance 
standard used to determine eligibility for maximum shared savings and 
to avoid maximum shared losses, if applicable:
     If the ACO reports all of the eCQMs in the APP Plus 
quality measure set applicable for a performance year, meeting the data 
completeness requirement at Sec.  414.1340 for all eCQMs, and;
     Achieves a quality performance score equivalent to or 
higher than the 10th percentile of the performance benchmark on at 
least one of the four outcome measures in the APP Plus quality measure 
set, and;
     Achieves a quality performance score equivalent to or 
higher than the 40th percentile of the performance benchmark on at 
least one of the remaining measures in the APP Plus quality measure 
set.
    For performance years 2025 and 2026, the reporting incentive will 
apply only to those ACOs that report all of the eCQMs/MIPS CQMs in the 
APP Plus quality measure set applicable for a performance year and meet 
the data completeness requirement for all of the eCQMs/MIPS CQMs. The 
reporting incentive would not apply to ACOs that report a combination 
of eCQMs/MIPS CQMs/Medicare CQMs or report only Medicare CQMs. 
Similarly, for performance year 2027 and subsequent performance years, 
the reporting incentive will apply only to those ACOs that report all 
of the eCQMs in the APP Plus quality measure set applicable for a 
performance year and meet the data completeness requirement for all of 
the eCQMs. The reporting incentive would not apply to ACOs that report 
a combination of eCQMs/Medicare CQMs or report only Medicare CQMs.
    In addition, we are finalizing to add paragraphs (a)(5)(i)(B)(1) 
and (2) to Sec.  425.512 to incorporate the policy to extend the eCQM/
MIPS CQM reporting incentive to performance years 2025 and 2026, and we 
are adding new paragraphs (a)(5)(i)(C), (a)(5)(i)(C)(1) and (2) to 
Sec.  425.512 to extend the eCQM reporting incentive to performance 
year 2027 and subsequent performance years into the regulation text.
e. Summary of Final Policies
    In Table 33 of the CY 2025 PFS proposed rule (89 FR 61864 through 
61865), we summarized the proposed changes to Sec.  425.512(a)(5) to 
reflect the changes we proposed to the quality reporting requirements 
and quality performance standard for performance year 2025 and 
subsequent performance years. In Tables 37 and 38 of this final rule, 
we summarize the policies we are finalizing related to the quality 
reporting requirements and quality performance standard for performance 
year 2025 and subsequent performance years.
BILLING CODE 4120-01-P

[[Page 98125]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.076


[[Page 98126]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.078

[GRAPHIC] [TIFF OMITTED] TR09DE24.077


[[Page 98127]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.079

BILLING CODE 4120-01-C

[[Page 98128]]

f. APP Plus Quality Measure Set
(1) Background
    The APP quality measure set for performance year 2024 and 
subsequent performance years was finalized in the CY 2024 PFS final 
rule (88 FR 79112 through 79114). In that final rule, for performance 
year 2024 and subsequent performance years, we also finalized the 
addition to the APP quality measure set of the Medicare CQM collection 
type for Diabetes: Hemoglobin A1c (HbA1c) Poor Control (>9%) (Quality 
#: 001), Preventive Care and Screening: Screening for Depression and 
Follow-up Plan (Quality #: 134) and Controlling High Blood Pressure 
(Quality #: 236).
(2) Revisions
    As described in section III.G.4.b.(2)(a) of the CY 2025 PFS 
proposed rule, for performance year 2025 and subsequent performance 
years, we proposed to require Shared Savings Program ACOs to report the 
APP Plus quality measure set as proposed in section IV.A.4.c.(3) of the 
CY 2025 PFS proposed rule (89 FR 61865). The proposed APP Plus quality 
measure set would comprise of eleven measures, consisting of six 
measures from the APP quality measure set and five newly proposed 
measures from the Adult Universal Foundation measure set that would be 
incrementally incorporated into the APP Plus quality measure set over 
performance years 2025 through 2028. We also proposed to focus the 
collection types available to Shared Savings Program ACOs for reporting 
the APP Plus quality measure set to all payer/all patient eCQMs and 
Medicare CQMs (89 FR 61865).
    The proposed APP Plus quality measure set for Shared Savings 
Program ACOs for performance year 2025, performance years 2026 and 
2027, and performance year 2028 and subsequent performance years are 
displayed in Tables 34, 35, and 36 of the CY 2025 PFS proposed rule, 
respectively (89 FR 61866 through 61868). In these tables, we also 
included the measure type for each measure in the APP Plus quality 
measure set to provide ACOs with a list of the outcome measures for 
purposes of qualifying for the eCQM reporting incentive, as described 
in section III.G.4.d. of the CY 2025 PFS final rule. As discussed in 
the CY 2025 PFS proposed rule, this information is also relevant to the 
alternative quality performance standard under which ACOs that fail to 
meet the quality performance standard to qualify for the maximum 
sharing rate, but that achieve a quality performance score equivalent 
to or higher than the 10th percentile of the performance benchmark on 
at least one of the four outcome measures in the APP Plus quality 
measure set, may be eligible to share in savings on a sliding scale, as 
discussed in the current Sec.  425.512(a)(4)(ii) (89 FR 61866).
    We received public comments on the proposed APP Plus quality 
measure set and refer readers to section IV.A.4.c.(2) for a summary of 
the comments we received and our responses. The final APP Plus quality 
measure set for Shared Savings Program ACOs for performance year 2025 
and subsequent performance years are displayed in Tables 39 through B-
42 of this final rule.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR09DE24.080


[[Page 98129]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.081


[[Page 98130]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.082


[[Page 98131]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.083


[[Page 98132]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.084

BILLING CODE 4120-01-C
g. Survey Modes for the Administration of the Consumer Assessment of 
Healthcare Providers and Systems (CAHPS) for MIPS Survey Request for 
Information
    We solicited public comment on the potential expansion of the 
survey modes of the CAHPS for MIPS Survey from a mail-phone protocol to 
a web-mail-phone protocol. During the 2023 CAHPS for MIPS Web Mode 
Field Test,\542\ we found that adding the web-based survey mode to the 
current mail-phone protocol of CAHPS for MIPS survey administration 
resulted in an increased response rate. We thank commenters for their 
comments in response to this request for information. This Request for 
Information is also discussed at IV.A.4.e.(1)(e)(i) of this final rule.
---------------------------------------------------------------------------

    \542\ https://qpp-cm-prod-content.s3.amazonaws.com/uploads/2893/2023_CAHPS_for_MIPS_WebMode_Field_Test.pdf.
---------------------------------------------------------------------------

5. Providing the Option of Prepaid Shared Savings
a. Background
    In the CY 2023 PFS final rule (87 FR 69782 through 69805), CMS 
finalized a new payment option for eligible Shared Savings Program ACOs 
entering agreement periods beginning on or after January 1, 2024, to 
receive advance shared savings payments. This payment option is 
referred to as advance investment payment (AIP) and the payments 
themselves are referred to as advance investment payments.
    These payments are intended to improve the quality and efficiency 
of items and services furnished to Medicare beneficiaries by reducing 
the barriers to participation in the Shared Savings Program by 
supporting investments in increased staffing, healthcare 
infrastructure, and the provision of accountable care for underserved 
beneficiaries. Accordingly, advance investment payments must be spent 
on one of the following categories: increased staffing, healthcare 
infrastructure, and the provision of accountable care for underserved 
beneficiaries, which may include addressing social determinants of 
health (Sec.  425.630(e)(1)).
    Advance investment payments are only available to ACOs newly 
entering the Shared Savings Program in their first agreement period 
(Sec.  425.630(b)(1)). Many commenters on the CY 2023 PFS final rule 
(87 FR 69782 through 69805) suggested that CMS should expand access to 
advance investment payments by expanding the eligibility criteria to 
include currently participating ACOs as well as high revenue ACOs. 
While we do not believe that it is appropriate to expand the 
eligibility criteria for advance investment payments at this time, as 
CMS still needs time to assess the impact of the new payment option, 
there is persuasive evidence that investment in staffing, healthcare 
infrastructure, and accountable care for underserved beneficiaries 
could be valuable for all ACOs, not just those that are new to the 
program. Investment in care coordination for beneficiaries reduces 
costs and improves the quality of care received.543 544 545 
Investment in health information technology can be leveraged to empower 
individuals, address patients' full range of health needs, promote 
healthy behaviors, and facilitate better health outcomes for 
individuals, families, and communities.\546\ Additionally, there is 
evidence that investment in services not currently covered by Medicare 
may improve beneficiary health and reduce avoidable health care 
utilization costs over time, including coverage of

[[Page 98133]]

dental,547 548 549 hearing,550 551 and vision 
\552\ care.
---------------------------------------------------------------------------

    \543\ Breckenridge ED, Kite B, Wells R, Sunbury TM. Population 
Health Management. Effect of Patient Care Coordination on Hospital 
Encounters and Related Costs. September 26, 2019. Available at 
https://doi.org/10.1089/pop.2018.0176.
    \544\ Elliott MN, Adams JL, Klein DJ, et al. Journal of General 
Internal Medicine. Patient-Reported Care Coordination is Associated 
with Better Performance on Clinical Care Measures. September 20, 
2021. Available at https://link.springer.com/article/10.1007/s11606-021-07122-8.
    \545\ Figueroa JF, Feyman Y, Zhou X, et al. Hospital-level care 
coordination strategies associated with better patient experience. 
BMJ Quality & Safety. April 4, 2018. Available at https://qualitysafety.bmj.com/content/27/10/844.
    \546\ The Office of the National Coordinator for Health 
Information Technology. 2020-2025 Federal Health IT Strategic Plan. 
Available at https://www.healthit.gov/sites/default/files/page/2020-10/Federal%20Health%20IT%20Strategic%20Plan_2020_2025.pdf.
    \547\ Schenkein HA, Loos BG. Inflammatory mechanisms linking 
periodontal diseases to cardiovascular diseases. Journal of Clinical 
Periodontology. April 30, 2013. Available at https://doi.org/10.1111/jcpe.12060.
    \548\ Teeuw WJ, Gerdes VE, Loos BG. Effect of periodontal 
treatment on glycemic control of diabetic patients: a systematic 
review and meta-analysis. Diabetes Care. February 2010. Available at 
https://pubmed.ncbi.nlm.nih.gov/20103557/.
    \549\ Allareddy V, Rampa S, Lee MK, Allareddy V, Nalliah RP. 
Hospital-based emergency department visits involving dental 
conditions: Profile and predictors of poor outcomes and resource 
utilization. The Journal of the American Dental Association. 
November 19, 2014. Available at https://doi.org/10.14219/jada.2014.7.
    \550\ Choi JS, Adams ME, Crimmins EM, Lin FR, Ailshire JA. 
Association between hearing aid use and mortality in adults with 
hearing loss in the USA: a mortality follow-up study of a cross-
sectional cohort. The Lancet Healthy Longevity. January 3, 2024. 
Available at https://doi.org/10.1016/S2666-7568(23)00232-5.
    \551\ Reed NS, Altan A, Deal JA, et al. Trends in Health Care 
Costs and Utilization Associated with Untreated Hearing Loss Over 10 
Years. JAMA Otolaryngology--Head and Neck Surgery. November 8, 2018. 
Available at https://jamanetwork.com/journals/jamaotolaryngology/fullarticle/2714049.
    \552\ Lipton BJ, Decker SL. The effect of health insurance 
coverage on medical care utilization and health outcomes: Evidence 
from Medicaid adult vision benefits. Journal of Health Economics. 
November 11, 2015. Available at https://doi.org/10.1016/j.jhealeco.2015.10.006.
---------------------------------------------------------------------------

    Furthermore, we have come to understand that, for beneficiaries, 
the benefits of receiving services from providers associated with 
ACOs--such as improvements in quality and coordinated care--may not be 
immediately apparent. By encouraging ACOs to invest in new services 
that beneficiaries otherwise would not receive, like hearing, vision 
and dental services, the benefits of receiving care from providers who 
are part of an ACO would become more tangible. This would encourage 
beneficiaries to receive care from providers participating in an ACO 
and may ultimately result in improved quality and efficiency of care 
for beneficiaries.
    For ACOs that are currently participating in the Shared Savings 
Program and that reinvest their earned shared savings payments in 
activities that reduce costs and improve quality of care, it could be 
more valuable to gain access to those shared savings payments early in 
and/or throughout each performance year, instead of waiting months 
after the end of each performance year when any earned shared savings 
payments are distributed. Currently, CMS completes the financial 
reconciliation calculations for each ACO during the summer after the 
end of each performance year, which allows time for claims runout and 
other necessary data to become available. CMS compares the updated 
historical benchmark to an ACO's assigned beneficiaries' per capita 
expenditures during the performance year to determine whether the ACO 
may share in savings or losses, if owed. CMS then notifies the ACO in 
writing regarding whether the ACO qualifies for a shared savings 
payment, and if so, the amount of the payment due. These payments are 
generally distributed to ACOs in the early Fall following the end of 
each performance year. This is the sole payment CMS makes to an ACO in 
the Shared Savings Program and generally an ACO's sole source of 
revenue. Distributing prepaid shared savings during a performance year 
would allow ACOs to invest these payments in additional services for 
assigned beneficiaries, staffing, and healthcare infrastructure earlier 
and reap the benefits from that investment earlier.
    The CMS Innovation Center tested a number of strategies for 
providing more experienced ACOs with advances of funding during each 
performance year. One of the innovations was the infrastructure 
payments available in the Next Generation ACO model, a CMS Innovation 
Center model that was intended for more experienced ACOs.\553\ Most 
Next Generation ACOs (82 percent) that participated in the Next 
Generation ACO model in 2018 had prior experience as Medicare ACOs 
before starting in the model, and the majority (56 percent) previously 
participated in the Shared Savings Program.\554\ ACOs selecting the 
infrastructure payment option received $6 per assigned beneficiary per 
month to support ACO Activities, which was later recouped during 
financial settlement following each performance year. The model defined 
ACO Activities as activities related to promoting accountability for 
the quality, cost, and overall care for the population of beneficiaries 
assigned to the Next Generation ACO, including managing and 
coordinating care; encouraging investment in healthcare infrastructure 
and redesigned care processes for high quality and efficient service 
delivery; or carrying out any other obligation or duty of the ACO under 
the terms of the Next Generation ACO model. Examples of these 
activities included, but were not limited to, providing direct patient 
care in a manner that reduces costs and improves quality; promoting 
evidence-based medicine and patient engagement; reporting on quality 
and cost measures; coordinating care, such as through the use of 
telehealth, remote patient monitoring, and other enabling technologies; 
establishing and improving clinical and administrative systems for the 
ACO; meeting the quality performance standards; evaluating health 
needs; communicating clinical knowledge and evidence-based medicine; 
and developing standards for beneficiary access and communication, 
including beneficiary access to medical records. In interviews 
performed as part of the CMS Innovation Center's evaluation of the 
model, Next Generation ACO leaders described using these funds to 
support upfront operating costs and healthcare infrastructure and 
clinical process enhancements such as new staff, health information 
technology, data analytic capacity, population health management, or 
care coordination.\555\
---------------------------------------------------------------------------

    \553\ Refer to ``Next Generation ACO Model'' available at 
https://www.cms.gov/priorities/innovation/innovation-models/next-generation-aco-model.
    \554\ NORC at the University of Chicago. Next Generation 
Accountable Care Organization Model Third Evaluation Report. 
September 2020. Available at https://www.cms.gov/priorities/innovation/data-and-reports/2020/nextgenaco-thirdevalrpt-fullreport.
    \555\ NORC at the University of Chicago. Evaluation of the Next 
Generation Accountable Care Organization (NGACO) Model--Final 
Report. January 2024. Available at https://www.cms.gov/priorities/innovation/data-and-reports/2024/nextgenaco-sixthevalrpt.
---------------------------------------------------------------------------

    Despite these ACOs' prior experience as Medicare ACOs and the 
meaningful investments many had made in their own healthcare 
infrastructure and providers, they still found value in access to 
funding during the performance year. Almost all Next Generation ACOs 
used the funds to develop workflows informed by data analytics and 
clinical staff input. Most Next Generation ACOs also reported using the 
funds to support care management, such as acquiring tools and 
developing healthcare infrastructure to support care coordination. 
Leaders from many Next Generation ACOs described how the payments 
facilitated new processes for seamless patient care handoffs between 
health care providers, enabled the creation of better workflows for 
scheduling follow-up visits, and supported provision of screenings and 
assessments. Data from a clinician survey suggested that the payments 
were likely helpful in improving the delivery or coordination of care, 
with 63 percent of providers agreeing that additional resources to 
support practice changes made their day-to-day work

[[Page 98134]]

easier.\556\ Separately, the ACO Investment Model (AIM), a model run by 
the CMS Innovation Center which informed development of the advance 
investment payments, gave participating ACOs upfront and quarterly 
funding to spend on ACO start-up costs. These ACOs primarily invested 
in staffing and healthcare infrastructure including care management, 
ACO administration, health IT and data analysis,\557\ and these ACOs 
generated an estimated net aggregate reduction in spending by Medicare 
of $381.5 million after accounting for Medicare's payment of AIM funds 
and participating ACOs' earned shared savings.\558\
---------------------------------------------------------------------------

    \556\ NORC at the University of Chicago. Next Generation 
Accountable Care Organization (NGACO) Model Evaluation Third 
Evaluation Report. 2020. Available at https://www.cms.gov/priorities/innovation/data-and-reports/2020/nextgenaco-thirdevalrpt-fullreport.
    \557\ Abt Associates, Evaluation of the Accountable Care 
Organization Investment Model, AIM Implementation and Impacts over 
Two Performance Years (September 2019), page 55. Available at 
https://www.cms.gov/priorities/innovation/aim-second-annrpt.pdf.
    \558\ Abt Associates, Evaluation of the Accountable Care 
Organization Investment Model, Final Report (September 2020), page 
39. Available at https://innovation.cms.gov/data-and-reports/2020/aim-final-annrpt.
---------------------------------------------------------------------------

    Section 1899(i)(3) of the Act authorizes the Secretary to use other 
payment models instead of the one-sided model described in section 
1899(d) of the Act so long as the Secretary determines that the other 
payment model will improve the quality and efficiency of items and 
services furnished to Medicare beneficiaries without additional program 
expenditures. We are interested in building on experience from the Next 
Generation ACO model, and we agree, in part, with comments on the CY 
2023 PFS final rule that encouraged CMS to expand AIP to additional 
ACOs. While we do not believe it is appropriate to expand the 
eligibility criteria for AIPs at this time as explained earlier in this 
section, we agree with commenters that additional ACOs could benefit 
from expanded access to performance year funding that encourages 
investment in staffing, healthcare infrastructure, and additional 
services for beneficiaries. Prepaid shared savings would be required to 
be spent at least partially on direct beneficiary services, improving 
the quality of care beneficiaries receive.
    Consequently, under the authority provided to the Secretary by 
section 1899(i)(3) of the Act, we proposed to provide prepaid shared 
savings to certain ACOs that meet the eligibility criteria described in 
section III.G.5.b of this final rule (Sec.  425.640(b)). Such payments 
would be made under the standards we proposed to establish in new Sec.  
425.640. This new payment option would provide prepaid shared savings 
to ACOs with a history of earning shared savings while participating in 
the Shared Savings Program. These payments would be distributed on a 
quarterly basis and would be recouped from shared savings CMS 
determines the ACO to have earned during the annual financial 
reconciliation cycle. Prepaid shared savings would be the advance 
payment of shared savings that are expected to be earned by the ACO and 
are covered under the Shared Savings Distribution Waiver (80 FR 66726). 
If the ACO does not earn sufficient shared savings to offset the 
advanced payment of shared savings during the applicable performance 
year, CMS may withhold or terminate the ACO's prepaid shared savings 
under proposed Sec.  425.640(h)(1)(iii).
    We have determined that the other payment model CMS has adopted 
under section 1899(i)(3) of the Act would continue to improve the 
quality and efficiency of care should this proposal be finalized. 
Section 1899(i)(3)(A) of the Act requires CMS determine that the other 
payment model will improve the quality and efficiency of items 
furnished under the Medicare program. Based on the evidence for direct 
beneficiary services noted above, our experience administering the 
Shared Savings Program, and the CMS Innovation Center's experience with 
AIM and infrastructure payments in the Next Generation ACO model, we 
have determined that allowing ACOs access to funding earlier than 
currently available, in the form of prepaid shared savings, would allow 
ACOs to more rapidly achieve the benefits of investing in staffing, 
healthcare infrastructure, and direct beneficiary services. Improvement 
in these areas would improve the quality and efficiency of beneficiary 
care, therefore meeting the standard of section 1899(i)(3)(A) of the 
Act. As we explained earlier in this section, ACOs have expenditures 
throughout the PY, particularly when implementing care coordination and 
beneficiary management strategies, and having access to their shared 
savings early can help ensure the ACO has adequate funding to perform 
these services throughout the year.
    Section 1899(i)(3)(B) of the Act requires CMS to determine that 
prepaid shared savings, when implemented in combination with existing 
modifications made to the Shared Savings Program payment model 
specified in section 1899(d) of the Act, will not result in additional 
program expenditures. The addition of prepaid shared savings meets this 
standard in part because the eligibility criteria for prepaid shared 
savings have been selected to only permit ACOs that CMS estimates are 
most likely to earn shared savings to receive payments. Additionally, 
any payments the ACO would receive under this proposal must be repaid 
to CMS, and CMS would be protected by the ACOs' repayment mechanisms in 
the event that an ACO does not earn shared savings or cannot otherwise 
repay the amount owed to CMS. Based on this design, we estimate that 
there would be no additional program expenditures stemming from the 
implementation of prepaid shared savings under this proposal. Please 
review section VI of this final rule for a more complete discussion of 
the financial impact of the Shared Savings Program payment model, 
including the findings necessary to demonstrate compliance with section 
1899(i)(3)(B) of the Act.
    We intend to periodically reassess whether a payment model 
established under section 1899(i)(3) of the Act, including the payment 
of prepaid shared savings, continues to improve the quality and 
efficiency of items and services furnished to Medicare beneficiaries 
without resulting in additional program expenditures. If we determine 
that the payment model no longer satisfies the requirements of section 
1899(i)(3) of the Act (for example if the payment model results in net 
program costs), we would undertake additional notice and comment 
rulemaking to adjust our payment methodology to assure continued 
compliance with the statutory requirements.
b. Eligibility
    To ensure that prepaid shared savings are provided only to ACOs 
that are well-positioned to use prepaid shared savings to improve the 
quality and efficiency of care to their assigned beneficiaries while 
minimizing the risk of an ACO being unable to repay prepaid shared 
savings, we proposed to limit the availability of prepaid shared 
savings to those ACOs that have a track record of success in the Shared 
Savings Program (89 FR 61596, 61871). This approach is also consistent 
with our compliance with section 1899(i)(3)(B) of the Act as such ACOs 
are most likely to be able to repay the upfront funding through earned 
shared savings.
    We proposed to establish the eligibility criteria for prepaid 
shared savings in Sec.  425.640(b). CMS must determine that an ACO 
meets all of the following criteria for the ACO to be

[[Page 98135]]

eligible to receive prepaid shared savings during an agreement period:
     The ACO is a renewing ACO as defined under Sec.  425.20 
entering an agreement period beginning on January 1, 2026, or in 
subsequent years.
     The ACO must have received a shared savings payment for 
the most recent performance year that:
    (A) Occurred prior to the agreement period for which the ACO has 
applied to receive prepaid shared savings; and
    (B) CMS has conducted financial reconciliation.
     The ACO must have a positive prior savings adjustment as 
calculated per Sec.  425.658 at application disposition for the 
agreement period in which they would receive prepaid shared savings.
     The ACO does not have any outstanding shared losses or 
advance investment payments that have not yet been repaid to CMS after 
reconciliation for the most recent performance year for which CMS 
completed financial reconciliation.
     If the ACO received prepaid shared savings in the current 
agreement period or a prior agreement period, the ACO must have fully 
repaid the amount of prepaid shared savings received through the most 
recent performance year for which CMS has completed financial 
reconciliation.
     The ACO is participating in Levels C-E of the BASIC track 
or the ENHANCED track during the agreement period in which they would 
receive prepaid shared savings.
     The ACO has in place an adequate repayment mechanism in 
accordance with Sec.  425.204(f) that can be used to recoup outstanding 
prepaid shared savings.
     During the agreement period immediately preceding the 
agreement period in which the ACO would receive prepaid shared savings, 
the ACO:
    (A) Met the quality performance standard as specified under Sec.  
425.512; and
    (B) Has not been determined by CMS to have avoided at-risk 
beneficiaries as specified under Sec.  425.316(b)(2).
    We proposed these eligibility criteria so that only ACOs with a 
record of meeting the quality performance standard, not avoiding at-
risk beneficiaries, and recent success in earning shared savings would 
receive prepaid shared savings. This is for the protection of both CMS 
and the ACOs, as CMS does not want to overestimate an ACO's ability to 
earn future shared savings and burden an ACO with debt that the ACO 
would not be able to repay. As we explained in the proposed rule (89 FR 
61596, 61871 and 61872), our experience administering the Shared 
Savings Program leads us to determine that ACOs with prior success in 
the program--that is, ACOs with a record of meeting the quality 
performance standard, not avoiding at-risk beneficiaries, and recent 
success in earning shared savings--are well positioned to identify 
beneficiary needs and invest prepaid shared savings to improve 
beneficiary care and are therefore most likely to benefit from prepaid 
shared savings. These ACOs would also be reasonably confident that they 
would be able to repay CMS through their earned shared savings and 
would therefore be comfortable spending the funding they receive. 
Accordingly, CMS would only permit ACOs that are currently 
participating in the Shared Savings Program, that have earned shared 
savings in the most recent performance year for which financial 
reconciliation has been completed, and that have a positive prior 
savings adjustment at application disposition to receive prepaid shared 
savings, as they would possess the history of success that would 
provide us with a more reasoned expectation that they would continue to 
earn shared savings in the future. New ACOs would not be eligible for 
prepaid shared savings, as they would not have a recent performance 
history that we could use to predict future performance.
    Many new ACOs are eligible to receive advance investment payments, 
which are not available to ACOs currently participating in the Shared 
Savings Program. Advance investment payments are more tailored to the 
needs of a new ACO as there is more flexibility in the use of funding, 
and advance investment payments do not need to be repaid in the event 
that the ACO does not earn shared savings.
    Additionally, ACOs that did not meet the quality performance 
standard as specified under Sec.  425.512, or were subject to a pre-
termination action from CMS after determining that the ACO had avoided 
at-risk beneficiaries, as specified under Sec.  425.316(b)(2), in the 
agreement period preceding the agreement period in which the ACO would 
receive prepaid shared savings, would be prohibited from participating 
in the prepaid shared savings payment option, as these compliance 
issues could prevent an ACO from earning shared savings that would be 
used to repay the prepaid shared savings.
    CMS also proposed to limit participation in the prepaid shared 
savings payment option to ACOs that have fully repaid all shared losses 
they may owe and any advance investment payments they may have received 
in a prior agreement period, and to ACOs that participate in a two-
sided risk track (Levels C-E of the BASIC track or the ENHANCED track), 
as these tracks require a repayment mechanism in accordance with Sec.  
425.204(f), which could be used to recoup prepaid shared savings. CMS 
also proposed these criteria, in part, to limit participation to ACOs 
that were most likely to be able to repay any prepaid shared savings 
they received. Similarly, if the ACO had received prepaid shared 
savings in a current or previous agreement period, they must have fully 
repaid the amount of prepaid shared savings received through the most 
recent performance year for which CMS had completed financial 
reconciliation before they would be able to renew their participation 
in prepaid shared savings for another agreement period. For example, if 
an ACO were in the fifth year of its 5-year agreement period during 
which the ACO had been receiving prepaid shared savings, and is in the 
process of renewing for a new agreement period, CMS would ensure that 
the ACO had fully repaid the prepaid shared savings received from the 
first four performance years of the ACO's current agreement period 
through earned shared savings before the ACO would be approved to 
receive prepaid shared savings in a new agreement period. As CMS 
intends to provide prepaid shared savings to ACOs if they improve and 
maintain performance and continue to see success in the program on an 
annual basis, ACOs that are not initially eligible would have the 
option to participate in the prepaid shared savings payment option in 
future years if they demonstrate a more recent history of success in 
the program and meet the other eligibility criteria. These criteria 
would also provide an additional incentive for ACOs to improve their 
performance in the program. CMS would also continue to review the 
eligibility criteria over time and may expand eligibility in future 
years if we determine that doing so is in the interests of the Shared 
Savings Program, participating ACOs, and their beneficiaries, and that 
all requirements under section 1899(i)(3) of the Act are satisfied. 
Additionally, to standardize timelines for payment, spending, and 
recoupment of prepaid shared savings, ACOs would only be eligible for 
prepaid shared savings if they renew or early renew to begin a new 
agreement period. The proposed policies for the calculation, spending 
and recoupment of prepaid shared savings allow for up to 5 years for 
ACOs to receive, spend, and repay the funding through earned

[[Page 98136]]

shared savings. We proposed to create a new paragraph in Sec.  
425.100(e) to establish that an ACO may receive prepaid shared savings 
if it meets the criteria under Sec.  425.640(b). We proposed in Sec.  
425.640(b) to specify the eligibility criteria for an ACO to receive 
prepaid shared savings.
    We solicited comments on these proposals.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters generally expressed appreciation for CMS's 
efforts to offer experienced ACOs prepaid shared savings for the 
purpose of encouraging investment in staffing, healthcare 
infrastructure, and additional services for beneficiaries. 
Additionally, most commenters supported the eligibility criteria for 
prepaid shared savings, noting that the proposed criteria would help 
ensure that experienced ACOs receiving prepaid shared savings are in 
good standing in the Shared Savings Program and are likely to generate 
sufficient earned shared savings to repay CMS.
    Response: We agree with commenters that the implementation of the 
new prepaid shared savings payment option will support experienced ACOs 
with upfront funding for the purpose of encouraging investment in 
staffing, healthcare infrastructure, and additional services for 
beneficiaries. We also agree that our proposed eligibility criteria for 
prepaid shared savings will help ensure that ACOs that receive prepaid 
shared savings have a track record of success that establishes 
confidence in the ACOs' ability to generate future shared savings, 
while also limiting risks of providing prepaid shared savings to ACOs 
that fail to comply with Shared Savings Program requirements or are 
unable to generate sufficient shared savings to repay CMS.
    Comment: Another commenter encouraged CMS to distribute prepaid 
shared savings to eligible hospitals, noting that upfront investments 
are important for enabling essential, safety net hospitals to implement 
the transition to value-based payments.
    Response: Pursuant to section 1899 of the Act, CMS is unable to 
distribute prepaid shared savings to entities other than ACOs 
participating in the Shared Savings Program. However, participation in 
the Shared Savings Program, and the prepaid shared savings payment 
option specifically, are beneficial tools for caring for underserved 
populations and helping close gaps in care. We note in particular that, 
as explained in greater detail below, prepaid shared savings are 
intended to support ACOs in providing direct beneficiary services, 
which should benefit underserved populations.
    Comment: Several commenters disagreed with the requirement that 
ACOs begin a new agreement period to receive prepaid shared savings. 
Commenters shared concerns about being subject to benchmark rebasing if 
they early renew to begin a new agreement period to comply with this 
eligibility requirement and believe this may negatively impact ACO 
participation in the payment option. Commenters encouraged CMS to allow 
ACOs to opt in to prepaid shared savings mid-agreement period.
    Response: We thank commenters for expressing their concerns related 
to the impact that recalculating an ACO's historical benchmark 
(benchmark rebasing) may have on ACOs that early renew so that they can 
participate in the payment option. However, generally requiring ACOs to 
begin a new agreement period is important for ensuring that ACOs are 
given adequate time to earn shared savings so that they can repay 
prepaid shared savings to CMS. CMS will demand repayment of any unspent 
prepaid shared savings, as well as any outstanding balance of prepaid 
shared savings, at the end of each agreement period in which an ACO 
receives prepaid shared savings, as noted in the new Sec.  
425.640(e)(3) and (g)(3). It is important for ACOs to have sufficient 
time to adjust to develop experience receiving, spending, and complying 
with program requirements related to prepaid shared savings, and 
repaying these funds through earned shared savings before they must be 
repaid directly to CMS. ACOs may not have sufficient time to develop 
this experience if they begin receiving prepaid shared savings mid-
agreement period. As we explained in the CY 2025 PFS proposed rule (89 
FR 61871), CMS aims to extend this payment option to the ACOs most 
likely to earn shared savings, to ensure that the addition of prepaid 
shared savings meets the standard set by section 1899(i)(3) of the Act, 
which requires CMS to determine that prepaid shared savings will 
improve the quality and efficiency of items and services furnished 
under the Medicare program and, when implemented in combination with 
existing modifications made to the Shared Savings Program payment model 
specified in section 1899(d) of the Act, not result in more program 
expenditures than would have resulted under the statutory payment 
methodology in section 1899(d) of the Act.
    ACOs will be able to renew and apply to receive prepaid shared 
savings on an annual basis, so if an ACO does not wish to early renew 
to participate, the ACO will be able to wait until it is prepared to 
renew in order to begin participating in this payment option. However, 
there is a very large cohort of ACOs renewing for a new agreement 
period in 2025 that we expect will meet the eligibility requirements 
under Sec.  425.640(b) and be interested in participating in this 
payment option. Allowing these ACOs to begin receiving prepaid shared 
savings in 2026, without renewing again, would encourage program 
participation and more rapid investment in staffing, healthcare 
infrastructure and direct beneficiary services. These ACOs will still 
have four out of five performance years available to develop experience 
receiving, spending, and complying with program requirements related to 
prepaid shared savings, and giving these ACOs a one-time exception to 
participate with a slightly shorter timeline would not negatively 
impact our obligation under section 1899(i)(3)(B) of the Act to ensure 
that this payment option does not negatively impact program 
expenditures. These ACOs were not able to consider the finalized 
prepaid shared savings policy when they renewed for the 2025 
performance year, and as this payment option will be available on an 
annual basis moving forward this will not be an issue in future 
performance years.
    Accordingly, CMS is making a one-time exception to allow these ACOs 
to elect to begin receiving prepaid shared savings in 2026, without 
renewing again. These ACOs will still be required to meet the other 
eligibility requirements under Sec.  425.640(b), including having a 
positive prior savings adjustment when they renew for an agreement 
period beginning in PY 2025 and ensuring they have in place an adequate 
repayment mechanism to support the repayment of prepaid shared savings 
in accordance with Sec.  425.204(f). These ACOs will only receive 
prepaid shared savings beginning in 2026; CMS will not distribute any 
payments of prepaid shared savings for performance year 2025. These 
ACOs will also be required to fully pay back the funding they receive 
by the end of their agreement period in 2029, giving them four years to 
receive, use, and repay prepaid shared savings.
    Furthermore, we note that we have taken steps through prior 
rulemaking, such as through establishment of a prior savings adjustment 
and the inclusion of the Accountable Care Prospective Trend (``ACPT'') 
in a three-way blended update factor, to improve the accuracy

[[Page 98137]]

of ACO financial benchmarks for ACOs entering a second or subsequent 
agreement period. Currently participating ACOs that early renew for a 
new agreement period beginning on or after January 1, 2026, will be 
subject to these financial benchmarking policies in accordance with 
Sec.  425.652.
    Comment: Several commenters suggested that CMS expand eligibility 
to more ACOs, including ACOs that are new to the Shared Savings Program 
or do not have a history of earning shared savings, as they believe 
additional ACOs could benefit from prepaid shared savings and improve 
the care their beneficiaries receive.
    Response: While we understand that some commenters believe 
additional ACOs may benefit from receiving prepaid shared savings, CMS 
is not expanding the prepaid shared savings eligibility criteria to new 
ACOs or those without a demonstrated history of earning shared savings. 
As we explained in the proposed rule (89 FR 61871-61872), we are 
obligated to protect the Medicare Trust Funds. To do so, we determine 
that we would not distribute prepaid shared savings to ACOs lacking a 
demonstrated track record of success generating shared savings, in 
order to avoid or mitigate the risk of providing ACOs with advances of 
shared savings they may not be able to repay.
    Some ACOs that are new to the Shared Savings Program may be 
eligible to participate in the advance investment payment option, which 
provides similar upfront funding for new ACOs serving underserved 
beneficiaries.
    After consideration of public comments, we are finalizing our 
proposal to establish a new section of the regulations at Sec.  425.640 
with provisions on the option to receive prepaid shared savings 
payments. We are also finalizing paragraph (a) of Sec.  425.640, as 
proposed, to describe the purpose of the payment option: prepaid shared 
savings provide an additional cash flow option to ACOs with a history 
of earning shared savings that will encourage their investment in 
activities that reduce costs for the Medicare program and beneficiaries 
and improve the quality of care provided to their assigned 
beneficiaries.
    We are finalizing the proposed prepaid shared savings eligibility 
criteria under Sec.  425.640(b) with modifications to allow ACOs that 
renewed to enter an agreement period beginning on January 1, 2025, the 
option to elect to participate in prepaid shared savings starting with 
performance year 2026 without renewing again. Specifically, within 
Sec.  425.640(b)(1), we specify the criterion that the ACO must meet 
either of the following conditions: (i) The ACO is a renewing ACO as 
defined under Sec.  425.20 entering an agreement period beginning on 
January 1, 2026, or in subsequent years; or (ii) The ACO was a renewing 
ACO as defined under Sec.  425.20 entering an agreement period 
beginning on January 1, 2025, and applied to receive prepaid shared 
savings in accordance with paragraph (c)(2) of this section starting 
with the performance year beginning on January 1, 2026. Otherwise, we 
are finalizing as proposed the remaining eligibility criteria listed in 
new Sec.  425.640(b)(2) through (8). We are also finalizing our 
proposal, without modification, to specify in a new paragraph in Sec.  
425.100(e) that an ACO may receive prepaid shared savings if it meets 
the criteria under Sec.  425.640(b).
c. Application Procedure & Contents
    We proposed to establish the process for an ACO to apply for 
prepaid shared savings in Sec.  425.640(c). Specifically, we proposed 
that an ACO must submit to CMS supplemental application information 
sufficient for CMS to determine whether the ACO is eligible to receive 
prepaid shared savings. The application cycle for prepaid shared 
savings would be conducted as part of, and in conjunction with, the 
Shared Savings Program application process under Sec.  425.202, with 
instructions and timelines published on the Shared Savings Program 
website. We proposed the initial application cycle to apply for prepaid 
shared savings would be for a January 1, 2026, start date. In the CY 
2025 PFS proposed rule (89 FR 61596, 61872), we explained that we 
intended to provide further information regarding the process, 
including the application contents and specific requirements such as 
the deadline for submitting applications and all supplemental 
application information that would be required, through guidance. The 
prepaid shared savings application procedure would also include a 
process by which CMS provides an applicant with feedback and an 
opportunity to clarify or revise their application.
    We will provide preliminary information to the applicant ACO about 
its eligibility to receive prepaid shared savings during the Phase 1 
application cycle requests for information, and a final determination 
about its eligibility to receive prepaid shared savings at the time of 
final application dispositions. For example, for ACOs applying in 2025 
for an agreement period beginning in 2026, we will provide preliminary 
information identifying whether an ACO is likely to earn shared savings 
in the 2024 performance year and have a positive prior savings 
adjustment as calculated per Sec.  425.658 at application disposition.
    We proposed at Sec.  425.640(d)(1) that an ACO would be required to 
submit a spend plan as part of its application for prepaid shared 
savings. We proposed that the plan must describe how the ACO would 
spend the prepaid shared savings during the first performance year of 
the agreement period during which the ACO would receive prepaid shared 
savings, including the breakdown of how the funding would be spent 
consistent with the allowable uses as described in section III.G.5.d of 
this final rule and information about: (1) direct beneficiary services 
that would be provided to ACO beneficiaries; and (2) investments that 
would be made in the ACO with prepaid shared savings. ACOs must also 
include their communication strategy for informing both CMS and any 
impacted beneficiaries if the ACO will no longer be providing any 
direct beneficiary services (as described in section III.G.5.d of this 
final rule) that had previously been provided by the ACO using prepaid 
shared savings. This communication strategy must include when and how 
the ACO intends to notify CMS and the impacted beneficiaries, as well 
as any available alternatives for impacted beneficiaries to access 
similar services. ACOs would be able to limit the distribution of 
direct beneficiary services to subgroups of assigned beneficiaries 
including those with specific medical conditions or specific 
socioeconomic needs. ACOs would be required to attest that they will 
not discriminate on the basis of race, color, religion, sex, national 
origin, disability, or age with respect to their use of prepaid shared 
savings. ACOs would have flexibility to alter their use of prepaid 
shared savings from their submitted spend plans during each performance 
year but would be required to ensure than any changes to proposed 
spending aligns with the restrictions on spending discussed in section 
III.G.5.d of this final rule. CMS will review mid-year changes of the 
use of prepaid shared savings at the end of each performance year. CMS 
would also be able to review an ACO's spend plan at any time and 
require the ACO to modify its spend plan to comply with the 
requirements of Sec.  425.640(d) and (i).
    As discussed in greater detail in section III.G.5.f of this final 
rule, we will reserve the right to withhold or terminate an ACO's 
ability to receive the prepaid shared savings if it is not in 
compliance with the requirements of the Shared Savings Program codified 
in part 425 of our regulations, under Sec.  425.640(h)(1)(i). In 
addition, by

[[Page 98138]]

certifying the application under Sec.  425.202(a)(2), the ACO certifies 
that the information contained in the application, including 
information related to the intended use of prepaid shared savings, is 
accurate, complete, and truthful.
    We proposed at Sec.  425.640(d) that we would review the 
information submitted in the ACO's prepaid shared savings application 
to determine whether an ACO meets the criteria for prepaid shared 
savings and would approve or deny the application accordingly. We will 
review the ACO's Shared Savings Program renewal application 
simultaneously with the prepaid shared savings application.
    As discussed in section III.G.5.g of this final rule, we also 
proposed to update our public reporting requirements under Sec.  
425.308 by adding new paragraph (b)(10) to require an ACO to publicly 
report its spend plan. We proposed to require that the ACO post on its 
dedicated public reporting web page: (1) the total amount of prepaid 
shared savings received from CMS for each performance year; (2) the 
ACO's spend plan; and (3) an itemization of how the prepaid shared 
savings were actually spent during each performance year, including 
expenditure categories, the dollar amounts spent on the various 
categories, information about which groups of beneficiaries received 
direct beneficiary services that were purchased with prepaid shared 
savings and investments that were made in the ACO with prepaid shared 
savings, how these direct beneficiary services were provided to 
beneficiaries, and how the direct beneficiary services and investments 
supported the care of beneficiaries, any changes to the spend plan as 
submitted under Sec.  425.640(d)(2) (if applicable), and such other 
information as may be specified by CMS. Additionally, we proposed that 
the ACO would report the same information as indicated in the ACO's 
publicly reported spend plan to CMS under Sec.  425.640(i) to 
facilitate efficient monitoring. This would help ensure that CMS 
efficiently obtains information in a consistent manner from all ACOs 
receiving prepaid shared savings and thereby support CMS's monitoring 
and analysis of the use of prepaid shared savings. CMS will also make 
this data publicly available through a public use file. Further, we 
expect to use the submitted data as the template that ACOs can use to 
populate their public reporting web page early in each performance year 
to minimize administrative burden for ACOs. We also intend to use the 
information submitted to CMS to generate a public use file that can be 
used to quickly review the use of prepaid shared savings across all 
participating ACOs.
    We proposed to add Sec.  425.640(c) and (d) to establish standards 
for the contents of an application to be determined eligible for 
prepaid shared savings as well as the procedures for filing such an 
application.
    We solicited comments on these proposals.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters supported the inclusion of the prepaid shared 
savings payment option in the Shared Savings Program annual application 
process, noting that ACOs would be required to submit supplemental 
application information, including a spend plan detailing how the ACO 
intends to use prepaid shared savings. A few commenters encouraged CMS 
to publish application guidance in advance of the 2026 Medicare Shared 
Savings Program application cycle to give ample time for interested 
ACOs to prepare.
    Response: We appreciate the commenters' support of our proposal to 
include the prepaid shared savings application as part of the Shared 
Savings Program application process. CMS intends to provide ACOs with 
additional guidance on applying to receive prepaid shared savings in 
advance of the 2026 Medicare Shared Savings Program application cycle 
in order to give ACOs time to prepare their spend plans and additional 
application materials.
    Comment: A few commenters requested that CMS reconsider the current 
application requirement of a written spend plan, as it generates 
additional burden for ACOs. Commenters also suggested that ACOs not be 
required to include a line item breakdown of the investment of prepaid 
shared savings in their spend plans, and only report on total spending 
within the categories of infrastructure, staffing and direct 
beneficiary services as a way to reduce burden on ACOs.
    Response: We understand that submitting a detailed spend plan on 
the use of prepaid shared savings requires administrative work for 
participating ACOs. However, detailed spend plans which include 
information on (1) direct beneficiary services that would be provided 
to ACO beneficiaries; and (2) investments that would be made in the ACO 
with prepaid shared savings are important for monitoring that ACOs use 
prepaid shared savings consistent with the requirements for use and 
management of prepaid shared savings under Sec.  425.640(e). It is 
particularly important for us to ensure ACOs use prepaid shared savings 
consistent with those use and management requirements because prepaid 
shared savings are advances of shared savings to ACOs prior to ACOs 
actually earning the shared savings, and should be focused on improving 
beneficiary outcomes and quality of care, reducing costs, improving ACO 
efficiency, and improving beneficiary engagement and willingness to 
receive care from a provider affiliated with an ACO. These requirements 
will also promote transparency in how ACOs are using prepaid shared 
savings. That transparency will improve the coordination and quality of 
care provided by participating ACOs by facilitating their efforts to 
share information with each other, CMS, and the public about how they 
effectively used prepaid shared savings to improve the quality and 
efficiency of the care they provided to their beneficiaries.
    After consideration of public comments, we are finalizing the 
proposed prepaid shared savings application procedures under Sec.  
425.640(c) with modifications to allow ACOs that renewed to enter an 
agreement period beginning on January 1, 2025, the option to elect to 
participate in prepaid shared savings starting with performance year 
2026 without renewing again (as described and for the reasons explained 
elsewhere in section III.G.5. of this final rule), among other changes. 
Specifically, within Sec.  425.640(c)(1), we specify the application 
procedure for an ACO renewing to enter an agreement period beginning on 
January 1, 2026, or in subsequent years, in accordance with our 
proposal. That is, for an ACO renewing to enter an agreement period 
beginning on January 1, 2026, or in subsequent years to obtain a 
determination regarding whether the ACO may receive prepaid shared 
savings, the ACO must submit to CMS a complete supplemental application 
with its application to renew for a new agreement period in the Shared 
Savings Program in the form and manner and by a deadline specified by 
CMS. The provision we are finalizing in paragraph (c)(1) of Sec.  
425.640 includes a modification to correctly reference the application 
procedures for renewing ACOs at Sec.  425.224 instead of referencing 
Sec.  425.202 (as proposed). Within Sec.  425.640(c)(2), we specify, 
for an ACO that renewed to enter an agreement period beginning on 
January 1, 2025, to obtain a determination regarding

[[Page 98139]]

whether the ACO may receive prepaid shared savings, the ACO must submit 
to CMS a complete supplemental application for prepaid shared savings 
prior to the start of the performance year beginning on January 1, 
2026, in the form and manner and by a deadline specified by CMS. We are 
also finalizing, without modifications, our proposal to specify in 
Sec.  425.640(d) provisions on the content of the supplemental 
application ACOs will use to apply to participate in prepaid shared 
savings, as well as provisions on CMS' review of the supplemental 
application information. We discuss certain provisions of Sec.  
425.640(d) elsewhere in section III.G.5. of this final rule.
d. Allowable and Prohibited Uses of Prepaid Shared Savings
    We proposed in Sec.  425.640(e) to specify how an ACO may use 
prepaid shared savings. Similar to advance investment payments, prepaid 
shared savings are intended to improve quality and efficiency of items 
and services furnished to Medicare beneficiaries. In the CY 2025 PFS 
proposed rule (89 FR 61596, 61873), we recognized that there are many 
ways to do this, and that the most effective ways would vary by ACO. 
Our proposal intended to provide ACOs with flexibility to use payments 
consistent with broad allowable uses. However, as prepaid shared 
savings would only be available to ACOs that are currently successfully 
participating in the Shared Savings Program, we stated that we intended 
to place restrictions on the amount of total annual prepaid shared 
savings that could be spent on each category of spending. Financially 
successful ACOs are likely to have already made significant investments 
in staffing and healthcare infrastructure, as they are necessary for 
the functioning of an ACO, and we stated that we intended to encourage 
ACOs receiving prepaid shared savings to invest in direct beneficiary 
services that are not already offered by the ACO. Direct beneficiary 
services like vision, hearing and dental, and other services that have 
a reasonable expectation of improving or maintaining the health or 
overall function of ACO beneficiaries have the potential to further 
improve beneficiary outcomes, reduce costs, and improve beneficiary 
engagement and willingness to receive care from a provider affiliated 
with an ACO. However, staffing and healthcare infrastructure are still 
important expenses that can have positive impacts on healthcare costs, 
ACO efficiency, and the quality of beneficiary care, regardless of an 
ACO's experience in the Shared Savings Program. Accordingly, we also 
explained that we intended to allow ACOs to use some of their prepaid 
shared savings to invest in these areas. For each performance year, 
ACOs would be permitted to use up to 50 percent of their estimated 
annual prepaid shared savings on staffing and healthcare infrastructure 
and up to 100 percent of their estimated annual prepaid shared savings 
on direct beneficiary services. ACOs would be required to use a minimum 
of 50 percent of their prepaid shared savings on direct beneficiary 
services.
    We note that under our proposal, an ACO may use prepaid shared 
savings for staffing, healthcare infrastructure and direct beneficiary 
services in a manner that complies with the beneficiary incentives 
provision at Sec.  425.304(a), (b), and newly proposed (d) as discussed 
in section III.G.5.i of this final rule, and all other applicable laws 
and regulations. Permitted uses for ``staffing and healthcare 
infrastructure'' include but are not limited to the following:
     Staffing. Examples could include, but are not limited to, 
hiring physicians, physicians' assistants, nurse practitioners, 
clinical nurse specialists, nutrition professionals, case managers, 
licensed clinical social workers, community health workers, patient 
navigators, health equity officers, psychiatrists, clinical 
psychologists, therapists, mental health counselors, licensed 
professional counselors, substance use counselors, peer support 
specialists, and other behavioral health clinicians, or staff 
education.
     Healthcare Infrastructure: Examples could include, but are 
not limited to, investments in or improvements to existing case or 
practice management systems, clinical data registries, electronic 
quality reporting, health information exchange participation, certified 
electronic health record technology (CEHRT), health IT to support 
behavioral health or dental services, IT-enabled screening tools, 
closed-loop referral tools, audiovisual interpreter technology, or 
practice physical accessibility improvements. Investments could be made 
for individual ACO providers/suppliers (as defined in Sec.  425.20) or 
ACO wide.
     Direct beneficiary services include in-kind items or 
services provided to an ACO beneficiary that are not otherwise covered 
by Traditional Medicare but are evidence-based and medically 
appropriate for the beneficiary based on clinical and social risk 
factors. Direct beneficiary services can also include cost sharing 
support including the reduction of beneficiary copay or deductibles for 
Traditional Medicare beneficiaries. In advance of the application 
deadline for agreement periods beginning on January 1, 2026, we intend 
to release additional guidance with more specific information about 
permitted uses of funding for direct beneficiary services. Permitted 
uses for direct beneficiary services could include, but are not limited 
to the following: beneficiary meals, nutrition support, tenancy support 
and sustaining services, caregiver support services, services to 
address social isolation, home visits, transportation services, home or 
environmental modifications like air conditioners, bathroom safety 
devices, personal emergency response systems or medical alert systems, 
and vision, hearing or dental care directly provided by ACO providers/
suppliers (as defined in Sec.  425.20) or covered under a health 
insurance plan purchased by the ACO on behalf of the beneficiary. While 
some of these services are covered in some form by Traditional 
Medicare, prepaid shared savings funding reserved for direct 
beneficiary services would only be permitted to be used for those 
services if the version of the service offered by the ACO is not 
currently covered by Traditional Medicare and they are evidence-based 
and medically appropriate for the beneficiary based on clinical and 
social risk factors. For example, some types of home visits are covered 
by Traditional Medicare, but an ACO would be able to extend the number 
of home visits offered to beneficiaries beyond the number covered by 
Traditional Medicare with prepaid shared savings. Direct beneficiary 
services would also include cost-sharing support, including the 
reduction of beneficiary copay or deductibles for Traditional Medicare 
beneficiaries for Part B primary care services. ACOs would be able to 
provide cost-sharing support for primary care services (as defined in 
Sec.  425.20) with respect to which coinsurance applies under Part B.
    As discussed in section III.G.5.i of this final rule, we stated 
that we expect to make a determination that the Federal anti-kickback 
statute safe harbor for CMS-sponsored model patient incentives (Sec.  
1001.952(ii)(2)) is available to protect direct beneficiary services 
that are made in compliance with this policy and the conditions for use 
of the anti-kickback statute safe harbor set out at Sec.  
1001.952(ii)(2). As noted earlier in this rule, ACOs that wish to 
provide direct beneficiary services to beneficiaries through prepaid 
shared savings will need to submit a spend plan with information 
including the

[[Page 98140]]

groups of beneficiaries they intend to provide direct beneficiary 
services, how the direct beneficiary services will be provided to 
beneficiaries and how such services support the care of beneficiaries, 
and attest that they will not discriminate on the basis of race, color, 
religion, sex, national origin, disability, or age with respect to how 
they propose to spend prepaid shared savings. As proposed, ACOs will 
also be required to report their actual use of prepaid shared savings 
after the end of each performance year, including which groups of 
beneficiaries received direct beneficiary services, how such services 
were provided to beneficiaries, and how these services supported the 
care of beneficiaries.
    Many direct beneficiary services may be provided by staff working 
for an ACO or its participating providers or suppliers. If a staff 
member is hired or directed to provide these services, ACOs may use 
dollars designated for direct beneficiary services to cover the 
percentage of their salary that aligns with the percentage of time the 
staff member spends providing direct beneficiary services that are not 
otherwise covered by Traditional Medicare. This funding may also be 
used to contract with a community-based organization (CBO) or other 
external entity to pay their staff to provide direct beneficiary 
services. Additionally, ACOs should take care to ensure that a direct 
beneficiary service that is provided to a beneficiary does not impact 
other Federal, State, or local means-tested benefits a beneficiary is 
already receiving, and ACOs should provide beneficiaries with any 
necessary documentation regarding their receipt of the direct 
beneficiary service. CMS will include additional information in later 
guidance regarding the approved uses for direct beneficiary services 
and potential impacts on beneficiary eligibility for other Federal 
means-tested programs.
    We proposed at Sec.  425.640(e)(2) that an ACO may not use prepaid 
shared savings for any expense other than those allowed under paragraph 
(e)(1). Prohibited uses of prepaid shared savings would include 
management company or parent company profit, performance bonuses, 
provision of medical services covered by Traditional Medicare, cash or 
cash equivalent payments to beneficiaries, and items or activities 
unrelated to the management and operations of an ACO or care of 
beneficiaries. Similar to advance investment payments, prepaid shared 
savings are intended to help an ACO put care processes in place to 
directly care for the unique needs of the ACO's beneficiary population, 
not to solely increase profits or to be spent on items unrelated to the 
management and operations of the ACO or the beneficiaries it serves. 
Additionally, we proposed that an ACO participating in Levels C-E of 
the BASIC track or the ENHANCED track may not use any prepaid shared 
savings to pay back any shared losses that it would have incurred as 
specified in a written notice from CMS under Sec.  425.605(e)(2) or 
Sec.  425.610(h)(2), respectively.
    To the extent that an ACO is addressing unmet social needs, 
including food insecurity and transportation problems, through direct 
beneficiary services, we encourage ACOs to coordinate with a community-
based organization (``CBO'') to provide these services. As explained in 
the CY 2023 PFS proposed rule (87 FR 46102), where we refer to CBO, we 
mean public or private not-for-profit entities that provide specific 
services to the community or targeted populations in the community to 
address the health and social needs of those populations. They may 
include community-action agencies, housing agencies, area agencies on 
aging, or other non-profits that apply for grants to perform social 
services. They may receive grants from other agencies in the U.S. 
Department of Health and Human Services, including Federal grants 
administered by the Center for Disease Control and Prevention (CDC), 
Administration for Children and Families (ACF), Administration for 
Community Living (ACL), or other Federal or State funded grants to 
provide social services.
    Generally, such organizations know the populations they serve and 
their communities and may have the infrastructure or systems in place 
to help coordinate supportive services that address social determinants 
of health (``SDOH'') or serve as a source from which ACOs can receive 
information regarding community needs. Because CBOs have developed such 
an expertise, it would be impactful for ACOs in the delivery of high-
quality direct beneficiary services to contract with CBOs in the 
provision of these services. CMS further encourages ACOs to work with 
community care hubs, which are community-focused entities supporting a 
network of CBOs that provide services addressing health-related social 
needs and centralize administrative functions and operational 
infrastructure. Working directly with a community care hub can help 
connect the ACO with multiple smaller CBOs in the provision of direct 
beneficiary services. If an ACO works with a CBO to provide these types 
of services and this is reflected in its plan to address the needs of 
its population, we would consider them to be in compliance with the 
requirement at Sec.  425.112(b)(2)(iii)(A), which requires an ACO to, 
in its plan to address the needs of its population, describe how it 
intends to partner with community stakeholders to improve the health of 
its population.
    We also proposed in Sec.  425.640(f)(6) to allow ACOs receiving 
prepaid shared savings to request a smaller quarterly payment amount 
from CMS. For example, if an ACO is eligible for a maximum quarterly 
prepaid shared savings amount of one million dollars, we would estimate 
their annual prepaid shared savings to be four million dollars. This 
allows the ACO to spend up to two million dollars on staffing and 
healthcare infrastructure and up to their full $4 million payment 
amount on direct beneficiary services. However, the ACO may request a 
lower quarterly payment of $500,000 that results in the ACO only 
receiving two million dollars over the full performance year. This 
would also reduce the amount the ACO can spend on staffing and 
healthcare infrastructure, as an ACO may not spend more than 50 percent 
of the prepaid shared savings received on staffing and healthcare 
infrastructure. In the event that CMS stops or reduces an ACO's 
quarterly payments during the performance year below the quarterly 
payment amount previously requested by the ACO, the reduction does not 
impact the total maximum amount the ACO is permitted to spend on each 
category of allowable uses identified at the start of each year, as it 
would not be appropriate to subject the ACO to mid-year spend plan 
changes when it may have entered into contracting or other arrangements 
with staff or suppliers which could impact continuity of care. We would 
monitor how ACOs are spending these funds and, as necessary, revisit 
these guidelines in future rulemaking if changes are required.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Most commenters agreed that earlier payment of shared 
savings would help fund ACO initiatives throughout the performance 
year. Commenters also appreciated CMS' definition of direct beneficiary 
services as ``in-kind items or services provided to an ACO beneficiary 
that are not otherwise covered by traditional Medicare but have a 
reasonable expectation of improving or maintaining the health or 
overall function of ACO beneficiaries,'' and believe that interpreting 
``direct beneficiary

[[Page 98141]]

services'' in this manner will help improve beneficiary care. A few 
commenters specifically supported that the portion of our proposed 
permitted uses policy allowing ACOs to provide Part B cost sharing 
support and other services to improve access to quality care for 
beneficiaries.
    Response: We agree with commenters and appreciate their support for 
the implementation of the prepaid shared savings payment option, 
including its permitted uses. We note that we have revised the 
definition of direct beneficiary services to include: in-kind items or 
services provided to an ACO beneficiary that are not otherwise covered 
by Traditional Medicare but are evidence-based and medically 
appropriate for the beneficiary based on clinical and social risk 
factors. We believe this definition will more appropriately direct 
funding towards improving beneficiary care and reduce potential impact 
on any other means-tested benefits a beneficiary may receive.
    Comment: Many commenters asserted that the restrictions on the use 
of prepaid shared savings are unnecessary and likely to negatively 
impact ACO participation in prepaid shared savings, including by 
disproportionally discouraging ACOs with the least access to resources 
from participating. Commenters asked for more flexibility in using 
prepaid shared savings. Most disagreed with the requirement that ACOs 
spend at least 50 percent of prepaid shared savings on direct 
beneficiary services. Some urged CMS to not require a specified minimum 
amount that must be spent on direct beneficiary services. A few 
commenters opposed the requirement that ACOs calculate a percentage of 
staff time spent on ``providing direct beneficiary services that are 
not otherwise covered by Traditional Medicare'' as unnecessarily 
burdensome. Other commenters contended that this requirement would take 
away from the shared savings dollars that ACOs distribute directly to 
ACO participants, which is a major incentive for ACO participants to 
join or form ACOs. Some commenters noted they believe that ACOs are 
best positioned to determine the appropriate use of prepaid shared 
savings and the level of investment needed toward infrastructure, 
staffing, and direct beneficiary services.
    Response: We understand that commenters would like additional 
flexibility with respect to the use of prepaid shared savings and that 
these restrictions may reduce the number of ACOs that ultimately decide 
to participate in prepaid shared savings. However, the prepaid shared 
savings policy was developed to improve the quality and efficiency of 
items and services furnished to Medicare beneficiaries and help close 
gaps in health equity. The requirement that ACOs spend at least 50 
percent of their prepaid shared savings on direct beneficiary services 
is important for meeting those goals. Direct beneficiary services like 
vision, hearing and dental, and other services that are evidence-based 
and medically appropriate for the beneficiary based on clinical and 
social risk factors, have the potential to improve beneficiary health 
outcomes, reduce costs, and improve beneficiary engagement and 
willingness to receive care from a provider affiliated with an ACO. 
Financially successful ACOs are likely to have already made significant 
investments in staffing and healthcare infrastructure, as they are 
necessary for the functioning of an ACO. The restriction on using 
prepaid shared savings for provider bonuses, in particular, is 
important for ensuring that prepaid shared savings are used for 
expenses that directly improve beneficiary care.
    We note that participation in prepaid shared savings is voluntary, 
and an ACO is able to request to receive less than the full amount of 
prepaid shared savings it is eligible to receive. The limits on the use 
of prepaid shared savings do not apply to shared savings paid by CMS at 
financial reconciliation. If an ACO believes it is important to 
distribute earned shared savings to ACO participants in order to 
encourage participation in the ACO, it may do so. Each ACO is well-
positioned to make its own decisions about the use of its shared 
savings, both prepaid and earned, and we understand that the permitted 
uses of prepaid shared savings may not align with the current financial 
strategy of some ACOs.
    Additionally, many direct beneficiary services may be provided by 
staff working for an ACO or its participating providers or suppliers. 
As we explained in the CY 2025 PFS proposed rule (89 FR 61596, 61874), 
if a staff member is hired or directed to provide these services, ACOs 
may, but are not required to, use dollars designated for direct 
beneficiary services to cover the percentage of their salary that 
aligns with the percentage of time the staff member spends ``providing 
direct beneficiary services that are not otherwise covered by 
Traditional Medicare,'' instead of fully including those staff expenses 
under the ``staffing'' category, where ACOs are limited in their 
ability to use prepaid savings. We understand that ACO staff may split 
time between multiple functions and proposed this aspect of our 
permitted uses criteria partly to make it easier for ACOs to categorize 
and account for the staff time necessary to provide direct beneficiary 
services not otherwise covered by Traditional Medicare while meeting 
the requirement that they spend at least 50 percent of their funding on 
direct beneficiary services.
    Comment: Several commenters expressed concern with CMS' proposal to 
require at least 50 percent of prepaid shared savings be spent on 
direct beneficiary services not otherwise payable in Traditional 
Medicare, because they believe it puts doctors in the direct role of 
supplying insurance benefits to Medicare recipients, akin to serving as 
a Medicare Advantage plan. A commenter stated that money spent on 
provision of direct beneficiary services should not be subject to 
repayment to CMS if the ACO fails to earn sufficient shared savings, 
and ACOs and participating providers should work within their 
communities to connect beneficiaries with such services rather than be 
required to supply supplemental benefits via prepaid shared savings. A 
commenter also suggested that CMS find more direct ways to expand 
health insurance benefits available to beneficiaries, including working 
with Congress to develop Traditional Medicare benefits that better 
compete with options offered by Medicare Advantage plans.
    Response: We disagree with commenters that using prepaid shared 
savings to pay for direct beneficiary services places providers in a 
role akin to a health insurer. Prepaid shared savings are an estimate 
of the shared savings an ACO may earn each performance year, and ACOs 
may use their earned shared savings to furnish additional services for 
their beneficiaries, including direct beneficiary services. The prepaid 
shared savings payment option merely changes the timing of CMS paying a 
portion of those savings to ACOs that elect this payment option. 
Participation in this payment option is voluntary, and ACOs control the 
amount of prepaid shared savings they request to receive, under the 
maximum amount calculated by CMS, and therefore how much of that 
funding must be invested into direct beneficiary services under Sec.  
425.640(e)(1)(ii). Additionally, as we explained in the proposed rule 
(89 FR 61870-61871), we are obligated to protect the Medicare Trust 
Funds, and this policy relies on the authority provided to the 
Secretary by section 1899(i)(3) of the Act. To protect the Medicare 
Trust Funds and maintain

[[Page 98142]]

compliance with section 1899(i)(3) of the Act, we determined that it 
would be appropriate for CMS to recoup all prepaid shared savings that 
ACOs receive, including those spent on direct beneficiary services.
    We agree with the commenter that ACOs and providers should work 
within their communities to connect beneficiaries with currently 
available resources, including direct beneficiary services that those 
beneficiaries may need. As explained earlier in this section of this 
final rule, we also note that ACO staff time used to connect 
beneficiaries with direct beneficiary services resources in their 
communities could be paid for with prepaid shared savings under the 
direct beneficiary services spending category. Additionally, ACOs can 
contract with CBOs using prepaid shared savings to provide direct 
beneficiary services, which CMS would encourage because in many 
instances CBOs have the most experience providing these services that 
are not otherwise payable by Traditional Medicare. CMS remains 
interested in working with and hearing from interested parties on ways 
to improve the care and benefits that beneficiaries receive.
    Comment: A few commenters noted concerns with the implementation of 
direct beneficiary services. One commenter expressed support for 
policies that increase access to direct beneficiary services for dually 
eligible beneficiaries (beneficiaries eligible for Medicare and 
Medicaid) but noted concern about the lack of coordination between the 
Shared Savings Program and other State and Federal programs, such as 
Medicaid, and identified possible unintended consequences of reducing 
the incentive for dually eligible beneficiaries to enroll or remain 
enrolled in an integrated dual eligible special needs plan (D-SNP). The 
commenter argued that poor coordination of economic and health related 
programs will cause significant confusion among beneficiaries and 
providers, which may result in healthcare access issues for 
beneficiaries. In addition, the commenter contended that because direct 
beneficiary services are not payable under Traditional Medicare Part A 
or B, direct beneficiary services would not be subject to the Medicare 
appeals process, which may cause additional confusion for beneficiaries 
if they only receive a direct beneficiary service from a provider 
associated with an ACO for a limited period of time and believe they 
should continue to receive the service. The commenter encouraged CMS to 
provide further clarification on the proposed policies and to provide 
guidance to providers and beneficiaries on the interaction of direct 
beneficiary services and services covered by other payers, such as 
Medicaid. Another commenter suggested that CMS monitor how ACOs use 
prepaid shared savings on direct beneficiary services.
    Response: We appreciate commenters raising this concern. D-SNPs 
play an important role in serving the special needs of some dual 
eligible beneficiaries. We agree that beneficiaries, including dually 
eligible beneficiaries, may find direct beneficiary services attractive 
We designed the standards governing the use of prepaid shared savings 
to ensure that the funds are used to improve the quality and 
effectiveness of beneficiary care while providing ACOs with the 
flexibility to experiment and determine which direct beneficiary 
services are most appropriate to offer to their assigned beneficiaries. 
However, as discussed in the proposed rule (89 FR 61874), ACOs should 
ensure the direct beneficiary services distributed to beneficiaries do 
not impact other means-tested benefits received by a beneficiary under 
Federal, State, or local means-tested programs. This includes benefits 
received through State Medicaid programs. ACOs should familiarize 
themselves with the means-tested benefits that their beneficiaries 
receive under Federal, State, or local means-tested programs, including 
their eligibility requirements. CMS provides quarterly lists to ACOs 
with information about beneficiaries including their State of residence 
and enrollment in Medicaid, which can be used to support this effort. 
Additionally, under Sec.  425.640(d)(2)(iv), ACOs would be responsible 
for notifying beneficiaries if a direct beneficiary service supplied by 
the ACO will no longer be available. ACOs must also share information 
with the impacted beneficiaries about any available alternatives for 
accessing similar services (89 FR 61873). ACOs should take care to 
avoid disrupting current care arrangements if they are not confident 
they will be able to provide direct beneficiary services to a 
beneficiary consistently. CMS intends to issue additional guidance to 
ACOs to support them in avoiding conflicts between their provision of 
direct beneficiary services and the means-tested benefits received by 
their beneficiaries under Federal, State, or local means-tested 
programs.
    We have also revised the definition of direct beneficiary services 
and removed some examples of direct beneficiary services to reduce 
potential impact on other means-tested benefits a beneficiary may 
receive.
    As both CMS and ACOs gain more experience with prepaid shared 
savings, we may reexamine these standards. To aid this process, ACOs 
are required to publicly report their use of prepaid shared savings 
under Sec.  425.308(b)(10), and CMS will be publicly sharing files with 
all ACO usage of prepaid shared savings. We appreciate commenters' 
feedback on how to improve communication in these areas to reduce 
beneficiary and provider confusion and will consider it in future 
rulemaking.
    Comment: A few commenters asked for clarification on the use of 
prepaid shared savings, specifically about ``fitness benefits'' that 
encourage physical activity for beneficiaries and whether prepaid 
shared savings could be used to support CBO efforts to build 
infrastructure that will allow them to collaborate with ACOs to 
effectively provide direct beneficiary services.
    Response: CMS appreciates these requests for clarification. 
``Fitness benefits'' for beneficiaries could be covered as a direct 
beneficiary service if the benefit is not otherwise covered by 
Traditional Medicare and are evidence-based and medically appropriate 
for the beneficiary based on clinical and social risk factors. 
Additionally, spending prepaid shared savings to support development of 
CBO infrastructure that will allow them to collaborate with ACOs could 
be covered under multiple prepaid shared savings permitted use 
categories, depending on the type of infrastructure assistance needed 
and the type of services provided by the CBO.
    We intend to release additional guidance with more specific 
information about permitted uses of funding for direct beneficiary 
services before the application cycle for Performance Year 2026.
    After consideration of public comments, we are finalizing the 
policy on the use and management prepaid shared savings as proposed, 
and as specified in new Sec.  425.640(e). This includes the requirement 
that ACOs spend to up to 50 percent of their estimated annual prepaid 
shared savings on staffing and healthcare infrastructure and up to 100 
percent, but not less than 50 percent, of their estimated annual 
prepaid shared savings on direct beneficiary services. We have also 
revised the definition of direct beneficiary services in the preamble 
text to reduce potential impact on any other means-tested benefits a 
beneficiary may receive.

[[Page 98143]]

e. Calculation of Prepaid Shared Savings
    As noted in section III.G.5.a of this final rule, we have 
determined that prepaid shared savings would not result in additional 
program expenditures. While ACOs will be required to repay the prepaid 
shared savings they receive through earned shared savings, it is also 
important for CMS to avoid paying ACOs an amount of prepaid shared 
savings that they are unlikely to be able to repay through earned 
shared savings. While prepaid shared savings will be helpful in 
providing successful ACOs with additional cash flow that would 
encourage their investment in activities that could potentially reduce 
ACOs' costs and improve the quality of care that ACOs provide to their 
beneficiaries, overpaying ACOs might result in a level of outstanding 
debt for some ACOs that could disrupt their operations and potentially 
their participation in the Shared Savings Program as well as generate 
unnecessary financial risk for CMS. Our proposed policies on the 
calculation and distribution of prepaid shared savings payments are 
intended to balance the benefit for the ACOs of receiving funding 
earlier with the risk of overpayment both for CMS and the ACO, while 
helping to ensure that prepaid shared savings do not result in 
additional program expenditures.
    We proposed a new Sec.  425.640(f) to provide an ACO that CMS 
determines meets the eligibility criteria described in section 
III.G.5.b of this final rule with a prepaid shared savings payment for 
each quarter of an agreement period that they are determined to be 
eligible for prepaid shared savings equal to the maximum quarterly 
payment amount calculated pursuant to the methodology outlined in Sec.  
425.640(f)(2) (as further explained elsewhere in this section), unless 
the ACO elects to receive a lesser amount as described in Sec.  
425.640(f)(6) (as further explained in section III.G.5.d. of this final 
rule) or the payment is withheld or terminated under Sec.  425.640(h). 
If an ACO's quarterly payment is withheld or terminated (as further 
explained in section III.G.5.f.(2) of this final rule), we will not 
provide ACOs with additional or catch-up payments if quarterly payments 
of prepaid shared savings are later resumed. We proposed that under new 
Sec.  [thinsp]425.640(f), CMS will notify in writing each ACO of its 
determination of the amount of prepaid shared savings. The notice would 
inform the ACO of its right to request reconsideration review in 
accordance with the procedures specified in subpart I of our 
regulations. If CMS does not make any prepaid shared savings payments, 
the notice would specify the reason(s) why and inform the ACO of its 
right to request reconsideration review in accordance with the 
standards specified in subpart I of our regulations. Thus, prior to 
each quarterly payment, we propose to provide the ACO with the notice 
described above in the form of a report that shows our calculation of 
the ACO's quarterly prepaid shared savings amount. We proposed to 
coincide the timing of these notices with the timing of existing report 
packages sent to ACOs for informational purposes, in December (after 
initial assignment prior to a given performance year), May (after 
quarter 1 assignment for a given performance year), and August (after 
quarter 2 assignment for a given performance year). Accordingly, notice 
regarding the first and second quarterly payments that an eligible ACO 
would receive in a given performance year would be provided in December 
of the immediately preceding year. Subsequent notices regarding the 
third and fourth quarterly payments that an eligible ACO would receive 
in a given performance year would then be provided in May and August, 
respectively, of that performance year.
    We also proposed a new Sec.  425.640(f)(2) to specify the 
calculation of an ACO's maximum quarterly prepaid shared savings 
payment. To calculate this payment, we proposed calculating a prepaid 
shared savings multiplier, adjusting it by several factors explained 
later in this section, and then multiplying one-fourth of the adjusted 
multiplier by an ACO's assigned beneficiary person years. We proposed 
to calculate the prepaid shared savings multiplier as the simple 
average of per capita savings or losses generated by the ACO during the 
two most recent performance years that have been financially reconciled 
at the time of the ACO's renewal application disposition, which 
constitute benchmark year (BY) 1 and BY2 of the agreement period in 
which the ACO may receive prepaid shared savings (``current agreement 
period,'' hereafter). That is, we would exclude BY3 from the 
calculation of an ACO's average per capita savings or losses because 
the performance year that constitutes BY3 of the ACO's current 
agreement period would not have been financially reconciled at the time 
of the ACO's application disposition. Accordingly, the per capita 
savings for each performance year would be determined as the quotient 
of the ACO's total updated benchmark expenditures minus total 
performance year expenditures divided by performance year assigned 
beneficiary person years. For purposes of calculating the simple 
average of per capita savings or losses generated by the ACO during the 
two most recent performance years that have been financially 
reconciled, we would use all savings generated during each of the 2 
performance years in the prepaid shared savings multiplier, not just 
savings that met or exceeded the ACO's minimum savings rate (MSR) for 
that prior performance year.
    Under new Sec.  425.640(f)(2)(iii), we proposed to apply a 
proration factor to the prepaid shared savings multiplier to account 
for situations where an ACO's assigned beneficiary population is larger 
in BY1 and BY2 when calculated using the ACO's certified ACO 
participant list and assignment methodology for a given performance 
year within the current agreement period, as compared to the ACO's 
assigned beneficiary population when the ACO was reconciled for the 
performance years that constitute BY1 and BY2 of the current agreement 
period. Mathematically, to apply this proration factor we would 
calculate the ratio between: (1) the ACO's average assigned beneficiary 
person years for the 2 performance years that constitute BY1 and BY2 
for the ACO's current agreement period (regardless of whether these 
performance years occurred over one or multiple prior agreement 
periods, which would occur if the ACO early renews immediately before 
the current agreement period) and (2) the average assigned beneficiary 
person years in BY1 and BY2 for the ACO's current agreement period 
calculated using the ACO's certified ACO participant list and 
assignment methodology for a given performance year within the current 
agreement period. Increases in the size of the ACO's assigned 
beneficiary population during the current agreement period would 
therefore result in a ratio less than 1, while decreases in the 
assigned beneficiary population would result in a ratio greater than 1. 
This ratio would be capped at 1 to avoid increasing the adjusted 
prepaid shared savings multiplier if the average number of 
beneficiaries assigned to the ACO across the 2 benchmark years of its 
current agreement period is lower than the average number of 
beneficiaries assigned during the 2 performance years that constitute 
BY1 and BY2. Prorating for growth in assignment would ensure that the 
prepaid shared savings amount does not exceed the amount of cumulative 
savings generated by the ACO during the performance years that 
constitute BY1 and BY2 for its current agreement period.
    It is necessary to calculate a proration factor at the start of the 
ACO's current agreement period to account for several

[[Page 98144]]

possible circumstances in which the ACO's assigned beneficiary 
population may be different in BY1 and BY2 when calculated using the 
ACO's certified ACO participant list and assignment methodology for a 
given performance year within the current agreement period, as compared 
to the ACO's assigned beneficiary population when the ACO was 
reconciled for the performance years that constitute BY1 and BY2 of the 
current agreement period. Specifically, changes in the size of the 
ACO's assigned beneficiary population at the start of the ACO's current 
agreement period could be due to the addition and removal of ACO 
participants or ACO providers/suppliers in accordance with Sec.  
425.118(b), a change to the ACO's beneficiary assignment methodology 
selection under Sec.  425.226(a)(1), or changes to the beneficiary 
assignment methodology specified in 42 CFR part 425, subpart E.
    Additionally, these circumstances could potentially arise after the 
start of the ACO's current agreement period. In turn, changes in the 
size of the ACO's assigned beneficiary population could potentially 
occur throughout the course of the current agreement period. Therefore, 
we proposed in new Sec.  425.640(f)(3)(ii) that for the second and each 
subsequent performance year during the term of the current agreement 
period, we would redetermine this proration factor.
    In addition to pro-rating the prepaid shared savings multiplier, we 
also proposed to adjust it in two ways. First, under new Sec.  
425.640(f)(2)(iv), we will apply a sharing rate scaling factor of \1/2\ 
(or 50 percent). This sharing rate scaling factor would be similar to 
the scaling factor we apply under Sec.  425.658(c)(1)(i) when 
calculating the prior savings adjustment, applicable to agreement 
periods beginning on or after January 1, 2024, as finalized in the CY 
2023 final rule (refer to 87 FR 69899 through 69915). As with the prior 
savings adjustment calculation, it is important to consider a measure 
of the sharing rate used in determining the shared savings payment the 
ACO earned in the applicable performance years under the agreement 
period immediately before it would receive prepaid shared savings. 
Consistent with the prior savings adjustment scaling factor, 50 percent 
represents an appropriate multiplier in this context because it 
represents a middle ground between the maximum sharing rate of 75 
percent under the ENHANCED track and the lower sharing rates available 
under the BASIC track.
    Second, under new Sec.  425.640(f)(2)(v)(A), we will apply a 
financial risk scaling factor equal to \2/3\. The purpose of the 
financial risk scaling factor would be to mitigate financial risk to 
the Medicare Trust Funds and to ACOs by reducing the possibility that 
an ACO's prepaid shared savings payments exceed the ACO's actual earned 
shared savings. The rationale for a financial risk scaling factor of 
this magnitude is that it enables us to account for a scenario in which 
an ACO earned zero per capita savings in the performance year that 
constitutes BY3 of the current agreement period, which is necessarily 
excluded from the calculation of an ACO's average per capita savings or 
losses for purposes of the prepaid shared savings multiplier because, 
as mentioned previously, the performance year that constitutes BY3 of 
the ACO's current agreement period will not have been financially 
reconciled at the time of the ACO's application disposition. Thus, by 
multiplying an ACO's average per capita savings or losses across BY1 
and BY2 by a financial risk scaling factor equal to \2/3\, we would 
impose a downward reduction on the prepaid shared savings multiplier by 
assuming that it would have been possible, in principle, for an ACO to 
have not earned any per capita savings in the performance year that 
constitutes BY3 of the current agreement period. By doing so, we are 
reducing the probability of distributing excessive prepaid shared 
savings. As discussed previously, it is important to avoid distribution 
of excessive prepaid shared savings because doing so could result in 
several undesirable outcomes, such as ACOs accruing debt to CMS that 
they are unable to repay, which could disruption the ACOs' operations 
and participation in the Shared Savings Program.
    Consistent with calculations of the prior savings adjustment (refer 
to Sec.  425.658), the positive regional adjustment (refer to Sec.  
425.656), and the proposed health equity benchmark adjustment (refer to 
section III.G.7.b of this final rule), we proposed under new Sec.  
425.640(f)(2)(v)(B), to cap the pro-rated, adjusted prepaid shared 
savings multiplier at 5 percent of national per capita FFS expenditures 
for Parts A and B services in order to ensure that the amount of 
prepaid shared savings that an ACO receives does not exceed an amount 
that the ACO is able to repay through earned shared savings. 
Specifically, we proposed to calculate the cap as 5 percent of national 
per capita FFS expenditures for Parts A and B services in BY2 for 
assignable beneficiaries identified for the 12-month calendar year 
corresponding to BY2. Consequently, under new Sec.  425.640(f)(2)(v), 
the pro-rated, adjusted, and capped prepaid shared savings multiplier 
that would ultimately be used to calculate a given maximum quarterly 
prepaid shared savings payment would be equal to the lesser of (A) the 
pro-rated, adjusted prepaid shared savings multiplier or (B) 5 percent 
of national per capita FFS expenditures for Parts A and B services in 
BY2 for assignable beneficiaries.
    To calculate a given maximum quarterly prepaid shared savings 
payment, we proposed under new Sec.  425.640(f)(4), to multiply one-
fourth of the pro-rated, adjusted, and capped prepaid shared savings 
multiplier (to account for four quarterly payments) by the ACO's 
assigned beneficiary person years for the latest available assignment 
list for a given performance year within the current agreement period. 
Varying the maximum quarterly payment to reflect the latest available 
assigned beneficiary person years is similar to how we calculate the 
AIP quarterly payment calculation (refer to Sec.  425.630(f), CY 2023 
PFS final rule (87 FR 69797)), for which we use the latest available 
assignment list to calculate the quarterly advance investment payment 
amount. We proposed to use the latest available beneficiary assigned 
person years for the maximum quarterly prepaid shared savings payment 
because an ACO's assigned beneficiary person years change over the 
course of a performance year and over the course of an agreement 
period. Because later assignment lists more closely reflect the final 
assignment list that will be used for calculating shared savings and 
losses for a given performance year within the current agreement 
period, later assignment lists are more likely than earlier assignment 
lists to facilitate calculation of quarterly prepaid shared savings 
payment amounts that closely align with the earned shared savings or 
losses that an ACO actually generates in the contemporaneous 
performance year. Using the latest available assigned beneficiary 
person years mitigates a financial risk that an ACO experiencing 
declining person years over the course of a performance year could 
receive excessive prepaid shared savings. As mentioned previously, 
overpaying prepaid shared savings could result in ACOs accruing a level 
of debt to CMS that they are unable to repay through earned shared 
savings which could, in turn, disrupt ACOs' operations and 
participation in the Shared Savings Program.
    We proposed to use assigned beneficiary person year values that CMS 
provides to ACOs in annual and quarterly informational reports. For

[[Page 98145]]

ACOs under preliminary prospective assignment with retrospective 
reconciliation, Medicare assigns beneficiaries in a preliminary manner 
at the beginning of a performance year based on the most recent data 
available (Sec.  425.400(a)(2)(i)). Assignment is updated quarterly 
based on the most recent 12 or 24 months of data, as applicable, under 
the methodology described in Sec. Sec.  425.402 and 425.404 (Sec.  
425.400(a)(2)(ii)). ACOs under preliminary prospective assignment with 
retrospective reconciliation receive an assigned beneficiary person 
years value based on the most recent 12 or 24 months of data, as 
applicable, in annual and quarterly informational reports. For ACOs 
under prospective assignment, Medicare FFS beneficiaries are 
prospectively assigned to an ACO at the beginning of each benchmark or 
performance year based on the beneficiary's use of primary care 
services in the most recent 12 or 24 months, as applicable, for which 
data are available, using the assignment methodology described in 
Sec. Sec.  425.402 and 425.404 (Sec.  425.400(a)(3)(i)). Each quarter, 
CMS excludes any prospectively assigned beneficiaries that meet the 
exclusion criteria under Sec.  425.401(b). ACOs under prospective 
assignment receive a year-to-date assigned beneficiary person years 
value with each quarterly report package. For ACOs under prospective 
assignment, we would annualize the quarterly year-to-date assigned 
beneficiary person years values for use in the maximum quarterly 
prepaid shared savings payment calculation. For example, a year-to-date 
person years value of 1,500 with quarter 1 informational reports would 
be annualized by multiplying 1,500 by 4. A year-to-date person years 
value of 3,000 with quarter 2 information reports would be annualized 
by multiplying 3,000 by 2.
    We further proposed to account for circumstances when an ACO was 
not reconciled for the performance year that constitutes BY1 in the 
calculation of average per capita prior savings and the proration 
factor. For instance, ACOs that renew their agreement periods early or 
are re-entering may not be reconciled for one or more of the years 
preceding the start of their current agreement period depending upon 
the timing of the expiration or termination of their prior agreement 
period and the start of their current agreement period. We proposed 
under new Sec.  425.640(f)(2)(i), that if an ACO was not reconciled 
during one of the 2 performance years that constitute BY1 or BY2 of its 
current agreement period, the ACO would receive zero savings or losses 
for the BY corresponding to the performance year that was not 
financially reconciled in the calculation of the prepaid shared savings 
multiplier. CMS has no way to determine whether the ACO would have 
generated savings or losses during a performance year for which it was 
not reconciled. We believe this is appropriate because it enables us to 
obtain a more conservative prediction of the ACO's financial 
performance for a given performance year within the current agreement 
period than we will be able to obtain if we were to exclude the BY 
corresponding to the performance year that was not financially 
reconciled from the calculation of the prepaid shared savings 
multiplier. Excluding this year entirely from the calculation of 
average per capita prior savings would unduly increase the weight on 
the other year included in the prepaid shared savings multiplier 
calculation. This would be problematic in a case where the ACO's 
financial performance in the BY corresponding to the performance year 
that was financially reconciled is atypically high because it would 
upwardly bias the prediction of the ACO's financial performance for a 
given performance year within the current agreement period. Thus, by 
imputing zero savings or losses for a BY corresponding to a performance 
year that was not financially reconciled in the calculation of the 
prepaid shared savings multiplier, we are reducing the probability of 
overpredicting the financial performance of the ACO for a given 
performance year within the current agreement period and, in turn, the 
probability of distributing excessive prepaid shared savings. As 
mentioned previously, excessive distribution of prepaid shared savings 
could result in several undesirable outcomes, such as ACOs accruing 
debt to CMS that they are unable to repay, which could disrupt the 
ACOs' operations and participation in the Shared Savings Program.
    In contrast, we determined that it would also be appropriate to 
exclude a year for which the ACO was not reconciled when calculating 
the proration factor. The purpose of the proration factor is to account 
for situations where an ACO's assigned beneficiary population 
calculated at financial reconciliation for the 2 performance years that 
constitute BY1 and BY2 of the ACO's current agreement period 
(numerator) is smaller than the ACO's assigned beneficiary population 
identified for those same years using the ACO's certified ACO 
participant list and assignment methodology for a given performance 
year within the current agreement period (denominator). If an ACO was 
not reconciled for one of the 2 performance years that constitute BY1 
and BY2 of the current agreement period, it would naturally have zero 
assigned beneficiary person years determined at financial 
reconciliation for such year, which would factor into the numerator of 
the proration factor if such year was considered. However, the ACO 
would have positive beneficiary counts in the 2 performance years that 
constitute BY1 and BY2 of the current agreement period generated using 
the ACO's certified ACO participant list and assignment methodology for 
a given performance year within the current agreement period, which 
would factor into the denominator of the proration factor if such year 
was considered. Thus, if the numerator and the denominator were both 
calculated as averages over 2 years, incorporating a year for which the 
ACO was not reconciled in the calculation of the proration factor would 
artificially decrease the proration factor and lead to a smaller pro-
rated average per capita prior savings for the ACO. Alternatively, if 
the numerator were calculated in a manner that excludes a performance 
year for which the ACO was not reconciled (that is, calculated in a 
manner that includes only the year for which the ACO was reconciled 
from among the 2 performance years that constitute BY1 and BY2 of the 
current agreement period) and the denominator was calculated as an 
average that included both of the 2 performance years that constitute 
BY1 and BY2 of the current agreement period, then the direction of the 
impact on the proration factor would depend on whether the number of 
assigned beneficiaries calculated using an ACO's current certified ACO 
participant list and assignment methodology in the benchmark year for 
which the ACO was not reconciled exceeds the number of assigned 
beneficiaries in the other benchmark year, and by how much. Therefore, 
we see no compelling reason to include a performance year immediately 
preceding the start of an ACO's current agreement period for which the 
ACO was not reconciled in the numerator or the denominator of the 
proration factor. Excluding such a year would ensure that the proration 
factor compares average person years determined for prior performance 
years at financial reconciliation (numerator) to average person years 
for those performance years determined using the ACO's current 
certified ACO participant

[[Page 98146]]

list and assignment methodology (denominator) across a consistent set 
of years preceding the start of the ACO's current agreement period.
    We also proposed to account for certain circumstances where there 
could be changes to the values used in calculating the prepaid shared 
savings multiplier as a result of issuance of a revised initial 
determination of financial performance under Sec.  425.315.
    To account for these situations and for the need to recalculate the 
proration factor as described elsewhere in this section, we proposed to 
specify in new Sec.  425.640(f)(3) when CMS would recalculate the 
prepaid shared savings multiplier during the current agreement period. 
For the first performance year in the current agreement period, the 
ACO's prepaid shared savings multiplier will be recalculated for 
changes in per capita shared savings or losses for the performance 
years that constitute BY1 or BY2 and that are used in the calculation 
of the prepaid shared savings multiplier as a result of issuance of a 
revised initial determination under Sec.  425.315. For the second and 
each subsequent performance year during the term of the current 
agreement period, the ACO's prepaid shared savings multiplier will be 
recalculated due to redetermining the proration factor for the addition 
and removal of ACO participants or ACO providers/suppliers in 
accordance with Sec.  425.118(b), for a change to the ACO's beneficiary 
assignment methodology selection under Sec.  425.226(a)(1), for a 
change to the beneficiary assignment methodology specified in subpart E 
of this part, and for changes in per capita shared savings or losses 
for the performance years that constitute BY1 or BY2 and that are used 
in the calculation of the prepaid shared savings multiplier as a result 
of issuance of a revised initial determination under Sec.  425.315.
    The specific computations involved in arriving at the maximum 
prepaid shared savings payment amount for a given ACO in a given 
quarter are described below.
     Step 1: Calculate a prepaid shared savings multiplier as 
the average per capita savings across the performance years that 
constitute BY1 and BY2 of the ACO's current agreement period. First, 
calculate the total per capita savings amount for each applicable 
performance year by subtracting assigned beneficiary expenditures from 
total benchmark expenditures and divide the difference by assigned 
beneficiary person years. Then, sum the resulting quotients and divide 
by 2. The per capita savings or losses would be set to zero for a 
performance year if the ACO was not reconciled for the performance 
year.
     Step 2: Apply a proration factor to the prepaid shared 
savings multiplier calculated in Step 1. The proration factor is equal 
to the ratio of the ACO's average assigned beneficiary person years for 
the 2 performance years that constitute BY1 and BY2 for the ACO's 
current agreement period (regardless of whether these performance years 
occurred over one or multiple prior agreement periods) and the ACO's 
average assigned beneficiary person years in BY1 and BY2 for the ACO's 
current agreement period calculated using the ACO's certified ACO 
participant list and assignment methodology for a given performance 
year within the current agreement period, capped at one. If the ACO was 
not reconciled for the performance year that constitutes BY1, the 
person years from that year (or years) will be excluded from the 
averages in the numerator and the denominator of this ratio. This ratio 
will be redetermined for each performance year during the agreement 
period in the event of any changes to the number of average person 
years in the benchmark years as a result of changes to the ACO's 
certified ACO participant list, a change to the ACO's beneficiary 
assignment methodology selection under Sec.  425.226(a)(1), or changes 
to the beneficiary assignment methodology specified in 42 CFR part 425, 
subpart E.
     Step 3: Adjust the pro-rated prepaid shared savings 
multiplier calculated in Step 2. First, apply a shared savings scaling 
factor by multiplying the pro-rated prepaid shared savings multiplier 
by 0.50. Then, multiply the resulting value by \2/3\ to apply a 
financial risk scaling factor.
     Step 4: Cap the pro-rated, adjusted prepaid shared savings 
multiplier at 5 percent of national per capita FFS expenditures for 
Parts A and B services in BY2 for assignable beneficiaries identified 
for the 12-month calendar year corresponding to BY2.
     Step 5: Multiply one-fourth of the pro-rated, adjusted, 
and capped prepaid shared savings multiplier by the assigned 
beneficiary person years derived from the ACO's latest available 
assignment list. The resulting product will serve as the ACO's total 
maximum prepaid shared savings payment for the applicable quarter. As 
discussed previously, an ACO's latest available assignment list is 
updated quarterly. For ACOs under preliminary prospective assignment 
with retrospective reconciliation, assignment is updated quarterly 
based on the most recent 12 or 24 months of data, as applicable, under 
the methodology described at Sec. Sec.  425.402 and 425.404 (Sec.  
425.400(a)(2)(ii)). For ACOs under prospective assignment, assignment 
is updated quarterly to exclude any prospectively assigned 
beneficiaries that meet the exclusion criteria under Sec.  425.401(b) 
(Sec.  425.401(b)). Thus, consistent with the methodology that we apply 
in the case of advance investment payments, quarterly variations in an 
ACO's assignment list will translate to variations in the maximum 
quarterly total prepaid shared savings payments that an ACO may receive 
in any given quarter, in order to help ensure that the payments 
accurately reflect the attributes of the ACO's assigned beneficiary 
population throughout the current agreement period.
    Table 43 presents a hypothetical example to demonstrate how the 
prepaid shared savings calculation would work in practice.
BILLING CODE 4120-01-P

[[Page 98147]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.085

BILLING CODE 4120-01-C
    The ACO's maximum quarterly prepaid shared savings payments would 
set a ceiling on the amount of quarterly prepaid shared savings that an 
ACO could receive from CMS for each quarter. ACOs will be able to 
request to receive an amount of funding under this maximum amount. 
Prior to each performance year, ACOs would notify CMS of the amount of 
prepaid shared savings they want to receive in the first quarter under 
the maximum quarterly prepaid shared savings amount and the first 
quarterly payment will be used to determine the total amount of prepaid 
shared savings the ACO will use to budget for that performance year. We 
proposed in new Sec.  425.640(f)(5) that for the purposes of 
determining the amount of prepaid shared savings permitted to be 
allocated to the uses specified in Sec.  425.640(e), the estimated 
annual prepaid shared savings amount can be calculated by multiplying 
the first quarterly payment amount the ACO will receive in each 
performance year by four. This allows the ACO to calculate the total 
amount of funding they are permitted to spend on each allowable use at 
the start of each performance year. If an ACO's maximum quarterly 
payments decrease over the performance year and result in the ACO 
receiving less than the estimated annual prepaid shared savings amount, 
the

[[Page 98148]]

ACO would not be subject to compliance actions solely because it spent 
more than 50 percent of the actual annual amount of prepaid shared 
savings it received during that PY on staffing and healthcare 
infrastructure, as long as it did not spend more than 50 percent of the 
originally estimated annual prepaid shared savings amount on staffing 
and healthcare infrastructure. For example, if an ACO is eligible for a 
maximum quarterly prepaid shared savings payment of $300,000 for 
quarter 1 of a performance year, but only wishes to receive $250,000 
for quarter 1 of a performance year, their estimated annual prepaid 
shared savings amount would be $1,000,000. This allows the ACO to spend 
up to $500,000 on staffing and healthcare infrastructure, or up to the 
full amount of $1,000,000 on direct beneficiary services. If an ACO has 
a reduction in assigned beneficiaries and is only eligible for a 
maximum quarterly prepaid shared savings payment of $200,000 for 
quarters 2, 3 and 4, this results in an actual total of $850,000 in 
received prepaid shared savings for the performance year. However, the 
ACO would still be permitted to spend up to $500,000 on staffing and 
healthcare infrastructure in that performance year, as that is 50 
percent of the original estimated amount and we do not want to change 
budget maximums retroactively for an ACO.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Most commenters supported the proposed policy for the 
calculation of the quarterly payments and the use of an ACO's latest 
available assignment list to reflect changes to the ACO's assigned 
population during the agreement period. One commenter encouraged CMS to 
provide ACOs with preliminary estimated prepaid shared savings amounts 
during the annual Medicare Shared Savings Program application cycle to 
inform development of their spend plan.
    Response: We appreciate the commenters' support. CMS does intend to 
share preliminary information about prepaid shared savings amounts with 
ACOs during the application cycle, which they can use to inform 
development of their spend plan.
    Comment: One commenter suggested that an ACO receiving prepaid 
shared savings should have the option to elect to receive a smaller 
payment amount than the maximum quarterly payment calculated by CMS, or 
to elect to have prepaid shared payments withheld and later resumed.
    Response: We agree with commenters that ACOs should have the 
flexibility to determine the amount of prepaid shared savings they 
receive below the maximum calculated quarterly payment, as well as the 
ability to elect to have these payments withheld and later resumed. 
Under Sec.  425.640(f)(6), we proposed to offer ACOs flexibility to 
request a smaller quarterly payment amount from CMS. Under Sec.  
425.640(h)(1)(vii), CMS may withhold an ACO's prepaid shared savings 
during an agreement period upon request of the ACO. Under Sec.  
425.640(h)(3), if CMS withholds a quarterly payment, the ACO will not 
receive additional or catch-up payments if quarterly payments of 
prepaid shared savings are later resumed. The ACO may later request to 
resume quarterly payments if it meets all other requirements for 
receiving quarterly payments.
    After consideration of public comments, we are finalizing the 
proposed prepaid shared savings payment and payment methodology 
provisions under Sec.  425.640(f) with modifications to specify the 
application of the provisions to ACOs that renewed to enter an 
agreement period beginning on January 1, 2025, and applied and were 
approved to participate in prepaid shared savings starting with 
performance year 2026 without renewing again. Specifically, under Sec.  
425.640(f)(1)(i) we specify that an eligible ACO entering an agreement 
period beginning on January 1, 2026, or in subsequent years will 
receive quarterly prepaid shared savings payments for the entirety of 
the ACO's agreement period unless the payment is withheld or terminated 
pursuant to Sec.  425.640(h). Under Sec.  425.640(f)(1)(ii), we specify 
that an eligible ACO participating in an agreement period beginning on 
January 1, 2025, will receive quarterly prepaid shared savings payments 
starting with the performance year beginning on January 1, 2026, and 
for the remainder of its agreement period, unless the payment is 
withheld or terminated pursuant to Sec.  425.640(h). The ACO will not 
receive additional or catch-up payments for performance year 2025. That 
is, these ACOs will only receive quarterly prepaid shared savings for 
the 4 years that would remain in their agreement period as of January 
1, 2026. We specify in Sec.  425.640(f)(1)(iii), in accordance with our 
proposal, that if an ACO's quarterly payment is withheld or terminated 
pursuant to paragraph Sec.  425.640(h), the ACO will not receive 
additional or catch-up payments if quarterly prepaid shared savings 
payments are later resumed.
    Regarding the steps involved in the calculation of prepaid shared 
savings payment amounts, ACOs that renewed to enter an agreement period 
beginning on January 1, 2025, and participate in prepaid shared savings 
starting with performance year 2026 without renewing again will be 
subject to the same methodology that applies to all other ACOs that 
participate in the payment option, consistent with proposed Sec.  
425.640(f)(2) through (f)(6). For example, for a given ACO that renewed 
in 2025 and participates in the payment option starting with 
performance year 2026 without renewing again, we will calculate both 
the prepaid shared savings multiplier and the proration factor by 
reference to the two performance years that constitute BY1 and BY2 of 
the agreement period during which the ACO receives prepaid shared 
savings: 2022 and 2023, respectively. Similarly, we will cap the pro-
rated, adjusted prepaid shared savings multiplier for these ACOs at 5 
percent of national per capita FFS expenditures for Parts A and B 
services for assignable beneficiaries identified for the 12-month 
calendar year corresponding to 2023, or BY2. We are finalizing without 
modification our proposed methodology described at new Sec.  
425.640(f)(2) through (f)(6).
f. Duration, Frequency and Withholding or Termination of Prepaid Shared 
Savings Payments
(1) Duration and Frequency
    We anticipate that the vast majority of ACOs receiving prepaid 
shared savings will fully repay the amount they receive of prepaid 
shared savings from their earned shared savings on an annual basis. 
This will allow CMS to distribute prepaid shared savings to ACOs 
continually, throughout an agreement period in which the ACO is deemed 
eligible to participate, without withholding prepaid shared savings 
under Sec.  425.640(h). We proposed at Sec.  425.640(f)(1) that ACOs 
would receive quarterly prepaid shared savings payments for the 
entirety of the ACO's agreement period unless withheld or terminated 
under Sec.  425.640(h). However, we also proposed at Sec.  
425.640(h)(3) that if CMS withholds or terminates a quarterly payment 
under paragraph (h), the ACO will not receive additional or catch-up 
payments if quarterly prepaid shared savings payments are later 
resumed. As discussed later in this section, prepaid shared savings 
payments will generally be withheld from ACOs when we have information 
that the ACO may not generate sufficient earned shared

[[Page 98149]]

savings to repay the prepaid shared savings in current or future 
performance years or has other Shared Savings Program compliance 
issues. Once prepaid shared savings payments are withheld, if an ACO 
earns shared savings in a future year, then prepaid shared savings can 
resume at the time of the next scheduled quarterly payment, but catch-
up payments would not be provided. This protects CMS from distributing 
payments that the ACOs may not be able to repay and the ACOs from 
accumulating more debt than they can repay through earned shared 
savings. An ACO will be notified if CMS is willing to resume prepaid 
shared savings payments and will have the ability to elect to resume 
payments as well as select the payment amount they would like to 
receive under the maximum quarterly payment, if desired.
(2) Withholding and Termination
    To ensure orderly administration of the Shared Savings Program, 
including protection of the Medicare Trust Funds, we intend to monitor 
the performance of ACOs receiving prepaid shared savings and proposed 
that we may withhold or terminate quarterly prepaid shared savings 
payments under a variety of specified circumstances. Many of the 
circumstances under which we proposed that CMS may withhold to 
terminate the payments directly relate to circumstances under which we 
will be concerned that the ACO has not or will not meet the standards 
for the use of prepaid shared savings, such as an ACO's failure to 
comply with the requirements of Sec.  425.640. Other circumstances 
address situations where it becomes apparent that the ACO is likely to 
lack the ability to repay prepaid shared savings to CMS. For example, 
we proposed that CMS may withhold or terminate the payments if CMS 
predicts that the ACO will not generate sufficient earned shared 
savings to repay the prepaid shared savings in future performance years 
or has other Shared Savings Program compliance issues. These 
predictions will be based on a rolling 12-month window of beneficiary 
claims data or year-to-date beneficiary claims data, depending on 
whether an ACO selects prospective assignment or preliminary 
prospective assignment with retrospective reconciliation. We proposed 
that CMS may also withhold quarterly payments if an ACO fails to earn 
enough shared savings in a performance year to fully repay the prepaid 
shared savings the ACO received during that performance year, to avoid 
the ACO accruing debt they will be unable to repay. As noted earlier in 
this section, an ACO will be notified if CMS determines the ACO is 
sufficiently likely to earn additional shared savings such that CMS 
could resume prepaid shared savings payments, in which case the ACO 
will have the ability to elect to resume payments and select the 
payment amount it would like to receive. Additionally, while unspent 
funds received for a performance year must be reallocated in the spend 
plan for the ACO's next performance year as noted at Sec.  
425.640(e)(3), if an ACO fails to spend a majority of the prepaid 
shared savings received in a performance year, we may withhold future 
quarterly payments until the ACO spends the funding already received 
and reports this spending to CMS through an updated spend plan. An ACO 
may also request that CMS withhold future quarterly payments until the 
ACO is ready for payments to resume. ACOs that elect to have CMS 
withhold their prepaid shared savings payments will have the ability to 
later elect to resume payments as well as select the payment amount 
they would like to receive. If an ACO has unspent funding at the end of 
their agreement period, that funding must be repaid to CMS under Sec.  
425.640(e)(3).
    Accordingly, we proposed at Sec.  425.640(h)(1) that CMS may 
withhold or terminate prepaid shared savings during an agreement period 
if:
     The ACO fails to comply with any of the prepaid shared 
savings requirements of Sec.  425.640;
     The ACO meets any of the grounds for ACO termination set 
forth at Sec.  425.218(b); \559\
---------------------------------------------------------------------------

    \559\ Under Sec. Sec.  425.216 and 425.218, CMS can terminate an 
ACO's participation agreement or take pre-termination actions (such 
as requesting a corrective action plan) if CMS determines that an 
ACO is not in compliance with the requirements of Part 425 of our 
regulations.
---------------------------------------------------------------------------

     The ACO fails to earn sufficient shared savings from a 
performance year to repay the prepaid shared savings they received 
during that performance year;
     CMS determines that the ACO is not expected to earn shared 
savings in a performance year during the agreement period in which the 
ACO received prepaid shared savings, based on a rolling 12-month window 
of beneficiary claims data or year-to-date beneficiary claims data;
     The ACO falls below 5,000 assigned beneficiaries;
     The ACO fails to spend the majority of prepaid shared 
savings they receive in a performance year; or
     The ACO requests that CMS withhold a future quarterly 
payment.
    Additionally, we proposed at Sec.  425.640(h)(2) that CMS must 
terminate an ACO's prepaid shared savings during an agreement period 
if:
     The ACO fails to maintain an adequate repayment mechanism 
in accordance with Sec.  425.204(f); or
     The ACO fails to meet the quality performance standard as 
specified under Sec.  425.512 or is subject to a pre-termination action 
after CMS determined the ACO avoided at-risk beneficiaries as specified 
under Sec.  425.316(b)(2).
    We further proposed under Sec.  425.640(h)(4) that CMS may 
immediately terminate an ACO's prepaid shared savings under Sec.  
425.640(h)(1) and (2) without taking any of the pre-termination actions 
set forth in Sec.  425.216.
    In general, if an ACO is complying with the Shared Savings Program 
and prepaid shared savings requirements but is not achieving, or is not 
predicted to achieve, success in earning shared savings, CMS may 
withhold payments while the ACO works to improve its financial 
performance. For example, if an ACO is eligible to receive quarterly 
prepaid shared savings payments in an agreement period beginning in 
2026 but does not earn shared savings during 2025 reconciliation that 
occurs in mid-2026, the ACO's quarterly payments will be withheld until 
the ACO earns shared savings in a future performance year 
reconciliation. Similar to our rationale for the eligibility 
requirement described at Sec.  425.640(b)(2), we believe that recent 
past performance in earning shared savings provides information on the 
ACO's potential to earn future shared savings, and we will not 
distribute prepaid shared savings to ACOs that have not earned 
sufficient shared savings in their most recent reconciled performance 
year to repay the prepaid shared savings they received during that 
performance year.
    Additionally, if CMS, through its financial monitoring of ACOs, 
predicts that an ACO would not earn shared savings in its current 
performance year, quarterly prepaid shared savings may be withheld 
until the ACO generates earned shared savings in the future. We expect 
that immediate termination of prepaid shared savings during an 
agreement period, without a possibility of resumption of payments 
during that agreement period, would be invoked only in cases of serious 
noncompliance with the requirements of Sec.  425.640, including 
deliberately spending prepaid shared savings on a prohibited use, or 
when the ACO's actions or inaction poses a risk of harm to 
beneficiaries or negatively affects their access to care.

[[Page 98150]]

    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Two commenters appreciated that CMS would generally only 
immediately terminate prepaid shared savings in cases of serious 
noncompliance with the requirements of Sec.  425.640 or when the ACO's 
actions or inaction poses a risk of harm to beneficiaries or negatively 
affects their access to care. Other commenters encouraged CMS to 
provide more clarity around what would trigger CMS's concern that an 
ACO may be unable to fully repay prepaid shared savings payments and 
offer more flexibility to work with ACOs before withholding or 
terminating prepaid shared payments.
    Response: CMS will primarily review claims data based on a rolling 
12-month window or year-to-date data, depending on whether an ACO 
selects prospective assignment or preliminary prospective assignment 
with retrospective reconciliation, to determine if an ACO is expected 
to earn adequate shared savings to repay CMS. For example, if CMS 
determines that it is likely that an ACO will not earn sufficient 
shared savings to repay CMS, CMS may withhold or terminate quarterly 
payments. CMS intends to release additional guidance on prepaid shared 
savings in advance of the PY 2026 annual application and change request 
cycle. ACOs will have access to the same financial indicators and 
quarterly reports reviewed by CMS in order to track their own financial 
performance. We refer commenters to additional discussion elsewhere in 
this section of this final rule explaining when CMS may withhold or 
terminate prepaid shared savings payments and the flexibilities that 
ACOs would have with respect to these issues.
    Comment: One commenter requested additional clarity around 
situations where an ACO is not able to repay prepaid shared savings 
through earned shared savings, or if CMS determines that prepaid shared 
savings have been used inappropriately. They note that there is not a 
clear pathway to refute these determinations and warn against 
withholding or terminating quarterly prepaid shared savings payments 
too quickly. They requested a clearer pathway for an ACO to refute 
these determination and recoup payments which have been withheld or 
terminated.
    Response: In response to the commenter who requested a pathway for 
ACOs to refute prepaid shared savings determinations and recoup 
payments which have been withheld or terminated, we note that Subpart I 
of 42 CFR part 425 details the reconsideration review process for the 
Shared Savings Program. For an ACO that is unable to repay prepaid 
shared savings through earned shared savings, the options for repayment 
would depend on where the ACO is in the agreement period. For ACOs not 
in the final performance year of their agreement period, they will be 
able to carry forward any unpaid balance of prepaid shared savings to a 
subsequent performance year and repay them through future earned shared 
savings during the agreement period, under Sec.  425.640(g)(1). CMS 
will only immediately require an ACO to repay prepaid shared savings if 
the ACO is at the end of its agreement period, or if the ACO or CMS 
terminates its participation agreement mid-agreement period, under 
Sec.  425.640(g)(3). Under Sec.  425.640(g)(3), if an ACO has an 
outstanding balance of prepaid shared savings after the calculation of 
shared savings or losses for the final performance year of an agreement 
period in which an ACO receives prepaid shared savings, the ACO must 
repay any outstanding amount of prepaid shared savings it received in 
full upon request from CMS. CMS would provide written notification to 
the ACO of the amount due and the ACO must pay such amount no later 
than 90 days after the receipt of notification. If an ACO fails to 
repay any outstanding amount of prepaid shared savings within 90 days 
of the notification, CMS would recoup that amount from the ACO's 
repayment mechanism established under Sec.  425.204(f).
    Additionally, if an ACO fails to earn sufficient savings to repay 
prepaid shared savings in a performance year, CMS may withhold 
additional quarterly payments to an ACO during the agreement period 
until prepaid shared savings are repaid, under Sec.  425.640(h)(1), in 
order to avoid burdening an ACO with more debt than it is able to 
repay. While the ACO would not receive quarterly payments until it 
earns sufficient shared savings to repay all prepaid shared savings it 
received, CMS would not recoup earned shared savings in excess of any 
outstanding prepaid shared savings. If prepaid shared savings are 
resumed during an agreement period, catch-up payments would not be 
provided.
    In the event that CMS determines an ACO has used prepaid shared 
savings for a prohibited use under Sec.  425.640(e)(2) or failed to 
spend the funding in accordance with Sec.  425.640(e)(1)(i) and (ii), 
CMS may immediately terminate prepaid shared savings during an 
agreement period (Sec.  425.640(h)(4)).
    After consideration of public comments, we are finalizing the 
proposed policies on the duration and frequency of prepaid shared 
savings under 425.640(f)(1) with modifications to specify that for ACOs 
that renewed to enter an agreement period beginning on January 1, 2025, 
and applied and were approved to participate in prepaid shared savings 
starting with performance year 2026 without renewing again, they will 
receive quarterly prepaid shared savings payments starting with the 
performance year beginning on January 1, 2026, and for the remainder of 
its agreement period, unless the payment is withheld or terminated 
pursuant to paragraph (h) of this section. The ACO will not receive 
additional or catch-up payments for performance year 2025. We are 
finalizing without modification our proposed policy on withholding or 
termination of prepaid shared savings payments at new Sec.  425.640(h).
g. Monitoring ACO Eligibility for and use of Prepaid Shared Savings
    To provide CMS with a clear indication of how ACOs intend to spend 
prepaid shared savings, help provide adequate protection to the 
Medicare Trust Funds, and prevent funds from being misdirected or 
appropriated for activities that do not fall within the parameters set 
forth within proposed Sec.  425.640(e), we proposed at Sec.  
425.316(f)(1) to monitor ACOs receiving prepaid shared savings for 
compliance with Sec.  425.640(e) and to determine whether it would be 
appropriate to withhold or terminate an ACO's prepaid shared savings 
under Sec.  425.640(h)(1) and (h)(2). In the proposed rule, we 
explained that for the first performance year of the current agreement 
period, we would monitor the ACO's use of prepaid shared savings by 
comparing the anticipated spending as set forth in the spend plan 
submitted with an ACO's application against the actual spending as 
reported by the ACO, including any expenditures not identified in the 
spend plan. ACOs would be required to submit a revised spend plan with 
updated anticipated spending annually, as well as annually report their 
actual expenditures to CMS and on their public reporting web page as 
noted in Sec. Sec.  425.308(b)(10) and 425.640(i), and we would 
similarly monitor the ACO's use of prepaid shared savings during the 
current agreement period using the updated spend plan and those 
reports. The reported annual spending must include any expenditures of 
prepaid shared

[[Page 98151]]

savings on items not identified in the spend plan. In the event that an 
ACO uses prepaid shared savings for uses not permitted by Sec.  
425.640(e), we would require them to reallocate the funding to a 
permitted use and may take compliance action as specified at Sec. Sec.  
425.216, 425.218 or withhold or terminate payments as specified at 
Sec.  425.640(h)(1) and (2).
    Similar to the policy for advance investment payments (Sec.  
425.630), we additionally believe that transparency of information in 
the healthcare sector facilitates more informed patient choice and 
offers incentives and feedback that help improve the quality and lower 
the cost of care and improve oversight with respect to program 
integrity. As CMS has discussed in previous final rules, improved 
transparency supports a number of program requirements. In particular, 
increased transparency is consistent with and supports the requirement 
under section 1899(b)(2)(A) of the Act for an ACO to be willing to 
``become accountable for the quality, cost, and overall care'' of the 
Medicare beneficiaries assigned to it. Therefore, we believe it is 
desirable and consistent with section 1899(b)(2)(A) of the Act for 
several aspects of an ACO's use of prepaid shared savings to be 
available to the public. Making this information available would 
provide both Medicare beneficiaries and the general public with insight 
into the use of prepaid shared savings by an ACO.
    Accordingly, we proposed to modify Sec.  425.308 to require that an 
ACO publicly report information annually regarding prepaid shared 
savings on its public reporting web page. Specifically, under new Sec.  
425.308(b)(10), we proposed that, for each performance year, an ACO 
would be required to report (in a standardized format specified by CMS) 
its spend plan, the total amount of prepaid shared savings received 
from CMS, and an itemization of how any prepaid shared savings were 
actually spent during each year, including expenditure categories, the 
dollar amounts spent on the various categories, information about which 
groups of beneficiaries received direct beneficiary services that were 
purchased with prepaid shared savings and investments that were made in 
the ACO with prepaid shared savings, how these direct beneficiary 
services were provided to beneficiaries and how the direct beneficiary 
services and investments supported the care of beneficiaries, any 
changes to the spend plan as submitted under Sec.  425.640(d)(2), and 
such other information as may be specified by CMS.\560\ We proposed 
that this itemization must include expenditures not identified or 
anticipated in the ACO's submitted spend plan, and any amounts 
remaining unspent. We also proposed at Sec.  425.640(i) that ACOs also 
be required to report this information directly to CMS.
---------------------------------------------------------------------------

    \560\ We note that in a corresponding description in the 
preamble of the CY 2025 PFS proposed rule (89 FR 61882) we 
inadvertently misstated some of the proposed regulations text under 
Sec.  425.308(b)(10), which we have corrected within this 
description in this final rule.
---------------------------------------------------------------------------

    Under this proposal, if CMS determined that an ACO used prepaid 
shared savings for a prohibited use under Sec.  425.640(e)(2), 
allocated over 50 percent of their annual maximum prepaid shared 
savings on staffing and healthcare infrastructure as at Sec.  
425.640(e)(1)(i), or failed to spend at least 50 percent of the annual 
maximum prepaid shared savings on direct beneficiary services, we would 
require the ACO to reallocate the funding in compliance with Sec.  
425.640(e) and submit an updated spend plan demonstrating the 
reallocation by a deadline specified by CMS and may withhold or 
terminate the ACO's receipt of prepaid shared savings at Sec.  
425.640(h)(1). CMS could also take compliance action as specified at 
Sec. Sec.  425.216 and 425.218. If an ACO fails to reallocate prepaid 
shared savings it received by a deadline specified by CMS, the ACO must 
repay all prepaid shared savings it received and may be subject to 
compliance action as specified at Sec. Sec.  425.216 and 425.218. CMS 
would provide written notification to the ACO of the amount due and the 
ACO must pay such amount no later than 90 days after the receipt of 
such notification.
    Additionally, we noted that under existing Sec.  425.314, ACOs 
would be required to retain and provide CMS with access to adequate 
books, contracts, records, and other evidence to ensure that we have 
the information necessary to conduct appropriate monitoring and 
oversight of ACOs' use of prepaid shared savings (for example, 
invoices, receipts, and other supporting documentation of prepaid 
shared savings disbursements). To protect the Shared Savings Program 
and the Medicare Trust Funds, we explained that we would reserve the 
right under Sec. Sec.  425.314 and 425.316(a) to audit and monitor ACO 
compliance with Shared Savings Program requirements, including with 
respect to prepaid shared savings. We explained that we would conduct 
audits as necessary to monitor and assess an ACO's use of prepaid 
shared savings and compliance with program requirements related to such 
payments.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our response.
    Comment: We received a few general comments on the administrative 
burden associated with participating in the prepaid shared savings 
payment option including the reporting requirements. Commenters noted 
that these burdens might negatively impact participation in prepaid 
shared savings.
    Response: We understand that the reporting requirements relating to 
the use of prepaid shared savings will produce some administrative 
burden for ACOs. However, these requirements are important for 
promoting transparency as to ACO's use of prepaid shared savings. These 
requirements are also important for allowing CMS to monitor that 
prepaid shared savings are spent consistent with program requirements 
and support the requirement under section 1899(b)(2)(A) of the Act for 
an ACO to be willing to ``become accountable for the quality, cost, and 
overall care'' of the Medicare beneficiaries assigned to it.
    After consideration of public comments, we are finalizing without 
modification the proposed policies on monitoring ACO eligibility for 
and use of prepaid shared savings under new Sec. Sec.  425.316(f)(1) 
and 425.308(b)(10).
h. Recoupment of Prepaid Shared Savings
    We anticipate that the vast majority of ACOs receiving prepaid 
shared savings will fully repay the amount they receive prepaid shared 
savings from their earned shared savings on an annual basis. However, 
as prepaid shared savings are an advance of the shared savings payments 
an ACO is expected to earn, we proposed to recoup prepaid shared 
savings from ACOs that are unable to fully repay prepaid shared savings 
through their earned shared savings. This approach will also help 
ensure that prepaid shared savings will not result in additional 
expenditures for the Shared Savings Program, as required by section 
1899(i)(3)(B) of the Act.
    We proposed to add a new Sec.  425.640(g)(1) to recoup prepaid 
shared savings from earned shared savings, as defined at Sec.  425.20, 
in each performance year. If there are insufficient shared savings to 
recoup the prepaid shared savings made to an ACO for a performance 
year, we would hold paying future prepaid shared savings payments and 
carry forward the remaining balance owed to subsequent

[[Page 98152]]

performance year(s) in which the ACO achieves shared savings.
    Under new Sec.  425.640(g)(2), we proposed that in circumstances 
where the amount of shared savings earned by the ACO is revised upward 
by CMS for any reason, we would reduce the redetermined amount of 
shared savings by the amount of prepaid shared savings made to the ACO 
as of the date of the redetermination. If the amount of shared savings 
earned by the ACO is revised downward by CMS for any reason, we 
proposed that the ACO would not receive a refund of any portion of the 
prepaid shared savings previously recouped or otherwise repaid, and any 
prepaid shared savings that are now outstanding due to the revision in 
earned shared savings must be repaid to CMS upon request.
    We proposed under Sec.  425.640(g)(3) that if an ACO has an 
outstanding balance of prepaid shared savings after the calculation of 
shared savings or losses for the final performance year of an agreement 
period in which an ACO receives prepaid shared savings, the ACO must 
repay any outstanding amount of prepaid shared savings it received in 
full upon request from CMS. We will provide written notification to the 
ACO of the amount due and the ACO must pay such amount no later than 90 
days after the receipt of notification. If an ACO fails to repay any 
outstanding amount of prepaid shared savings within 90 days of the 
notification, we would recoup that amount from the ACO's repayment 
mechanism established at Sec.  425.204(f).
    For example, if an ACO received $300,000 in prepaid shared savings 
payments and earned shared savings of $500,000 for the first 
performance year, we would recoup $300,000 in prepaid shared savings 
payments and make $200,000 in reconciliation shared savings payments to 
the ACO. Alternatively, if an ACO received $300,000 in prepaid shared 
savings and earned shared savings of $200,000 for the first performance 
year, we would recoup only $200,000 in prepaid shared savings payment 
and not make a reconciliation shared savings payment to the ACO. The 
ACO would have future prepaid shared savings payments placed on hold, 
and the outstanding balance of $100,000 would be carried forward, to be 
recouped in a future performance year in which the ACO achieves shared 
savings. Under a third scenario, if the ACO does not earn sufficient 
shared savings in all 5 performance years of its agreement period, CMS 
would recoup the outstanding balance directly from the ACO under new 
Sec.  425.640(g)(3). If the ACO fails to repay the funding to CMS, we 
would recoup the outstanding balance from the ACO's repayment 
mechanism.
    Under the new Sec.  425.640(g)(4), we proposed that if an ACO or 
CMS terminates its participation agreement during the agreement period 
in which it received prepaid shared savings, the ACO must repay all 
outstanding prepaid shared savings received in full. In such a case, we 
will provide written notification to the ACO of the amount due and the 
ACO must pay such amount no later than 90 days after the receipt of 
notification. If an ACO fails to repay any outstanding amount of 
prepaid shared savings within 90 days of the notification, we would 
recoup that amount from the ACO's repayment mechanism established at 
Sec.  425.204(f). We also proposed edits to Sec.  425.204(f) to 
incorporate a reference to prepaid shared savings in existing 
provisions that reference only shared losses to clarify that we would 
be able to recoup outstanding prepaid shared savings from an ACO's 
repayment mechanism.\561\ If the ACO terminates its participation 
agreement early in order to renew under a new participation agreement, 
CMS may also recover the amount owed by reducing the amount of any 
future shared savings the ACO may be eligible to receive.
---------------------------------------------------------------------------

    \561\ In the CY 2025 PFS proposed rule, refer to the proposed 
amendments to the text of the regulations for Sec.  425.204(f) at 89 
FR 62220. We note that we inadvertently mischaracterized some of 
these proposed changes in the preamble description at 89 FR 61883.
---------------------------------------------------------------------------

    In the event the ACO enters into proceedings relating to 
bankruptcy, whether voluntary or involuntary, we proposed at Sec.  
425.630(g)(5) that the ACO must provide written notice of the 
bankruptcy to CMS and to the U.S. Attorney's Office in the district 
where the bankruptcy was filed, unless final payment for the agreement 
period has been made by either CMS or the administrative or judicial 
review proceedings relating to any payments under the Shared Savings 
Program have been fully and finally resolved. The notice of bankruptcy 
must be sent by certified mail no later than 5 days after the petition 
has been filed and must contain a copy of the filed bankruptcy petition 
(including its docket number). The notice to CMS must be addressed to 
the CMS Office of Financial Management at 7500 Security Boulevard, 
Mailstop C3-01-24, Baltimore, MD 21244, or such other address as may be 
specified on the CMS website for purposes of receiving such notices.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters noted that to protect the fiscal sustainability 
of the Medicare program, it is imperative that CMS implement a robust 
recoupment process as planned to avoid unwarranted increases in program 
spending. Another commenter expressed concern for the financial risks 
tied to participation in prepaid shared savings option, as the 
requirement for ACOs to repay prepaid shared savings if they do not 
earn sufficient savings to repay all of the prepaid shared saving 
received by the ACO could pose significant challenges. This commenter 
is concerned that ACOs may be hesitant to elect to participate in the 
prepaid shared savings option if they are uncomfortable with the risk 
that they will be unable to repay CMS. This financial obligation could 
deter participation in the option or create financial instability, even 
among ACOs that are otherwise performing well. This commenter requested 
detailed guidelines from CMS on repayment terms, permissible 
investments of prepaid shared savings, and additional monitoring 
processes to ensure that the proposal is implemented effectively and 
transparently. A different commenter recommended that CMS work with 
ACOs to develop reasonable repayment parameters.
    Response: We appreciate commenters' concerns about protecting the 
Medicare Trust Funds, and we have designed prepaid shared savings 
eligibility requirements to maximize the chance that participating ACOs 
should earn sufficient shared savings to repay all upfront funding they 
receive on an annual basis.
    With respect to the other commenter's concern that requiring ACOs 
to repay prepaid shared savings may deter some ACOs from electing this 
option, we acknowledge that some ACOs that are eligible to receive 
prepaid shared savings may opt not to receive them. The policies we 
adopt to improve the quality and efficiency of care provided to 
beneficiaries must be consistent with our statutory obligation to not 
increase program expenditures, as discussed elsewhere in this rule. We 
have balanced these concerns by providing ACOs with numerous 
opportunities to repay prepaid shared savings through earned shared 
savings.
    Under Sec.  425.630(g)(1), if an ACO fails to earn sufficient 
prepaid shared savings, the balance will carry forward until all 
prepaid shared savings have been recouped by CMS. Under Sec.  
425.630(g)(3), if an ACO has an outstanding balance of prepaid shared

[[Page 98153]]

savings after the calculation of shared savings or losses for the final 
performance year of an agreement period in which an ACO receives 
prepaid shared savings, then the ACO must repay any outstanding amount 
of prepaid shared savings it received in full upon request from CMS. 
CMS would provide written notification to the ACO of the amount due and 
the ACO would have 90 days after the receipt of notification to make 
repayment. Only if the ACO failed to repay any outstanding amount of 
prepaid shared savings within 90 days of that written notification, CMS 
would recoup against an ACO's repayment mechanism established under 
Sec.  425.204(f). Also, under Sec.  425.630(g)(3), CMS may recover any 
outstanding amount of prepaid shared savings owed by recouping from any 
future shared savings the ACO may be eligible to receive in a 
subsequent agreement period. If an ACO or CMS terminates the ACOs 
participation agreement during the agreement period in which it 
received prepaid shared savings, the ACO must repay all outstanding 
prepaid shared savings it received in full upon request from CMS (Sec.  
425.640(g)(4)), unless the ACO terminates its current participation 
agreement under Sec.  425.220 and immediately enters a new agreement 
period to continue its participation in the program, in which case CMS 
may recover the amount owed by recouping from any future shared savings 
the ACO may be eligible to receive in subsequent agreement periods 
(Sec.  425.640(g)(4)(ii)).
    ACOs that do not earn sufficient shared savings during an agreement 
period where they are receiving prepaid shared savings may also have 
their quarterly prepaid shared savings withheld until they earn 
sufficient shared savings again, in order to avoid overburdening the 
ACO with repayment obligations. ACOs are also permitted to request 
lower quarterly payment amounts, in order to avoid incurring a debt 
they are uncomfortable repaying to CMS. Additionally, the eligibility 
requirement for an ACO to have established an adequate repayment 
mechanism helps protect ACOs from incurring a debt in prepaid shared 
savings that they may be unable to repay.
    CMS intends to provide more detailed guidance for ACOs regarding 
participation in the prepaid shared savings option, including guidance 
on repayment processes and permissible uses of prepaid shared savings 
prior to the 2026 Medicare Shared Savings Program application cycle. 
However, we note that this is a voluntary payment option and no ACO 
must participate. CMS appreciates commenters' feedback on the prepaid 
shared savings recoupment processes and will consider this feedback in 
future rulemaking.
    After consideration of public comments, we are finalizing as 
proposed our policies on recoupment of prepaid shared savings, as 
specified under new Sec.  425.640(g). We are also finalizing without 
modification our proposed amendments to Sec.  425.204(f) to support the 
requirement for ACOs to have in place an adequate repayment mechanism 
that CMS can use to recoup outstanding prepaid shared savings (as 
applicable).
i. OIG Safe Harbor Authority
    In section II.G.5.i. of the CY 2025 PFS proposed rule (89 FR 61883 
and 61884), we stated that should the proposed policies be finalized, 
CMS expects to make a determination, that the anti-kickback statute 
safe harbor for CMS-sponsored model patient incentives (Sec.  
1001.952(ii)(2)) is available to protect patient incentives that may be 
permitted under the final rule, if issued. Specifically, we stated that 
we expect to determine that the CMS-sponsored models safe harbor would 
be available to protect direct beneficiary services provided to 
beneficiaries through the prepaid shared savings payment option.
    We proposed to add a new paragraph (d) to Sec.  425.304 that notes 
that we have determined that the Federal anti-kickback statute safe 
harbor for CMS-sponsored model patient incentives (42 CFR 
1001.952(ii)(2)) is available to protect remuneration furnished in the 
prepaid shared savings program option of the Shared Savings Program in 
the form of direct beneficiary services that meets all safe harbor 
requirements set forth at Sec.  1001.952(ii)(2).
    We received no comments on the OIG safe harbor authority in 
relation to prepaid shared savings and are therefore finalizing as 
proposed to specify in Sec.  425.304(d) that CMS has determined that 
the Federal anti-kickback statute safe harbor for CMS-sponsored model 
patient incentives (42 CFR 1001.952(ii)(2)) is available to protect 
remuneration furnished in the prepaid shared savings option of the 
Shared Savings Program in the form of direct beneficiary services that 
meets all safe harbor requirements set forth in Sec.  1001.952(ii).
6. Advance Investment Payment Policies
a. Allow ACOs Receiving Advance Investment Payments to Voluntarily 
Terminate Payments While Continuing Participation in the Shared Savings 
Program
    Beginning January 1, 2024, we implemented a new payment option in 
the Shared Savings Program, advance investment payments (AIP), and 
codified AIP requirements at Sec.  425.630. In the CY 2023 PFS final 
rule (87 FR 69803 through 69805), we discussed policies for termination 
of advance investment payments from ACOs whose participation agreements 
are terminated for noncompliance with certain requirements and 
finalized a recoupment policy in which all advance investment payments 
must be repaid to CMS within 90 days from the date CMS provided the ACO 
whose participation agreement was terminated with written notice of the 
amount due. These regulations are codified at Sec.  425.630(g) and (h).
    Currently, there are no regulations that account for an ACO that 
seeks to voluntarily terminate receipt of advance investment payments 
from CMS, but that wishes to remain in the Shared Savings Program for 
the rest of their agreement period. While we expect advance investment 
payment terminations to be an uncommon occurrence, since advance 
investment payments are a voluntary payment option, ACOs should be able 
to decline further participation. To accommodate voluntary terminations 
of advance investment payments for ACOs that wish to continue 
participating in the Shared Savings Program, in the CY 2025 PFS 
proposed rule (89 FR 61884 through 61885), we proposed to modify 
program regulations at Sec.  425.630(g) and (h). We proposed to allow 
ACOs who wish to voluntarily terminate receipt of advance investment 
payments to do so and remain in the Shared Savings Program.
    We explained that an ACO may have justified business reasons for 
terminating receipt of advance investment payments (such as an ACO's 
desire to participate in a CMS Innovation Center model whose 
eligibility criteria exclude ACOs that receive AIP), and that CMS 
wishes to amend its termination policies to account for such a 
scenario. We also stated that it is the best interest of the Medicare 
Trust Funds and the Shared Savings Program to allow continued program 
participation by ACOs that terminate receipt of advance investment 
payments, especially among ACOs and

[[Page 98154]]

ACO participants in, or that serve, underserved communities. Therefore, 
we proposed new regulations effective January 1, 2025, to allow ACOs to 
voluntarily terminate receipt of advance investment payments while 
remaining in the Shared Savings Program. We explained that under this 
proposal, we would develop an advance investment payment voluntary 
termination notification process to allow ACOs to voluntarily terminate 
receipt of these payments, and we would issue guidance regarding this 
process to participating Shared Savings Program ACOs shortly after 
publication of the CY 2025 PFS final rule.
    We proposed to update Sec.  425.630(g) to state that if an ACO opts 
to voluntarily terminate from the advance investment payment option, 
they will be required to return any outstanding advance investment 
payments to CMS. Upon an ACO notifying CMS that it wants to terminate 
from the advance investment payment option, we would then provide a 
written notification to the ACO of the total amount of recoupment due. 
We would then require the ACO to repay the amount due no later than 90 
days after the receipt of such notification. This aligns with how CMS 
recoups advance investment payments from ACOs whose advance investment 
payments are involuntarily terminated due to failure to comply with 
advance investment payment eligibility requirements at Sec.  
425.316(e)(3) and with the repayment requirements at Sec.  
425.630(g)(4), if an ACO chooses to terminate from the Shared Savings 
Program.
    ACOs that terminate from the advance investment payment option 
would no longer be monitored for their appropriate use of advance 
investment payments once the payments are repaid to CMS. As such, ACOs 
that terminate would no longer be subject to annual reporting 
requirements for their spend plans once the payments are repaid to CMS. 
This proposal will allow an ACO additional flexibility to determine its 
best payment and participation options, making it easier for an ACO 
receiving advance investment payments to continue their participation 
in the Shared Savings Program long-term. As noted in the CY 2023 PFS 
final rule (87 FR 69784), advance investment payments were designed to 
assist ACOs that face difficulty funding the start-up costs for forming 
ACOs, caring for beneficiaries in underserved communities, and 
achieving long term success in the Shared Savings Program. Allowing 
these ACOs more flexibility would have the effect of supporting 
continued Shared Savings Program participation among these ACOs, 
including those serving rural and underserved populations.
    We proposed to update Sec.  425.630(g)(5) to state that if an ACO 
notifies CMS that it no longer wants to participate in the advance 
investment payment option but does want to continue its participation 
in the Shared Savings Program, the ACO must repay all outstanding 
advance investment payments it received. We would provide written 
notice to the ACO of the amount due and the ACO must pay such amount no 
later than 90 days after the receipt of such notification.
    Additionally, we proposed conforming revisions to Sec.  425.630(h) 
to clarify that ACOs can voluntarily terminate from the advance 
investment payment option. Specifically, we proposed to add a paragraph 
(h)(1)(iv) to read ``Voluntarily terminates payments of advance 
investment payments but continues its participation in the Shared 
Savings Program.'' CMS also proposed conforming revisions to Sec.  
425.630(h)(1)(ii) and (iii). The proposed changes would be effective 
beginning January 1, 2025.
b. Recoup Advance Investment Payments When CMS Terminates the 
Participation Agreement of an ACO
    Under current advance investment payment recoupment regulations, 
there is no clear pathway for CMS to recoup outstanding advance 
investment payments if CMS terminates an ACO's participation agreement 
in accordance with Sec.  425.218(b). To address this and reduce the 
risk to the Trust Funds, in the CY 2025 PFS proposed rule (89 FR 61884 
through 61885), we proposed to add new Sec.  425.630(g)(6) to require 
ACOs to repay any outstanding advance investment payments in the event 
that CMS terminates the ACO's Shared Savings Program participation 
agreement.
    Upon the termination of their Shared Savings Program participation 
agreement, the ACO's advance investment payments will cease immediately 
under Sec.  425.630(h)(1)(ii). We would provide the ACO with written 
notification of the total amount due for the full recoupment of advance 
investment payments, and the ACO must pay such amount within 90 days 
after the receipt of such notification. This approach aligns with how 
CMS recoups advance investment payments for ACOs under Sec.  
425.630(g)(4) if an ACO receiving advance investment payments chooses 
to voluntarily terminate from the Shared Savings Program. This proposal 
would protect CMS from not being able to recoup outstanding advance 
investment payments in the event CMS terminates an ACO's participation 
agreement in accordance with Sec.  425.218(b).
    Specifically, we proposed to add Sec.  425.630(g)(6) to state that 
if CMS terminates the participation agreement of an ACO that has an 
outstanding balance of advance investment payments owed to CMS, the ACO 
must repay any outstanding advance investment payments it received. We 
would provide written notification to the ACO of the amount due and the 
ACO must pay such amount no later than 90 days after the receipt of 
such notification. If an ACO fails to fully repay the advance 
investment payments they received, we would carry forward any remaining 
balance owed to subsequent performance year(s) in which the ACO 
achieves shared savings, including in any performance year(s) in a 
subsequent agreement period.
    We also proposed conforming edits to Sec.  425.630(g)(3) to remove 
the phrase ``paragraph (g)(4) of this section'' and add in its place 
the phrase ``paragraphs (g)(4) through (g)(6) of this section.'' If 
finalized, this proposal would allow CMS to recoup more than the amount 
of shared savings earned by an ACO in a particular performance year in 
the event that an ACO or CMS terminates an ACO from the advance 
investment payment option or the Shared Savings Program as a whole. 
This proposal would require CMS to renumber regulations at Sec.  
425.630(g). Therefore, we proposed a conforming change to redesignate 
Sec.  425.630(g)(5) as Sec.  425.630(g)(7). If finalized, these 
proposals would be effective beginning January 1, 2025.
    We received public comments on both of these proposals. The 
following is a summary of the comments we received and our responses.
    Comment: Commenters expressed support for the proposals and noted 
that they align with existing AIP and other Shared Savings Program 
policies. The commenters explained that the proposals would provide 
clarity for participating ACOs on AIP termination and recoupment 
policies. Commenters particularly supported the codification of 
regulations to allow ACOs to terminate their advance investment 
payments while continuing participation in the Shared Savings Program.
    Response: We agree with commenters that these proposals should 
improve clarity for participating ACOs and align with current AIP and 
other Shared Savings Program policies.
    After consideration of public comments, we are finalizing our 
proposal, without modification, to

[[Page 98155]]

amend Sec.  425.630(g) to specify under Sec.  425.630(g)(5) a policy to 
allow ACOs receiving advance investment payments to voluntarily 
terminate from the advance investment payment option while remaining in 
the Shared Savings Program. We are also finalizing related conforming 
changes to Sec.  425.630(h) to clarify that ACOs can voluntarily 
terminate from the advance investment payment option, and that CMS may 
terminate an ACO's advance investment payments if the ACO does so. 
Further, we are finalizing our proposal, without modification, to add 
Sec.  425.630(g)(6), to specify a policy for recouping advance 
investment payments from ACOs whose participation agreements are 
terminated by CMS. We are also finalizing as proposed conforming edits 
and changes to other provisions of Sec.  425.630(g).
7. Financial Methodology
a. Overview
    In section III.G.7 of the CY 2025 PFS proposed rule (89 FR 61885 
through 61923), we proposed modifications to the financial 
methodologies used under the Shared Savings Program. We stated that the 
modifications we proposed would encourage participation in the program 
by removing barriers for ACOs serving underserved communities \562\ as 
well as provide greater specificity and clarity on how CMS would 
perform certain financial calculations in the Shared Savings Program. 
Specifically, we proposed to create a health equity benchmark 
adjustment (section III.G.7.b of the proposed rule) to potentially 
provide an upward adjustment to an ACO's historical benchmark based on 
the proportion of beneficiaries they serve who are dually eligible or 
enrolled in the Medicare Part D low-income subsidy (LIS). We also 
proposed to establish a calculation methodology to account for the 
impact of improper payments in recalculating expenditures and payment 
amounts used in Shared Savings Program financial calculations, upon 
reopening a payment determination pursuant to Sec.  425.315(a) (section 
III.G.7.c. of the proposed rule). We proposed to establish an approach 
to identify significant, anomalous, and highly suspect (``SAHS'') 
billing activity in CY 2024 or subsequent calendar years (section 
III.G.7.d of the proposed rule). We proposed to specify how we would 
exclude payment amounts from expenditure and revenue calculations for 
the relevant calendar year for which the SAHS billing activity is 
identified as well as from historical benchmarks used to reconcile the 
ACO for a performance year corresponding to the calendar year for which 
the SAHS billing activity was identified to mitigate the impact of SAHS 
billing activity. We sought comment on a financial model that would 
allow for higher risk and potential reward than currently available 
under the ENHANCED track while still meeting the requirements for use 
of our authority under section 1899(i)(3) of the Act, among other 
considerations for the financial model design (section III.G.7.e of the 
proposed rule). We also proposed certain modifications for clarity and 
consistency in provisions of the Shared Savings Program regulations on 
calculation of the ACO risk score growth cap in risk adjusting the 
benchmark each performance year and the regional risk score growth cap 
in calculating the regional component of the three-way blended 
benchmark update factor (section III.G.7.f of the proposed rule).
---------------------------------------------------------------------------

    \562\ As described in the CMS Framework for Health Equity and 
consistent with Executive Order 13985 on Advancing Racial Equity and 
Support for Underserved Communities Through the Federal Government 
(86 FR 7009), the term ``underserved communities'' refers to 
populations sharing a particular characteristic, including 
geographic communities that have been systematically denied a full 
opportunity to participate in aspects of economic, social, and civic 
life, as exemplified in the definition of ``equity.'' See for 
example CMS Framework for Health Equity 2022-2032, available at 
https://www.cms.gov/files/document/cms-framework-health-equity-2022.pdf.
---------------------------------------------------------------------------

b. Health Equity Benchmark Adjustment
(1) Background
(a) Summary of Statutory and Regulatory Background on Adjusting the 
Historical Benchmark
    Section 1899(d)(1)(B)(ii) of the Act addresses how ACO benchmarks 
are to be established, updated, and reset at the start of each 
agreement period under the Shared Savings Program. This provision 
specifies that the Secretary shall estimate a benchmark for each 
agreement period for each ACO using the most recent available 3 years 
of per beneficiary expenditures for Parts A and B services for Medicare 
FFS beneficiaries assigned to the ACO. The benchmark shall be reset at 
the start of each agreement period. Section 1899(d)(1)(B)(ii) of the 
Act also provides the Secretary with discretion to adjust the 
historical benchmark by ``such other factors as the Secretary 
determines appropriate.'' Pursuant to this authority, over time we have 
adopted a variety of methods to adjust the historical benchmark to meet 
certain policy goals.
    Benchmarking policies applicable to all ACOs in agreement periods 
beginning on January 1, 2024, and in subsequent years, are specified at 
Sec.  425.652. We refer readers to discussions of the benchmark 
calculations in earlier rulemaking for details on the development of 
the current policies (see November 2011 final rule, 76 FR 67909 through 
67927; June 2015 final rule, 80 FR 32785 through 32796; June 2016 final 
rule, 81 FR 37953 through 37991; December 2018 final rule, 83 FR 68005 
through 68030; CY 2023 PFS final rule, 87 FR 69875 through 69928; and 
CY 2024 PFS final rule, 88 FR 79174 through 79208).
    In the CY 2023 PFS final rule, we adopted policies to modify the 
regional adjustment under Sec.  425.656 (refer to 87 FR 69915 through 
69923) and to reinstate a prior savings adjustment under Sec.  425.658 
(refer to 87 FR 69898 through 69915). The modifications to the regional 
adjustment are designed to limit the impact of negative regional 
adjustments on ACO historical benchmarks and further incentivize 
program participation among ACOs serving high-cost beneficiaries. In 
the CY 2024 PFS final rule (refer to 88 FR 79185 through 79196), we 
modified the regional adjustment policy further to prevent any ACO from 
receiving an adjustment that would cause its benchmark to be lower than 
it would have been in the absence of a regional adjustment. The prior 
savings adjustment policy was developed such that a renewing or re-
entering ACO may be eligible to receive an adjustment to its benchmark 
to account for savings generated in performance years that correspond 
to the benchmark years of its new agreement period. In the CY 2024 PFS 
final rule (refer to 88 FR 79196 through 79200), we modified the prior 
savings adjustment policy further to account for the following: a 
change in savings earned by the ACO in a benchmark year due to 
compliance action taken to address avoidance of at-risk beneficiaries 
or a change in the amount of savings or losses for a benchmark year as 
a result of a reopening of a prior determination of ACO shared savings 
or shared losses and the issuance of a revised initial determination 
under Sec.  425.315.
(b) Methodology for Determining the Applicability of a Regional 
Adjustment or Prior Savings Adjustment to the ACO's Historical 
Benchmark, for Agreement Periods Beginning on or After January 1, 2024
    Under the benchmarking methodology for agreement periods beginning 
on January 1, 2024, and in subsequent years, CMS calculates two 
adjustments to the historical benchmark, a regional adjustment (refer 
to Sec.  425.656) and a prior savings adjustment (refer to Sec.  
425.658). We determine which adjustment is applied

[[Page 98156]]

to the benchmark, either the regional adjustment, prior savings 
adjustment, or no adjustment (refer to Sec.  425.652(a)(8) and (c)).
    Under the current methodology, the adjustment that will apply in 
the establishment of benchmarks for ACOs entering an agreement period 
beginning on January 1, 2024, and in subsequent years, is calculated as 
follows:
     Step 1: Calculate the capped regional adjustment expressed 
as a single dollar value as specified in Sec.  425.656. CMS calculates 
the regional adjustment to the historical benchmark based on the ACO's 
regional service area expenditures, making separate calculations for 
the following populations of beneficiaries: ESRD, disabled, aged/dual 
eligible Medicare and Medicaid beneficiaries, and aged/non-dual 
eligible Medicare and Medicaid beneficiaries.
    ++ Under Sec.  425.656(c)(3), CMS caps the per capita dollar amount 
for each Medicare enrollment type at a dollar amount equal to a 
percentage of national per capita expenditures for Parts A and B 
services under the original Medicare fee-for-service (FFS) program in 
BY3 for assignable beneficiaries in that enrollment type identified for 
the 12-month calendar year corresponding to BY3 using data from the CMS 
Office of the Actuary.

--Under Sec.  425.656(c)(3)(i), for positive adjustments, the per 
capita dollar amount for a Medicare enrollment type is capped at 5 
percent of the national per capita expenditure amount for the 
enrollment type for BY3.
--Under Sec.  425.656(c)(3)(ii), for negative adjustments, the per 
capita dollar amount for a Medicare enrollment type is capped at 
negative 1.5 percent of the national per capita expenditure amount for 
the enrollment type for BY3.

    ++ Under Sec.  425.656(d)(1), CMS expresses the regional adjustment 
as a single value by taking a person year \563\ weighted average of the 
Medicare enrollment type-specific regional adjustment values.
---------------------------------------------------------------------------

    \563\ To calculate person years: We sum the number of Shared 
Savings Program-eligible months (beneficiaries are only assigned a 
monthly enrollment status for months in which they are alive on 1st 
of the month, enrolled in both Parts A and B, and not enrolled in a 
Medicare Group Health Plan for the month) for each assigned 
beneficiary for each Medicare enrollment type; we then divide this 
number by 12 (the number of months in a calendar year). Refer to the 
Medicare Shared Savings Program, Shared Savings and Losses and 
Assignment Methodology Specifications (version #11, January 2023), 
available at https://www.cms.gov/files/document/medicare-shared-savings-program-shared-savings-and-losses-and-assignment-methodology-specifications.pdf-2 (Section 3.1 Calculating ACO-
Assigned Beneficiary Expenditures).
---------------------------------------------------------------------------

     Step 2: For eligible ACOs, calculate the capped prior 
savings adjustment as specified in Sec.  425.658. Under Sec.  
425.658(c)(1), CMS calculates an adjustment to the historical benchmark 
to account for savings generated in the 3 years prior to the start of 
the ACO's current agreement period for renewing or re-entering ACOs 
that were reconciled for one or more performance years in the Shared 
Savings Program during this period.
     Step 3: Determine the final adjustment to the benchmark, 
as specified in Sec.  425.652(a)(8). Compare the regional adjustment in 
accordance with Sec.  425.656 and the prior savings adjustment in 
accordance with Sec.  425.658.
    ++ Under Sec.  425.652(a)(8)(ii), if an ACO is not eligible to 
receive a prior savings adjustment under Sec.  425.658(b)(3)(i), and 
the regional adjustment, expressed as a single value as described in 
Sec.  425.656(d), is positive, the ACO will receive an adjustment to 
its benchmark equal to the positive regional adjustment amount. The 
adjustment will be calculated as described in Sec.  425.656(c) and 
applied separately to the following populations of beneficiaries: ESRD, 
disabled, aged/dual eligible Medicare and Medicaid beneficiaries, and 
aged/non-dual eligible Medicare and Medicaid beneficiaries. Under Sec.  
425.652(a)(8)(iii), if an ACO is not eligible to receive a prior 
savings adjustment under Sec.  425.658(b)(3)(i), and the regional 
adjustment, expressed as a single value as described in Sec.  
425.656(d), is negative or zero, the ACO will not receive an adjustment 
to its benchmark.
    ++ Under Sec.  425.652(a)(8)(iv), if an ACO is eligible to receive 
a prior savings adjustment and the regional adjustment, expressed as a 
single value as described in Sec.  425.656(d), is positive, the ACO 
will receive an adjustment to its benchmark equal to the higher of the 
following:

--Under Sec.  425.652(a)(8)(iv)(A), the positive regional adjustment 
amount. The adjustment will be calculated as described in Sec.  
425.656(c) and applied separately to the following populations of 
beneficiaries: ESRD, disabled, aged/dual eligible Medicare and Medicaid 
beneficiaries, and aged/non-dual eligible Medicare and Medicaid 
beneficiaries.
--Under Sec.  425.652(a)(8)(iv)(B), the prior savings adjustment. The 
adjustment will be calculated as described in Sec.  425.658(c) and 
applied as a flat dollar amount to the following populations of 
beneficiaries: ESRD, disabled, aged/dual eligible Medicare and Medicaid 
beneficiaries, and aged/non-dual eligible Medicare and Medicaid 
beneficiaries.

    ++ Under Sec.  425.652(a)(8)(v), if an ACO is eligible to receive a 
prior savings adjustment and the regional adjustment, expressed as a 
single value as described in Sec.  425.656(d), is negative or zero, the 
ACO will receive an adjustment to its benchmark equal to the prior 
savings adjustment. The adjustment will be calculated as described in 
Sec.  425.658(c) and applied as a flat dollar amount to the following 
populations of beneficiaries: ESRD, disabled, aged/dual eligible 
Medicare and Medicaid beneficiaries, and aged/non-dual eligible 
Medicare and Medicaid beneficiaries.
(c) Background on Incorporating Health Equity Data Within the Shared 
Savings Program
    Development of a health equity benchmark adjustment builds upon 
Shared Savings Program policies finalized in the CY 2023 and CY 2024 
PFS final rules to advance health equity, including the establishment 
of the health equity adjustment to an ACO's MIPS quality performance 
category score (applicable to all ACOs beginning with performance year 
2023) (87 FR 69838 through 69857 and 88 FR 79114 through 79117); the 
availability of advance investment payments to eligible new, low 
revenue ACOs entering a new agreement period beginning on January 1, 
2024, and in subsequent years (87 FR 69782 through 69805 and 88 FR 
79208 through 79216); as well as changes to the benchmarking 
methodology aimed to facilitate participation by ACOs serving medically 
complex or underserved beneficiaries (87 FR 69915 through 69924 and 88 
FR 79185 through 79195).
    Further, in a Request for Information in the CY 2023 PFS final rule 
(87 FR 69977 through 69979), we discussed addressing health equity 
through benchmarking and summarized related comments. In the CY 2023 
PFS final rule (87 FR 69978), we explained our interest in considering 
how direct modification of benchmarks to account for existing 
inequities in care can be used to advance health equity. The vast 
majority of commenters expressed support for exploring methodologies to 
address health equity via benchmarking changes. Specifically, many of 
these commenters noted that benchmark adjustments could be an effective 
tool to redirect resources to ACOs serving underserved communities. 
Multiple

[[Page 98157]]

commenters commented specifically on the health equity benchmark 
adjustment approach utilized by the ACO Realizing Equity, Access, and 
Community Health (REACH) Model. Several of these commenters expressed 
support for using a similar methodology in implementing a health equity 
benchmark adjustment in the Shared Savings Program. In response, we 
stated that we will consider these comments in the development of 
policies for future rulemaking. Based on our experience with 
adjustments under the current benchmarking methodology, our experience 
establishing policies to advance health equity in the Shared Savings 
Program, and the support received for addressing health equity through 
benchmarking in response to the Request for Information, we explained 
in the CY 2025 PFS proposed rule that it would be timely to implement a 
health equity benchmark adjustment (HEBA) into the Shared Savings 
Program's benchmarking methodology. Implementing a HEBA would ensure 
benchmarks continue to serve as a reasonable baseline when ACOs serve 
high proportions of beneficiaries who are members of underserved 
communities and incentivize ACOs to provide coordinated care to 
beneficiaries who are members of underserved communities.
    In the CY 2025 PFS proposed rule (89 FR 61887), we explained that a 
health equity benchmark adjustment is likely to encourage more 
participation in the Shared Savings Program by ACOs that serve 
beneficiaries who are members of rural and underserved communities by 
allowing them to participate with potentially higher benchmarks. That, 
in turn, would increase the likelihood that they could earn shared 
savings and increase the amount of those shared savings payments and 
reduce the financial barriers to forming ACOs that providers who serve 
underserved communities face. We explained that benchmarks based on 
historically observed spending could be set too low if they are based 
on the spending of a population of underserved communities. An ACO 
serving such communities could be harmed financially if they are 
successful at improving access to high-value care during the 
performance period. Additionally, the Congressional Budget Office (CBO) 
recently reported high start-up costs for providers in rural and 
underserved communities as a barrier to forming ACOs.\564\ We stated in 
the CY 2025 PFS proposed rule that these providers may want to 
participate in ACOs but are disincentivized due to steep start-up 
costs.
---------------------------------------------------------------------------

    \564\ Congressional Budget Office (CBO), ``Medicare Accountable 
Care Organizations: Past Performance and Future Directions,'' April 
2024, available at https://www.cbo.gov/system/files/2024-04/59879-Medicare-ACOs.pdf.
---------------------------------------------------------------------------

    We also explained in the CY 2025 PFS proposed rule that a health 
equity benchmark adjustment would encourage currently participating 
ACOs to attract more beneficiaries who are members of underserved 
communities and remain in the Shared Savings Program. Direct increases 
to benchmarks for ACOs serving higher proportions of beneficiaries who 
are members of underserved communities would grant additional financial 
resources to healthcare providers accountable for the care of these 
populations and may work to offset historical patterns of underspending 
that influence benchmark calculations.
    The ACO REACH Model incorporates a HEBA to test a way to address 
historical health inequities within CMS ACO initiatives, with the 
intent of incentivizing ACOs to seek out and form relationships with 
beneficiaries who are members of underserved communities. The 
adjustment is intended to mitigate the disincentive for ACOs to serve 
underserved communities by accounting for historically suppressed 
spending levels for these populations. It is a critical step towards 
enabling ACOs to serve underserved communities in a manner that 
reflects their health needs.\565\ Likewise, the Shared Savings Program 
aims to design a health equity benchmark adjustment that achieves those 
same goals while aligning the program's benchmarking policies and 
health equity initiatives. We explained in the CY 2025 PFS proposed 
rule (89 FR 61887) that the HEBA proposal was informed by CMS' initial 
experience with the ACO REACH Model, which includes a HEBA, that has 
been associated with increased participation in ACOs by safety net 
providers.\566\ Increasing access to providers participating in ACOs in 
rural and other underserved areas remains a priority for CMS to help 
address inequities in ACO participation and grow accountable care.
---------------------------------------------------------------------------

    \565\ Centers for Medicare & Medicaid Services, ``ACO Realizing 
Equity, Access, and Community Health (REACH) Model Finance-Focused 
Frequently Asked Questions'' (Version 1, April 2022), available at 
https://www.cms.gov/priorities/innovation/media/document/aco-reach-finfaqs.
    \566\ See Rawal P., Seyoum S., Fowler E. ``Advancing Health 
Equity Through Value-Based Care: CMS Innovation Center Update,'' 
Health Affairs Forefront, June 4, 2024. DOI: 10.1377/
forefront.20240603.385559. Available at https://www.healthaffairs.org/content/forefront/advancing-health-equity-through-value-based-care-cms-innovation-center-update.
---------------------------------------------------------------------------

(2) Revisions
    As described in the CY 2025 PFS proposed rule (89 FR 61887 through 
61892), relying on our authority under section 1899(d)(1)(B)(ii) of the 
Act, we proposed a HEBA applicable to ACOs in agreement periods 
beginning on January 1, 2025, and in subsequent years. The proposed 
HEBA would offer a third method of upwardly adjusting an ACO's 
historical benchmark, in addition to the existing regional adjustment 
and prior savings adjustment. This upward adjustment to the historical 
benchmark is designed to benefit ACOs serving larger proportions of 
beneficiaries from underserved communities and receiving lower regional 
adjustments (Sec.  425.656) or lower prior savings adjustments (Sec.  
425.658), or receiving neither adjustment. Under proposed Sec.  
425.652(a)(8)(ii), an ACO would receive the highest of the positive 
adjustments for which it is eligible, either the regional adjustment, 
prior savings adjustment, or health equity benchmark adjustment. If an 
ACO is not eligible to receive a prior savings adjustment or a HEBA, 
and the regional adjustment, expressed as a single value, is negative 
or zero, then the ACO would not receive an adjustment to its benchmark.
    By increasing the likelihood that an ACO would earn shared savings 
and by potentially increasing the amount of shared savings earned, the 
HEBA is meant to provide a greater financial incentive for ACOs to 
serve more beneficiaries from underserved communities and to encourage 
ACOs already serving higher proportions of beneficiaries from 
underserved communities to enter and remain in the Shared Savings 
Program. Practices that serve large proportions of beneficiaries who 
are members of underserved communities that may otherwise see financial 
risk in joining the program may be incentivized to form an ACO and join 
the program with a health equity benchmark adjustment policy in place. 
In addition, currently participating ACOs that may otherwise see risk 
in attracting additional beneficiaries from underserved communities to 
their ACOs may be incentivized to do so with a health equity benchmark 
adjustment policy in place. In the CY 2025 PFS proposed rule, we noted 
that, if finalized, the proposed prepaid shared savings option 
(described in section III.G.5 of the CY 2025 PFS proposed rule) would 
operate synergistically with the proposed HEBA, in that ACOs that have 
been

[[Page 98158]]

successful in earning shared savings while serving larger proportions 
of beneficiaries from underserved communities would in subsequent years 
have additional capabilities through prepaid shared savings to address 
the unmet health-related social needs of the beneficiaries they serve 
and may have higher benchmarks due to the HEBA.
    We proposed to calculate the HEBA as the multiplicative product of 
the HEBA scaler and the proportion of the ACO's assigned beneficiaries 
who are enrolled in the Medicare Part D LIS or dually eligible for 
Medicare and Medicaid. We proposed to calculate the HEBA scaler as a 
measure of the difference between the following two per-capita dollar 
values:
     5 percent of national per capita expenditures for Parts A 
and B services under the original Medicare FFS program in BY3 for 
assignable beneficiaries identified for the 12-month calendar year 
corresponding to BY3 using data from the CMS Office of the Actuary, 
expressed as a single value by taking a person year weighted average of 
the Medicare enrollment type-specific values: ESRD, disabled, aged/
dually eligible for Medicare and Medicaid, and aged/non-dually eligible 
for Medicare and Medicaid, and
     the higher of the regional adjustment expressed as a 
single value, the prior savings adjustment, or no adjustment, in the 
case where the regional adjustment is negative and the ACO is not 
eligible for the prior savings adjustment.
    We explained that this approach would ensure that the value of the 
HEBA itself cannot exceed 5 percent of national assignable per capita 
expenditures expressed as a single value using the ACO's BY3 enrollment 
proportions, similar to the cap applied to the regional adjustment 
under Sec.  425.656(c)(3) and the cap applied to the prior savings 
adjustment under Sec.  425.658(c)(1)(ii).
    For this proposed health equity benchmark adjustment, we proposed 
to identify beneficiaries from underserved communities as those who are 
enrolled in the Medicare Part D LIS or dually eligible for Medicare and 
Medicaid. Furthermore, we proposed to determine the proportion of the 
ACO's assigned beneficiaries who are enrolled in the Medicare Part D 
LIS or dually eligible for Medicare and Medicaid using the ACO's 
performance year assigned population. We stated that because a higher 
proportion of assigned beneficiaries who are enrolled in Medicare Part 
D LIS or dually eligible would result in a higher HEBA, using the 
performance year assigned population is expected to incentivize ACOs to 
provide coordinated care to beneficiaries who are members of 
underserved communities while accounting for changes in the ACO's 
population over the agreement period.
    We proposed to provide ACOs with a preliminary calculation of the 
HEBA near the start of their agreement period when final historical 
benchmarks are determined, using the ACO's BY3 assigned population in 
this preliminary calculation of the proportion of the ACO's assigned 
beneficiaries who are enrolled in the Medicare Part D LIS or dually 
eligible for Medicare and Medicaid. Under the proposed approach, we 
would then update the calculation when the ACO's historical benchmark 
is updated at the time of financial reconciliation for the performance 
year to reflect the ACO's performance year-assigned population in the 
calculation of the proportion of the ACO's assigned beneficiaries who 
are enrolled in the Medicare Part D LIS or dually eligible for Medicare 
and Medicaid.
    In the CY 2025 PFS proposed rule, we proposed (89 FR 61888) that 
ACOs with a proportion of assigned beneficiaries who are enrolled in 
the Medicare Part D LIS or dually eligible for Medicare and Medicaid of 
less than 20 percent would be ineligible for a HEBA.\567\ We explained 
our belief that imposing this threshold of 20 percent would reinforce 
that the HEBA is intended for ACOs serving higher proportions of 
beneficiaries who are members of underserved communities. Based on data 
from PY 2023, the average proportion of ACO-assigned beneficiaries 
enrolled in the Medicare Part D LIS or dually eligible for Medicare and 
Medicaid was roughly 15 percent. Thus, ACOs meeting the threshold of 20 
percent are serving a larger-than-average proportion of beneficiaries 
from underserved communities. We explained that absent such a 
threshold, an ACO with a lower-than-average regional adjustment or 
prior savings adjustment (and therefore a larger HEBA scaler) that is 
providing care for relatively few beneficiaries from underserved 
communities may receive a sizable HEBA, which would reward the ACO 
despite it not serving a significant proportion of beneficiaries from 
underserved communities. This would not support the purpose of the 
HEBA, which is to provide a greater financial incentive for ACOs to 
serve more beneficiaries from communities and encourage practices 
already serving higher proportions of beneficiaries from underserved 
communities to enter and/or remain in the Shared Savings Program.
---------------------------------------------------------------------------

    \567\ The health equity adjustment to an ACO's MIPS quality 
performance category score (87 FR 69838 through 69857 and 88 FR 
79114 through 79117) has established a similar 20 percent threshold. 
ACOs with an underserved multiplier of less than 20 percent are not 
eligible to receive a health equity adjustment (Sec.  425.512(b)).
---------------------------------------------------------------------------

    We explained in the CY 2025 PFS proposed rule (89 FR 61889) that 
under this proposed approach, simulation analysis based on 456 ACOs 
using historical benchmark data from 2023 indicated that 20 ACOs would 
receive a HEBA greater than either the prior savings adjustment or 
regional adjustment. With the HEBA applied, the average increase to 
historical benchmarks among these 20 ACOs would be $230 per capita, 
which corresponds to an increase of 1.57 percent to their historical 
benchmarks on average.
    Tables 44 through 46 present hypothetical examples to demonstrate 
how the HEBA would work in practice.
BILLING CODE 4120-01-P

[[Page 98159]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.086


[[Page 98160]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.087


[[Page 98161]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.088

BILLING CODE 4120-01-C
    We proposed to implement the changes described in this section 
through revisions to Sec.  [thinsp]425.652 and the addition of Sec.  
[thinsp]425.662. Specifically, within Sec.  [thinsp]425.652, which sets 
forth the methodology for establishing, adjusting, and updating the 
benchmark for agreement periods beginning on January 1, 2024, and in 
subsequent years, we proposed revisions to Sec.  [thinsp]425.652(a)(8). 
As proposed, this revised provision would describe how we would 
determine and apply the adjustment to an ACO's benchmark, if any, based 
on a comparison of the ACO's regional adjustment expressed as a single 
value, prior savings adjustment, and the proposed health equity 
benchmark adjustment. Furthermore, we proposed to amend Sec.  
[thinsp]425.652 by redesignating paragraphs (a)(9)(v) and (vi) as 
paragraphs (a)(9)(vi) and (vii), respectively, and to specify in a new 
paragraph (a)(9)(v) the adjustments made to the health equity benchmark 
adjustment for the first performance year during the term of the 
agreement period and in the second and each subsequent performance year 
during the term of the ACO's agreement period, if applicable. We also 
proposed conforming changes in newly redesignated Sec.  
425.652(a)(9)(vi), specifying that CMS redetermines the adjustment to 
benchmark in accordance with Sec.  425.652(a)(8), to list the HEBA 
along with the regional adjustment and prior savings adjustment. In the 
proposed new section of the regulation at Sec.  [thinsp]425.662, we 
describe the calculation of the HEBA. We also proposed to make 
conforming changes to Sec.  [thinsp]425.658(d), which describes the 
applicability of the prior savings adjustment, to include consideration 
of the HEBA in addition to the regional adjustment, in determining the 
adjustment (if any) that would be applied to the ACO's benchmark. We 
sought comment on these proposals.
    In combination with the proportion of ACO-assigned beneficiaries 
who are enrolled in the Medicare Part D LIS or are dually eligible for 
Medicare and Medicaid, we also solicited comment on the use of the Area 
Deprivation Index (ADI) to identify beneficiaries from underserved 
communities for purposes of determining eligibility for and the amount 
of any health equity benchmark adjustment. For example, similar to how 
the ADI is used in the underserved multiplier as part of the 
calculation of the health equity adjustment to an ACO's MIPS Quality 
performance category score (87 FR 69838 through 69857 and 88 FR 79114 
through 79117), we stated that we were considering taking the higher of 
either the proportion of the ACO's assigned beneficiaries residing in a 
census block group with an ADI national percentile rank of at least 85 
or the proportion of the ACO's assigned beneficiaries who are enrolled 
in the Medicare Part D LIS

[[Page 98162]]

or dually eligible for Medicare and Medicaid to determine eligibility 
for and the amount of any health equity benchmark adjustment. We stated 
that CMS would explore how best to incorporate geographic parameters 
into Shared Savings Program benchmark adjustments, informed by the 
current use of the ADI in other health equity provisions of the Shared 
Savings Program. We explained that CMS would also consider learnings 
from the Innovation Center's ACO REACH Model, which is testing the use 
of the ADI as a component of the model's HEBA. We stated that by 
considering the ADI in addition to the proportion of ACO-assigned 
beneficiaries who are enrolled in the Medicare Part D LIS or are dually 
eligible for Medicare and Medicaid, the HEBA would more closely align 
with existing Shared Savings Program policies to advance health equity, 
such as the health equity adjustment to an ACO's MIPS Quality 
performance category score (87 FR 69838 through 69857 and 88 FR 79114 
through 79117) and the calculation of the amount of quarterly advance 
investment payments made available to eligible new, low revenue ACOs 
(87 FR 69782 through 69805 and 88 FR 79208 through 79216).
    In the CY 2025 PFS proposed rule (89 FR 61892), we also explained 
that recent analyses have found that the ADI weights 2 variables 
(median home value and median income) higher relative to the weights 
associated with the other 15 variables in the index, which may have 
limited contributions in determining the ADI. In many indexes, 
variables are standardized to the same range for ease of comparison, 
prior to incorporation into the index. The ADI does not standardize its 
variables; median home value and median income are measured on their 
local area dollar-value scales, which are larger than the scales on 
which the other variables are measured. Some researchers have reported 
that, without standardization, the ADI overemphasizes the 2 variables 
(median home value and median income), a finding that may underscore 
the importance of using standardized values.568 569 570 We 
solicited comment on considering the ADI for purposes of determining 
eligibility for and the amount of any health equity benchmark 
adjustment, and related factors including the calculation of the ADI.
---------------------------------------------------------------------------

    \568\ See Hannan, EL, et al. The Neighborhood Atlas Area 
Deprivation Index For Measuring Socioeconomic Status: An 
Overemphasis On Home Value. Health Affairs, vol. 42, no. 5 (May 
2023): 702-709. Available at https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2022.01406.
    \569\ See Rehkopf, DH, and Phillips, RL, Jr. The Neighborhood 
Atlas Area Deprivation Index And Recommendations For Area-Based 
Deprivation Measures. Health Affairs, vol. 42, no. 5 (May 2023): 
710-711. Available at https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2023.00282.
    \570\ See Petterson, S. Deciphering the Neighborhood Atlas Area 
Deprivation Index: the consequences of not standardizing. Health 
Affairs Scholar, volume 1, issue no. 5 (November 2023), qxad063; 
Available at https://academic.oup.com/healthaffairsscholar/article/1/5/qxad063/7342005.
---------------------------------------------------------------------------

    The following is a summary of the public comments we received on 
the proposal to create a health equity benchmark adjustment, the 
comment solicitation on the use of ADI for purposes of determining 
eligibility for and the amount of any health equity benchmark 
adjustment, and conforming changes to the Shared Savings Program 
regulations, and our responses.
    Comment: The proposed HEBA was generally supported by many 
commenters. One commenter stated they supported CMS's efforts to 
address the higher cost and resource utilization associated with dually 
eligible beneficiaries and those enrolled in Medicare Part D LIS. A few 
commenters acknowledged the proposed upward adjustment of the HEBA as a 
positive step towards enhancing health equity in the Shared Savings 
Program. One commenter appreciated CMS's efforts to implement a HEBA 
and acknowledged the challenge of developing a methodology to identify 
underserved beneficiaries for purposes of an ACO benchmark adjustment, 
noting that the proposed HEBA is a ``starting point'' and ``not 
necessarily the optimal approach.'' Another commenter supported the 
proposal to ``incentivize ACOs to treat rural and underserved 
beneficiaries through the establishment of the HEBA.'' Some of the 
supportive commenters encouraged CMS to find additional ways to 
``support providers caring for underserved beneficiaries.''
    The majority of supportive commenters believed that this adjustment 
will also improve beneficiary access to ACO providers in underserved 
areas, ``encourage equitable care for all beneficiaries,'' especially 
for ``dual-eligible beneficiaries who often face compounded health 
disparities,'' and improve participation in the Shared Savings Program 
by ACOs serving higher-risk beneficiaries. Commenters characterized the 
HEBA as a significant step forward in promoting health equity and 
addressing health disparities faced by dually eligible beneficiaries 
and those enrolled in Medicare Part D LIS.
    Many commenters also supported the HEBA because it would modify 
current Shared Savings Program financial methodologies to better 
account for the needs of underserved beneficiaries. One commenter 
supported the HEBA, noting that ``remedying historical barriers to care 
among some populations might initially increase costs as these 
inequities are corrected.'' Other commenters stated that the HEBA would 
increase resources for ACOs serving underserved beneficiaries without 
penalizing other ACOs by reducing their benchmarks. Commenters 
generally characterized the HEBA as a positive step toward ensuring 
that all ACOs, regardless of size or location, have a fair opportunity 
to succeed in the Shared Savings Program while advancing equitable 
healthcare for all beneficiaries.
    Response: We thank commenters for their support and agree that the 
HEBA will address the higher cost and resource utilization associated 
with dually eligible and LIS beneficiaries, increase beneficiary access 
to ACO providers in underserved areas, encourage equitable care 
(including by incentivizing ACOs to treat rural and underserved 
beneficiaries and better accounting for the needs of those 
beneficiaries), and improve participation in the Shared Savings Program 
by ACOs serving higher-risk beneficiaries. We appreciate commenters' 
support and acknowledge the challenge of developing a methodology to 
identify underserved beneficiaries for purposes of adjusting ACO 
benchmarks. We note that the HEBA is a starting point in this regard, 
and we will continue to refine the HEBA in accordance with learnings 
from ACO REACH and other CMMI models. We will also continue to evaluate 
additional ways to support Shared Savings Program ACOs and providers 
caring for underserved beneficiaries.
    Comment: Several commenters, while supportive of CMS's goals to 
advance health equity, nonetheless expressed opposition to the 
proposal.
    A few commenters expressed concerns that the proposed HEBA 
``conflates risk adjustment with the goals of Shared Savings Program 
benchmarking policy'' and is thus ``unlikely to achieve its stated 
goals.'' These commenters encouraged CMS to develop policies that 
advance health equity without impacting benchmark adjustments. As an 
example, one commenter proposed that CMS implement a HEBA that more 
closely resembles the HEBA in ACO REACH, which uses a relatively small 
downward adjustment across many ACOs without a need for a health equity 
adjustment to

[[Page 98163]]

``subsidize'' upward adjustments for a smaller set of ACOs serving 
higher proportions of underserved beneficiaries. One commenter argued 
that because there is already a high rate of dually eligible 
beneficiaries in rural counties, the HEBA does not seem necessary to 
incentivize ACOs to serve dually eligible beneficiaries in all rural 
counties. Further, this same commenter suggested the HEBA would provide 
additional financial support to ACOs without commensurate support to 
dual eligible special needs plans (D-SNPs) and may make it more 
difficult for D-SNPs to compete with ACOs for providers in certain 
counties.
    Response: We appreciate the commenters' concerns and 
recommendations. The Shared Savings Program has implemented policies 
that advance health equity without impacting benchmarking adjustments 
through advance investment payments and prepaid shared savings. We 
refer readers to our discussion of advance investment payments in the 
CY 2023 final rule at 87 FR 69782 through 69805, and in the CY 2024 
final rule at 88 FR 79208 through 79216, as well as our discussion of 
prepaid shared savings in section III.G.5 of this final rule. 
Additionally, we explained in the CY 2025 PFS proposed rule (89 FR 
61887) that the HEBA proposal was informed by CMS' initial experience 
with the ACO REACH Model, which includes a HEBA, that has been 
associated with increased participation in ACOs by safety net 
providers.\571\ In contrast with the ACO REACH Model's HEBA, the Shared 
Savings Program's HEBA was proposed as an upward adjustment to the 
historical benchmark; and would not adjust historical benchmarks 
downward as a result of the proposed HEBA. The Shared Savings Program 
aims to design a health equity benchmark adjustment that incentivizes 
ACOs to form relationships with beneficiaries who are members of 
underserved communities while aligning the program's benchmarking 
policies and health equity initiatives. In this way, the HEBA would 
ensure that benchmarks continue to serve as a reasonable baseline when 
ACOs serve high proportions of beneficiaries who are members of 
underserved communities. Furthermore, the proposed HEBA is designed to 
benefit ACOs serving larger proportions of beneficiaries from 
underserved communities--including those residing in rural areas and in 
other underserved communities--and receiving lower regional adjustments 
(Sec.  425.656), lower prior savings adjustments (Sec.  425.658), or 
receiving neither adjustment. Increasing beneficiary access to 
providers participating in ACOs in both rural and other underserved 
areas remains a priority for CMS to help address inequities in ACO 
participation in the Shared Savings Program and grow accountable care.
---------------------------------------------------------------------------

    \571\ See Rawal P, Seyoum S, Fowler E. ``Advancing Health Equity 
Through Value-Based Care: CMS Innovation Center Update'', Health 
Affairs Forefront, June 4, 2024. DOI: 10.1377/
forefront.20240603.385559. Available at https://www.healthaffairs.org/content/forefront/advancing-health-equity-through-value-based-care-cms-innovation-center-update.
---------------------------------------------------------------------------

    We thank the commenter for their feedback on D-SNPs. We note that 
providers associated with Shared Savings Program ACOs are not 
prohibited from providing care in Medicare Advantage networks, and 
therefore we do not believe that the HEBA will necessarily make it more 
difficult for D-SNPs to compete with ACOs for providers in certain 
counties.
    Comment: Several commenters suggested that CMS modify the policy to 
reduce or remove the requirement that at least 20 percent of ACOs' 
assigned beneficiaries must be enrolled in LIS or dually eligible in 
order for the ACO to be eligible for the HEBA. These commenters assert 
that the HEBA, as proposed, is expected to impact relatively few ACOs, 
and that removing or reducing the 20 percent threshold would 
significantly increase the number of ACOs eligible for the HEBA. A few 
commenters suggested eliminating the 20 percent threshold to maximize 
the HEBA's impact and ensure that value-based care models do not 
penalize providers caring for higher-risk beneficiaries. One commenter 
asserted that ``studies show that approximately 49 percent of safety 
net hospitals participate in a Shared Savings Program ACO, and a 
quarter of all participating Shared Savings Program ACOs include a 
Federally Qualified Health Center, thus demonstrating that the proposed 
methodology would not benefit the majority of ACOs serving dually 
eligible and LIS-enrolled beneficiaries.''
    Several commenters stated that the HEBA as proposed would not go 
far enough--that the proposed approach considers too narrow of a 
population of beneficiaries for purposes of determining eligibility, is 
likely to benefit too few ACOs, would not adequately account for the 
expense associated with providing care for historically underserved 
populations, and is unlikely to drive increased or sustained 
participation in the Shared Savings Program.
    Response: We are persuaded by commenters' concerns that the 
proposed policy considers too narrow of a population of beneficiaries 
for purposes of determining eligibility, is likely to benefit too few 
ACOs, and that removing or reducing the 20 percent threshold would 
increase the number of ACOs eligible for the HEBA while still 
furthering our policy goals with the HEBA explained in the proposed 
rule (89 FR 61887. In consideration of public comments, we are 
finalizing our proposal with modification. Specifically, we are 
modifying our policy (under Sec.  425.662(b)(3)) to modify the 
requirement that ACOs must have at least 20 percent of their assigned 
beneficiaries enrolled in LIS or dually eligible in order to be 
eligible for the HEBA. We are instead finalizing Sec.  425.662(b)(3) to 
require that ACOs have at least 15 percent of their assigned 
beneficiaries enrolled in LIS or dually eligible in order to be 
eligible for the HEBA.
    Based on data for 456 ACOs that participated in the Shared Savings 
Program in PY 2023, decreasing the HEBA eligibility threshold to 15 
percent will increase the number of ACOs estimated to receive a HEBA by 
60 percent and, like our proposed 20 percent threshold, will continue 
to ensure that ACOs with an above-average percent of dually eligible or 
LIS enrolled beneficiaries are eligible for a HEBA.\572\ Increasing the 
number of ACOs eligible for the HEBA by 60 percent supports the goals 
of the HEBA described in the CY 2025 PFS proposed rule (89 FR 61888) by 
increasing the likelihood that an ACO would earn shared savings and by 
potentially increasing the amount of shared savings earned, which in 
turn provides a greater financial incentive for ACOs to serve more 
beneficiaries from underserved communities and encourages ACOs already 
serving higher proportions of beneficiaries from underserved 
communities to remain in the Shared Savings Program and attracts new 
ACOs to join the Shared Savings Program. We will monitor the effect of 
using the 15 percent eligibility threshold for the HEBA and may revisit 
this threshold in future rulemaking.
---------------------------------------------------------------------------

    \572\ Based on PY 2023 data (for the 456 ACOs that participated 
in the Shared Savings Program in PY 2023), the average percent of 
ACO-assigned beneficiaries who are dually eligible or enrolled in 
LIS is approximately 15 percent.
---------------------------------------------------------------------------

    This modification furthers the goals of the original proposal, 
including to provide greater financial incentives for ACOs to attract 
and retain underserved beneficiaries, particularly ACOs with smaller or 
no regional adjustments or prior savings adjustments, while also 
producing significant savings, as identified in the Regulatory Impact

[[Page 98164]]

Analysis Table D-B7, in section VI of this final rule. Removing the 
threshold entirely as some commenters recommended would result in ACOs 
that are not serving an above-average proportion of underserved 
beneficiaries receiving a HEBA, which is not in line with the intent of 
our HEBA proposal.
    Further, we clarify for commenters who suggested that CMS ensure 
value-based care models do not inadvertently penalize providers caring 
for higher-risk beneficiaries that the HEBA is an upside-only 
adjustment to the benchmark, and it will not penalize providers with a 
downward adjustment. Regarding the commenter's statement that the HEBA, 
as proposed, would not benefit the majority of ACOs serving dually 
eligible and LIS-enrolled beneficiaries, we reaffirm that the HEBA as 
finalized with modifications will benefit ACOs serving an above-average 
proportion of LIS enrolled or dually eligible beneficiaries. The HEBA 
is designed to benefit ACOs serving larger proportions of beneficiaries 
from underserved communities and receiving lower regional adjustments 
or lower prior savings adjustments, or receiving neither adjustment. 
Regarding commenters' statements that the HEBA does not go far enough, 
we note that the HEBA as finalized with modifications will increase the 
number of ACOs estimated to receive a HEBA by 60 percent. We reiterate 
for commenters that we will monitor the HEBA's impact on ACOs 
participating in the Shared Savings Program and may consider 
modifications to the policy as appropriate in future notice-and-comment 
rulemaking.
    Comment: Many commenters suggested that CMS make the HEBA additive, 
applicable in addition to the regional adjustment and prior savings 
adjustment to the benchmark, instead of applying only the highest 
positive adjustment for which the ACO is eligible. According to 
commenters, doing so would allow the HEBA to increase benchmarks for 
any ACO that has disproportionate number of assigned beneficiaries from 
underserved communities, thus allowing more ACOs to benefit from the 
HEBA and making the Shared Savings Program more appealing to ACOs whose 
assigned beneficiary population includes a disproportionate number of 
historically underserved beneficiaries. One commenter emphasized that 
this change would help to compensate for the lack of risk adjustment in 
the prior savings adjustment, which especially impacts renewing ACOs 
with high percentages of complex, high risk assigned beneficiaries.
    Response: We thank commenters for their feedback. We disagree with 
commenters that we should make the HEBA additive, applicable in 
addition to the regional adjustment and prior savings adjustment to the 
benchmark. As noted in our proposal (89 FR 61887), our intent is to 
establish HEBA as a third method of upwardly adjusting an ACO's risk-
adjusted historical benchmark, in addition to the existing regional 
adjustment and prior savings adjustment. This upward adjustment to the 
historical benchmark is designed to benefit ACOs serving larger 
proportions of beneficiaries from underserved communities and receiving 
lower regional adjustments (Sec.  425.656) or lower prior savings 
adjustments (Sec.  425.658), or receiving neither adjustment. We 
explain in the CY 2025 PFS proposed rule (89 FR 61887) that 
implementing a HEBA would ensure benchmarks continue to serve as a 
reasonable baseline when ACOs serve high proportions of beneficiaries 
who are members of underserved communities and incentivize ACOs to 
provide coordinated care to beneficiaries who are members of 
underserved communities. A HEBA is likely to encourage more 
participation in the Shared Savings Program by ACOs that serve 
beneficiaries who are members of rural and underserved communities by 
allowing them to participate with potentially higher benchmarks. That, 
in turn, would increase the likelihood that they could earn shared 
savings and increase the amount of those shared savings payments and 
reduce potential financial barriers to forming ACOs. Furthermore, a 
health equity benchmark adjustment would also encourage currently 
participating ACOs to attract more beneficiaries who are members of 
underserved communities and remain in the Shared Savings Program. 
However, a majority of existing ACOs already benefit from adjustments 
to their benchmarks based on the higher of the regional adjustment or 
prior savings adjustment. A further adjustment for ACOs already 
benefiting from the existing benchmark adjustment methodology would 
increase program spending without materially improving the incentive 
for these ACOs to continue participation. Therefore, we believe the 
proposal to include the HEBA as a third method of upwardly adjusting an 
ACO's risk-adjusted historical benchmark, is the appropriate approach 
to incentivizing ACOs to remain in or join the Shared Savings Program 
while balancing costs to the Trust Funds, and it would not be 
appropriate for the HEBA to be additive for ACOs already benefiting 
from prior savings adjustments or regional adjustments.
    With respect to the commenter who stated that making HEBA additive 
would help ``compensate for the lack of risk adjustment in the prior 
savings adjustment, which especially impacts renewing ACOs with high 
percentages of complex, high risk assigned beneficiaries,'' we note 
that total per capita savings or losses for each performance year 
during the 3 years prior to the start of the ACO's current agreement 
(which are used to calculate the prior savings adjustment) are 
calculated using expenditures that are risk adjusted to reflect 
severity and case mix in the assigned beneficiary population in the 
performance year. Further, through recent prior rulemaking (see, for 
example, 88 FR 79185 and 79195) we have refined the financial 
methodology to support ACOs serving medically complex, high-costs 
populations, such as the policy to cap regional risk score growth in an 
ACO's regional service area when calculating regional trends used to 
update the historical benchmark at the time of financial reconciliation 
for symmetry with the cap on ACO risk score growth according to Sec.  
425.652(b)(2), and the policy to eliminate negative regional 
adjustments.
    Further, we note for commenters that the prepaid shared savings 
option finalized in section III.G.5 of this final rule would operate 
synergistically with the proposed HEBA, in that ACOs that have been 
successful in earning shared savings while serving larger proportions 
of beneficiaries from underserved communities would in subsequent 
agreement periods have additional capabilities through prepaid shared 
savings to address the unmet health-related social needs of the 
beneficiaries they serve and may have higher benchmarks due to the 
HEBA.
    Comment: A couple of commenters expressed concerns related to the 
proposed HEBA, including whether the HEBA's perceived complexity or the 
proposed cap on an ACO's HEBA equal to 5 percent of the United States 
Per Capita Costs (USPCC) may limit its impact or overall effectiveness. 
One commenter expressed concerns that introducing a third potential 
benchmark adjustment makes setting financial targets related to 
assigned beneficiary expenditures more difficult and may result in 
``negative financial outcomes.'' Another commenter requested clarity 
related to whether CMS will modify the HCC risk adjustment process if 
the HEBA proposal is finalized.

[[Page 98165]]

    Response: We acknowledge the complexity of the HEBA and refer 
readers to the discussion in the proposed rule (89 FR 61888) detailing 
how the HEBA is calculated and applied as well as to the Shared Savings 
Program's Program Guidance & Specifications web page,\573\ where we 
anticipate publishing details on the HEBA calculation in a future 
version of the Shared Savings and Losses, Assignment and Quality 
Performance Standard Methodology Specifications. We also refer readers 
to the discussion elsewhere in this section of this final rule in which 
we describe the design of the HEBA, which does not feature a 5 percent 
cap of the USPCC or a downward adjustment that would introduce 
unpredictability when setting financial targets. Additionally, we 
explained that an ACO would receive the highest of the positive 
adjustments for which it is eligible, either the regional adjustment, 
prior savings adjustment, or health equity benchmark adjustment. The 
resulting historical benchmark can be used to set financial targets 
related to assigned beneficiary expenditures in the same way regardless 
of which--if any--adjustment was applied to the benchmark.
---------------------------------------------------------------------------

    \573\ https://www.cms.gov/medicare/payment/fee-for-service-providers/shared-savings-program-ssp-acos/guidance-regulations#Financial_and_Beneficiary_Assignment.
---------------------------------------------------------------------------

    Additionally, in response to the commenter's request for clarity 
regarding whether we plan to implement any changes to the HCC risk 
adjustment process, we note that the HEBA is an upward adjustment to an 
ACO's historical benchmark that does not change or otherwise impact 
adjustments for changes in severity and case mix using prospective HCC 
risk scores when establishing or adjusting the benchmark as described 
in Sec.  425.652(a)(3), (a)(9), and (a)(10). Accordingly, the 
finalization of the HEBA policy does not necessitate changes to our HCC 
risk adjustment methodologies.
    Comment: Many commenters supported considering ADI to determine 
HEBA eligibility and amounts. These commenters stated that using ADI to 
determine HEBA eligibility and amounts could ``ensure more precise 
targeting of resources to areas most in need,'' and that, while person-
level measures of social vulnerability are the ``gold standard, 
validated geographic indices such as the ADI are useful proxies.'' One 
commenter described the ADI as ``a crucial metric for identifying 
underserved communities.'' A few commenters recognized the shortcomings 
of currently available metrics, including ADI, for identifying 
beneficiaries from underserved communities but noted that using all 
available data on social risk for purposes of determining HEBA 
eligibility and amounts will ``expand the HEBA's ability to address 
issues [related to providing care for higher-risk beneficiaries].'' 
Many other commenters suggested considering metrics such as Medicare 
enrollment due to disability in combination with the ADI and the 
proportion of the ACO's assigned beneficiaries who are enrolled in the 
Medicare Part D LIS or dually eligible for Medicare and Medicaid for 
the purposes of determining eligibility for and the amount of any HEBA. 
Another commenter suggested that it may be helpful to use ADI, which is 
a census block group level measure, to calculate HEBA amounts but noted 
that it ``may not be applicable to rural areas, for which most measures 
are available at the county level.''
    Several commenters suggested alternatives to the ADI for the 
purpose of determining HEBA eligibility and amounts. One commenter 
suggested exploring whether the Social Vulnerability Index \574\ or the 
new standardized area-level measure of socioeconomic deprivation under 
the ACO REACH Model \575\ would be a better metric than ADI when used 
in combination with the proportion of ACO-assigned beneficiaries who 
are enrolled in the Medicare Part D LIS or are dually eligible for 
Medicare and Medicaid for determining HEBA eligibility and amounts in 
the Shared Savings Program. Additionally, one commenter noted that as 
CMS considers area-level composite indices of socioeconomic 
deprivation, such as the ADI, it is critical that those indices are 
comprised of a variety of unique measures of social vulnerability. One 
commenter encouraged CMS to consider ACO beneficiary engagement, 
Patient Reported Outcome Measures, and Patient Reported Experience 
Measures \576\ when deciding an ACO's eligibility for HEBA and the 
amount of any adjustment. Another commenter emphasized the need for 
additional measures beyond ADI that are based on analyses of the root 
causes of historical inequality, such as hypersegregation and 
redlining, to more reliably design financial policies that promote 
health equity.
---------------------------------------------------------------------------

    \574\ The Centers for Disease Control and Prevention and Agency 
for Toxic Substances and Disease Registry Social Vulnerability Index 
is a place-based index, database, and mapping application designed 
to identify and quantify communities experiencing social 
vulnerability. See https://www.atsdr.cdc.gov/placeandhealth/svi/index.html.
    \575\ In PY 2025, CMS will remove the National/State blended ADI 
and replace it with an area-level socioeconomic deprivation measure 
that uses standardized variables. This will ensure the ADI 
accurately captures deprivation in areas with high housing values. 
See https://www.cms.gov/aco-reach-model-performance-year-2025-model-update-quick-reference.
    \576\ Patient-Reported Outcome Measures (PROM) and Patient 
Reported Experience Measures (PREM) are standardized questionnaires 
that can be used to capture patients' perspectives of their health 
and healthcare.
---------------------------------------------------------------------------

    A few other commenters opposed the use of ADI for determining HEBA 
eligibility and amounts, arguing that ADI can ``underestimate the 
vulnerability of neighborhoods where housing prices do not reflect 
broader trends and other specific obstacles to health and healthcare.'' 
One of these commenters recommended using the Vizient Vulnerability 
Index,\577\ which is more closely associated with average life 
expectancy than does the ADI. Two additional commenters opposed using 
the ADI and suggested that CMS continue to monitor and refine the use 
of ADI for calculating the ACO REACH Model's HEBA.
---------------------------------------------------------------------------

    \577\ See https://www.vizientinc.com/what-we-do/health-equity/vizient-vulnerability-index-public-access.
---------------------------------------------------------------------------

    Response: We appreciate the commenter's feedback and will consider 
for future rulemaking.
    After consideration of public comments, we are finalizing with 
modifications our proposed changes to the Shared Savings Program 
regulations to establish the HEBA that applies to ACOs with agreement 
periods beginning on January 1, 2025, and in subsequent years. We are 
finalizing our proposal to add a new section of the regulation at 
Sec. [thinsp]425.662 describing the calculation of the HEBA. We are 
finalizing as proposed the provisions of Sec. [thinsp]425.662, with the 
exception of Sec. [thinsp]425.662(b)(3). We are finalizing with 
modification the provision in Sec. [thinsp]425.662(b)(3), which 
specifies that CMS determines the ACO's eligibility for the HEBA based 
on the proportion of the ACO's assigned beneficiaries for the 
performance year who are enrolled in the Medicare Part D LIS or dually 
eligible for Medicare and Medicaid, to specify that: (1) an ACO is only 
eligible for the HEBA if this proportion is greater than or equal to 15 
percent, and (2) an ACO with a proportion less than 15 percent is 
ineligible to receive a HEBA. This reflects a modification from the 
proposed eligibility threshold of 20 percent.

[[Page 98166]]

    Further, within Sec. [thinsp]425.652, which sets forth the 
methodology for establishing, adjusting, and updating the benchmark for 
agreement periods beginning on January 1, 2024, and in subsequent 
years, we are finalizing our proposal to revise 
Sec. [thinsp]425.652(a)(8) to describe how we would determine and apply 
the adjustment to an ACO's benchmark, if any, based on a comparison of 
the ACO's regional adjustment expressed as a single value, prior 
savings adjustment, and the health equity benchmark adjustment. 
Furthermore, we are finalizing our proposal to amend 
Sec. [thinsp]425.652 by redesignating paragraphs (a)(9)(v) and (vi) as 
paragraphs (a)(9)(vi) and (vii), respectively, and to specify in a new 
paragraph (a)(9)(v) the adjustments made to the health equity benchmark 
adjustment for the first performance year during the term of the 
agreement period and in the second and each subsequent performance year 
during the term of the ACO's agreement period, if applicable. We are 
also finalizing as proposed conforming changes in newly redesignated 
Sec.  425.652(a)(9)(vi), specifying that CMS redetermines the 
adjustment to benchmark in accordance with Sec.  425.652(a)(8), to list 
the HEBA along with the regional adjustment and prior savings 
adjustment. We are also finalizing as proposed to make conforming 
changes to Sec. [thinsp]425.658(d), which describes the applicability 
of the prior savings adjustment, to include consideration of the HEBA 
in addition to the regional adjustment, in determining the adjustment 
(if any) that would be applied to the ACO's benchmark.
    Further, the text of the proposed regulations in the CY 2025 PFS 
proposed rule (89 FR 62228) included two technical changes to 
provisions of subpart G of part 425 that were not described in 
preamble. We proposed to amend Sec.  425.650(a) by removing the 
reference to ``425.660'' and adding in its place the reference 
``425.662.'' This change is necessary to ensure the range of sections 
specifying the benchmarking methodology for agreement periods beginning 
on or after January 1, 2024, referenced in Sec.  425.650(a), 
appropriately includes the new section of the regulations at Sec.  
425.662, describing the calculation of the HEBA. As previously 
described in this section of this final rule, we are finalizing our 
proposal to add a new section of the regulation at Sec. [thinsp]425.662 
describing the calculation of the HEBA. We received no comments 
addressing the proposed change in the regulations at Sec.  425.650(a), 
and we are finalizing this technical change without modification.
    Additionally, the text of the proposed regulations in the CY 2025 
PFS proposed rule (89 FR 62230) included an amendatory instruction: 
``Sections 425.664 through 425.669 are added and reserved.'' There was 
no corresponding discussion of this proposed change in the preamble. 
However, our proposed changes specified with the SAHS billing activity 
proposed rule (which appeared in the July 3, 2024 Federal Register, 
prior to the issuance of the CY 2025 PFS proposed rule, which appeared 
in the July 31, 2024 Federal Register) included the following 
amendatory instruction: ``Add reserved Sec. Sec. [thinsp]425.661 
through 425.669 to subpart G'' (refer to 89 FR 55168, including the 
preamble discussion at 89 FR 55174, and text of the proposed 
regulations at 89 FR 55179). We finalized this proposed change, among 
our other proposals, in the SAHS billing activity final rule, which 
appeared in the September 27, 2024 Federal Register (refer to 89 FR 
79152, including the preamble discussion at 89 FR 79165, and the text 
of the regulations at 89 FR 79171). We received no comments addressing 
this proposed change in the regulations. However, because we already 
added and reserved sections 425.664 through 425.669 in the SAHS billing 
activity final rule, we are not finalizing this proposal in this final 
rule.
c. Reopening ACO Payment Determinations
(1) Background
(a) Statutory Background on Shared Savings Program Financial 
Calculations
    Section 1899(d)(1)(B)(ii) of the Act provides for the calculation 
and update of ACO benchmarks under the Shared Savings Program. This 
provision specifies that the Secretary shall estimate a benchmark for 
each agreement period for each ACO using the most recent available 3 
years of per beneficiary expenditures for Parts A and B services for 
Medicare FFS beneficiaries assigned to the ACO. Such benchmark shall be 
adjusted for beneficiary characteristics and such other factors as the 
Secretary determines appropriate and updated by the projected absolute 
amount of growth in national per capita expenditures for Parts A and B 
services under the original Medicare FFS program, as estimated by the 
Secretary. Further, an ACO's benchmark must be reset at the start of 
each agreement period. Section 1899(d)(1)(B)(i) of the Act specifies 
that, in each year of the agreement period, an ACO is eligible to 
receive payment for shared savings only if the estimated average per 
capita Medicare expenditures under the ACO for Medicare FFS 
beneficiaries for Parts A and B services, adjusted for beneficiary 
characteristics, is at least the percent specified by the Secretary 
below the applicable benchmark under section 1899(d)(1)(B)(ii) of the 
Act.
    Section 1899(i)(3) of the Act authorizes the Secretary to use other 
payment models, if the Secretary determines it is appropriate, and if 
the Secretary determines that doing so would improve the quality and 
efficiency of items and services furnished under Title XVIII and the 
alternative methodology would result in program expenditures equal to 
or lower than those that would result under the statutory payment 
model. As discussed in earlier rulemaking, we have used the authority 
under section 1899(i)(3) of the Act to adopt alternative policies to 
the provisions of section 1899(d)(1)(B) of the Act for updating the 
historical benchmark \578\ and calculating performance year 
expenditures,\579\ among other factors.\580\ We have also used our 
authority under section 1899(i)(3) of the Act to establish the Shared 
Savings Program's two-sided payment models,\581\ and to mitigate

[[Page 98167]]

shared losses owed by ACOs affected by extreme and uncontrollable 
circumstances during PY 2017 and subsequent performance years.\582\
---------------------------------------------------------------------------

    \578\ Such as using only assignable beneficiaries instead of all 
Medicare FFS beneficiaries in calculating the benchmark update based 
on national FFS expenditures (81 FR 37985 through 37989), 
calculating the benchmark update using factors based on regional FFS 
expenditures (81 FR 37977 through 37981), calculating the benchmark 
update using a blend of national and regional expenditure growth 
rates (83 FR 68027 through 68030), removing payment amounts for 
episodes of care for treatment of COVID-19 from expenditures used to 
calculate the benchmark update (85 FR 27577 through 27582), and 
calculating the benchmark update using an Accountable Care 
Prospective Trend/national-regional three-way blended update factor 
(87 FR 69881 through 69898).
    \579\ Such as excluding indirect medical education and 
disproportionate share hospital payments from ACO performance year 
expenditures (76 FR 67920 through 67922), determining shared savings 
and shared losses for the 6-month performance years (or performance 
period) in 2019 using expenditures for the entire CY 2019 and then 
pro-rating these amounts to reflect the shorter performance year or 
performance period (83 FR 59949 through 59951, 83 FR 67950 through 
67956), removing payment amounts for episodes of care for treatment 
of COVID-19 from performance year expenditures (85 FR 27577 through 
27582), and the exclusion of the supplemental payment for IHS/Tribal 
hospitals and Puerto Rico hospitals from performance year 
expenditures (87 FR 69954 through 69956).
    \580\ Such as allowing for advance investment payments (87 FR 
69782 through 69805), and expansion of the criteria for certain low 
revenue ACOs participating in the BASIC track to qualify for shared 
savings in the event the ACO does not meet the MSR as required under 
section 1899(d)(1)(B)(i) of the Act (87 FR 69946 through 69952).
    \581\ See earlier rulemaking establishing two-sided models: 
Track 2 (76 FR 67904 through 67909), Track 3 (subsequently renamed 
the ENHANCED track) (80 FR 32771 and 32772), and the BASIC track (83 
FR 67834 through 67841). We also used our authority under section 
1899(i)(3) of the Act to remove payment amounts for episodes of care 
for treatment of COVID-19 from ACO participants' Medicare FFS 
revenue used to determine the loss sharing limit in the two-sided 
models of the BASIC track (85 FR 27577 through 27582).
    \582\[thinsp]See earlier rulemaking establishing policies for 
mitigating shared losses owed by ACOs affected by extreme and 
uncontrollable circumstances (82 FR 60916 and 60917, 83 FR 59974 
through 59977).
---------------------------------------------------------------------------

    (b) Background on Shared Savings Program Reopening Policy and 
Financial Calculation Methodology
    Under Sec.  425.315(a)(1), if CMS determines that the amount of 
shared savings due to the ACO or the amount of shared losses owed by 
the ACO has been calculated in error CMS may reopen the initial 
determination or a final agency determination under subpart I and issue 
a revised initial determination: (i) at any time in the case of fraud 
or similar fault as defined in Sec.  405.902; \583\ or (ii) not later 
than 4 years after the date of the notification to the ACO of the 
initial determination of savings or losses for the relevant performance 
year, for good cause.
---------------------------------------------------------------------------

    \583\ As defined in Sec.  405.902, ``similar fault'' means to 
obtain, retain, convert, seek, or receive Medicare funds to which a 
person knows or should reasonably be expected to know that he or she 
or another for whose benefit Medicare funds are obtained, retained, 
converted, sought, or received is not legally entitled. This 
includes, but is not limited to, a failure to demonstrate that he or 
she filed a proper claim as defined in 42 CFR part 411.
---------------------------------------------------------------------------

    In accordance with Sec.  425.315(a)(2), good cause may be 
established when (i) there is new and material evidence that was not 
available or known at the time of the payment determination and may 
result in a different conclusion, or (ii) the evidence that was 
considered in making the payment determination clearly shows on its 
face that an obvious error was made at the time of the payment 
determination. Section 425.315(a)(3) specifies that a change of legal 
interpretation or policy by CMS in a regulation, CMS ruling or CMS 
general instruction, whether made in response to judicial precedent or 
otherwise, is not a basis for reopening a payment determination under 
the Shared Savings Program regulations. CMS has sole discretion to 
determine whether good cause exists for reopening a payment 
determination (Sec.  425.315(a)(4)).
    We first adopted a reopening policy in the November 2011 final 
rule, where we finalized at Sec.  425.314(a)(4) a provision reserving 
the right for CMS to reopen the initial determination and issue a 
revised initial determination, if as a result of any inspection, 
evaluation, or audit, it is determined that the amount of shared 
savings due to the ACO or amount of shared losses owed by the ACO has 
been calculated in error (see 76 FR 67957 through 67958, and 67982). In 
the June 2016 final rule, we revised the Shared Savings Program 
regulations, including to remove the provision in Sec.  425.314(a)(4), 
and further specify the reopening policy in a new section of the 
regulation at Sec.  425.315 (81 FR 37997 through 38002, and 38013 
through 38014). We subsequently revised Sec.  425.315 to apply the 
policies on reopening determinations to payment determinations for a 6-
month performance year or 6-month performance period during CY 2019 
(refer to the November 2018 final rule, 83 FR 59958 and 60092, and the 
December 2018 final rule, 83 FR 67955 through 67967), and to ACOs 
participating in the BASIC track (refer to the December 2018 final 
rule, 83 FR 67842 and 68068). In the CY 2023 PFS final rule, we 
clarified the circumstances in which CMS would exercise discretion to 
reopen the initial determination of an ACO's financial performance for 
good cause to correct errors in the determination of MIPS Quality 
performance category scores that affect the determination of whether an 
ACO is eligible for shared savings, the amount of shared savings due to 
the ACO, or the amount of shared losses owed by the ACO (see 87 FR 
69868 through 69869).
    Most recently, in the CY 2024 PFS final rule, we finalized an 
approach to recalculating the prior savings adjustment for changes in 
values used in benchmark calculations due to compliance action taken to 
address avoidance of at-risk beneficiaries, or as a result of the 
issuance of a revised initial determination of financial performance 
for a previous performance year following a reopening of ACO shared 
savings and shared losses calculations (88 FR 79195 through 79200). In 
the CY 2024 PFS final rule, we also discussed a proposed timing cutoff 
such that changes to savings or losses for a benchmark year that were 
finalized after notification to the ACO of the initial determination of 
shared savings or shared losses for a given performance year would be 
reflected in the adjusted benchmark applied to any subsequent 
performance year during the relevant agreement period but would not be 
retroactively applied to completed performance years in the agreement 
period (88 FR 79198 through 79200). We stated that we believed it would 
be appropriate to consider new information that could impact the prior 
savings adjustment up to the point at which an ACO receives its initial 
determination. However, we also noted that we would continue to 
consider the complexities surrounding reopening initial determinations 
for multiple prior performance years throughout the program's 
benchmarking and financial reconciliation methodologies and may address 
this issue in future rulemaking (88 FR 79199). We refer readers to 
these discussions in past rulemaking for additional details.
    In our earlier rulemaking, we did not discuss the specific 
methodology that would be employed for recalculating an ACO's shared 
savings or shared losses in the event of a reopening in order to issue 
a revised initial determination. As additional background, in the 
following discussion, we summarize the general approach to 
identification and use of payment amounts from Medicare FFS Parts A and 
B FFS claims and certain other payment amounts in Shared Savings 
Program calculations.
    Under the Shared Savings Program, providers and suppliers continue 
to bill for services furnished to Medicare beneficiaries and receive 
FFS payments under traditional Medicare. CMS uses payment amounts for 
Parts A and B FFS claims for calculating benchmark and performance year 
expenditures and determining benchmark update factors as specified in 
the Shared Savings Program regulations in subpart G. These operations 
typically require the determination of expenditures for Parts A and B 
services under the original Medicare FFS program for a specified 
population of Medicare FFS beneficiaries or the Medicare Parts A and B 
FFS revenue of ACO participants. The Medicare FFS beneficiary 
population for which expenditures are determined may differ depending 
on the specific program operation being performed and may reflect 
expenditures for the ACO's assigned beneficiaries, assignable 
beneficiaries, or all Medicare FFS beneficiaries. The applicable 
Medicare FFS beneficiary population is specified in the regulations 
governing each program operation.
    In calculating expenditures for Medicare FFS beneficiaries used in 
Shared Savings Program calculations, CMS uses payment amounts included 
on Parts A and B FFS claims with dates of service in the relevant 
benchmark or performance year, allowing for a 3-month claims run out, 
as follows: claim payment amounts identified for inpatient, Skilled 
Nursing Facility (SNF), outpatient, Home Health Agency (HHA), and 
hospice claims at any provider; and line item payment amounts 
identified for carrier (including

[[Page 98168]]

physician/supplier Part B) and Durable Medical Equipment, Prosthetics, 
Orthotics & Supplies (DMEPOS) claims. For both Parts A and B claims, 
CMS excludes payments on denied claims or line items from the 
calculation, for claims or line items with dates of service within the 
relevant benchmark year or performance year, processed before the end 
of the 3-month claims run out period. In calculating expenditure 
amounts for Medicare FFS beneficiaries under the Shared Savings 
Program, CMS makes certain adjustments,\584\ which if applicable, 
exclude indirect medical education (IME) and disproportionate share 
hospital (DSH) payments, and the supplemental payment for IHS/Tribal 
hospitals and Puerto Rico hospitals, and take into consideration 
individually beneficiary identifiable final payments made under a 
demonstration, pilot or time limited program. We also account for 
certain population-based payments or other similarly structured 
payments made under other Medicare shared savings initiatives, 
specifically the Pioneer ACO Model, Next Generation ACO Model, Vermont 
All-Payer ACO Model, and ACO REACH Model (as applicable). Population-
based payments are a per-beneficiary per month payment amount intended 
to replace some or all of the FFS payments with prospective monthly 
payment.\585\
---------------------------------------------------------------------------

    \584\ The Shared Savings Program's financial models and 
benchmarking policies, among other program policies, have changed 
over time as described in earlier rulemaking (refer to section 
III.G.1.b. of this final rule), and as outlined in the provisions of 
subpart G.
    \585\ See for example, Medicare Shared Savings Program, Shared 
Savings and Losses, Assignment and Quality Performance Standard 
Methodology Specifications (Version 11, January 2023), available at 
https://www.cms.gov/files/document/medicare-shared-savings-program-shared-savings-and-losses-and-assignment-methodology-specifications.pdf-2 (refer to Section 3.1 Calculating ACO-Assigned 
Beneficiary Expenditures).
---------------------------------------------------------------------------

    The Shared Savings Program's existing financial methodology does 
not fully account for actions taken to protect the integrity of the 
Medicare program, or address the impact of improper payments, including 
improper payments resulting from fraud or similar fault on program 
calculations. For instance, demanded overpayment determinations 
resulting in adjusted claim or line item payment amounts after the 3-
month claims run out period, or aggregate amounts that are not linked 
to specific claims or line items, are not accounted for in Shared 
Savings Program expenditure calculations. Additionally, under the 
existing financial methodology for the Shared Savings Program, we lack 
a means to account for improper payment amounts identified in a 
settlement agreement between a provider or supplier and the Government 
or a court's judgment, including pursuant to conduct by individuals or 
entities performing functions or services related to an ACO's 
activities. Under the proposed approach described in section 
III.G.7.c.(2).(c) of the CY 2025 PFS proposed rule, the term ``improper 
payment'' for purposes of the Shared Savings Program would include an 
amount associated with a demanded overpayment determination and certain 
amounts identified in a settlement agreement or judgment that have the 
potential to impact program financial calculations. We explained in the 
CY 2025 PFS proposed rule that since January 2023, we have evaluated 
several cases where such improper payments may have impacted one or 
more reconciled performance years for an ACO under the Shared Savings 
Program, including cases where ACOs reported concerns about alleged 
fraud or similar fault to CMS. We stated it is thus timely and 
appropriate to undertake notice and comment rulemaking to establish a 
calculation methodology to account for the impact of improper payments 
in recalculating expenditures and payment amounts used in Shared 
Savings Program financial calculations, upon reopening a payment 
determination pursuant to Sec.  425.315(a); to describe factors that we 
may consider in exercising our discretion to reopen an ACO's payment 
determination under which we apply the proposed methodology to 
recalculate the ACO's financial performance; and to propose to 
establish a process by which an ACO could request a reopening of an 
initial determination of shared savings or shared losses. Our 
experience reviewing several cases supported the development of our 
proposed revisions to Shared Savings Program policies.
(2) Revisions
    Section III.G.7.c.(2) of the CY 2025 PFS proposed rule (89 FR 61894 
through 61909) included a proposed change to the provision specifying 
CMS' discretion to reopen payment determinations under Sec.  
425.315(a)(4) (described in section III.G.7.c.(2).(a) of the proposed 
rule). We discussed and solicited comment on the circumstances in which 
we would exercise our discretion to reopen a payment determination and 
issue a revised initial determination to account for the impact of 
identified improper payments on Shared Savings Program calculations 
(described in section III.G.7.c.(2).(b) of the proposed rule). We 
proposed modifications to the Shared Savings Program regulations to 
specify a calculation methodology to account for the impact of 
identified improper payments in recalculating expenditures and payment 
amounts used in Shared Savings Program financial calculations, upon 
reopening a payment determination pursuant to Sec.  425.315(a) 
(described in section III.G.7.c.(2).(c) of the proposed rule). We also 
proposed certain adjustments to Shared Savings Program benchmark 
calculations to account for the impact of identified improper payments, 
in the event a performance year for which we issue a revised initial 
determination becomes a benchmark year of an ACO's current agreement 
period, and when CMS has not yet issued an initial determination for a 
performance year of the ACO's current agreement period (described in 
section III.G.7.c.(2).(d) of the proposed rule).\586\ Lastly, we 
proposed a process for ACOs to request that CMS reopen a payment 
determination (described in section III.G.7.c.(2).(e) of the proposed 
rule), and briefly discussed the role of ACOs in preventing and 
reporting Medicare fraud (described in section III.G.7.c.(2).(f) of the 
proposed rule). Our specific proposals are discussed in detail in the 
following sections.
---------------------------------------------------------------------------

    \586\ We refer readers to section III.G.7.c.(2).(d) of this 
final rule, in which we clarify the applicability of the benchmark 
adjustment.
---------------------------------------------------------------------------

    We proposed that the policy changes discussed in section III.G.7.c. 
of the CY 2025 PFS proposed rule would be effective January 1, 2025, 
unless specified otherwise (89 FR 61894). We explained that should the 
proposed policies be finalized, the policies would apply to reopening 
requests made on or after January 1, 2025. We also explained that if 
the proposal to establish a process by which an ACO may request a 
reopening review was to be finalized, we anticipated continuing to 
evaluate previously received reopening requests for performance years 
for which initial determinations were issued prior to January 1, 2025, 
consistent with the timeframes specified under Sec.  425.315(a)(1). If 
the proposed recalculation methodology to account for the impact of 
improper payments were to be finalized, we would consistently apply the 
methodology in recalculating expenditures and payment amounts used in 
Shared Savings Program financial calculations upon reopening a payment 
determination pursuant to Sec.  425.315(a).
    The following is a summary of general comments we received on our 
discussion and proposals regarding reopening ACO payment determinations

[[Page 98169]]

and the timing of applicability of the proposed modifications.
    Comment: Most commenters addressing the reopening policy proposals 
and related considerations described in section III.G.7.c of the CY 
2025 PFS proposed rule responded favorably to an approach under which 
CMS would recalculate ACO financial performance and adjust ACO 
historical benchmarks to account for the impact of improper payments on 
Shared Savings Program financial calculations, establish a process for 
ACOs to request reopening, and related considerations in connection 
with these proposals. Some commenters addressed the specific proposals 
or policy considerations, including to provide alternative suggestions, 
or to urge CMS to provide additional information on the approach and 
transparency into its processes. At least one commenter, which was a 
supportive commenter, attempted to summarize the proposals, but did so 
inaccurately.\587\
---------------------------------------------------------------------------

    \587\ We refer commenters and other readers of this final rule 
to the summary of the proposals and policy considerations described 
elsewhere in this section of this final rule to aide their 
understanding of the proposals.
---------------------------------------------------------------------------

    Some commenters addressing the proposals and related considerations 
tended to express general support for CMS' proposal to codify a process 
for reopening payment determinations in instances where improper 
payments have been identified. Only a few commenters provided detailed 
explanations of their support. More generally, one commenter explained 
the approach is responsive to ongoing concerns from ACOs around the 
negative impact of bad actors on both the Medicare Trust Funds as well 
as ACOs' ability to succeed in the Shared Savings Program. Another 
commenter supported proposals to facilitate the reopening of payment 
determinations to assist in mitigating the negative effects of improper 
payments. Some commenters stated their belief that the reopening policy 
could be an opportunity to remove instances of fraud or abuse from ACO 
performance calculations, and tended to underscore that criminal 
matters are not often resolved until months or years after a 
performance year's reconciliation. Some of these commenters further 
explained that ACOs typically hear about confirmed fraud in their 
markets years after the performance period ended yet have no recourse 
for action, and as a result, ACOs are held accountable for patients' 
total cost of care but have no ability to stop instances of improper 
payments. One commenter expressed their belief that accounting for the 
impact of certain improper payments in performance year and benchmark 
expenditures, among other proposed changes to Shared Savings Program 
policies described in the CY 2025 PFS proposed rule, will help increase 
participation in ACOs and enable ACOs to focus more on underserved 
populations, but did not offer a detailed explanation of how this could 
occur.
    Response: We summarize and respond to commenters' specific concerns 
and suggestions throughout the rest of this section of this final rule. 
We appreciate the commenters' support for the proposals in connection 
with reopening ACO payment determinations. As described throughout this 
rest of this section of this final rule, we are finalizing our 
proposals, and note that in the case of the benchmark adjustment we are 
finalizing a clarification to our proposal, as specified in section 
III.G.7.c.(2).(d) of this final rule.
    As we explained in the CY 2025 PFS proposed rule, the Shared 
Savings Program's existing financial methodology does not fully account 
for actions taken to protect the integrity of the Medicare program, or 
address the impact of improper payments, including improper payments 
resulting from fraud or similar fault on program calculations. We 
acknowledge commenters' concerns that ACOs' financial performance can 
be negatively impacted by confirmed fraud in their markets that is 
beyond their control yet are held accountable for the related costs, 
potentially impeding their ability to succeed in the Shared Savings 
Program. Addressing improper payments in the Medicare program, through 
the program's reopening authority, would help protect the accuracy, 
fairness, and integrity of Shared Savings Program financial 
calculations, and lead to greater beneficiary protections and 
protection of the Trust Funds.
    While ACOs may learn of fraud or abuse in their region, or 
impacting their assigned beneficiaries, not all instances of such 
conduct may result in a decision by CMS to reopen the ACO's payment 
determination and to issue a revised initial determination. CMS retains 
discretion over whether to reopen payment determinations after 
identifying improper payments that have the potential to impact Shared 
Savings Program financial calculations, which may come to our attention 
through ACO reopening requests, as well as input from program integrity 
staff and law enforcement agencies. We also caution ACOs of the 
potential effects on their performance that could result from 
addressing the impact of improper payments on Shared Savings Program 
financial calculations. As described in section III.G.7.c.(2).(c). of 
this final rule, accounting for the impact of improper payments on 
expenditures could increase or decrease an ACO's amount of shared 
savings or shared losses. We also reiterate a key point from our 
discussion in section III.G.7.c.(2).(b) of this final rule, that we are 
continuing to consider applying an approach under which we 
differentiate between cases where improper payments originate inside 
the ACO versus outside the ACO, in deciding whether to reopen the 
payment determination, in order to strike a balance between improving 
the accuracy of the calculations and ACOs' and CMS' interest in 
administrative finality of payment determinations.
    Codifying an approach to account for the impact of improper 
payments in Shared Savings Program financial calculations, and 
establishing a process for ACO reopening requests are critical initial 
steps towards more systemically identifying and addressing improper 
payments that impact Shared Savings Program calculations.
    Comment: Many of the comments on the reopening policies in the CY 
2025 PFS proposed rule addressed both the reopening policy proposals 
and SAHS billing activity proposals, and did not differentiate between 
these two approaches. For instance, a few commenters expressed support 
for the reopening policy proposals in conjunction with the proposal to 
mitigate the impact of SAHS billing activity on Shared Savings Program 
financial calculations in CY 2024 or subsequent calendar years. One 
such commenter encouraged CMS to ``streamline the process'' as much as 
possible (although the commenter did not make clear the process being 
referred to) and to work with ACOs to ``address SAHS situations as 
early as possible.''
    Some commenters' descriptions generally indicated that the concept 
of SAHS billing activity was addressed through or included in the 
reopening policy. For instance, several commenters suggested that CMS 
hold ACOs ``harmless'' for SAHS billing activity by recalculating 
expenditures and payment amounts to account for improper payments upon 
reopening a payment determination and excluding SAHS billing activity 
from expenditure and revenue calculations for the relevant calendar 
year, as well as from historical benchmarks. Another commenter stated 
support for CMS' ``exclusion [of] SAHS billing including

[[Page 98170]]

establishing a process to reopen payment determinations.''
    Further, we have summarized and responded to comments addressing 
the SAHS billing activity policy within section III.G.7.d. of this 
final rule.
    Response: These comments indicate that some commenters may have 
misunderstood the differences between the SAHS billing activity policy 
proposal and the reopening policy proposal. Together, the SAHS billing 
activity policy and the reopening policy provide a comprehensive basis 
for CMS to adjust payment amounts used in Shared Savings Program 
financial calculations. Each policy, however, addresses a different 
type of payment issue. Under the SAHS billing activity policy proposal 
(refer to section III.G.7.d of this final rule), CMS would proactively 
adjust Shared Savings Program calculations pursuant to a determination 
that SAHS billing activity occurred in CY 2024 or a subsequent calendar 
year. The SAHS policy would address and remove--prior to financial 
reconciliation for a performance year--large scale, unexplained billing 
anomalies for all ACOs. By contrast, the reopening process is the 
mechanism by which CMS would determine whether to reopen a previous 
initial determination and final agency determination for a performance 
year, for fraud or similar fault, or good cause, as specified under 
Sec.  425.315(a), and issue a revised initial determination, which may 
include accounting for the impact of identified improper payments in 
recalculating savings or losses under the proposed calculation 
methodology (refer to section III.G.7.c.(2).(c) of this final rule). 
CMS may learn of potential inaccuracies in the ACO's previously 
completed financial reconciliation results through an ACO's submission 
of a reopening request, and we proposed to establish a related 
reopening request process (refer to section III.G.7.c.(2).(e) of this 
final rule).
    Further, since the adjustment for SAHS billing activity would occur 
prior to the issuance of an initial determination, we would not reopen 
an initial determination to adjust for payment amounts excluded under 
the SAHS billing activity policy. Those amounts were already excluded 
in their entirety from all calculations due to the high probability of 
inaccurate and inequitable payments and repayment obligations in the 
Shared Savings Program if left in. However, we note that there could be 
other reasons why CMS would reopen an initial determination which used 
expenditures adjusted under the SAHS billing policy.
    To the extent the commenters' remarks are suggesting that CMS use 
alternative approaches to address SAHS billing activity, to account for 
the impact of improper payments on Shared Savings Program financial 
calculations upon reopening a payment determination, or both, we 
decline these suggestions at this time. In light of the aforementioned 
considerations, the adjustment for SAHS billing activity described in 
section III.G.7.d of this final rule, and the policies for 
recalculating expenditures and payment amounts to account for improper 
payments upon reopening a payment determination, each support critical 
and different functions for improving the accuracy, fairness, and 
integrity of Shared Savings Program financial calculations. We believe 
it is timely to finalize proposals in each of these policy areas. As we 
gain experience with these policies, we may revisit potential 
interactions between the policies in future notice and comment 
rulemaking.
    Comment: Some commenters addressed the discussion in the CY 2025 
PFS proposed rule on the timing of applicability of the policy changes 
on reopening ACO payment determinations, and in particular the 
applicability of the policies to reopening requests made on or after 
January 1, 2025. These commenters requested that CMS apply the policy 
changes on reopening ACO payment determinations to reopening requests 
for performance years prior to 2025. Commenters making this suggestion 
tended to specify that CMS should apply the policy for reopening ACO 
payment determinations to address other billing activity that ACOs 
suspect to be SAHS, citing examples impacting CY 2023 that would not be 
addressed by the rulemaking to address SAHS billing activity for 
urinary catheters in CY 2023 (see SAHS billing activity proposed rule, 
89 FR 55168), or CY 2024. (Related comments are summarized and 
responded to in section III.G.7.d. of this final rule.) One commenter 
specified that ACOs had identified ``improper payments'' impacting 
performance years prior to 2025, including billings for skin 
substitutes, ventilators, diabetic supplies, and collagen dressings, 
but did not specify additional details including how the determination 
was made or the year(s) impacted.
    Response: Commenters' suggestions that the policy changes on 
reopening ACO payment determinations apply to reopening requests for 
performance years prior to 2025, may reflect confusion over the 
difference between the effective date for the policies being finalized 
in this final rule and the timeframes for reopening payment 
determinations in accordance with Sec.  425.315(a) (as amended by this 
final rule), and the new process for ACOs to request reopening review 
under the provisions we are finalizing with this final rule in Sec.  
425.315(b) (as described in section III.G.7.c.(2).(e) of this final 
rule). Under the policies we are finalizing described in section 
III.G.7.c. of this final rule, ACOs may submit to CMS for consideration 
reopening requests for performance years prior to PY 2025. CMS will 
apply the policies established with this final rule beginning on the 
effective date of the final rule, January 1, 2025. As we specified in 
the CY 2025 PFS proposed rule, and reiterated in section 
III.G.7.c.(2).(e) of this final rule, the timing of an ACO's reopening 
request must be consistent with the timeframes specified in Sec.  
425.315(a)(1)(i) and (ii), respectively, either (i) at any time in the 
case of fraud or similar fault, or (ii) not later than 4 years after 
the date of the notification to the ACO of the initial determination of 
savings or losses for the relevant performance year for good cause. 
Consistent with our statement in the CY 2025 PFS proposed rule (89 FR 
61894), with the finalization of the policies on reopening ACO payment 
determinations in this final rule, we will evaluate previously received 
reopening requests for performance years for which initial 
determinations were issued prior to January 1, 2025, consistent with 
the timeframes specified under Sec.  425.315(a)(1). In recalculating 
expenditures and payment amounts used in Shared Savings Program 
financial calculations to account for the impact of improper payments, 
we will consistently apply the methodology finalized in this section of 
this final rule, upon reopening a payment determination pursuant to 
Sec.  425.315(a).
    In response to a commenter's assertion that ACOs have identified 
improper payments impacting performance years prior to 2025, we 
encourage ACOs, or anyone else suspecting healthcare fraud, waste or 
abuse to report it to CMS or the Department of Health and Human 
Services Office of Inspector General (HHS-OIG). Refer to section 
III.G.7.c.(2).(f) of this final rule entitled ``Preventing and 
Reporting Medicare Fraud'' for related information. As explained in 
section III.G.7.c.(2).(e) of this final rule, we anticipate providing 
additional information on the reopening request process for ACOs 
through guidance, including the form and manner in which CMS must 
receive a

[[Page 98171]]

reopening request. ACOs seeking to submit a reopening request prior to 
the issuance of the guidance material on the reopening request process 
are encouraged to submit detailed information in writing to CMS by 
email to [email protected]. Further, as we described in 
the CY 2025 PFS proposed rule, and reiterated in section 
III.G.7.c.(2).(b) of this final rule, the Shared Savings Program will 
coordinate with program integrity staff and law enforcement agencies to 
identify and quantify improper payments potentially impacting 
expenditures used in program calculations that are not otherwise 
accounted for in Shared Savings Program expenditure calculations.
    Although some commenters referred to billing activity that ACOs may 
suspect to be SAHS billing activity, we wish to reiterate that CMS will 
have the sole discretion to identify cases of SAHS billing activity for 
a particular calendar year that warrant adjustment of Shared Savings 
Program financial calculations, for CY 2024 or subsequent calendar 
years, in the approach we are finalizing in section III.G.7.d of this 
final rule. Further, as we describe elsewhere in this final rule, we 
anticipate this policy to adjust Shared Savings Program calculations to 
mitigate the impact of SAHS billing activity would be invoked in rare 
and extreme cases when CMS identifies a code that meets the high bar to 
be defined as SAHS billing activity. In section III.G.7.d. of this 
final rule, we summarize and respond to public comments received on the 
proposals to mitigate the impact of SAHS billing activity on Shared 
Savings Program financial calculations in CY 2024 or subsequent 
calendar years.
    More generally, in the discussion that follows, we summarize and 
respond to public comments we received on the remaining proposals and 
considerations described in section III.G.7.c.(2) of the CY 2025 PFS 
proposed rule.
(a) Change to Provision Specifying CMS' Discretion To Reopen Payment 
Determinations
    In earlier rulemaking we explained that CMS would have discretion 
to reopen a payment determination for fraud or similar fault, or good 
cause, as reflected in the provisions in Sec.  425.315(a)(1) and (4). 
The latter provision expressly provides that CMS has sole discretion to 
determine whether good cause exists for reopening a payment 
determination. In the June 2016 final rule, in restating the discussion 
of the proposal from the February 2016 proposed rule, we explained that 
CMS would have discretion to reopen a payment determination at any time 
in the case of fraud or ``similar fault,'' as defined in Sec.  405.902 
(81 FR 37998).
    We continue to believe that it is important to maintain CMS' sole 
discretion in determining whether to reopen a payment determination. We 
also believe it is important to preserve CMS' flexibility in 
determining whether reopening is warranted to address the impact of 
fraud or similar fault on Shared Savings Program calculations, in 
particular given the potential for various actions to be taken by CMS, 
law enforcement agencies and courts in response to fraud or similar 
fault. Thus, we proposed revisions to Sec.  425.315(a)(4) to make clear 
that CMS has the sole discretion to determine whether to reopen a 
payment determination in the case of fraud or similar fault, as well as 
to determine whether good cause exists to reopen a payment 
determination.
    We received no comments directly addressing the proposed revisions 
to Sec.  425.315(a)(4), as described in this section of this final 
rule. We are finalizing without modification our proposal to revise 
Sec.  425.315(a)(4) to make clear CMS' discretion applies to 
determining whether to reopen a payment determination in the case of 
fraud or similar fault, as well as to determining whether good cause 
exists to reopen a payment determination.
(b) Considerations for Reopening a Payment Determination To Account for 
Improper Payments
    In section III.G.7.c.(2).(b) of the CY 2025 PFS proposed rule (89 
FR 61895 through 61898), we described factors CMS may consider to 
inform our decision of whether to reopen an initial determination of an 
ACO's financial performance pursuant to Sec.  425.315(a)(1)(i) or (ii) 
to account for the impact of improper payments that affect the 
determination of whether an ACO is eligible for shared savings or 
liable for shared losses, and the amount of shared savings due to the 
ACO or the amount of shared losses owed by the ACO. We solicited 
comments on these considerations. We also explained that we anticipate 
revisiting these considerations as we gain experience with processing 
ACO reopening requests as described in section III.G.7.c.(2).(e) of the 
proposed rule (89 FR 61907 through 61908), reopening payment 
determinations and applying the calculation methodology described in 
section III.G.7.c.(2).(c) of the proposed rule (89 FR 61898 through 
61907), and applying the benchmark adjustment described in section 
III.G.7.c.(2).(d) of the proposed rule (89 FR 61907). We specified 
that, if appropriate, we may revisit these considerations for 
exercising our discretion to reopen payment determinations in future 
notice and comment rulemaking.
    As an initial matter, the Shared Savings Program would need to 
identify improper payments that have the potential to impact program 
financial calculations. The Shared Savings Program depends on input 
from the CMS Center for Program Integrity (CPI) and law enforcement 
agencies (including the Department of Justice) to identify and quantify 
improper payments potentially impacting expenditures used in program 
calculations that are not otherwise accounted for in Shared Savings 
Program expenditure calculations as described in section 
III.G.7.c.(2).(b) of the CY 2025 PFS proposed rule. This could include: 
(1) certain demanded overpayment determinations, such as demanded 
overpayment amounts that result in adjusted claim or line item payment 
amounts associated with dates of service during a performance year or 
benchmark year, where the adjustment occurs after the 3-month claims 
run out period, and demanded extrapolated overpayment amounts which are 
aggregate amounts that are not linked to specific claims or line items 
and are not currently accounted for in Shared Savings Program 
expenditures; \588\ and (2) improper payments resulting from conduct by 
individuals or entities performing functions or services related to an 
ACO's activities as identified in certain settlement agreements or 
judgments. In section III.G.7.c.(2).(c) of the CY 2025 PFS proposed 
rule we discussed considerations for identifying these amounts. 
Further, as discussed in greater detail in section III.G.7.c.(2).(e) of 
the CY 2025 PFS proposed rule, ACOs can play an important role in 
identifying for CMS improper payments that may impact Shared Savings 
Program calculations. ACO reopening requests submitted to CMS may be 
another means by which the Shared Savings Program becomes aware of 
improper payments impacting ACO financial calculations; however, CMS 
would retain discretion over whether to reopen payment determinations 
after

[[Page 98172]]

reviewing information provided in such requests.
---------------------------------------------------------------------------

    \588\ For additional information on overpayment procedures and 
overpayment estimation, see, for example, Medicare Program Integrity 
Manual, Chapter 8--Administrative Actions and Sanctions and 
Statistical Sampling for Overpayment Estimation, available at 
https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/pim83c08.pdf.
---------------------------------------------------------------------------

    Second, we anticipated needing to perform an initial analysis of 
whether the improper payments would warrant reopening the ACO's payment 
determination. This analysis may include a number of factors, such as 
whether the improper payments meet the requirements for reopening for 
fraud or similar fault in accordance with Sec.  425.315(a)(1)(i), or 
for good cause in accordance with Sec.  425.315(a)(1)(ii) and (a)(2). A 
variety of circumstances could lead CMS, law enforcement agencies or 
courts to determine whether good cause exists or whether fraud or 
similar fault has occurred. The timelines associated with the related 
investigations, and the potential for various actions to be taken in 
response, can make it challenging to identify a one-size-fits-all 
approach to addressing the impact of improper payments on Shared 
Savings Program calculations. We noted that once we are notified of 
potential improper payments impacting Shared Savings Program 
calculations, it may take months or years to determine the actual 
amount of any improper payments impacting an ACO's payment 
determination, particularly if we are awaiting the conclusion of 
program integrity and law enforcement investigations, among other 
possible determinations about the related conduct of providers or 
suppliers. Additionally, administrative action and judicial action 
leading to the identification of improper payments may be subject to 
appeal, and ultimately the amount of the improper payments may be 
redetermined or otherwise amended.\589\ It would further protract the 
timeline for considering use of improper payments in recalculating ACO 
financial performance results to await the outcome of any appeal of an 
improper payment.
---------------------------------------------------------------------------

    \589\ For instance, a provider receiving an initial demand 
letter for an overpayment may appeal the overpayment by requesting a 
redetermination, among other actions. See for example, CMS, MLN Fact 
Sheet, ``Medicare Overpayments'' (MLN006379 October 2023), available 
at https://www.cms.gov/outreach-and-education/medicare-learning-network-mln/mlnproducts/downloads/overpaymentbrochure508-09.pdf. The 
Medicare Parts A and B appeals process includes multiple levels of 
appeal. See for example, CMS, MLN Booklet, ``Medicare Parts A & B 
Appeals Process'' (MLN006562 November 2023), available at https://www.cms.gov/files/document/mln006562-medicare-parts-b-appeals-process.pdf.
---------------------------------------------------------------------------

    We further explained that since there could be a variety of reasons 
for which CMS seeks to recoup an overpayment amount from a provider or 
supplier, there are many possible circumstances that could warrant 
reopening under Sec.  425.315. As an example, we may consider a 
combination of factors in evaluating whether demanded overpayment 
determinations would be the basis for reopening for fraud or similar 
fault under Sec.  425.315(a)(1)(i).\590\ For instance, we may consider 
whether there is ``reliable evidence'' (as defined according to Sec.  
405.902, which means evidence that is relevant, credible, and material) 
of similar fault to warrant reopening a Shared Savings Program payment 
determination.\591\ For purposes of the Shared Savings Program's 
reopening policy, we may find there is reliable evidence of similar 
fault when a demanded overpayment determination was issued to a 
provider or supplier for which CMS has revoked or deactivated their 
Medicare billing privileges, or for which there is a closed law 
enforcement investigation, among other possible factors. Although 
demanded overpayment determinations are subject to appeal, we stated 
our belief that using these amounts in reopening and recalculating an 
ACO's financial performance under the Shared Savings Program would 
allow us to more timely address the impact of improper payments on 
Shared Savings Program calculations, rather than waiting to consider 
the outcome of any possible appeal of the amounts (as discussed in 
section III.G.7.c.(2).(c) of the CY 2025 PFS proposed rule, 89 FR 
61906).
---------------------------------------------------------------------------

    \590\ While this example presumes reopening for fraud or similar 
fault, there may be additional considerations and complexities 
around reopening for good cause.
    \591\ This approach may continue to maintain a degree of 
alignment between reopening policies under the Shared Savings 
Program and other Medicare policies. In the February 2016 proposed 
rule, in which we proposed amending the Shared Savings Program's 
reopening policy, we referred to the longstanding policy in the 
Medicare program that a determination may be reopened at any time if 
it was procured by fraud or similar fault, and as an example 
referred to 42 CFR 405.980(b)(3) (see 81 FR 5855). In accordance 
with Sec.  405.980(b)(3), a contractor may reopen an initial 
determination or redetermination on its own motion at any time if 
there exists reliable evidence as defined in Sec.  405.902 that the 
initial determination was procured by fraud or similar fault as 
defined in Sec.  405.902.
---------------------------------------------------------------------------

    We explained that as part of our initial analysis to evaluate 
whether to reopen an ACO's initial determination, we may also consider 
the significance of the improper payments to an ACO's financial 
calculations by estimating the financial impact of improper payments on 
an ACO's payment determination. We noted that if we estimate that the 
improper payments have impacted the dollar amount of earned shared 
savings, or the amount of shared losses that the ACO owes or has paid 
to CMS, we anticipate reopening an ACO's payment determination. We 
described that, when determining whether to reopen an ACO's payment 
determination, we anticipate considering a combination of factors 
including:
     The dollar value of improper payments and the number of 
claims or line items impacted (if applicable).
     How any related impact on performance year expenditures 
may compare to the impact on the ACO's updated historical benchmark 
(which could include considering the impact on benchmark year 
expenditures and factors used to establish, adjust and update the 
benchmark). In particular, we may consider whether comparing 
performance year expenditures to the updated benchmark expenditures 
used in financial reconciliation, once adjusted to account for the 
estimated impact of the improper payments, would result in a 
significant change in the amount of shared savings paid to or shared 
losses owed by the ACO. For purposes of this analysis we may consider 
the following (restated with a minor corrections for clarity):
    ++ The minimum savings rate (MSR)/minimum loss rate (MLR) 
applicable to the ACO for the relevant performance year.
    ++ Whether the ACO met or exceeded the applicable MSR/MLR with the 
initial determination.
    ++ Whether accounting for improper payments would cause a change in 
the ACO's financial performance compared to its performance under the 
initial determination, including:

--Causing an ACO to meet or exceed its MSR/MLR when it did not do so 
under its initial determination, or to no longer meet or exceed the 
relevant threshold when it did so under its initial determination.
--Causing an ACO that shared in savings or owed shared losses under the 
initial determination to share in either a higher or lower amount of 
savings or losses (respectively).
--Causing an ACO to continue to generate savings or losses less than 
the MSR/MLR threshold, as it did under its initial determination, and 
therefore the ACO would remain ineligible for shared savings, except in 
cases where certain low revenue ACOs participating in the BASIC track 
may qualify for a shared savings payment in accordance with Sec.  
425.605(h), and would not be held liable for shared losses.

    We noted that the existing reopening authority at Sec.  425.315 and 
the proposed financial methodology to address improper payments in such 
a reopening are not intended to address particular instances of low-
value improper payments which, in an individual case may be to the 
benefit of either the ACO

[[Page 98173]]

or CMS and in the aggregate are likely have a de minimis net effect on 
program expenditures in the long run.\592\ CMS would be highly unlikely 
to reopen in such cases under Sec.  425.315. We stated our belief that 
considering the significance of the potential impact of the improper 
payments on the ACO's payment determination, in deciding whether to 
reopen the payment determination, is a key component of striking a 
balance between improving the accuracy of the calculations and ACOs' 
and CMS' interest in administrative finality of payment determinations. 
We discussed related concerns and considerations elsewhere in the CY 
2025 PFS proposed rule. Therefore, we would seek to reopen an ACO's 
payment determination only in cases where the impact of improper 
payments warrants disrupting the initial determination.
---------------------------------------------------------------------------

    \592\ See, for example, 81 FR 38000 and 38001.
---------------------------------------------------------------------------

    We discussed, as an example, the case of an initial determination 
in which we found that an ACO generated savings below its MSR and, 
therefore, did not qualify for a shared savings payment according to 
the policies for determining the ACO's eligibility for shared savings 
applicable to its agreement period under the Shared Savings 
Program.\593\ If, based on an initial analysis, we estimate that the 
ACO's savings, though higher once adjusted to remove improper payments 
from performance year expenditure calculations, would still fall below 
the MSR, it would not be necessary to reopen an ACO's payment 
determination because the ACO would still not qualify for a shared 
savings payment. Under such circumstances, we would not reopen the 
initial determination or proceed with the recalculations described in 
section III.G.7.c.(2).(c) of the CY 2025 PFS proposed rule. We 
anticipated that this particular type of situation could occur in cases 
where the improper payments at issue are relatively small and the 
differential between an ACO's generated shared savings and MSR as 
calculated in the initial determination is relatively large such that 
recalculating the amounts would not produce a different outcome to the 
payment determination.
---------------------------------------------------------------------------

    \593\ This example assumes a one-sided model ACO with an MSR 
based on the number of beneficiaries assigned to the ACO, or a two-
sided model ACO with an MSR/MLR greater than zero.
---------------------------------------------------------------------------

    It is also possible that improper payments would have no impact on 
Shared Savings Program financial calculations as they may consist of 
claims or payment amounts that were not used in reaching the initial 
determination of the ACO's financial performance. For instance, if a 
demanded overpayment determination was for a payment amount on a claim 
with a HCPCS or CPT code identified as having significant, anomalous, 
and highly suspect billing activity, and therefore the payment amount 
was excluded from certain financial calculations used in determining 
the ACO's financial performance under the proposed adjustment discussed 
in section III.G.7.d of the CY 2025 PFS proposed rule, we would not 
include this amount as part of a reopening for the same performance 
year. As another example, if the demanded overpayment determination was 
for a claim or line item that was initially paid after the end of the 
3-month claims run out period, we would not take into account through 
the reopening process a payment amount that was not included in Shared 
Savings Program calculations to begin with. We anticipated improper 
payments identified in these circumstances would not merit reopening 
the ACO's initial determination.
    We specified that a number of steps would follow after CMS has 
decided to reopen the initial determination. We would recalculate the 
ACO's financial performance for a performance year by applying the 
methodology as described in section III.G.7.c.(2).(c) of the CY 2025 
PFS proposed rule. With this recalculation we would determine the 
amount of shared savings payment the ACO may be eligible to receive or 
the amount of shared losses the ACO may owe for the performance year 
after accounting for the impact of the improper payments. We would 
issue a revised initial determination to the ACO with the recalculated 
payment determination for the performance year. We would notify the ACO 
of savings and losses in accordance with Sec.  425.604(f), Sec.  
425.605(e), Sec.  425.606(h), Sec.  425.609(e), or Sec.  425.610(h) (as 
applicable). Depending on the outcome of the recalculation as specified 
in the revised initial determination, we would engage in payment 
activities and recoupment activities, as needed. As explained in 
earlier rulemaking, we anticipated considering ways to minimize program 
disruptions for ACOs that could result from one or more reopenings (see 
for example, 81 FR 38001 through 38002; see also, 87 FR 69868 through 
69872). We noted that CMS may require considerable time after deciding 
to reopen an initial determination before it can complete the 
aforementioned process for a variety of reasons. For example, 
additional time may be necessary for CMS or other agencies to ascertain 
the precise amount of improper payments that affected the initial 
determination.
    In reopening a payment determination, we noted that improper 
payments may impact either performance year expenditures, the ACO's 
updated historical benchmark used in determining the ACO's financial 
performance (including calculation of benchmark expenditures and 
factors used to establish, adjust and update the ACO's historical 
benchmark), or both. The recalculation of the ACO's financial 
performance may have varying effects on the ACO's payment determination 
for the performance year. In some scenarios, the recalculation may 
change the determination of whether the ACO earned shared savings or 
owes shared losses, or may change the amount of any shared savings 
earned or shared losses owed. It is also possible that we may observe 
there is no impact on the amount of shared savings earned or amount of 
shared losses owed by the ACO, once we have performed the recalculation 
of the ACO's financial performance.
    Under the Shared Savings Program's benchmarking methodology, there 
are potential interactions between performance of an ACO under the 
program for a performance year during an agreement period and resetting 
the ACO's benchmark for a subsequent agreement period. Specifically, an 
ACO's performance year may correspond to a benchmark year of its 
subsequent agreement period, such that improper payments impacting 
expenditures for Medicare FFS beneficiaries used to determine 
performance year expenditures may similarly impact expenditures for the 
same period used to establish the ACO's historical benchmark. For 
instance, for ACOs that have participated in the Shared Savings Program 
over multiple agreement periods, improper payments may impact the 
amount of a prior savings adjustment to the historical benchmark (if 
applicable).\594\ We noted

[[Page 98174]]

the complexity around some related interactions in regard to 
recalculating the prior savings adjustment, as discussed in CY 2024 PFS 
rulemaking (see 88 FR 79198 through 79200), and as described in section 
III.G.7.c.(1).(b) of the CY 2025 PFS proposed rule. We noted that 
reopenings at any time for fraud or similar fault could extend to any 
prior performance year of the Shared Savings Program. Since Shared 
Savings Program policies have changed over time, in performing the 
recalculation we would apply the relevant financial model and 
benchmarking policy for the ACO for that performance year, in 
accordance with the applicable provisions of subpart G.
---------------------------------------------------------------------------

    \594\ Refer to Sec.  425.658 specifying calculation of the prior 
savings adjustment applicable to ACOs in agreement periods beginning 
on January 1, 2024, and in subsequent years. Refer to Sec.  
425.603(b)(2) specifying an additional adjustment is made to the 
historical benchmark to account for the average per capita amount of 
savings generated during the ACO's previous agreement period, 
implemented for renewing ACOs entering a second agreement period in 
2016. See the discussion in the CY 2023 PFS final rule, in which we 
finalized the prior savings adjustment applicable for agreement 
periods beginning on January 1, 2024, and in subsequent years, and 
provided background on, and a description of, the prior savings 
adjustment that applied to certain ACOs in an earlier agreement 
period (87 FR 69898 through 69915).
---------------------------------------------------------------------------

    Third, we specified that we are considering limiting the instances 
in which we reopen an initial determination to account for improper 
payments, pursuant to Sec.  425.315(a), to strike a balance between 
improving the accuracy of the calculations and ACOs' and CMS' interest 
in administrative finality of payment determinations. We explained that 
in rulemaking for the Shared Savings Program during 2016, we considered 
factors for balancing the need to reopen and correct Shared Savings 
Program payment determinations with the need for administrative 
finality, which has implications for both ACOs and CMS (81 FR 5853 
through 5858, and 81 FR 37997 through 38002). Some of these factors 
were discussed more generally, in the February 2016 proposed rule, with 
respect to our consideration of options for further developing our 
reopening policy (see, for example, 81 FR 5854 and 5855). We explained 
that an approach of correcting even very minor errors might result in 
significant operational burdens for ACOs and CMS, including multiple 
financial reconciliation re-runs and off-cycle payment/recoupment 
activities that could have the potential for significant and unintended 
operational consequences, and could jeopardize the certainty of 
performance results for both ACOs and CMS. We explained our concern 
that a relatively broad scope and extended timeframe for reopening 
could introduce financial uncertainty that could limit an ACO's ability 
to invest in additional improvements to increase quality and efficiency 
of care. This uncertainty could also limit an ACO's ability to get a 
clean opinion from its financial auditors and/or to obtain funds from 
lenders or investors.
    We noted our concern about the potential for financial uncertainty 
resulting from a broad scope and extended timeframe for reopening for 
ACOs and CMS, particularly if correcting minor errors resulting from 
improper payments. We stated our concern that reopening payment 
determinations for minor issues impacting calculations for one or 
several performance years of an ACO's earlier agreement period could in 
turn disrupt the administrative finality of calculations for multiple 
performances years, in one or more subsequent agreement period, if the 
impacted year(s) become benchmark year(s) used in resetting the ACO's 
historical benchmark. We also noted that since an ACO's performance can 
vary from year to year (in terms of whether the ACO generates savings 
or losses and is eligible for shared savings or owes shared losses), it 
is possible for there to be a mixed effect across reopening payment 
determinations for multiple performance years. If the recalculation of 
financial performance identifies relatively small changes in the amount 
of shared savings or shared losses, it could be possible for these 
changes to balance out over a span of multiple performance years. This 
raises further questions about the utility of reopening payment 
determinations versus maintaining administrative finality of initial 
determinations.
    We noted that a relatively straight-forward case would be to reopen 
a single performance year that we identify as having been impacted by 
improper payments. When a performance year for which we issue a revised 
initial determination becomes a benchmark year of an ACO's subsequent 
agreement period, whether we reopen an ACO's payment determination to 
account for the impact of improper payments in Shared Savings Program 
calculations would differ depending on whether or not we have issued an 
initial determination for a performance year of the ACO's subsequent 
agreement period. If the subsequent agreement period is the ACO's 
current agreement period, and CMS has not yet issued an initial 
determination for a performance year within the current agreement 
period, we would account for the impact of improper payments on future 
financial calculations pursuant to the proposed benchmark adjustment 
specified in modifications to Sec. Sec.  425.601(a)(9) and 
425.652(a)(9).\595\ In section III.G.7.c.(2).(d) of the CY 2025 PFS 
proposed rule we discussed our proposals related to modifying these 
provisions.
---------------------------------------------------------------------------

    \595\ We note that the description in the CY 2025 PFS proposed 
rule is an illustration of the applicability of the benchmark 
adjustment, among other possible scenarios in which it could be 
applied. We refer readers to section III.G.7.c.(2).(d) of this final 
rule, in which we clarify the applicability of the benchmark 
adjustment.
---------------------------------------------------------------------------

    We specified that CMS' decision to reopen an initial determination 
for a performance year is independent of a determination by CMS to 
reopen an initial determination for any other performance year, 
including in cases where multiple performance years are impacted by the 
same improper payments, whether within the ACO's current agreement 
period, or a past agreement period. In these circumstances, we would 
need to potentially consider reopening initial determinations for 
multiple performance years, which may span multiple agreement periods, 
in cases where an ACO has continued its participation in the Shared 
Savings Program over time. Therefore, we may use a combination of the 
following factors in determining whether to reopen an initial 
determination: (1) consideration of the timing of reopening and 
recalculating the payment determination for a performance year, and the 
timing of financial reconciliation for one or more performance year of 
a subsequent agreement period that includes the affected period as a 
benchmark year, and (2) consideration of whether the improper payments 
result from conduct of individuals or entities performing functions or 
services related to the ACO's activities.
    Regarding the timing for reopening, we stated that we may consider 
whether a performance year that is being reopened corresponds to a 
benchmark year of an ACO's subsequent agreement period. We may consider 
whether we have completed financial reconciliation for a subsequent 
performance year, using a benchmark that is impacted by the same 
improper payments that were accounted for in reopening a payment 
determination for a performance year corresponding to a benchmark year.
    We explained our expectation that ACOs continuing their 
participation over multiple agreement periods in the Shared Savings 
Program have a heightened interest in administrative finality of 
payment determinations, which would provide greater financial certainty 
to the continued operation of ACOs and progress towards meeting the 
program's goals. In such cases, our belief is that (1) reopening 
payment determinations for a performance year to account for the impact 
of improper

[[Page 98175]]

payments remains important to improving the accuracy of the Shared 
Savings Program's calculations, and (2) maintaining the administrative 
finality of subsequent payment determinations, if the same improper 
payments impact a benchmark year of an ACO's subsequent agreement 
period, could provide ACOs greater financial certainty with respect to 
their participation which may outweigh the benefits of reopening the 
calculations. Maintaining administrative finality of the payment 
determinations for these subsequent performance years may be warranted 
in cases where the improper payments are not a result of the conduct of 
individuals or entities within the ACO. On the other hand, in cases 
where improper payments impacting Shared Savings Program calculations 
results from conduct by individuals or entities within the ACO, CMS' 
interest in addressing program integrity concerns would warrant 
reopening all affected payment determinations. In these cases, if left 
unaddressed, ACOs, ACO participants and ACO providers/suppliers, among 
others, may have incentives to continue to engage in conduct, which 
could include fraud or similar fault, in a way that could improve the 
ACO's performance under the Shared Savings Program.
    We noted in the CY 2025 PFS proposed rule, although not expressly 
stated in Sec.  425.315, improper payments that are the basis of a 
reopening may result from the conduct of individuals or entities 
including but not limited to: (1) conduct of an ACO, ACO participant, 
ACO provider/supplier, ACO professional, or other individuals or 
entities performing functions or services related to the ACO's 
activities; or (2) conduct of a provider or supplier, or other 
individuals or entities outside the ACO. For purposes of the discussion 
within section III.G.7.c of the CY 2025 PFS proposed rule, we referred 
to the former as improper payments originating ``inside the ACO,'' and 
the latter as improper payments originating ``outside the ACO.''
    We provided a brief summary of an approach we may use for 
differentiating between cases where improper payments originate inside 
the ACO versus outside the ACO. If we identify a single performance 
year for which we have issued an initial determination that has been 
impacted by improper payments, we would seek to reopen the payment 
determination if the improper payments originated either inside the ACO 
or outside the ACO.
    When a performance year for which we issue a revised initial 
determination becomes a benchmark year of an ACO's subsequent agreement 
period, we would consider whether to reopen each initial determination 
for a subsequent performance year that is impacted. We explained that 
we may take the following approach as one means to operate reopenings 
in an equitable and manageable manner:
     In cases where improper payments originated outside the 
ACO: Generally, we would not seek to reopen payment determinations for 
any performance year of the ACO's subsequent agreement period in order 
to mitigate the extent to which we disrupt the administrative finality 
of payment determinations for ACOs when the improper payments impacting 
Shared Savings Program calculations originate outside the ACO. However, 
we may consider reopening the initial determination for the performance 
year upon the ACO's request for a reopening if the improper payments 
are anticipated to result in significant adjustment to the ACO's 
initial determination upon recalculation.
     In cases where improper payments originated inside the 
ACO: As a means to address our program integrity concerns, we would 
reopen the payment determination for any performance year of the ACO's 
subsequent agreement period issued prior to the revised initial 
determination for the performance year corresponding to the benchmark 
year impacted by improper payments originating inside the ACO, if the 
improper payments are anticipated to result in significant adjustment 
to the ACO's initial determination upon recalculation. We believe this 
approach would guard against circumstances where an ACO may benefit 
from improper payments remaining in its benchmark calculations that 
result from conduct by individuals or entities performing functions or 
services related to the ACO's activities.
    We solicited comment on the factors we described in section 
III.G.7.c.(2).(b) of the CY 2025 PFS proposed rule (89 FR 61895 through 
61898), that may inform our decision of whether to reopen an initial 
determination of an ACO's financial performance to account for the 
impact of improper payments. In particular, we solicited comment on the 
approach we outlined for conducting initial analysis of whether the 
improper payments would warrant reopening the ACO's payment 
determination. We also solicited comment on approaches to, and 
considerations in connection with, balancing the need for accuracy in 
payment calculations with the need for administrative finality in 
payment determinations.
    We received public comments on the considerations we described and 
sought comment on, for reopening payment determinations to account for 
the impact of improper payments. The following is a summary of the 
comments we received and our responses.
    Comment: One commenter urged that CMS provide additional clarity 
around CMS' considerations for determining if an improper payment is of 
sufficient magnitude to reopen a determination. Another commenter, an 
ACO, explained that it was difficult to model the impact of improper 
payments outside the ACO on its ACO and on regional and national 
trends, and on providers and ACOs more generally. As a result, the 
commenter stated that they were unable to ascertain the meaningfulness 
of the approach, including consideration of whether there is resulting 
``significant'' change to ACO financials.
    Response: In response to commenters indicating it was unclear from 
the discussion in the proposed rule our considerations for determining 
if an improper payment is of sufficient magnitude to reopen a payment 
determination, for one, we note that in the CY 2025 PFS proposed rule 
(89 FR 61896) we specified that we would be highly unlikely to exercise 
our discretion to reopen a payment determination to address particular 
instances of low-value improper payments which, in an individual case 
may be to the benefit of either the ACO or CMS and in the aggregate are 
likely to have a de minimis net effect on program expenditures in the 
long run. In the case of a reopening to account for the impact of 
improper payments, we wish to clarify that this consideration about our 
concerns with reopening payment determinations to address low-value 
improper payments is also relevant at the level of individual ACO 
expenditures, in addition to more broadly with respect to program 
expenditures. We also explained that we may reopen an ACO's payment 
determination if accounting for the impact of improper payments would 
result in a significant change in the amount of shared savings paid to 
or shared losses owed by the ACO, including if we estimate that the 
improper payments have impacted the dollar amount of earned shared 
savings, or the amount of shared losses that the ACO owes or has paid 
to CMS. There could be a wide range of potential financial impacts as a 
result of reopening payment determinations that could be considered 
``significant''.
    As described in the CY 2025 PFS proposed rule (89 FR 61896), and 
reiterated in this section of this final

[[Page 98176]]

rule, we may consider a combination of factors to evaluate the 
significance of the improper payments to an ACO's financial 
calculations. This includes considerations for whether accounting for 
the improper payments would cause a change in the ACO's eligibility for 
shared savings or liability for shared losses, or the extent to which 
an ACO would share in either a higher or lower amount of savings or 
losses, compared to its performance under its initial determination. We 
decline at this time to further specify how we may determine whether 
improper payments have significant impact on an ACO's financial 
calculations, and what may constitute a significant impact, or 
sufficient magnitude of an impact, to warrant reopening an ACO's 
payment determination. As we gain experience with the application of 
the methodology for recalculating expenditures to account for the 
impact of improper payments on Shared Savings Program financial 
calculations being finalized with this final rule, we may address these 
factors and related considerations further in future notice and comment 
rulemaking.
    We agree with the commenter that explained it is potentially 
difficult for an ACO to model the impact of improper payments outside 
the ACO on its ACO and on regional and national trends, as well as on 
providers and ACOs more generally, because they may lack insight into 
these larger impacts. The hypothetical example calculations described 
in section III.G.7.c.(2).(c) of the CY 2025 PFS proposed rule (89 FR 
61901 through 61906) provide a basis for ACOs and other interested 
parties to understand how the recalculation methodology to account for 
improper payments would be applied, and considerations in connection 
with the potential impact of the recalculation on factors based on 
national and regional expenditures for the assignable population (under 
the scenarios illustrated in the examples). An ACO, for example, could 
follow the approach illustrated in the hypothetical examples using a 
range of assumptions on the impact to national and regional 
expenditures to estimate the potential range of impacts to the ACO's 
own savings/losses calculations. In section III.G.7.c.(2).(e) of this 
final rule, we described in another response to comments, additional 
considerations regarding ACOs' ability to estimate the financial impact 
of improper payments on their shared savings or shared losses 
calculations in reference to the types of information ACOs may submit 
to CMS with a reopening request, and refer the commenter and other 
interested parties to the cross-referenced discussion for additional 
considerations. In particular, we wish to underscore that with respect 
to the evidence or analysis of financial impact of improper payments 
that an ACO may provide with its reopening request, although an ACO may 
undertake this analysis and submit related information to CMS, this 
does not necessarily need to involve a complex analysis or include an 
analysis of the impact on national expenditures, regional expenditures, 
or both.
    Comment: A few commenters expressed general support for the 
approach discussed in the CY 2025 PFS proposed rule under which CMS 
would limit the instances in which it reopens an initial determination, 
and thereby maintain administrative finality of initial determinations. 
One commenter explained that it is important to minimize the reopening 
of previous years to avoid a perception of instability for the program, 
and recommended CMS avoid reopening previous years' financial 
determinations without ``significant reasons.''
    Response: We appreciate commenters' support for the approach we 
specified in the CY 2025 PFS proposed rule under which we would 
consider limiting the instances in which we reopen an initial 
determination to account for improper payments, pursuant to Sec.  
425.315(a), to strike a balance between improving the accuracy of the 
calculations and ACOs' and CMS' interest in administrative finality of 
payment determinations. ACOs continuing their participation over 
multiple agreement periods in the Shared Savings Program have a 
heightened interest in administrative finality of payment 
determinations, which would provide greater financial certainty to the 
continued operation of ACOs and progress towards meeting the program's 
goals.
    In response to the commenter that underscored the importance of 
minimizing the reopening of previous years' initial determinations to 
avoid a perception of instability for the program, we agree that 
preserving administrative finality of ACO payment determinations, when 
possible, would provide greater certainty to ACOs currently 
participating in the Shared Savings Program, and also may impact 
participation decisions by ACOs considering entering the program or 
renewing to continue their participation in the program. An approach to 
reopening in which we differentiate between cases where improper 
payments originate inside the ACO versus outside the ACO when 
considering whether to reopen a payment determination or to maintain 
administrative finality strikes an important balance. The approach 
outlined elsewhere in this section of this final rule, balances 
mitigating disruption to the administrative finality of payment 
determinations for ACOs when the improper payments impacting Shared 
Savings Program calculations originate outside the ACO and guarding 
against circumstances where an ACO may benefit from improper payments 
remaining in its benchmark calculations that result from conduct by 
individuals or entities performing functions or services related to the 
ACO's activities.
    Comment: One commenter, addressing the circumstance in which 
adjustment to ACO financial performance under the proposed approach 
results in a recoupment from ACOs, suggested that CMS delay recoupment 
until ``the next shared savings settlement,'' to enable ACOs to 
financially plan with confidence since many ACOs operate without 
significant cash reserves.
    Response: We appreciate that ACOs operate under financial 
constraints, and we will take the commenter's suggestion under 
consideration as we adjudicate reopening requests. We will continue to 
consider ways to minimize program disruptions for ACOs that could 
result from one or more reopenings, to the extent feasible, and to 
reduce operational burdens for both ACOs and CMS that could result from 
making payment adjustments, as reflected in the discussion in the CY 
2025 PFS proposed rule (89 FR 61896 through 61897), and earlier 
rulemaking (see for example, 81 FR 38001 through 38002; see also, 87 FR 
69868 through 69872).
    Comment: One commenter expressed support for an approach under 
which revised initial determinations should be subject to 
reconsideration review to allow for an ACO to ``appeal 
recalculations.''
    Response: As we have explained in earlier rulemaking (see, for 
example, 81 FR 37998), the financial reconciliation calculation/
methodology and the amount of shared savings an ACO might earn, 
including all underlying financial calculations, are not appealable. 
That is, the determination of whether an ACO is eligible for shared 
savings under section 1899(d) of the Act, and the amount of such shared 
savings, as well as the underlying financial calculations are precluded 
from administrative and judicial review under section 1899(g)(4) of the 
Act and Sec.  425.800(a)(4). Section 425.800(a)(4) specifies there is 
no reconsideration, appeal, or other administrative or judicial review 
of the initial determination or revised initial

[[Page 98177]]

determination of whether an ACO is eligible for shared savings, and the 
amount of such shared savings, including the initial determination or 
revised initial determination of the estimated average per capita 
Medicare expenditures under the ACO for Medicare FFS beneficiaries 
assigned to the ACO and the average benchmark for the ACO in accordance 
with section 1899(d) of the Act, as implemented under Sec. Sec.  
425.601, 425.602, 425.603, 425.604, 425.605, 425.606, 425.610, and 
425.652. For more information on reconsideration review under the 
Shared Savings Program, we would refer readers to Subpart I of our 
regulations, and the Shared Savings Program's guidance on Requesting 
Technical Assistance and Reconsideration Review, which is located on 
the Shared Savings Program website, For ACOs web page, at https://www.cms.gov/medicare/medicare-fee-for-service-payment/sharedsavingsprogram/application-information.
    Comment: One commenter suggested an alternative approach under 
which CMS should be able to recalculate shared savings or shared losses 
for instances other than fraud or similar fault, or good cause as 
currently specified in the regulations under Sec.  425.315. In 
particular, the commenter requested that CMS reopen and adjust 
benchmark periods, trends, and performance year expenditures in 
situations when ACOs are without recourse from improper agency actions 
significantly impacting ACO reconciliation and for which there is no 
opportunity to otherwise mitigate reconciliation impact. Further, the 
commenter gave as an example that several ACOs experienced significant 
benchmark discrepancies as a result of the payment remedy for 340B-
acquired drugs, referring to earlier rulemaking for the Hospital 
Outpatient Prospective Payment System,\596\ among other details.
---------------------------------------------------------------------------

    \596\ Referring to a comment letter submitted in response to the 
proposed rule entitled ``Medicare Program; Hospital Outpatient 
Prospective Payment System: Remedy for the 340B-Acquired Drug 
Payment Policy for Calendar Years 2018-2022'' (file code CMS-1793-P) 
which appeared in the July 14, 2023 Federal Register (88 FR 44078).
---------------------------------------------------------------------------

    Response: We decline, at this time, the commenter's suggestion to 
expand the reopening authority to potentially address circumstances 
other than fraud or similar fault, or good cause as currently specified 
in the regulations under Sec.  425.315. Changes to the basis for which 
CMS reopens a payment determination under the Shared Savings Program 
were not contemplated in the proposals and other policy considerations 
we specified in the CY 2025 PFS proposed rule. Further, the existing 
standard strikes a good balance between allowing for the correction of 
significant issues impacting payment determinations and providing 
finality to ACOs. We also refer to our response to comments in earlier 
rulemaking (see 88 FR 77184 through 77185) in which we explained that 
the Shared Savings Program's benchmarking methodology has the potential 
to mitigate the differences between the 340B-acquired drug payments 
included in historical benchmark year and performance year expenditure 
calculations, among other considerations with respect to how the 
payments amounts would be considered in Shared Savings Program 
calculations.
(c) Methodology for Recalculating Expenditures To Account for Improper 
Payments
    In section III.G.7.c.(2).(c) of the CY 2025 PFS proposed rule (89 
FR 61898 through 61907), we proposed to establish a financial 
calculation methodology that may be used to account for the impact of 
improper payments on Shared Savings Program financial calculations, 
upon reopening a payment determination pursuant to Sec.  425.315(a). We 
proposed to add to subpart G a new section of the Shared Savings 
Program regulation at Sec.  425.674 specifying provisions on accounting 
for the impact of improper payments on Shared Savings Program financial 
calculations.
    As a general rule, we proposed to specify in paragraph (a) of Sec.  
425.674, that upon the reopening of an initial determination pursuant 
to Sec.  425.315(a)(4), CMS will use the methodology set forth in Sec.  
425.674 to account for the impact of improper payments when: (1) 
determining savings or losses for the relevant performance year in 
accordance with Sec.  425.315 in order to issue a revised initial 
determination, and (2) adjusting the benchmark by recalculating 
benchmark year expenditures in the event that we recalculate a payment 
determination and issue a revised initial determination for the 
corresponding performance year in a prior agreement period (discussed 
in section III.G.7.c.(2).(d) of the CY 2025 PFS proposed rule, 89 FR 
61907).
    We proposed to specify in paragraph (b) of Sec.  425.674 that for 
the purpose of the Shared Savings Program, ``improper payment'' 
includes: (1) an amount associated with a demanded overpayment 
determination, and (2) an amount identified in a settlement agreement 
or judgment, pursuant to conduct of individuals or entities performing 
functions or services related to an ACO's activities, less any 
penalties or damages.
    We proposed to establish a methodology under Sec.  425.674 under 
which we would adjust Medicare Parts A and B FFS expenditure values 
used in certain Shared Savings Program financial calculations to 
account for a per capita amount of improper payments for an identified 
population used in calculating performance year or benchmark year 
expenditures, and in calculating county-level FFS expenditures used in 
factors based on regional expenditures.
    We proposed to specify under Sec.  425.674 a generalized approach 
to calculating the per capita amounts of improper payments that 
accounts for the fact that improper payments may be associated with 
specific claims or line items, or may be aggregate amounts. A number of 
factors informed our consideration of this approach. For one, we 
considered the need to establish a calculation methodology to account 
for demanded overpayment determinations that result in adjustments to 
payment amounts associated with claims and line items used in Shared 
Savings Program calculations, such as the denial of claims or line 
items that occur after the 3-month claims run out period, or in an 
aggregate amount, such as based on extrapolated overpayment demands 
that do not result in adjustments to claim or line item payment 
amounts. Medicare Parts A and B FFS claim adjustments for overpayments 
would be reflected in current Shared Savings Program expenditure 
calculations if processed before the end of the 3-month claims run out 
period but are not included in calculations if processed after the 3-
month claims run out period. Regarding the latter, the amounts of the 
claims adjusted overpayments can be identified for Medicare FFS 
beneficiaries, and can be aggregated across a population of Medicare 
FFS beneficiaries that is the basis for certain Shared Savings Program 
calculations. Additionally, aggregate amounts of demanded overpayment 
determinations, such as extrapolated overpayment demands, may be used 
to identify the amount of improper payments for a large set of claims 
for a particular provider or supplier and a certain time period, since 
error rates are extrapolated and applied to a universe of claims rather 
than individual claims. In these cases, an aggregate amount of a 
demanded overpayment determination is attributable to a provider or 
supplier and would have to be further prorated to determine its 
relevance to a particular population of Medicare FFS

[[Page 98178]]

beneficiaries that is the basis for certain Shared Savings Program 
calculations.
    Second, we considered the need for the calculation methodology to 
account for improper payments resulting from conduct by an ACO, ACO 
participant, ACO provider/supplier, ACO professional, or other 
individuals or entities performing functions or services related to the 
ACO's activities identified in certain settlements, or judgments. With 
respect to the Shared Savings Program calculations, we noted that we 
anticipate that a key focus would be on improper payments pursuant to 
conduct of individuals or entities performing functions or services 
related to an ACO's activities as identified in certain False Claims 
Act (31 U.S.C. 3729 et seq.) settlement agreements, or judgments. In 
considering the amount of improper payments that are relevant to Shared 
Savings Program calculations, we would exclude the amount of any 
penalties or damages included in the settlement or judgment. In 
addition, we may seek to attribute an aggregate improper payment amount 
to a provider or supplier that is specified within a settlement 
agreement, or judgment, across a population of Medicare FFS 
beneficiaries that is the basis for the applicable Shared Savings 
Program calculation.
    Further, we explained there may be circumstances that warrant 
adjustment to payment amounts used in Shared Savings Program 
calculations, at the claims level, instead of or in addition to 
accounting for the amount of demanded overpayment determinations or an 
aggregate amount in a settlement agreement or judgment. For instance, 
in analyzing improper payments impacting Shared Savings Program 
calculations, we may conclude that a provider's or supplier's billings 
for a particular HCPCS or CPT code for a population of Medicare FFS 
beneficiaries resulted in inaccuracies in payment amounts used in 
Shared Savings Program calculations. We proposed that we may address 
these circumstances by decreasing or entirely removing the value of 
HCPCS or CPT code payment amounts for certain claims or line items used 
in Shared Savings Program calculations, in reopening and recalculating 
the ACO's payment determination. We specified that we anticipated using 
all information available to us from an investigation, settlement 
agreement, or judgment to determine the correct payment amount or level 
of billing. This could include considering the nature of the remedy in 
the case and how any related amount would be applied in the proposed 
methodology to account for improper payments impacting Shared Savings 
Program financial calculations. In particular, we would consider if it 
would be a more precise adjustment to Shared Savings Program financial 
calculations to adjust the claim or line item payment amounts, instead 
of or in addition to accounting for the amount of demanded overpayment 
determinations or an aggregate amount in a settlement agreement or 
judgment (if applicable). For instance, in cases where an 
investigation, settlement agreement, or judgment has determined 
inaccurate use of a higher paying code \597\ that is reflected in 
payment amounts used in Shared Savings Program calculations, we may 
identify use of a code with lower reimbursement within a HCPCS or CPT 
code category that would result in a more precise adjustment to the 
ACO's payment determination.
---------------------------------------------------------------------------

    \597\ See, for example, CMS, Medicare Claims Processing Manual 
Chapter 23--Fee Schedule Administration and Coding Requirements, 
section 20.9.5 ``Adjustments'', available at https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c23.pdf 
(explaining that if the wrong, higher paying code is paid on the 
first of multiple claims submitted, A/B MACs processing Medicare 
Part B claims pay the subsequent claim(s) and initiate recovery 
action on the previously paid claim(s)).
---------------------------------------------------------------------------

    We proposed to specify in paragraphs (c) and (d) of Sec.  425.674 
the general approach for adjusting Medicare Parts A and B FFS 
expenditures for improper payments, according to the following steps:
     Step 1--Identify calculation for adjustment: Identify each 
Shared Savings Program expenditure calculation for a performance year 
or benchmark year, as calculated according to the standard methodology 
described in subpart G and expressed as a per capita dollar amount, 
that would be adjusted for the impact of improper payments (as proposed 
in Sec.  425.674(c)(1)).
     Step 2--Determine the relevant population for adjustment: 
Determine each specific population of Medicare FFS beneficiaries used 
to calculate the expenditure amount identified in Step 1, expressed as 
person years (as proposed in Sec.  425.674(c)(2)). The populations 
relevant for a specific expenditure calculation may include:
    ++ The population of beneficiaries assigned to the ACO for 
calculating the ACO's performance year or benchmark year expenditures.
    ++ The population of assignable beneficiaries in each county in the 
ACO's regional service area for calculating county-level expenditures.
    ++ The national population of assignable beneficiaries for 
calculating national assignable expenditures.
    ++ The national population of Medicare FFS beneficiaries for 
calculating national expenditures.
     Step 3--Determine per capita amount of improper payments 
attributable to the relevant population: Determine the per capita 
amount of improper payments for the performance year or benchmark year 
included in the per capita Medicare Parts A and B FFS expenditure 
amount for a population identified in Step 2 (as proposed in Sec.  
425.674(c)(3)). We may use one or more of the following approaches to 
determine the per capita amount of improper payments, for all providers 
or suppliers with improper payments, that would be used to adjust the 
expenditure calculations identified in Step 1 (as proposed in Sec.  
425.674(d)):
    ++ Step 3(i): Calculate aggregate improper payments attributable to 
a population identified in Step 2 for each provider or supplier that 
had improper payments.

--For improper payments associated with specific claims, we would do 
the following:

    (A) For improper payments to a provider or supplier that correspond 
to payment amounts on claims or line items that were used in a Shared 
Savings Program calculation identified in Step 1, and subsequently 
adjusted after the 3-month claims run out period, we would sum the 
improper payment amounts across all such claims or line items with 
dates of service during the period used to calculate performance year 
or benchmark year expenditures, for a population identified in Step 2.
    To allow for this approach, we proposed to adjust Shared Savings 
Program expenditure calculations to reflect adjustments occurring after 
the original 3-month claims run out period for claim or line item 
payment amounts associated with improper payments. We would not capture 
payments or payment adjustments occurring outside the original 3-month 
claims run out period for claims or line items unrelated to improper 
payments.
    (B) In the event that CMS determines it is necessary to account for 
the impact of improper payments on Shared Savings Program financial 
calculations by adjusting the payment amounts for a specific HCPCS or 
CPT code billed by the provider or supplier for the population 
identified in Step 2, we would do the following: identify the 
applicable claims or line items with dates of service during the period 
used to calculate performance year or benchmark year expenditures 
processed before the end of the applicable 3-month claims run out 
period, and sum the

[[Page 98179]]

claim or line item payment amounts on the claims or line items 
identified; and if applicable, multiply the resulting sum by a scaling 
factor to compute the payment differential between the HCPCS or CPT 
code that was improperly billed and a CMS-identified alternate code. We 
would apply a scaling factor in cases where it is determined that the 
provider or supplier did not bill the correct code for a particular 
service. In cases where we determine it is appropriate to remove 
payments for the billed HCPCS or CPT code in their entirety, we would 
not apply a scaling factor.

--For aggregate improper payment amounts that are not linked to 
specific claims or line items, we would calculate the amount 
attributable to the population identified in Step 2 by applying a 
proration factor to the aggregate improper payment amount identified 
for that provider or supplier. We would calculate the proration factor 
as follows:

    (A) The denominator of the proration factor would be total Medicare 
Parts A and B claim or line item payment amounts to the provider or 
supplier for all FFS beneficiaries on claims of specified claim types 
for the time period associated with the aggregate improper payment 
amount identified for the provider or supplier that were made before 
the end of the applicable 3-month claims run out period.
    (B) The numerator of the proration factor would be the portion of 
the total from the denominator that CMS determines is attributable to 
the population identified in Step 2 with dates of service during the 
period used to calculate expenditures for the applicable performance 
year or benchmark year.
    Under the proposed approach, if an aggregate amount of improper 
payment is associated with claims activity that spans multiple calendar 
years, we would account for this in the proration factor by expanding 
the time period used to compute payments for the denominator to include 
the relevant years. For example, if the aggregate amount of improper 
payments was associated with claims activity in 2021 and 2022, we would 
include in the denominator payments on claims or line items with dates 
of service in 2021 (made before the end of March 2022) and on claims or 
line items with dates of service in 2022 (made before the end of March 
2023). If we were adjusting PY 2022 expenditures for an ACO's assigned 
population, the numerator of the proration factor would be the portion 
of the denominator that is attributable to the ACO's assigned 
population during CY 2022.
    ++ Step 3(ii): Sum the amounts calculated under Step 3(i) 
attributable to the population identified in Step 2 across providers or 
suppliers that had identified improper payments.
    ++ Step 3(iii): Take the lesser of the following two values:

--The sum from Step 3(ii); or
--Total Medicare Parts A and B claim or line item payment amounts to 
all providers or suppliers that had improper payments for the 
population identified in Step 2 on claims of specified claim types with 
dates of service within the performance year or benchmark year made 
before the end of the applicable 3-month claims run out period.

    The purpose of taking the lesser of two values in this step is to 
ensure that the improper payment amount that we attribute to a given 
population cannot be greater than the total amount of payments for the 
providers or suppliers at issue that was included in the original 
expenditure calculation for that population.
    ++ Step 3(iv): Express the lesser-of-amount from Step 3(iii) as a 
per capita value by dividing by the total beneficiary person years in 
the population identified in Step 2 for the applicable performance year 
or the benchmark year.
     Step 4--Subtract per capita improper payment amount from 
original expenditures: From the expenditure calculation identified in 
Step 1 for the population identified in Step 2, subtract the per capita 
amount calculated in Step 3(iv) for each of the following populations 
of beneficiaries: ESRD, disabled, aged/dual eligible Medicare and 
Medicaid beneficiaries, and aged/non-dual eligible Medicare and 
Medicaid beneficiaries (as proposed in Sec.  425.674(c)(4)).
     Step 5--Determine adjusted regional expenditures: If 
applicable, we would do the following to adjust regional expenditures 
for improper payments (as proposed in Sec.  425.674(c)(5)):
    ++ Step 5(i): Adjust county-level FFS expenditures determined in 
Step 4, for each county in the ACO's regional service area, for 
severity and case mix of assignable beneficiaries in the county using 
prospective HCC risk scores. This calculation would be for each of the 
following populations of beneficiaries based on Medicare enrollment 
type: ESRD, disabled, aged/dual eligible Medicare and Medicaid 
beneficiaries, and aged/non-dual eligible Medicare and Medicaid 
beneficiaries. We note that under this approach CMS would not adjust 
the risk scores used to calculate risk adjusted county-level FFS 
expenditures.
    ++ Step 5(ii): Weight the risk-adjusted county-level FFS 
expenditures determined in Step 5(i) according to the ACO's proportion 
of assigned beneficiaries in the county, determined in accordance with 
Sec.  425.601(d)(1), Sec.  425.603(f)(1), or Sec.  425.654(b)(1), as 
applicable, for each of the populations of beneficiaries by Medicare 
enrollment type.
    ++ Step 5(iii): Aggregate the values determined in Step 5(ii) for 
each of the populations of beneficiaries (by Medicare enrollment type) 
across all counties within the ACO's regional service area.
    We illustrated how the proposed calculation methodology would be 
applied, considering the following hypothetical example in which CMS 
confirmed that two suppliers, NPI 1 and NPI 2, received improper 
payments from Medicare during calendar year 2022. Specifically, CMS 
identified $8 million in demanded overpayment determinations for NPI 1 
which resulted in CMS adjusting payment amounts after the 3-month 
claims run out period for PY 2022 on claims or line items with dates of 
service during the performance year, and CMS identified an aggregate 
extrapolated overpayment demand amount of $30 million for NPI 2. This 
example assumes that CMS determines that reopening the ACO's PY 2022 
initial determination is warranted, and CMS recalculates that ACO's 
financial performance using the proposed methodology to account for 
improper payments. To recalculate the ACO's financial performance for 
PY 2022, we would identify three separate expenditure calculations that 
need to be recalculated to determine the impact on an ACO's earned 
performance payment or owed shared losses: (1) PY 2022 expenditures for 
the ACO's assigned beneficiaries; (2) PY 2022 expenditures for 
assignable beneficiaries in the ACO's regional service area; and (3) PY 
2022 expenditures for national assignable beneficiaries. For this 
example, in Table 47 we outlined the steps and calculations for 
recalculating expenditures for beneficiaries assigned to the ACO for PY 
2022. In Table 48, we outlined how PY 2022 expenditures for assignable 
beneficiaries in the ACO's regional service area and PY 2022 
expenditures for national assignable beneficiaries, recalculated to 
account for improper payments, would be incorporated into the blended 
national-regional benchmark update factor. In Table 49, we outlined how 
an ACO's

[[Page 98180]]

financial performance may be recalculated after accounting for improper 
payments in PY 2022 expenditures for the ACO's assigned beneficiaries, 
and using the recalculated blended national-regional benchmark update 
factor.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR09DE24.089

BILLING CODE 4120-01-C
    In Step 1, we identify expenditures for the ACO's assigned 
beneficiaries in PY 2022 as the calculation to be recalculated. In Step 
2, we identify the ACO's assigned beneficiaries in PY 2022 as the 
population relevant for this expenditure calculation. In Step 3, we 
determine the per capita amount of improper payments that is 
attributable to the ACO's assigned beneficiaries. For NPI 1, we 
identify that $200,000 of the NPI's total aggregate improper payments 
were on claims for the ACO's assigned beneficiaries (row [D]). Because 
improper payments for NPI 2 were identified at the NPI level and thus 
are not tied to individual claims, we need

[[Page 98181]]

to apply a proration factor to calculate the share of the total 
aggregate improper payments, $30 million (row [E]), that is 
attributable to the ACO's assigned beneficiaries. We calculate this 
proration factor as the total Medicare Parts A and B claim or line item 
payment amounts made to NPI 2 for the ACO's assigned beneficiaries for 
PY 2022 ($4.8 million, row [F]), divided by the total Medicare Parts A 
and B claim or line item payment amounts made to NPI 2 for all Medicare 
FFS beneficiaries ($80 million, row [G]); this results in a proration 
factor of 0.06 (row [H]), which when applied to NPI 2's total aggregate 
improper payments results in $1.8 million in aggregate improper 
payments attributable to the ACO's assigned beneficiaries (row [I]). 
Summing across NPI 1 and NPI 2, we calculate $2 million in total 
aggregate improper payments attributable to the ACO's assigned 
beneficiaries for PY 2022 (row [J]). We then compare this sum (row [J]) 
with total Medicare Parts A and B claim or line item payment amounts to 
the two suppliers for the ACO's assigned beneficiaries for PY 2022 (row 
[K]) and take the lesser of the two values (row [L]). We then express 
this lesser-of value in per capita terms by dividing by the ACO's total 
assigned beneficiary person years for PY 2022, 20,000, arriving at a 
$100 per capita improper payment amount attributable to the ACO's 
assigned beneficiaries (row [M]). Finally, in Step 4, we subtract the 
$100 per capita improper payment amount from the original PY 2022 per 
capita expenditure amount for the ACO's assigned beneficiaries used to 
make the initial payment determination, conducting this adjustment by 
enrollment type (row [N]).
    We noted that subtracting the same per capita improper payment 
amount ($100 in this example) from the expenditure calculation for each 
enrollment type population implicitly assumes that improper payments 
attributable to the overall population are distributed in proportion to 
the four enrollment types (ESRD, disabled, aged/dual eligible, aged/
non-dual eligible). For example, if the aged/non-dual eligible 
population represents 82 percent of an ACO's overall assigned 
population for the performance year, we are assuming that 82 percent of 
improper payments attributable to the ACO's entire assigned population 
are associated with aged/non-dual eligible beneficiaries. We explained 
our belief that this is a reasonable assumption as we expect that, in 
most cases, improper payments are unlikely to be associated with a 
particular enrollment type as defined by the Shared Savings Program and 
used in program financial calculations.\598\ This also allows for a 
standard approach across the potential variety of reopening scenarios, 
lending greater transparency and simplicity to the proposed 
methodology.
---------------------------------------------------------------------------

    \598\ For criteria used to identify the four Medicare enrollment 
types, refer to the Medicare Shared Savings Program, Shared Savings 
and Losses, Assignment and Quality Performance Standard Methodology 
Specifications (version #11, January 2023), available at https://www.cms.gov/files/document/medicare-shared-savings-program-shared-savings-and-losses-and-assignment-methodology-specifications.pdf-2 
(Appendix E: Identifying Medicare Enrollment Type).
---------------------------------------------------------------------------

    We would follow the same overall methodology to account for the 
impact of improper payments in recalculating PY 2022 expenditures for 
assignable beneficiaries in the ACO's regional service area and for 
national assignable beneficiaries. These amounts are calculated for the 
following populations of beneficiaries, by Medicare enrollment type: 
ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries, 
and aged/non-dual eligible Medicare and Medicaid beneficiaries. We 
would then use these adjusted expenditure calculations as new inputs 
along with other original calculations that were not adjusted for the 
impact of improper payments (such as the ACO's historical benchmark for 
PY 2022) to recalculate the ACO's financial performance for PY 2022, 
following the standard financial methodology described in Sec.  425.605 
(for ACOs participating in the BASIC track) or Sec.  425.610 (for ACOs 
participating in the ENHANCED track), as applicable.
    In Table 48, we expanded upon the hypothetical example described in 
Table 47 and summarized how we would calculate national and regional 
update factors following the methodology specified in Sec.  
425.652(b)(2) but using the adjusted regional and national expenditures 
for the performance year for each enrollment type in place of the 
original values. Because benchmark update factors are calculated by 
enrollment type under the standard financial methodology, they would 
also be recalculated by enrollment type when using the adjusted 
national and regional expenditures. However, for brevity, we described 
only the recalculation of the update factors for the aged/non-dual 
eligible population in Table 48.
    In this continued hypothetical example, we used the proposed 
methodology to account for the impact of improper payments in 
recalculating national and regional per capita expenditures in the 
performance year, resulting in adjusted expenditures of $11,609 (row 
[A]) and $11,210 (row [C]), respectively. Dividing these PY values by 
the original BY3 national and regional per capita expenditures 
($10,977, row [A], and $10,900, row [C], respectively), we recalculate 
the national update factor (1.058, row [B]) and regional update factor 
(1.028, row [D]). In this example, there is a $1 difference between the 
original and recalculated national per capita expenditure amount. The 
resulting value for the recalculated national update factor, shown 
rounded to the third decimal place, remains the same as the original 
value, but there would be a difference in the values if additional 
precision was shown. We then blend these adjusted update factors using 
the original national and regional weights (0.250, row [E], and 0.750, 
row [F], respectively). As shown in row [G], accounting for improper 
payments in PY 2022 causes the blended benchmark update factor to 
decrease from 1.042 to 1.036.

[[Page 98182]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.090

    Table 49 summarized how the recalculated blended update factor to 
account for improper payments, based on adjusted national and regional 
expenditures for PY 2022, would be used with other original 
calculations and adjusted PY expenditures for ACO assigned 
beneficiaries to recalculate the ACO's financial performance for PY 
2022. Applying the blended update factor (row [B]) to the original 
historical benchmark values by enrollment type (row [A]), we 
recalculate the updated benchmark values by enrollment type (row [C]) 
that account for improper payments occurring in PY 2022. The adjusted 
updated benchmark values (row [C]) and adjusted PY expenditures for ACO 
assigned beneficiaries by enrollment type (row [D]), also described in 
Table 47, are multiplied by original PY assigned beneficiary 
proportions by enrollment type (row [E]), and summed across enrollment 
types to recalculate the per capita updated benchmark (row [F]) and per 
capita ACO PY assigned beneficiary expenditures (row [G]). We then 
express these per capita quantities as the total updated benchmark 
amount (row [I]) and the total ACO PY assigned beneficiary expenditures 
amount (row [J]) by multiplying the per capita dollar amount by the 
ACO's total assigned beneficiary person years for PY 2022 (row [H]). 
The recalculated total updated benchmark (row [I]) can then be used to 
recalculate the MSR/MLR dollar threshold (row [L]). We subtract the 
recalculated total ACO PY assigned beneficiary expenditures (row [J]) 
from the recalculated total updated benchmark (row [I]) to determine if 
the ACO has gross savings or gross losses. Under this example, the 
recalculation indicates the ACO has total gross savings (row [K]). 
Finally, because the recalculated total gross savings (row [K]) is 
greater than the recalculated MSR dollar threshold, we recalculate the 
ACO's shared savings (row [N]) by multiplying the total gross savings 
(row [K]) by the original sharing rate (row [M]).
    The result of these calculations is an adjusted shared savings 
amount of $17,355,000 (before accounting for sequestration), compared 
to an original amount of $16,950,000. Thus, while adjustments for 
improper payments reduced the ACO's PY assigned beneficiary 
expenditures by $2 million, the impact on the ACO's recalculated shared 
savings is only $405,000 due to the impact of improper payments on the 
expenditures for assignable beneficiaries that factor into the ACO's 
recalculated updated benchmark for PY 2022.
BILLING CODE 4120-01-P

[[Page 98183]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.091

BILLING CODE 4120-01-C
    Under the proposed financial methodology, accounting for the impact 
of improper payments on expenditures could increase or decrease an 
ACO's amount of shared savings or shared losses. As demonstrated in the 
hypothetical example, the direction of changes to an ACO's shared 
savings or shared losses would depend on the differential impact of 
improper payments on the ACO's assigned beneficiary expenditures 
compared to

[[Page 98184]]

the impact on expenditures for assignable beneficiaries used to 
determine the national and regional updates to the ACO's benchmark. In 
this example, the reduction in ACO PY assigned beneficiary expenditures 
due to the adjustment for improper payments was larger than the 
reduction to the updated benchmark stemming from adjustments to PY 
national and regional expenditures, ultimately causing the ACO to see 
an increase in both gross savings and shared savings. Other ACOs for 
which the reduction in ACO PY assigned beneficiary expenditures is 
greater than the reduction to the updated benchmark, may switch from 
earning no shared savings to earning shared savings or may see a 
reduction in shared losses owed. However, if accounting for improper 
payments results in relatively larger reductions to the expenditures 
for assignable beneficiaries in the ACO's regional service area or in 
the national assignable population, and relatively smaller reductions 
to the ACO's PY assigned beneficiary expenditures, the ACO might 
observe a reduction in shared savings or increase in shared losses, or 
potentially cause the ACO to switch from earning shared savings to not 
earning any shared savings or to owing shared losses.
    As we proposed in section III.G.7.c.(2).(d) of the CY 2025 PFS 
proposed rule (89 FR 61907), if the reopened PY becomes a BY for a 
subsequent agreement period, CMS would adjust the historical benchmark 
to be used for any PY in that subsequent agreement period that has not 
yet been reconciled. We explained that accounting for improper payments 
as it affects the ACO's benchmark could then result in changes to the 
ACO's shared savings or shared losses for a future performance year 
that differ in direction compared to the change in shared savings or 
shared losses observed with the initial reopening that affected PY 
expenditures. That is, following the example from Table 49, accounting 
for improper payments occurring in calendar year 2022 might result in 
the ACO earning greater shared savings (or smaller shared losses) for 
PY 2022 (because the reduction in ACO PY assigned beneficiary 
expenditures outweighs the reduction in national and regional 
expenditures used to update the benchmark), but may result in smaller 
shared savings (or greater shared losses) for future performance years 
for which CY 2022 becomes a benchmark year (because the adjustment for 
improper payments in BY 2022 causes a reduction in the overall 
benchmark with no corresponding reduction to ACO PY expenditures).
    We explained that administrative action and judicial action leading 
to the identification of improper payments may be subject to appeal, 
and ultimately the amount of the improper payments may be redetermined 
or otherwise amended. We acknowledged the potential inaccuracy in using 
amounts of improper payments that may be reversed, in whole or in part, 
in recalculating an ACO's financial performance. However, waiting for 
each possible appeal to be raised and resolved with respect to improper 
payments could delay our ability to reach a determination of whether to 
reopen an ACO's payment determination, identify the amounts of improper 
payments to be used in the recalculation, or both. We explained that we 
considered whether to account for the possibility that the improper 
payment amounts would be appealed, and the amount redetermined, as part 
the proposed methodology, but did not propose a related approach. For 
instance, we considered whether to apply an adjustment factor as part 
of the methodology, that would reduce the amount of improper payments 
by a percentage, to account for the rate at which the amounts could 
change, and to base this rate on statistics gathered on the outcomes of 
Medicare Parts A and B administrative appeals processes. Given that the 
proposed approach, if finalized, would be the initial use of improper 
payment amounts in Shared Savings Program calculation, we noted our 
intent to monitor for the impact of appeals on the amounts of improper 
payments that may be used in reopenings under the Shared Savings 
Program. We stated that we may revisit our approach in future notice 
and comment rulemaking, after we gain additional experience with using 
improper payment amounts in Shared Savings Program calculations.
    We proposed to use our authority under section 1899(d)(1)(B)(ii) of 
the Act to calculate benchmark year expenditures using the proposed 
methodology to account for the impact of improper payments. This 
provision authorizes the Secretary to adjust the benchmark for 
beneficiary characteristics and ``such other factors as the Secretary 
determines appropriate''. When reopening an initial determination for a 
performance year pursuant to Sec.  425.315, we considered it 
appropriate to account for the impact of improper payments on 
expenditures used to establish the ACO's historical benchmark, 
consistent with our proposal.
    We proposed to use our authority under section 1899(i)(3) of the 
Act to use the proposed methodology to account for the impact of 
improper payments in calculating performance year expenditures and 
calculating the historical benchmark update factors. CMS may only adopt 
an alternative payment methodology pursuant to section 1899(i)(3) of 
the Act if we determine that the alternative payment methodology will 
improve the quality and efficiency of items and services furnished to 
Medicare beneficiaries, without resulting in additional program 
expenditures.
    We explained that the proposed adjustments would remove improper 
payments from the performance year expenditures and factors used to 
calculate updated historical benchmarks, among other financial 
calculations, that resulted in inaccuracies in an ACO's payment 
determination, including the amount of shared savings CMS paid an ACO 
or the amount of shared losses owed to CMS by an ACO participating 
under a two-sided model. We stated that these policies improve the 
accuracy of financial calculations by which ACOs are held accountable 
for the cost and quality of care for their assigned beneficiary 
populations.
    Further, addressing the impact of improper payments on ACO payment 
determinations could serve as a mechanism to bolster program integrity. 
ACO accountability for the total cost of care can deter fraud, waste, 
and abuse that is otherwise under the control of ACO participants. 
Additionally, ACOs have unique insight into Medicare Part A, B, and D 
claims data for their assigned beneficiary populations from monthly 
claim and claim line level data ACOs receive from CMS for care 
coordination and quality improvement. This vantage point makes ACOs 
uniquely situated to observe trends in expenditures and utilization 
patterns, including by providers and suppliers that are not 
participating in the ACO. Further establishing policies to specify the 
approach to excluding improper payments from Shared Savings Program 
calculations could encourage ACOs to report to CMS and the HHS-OIG 
potential fraud and abuse within the Medicare program. Addressing 
improper payments in the Medicare program would protect the accuracy, 
fairness, and integrity of Shared Savings Program financial 
calculations, and lead to greater beneficiary protections and 
protection of the Trust Funds.
    Accounting for the impact of improper payments in financial 
calculations promotes continued

[[Page 98185]]

integrity and fairness of Shared Savings Program payment determinations 
and may in turn bolster ACO participation in the Shared Savings 
Program. Policies that improve the accuracy of the payment calculations 
could provide greater certainty to organizations considering entering 
or continuing their participation in the Shared Savings Program and 
thereby lead to more robust and sustained participation by ACOs in the 
Shared Savings Program. This, in turn, means that these organizations 
would continue working towards meeting the Shared Savings Program's 
goals of lowering growth in Medicare FFS expenditures and improving the 
quality of care furnished to Medicare beneficiaries.
    As described in the Regulatory Impact Analysis of the CY 2025 PFS 
proposed rule (89 FR 62183), accounting for the impact of improper 
payments on performance year expenditures and factors used to calculate 
updated historical benchmarks would not result in an increase in 
spending beyond the expenditures that would otherwise occur under the 
statutory payment methodology in section 1899(d) of the Act. As we also 
discuss in the CY 2025 PFS proposed rule, across an ACO's 
reconciliations where improper payments impact performance year or BY 
expenditures, the overall net impact of using the proposed methodology 
on the ACO's aggregate shared savings or shared losses across those 
reconciliations could be positive or negative and would depend on the 
circumstances of a given reopening scenario.
    We stated that we will continue to reexamine this projection in the 
future to ensure that the requirement under section 1899(i)(3)(B) of 
the Act that an alternative payment model not result in additional 
program expenditures continues to be satisfied. In the event that we 
later determine that the payment model established under section 
1899(i)(3) of the Act no longer meets this requirement, we would 
undertake additional notice and comment rulemaking to make adjustments 
to the payment model to assure continued compliance with the statutory 
requirements.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Some commenters expressed general support for CMS' 
proposal to recalculate expenditures and payment amounts to account for 
improper payments upon reopening a payment determination, and a few 
commenters specifically stated support for the proposed calculation 
methodology, in general. A few commenters specifically supported the 
approach to accounting for improper payments identified beyond the 
Shared Savings Program's 3-month claims run-out period.
    Response: We appreciate commenters' support for our proposed 
calculation methodology, and we are finalizing the methodology as 
proposed.
    After consideration of the public comments, we are finalizing our 
proposal to add to subpart G a new section of the Shared Savings 
Program regulation at Sec.  425.674 specifying provisions on accounting 
for the impact of improper payments on Shared Savings Program financial 
calculations, as described in this section of this final rule. 
Specifically, as finalized, paragraph (a) of Sec.  425.674 specifies 
that upon the reopening of an initial determination pursuant to Sec.  
425.315(a)(4), CMS will use the methodology set forth in Sec.  425.674 
to account for the impact of improper payments when: (1) determining 
savings or losses for the relevant performance year in accordance with 
Sec.  425.315 in order to issue a revised initial determination, and 
(2) adjusting the benchmark by recalculating benchmark year 
expenditures in the event that we recalculate a payment determination 
and issue a revised initial determination for the corresponding 
performance year in a prior agreement period. Paragraph (b) of Sec.  
425.674 specifies that for the purpose of the Shared Savings Program, 
``improper payment'' includes: (1) an amount associated with a demanded 
overpayment determination, and (2) an amount identified in a settlement 
agreement or judgment, pursuant to conduct of individuals or entities 
performing functions or services related to an ACO's activities, less 
any penalties or damages. Paragraphs (c) and (d) of Sec.  425.674 
specify the general approach for adjusting Medicare Parts A and B FFS 
expenditures values used in certain Shared Savings Program financial 
calculations to account for a per capita amount of improper payments 
for an identified population used in calculating performance year or 
benchmark year expenditures, and in calculating county-level FFS 
expenditures used in factors based on regional expenditures.
(d) Adjusting Historical Benchmarks To Account for the Impact of 
Improper Payments
    In the CY 2025 PFS proposed rule (89 FR 61907), we explained that 
CMS adjusts an ACO's historical benchmark annually, during the term of 
the ACO's agreement period, to account for certain changes, as 
specified in the Shared Savings Program regulations. The related 
adjustment is specified under Sec.  425.601(a)(9), for the benchmarking 
methodology applicable to agreement periods beginning on or after July 
1, 2019, and before January 1, 2024, and under Sec.  425.652(a)(9), for 
the benchmarking methodology applicable to agreement periods beginning 
on January 1, 2024, and in subsequent years. As finalized with the CY 
2024 PFS final rule (88 FR 79195 through 79200), Sec.  425.652(a)(9) 
introductory text was amended to specify, among other changes, that for 
each performance year during the term of the agreement period, the 
ACO's benchmark is adjusted for changes in values used in benchmark 
calculations as a result of issuance of a revised initial determination 
under Sec.  425.315 (among other factors). Similar language is not 
currently included in Sec.  425.601(a)(9) introductory text.
    We proposed to use our authority under section 1899(d)(1)(B)(ii) of 
the Act to adjust the benchmark to account for the impact of improper 
payments, in the event CMS recalculates a payment determination and 
issues a revised initial determination for a performance year in a 
prior agreement period that corresponds to a benchmark year of the 
ACO's current agreement period. We proposed to adjust an ACO's 
historical benchmark for use in reaching an initial determination of 
financial performance for a performance year, in cases where an ACO has 
a benchmark year that corresponds to a performance year for which we 
issued a revised initial determination. In such a case, we would apply 
the same methodology to recalculate the ACO's BY expenditures as used 
in recalculating the expenditures for the corresponding performance 
year, as part of a reopening. Under the proposed approach, we would be 
able to improve the accuracy of the benchmark year calculations used in 
reaching an initial determination for a performance year, by addressing 
the impact of previously identified improper payments on the 
expenditure calculations. Such an adjustment to the benchmark 
expenditures would appropriately calculate the ACO's historical 
benchmark that might otherwise be under- or over-stated due to improper 
payments.
    We expanded upon the example illustrated in Table 49, to explain 
that if we have issued a revised initial determination for PY 2022 in 
December 2025, for an ACO that renewed to continue its participation 
under a new agreement period beginning on January

[[Page 98186]]

1, 2025, our proposed policy would enable us to use the same 
methodology for calculating BY 2022 expenditures for PY 2025, in 
reaching the initial determination for PY 2025.
    We proposed to amend Sec. Sec.  425.601(a)(9) and 425.652(a)(9) to 
specify the proposed adjustment to the historical benchmark. We 
proposed to revise Sec.  425.601(a)(9) introductory text to further 
specify that for the second and each subsequent performance year during 
the term of the agreement period, the ACO's benchmark would be adjusted 
for changes in values used in benchmark calculations as a result of 
issuance of a revised initial determination under Sec.  425.315. We 
also proposed to add a new paragraph (a)(9)(iii) to Sec.  425.601 and 
to add a new paragraph (a)(9)(viii) to Sec.  425.652, each specifying 
that we would recalculate benchmark year expenditures to account for 
the impact of improper payments, for the benchmark year corresponding 
to a performance year for which CMS issued a revised initial 
determination under Sec.  425.315. In recalculating expenditures for 
the benchmark year, CMS would apply the same calculation methodology 
applied in recalculating expenditures for the corresponding performance 
year, in accordance with the proposed new section of the regulation at 
Sec.  425.674.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Some commenters expressed support for accounting for 
improper payments in ACO historical benchmarks, and a few commenters 
stated generalized support for the proposal to adjust the historical 
benchmark to account for the impact of improper payments. More 
specifically, one commenter stated support for CMS' proposal to adjust 
the historical benchmark to account for the impact of improper payments 
if CMS recalculates a payment determination in a prior agreement period 
that corresponds to a benchmark year of the ACO's current agreement 
period. One commenter stated that accounting for improper payments in 
benchmarks is a ``welcome change and significant improvement.''
    Response: We appreciate commenters' support for our proposal to 
establish an adjustment to Shared Savings Program benchmark 
calculations to account for the impact of identified improper payments 
for use in reaching an initial determination of financial performance 
for a performance year, in certain cases. We have further considered 
the phrasing of our proposal, as specified in the preamble of the CY 
2025 PFS proposed rule (89 FR 61907), and reflected in one commenter's 
statement, that the adjustment would be applied ``in the event CMS 
recalculates a payment determination and issues a revised initial 
determination for a performance year in a prior agreement period that 
corresponds to a benchmark year of the ACO's current agreement period'' 
(emphasis added).
    In the CY 2025 PFS proposed rule, although we provided one example 
of a potential scenario in which this adjustment would apply (89 FR 
61907), we did not discuss the potential for there to be various 
scenarios around the timing of when the revised initial determination 
is issued for a performance year relative to when the ACO enters a 
subsequent agreement period for which the performance year for which we 
issue a revised initial determination corresponds to a benchmark year 
(BY). These scenarios could include the following, with hypothetical 
examples included to further illustrate:
     CMS issues a revised initial determination for a PY that 
corresponds to a BY of an ACO's agreement period while the current 
agreement period is underway, and before completing financial 
reconciliation for one or more performance years of the current 
agreement period. This could have been one interpretation of the 
scenario we provided in the CY 2025 PFS proposed rule. To restate and 
expand upon this example: An ACO participates under and completes an 
agreement period beginning on January 1, 2020, and renews to continue 
its participation in a new agreement period beginning on January 1, 
2025. We issue a revised initial determination for PY 2022 in Fall 
2025. We would use the same methodology for calculating BY 2022 
expenditures as we used to reach the revised initial determination for 
PY 2022, in calculating the benchmark used to reach the initial 
determination for all performance years of the ACO's agreement period 
beginning on January 1, 2025 (PYs 2025-2029).
     CMS issues a revised initial determination for a PY that 
corresponds to a BY of an ACO's agreement period prior to the start of 
a future agreement period, while the ACO was participating in an 
earlier agreement period. For example: An ACO participates under and 
completes an agreement period beginning on January 1, 2022, and renews 
to continue its participation in a new agreement period beginning on 
January 1, 2027. We issue a revised initial determination for PY 2024 
in Fall 2026. We would use the same methodology for calculating BY 2024 
expenditures as we used to reach the revised initial determination for 
PY 2024, in calculating the benchmark used to reach the initial 
determination for all performance years of the ACO's agreement period 
beginning on January 1, 2027 (PYs 2027-2031).
     CMS issues a revised initial determination for a PY that 
corresponds to a BY of more than one agreement period, which could 
occur in cases where an ACO's participation agreement is terminated and 
the ACO quickly enters a new agreement period, such as under the option 
for an ACO to early renew.\599\ For example: An ACO participates under 
an agreement period beginning on January 1, 2020, and early renews to 
continue its participation in a new agreement period beginning on 
January 1, 2024. The ACO early renews again to enter a new agreement 
period beginning on January 1, 2025. We issue a revised initial 
determination for PY 2023 in Spring 2025. We would use the same 
methodology for calculating BY 2023 expenditures as we used to reach 
the revised initial determination for PY 2023, in calculating the 
benchmark for the agreement period beginning on January 1, 2024 used to 
reach the initial determination for PY 2024, and in calculating the 
benchmark used to reach the initial determination for all performance 
years of the ACO's new agreement period beginning on January 1, 2025 
(PYs 2025-2029).
---------------------------------------------------------------------------

    \599\ ACOs have the option to ``early renew'', meaning to 
terminate their current participation agreement under Sec.  425.220 
and immediately enter a new agreement period to continue 
participation in the Shared Savings Program.
---------------------------------------------------------------------------

    In light of the number and complexity of the scenarios in which a 
PY corresponds to a BY that is used in calculating the benchmark that 
is in turn used to determine financial performance for a performance 
year that has not yet been reconciled, we are concerned that the 
phrasing ``current agreement period'' in reference to the benchmark 
being adjusted could make unclear the applicability of the adjustment, 
and prove unduly limiting depending on how it could be interpreted. We 
clarify that we would apply the adjustment in calculating benchmark 
expenditures used in reaching an initial determination of financial 
performance for a performance year within an ACO's agreement period 
that has concluded, or its current agreement period which is underway, 
as well as a future agreement period, to account for improper payments 
in expenditures for a benchmark year that corresponds to a performance 
year for which we issued a revised initial determination.

[[Page 98187]]

    Therefore, we are finalizing our proposal with the aforementioned 
clarification to generalize the description of benchmark adjustment to 
allow for the continued applicability of the adjustment over time. 
Under the finalized approach we will adjust the benchmark to account 
for the impact of improper payments, in the event CMS recalculates a 
payment determination and issues a revised initial determination for a 
performance year in a prior agreement period that corresponds to a 
benchmark year of the ACO's agreement period (emphasis added to reflect 
revised text) instead of referencing the ACO's current agreement period 
(emphasis added). This clarification only impacts our discussion of the 
proposal in preamble of the CY 2025 PFS proposed rule. The potentially 
problematic language was not included in the text of proposed 
regulations to establish the benchmark adjustment.
    After consideration of the public comments, we are finalizing, with 
a clarification, our proposal to use our authority under section 
1899(d)(1)(B)(ii) of the Act to adjust the benchmark to account for the 
impact of improper payments, in the event CMS recalculates a payment 
determination and issues a revised initial determination for a 
performance year in a prior agreement period that corresponds to a 
benchmark year of the ACO's agreement period (emphasis added). We are 
also finalizing without modification our proposed amendments to the 
regulations at Sec. Sec.  425.601(a)(9) and 425.652(a)(9) to specify 
the adjustment to the historical benchmark. In recalculating 
expenditures for the benchmark year, CMS will apply the same 
calculation methodology applied in recalculating expenditures for the 
corresponding performance year, in accordance with the new section of 
the regulation at Sec.  425.674.
(e) ACO Reopening Requests
    In section III.G.7.c.(2).(e) of the CY 2025 PFS proposed rule (89 
FR 61907 through 61908), we described our proposal to establish a 
process by which ACOs may request a reopening review, and related 
considerations. We stated that the discussion of requesting and 
conducting a reopening pertained to reopening a payment determination 
for good cause or for fraud or similar fault, unless specified 
otherwise.
    We proposed to establish a process at Sec.  425.315(b) by which an 
ACO may request a reopening of an initial determination, or a final 
agency determination under subpart I, of shared savings or shared 
losses. Although an ACO's submission of a reopening request is 
optional, we proposed to require that the ACO's request be in a form 
and manner specified by CMS. Further, we proposed that the timing of 
the ACO's reopening request must be consistent with the timeframes 
specified in Sec.  425.315(a)(1)(i) and (ii), respectively, either (i) 
at any time in the case of fraud or similar fault, or (ii) not later 
than 4 years after the date of the notification to the ACO of the 
initial determination of savings or losses for the relevant performance 
year for good cause. We noted that we anticipate providing additional 
information on the reopening request process for ACOs through guidance, 
including the form and manner in which CMS must receive a reopening 
request.
    We stated that CMS will need to receive sufficient, detailed 
information from ACOs to evaluate an ACO's reopening request. For 
instance, in the case of a reopening request in connection with 
improper payments, or fraud or similar fault potentially impacting the 
ACO's financial calculations, receiving detailed information about the 
issue, including the following information, would aid in our analysis 
of the ACO's request:
     ACO identifier(s) (also referred to as ``ACO ID'') and 
Legal Business Name(s).
     Identity of the provider or supplier for which there may 
be improper payment(s), or that may be suspected of fraud or similar 
fault, including name, NPI or Provider Transaction Access Number 
(PTAN), TIN, or other identifier.
     Time period during which potentially impacted claims were 
submitted or improper conduct occurred.
     Short description of the improper payment, alleged fraud 
or similar fault, and how it was identified, including information such 
as any specific claim type codes and HCPCS or CPT codes.
     Evidence of financial impact on the ACO's shared savings 
or shared losses calculation, such as any analysis supporting the 
calculation of financial impact to the ACO and a list of beneficiaries 
assigned to the ACO for whom claims were submitted by the provider or 
supplier suspected of fraud or similar fault, or for which expenditures 
may be impacted by improper payments.
    We reiterated that a recalculation of shared savings and shared 
losses to account for improper payments could result in a variety of 
outcomes. We stated that an ACO should weigh these potential outcomes 
when considering whether to submit a reopening request.
    We acknowledged that the proposed process for requesting a 
reopening, whether for good cause or for fraud or similar fault, would 
represent a new process. Therefore, we solicited comments and 
suggestions on the form and manner in which CMS should receive these 
requests. We also solicited comment on approaches to ensuring that ACOs 
submit reopening requests with sufficient information to allow CMS to 
identify and evaluate the impact of improper payments, or fraud or 
similar fault, on Shared Savings Program financial calculations.
    We described the following steps to illustrate how the Shared 
Savings Program may conduct review of an ACO's request to reopen a 
payment determination to account for the impact of improper payments 
(restated with a minor correction for clarity):
     Upon receiving an ACO's reopening request, CMS would 
evaluate this request, and ask the requesting ACO to provide 
supplemental information if needed.
     We would work with program integrity staff and law 
enforcement agencies to identify, validate and quantify improper 
payments potentially impacting expenditures used in Shared Savings 
Program calculations. We noted that identification of improper payments 
may be contingent on the conclusion of an investigation that is 
underway.
     We may conduct initial analysis to consider the basis for 
reopening the ACO's payment determination under Sec.  425.315(a), and 
the significance of the improper payments to an ACO's financial 
calculations under the Shared Savings Program (described in section 
III.G.7.c.(2).(b) of the CY 2025 PFS proposed rule, see 89 FR 61896):
    ++ If we find that the potential improper payment does not meet 
CMS' standards for reopening the payment determination, we noted we 
would notify the ACO of our decision.
    ++ If we reach a determination to reopen the ACO's payment 
determination for a performance year:

--We would recalculate expenditures to account for improper payments 
using the methodology proposed in section III.G.7.c.(2).(c) of the CY 
2025 PFS proposed rule (89 FR 61898 through 61907), recalculate the 
ACO's shared savings or shared losses, issue a revised initial 
determination, and engage in payment activities and recoupment 
activities, as needed.
--During the recalculation period CMS would also identify whether the 
relevant performance year is also serving as a benchmark year for the

[[Page 98188]]

ACO's current agreement period and prepare to adjust the ACO's 
benchmark year expenditures to account for the revised initial 
determination (once issued), as discussed in section III.G.7.c.(2).(d) 
of the CY 2025 PFS proposed rule (89 FR 61907).

    We noted that in the event that improper payments identified in 
analyzing an ACO's reopening request have the potential to impact the 
payment determinations of one or more other ACOs, we may only determine 
whether to reopen the payment determination for an ACO that submitted 
the reopening request. More generally, we may initiate analysis of the 
impact of improper payments on Shared Savings Program financial 
calculations, and potentially reopen the payment determination for one 
or more ACOs absent an ACO's request for reopening. For instance, in 
learning of improper payments that may potentially impact Shared 
Savings Program calculations for multiple ACOs, including through the 
reopening request process, we may seek to reopen payment determinations 
where improper payments are anticipated to result in significant 
adjustments to ACOs' initial determinations upon recalculation. We also 
noted that we anticipate initiating analysis of the impact of improper 
payments on an ACO's payment determination upon learning of improper 
payments originating inside the ACO that may potentially impact Shared 
Savings Program calculations, and may reopen the ACO's payment 
determination, as needed, to address program integrity concerns.
    We stated that we anticipate that our review and analysis of 
reopening requests could occur over a protracted period of time during 
which we may be able to provide little additional information to the 
ACO until we have reached our decision. We would aim to conduct a 
reopening such that the timing of any issuance of a revised initial 
determination aligns with the timeframe for when CMS typically 
completes annual performance year financial reconciliation and payment 
and recoupment. However, because investigations into improper payments, 
including considering whether there is reliable evidence of fraud or 
similar fault, may involve varying degrees of complexity and scale, and 
because the application of our proposed methodology for calculating 
expenditures relies on information that may result from such 
investigations, among other sources of information, CMS may not always 
be able to conduct a reopening within a specific timeframe after an ACO 
submits a reopening request. We specified that the process for 
analyzing an ACO's reopening request, reaching a decision on whether to 
reopen the initial determination, recalculating the ACO's payment 
determination, and issuing a revised initial determination, may occur 
over a period of months or potentially years, and may have impacts on 
future agreement periods. In cases where CMS and law enforcement 
officials may have investigations underway, CMS must refrain from 
providing details to ACOs, and other individuals or entities, of 
pending actions to protect the integrity of those investigations. 
Therefore, we explained that we may be limited in the information we 
can communicate to an ACO about our consideration of the ACO's 
reopening request.
    We solicited comment on the aforementioned considerations for how 
we could conduct review of an ACO's request to reopen a payment 
determination to account for the impact of improper payments. We 
specified that as we gain additional experience with ACOs' submission 
of reopening requests, including the volume of the requests, and nature 
of the requests, we may revisit the reopening request process, as 
needed, in future notice and comment rulemaking.
    We received public comments on these proposals and related 
considerations. The following is a summary of the comments we received 
and our responses.
    Comment: The commenters addressing the proposal to create a process 
by which ACOs can request CMS reopen a payment determination, expressed 
support for the concept. One commenter explained that codifying a 
process for reopening a payment determination provides clarity on the 
steps an ACO needs to take and will, subsequently, encourage 
institutions to pursue the process. This commenter further explained a 
formal reopening process is necessary for any and all value-based care 
models that involve two-sided risk, as it clarifies how the agency will 
address any issues regarding miscalculations or fraud.
    Response: We appreciate commenters' support for our proposal to 
establish a process by which ACOs may request a reopening review by CMS 
of a Shared Savings Program payment determination. In response to the 
commenter's assertion that a formal reopening process is necessary for 
value-based care models that involve two-sided risk, we note that the 
Shared Savings Program's long-standing reopening policy, and the 
changes to our policies being finalized in this final rule, apply 
program-wide, to ACOs participating in the program's one-sided models 
and two-sided models. Further, we note that the proposals being 
finalized in this section of this final rule are specific to the Shared 
Savings Program.
    Comment: Some commenters addressing the proposed reopening request 
process provided a variety of suggestions in connection with an ACO's 
initiation of a reopening request. A few commenters requested greater 
transparency around the reopening request process including on the type 
of information CMS will request, potential timelines, and steps ACOs 
should take to request reopening, and several of these commenters urged 
CMS to publish related information in subregulatory guidance.
    Some commenters urged CMS to employ a reopening process that 
minimizes the burden to ACOs with respect to the types of information 
it must receive from ACOs. In particular, a few commenters explained 
that ACOs can perform in depth analysis of their data, but lack 
detailed information on national or regional billing to make 
comparisons and urged that CMS not request ACOs provide such 
information as part of the reopening request process.
    Response: As we specified in the CY 2025 PFS proposed rule (89 FR 
61907), we anticipate providing additional information on the reopening 
request process for ACOs through guidance, including the form and 
manner in which CMS must receive a reopening request. As we develop the 
guidance, we will carefully consider the commenters' suggestions for 
the types of information to include, such as the information from ACOs 
that will aid our analysis, timing considerations, and steps involved 
for an ACO to submit a reopening request.
    We agree with commenters on the importance of developing the 
requirements for a reopening request process in a way that would 
minimize additional burden on ACOs, including with respect to ACOs' 
submissions of reopening requests, and compiling related information, 
among other possible actions. We anticipate considering approaches to 
minimizing the burden on ACOs in connection with the reopening request 
process, as we develop related requirements and operational procedures.
    In the CY 2025 PFS proposed rule (89 FR 61907 through 61908), as 
restated elsewhere in this section of this final rule, we explained 
that CMS will need to receive sufficient, detailed

[[Page 98189]]

information from ACOs to evaluate an ACO's reopening request. We listed 
certain information that would aid in our analysis of the ACO's request 
in the case of a reopening request in connection with improper 
payments, or fraud or similar fault potentially impacting the ACO's 
financial calculations. In the initial discussion of these factors we 
did not specify a priority for the information listed. We believe 
clarifying this information addresses, in part, commenters' requests 
for CMS to provide transparency around the type of information CMS will 
request from ACOs as part of the reopening request process, and to 
address concerns over whether the information CMS may request would be 
readily available to ACOs.
    To clarify, we would need to receive certain, basic details within 
the ACO's reopening request to allow us to effectively identify, 
validate and quantify the improper payments, or evaluate the alleged 
fraud or similar fault, potentially impacting expenditures used in 
Shared Savings Program calculations, in particular: (1) the identity of 
the provider or supplier for which there may be improper payment(s), or 
suspected of fraud or similar fault; (2) the time period during which 
potentially impacted claims were submitted or improper conduct 
occurred; (3) a description of the improper payment, alleged fraud or 
similar fault, and how it was identified, including any specific claim 
type codes and HCPCS or CPT codes; and (4) a list of beneficiaries 
assigned to the ACO for whom claims were submitted by the provider or 
supplier suspected of fraud or similar fault, or for which expenditures 
may be impacted by improper payments. While it may aid our review of 
the ACO's reopening request to receive evidence of financial impact on 
the ACO's shared savings or shared losses calculation, this could 
include a brief description with any available evidence, and does not 
necessarily need to involve a complex analysis. We recognize there may 
be limitations to the analyses ACOs can perform, particularly with 
respect to potential impacts on national or regional billing, as 
commenters point out. We note that in the CY 2025 PFS proposed rule, 
while we discussed the types of information we would find helpful to 
receive from ACOs (89 FR 61907 through 61908) and in a separate 
discussion provided detailed hypothetical examples illustrating how the 
proposed calculation methodology would be applied (89 FR 61901 through 
61906), we did not specifically state that we were contemplating 
requesting or requiring ACOs to submit to CMS as part of their 
reopening request evidence or analysis of the financial impact of 
improper payments on national expenditures, regional expenditures, or 
both. If an ACO were to have available information or analysis of the 
estimated financial impact of improper payments on the ACO's shared 
savings or shared losses calculation, the ACO may submit these details 
with their reopening request. More generally, we will carefully 
consider the information provided by the ACO, and we will undertake our 
own internal analysis to inform our decision of whether to reopen an 
ACO's payment determination, and (if warranted) we will perform 
recalculations needed to issue a revised initial determination based on 
validated and quantified information.
    Additionally, in response to the comment requesting that CMS 
provide greater transparency into the steps ACOs should take to submit 
a reopening request, we recognize that ACOs may be seeking specific 
additional information on how to prepare and submit a reopening request 
prior to the issuance of the guidance material on the reopening request 
process. In brief, as we specified elsewhere in this section of this 
final rule, ACOs seeking to submit a reopening request prior to the 
issuance of guidance material on the reopening request process, are 
encouraged to submit detailed information in writing to CMS by email to 
[email protected]. For ACOs contemplating submitting a 
reopening request in connection with improper payments, or fraud or 
similar fault potentially impacting the ACO's financial calculations, 
we urge that they consider providing the types of information we 
specified would aid in our analysis of the ACO's request in preparing 
their submission, as outlined in the CY 2025 PFS proposed rule (89 FR 
61907 through 61908), and about which we have provided additional 
explanations within this response.
    Comment: Some commenters urged CMS to complete actions quickly or 
timely, and to provide detailed responses to ACO reopening requests 
outlining why an ACO's reopening request is granted or not granted, 
citing considerations about the need for ACOs to notify participants of 
the outcome and adjust any ``downstream'' payment or incentives. One of 
these commenters went on to explain transparency and timely action on 
CMS' behalf will enhance agency credibility, promote sustainable ACO 
financial planning and budgeting, and impact participants' willingness 
to participate in ACO models in the future, concepts echoed in other 
similar comments.
    Response: We acknowledge the importance of completing reopening 
requests in a timely manner and communicating the findings as soon as 
possible to the ACO, including for the reasons outlined by commenters. 
We anticipate acknowledging receipt of each reopening request and 
providing a response as to the final outcome of the request.
    Further, in response to commenters' suggestions that we complete 
actions quickly or timely and provide detailed responses to ACOs, we 
note that there are interactions between our investigation into the 
issues potentially impacting ACO financial calculations that may 
warrant reopening, and the extent to which we can provide additional 
information to ACOs to explain the status of our investigation and 
findings, and relatedly the timeline for communicating our decision or 
related information to the ACO that submitted the request. Until we 
reach a decision on whether or not to reopen the ACO's payment 
determination, we may be limited in the information that we can 
communicate to an ACO about the status of its reopening request. As 
explained in the CY 2025 PFS proposed rule (89 FR 61908), in cases 
where CMS, law enforcement officials, or both, may have investigations 
underway, CMS must refrain from providing details to ACOs and other 
entities, of pending actions to protect the integrity of those 
investigations. In addition, for a reopening request to account for 
improper payments, we must identify and quantify the improper payments, 
including certain demanded overpayment determinations, and improper 
payments resulting from conduct by individuals or entities performing 
functions or services related to an ACO's activities as identified in 
certain settlement agreements or judgments (as discussed in section 
III.G.7.c.(2).(b) of this final rule). We reiterate that it may take 
months or years to determine the actual amount of any improper payments 
impacting an ACO's payment determination, particularly if we are 
awaiting the conclusion of program integrity and law enforcement 
investigations, among other possible determinations about the related 
conduct of providers or suppliers.
    With respect to commenters urging the need for CMS to provide ACOs 
with detailed responses to ACO reopening requests, including for the 
purposes of notifying its participants of the outcome, and for the ACO 
to adjust

[[Page 98190]]

payment or incentives participants may receive, we note that in the 
event we decide to reopen an ACO's payment determination and issue a 
revised initial determination, we anticipate specifying related 
information in a financial reconciliation report delivered to the ACO. 
As we explained in the CY 2025 PFS proposed rule (see 89 FR 61896 
through 61897; and 61908), a number of steps would follow after we 
decide to reopen the initial determination and perform the 
recalculations needed to reach a revised initial determination, 
including issuing the revised initial determination to the ACO, and 
engaging in payment and recoupment activities, as needed. As we 
previously explained in rulemaking (81 FR 38001 through 38002, see also 
87 FR 69872), and continue to believe, we would provide ACOs with 
sufficient details regarding any necessary adjustments in their shared 
savings or shared losses resulting from reopened financial calculations 
for each performance year affected such that they will be able to 
attribute the additional payment or recoupment arising from the 
reopening internally with their ACO participants.
    Comment: One commenter urged transparency on how ACO reopening 
requests will be ``prioritized'' but did not provide details on what 
this meant.
    Response: In response to the commenter's suggestion that CMS 
provide transparency into how ACO reopening requests are 
``prioritized,'' we note that it is unclear what form of 
``prioritization'' the commenter is referring to given the lack of 
details in the comment. As a general matter, we agree with the 
importance of transparency in our processes for implementing the Shared 
Savings Program. However, we decline at this time to specify a 
particular approach we may use to create a prioritization among 
multiple reopening requests from different ACOs. There are various 
factors that may affect the timing for our consideration of an ACO's 
reopening request, including with respect to the timeframe for 
conducting our initial analysis, and reaching a decision on whether to 
reopen the calculations as we have described elsewhere in section 
III.G.7.c of this final rule. Further, the timing of the reopening must 
be consistent with the timeframes specified in Sec.  425.315(a)(1)(i) 
and (ii), respectively, either (i) at any time in the case of fraud or 
similar fault, or (ii) not later than 4 years after the date of the 
notification to the ACO of the initial determination of savings or 
losses for the relevant performance year for good cause. Depending on 
the timing of when the issue potentially impacting ACO financial 
calculations comes to our attention, we may need to more urgently 
decide whether to reopen the payment determination, for good cause, in 
order to be able to exercise our authority under Sec.  
425.315(a)(1)(ii). Once a decision is reached on whether to reopen the 
payment determination, additional time would be needed to complete 
recalculation of a payment determination (if warranted), and issue the 
revised initial determination to an ACO, or otherwise notify the ACO of 
our decision with respect to their reopening request. Additionally, we 
may also consider that the timing of issuing a revised initial 
determination could impact other program calculations, such as 
benchmark calculations used in determining financial performance for a 
performance year that has not yet been reconciled, specifically in 
connection with calculating or recalculating the prior savings 
adjustment for the ACO (if applicable), or the application of the 
benchmark adjustment described in section III.G.7.c.(2).(d) of this 
final rule. In light of the complexity of these circumstances, and our 
limited experience with ACO reopening requests as of the time of this 
final rule, we believe it would be prudent to gain additional 
experience with the application of these policies, and related 
processes, to inform any potential consideration for development of a 
policy for prioritizing ACO reopening requests.
    After consideration of public comments, we are finalizing our 
proposal, without modification, to establish a process at Sec.  
425.315(b) by which an ACO may request a reopening of an initial 
determination, or a final agency determination under subpart I, of 
shared savings or shared losses. We anticipate providing additional 
information on the reopening request process for ACOs through guidance, 
including the form and manner in which CMS must receive a reopening 
request, among other possible information.
(f) Preventing and Reporting Medicare Fraud
    As we explained in the CY 2025 PFS proposed rule (89 FR 61908 
through 61909), ACOs can help prevent fraud and abuse within the 
Medicare program or in other Federal healthcare programs. Program 
integrity requirements for the Shared Savings Program include the 
requirement under Sec.  425.300 that the ACO must have a compliance 
plan. Among other required elements, an ACO's compliance plan must 
include a method for employees or contractors of the ACO, ACO 
participants, ACO providers/suppliers, and other individuals or 
entities performing functions or services related to ACO activities to 
anonymously report suspected problems related to the ACO to the 
compliance officer (Sec.  425.300(a)(3)). ACOs' compliance plans must 
also include a requirement for the ACO to report probable violations of 
law to an appropriate law enforcement agency (Sec.  425.300(a)(5)). 
(Refer to the November 2011 final rule, 76 FR 67951 and 67952.)
    We reiterate that ACOs are encouraged to report potential fraud or 
abuse to the CMS Center for Program Integrity (CPI) and the HHS-OIG. 
ACOs may submit a complaint to the CMS CPI, Fraud Investigations Group 
(FIG), Division of Provider Investigations (DPI) at 
[email protected]. ACOs can also report potential fraud or abuse 
by submitting a complaint to the HHS-OIG website, https://oig.hhs.gov/fraud/report-fraud/, HHS-OIG hotline at 1-800-HHS-TIPS (1-800-447-
8477), TTY at 1-800-377-4950, by fax at 1-800-223-8164, or by mailing 
to: Office of Inspector General ATTN: OIG HOTLINE OPERATIONS, P.O. Box 
23489, Washington, DC 20026. ACOs suspecting healthcare fraud, waste, 
or abuse are encouraged to visit the CMS CPI's website on Reporting 
Fraud at https://www.cms.gov/medicare/medicaid-coordination/center-program-integrity/reporting-fraud for more information. More generally, 
anyone suspecting healthcare fraud, waste or abuse is encouraged to 
report it to CMS or the HHS-OIG.
    As we explained in the CY 2025 PFS proposed rule (89 FR 61909), in 
the absence of a reopening request submitted by an ACO in the form and 
manner specified by CMS (discussed in section III.G.7.c.(2).(e) of the 
proposed rule), the reporting of potential fraud or abuse to CMS CPI or 
the HHS-OIG does not itself constitute a reopening request under the 
Shared Savings Program.
    We also solicited comments on considerations in connection with 
ACOs' potential role in preventing and reporting Medicare fraud, among 
other proposals and considerations described in section III.G.7.c of 
the CY 2025 PFS proposed rule.
    We received public comments on considerations about ACOs' role in 
preventing and reporting Medicare fraud, in connection with the SAHS 
billing activity proposals. Therefore, we summarize and respond these 
public comments in section III.G.7.d of this final rule.
    In summary, as described in section III.G.7.c of this final rule, 
we are

[[Page 98191]]

finalizing our proposals to modify the Shared Savings Program 
regulations to provide greater specificity on reopening ACO payment 
determinations. We are finalizing our proposal to revise Sec.  
425.315(a)(4) to make clear CMS' discretion to determine whether to 
reopen a payment determination applies in the case of fraud or similar 
fault, as well as to determining whether good cause exists to reopen a 
payment determination. We are finalizing our proposal to add to subpart 
G a new section of the Shared Savings Program regulation at Sec.  
425.674 specifying provisions on accounting for the impact of improper 
payments on Shared Savings Program financial calculations. We are 
finalizing with clarification our proposal to adjust the benchmark to 
account for the impact of improper payments, in the event CMS 
recalculates a payment determination and issues a revised initial 
determination for a performance year in a prior agreement period that 
corresponds to a benchmark year of the ACO's agreement period (emphasis 
added to reflect clarified text). Relatedly, we are finalizing without 
modification our proposed amendments to the regulations at Sec. Sec.  
425.601(a)(9) and 425.652(a)(9) to specify the adjustment to the 
historical benchmark. Lastly, we are finalizing our proposal to 
establish a process at Sec.  425.315(b) by which an ACO may request a 
reopening of an initial determination, or a final agency determination 
under subpart I, of shared savings or shared losses.
d. Mitigating the Impact of Significant, Anomalous, and Highly Suspect 
Billing Activity on Shared Savings Program Financial Calculations in 
Calendar Year 2024 or Subsequent Calendar Years
(1) Background
(a) Statutory Background on Shared Savings Program Financial 
Calculations
    Section 1899 of the Act (42 U.S.C. 1395jjj), as added by section 
3022 of the Patient Protection and Affordable Care Act (Pub. L. 111-
148, enacted March 23, 2010), establishes the general requirements for 
payments to participating ACOs in the Shared Savings Program. 
Specifically, section 1899(d)(1)(A) of the Act provides that providers 
of services and suppliers participating in an ACO will continue to 
receive payment under the original Medicare fee-for-service program 
under Medicare Parts A and B in the same manner as they would otherwise 
be made. However, section 1899(d)(1)(A) of the Act also provides for an 
ACO to receive payment for shared savings provided that the ACO meets 
both the quality performance standards established by the Secretary and 
demonstrates that it has achieved savings against a benchmark of 
expected average per capita Medicare FFS expenditures. Additionally, 
section 1899(i) of the Act authorizes the Secretary to use other 
payment models in place of the one-sided model described in section 
1899(d) of the Act. This provision authorizes the Secretary to select a 
partial capitation model or any other payment model that the Secretary 
determines will improve the quality and efficiency of items and 
services furnished to Medicare beneficiaries without additional program 
expenditures. We have used our authority under section 1899(i)(3) of 
the Act to establish the Shared Savings Program's two-sided payment 
model (see for example, 80 FR 32771 and 32772, and 83 FR 67834 through 
67841) and to mitigate shared losses owed by ACOs affected by extreme 
and uncontrollable circumstances during PY 2017 and subsequent 
performance years (82 FR 60916 and 60917, 83 FR 59974 through 59977), 
among other uses of this authority described elsewhere in this final 
rule.
    Section 1899(d)(1)(B)(i) of the Act specifies that, in each year of 
the agreement period, an ACO is eligible to receive payment for shared 
savings only if the estimated average per capita Medicare expenditures 
under the ACO for Medicare FFS beneficiaries for Parts A and B 
services, adjusted for beneficiary characteristics, is at least the 
percent specified by the Secretary below the applicable benchmark under 
section 1899(d)(1)(B)(ii) of the Act. Section 1899(d)(1)(B)(ii) of the 
Act addresses how ACO benchmarks are to be established and updated 
under the Shared Savings Program. This provision specifies that the 
Secretary shall estimate a benchmark for each agreement period for each 
ACO using the most recent available 3 years of per beneficiary 
expenditures for Parts A and B services for Medicare FFS beneficiaries 
assigned to the ACO. This benchmark shall be adjusted for beneficiary 
characteristics and such other factors as the Secretary determines 
appropriate and updated by the projected absolute amount of growth in 
national per capita expenditures for Parts A and B services under the 
original Medicare FFS program, as estimated by the Secretary.
    In past rulemaking, we have used our authority under sections 
1899(d)(1)(B)(ii) and 1899(i)(3) of the Act to establish adjustments to 
the benchmark and program expenditure calculations, respectively, to 
exclude certain Medicare Parts A and B payments. In the November 2011 
final rule (76 FR 67920 through 67922), we adopted an alternate payment 
methodology that excluded Indirect Medical Education (IME) and 
Disproportionate Share Hospital (DSH) payments from ACO benchmark and 
performance year expenditures due to concerns that the inclusion of 
these amounts would incentivize ACOs to avoid referring patients to the 
types of providers that receive these payments. In the CY 2023 PFS 
final rule (87 FR 69954 through 69956), we excluded new supplemental 
payments to Indian Health Service/Tribal hospitals and hospitals 
located in Puerto Rico consistent with our longstanding policy to 
exclude IME, DSH and uncompensated care payments from ACOs' assigned 
and assignable beneficiary expenditure calculations. In the May 8, 2020 
COVID-19 IFC (85 FR 27577 through 27582), we established a methodology 
to adjust Shared Savings Program financial calculations to account for 
the PHE for COVID-19. Specifically, we established a methodology that 
would exclude all Medicare Parts A and B FFS payment amounts for a 
beneficiary's episode of care for treatment of COVID-19 to prevent 
distortion to, among other calculations, an ACO's benchmark and program 
expenditure calculations.
(b) Background on Significant, Anomalous, and Highly Suspect Billing 
Activity
    Recently, ACOs and other interested parties have raised concerns 
about an increase in billing to Medicare for selected intermittent 
urinary catheter supplies on Durable Medical Equipment, Prosthetics, 
Orthotics & Supplies (DMEPOS) claims in CY 2023, alleging that the 
increase in payments represents fraudulent activity (the ``alleged 
conduct''). The observed DMEPOS billing volume for intermittent urinary 
catheters in CY 2023 represents significant, anomalous, and highly 
suspect (SAHS) billing activity.\600\
---------------------------------------------------------------------------

    \600\ SAHS billing activity may appear in claims for items and 
services rendered to beneficiaries assigned to an ACO as well as for 
beneficiaries who are not assigned to an ACO. Such activity may be 
caused by providers and suppliers who participate in an ACO and who 
do not participate in an ACO. This discussion is primarily focused 
on SAHS billing activity performed by providers and suppliers that 
do not participate in ACOs billing items and services for 
beneficiaries who are assigned to ACOs or who are in the assignable 
population used in national and regional factors used in Shared 
Savings Program calculations.
---------------------------------------------------------------------------

    Generally, a level of billing for a given HCPCS or CPT code is 
considered SAHS billing activity when a given HCPCS or

[[Page 98192]]

CPT code exhibits a level of billing that represents a significant 
claims increase either in the volume or dollars (for example, dollar 
volume significantly above prior year, or claims volume beyond 
expectations) with national or regional impact (for example, not only 
impacting one or few ACOs) and represents a deviation from historical 
utilization trends that is unexpected and is not clearly attributable 
to reasonably explained changes in policy or the supply or demand for 
covered items or services. The billing level is significant and 
represents billing activity that would cause significantly inaccurate 
and inequitable payments and repayment obligations in the Shared 
Savings Program if not addressed.
    In a separate proposed rule entitled ``Medicare Program: Mitigating 
the Impact of Significant, Anomalous, and Highly Suspect Billing 
Activity on Medicare Shared Savings Program Financial Calculations in 
Calendar Year 2023'' (89 FR 55168, July 3, 2024) (referred to herein as 
the ``SAHS billing activity proposed rule''), we proposed an approach 
to address the SAHS billing activity identified by CMS for CY 2023 to 
protect the accuracy, fairness, and integrity of Shared Savings Program 
financial calculations. Specifically, we proposed to exclude payment 
amounts for two HCPCS codes (A4352 (Intermittent urinary catheter; 
Coude (curved) tip, with or without coating (Teflon, silicone, silicone 
elastomeric, or hydrophilic, etc.), each) and A4353 (Intermittent 
urinary catheter, with insertion supplies)) on DMEPOS claims submitted 
by any supplier from expenditure and revenue calculations used for: 
assessing performance year (PY) 2023 financial performance of Shared 
Savings Program ACOs, establishing benchmarks for ACOs starting 
agreement periods in 2024, 2025, and 2026, and calculating factors used 
to determine revenue status and repayment mechanism amounts in the 
application and change request cycle for ACOs applying to enter a new 
agreement period beginning on January 1, 2025, or continue their 
participation in the program in PY 2025, respectively. After the 
comment period closed for the CY 2025 PFS proposed rule, we finalized 
the proposals without modification in the SAHS billing activity final 
rule (89 FR 79152, September 27, 2024).
    Current Shared Savings Program regulations, codified at 42 CFR part 
425, do not provide a basis for CMS to adjust program expenditure or 
revenue calculations to remove the impact of SAHS billing activity 
occurring in CY 2024 or in subsequent calendar years in advance of 
issuing an initial determination. As discussed in section III.G.7.c of 
this final rule, CMS may reopen an initial determination or a final 
agency determination and issue a revised initial determination at any 
time in the case of fraud or similar fault, and not later than 4 years 
after the date of the notification to the ACO of the initial 
determination of savings or losses for the relevant performance year 
for good cause (Sec.  425.315). This does not allow for CMS to address 
SAHS billing activity occurring in CY 2024 or in subsequent calendar 
years, which must be addressed prior to conducting financial 
reconciliation, which is an initial determination, to prevent 
significant inequity and inaccurate payment determinations.
    In the CY 2025 PFS proposed rule (89 FR 61909 through 61916), we 
proposed a policy that would proactively make adjustments to Shared 
Savings Program calculations should new SAHS billing activity be 
identified in CY 2024 or in subsequent calendar years. We explained 
that we are concerned that such SAHS billing activity, should it occur 
in CY 2024 or later, would inflate Medicare Parts A and B payment 
amounts and affect Shared Savings Program calculations, including:
     Performance year reconciliation calculations, including 
expenditures for each ACO's assigned beneficiaries for the calendar 
year that has SAHS billing activity, the national-regional blended 
update factor used to update the benchmark for ACOs beginning an 
agreement period before January 1, 2024 (refer to Sec.  425.601(b)), 
the three-way blended update factor used to update the benchmark for 
ACOs beginning an agreement period on January 1, 2024 and in subsequent 
years (refer to Sec.  425.652(b)), and factors based on ACO participant 
revenue to determine the loss recoupment limits for ACOs participating 
under two-sided models of the BASIC track (Levels C, D, E) (refer to 
Sec.  425.605(d)).
     Historical benchmark calculations for establishing the 
benchmark for ACOs beginning new agreement periods on January 1, 2025, 
or in subsequent years with a benchmark year that has SAHS billing 
activity (refer to Sec.  425.652(a)).
     Factors used in the application cycle for ACOs applying to 
enter a new agreement period beginning 2 years after the SAHS billing 
activity occurred, and the change request cycle for ACOs continuing 
their participation in the program, including data used to determine an 
ACO's eligibility for Advance Investment Payments under Sec.  
425.630(b) or for the CMS Innovation Center's new ACO Primary Care Flex 
Model (ACO PC Flex Model) based on ACO revenue status (high revenue or 
low revenue), and to determine repayment mechanism amounts for ACOs 
entering, or continuing in, two-sided models (refer to Sec.  
425.204(f)).
    The accuracy of the Shared Savings Program's determination of an 
ACO's financial performance (through a process referred to as financial 
reconciliation) in terms of the ACO's eligibility for and amount of a 
shared savings payment or liability for shared losses, depends on the 
accuracy of claims data. Absent CMS action, SAHS billing activity would 
affect performance year financial reconciliation program-wide rather 
than being limited to ACOs that have assigned beneficiaries directly 
impacted by the issue. For instance:
     An ACO with assigned beneficiaries impacted by the SAHS 
billing activity will see an increase in performance year expenditures, 
reducing the ACO's shared savings or increasing the amount of shared 
losses owed by the ACO. The impact on the ACO's performance may be 
partially mitigated if the SAHS billing activity also increases the 
ACO's regional service area expenditures and the national expenditures 
used to calculate the two-way national-regional blended benchmark 
update factor.
     An ACO with assigned beneficiary expenditures and regional 
service area expenditures with little or no impact from the SAHS 
billing activity will receive a relatively higher benchmark update 
under the national-regional blended update factors used in performance 
year reconciliation, and therefore, may appear to perform better as a 
result of the national impact of the SAHS billing activity, resulting 
in higher earned performance payments or lower or no losses for the 
ACO.
    Unaddressed, SAHS billing activity in a given calendar year can 
distort the historical benchmarks for an ACO in an agreement period 
that have the calendar year as a benchmark year and the accuracy of any 
future financial reconciliation performed against those benchmarks. 
Similarly, inaccurate revenue and expenditure calculations based on 
data from a calendar year affected by SAHS billing activity may affect 
an ACO's revenue status and the amount of funds an ACO in a two-sided 
model must secure as a repayment mechanism, one of the program's 
important safeguards for protecting the Medicare Trust Funds. Absent 
CMS action, SAHS billing activity likely would significantly impact 
shared savings and losses calculations for the performance year 
affected by SAHS billing activity, and for future

[[Page 98193]]

performance years that have benchmark years affected by SAHS billing 
activity. Under these circumstances, some ACOs would likely experience 
adverse impacts (for example, lower or no shared savings or higher 
shared losses) while other ACOs would experience windfall gains (for 
example, higher shared savings or lower or no shared losses).
    Failing to address SAHS billing activity will jeopardize the 
integrity of the Shared Savings Program. There are 480 ACOs in the 
Shared Savings Program with over 608,000 healthcare providers who care 
for 10.8 million assigned FFS beneficiaries.\601\ In PY 2022, the most 
recent year for which data is available, savings achieved by ACOs 
relative to benchmarks amounted to $4.3 billion, of which ACOs received 
shared savings payments totaling $2.5 billion, and Medicare retained 
$1.8 billion in savings.\602\ ACOs are held accountable for 100 percent 
of total Medicare Parts A and B expenditures for their assigned 
beneficiary populations (with limited exceptions). This incentivizes 
ACOs to generate savings for the Medicare program as they have the 
opportunity to share in those savings if certain requirements are met. 
It also discourages the ACO from generating unnecessary expenditures 
for Medicare as they may be required to repay those amounts to CMS. 
Accountable care arrangements such as this cannot function if the ACO 
may be held responsible for all SAHS billing activity that is outside 
of their control. Holding an ACO accountable for substantial losses due 
to SAHS billing activity is not only inequitable but will dramatically 
increase the level of risk associated with participation, making the 
Shared Savings Program unattractive.
---------------------------------------------------------------------------

    \601\ Refer to CMS, Shared Savings Program Fast Facts--As of 
January 1, 2024, available at https://www.cms.gov/files/document/2024-shared-savings-program-fast-facts.pdf.
    \602\ Refer to CMS, Shared Savings Program Performance Year 
Financial and Quality Results, 2022, available at https://data.cms.gov/medicare-shared-savings-program/performance-year-financial-and-quality-results/data.
---------------------------------------------------------------------------

    The following is a summary of general comments we received on our 
discussion and proposals regarding mitigating the impact of SAHS 
billing activity on Shared Savings Program calculations should new SAHS 
billing activity be identified in CY 2024 or in subsequent calendar 
years.
    Comment: Most commenters expressed broad support--or general 
support with additional recommendations--for the proposal to establish 
a policy that would allow CMS to proactively make adjustments to Shared 
Savings Program calculations should new SAHS billing activity be 
identified in CY 2024 or in subsequent calendar years. Many commenters 
characterized the combination of the SAHS billing activity proposed 
rule and the proposal for CY 2024 and subsequent years as an approach 
that holds ACOs ``harmless'' for fraudulent billing activity, as 
``fair'' because the approach protects ACOs against SAHS billing 
activity outside of their control, or as a ``comprehensive approach''. 
One commenter agreed that it is appropriate and necessary for CMS to 
have the authority to mitigate the impact of SAHS billing activity on 
Shared Savings Program calculations. Many commenters commended CMS for 
taking action through the SAHS billing activity proposed rule and 
through this proposal to address concerns raised by ACOs and other 
interested parties about the impact of SAHS billing activity, and a few 
also characterized CMS's attention to the matter as prompt, responsive 
to concerns, or aligned with stakeholder recommendations. One commenter 
characterized the proposal as setting a standard policy for addressing 
SAHS billing activity.
    Supportive commenters offered a variety of reasons why they 
supported the proposal. Many commenters agreed that the proposal will 
strengthen program or financial integrity, accuracy of calculations, 
sustainability of ACO business models, or effectiveness of the Shared 
Savings Program. Several commenters agreed that unaddressed, SAHS 
billing activity can impact ACOs' shared savings and losses and other 
financial calculations. A few commenters stated that the proposal would 
benefit ACOs, with a couple also stating that it will benefit 
beneficiaries or providers and suppliers. A couple commenters stated 
that their ACOs have been highly affected by SAHS billing activity in 
PY 2023 and PY 2024 and that keeping the codes in shared savings and 
losses calculations for those performance years would erase all the 
work they have done to generate savings.
    Response: We thank commenters for their support for CMS's actions 
to undertake notice and comment rulemaking to establish a policy that 
would allow CMS to proactively make adjustments to Shared Savings 
Program calculations should SAHS billing activity be identified in CY 
2024 or in subsequent calendar years. We agree with the commenters who 
stated that mitigating the impact of SAHS billing activity is important 
for promoting continued integrity and improving the accuracy of Shared 
Savings Program financial calculations.
    Comment: Commenters addressed the role that ACOs play in the 
identification of SAHS billing activity or fraud, waste, and abuse in 
Medicare and the process by which ACOs report suspected fraud. A few 
commenters stated their belief that ACOs are well positioned to detect 
anomalous billing or uncover potential fraud, waste and abuse given 
their ongoing and in-depth analysis of claims and utilization data, 
with one noting that the HHS-OIG recommended that CMS prioritize 
referrals from ACOs. Some commenters urged CMS to work with ACOs to 
improve the process for reporting suspected fraud. A few commenters 
suggested that ACO referrals be given priority by CMS or be handled 
through an expedited process.
    Several commenters requested that CMS and the HHS-OIG provide more 
transparency to ACOs into investigations of potential fraud and abuse. 
Several commenters requested CMS better educate ACOs on the processes 
that CMS and the HHS-OIG undertake to investigate fraud. Multiple 
commenters requested a ``feedback loop'' after the ACO notifies CMS and 
the HHS-OIG of suspected fraud, with several stating that ACOs need 
information to inform their patient communications and make decisions 
about future participation given fraud investigations can take years to 
resolve. These commenters requested that CMS explore additional ways to 
notify ACOs of actions being taken; for example, commenters suggested 
CMS could provide information in claim and claim line feeds to indicate 
when CMS is ``placing some claims into escrow''.
    Response: We agree that ACOs are well positioned to support 
monitoring efforts that will improve the integrity of the Medicare 
program including value-based payment systems. ACOs have tools that may 
be used to detect unusual or suspect billing areas or activity among 
their assigned beneficiary population through data and reports provided 
by CMS and through their own data systems and care coordination and 
quality improvement activities. ACOs are encouraged to report potential 
fraud or abuse by submitting a complaint to the CMS Center for Program 
Integrity (CPI), Fraud Investigations Group (FIG), Division of Provider 
Investigations (DPI) at [email protected]. ACOs can also report 
potential fraud or abuse by submitting a complaint to the HHS-OIG 
website, https://oig.hhs.gov/fraud/report-fraud/, HHS-OIG hotline at 1-
800-HHS-TIPS (1-800-447-8477), TTY at 1-800-377-4950, by fax at 1-800-
223-8164, or by mailing to: Office of

[[Page 98194]]

Inspector General ATTN: OIG HOTLINE OPERATIONS, P.O. Box 23489, 
Washington, DC 20026. ACOs suspecting healthcare fraud, waste, or abuse 
are encouraged to visit the CMS CPI website on Reporting Fraud at 
https://www.cms.gov/medicare/medicaid-coordination/center-program-integrity/reporting-fraud for more information. We will continue to 
work with our program integrity colleagues on ways to improve ACO 
reporting of potential fraud or abuse.
    Further, in response to commenters suggesting that ACO referrals be 
given priority by CMS or be handled through an expedited process we 
note that, in investigating leads that are vetted and approved by CMS 
to be opened as an investigation, the Unified Program Integrity 
Contractors (UPICs) focus investigations in an effort to establish the 
facts and the magnitude of the alleged fraud, waste, or abuse and take 
any appropriate action to protect Medicare Trust Fund dollars, unless 
otherwise specified by CMS. The UPICs ensure that all investigations 
originating from an ACO referral or involving ACOs, ACO participants or 
ACO providers/suppliers are provided a heightened level of priority and 
are promptly reviewed and investigated to ensure the appropriate 
administrative or other action(s) are taken in an expeditious 
manner.\603\
---------------------------------------------------------------------------

    \603\ For additional information on how CMS conducts 
investigations of potential fraud, waste, or abuse, see, for 
example, Medicare Program Integrity Manual, Chapter 4--Program 
Integrity, available at https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/pim83c04.pdf.
---------------------------------------------------------------------------

    Comment: Some commenters addressed fraud prevention and mitigation 
actions in the Medicare program more broadly. One commenter urged CMS 
to develop clear, objective standards for identifying and refunding 
suspect claims, opining that current rules allow for subjectivity and 
inconsistent application and create operational challenges for ACOs and 
undermines ACOs' ability to provide comprehensive care. Another 
commenter recommended that, rather than removing specific HCPCS codes, 
CMS should ``focus on removing the bad actors'' who, if not restricted 
from billing Medicare, could simply target a new code.
    Response: CMS continues to adapt its monitoring, investigative 
targeting, and data analytics programs to prevent future fraud, waste, 
and abuse. CMS also continues to work closely with the HHS-OIG and 
Department of Justice, as well as our UPICs, to investigate healthcare 
fraud activities that exploit the Medicare program.
    This provision establishes a policy to mitigate the impact of SAHS 
billing activity in CY 2024 or in subsequent calendar years on Shared 
Savings Program calculations. We clarify that neither this provision 
nor the reopening policy provision described in section III.G.7.c. of 
this final rule, changes rules or processes for CMS or the HHS-OIG to 
investigate and resolve potential fraud, waste and abuse within the 
broader Medicare program.
(2) Revisions
    In the CY 2025 PFS proposed rule (89 FR 61911), we explained that 
it is important to establish a policy that would allow CMS to 
proactively make similar adjustments for future calendar years, should 
new SAHS billing activity be identified. In general, we anticipated 
that billing activity that meets the high bar to be considered 
significant, anomalous, and highly suspect billing activity will be a 
rare occurrence. This is evidenced by the program's history. The SAHS 
billing activity surrounding selected catheter codes in 2023 is the 
first occasion we have had in the program's 12-year history to consider 
this issue. We proposed that we would notify ACOs and ACO applicants of 
our determinations to remove any codes and the aggregate per capita 
dollar amount of the codes removed as part of the annual financial 
reconciliation process. While we anticipate future occurrences of the 
scope and magnitude observed for urinary catheters in CY 2023 to be 
rare, having a permanent policy in place would:
     Allow CMS to move quickly to make adjustments to financial 
calculations without having to engage in additional rulemaking, 
ensuring timely issuance of initial determinations of savings and 
losses and disbursement of earned performance payments;
     Provide ACOs with greater certainty that they will not be 
held accountable for SAHS billing activity that is out of their 
control, promote integrity and fairness and ensure accuracy of program 
calculations;
     Limit requests to reopen initial determinations, thus 
reducing burden for ACOs and CMS.
    In this final rule, we are finalizing an approach by which we will 
adjust Shared Savings Program calculations to mitigate the impacts of 
SAHS billing activity occurring in CY 2024 or subsequent calendar 
years.
(a) Identifying Significant, Anomalous, and Highly Suspect Billing 
Activity
    In section III.G.7.d.(2).(a) of the CY 2025 PFS proposed rule (89 
FR 61911 through 61912) we proposed that CMS would have the sole 
discretion to identify cases of SAHS billing activity for a particular 
calendar year that would warrant the adjustment of Shared Savings 
Program financial calculations. We explained that we anticipate 
routinely examining billing trends identified by CMS and other relevant 
information that had been raised through complaints by ACOs or other 
interested parties to the HHS-OIG or to CMS. We would seek to identify 
and monitor any codes that would potentially trigger the adjustment 
policy by meeting the high bar for removal under the criteria used to 
determine SAHS billing activity. Shortly after the start of a calendar 
year CMS would make a final determination as to which codes, if any, 
warrant adjustments for the previous calendar year. For example, in 
early CY 2026 CMS would make a final determination of whether any codes 
met the high bar for removal under the criteria used to determine SAHS 
billing activity in CY 2025, allowing time for the adjustments to be 
incorporated in forthcoming calculations.
    We explained that CMS must retain sole discretion to identify cases 
of SAHS billing activity because we cannot anticipate what SAHS billing 
activity we may encounter in the future that may warrant adjustments to 
the program's financial calculations. We also stated our concern about 
balancing adjustments for billing activity that rises to the level of 
SAHS versus removing payment amounts associated with billing activity 
due to inefficiencies that are within the ACO's control. We explained 
that depending on the frequency of the use of this authority and the 
occurrence of SAHS billing activity, and thus the experience we develop 
in this area, we would consider proposing to codify criteria to 
identify SAHS billing activity in the future through additional 
rulemaking. We stated that nonetheless, CMS should retain sole 
discretion to determine whether SAHS billing activity occurred on a 
case-by-case basis at this time.
    We explained that we anticipate considering multiple criteria in 
determining whether SAHS billing activity warrants removal of the 
corresponding billing codes from Shared Savings Program financial 
calculations. These criteria include:
     The observed increase in claims for a HCPCS or CPT code 
year-to-year meets the definition of SAHS billing activity, as defined 
elsewhere in this section of this final rule;
     The observed billing activity has national or regional 
impact or significance, such as:

[[Page 98195]]

    ++ Involves a Medicare provider or supplier, a beneficiary 
population and/or States with claims activity that that significantly 
impacts national or regional expenditure values or trends;
    ++ Warrants adjustment (all or partial) to national Medicare 
expenditure trend calculations used in payment (for example, United 
States Per Capita Cost) and/or Federal budget forecast calculations;
    ++ Warrants removal from national and regional growth rates used to 
update ACO historical benchmarks;
     If no action is taken there would be an imbalance between 
ACO performance year and historical benchmark year expenditures;
     Use of payment amounts associated with the SAHS billing 
activity could result in payment inaccuracies that produce 
significantly inaccurate and inequitable payment determinations in the 
Shared Savings Program (including the amount of shared savings or 
shared losses), due to factors beyond the control of ACOs; and
     The claims in question may be disproportionately 
represented by Medicare providers or suppliers whose Medicare 
enrollment status has been revoked.
    Further, we explained that we anticipate utilizing this authority 
only in rare and extreme cases where a number of the criteria are 
satisfied. We specified that we would consider the extent to which the 
billing activity meets each criterion when developing a holistic 
assessment of the billing activity's impact on the Shared Savings 
Program.
    The extent of the geographic impact of the SAHS billing activity in 
question is relevant given that the proposed policy would entail 
adjustments program-wide. One consideration for determining whether the 
billing activity has national or regional significance would be if the 
pattern warrants an adjustment to or special assumption for calculating 
official Medicare expenditure trends (such as the United States Per 
Capita Cost (USPCC) or Federal budget forecasts) due to the activity's 
significant, anomalous, and highly suspect nature. For example, the 
2024 Medicare Trustees Report noted a significant increase in suspected 
fraudulent spending on certain intermittent catheters in 2023.\604\ The 
DME projections in the report include the assumption that this 
suspected fraud will be addressed during 2024.\605\ Billing activity in 
the Medicare FFS program at a scale warranting a special assumption for 
calculating the USPCC or Federal budget forecasts has per se national 
or regional significance, and thus would likely rise to the high bar of 
warranting adjustment to Shared Savings Program expenditure and revenue 
calculations.
---------------------------------------------------------------------------

    \604\ The Boards of Trustees, Federal Hospital Insurance and 
Federal Supplementary Medical Insurance Trust Funds, ``2024 Annual 
Report of the Boards of Trustees of the Federal Hospital Insurance 
and Federal Supplementary Medical Insurance Trust Funds'', p. 136, 
available at https://www.cms.gov/oact/tr/2024.
    \605\ Ibid.
---------------------------------------------------------------------------

    We would seek to assess whether the billing activity creates an 
imbalance between ACO performance year and historical benchmark year 
expenditures. This assessment could involve considering whether the 
increase in billing activity was at such scale that it causes the 
difference between performance year and benchmark year expenditures for 
an ACO's assigned beneficiary population for the claim type affected by 
the billing activity (for example, DMEPOS) to be substantially larger 
than differences for other claim types.
    We stated that we would also consider whether the billing activity, 
and any inaccurate or inequitable payment determinations that could 
result from using the related payment amounts, was outside of Shared 
Savings Program ACOs' ability to reasonably control. Most commonly, 
this would entail examining whether the Medicare providers or suppliers 
billing the codes in question are ACO providers or suppliers. 
Generally, we explained that we would be more likely to apply the 
proposed policy if the SAHS billing activity were outside of the ACO's 
control as the program may otherwise lack a means to control the growth 
of such amounts.
    Finally, we stated that we would consider whether billing activity 
was disproportionately represented by Medicare providers or suppliers 
whose Medicare enrollment status has been revoked. Such a circumstance 
would provide further evidence that the billing activity surrounding 
these codes was highly suspect. We solicited comment on the processes 
and criteria described.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters addressed the proposed approach for identifying 
cases of SAHS billing activity for a particular calendar year. One 
commenter supported the proposal to identify cases in time to make 
adjustments to forthcoming calculations prior to issuance of initial 
determinations of shared savings and losses. A couple commenters 
requested that CMS determine whether certain billing activity meets the 
definition of SAHS billing activity on an ad hoc basis. Similarly, 
other commenters urged CMS to maintain flexibility to notify ACOs more 
frequently than on the proposed annual basis after the end of a 
performance year if billing activity on any codes is determined to be 
SAHS billing activity. A few of these commenters stated that SAHS 
billing activity for intermittent urinary catheters persisted into the 
first quarter of 2024, and therefore, reasoned that if CMS is already 
planning to make adjustments for this billing during CY 2024 that CMS 
should notify ACOs sooner than spring 2025. Another commenter generally 
supported the concept of mitigating the impact of SAHS billing activity 
on Shared Savings Program calculations, but suggested that CMS remove 
payment amounts for suspect billing activity as soon as a provider 
submitting claims related to the billing activity is under indictment 
or investigation by the HHS-OIG. This commenter reasoned that while the 
reopening policy is a mechanism for removing fraud and abuse from 
shared savings and losses calculations, the extended periods of time 
ACOs must wait for resolution negatively impacts ACOs that rely on 
shared savings payments to operate.
    Response: We decline to adopt an approach that would require CMS to 
make a SAHS billing activity determination and notify ACOs of the 
determination prior to the end of a performance year or to take action 
to remove payment amounts earlier than this timeframe. To meet the 
definition of SAHS billing activity we are establishing in this final 
rule, a given HCPCS or CPT code must exhibit a level of billing that 
represents a significant claims increase either in the volume or 
dollars (for example, dollar volume significantly above prior year, or 
claims volume beyond expectations) with national or regional impact 
(for example, not only impacting one or few ACOs) and represents a 
deviation from historical utilization trends that is unexpected and is 
not clearly attributable to reasonably explained changes in policy or 
the supply or demand for covered items or services. The billing level 
is significant and represents billing activity that would cause 
significantly inaccurate and inequitable payments and repayment 
obligations in the Shared Savings Program if not addressed. In making 
the determination that billing activity on a certain code during the 
calendar year

[[Page 98196]]

represents SAHS billing activity that warrants adjustment, we 
anticipate that it will be necessary to consider the total level of 
billing in a calendar year compared to the total level of billing from 
prior years and therefore and that we would make this determination 
once we know all of the spending that has occurred for that code during 
the calendar year.
    The policy to make adjustments to Shared Savings Program 
calculations to mitigate the impact of SAHS billing activity in CY 2024 
and in subsequent calendar years is intended as a policy to be invoked 
in rare and extreme cases when CMS identifies a code that meets the 
high bar to be defined as SAHS billing activity as finalized in this 
final rule. We narrowly crafted the definition of SAHS billing activity 
in fairness to ACOs and to balance the goals of the Shared Savings 
Program to better coordinate care and improve quality, while not 
holding ACOs accountable for activity that is beyond their control. 
These high standards are appropriate because the remedy we are using to 
correct for SAHS billing activity is the broad exclusion of the 
relevant CPT or HCPCS code from certain important financial 
calculations, and this could have mixed impact on Shared Savings 
Program ACOs. Both under this rule and in the SAHS billing activity 
standalone rule, we are mindful of equitable concerns that may arise 
from CMS making adjustments to calculations of the ACO's historical 
benchmark or to performance year expenditures after the conclusion of a 
performance year.
    We agree with the commenter that noted that the reopening policy is 
an appropriate channel for removing improper payments from an ACO's 
shared savings and losses calculations; see section III.G.7.c. of this 
final rule for more details on this policy.
    Comment: Some commenters recommended codes for consideration as 
SAHS billing activity in CY 2023. Specifically, commenters suggested 
that CMS consider whether codes for skin substitutes, collagen 
dressings, laboratory services, telemedicine, ventilators, and diabetic 
supplies warrant adjustment to Shared Savings Program calculations, 
echoing some related suggestions made in response to the SAHS billing 
activity proposed rule.
    Response: With respect to billing activity on other codes in CY 
2023, we note that this is outside the scope of this final rule. We 
refer readers to the SAHS billing activity final rule (89 FR 79157 
through 79158) for our responses to public comments related to these 
other codes for CY 2023. We remain committed to evaluating cases when 
improper payments may have been made and assessing the impact on Shared 
Savings Program calculations. The reopening policy we are finalizing in 
this final rule can potentially provide relief to ACOs that are 
affected by specific instances of fraud or other improper payments that 
may not be SAHS billing activity or for which there is not enough 
information available at the close of the affected calendar year to 
make a determination of whether SAHS billing activity occurred. Under 
this policy, CMS may consider in its discretion whether to reopen the 
completed financial reconciliation results for fraud or similar fault 
or good cause, as specified under Sec.  425.315(a). As discussed in 
section III.G.7.c of this final rule, we may conduct a reopening to 
account for the impact of improper payments, at the request of an ACO, 
after an initial determination has been issued.
    Comment: A couple commenters recommended codes for consideration as 
SAHS billing activity in CY 2024. Specifically, commenters identified 
skin substitutes and the intermittent catheter codes as displaying SAHS 
billing activity in CY 2024.
    Response: We appreciate commenters notifying us of their concerns 
over billing activity in CY 2024 for certain services. We will take 
this information into consideration when making a final determination 
of which codes, if any, displayed SAHS billing activity in CY 2024. We 
will make this determination shortly after the start of 2025.
    Comment: Many commenters requested transparency into the process of 
CMS's determination whether codes meet the definition of SAHS billing 
activity, with most also requesting that ACOs receive written feedback 
on their requests that certain codes be considered SAHS billing 
activity including an explanation from CMS as to why the situation does 
or does not meet the SAHS criteria.
    Response: As we explained elsewhere in this section, we will 
routinely examine billing trends identified by CMS and other relevant 
information that had been raised through complaints by ACOs or other 
interested parties to the HHS-OIG or to CMS. For instance, ACOs may 
alert the HHS-OIG or CMS when they suspect a code is displaying SAHS 
billing activity. Shortly after the start of a calendar year CMS will 
make a final determination as to which codes, if any, warrant 
adjustments for the previous calendar year. With respect to commenters 
urging the need for CMS to provide ACOs with written responses to ACO 
requests for certain codes to be considered SAHS billing activity, we 
note that in the rare case when CMS will determine that SAHS billing 
activity occurred in the previous calendar year, CMS will notify all 
program participants of this finding including the codes removed and 
the per capita expenditure amount for their assigned beneficiary 
population.
    Comment: Commenters also addressed the criteria, described 
elsewhere in this final rule, to determine whether SAHS billing 
activity warrants removal of the corresponding billing codes from 
Shared Savings Program financial calculations. One commenter, while 
urging transparency into the determination process, stated that the 
requirements for initiating SAHS policies are reasonable and allow the 
agency to adjust to evolving and unpredictable requirements. A few 
commenters requested CMS provide more clarity on the criteria, with one 
requesting that CMS codify the criteria for identifying SAHS billing 
activity to ensure ACOs clearly understand when billing activity meets 
the ``threshold'' and another requesting CMS further define what is 
``significant.'' Another commenter suggested CMS develop a threshold 
(such as two standard deviations from the mean) for individual billing 
codes such that any codes surpassing the threshold would automatically 
trigger adjustments.
    A few commenters urged CMS to expand the criteria such that SAHS 
billing activity occurring on a more regional or local level can be 
considered SAHS billing activity that warrants adjustment. One of these 
commenters offered an expanded definition for SAHS billing activity 
specific to DMEPOS claims which would consider whether a DMEPOS code 
had a significant volume increase in billing for a particular ACO that 
was not supported by a referral from a treating provider or by a 
corresponding office visit. Additionally, the commenter requested that 
CMS remove from an ACO's own financial calculations any claims for 
which CMS payment is paid into escrow or a holding account while under 
investigation, any claims submitted by a provider under indictment or 
investigation by a Federal agency, and any claims for billing codes 
previously deemed SAHS in prior years. Another commenter suggested that 
CMS consider provider-level billing activity rather than code-level 
billing activity in identifying SAHS billing activity.
    Response: We appreciate the support of the commenter who stated 
that the requirements for initiating SAHS policies are reasonable. We 
agree that the criteria allow the agency to adjust to

[[Page 98197]]

evolving and unpredictable requirements.
    We decline to specify more specific and narrower criteria or a 
threshold that would automatically trigger the SAHS billing activity. 
The flexible definition of SAHS billing activity that we are adopting 
allows CMS to determine whether SAHS billing activity occurred on a 
case-by-case basis allowing us to develop experience in this area 
before further refining or codifying additional criteria. We also 
decline to codify a specific set of criteria for DMEPOS claims since 
the criteria we are establishing allow us to address SAHS billing 
activity related to DMEPOS.\606\
---------------------------------------------------------------------------

    \606\ See, for example, the SAHS billing activity final rule, 
which removed payment amounts for HCPCS codes A4352 and A4353 on 
DMEPOS claims from Shared Savings Program financial calculations 
from CY 2023 with a determination made under substantially the same 
definition of SAHS billing activity we are now adopting.
---------------------------------------------------------------------------

    As we explain elsewhere in this section, we anticipate considering 
multiple criteria when making a determination of SAHS billing activity, 
including whether the observed billing activity has national or 
regional impact or significance. The extent of the geographic impact of 
the SAHS billing activity in question is relevant given that the policy 
we are finalizing in this final rule would entail program-wide 
adjustments. For this reason, we would not utilize this authority when 
billing activity did not have national or regional significance. The 
current set of criteria do not preclude CMS from determining a 
particular code for a particular year exhibits SAHS billing activity if 
the highly suspect billing activity is concentrated at one or a few 
providers. Indeed, the SAHS billing activity for intermittent urinary 
catheters was driven by a relatively small number of suppliers 
submitting a large majority of all claims for these 
devices.607 608
---------------------------------------------------------------------------

    \607\ See the discussion in the SAHS billing activity final rule 
(89 FR 79156).
    \608\ As noted in the SAHS billing activity final rule (89 FR 
79154), using our authority to suspend payments, CMS quickly stopped 
payment on almost all of these claims and began investigating the 
suppliers who were billing. Since then, the top 15 billers of 
suspicious catheter claims have had their Medicare enrollment 
revoked. We also described additional actions taken by CMS to 
prevent fraud, waste and abuse in the rule and in a case study, 
``Urinary Catheter Case Study: CMS' Swift Action Saves Billions,'' 
available at https://www.cms.gov/files/document/cpi-urinary-catheter-case-study.pdf.
---------------------------------------------------------------------------

    After consideration of public comments, we are finalizing our 
proposal that CMS have the sole discretion to identify cases of SAHS 
billing activity for a particular calendar year that would warrant the 
adjustment of Shared Savings Program financial calculations. We 
anticipate that shortly after the start of a calendar year CMS would 
make a final determination as to which codes, if any, warrant 
adjustments for the previous calendar year. We will consider multiple 
criteria in determining whether SAHS billing activity warrants removal 
of the corresponding billing codes from Shared Savings Program 
financial calculations.
(b) Adjustments to Shared Savings Program Calculations
    In section III.G.7.d.(2).(b) of the CY 2025 PFS proposed rule (89 
FR 61912 through 61916), we indicated that in the event that CMS 
identifies one or more HCPCS or CPT codes with SAHS billing activity in 
CY 2024 or a subsequent calendar year that warrant adjustment, we 
proposed to exclude all Medicare Parts A and B payment amounts 
associated with the identified codes on specified claim types submitted 
by any provider or supplier from expenditure and revenue calculations 
for the relevant calendar year for which the SAHS billing activity is 
identified. For example, if CMS identifies one or more codes with SAHS 
billing activity in CY 2025 that warrant adjustment, we would exclude 
payments for those codes for both calculations where CY 2025 is the 
performance year and in calculations where CY 2025 is a benchmark year 
for ACOs in agreement periods beginning in 2026, 2027, and 2028.
    We proposed that we would also adjust the 3 most recent years prior 
to the start of the ACO's agreement period used in establishing the 
historical benchmark that is used to reconcile the ACO for a 
performance year corresponding to the calendar year for which the SAHS 
billing activity was identified. In the example where CMS identified 
SAHS billing activity for 2025, we would adjust benchmark expenditures 
(ACO, national, and regional) for 2019, 2020, and 2021, for an ACO that 
began an agreement period in 2022 (for which PY 2025 is the fourth 
performance year in its agreement period) and would adjust benchmark 
expenditures (ACO, national, and regional) for 2022, 2023, and 2024 for 
an ACO that began its agreement period in 2025 (for which PY 2025 is 
the first performance year in its agreement period). We noted that in 
computing benchmark expenditures for 2023 for this second ACO, because 
2023 is a benchmark year, we would also exclude payments for the 
catheter claims with SAHS billing activity in 2023, as proposed in the 
SAHS billing activity proposed rule, if finalized.
    We explained that our proposal to adjust an ACO's historical 
benchmark to exclude Medicare Parts A and B FFS payment amounts 
associated with the HCPCS or CPT codes displaying SAHS billing activity 
during a performance year would achieve greater consistency between the 
benchmark period and the performance year, given that we are excluding 
all payments on specified claim types for the selected codes from 
performance year calculations, including payments that would have been 
made in the absence of any SAHS billing activity. This helps to ensure 
a balance between the benchmark and the performance year such that an 
ACO is not unfairly benefitting from a benchmark that includes certain 
expenditures that are excluded from the performance year. Under our 
proposal, we would identify any codes warranting adjustment at the 
start of the next calendar year and our operational schedule would 
accommodate the additional calculations required. Therefore, we stated 
that we anticipate being able to compute adjusted historical benchmarks 
for the affected reconciliation with minimal, if any, delays to the 
typical timeline for issuing initial determinations.
    We proposed that we would provide the historical benchmark that has 
been adjusted to exclude payment amounts for HCPSC or CPT codes 
associated with SAHS billing activity occurring in the performance year 
being reconciled to ACOs as part of their financial reconciliation 
settlement package for the performance year, as opposed to providing a 
separate new historical benchmark report in advance of settlement. This 
approach is consistent with what we have done for rare past occasions 
where we computed revised benchmarks immediately prior to 
reconciliation to correct for late-breaking data issues. Consistent 
with existing operational practice, in calculating these adjusted 
benchmarks, we would recompute ACO expenditures using beneficiary 
assignment data that was generated during the performance year being 
reconciled for all ACOs. For example, if computing adjusted historical 
benchmarks for PY 2025 to exclude claim payments for codes with SAHS 
billing activity during the performance year, we would use beneficiary 
assignment data generated during CY 2025. Although the benchmark year 
assignment data generated during the performance year being reconciled 
would be based on the same ACO participant list, assignment methodology 
selection under Sec.  425.226(a)(1), and assignment methodology under 
subpart E of Part 425 of the regulations as used in

[[Page 98198]]

calculating the ACO's most recent prior benchmark, other factors, such 
as more recent Medicare beneficiary eligibility data along with the 
ACOs included in the claims-based assignment competition, could differ 
and impact an ACO's assigned population. We considered whether to 
provide ACOs with their adjusted benchmark at the time we announce our 
determination of SAHS billing activity for a given calendar year 
(anticipated to occur near the start of the next calendar year), 
however we concluded this would delay other important program 
milestones, such as the issuance of preliminary and adjusted historical 
benchmarks for the new performance year.
    When the calendar year with SAHS billing activity becomes a 
benchmark year, we proposed adjustments to calculations for the 
calendar year itself, and not for other years in the benchmark period, 
or the performance years that will be reconciled against those 
benchmarks. Thus, in the example where we identified codes with SAHS 
billing activity in CY 2025, in establishing or resetting the benchmark 
for an ACO entering an agreement period in 2026, we would exclude 
payments for the relevant codes identified for CY 2025 from BY 2025 
calculations and, if our proposed policy in the SAHS billing activity 
proposed rule is finalized, would remove payments for the specified 
catheter codes from BY 2023 calculations. We would not exclude the 
catheter codes identified as having SAHS billing activity in BY 2023 or 
the codes identified for CY 2025 from either BY 2024 calculations or 
calculations for PY 2026 or any subsequent performance years in the 
same agreement period.\609\
---------------------------------------------------------------------------

    \609\ This assumes these same codes were not identified as 
having SAHS billing activity in CY 2024 or CY 2026 or later years.
---------------------------------------------------------------------------

    Specifically, we proposed to adjust the following Shared Savings 
Program calculations, as applicable, to exclude all Medicare Parts A 
and B payment amounts associated with a HCPCS or CPT code on claims for 
the specified claim types displaying SAHS billing activity:
     Calculation of Medicare Parts A and B FFS expenditures for 
an ACO's assigned beneficiaries for all purposes including the 
following: Establishing, adjusting, updating, and resetting the ACO's 
historical benchmark and determining performance year expenditures.
     Calculation of FFS expenditures for assignable 
beneficiaries as used in determining county-level FFS expenditures and 
national Medicare FFS expenditures, including the following 
calculations:
    ++ Determining average county FFS expenditures based on 
expenditures for the assignable population of beneficiaries in each 
county in the ACO's regional service area according to Sec. Sec.  
425.601(c) and 425.654(a) for purposes of calculating the ACO's 
regional FFS expenditures.
    ++ Determining the 99th percentile of national Medicare FFS 
expenditures for assignable beneficiaries for purposes of the 
following:
    -- Truncating assigned beneficiary expenditures used in calculating 
benchmark expenditures under Sec. Sec.  425.601(a)(4) and 
425.652(a)(4), and performance year expenditures under Sec. Sec.  
425.605(a)(3) and 425.610(a)(4).
    -- Truncating expenditures for assignable beneficiaries in each 
county for purposes of determining county FFS expenditures according to 
Sec. Sec.  425.601(c)(3) and 425.654(a)(3).
    -- Truncating expenditures for assignable beneficiaries for 
purposes of determining truncated national per capita FFS expenditures 
for purposes of calculating the Accountable Care Prospective Trend 
(ACPT) according to Sec.  425.660(b)(3).
    ++ Determining truncated national per capita expenditures FFS per 
capita expenditures for assignable beneficiaries for purposes of 
calculating the ACPT according to Sec.  425.660(b)(3).
    ++ Determining national per capita expenditures for Parts A and B 
services under the original Medicare FFS program for assignable 
beneficiaries for purposes of capping the regional adjustment to the 
ACO's historical benchmark according to Sec. Sec.  425.601(a)(8)(ii)(C) 
and 425.656(c)(3), capping the prior savings adjustment according to 
Sec.  425.658(c)(1)(ii), capping the prepaid shared savings multiplier 
according to Sec.  425.640(f)(2)(v), and calculating the proposed HEBA 
scaler according to Sec.  425.662(b)(2).
    ++ Determining national growth rates that are used as part of the 
blended growth rates used to trend forward BY1 and BY2 expenditures to 
BY3 according to Sec. Sec.  425.601(a)(5)(ii) and 425.652(a)(5)(ii) and 
as part of the blended growth rates used to update the benchmark 
according to Sec. Sec.  425.601(b)(2) and 425.652(b)(2)(i).
     Calculation of Medicare Parts A and B FFS revenue of ACO 
participants for purposes of calculating the ACO's loss recoupment 
limit under the BASIC track as specified at Sec.  425.605(d).
     Calculation of total Medicare Parts A and B FFS revenue of 
ACO participants and total Medicare Parts A and B FFS expenditures for 
the ACO's assigned beneficiaries for purposes of identifying whether an 
ACO is a high revenue ACO or low revenue ACO, as defined at Sec.  
425.20, determining an ACO's eligibility to receive advance investment 
payments according to Sec.  425.630, and determining whether an a ACO 
qualifies for a shared savings payment at Sec.  425.605(h).
     Calculation or recalculation of the amount of the ACO's 
repayment mechanism arrangement according to Sec.  425.204(f)(4).
    We explained that this approach would recognize that SAHS billing 
activity has the potential to impact an ACO's savings and loss 
determination for both the performance year when the SAHS billing 
activity occurred and future performance years for which the affected 
year is a benchmark year. Making adjustments when the affected period 
represents a performance year or benchmark year is consistent with our 
approach for the exclusion of payment amounts for episodes of care for 
treatment of COVID-19 that we established in the May 8, 2020 COVID-19 
IFC (85 FR 27577 through 27581).
    The listed calculations reflect the same set of calculations that 
CMS adjusts for a beneficiary's episode of care for treatment of COVID-
19, specified at Sec.  425.611(c), as amended by the CY 2021 PFS final 
rule (85 FR 85044), the CY 2023 PFS final rule (87 FR 70241), and the 
CY 2024 PFS final rule (88 FR 79548), with a few exceptions. First, 
Sec.  425.611(c) includes certain provisions that are not relevant for 
the proposed policy.\610\ Second, the proposed policy includes 
calculations related to truncated national per capita expenditures used 
in determining the ACPT as described at Sec.  425.660(b)(3) that are 
not included at Sec.  425.611(c),\611\ as well as references to other 
new or

[[Page 98199]]

proposed calculations that do not rely on expenditures from a period of 
time overlapping the PHE for COVID-19 for the United States which was 
in effect from January 27, 2020, through May 11, 2023 (capping the 
proposed prepaid shared savings multiplier (Sec.  425.640(f)(2)(v)), 
calculating the proposed HEBA scaler (Sec.  425.662(b)(2)), and 
determining whether an ACO that does not meet its minimum savings 
requirement qualifies for a shared savings payment (Sec.  425.605(h)). 
We proposed to adjust calculations used for the ACPT to mitigate the 
impact of any SAHS billing activity identified for CY 2024 or 
subsequent calendar years. Specifically, in projecting growth rates at 
the start of an agreement period according to Sec.  425.660, we would 
make an adjustment to the growth rates to mitigate the impact that any 
known SAHS billing activity have on spending growth projections.
---------------------------------------------------------------------------

    \610\ This includes provisions under Sec. Sec.  425.600, 
425.602, 425.603, 425.604, and 425.606 which are not relevant for 
the proposed policy because they are not applicable to PY 2024 or 
later performance years or for agreement periods where CY 2024 or 
later years are benchmark years. These provisions are relevant for 
the COVID-19 episode exclusion policy under Sec.  425.611 because 
they are applicable to performance or benchmark years that overlap 
with the PHE for COVID-19.
    \611\ When establishing the ACPT in the CY 2023 PFS final rule, 
we noted that the first ACPT release would be published in 2024 for 
agreement periods beginning on January 1, 2024, and would provide a 
projected annualized growth rate (or rates) relative to the 2023 
benchmark year (BY3). We noted further that to the extent that 
Medicare projections made at that time (2024) anticipated lingering 
effects from the COVID-19 pandemic then they would be reflected in 
the ACPT (see 87 FR 69894) and we opted not to amend Sec.  425.611 
to include adjustments of ACPT-related calculations. In the CY 2025 
PFS proposed rule, we explained our belief that it is appropriate to 
propose making adjustments to ACPT-related calculations.
---------------------------------------------------------------------------

    We explained our belief that it is unlikely that fixed growth rates 
projected at the start of agreement periods beginning in earlier years 
may also need mitigation from a code displaying SAHS billing activity. 
For example, if CMS identifies a HCPCS or CPT code displaying SAHS 
billing activity in CY 2025, the projected growth rate from 2023 to 
2025--which will be used to update the historical benchmark for PY 2025 
financial reconciliation for ACOs that began an agreement period on 
January 1, 2024--would likely have assumed typical billing patterns for 
the code in CY 2025. Additionally, the projected growth rate from BY 
2024 to PY 2025--which will be used to update the historical benchmark 
for PY 2025 financial reconciliation for ACOs that began an agreement 
period on January 1, 2025--would likely also have assumed typical 
billing patterns for the code in CY 2025 given the projections were 
finalized early in CY 2025.
    However, we explained that if we determine a bias exists due to 
differences between adjustments to the projected growth rates for the 
ACPT and other Shared Savings Program calculations, we could rely on 
our current policy under Sec.  425.652(b)(4)(ii) to reduce the weight 
of the ACPT in the three-way blend. We proposed that we would use our 
discretion to reduce the weight of the ACPT rather than recalculate the 
growth rates that had been projected at the start of agreement periods 
starting in earlier years, as we believe it is important to maintain 
the policy that the projected growth rates remain fixed for the ACO's 
agreement period. In the CY 2023 PFS final rule (refer to 87 FR 69886 
through 69898) we finalized our proposal to establish the ACPT at the 
outset of an agreement period, based on one or more annualized growth 
rates. We explained that we will not adjust the ACPT due to external 
factors such as geographic price changes, efficiency discounts, or 
other retrospective updates occurring during the performance years 
throughout the agreement period. In response to commenters concern that 
CMS might adjust the ACPT downward during the agreement period, we 
stated that we will not adjust the ACPT projections over the course of 
the agreement period (87 FR 69897). However, we acknowledged that a 
variety of circumstances could cause actual expenditure trends to 
significantly deviate from projections. If unforeseen circumstances 
occur during an ACO's agreement period, we retained flexibility to 
reduce the impact of the prospectively determined ACPT portion of the 
three-way blend when necessary to mitigate unforeseen circumstances. We 
explained that we will determine, on an ad hoc basis, whether an 
unforeseen circumstance warrants adjustment of the weight placed on the 
ACPT component of the three-way blend by considering whether it has a 
material impact across the entire Shared Savings Program. If we 
determine that expenditure growth has differed significantly from 
projections made at the start of the agreement period due to unforeseen 
circumstances, such as an economic recession, pandemic, or other 
factors, a reduction in the weight placed on the ACPT may be 
considered.
    To summarize, we proposed that when projecting growth rates used 
for the ACPT at the beginning of an agreement period, we would make an 
adjustment to mitigate the impact of any known SAHS billing activity on 
spending growth projections. Additionally, in accordance with Sec.  
425.660(a), CMS would not adjust the ACPT projections over the course 
of the agreement period to account for SAHS billing activity later 
identified. Rather, CMS may use its discretion to reduce the weight of 
the ACPT in the three-way blend in accordance with Sec.  
425.652(b)(4)(ii) if CMS determines that the SAHS billing activity 
represents an unforeseen circumstance that warrants a reduction to the 
weight.
    The direction and magnitude of the impact of the proposed 
adjustments may vary by ACO. However, by making these adjustments, we 
would be helping to ensure that no ACOs are held accountable, and 
financially penalized for SAHS billing activity that was outside their 
direct control while also protecting the Trust Funds from other ACOs 
potentially receiving windfall gains.
    For this proposal, we relied on our authority under section 
1899(d)(1)(B)(ii) of the Act. Section 1899(d)(1)(B)(ii) of the Act 
authorizes the Secretary to adjust the benchmark for beneficiary 
characteristics and such other factors as the Secretary determines 
appropriate. Here, we proposed to adjust the benchmark in order to 
remove payments for HCPCS or CPT codes identified as exhibiting SAHS 
billing activity in CY 2024 or subsequent calendar years from the 
determination of benchmark expenditures when the calendar year serves 
as a benchmark year or from the determination of benchmark expenditures 
that will be used to reconcile the calendar year when it serves as a 
performance year.
    We proposed to use our authority under section 1899(i)(3) of the 
Act to remove payment amounts for HCPCS or CPT codes identified as 
exhibiting SAHS billing activity in CY 2024 or subsequent calendar 
years from the following calculations: (1) performance year 
expenditures; (2) updates to the historical benchmark; and (3) ACO 
participants' Medicare FFS revenue used for multiple purposes across 
the Shared Savings Program, including determinations of loss sharing 
limits in the two-sided models of the BASIC track,\612\ determinations 
of eligibility for advance investment payments,\613\ and expanded 
criteria for certain low revenue ACOs participating in the BASIC track 
to qualify for shared savings in the event the ACO does not meet the 
MSR.\614\ Section 1899(i)(3) of the Act requires that we determine that 
the alternative payment methodology adopted under that provision would 
improve the quality and efficiency of items and services furnished to 
Medicare beneficiaries, without resulting in additional program 
expenditures. The adjustments we proposed therein, which would remove 
payment amounts for codes with identified SAHS billing activity from 
the specified Shared Savings Program calculations as proposed at Sec.  
425.672(c) and (e), would capture and remove from program calculations 
expenditures that are outside of an ACO's control, but that could 
significantly affect the ACO's performance under the program. In 
particular, failing to remove these payments would likely create highly 
variable savings and loss results for

[[Page 98200]]

individual ACOs that happen to have over-representation or under-
representation of SAHS billing activity for the selected codes among 
their assigned beneficiary populations.
---------------------------------------------------------------------------

    \612\ Refer to Sec.  425.605(d)(1)(iii)(D), (d)(1)(iv)(D), and 
(d)(1)(v)(D) for BASIC track Levels C, D and E, respectively.
    \613\ Refer to Sec.  425.630(b).
    \614\ Refer to Sec.  425.605(h).
---------------------------------------------------------------------------

    As described in the Regulatory Impact Analysis of the CY 2025 PFS 
proposed rule (89 FR 62183 through 62184), excluding payment amounts 
for the selected codes from the specified calculations are not expected 
to result in an increase in spending beyond the expenditures that would 
otherwise occur under the statutory payment methodology in section 
1899(d) of the Act. Further, these adjustments to our calculations to 
remove payment amounts for these codes would promote continued 
integrity and fairness and improve the accuracy of Shared Savings 
Program financial calculations. As a result, we expect these policies 
would support ACOs continued participation in the Shared Savings 
Program and the program's goals of lowering growth in Medicare FFS 
expenditures and improving the quality of care furnished to Medicare 
beneficiaries.
    Based on these considerations, and as specified in the Regulatory 
Impact Analysis of the CY 2025 PFS proposed rule (89 FR 62183 through 
62184), we determined that adjusting certain Shared Savings Program 
calculations to remove payment amounts for selected codes, in the event 
we determine SAHS billing activity occurs in CY 2024 or subsequent 
calendar years, from the calculation of performance year expenditures, 
updates to the historical benchmark, and ACO participants' Medicare FFS 
revenue used for multiple purposes across the Shared Savings Program, 
meets the requirements for use of our authority under section 
1899(i)(3) of the Act when incorporated into the existing other payment 
model we have established pursuant to that section.
    In the CY 2025 PFS proposed rule (89 FR 61915), we explained that 
the changes we proposed in section III.G.7.d of the proposed rule would 
apply to address the impact of SAHS billing activity identified in CY 
2024 or subsequent calendar years, and thus would apply to ACOs 
currently participating in PY 2024. Therefore, these changes to 
policies applicable for PY 2024 constitute retroactive rulemaking. 
Section 1871(e)(1)(A)(ii) of the Act permits a substantive change in 
regulations, manual instructions, interpretive rules, statements of 
policy, or guidelines of general applicability under Title XVIII of the 
Act to be applied retroactively to items and services furnished before 
the effective date of the change if the failure to apply the change 
retroactively would be contrary to the public interest.
    We found that failing to apply the proposed changes retroactively 
to PY 2024 would be contrary to the public interest because it would 
unfairly punish Shared Savings Program ACOs by forcing them to 
unexpectedly assume a substantial magnitude of financial risk for costs 
outside of their control and not previously contemplated in the Shared 
Savings Program, undermining both the sustainability of the Shared 
Savings Program and the public's faith in CMS as a fair partner, in the 
event we determine SAHS billing activity impacts CY 2024. We did not 
fully contemplate the potential for SAHS billing activity outside of an 
ACO's control when the Shared Savings Program was established.\615\ For 
this reason, the Shared Savings Program financial methodology and the 
procedures we have utilized in the past did not provide a means to 
adequately account for instances of SAHS billing activity outside of an 
ACO's control, and thereby the related financial risk is assumed 
entirely by ACOs. We view this outcome as particularly inequitable to 
ACOs because they have no direct means of controlling such costs. 
Unlike Medicare Advantage organizations, ACOs are not responsible for 
processing claims for their assigned beneficiaries and otherwise have 
no means of causing the denial of such claims. CMS thus cannot 
reasonably have expected ACOs to have intended to assume responsibility 
for all instances of SAHS billing activity outside of an ACO's control 
when they joined the Shared Savings Program. For these reasons, it 
would be contrary to the public interest for CMS to fail to apply a 
policy mitigating this issue retroactively.
---------------------------------------------------------------------------

    \615\ See, for example, 76 FR 67948 through 67950. Such 
approaches were more focused on policies to support monitoring of 
ACO performance and ensuring program integrity.
---------------------------------------------------------------------------

    We explained that we did not foresee the acute need to address SAHS 
billing activity impacting CY 2023, and the need for the related policy 
proposal for addressing SAHS billing activity in CY 2024 or subsequent 
calendar years, with sufficient time in advance of the start of PY 2024 
to undertake notice and comment rulemaking earlier, and to avoid 
retroactive rulemaking. More specifically, we were only able to 
determine that the increase in billing on HCPCS codes A4352 and A4353 
in CY 2023 represented SAHS billing activity after the calendar year 
ended. To identify that the billing activity in CY 2023 was 
significant, anomalous, and highly suspect, CMS reviewed actual billing 
levels after the calendar year closed and services furnished in CY 2023 
had occurred and the billing level could then be compared to billing 
levels observed in prior calendar years.
    We solicited comment on our proposal to apply the policy 
retroactively to PY 2024, including whether failing to apply the policy 
retroactively would be contrary to the public interest and how it would 
affect ACOs and their ability to participate in the Shared Savings 
Program.
    We proposed a new Sec.  425.672 to describe adjustments CMS could 
make to Shared Savings Program calculations to mitigate the impact of 
SAHS billing activity for CY 2024 or subsequent calendar years. We 
proposed that Sec.  425.672(b) specify that CMS, at its sole 
discretion, may determine that the billing of specified HCPCS or CPT 
codes represents SAHS billing activity in calendar year 2024 or 
subsequent calendar years that warrants adjustment to calculations made 
under this part. We proposed under Sec.  425.672(c) to specify the 
Shared Savings Program calculations for which CMS would exclude all 
Medicare Parts A and B FFS payment amounts for the specified claim 
types associated with a HCPCS or CPT code identified at Sec.  
425.672(b) when an adjustment to the calculation is appropriate in 
light of the SAHS billing activity. The calculations specified at Sec.  
425.672(c) include all potentially relevant financial calculation 
provisions, including those covering the financial benchmarking 
methodologies (including the proposed HEBA scaler at Sec.  
425.662(b)(2)) and those covering calculation of shared savings and 
losses. We proposed at Sec.  425.672(d) that for calendar year 2024 or 
subsequent calendar years,\616\ we would adjust Shared Savings Program 
calculations for SAHS billing activity identified at Sec.  425.672(b) 
for the calendar year when it is either a performance year or a 
benchmark year, as well as the 3 most recent years prior to the start 
of the ACO's agreement period used in establishing the historical 
benchmark, when such a benchmark is used to reconcile the ACO

[[Page 98201]]

for a performance year adjusted for SAHS billing activity. We proposed 
to specify at Sec.  425.672(e) that we would also make adjustments for 
any calendar year corresponding to BY3 in projecting per capita growth 
in Medicare Parts A and B FFS expenditures according to Sec.  
425.660(b)(1) for purposes of calculating the ACPT for agreement 
periods beginning on January 1, 2024, and in subsequent years. 
Additionally, we proposed conforming revisions to Sec. Sec.  
425.601(a)(9) and 425.652(a)(9), as well as paragraphs at Sec. Sec.  
425.601(a)(9)(iv) and 425.652(a)(9)(ix) to include adjustments for SAHS 
billing activity as one of the reasons that CMS would adjust an ACO's 
benchmark during the term of its agreement period. We explained our 
belief that while we expect that the identification of SAHS billing 
activity that triggers these proposed policies will be rare, if 
finalized, these policies will allow us to proactively ensure the 
accuracy of program calculations and provide greater certainty for ACOs 
and the Trust Funds.
---------------------------------------------------------------------------

    \616\ We note that by anchoring this policy on the calendar 
year, this proposed provision differs from many other program 
regulations that are applicable for a given performance year or for 
agreement periods beginning on a given date or within a given range. 
However, we believe this approach is appropriate for this policy as 
(1) we would adjust expenditures for the affected calendar year both 
when it is a performance year and when it is a benchmark year and 
(2) it ties the policy to the period for which the SAHS billing 
activity was identified much in the way the policy for COVID-19 
episodes of care specified in Sec.  425.611 is tied to the related 
public health emergency.
---------------------------------------------------------------------------

    We solicited comments on these proposals.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Some commenters addressed the proposed adjustments to 
Shared Savings Program calculations. One commenter expressed support 
for CMS to adjust calculations prior to sending ACOs initial 
determinations of their shared savings and losses, stating that timely 
removal of SAHS billing activity is essential for ACOs that rely on 
shared savings revenue to operate or to make additional investments in 
patient care.
    Response: We thank the commenter for their support of the proposal 
to adjust Shared Savings Program calculations for SAHS billing activity 
in advance of issuing initial determinations of shared savings and 
losses. We expect this policy will limit requests to reopen initial 
determinations, thus reducing burden for ACOs and CMS.
    Comment: Some commenters addressed the proposal to exclude all 
Medicare Parts A and B payment amounts associated with the identified 
codes on specified claim types submitted by any provider or supplier 
from expenditure and revenue calculations for the relevant calendar 
year for which the SAHS billing activity is identified. A few 
commenters characterized the approach to exclude all payment amounts 
for the codes that displayed SAHS billing activity as comprehensive, 
and that it is the most straightforward approach and will help to 
minimize complications in the calculations for the impacted years. 
Another commenter recommended that CMS only remove payment amounts 
billed by certain providers or suppliers, as identified by NPIs, to 
avoid any unintended consequences for some ACOs.
    Response: We thank commenters for their support of the proposal to 
exclude all Medicare Part A and B payment amounts associated with the 
identified codes on specified claim types submitted by any provider or 
supplier. We proposed to not limit the exclusion to payment amounts on 
claims submitted by certain suppliers that may have individually 
displayed SAHS billing activity so as to protect the integrity of any 
potential investigations which may be ongoing at the time CMS makes a 
determination of SAHS billing activity.
    Comment: Some commenters addressed the proposal to exclude payment 
amounts associated with identified codes for the calendar year serving 
as a performance year as well as from the historical benchmark used to 
reconcile that performance year. A few commenters urged CMS to remove 
all payment amounts for a code from expenditure calculations for a 
performance year if payment amounts for that code are removed from 
expenditure calculations for an ACO's benchmark year.
    A couple commenters appeared to address CMS's approach for 
intermittent urinary catheters. One commenter urged CMS to eliminate 
``SAHS billing activity from future agreements,'' citing an example to 
remove ``2023 SAHS'' from both benchmark and performance years for 
agreements starting 2024, 2025 and 2026. Another commenter stated their 
support for an approach that would exclude SAHS billing activity from 
historical benchmarks for ACOs starting new agreement periods in 2024, 
2025 and 2026, as well as from any calculation used to determine 
revenue status or the repayment mechanism.
    Response: We proposed to exclude all Medicare Parts A and B payment 
amounts associated with the identified codes on specified claim types 
submitted by any provider or supplier from expenditure and revenue 
calculations for the relevant calendar year for which the SAHS billing 
activity is identified. We explained that we would also adjust the 3 
most recent years prior to the start of the ACO's agreement period used 
in establishing the historical benchmark that is used to reconcile the 
ACO for a performance year corresponding to the calendar year for which 
the SAHS billing activity was identified. When the calendar year with 
SAHS billing activity is (or becomes) a benchmark year, we proposed 
adjustments to calculations for the calendar year itself, and not for 
other years in the benchmark period, or the performance years that will 
be reconciled against those benchmarks. This approach avoids adjusting 
calculations more than is necessary to reasonably mitigate the impact 
of SAHS billing activity on an ACO's financial performance. Given the 
potential for the adjustments to have mixed impact on ACOs' updated 
benchmarks, this approach is the most equitable. An ACO's historical 
benchmark is calculated using the per capita Parts A and B fee-for-
service expenditures for beneficiaries that would have been assigned to 
the ACO in any of the 3 most recent years prior to the start of the 
agreement period. Thus, removing payment amounts for a HCPCS or CPT 
code from the benchmark year affected by SAHS billing activity from ACO 
expenditures and national and regional trend and update factors strikes 
a balance between mitigating the impact of SAHS billing activity and 
not introducing unnecessary bias into calculations.
    As part of our final policy, we decline to remove payment amounts 
for the codes from future performance years that are reconciled using a 
historical benchmark that includes a benchmark year with codes 
excluded. For example, since we identified SAHS billing activity in CY 
2023, then in the future when performing financial reconciliation for 
PY 2025 for an ACO with benchmark years 2022 through 2024, we will 
exclude payment amounts for the selected codes from BY 2023 
expenditures and not from BY 2022, BY 2024, and PY 2025 expenditures.
    Comment: One commenter supported the proposal but urged CMS to 
consider an approach that would ensure no ACOs are negatively impacted. 
Another commenter stated that CMS should calculate ACO shared savings 
and losses twice, both before and after adjusting calculations to 
remove the payment amounts.
    Response: We interpret both comments as suggesting that CMS perform 
two versions of Shared Savings Program calculations--one that makes 
adjustments for SAHS billing activity and one that does not--and then 
issuing initial determinations based on the version of the calculations 
that would result in an ACO maximizing their shared savings or 
minimizing their shared losses for the performance year.

[[Page 98202]]

We decline to adopt such an approach. The inclusion of SAHS billing 
activity would cause significantly inaccurate and inequitable payments 
and potential repayment obligations if not addressed. It would be 
inequitable for ACOs to be held accountable for SAHS billing activity 
that occurred among their assigned population in the performance year. 
It would also be inequitable to allow other ACOs whose assigned 
populations were less affected by SAHS billing to benefit from the 
inclusion of these expenditures in benchmark update factors. Such ACOs 
would receive an inflated updated benchmark as a result of SAHS billing 
activity affecting national or regional expenditures. Allowing either 
source of inequity or imposing an artificial limit on the impacts of 
excluding the SAHS billing activity would undermine the integrity, 
fairness and accuracy of Shared Savings Program calculations.
    Comment: One commenter urged CMS to provide ACOs with information 
about the impact of removing payment amounts for the codes displaying 
SAHS billing activity on ACO expenditures as well as regional and 
national expenditures. Additionally, the commenter suggested that CMS 
start providing ACOs with regional component-level data ``to help 
quantify these sorts of issues in the future.''
    Response: Consistent with the SAHS billing activity final rule (89 
FR 79164) in order to promote transparency in calculations and address 
commenter's concerns, within program reports provided with a given 
performance year's financial reconciliation results, we will identify 
the codes and provide ACOs with the per capita amount of any codes, 
determined to be SAHS billing activity, removed from their performance 
year assigned beneficiary expenditures consistent with other spending 
categories. Medicare claim payment amounts for any codes determined to 
be SAHS billing activity will continue to be included in the monthly 
Part A, B and D Medicare CCLF files sent to ACOs and ACOs may use that 
data and information to identify potentially impacted beneficiaries and 
healthcare providers.
    Comment: Some commenters made recommendations for mitigating the 
impact of SAHS billing activity on Innovation Center models or the 
Quality Payment Program. Most of these commenters requested that the 
Center for Medicare and Medicaid Innovation (CMS Innovation Center) 
perform similar adjustments to mitigate SAHS billing activity for the 
catheter codes in the ACO Realizing Equity, Access, and Community 
Health (ACO REACH) Model. One commenter requested that the CMS 
Innovation Center exclude payment amounts for the catheter codes from 
the Bundled Payments for Care Improvement Advanced Model and the 
Comprehensive Care for Joint Replacement Model. Some commenters urged 
CMS to perform similar adjustments to expenditure calculations on 
Merit-Based Incentive Payment System cost measures.
    Response: The commenters' suggestions are beyond the scope of this 
rulemaking, which addresses adjustments to Shared Savings Program 
calculations to mitigate the impact of SAHS billing activity in CY 2024 
or subsequent year, however, we will share these comments with our 
colleagues in the Innovation Center and Quality Payment Program.
    We received no public comments on the retroactive application of 
the proposed policy in the event we determine SAHS billing activity 
impacts CY 2024, and we are finalizing our proposal to apply the policy 
with retroactive effect for PY 2024.
    After consideration of public comments, we are finalizing without 
modification our proposal with retroactive effect for PY 2024, to 
exclude all Medicare Parts A and B payment amounts associated with the 
identified codes on specified claim types submitted by any provider or 
supplier from expenditure and revenue calculations for the relevant 
calendar year for which the SAHS billing activity is identified, in the 
event that CMS identifies one or more HCPCS or CPT codes with SAHS 
billing activity in CY 2024 or a subsequent calendar year that warrant 
adjustment. Specifically, we are finalizing our proposal to add a new 
section of the regulation at Sec.  425.672 to describe adjustments CMS 
will make to Shared Savings Program calculations to mitigate the impact 
of SAHS billing activity involving CY 2024 or subsequent calendar 
years. Section 425.672(b) describes that CMS, at its sole discretion, 
may determine that that the billing of one or more specified HCPCS or 
CPT codes represents SAHS billing activity for a calendar year that 
warrants adjustment to calculations. Section 425.672(c) specifies the 
Shared Savings Program calculations for which CMS will exclude all 
Medicare Parts A and B FFS payment amounts for the specified claim 
types associated with a HCPCS or CPT code and includes references to 
all relevant sections of the regulations in these provisions. In Sec.  
425.672(d), on the period of adjustment, we specify that CMS will 
adjust Shared Savings Program calculations for SAHS billing activity 
identified for CY 2024 or subsequent calendar years when the affected 
calendar year is either a performance year or a benchmark year, and 
from the 3 most recent years prior to the start of the ACO's agreement 
period used in establishing the historical benchmark when such a 
benchmark is used to reconcile the ACO for a performance year adjusted 
for SAHS billing activity. We specify under Sec.  425.672(e) that we 
will make adjustments for payments associated with the identified HCPCS 
or CPT codes for BY3 in projecting per capita growth in Parts A and B 
FFS expenditures, according to Sec.  425.660(b)(1), for purposes of 
calculating the ACPT for agreement periods beginning on January 1, 
2024, and in subsequent years. Additionally, we are finalizing as 
proposed conforming revisions to Sec. Sec. 425.601(a)(9) and 
425.652(a)(9), as well as paragraphs at Sec. Sec. 425.601(a)(9)(iv) and 
425.652(a)(9)(ix), to include adjustments for SAHS billing activity as 
one of the reasons that CMS would adjust an ACO's benchmark during the 
term of its agreement period.
e. Solicited Comment on Establishing Higher Risk and Potential Reward 
under the ENHANCED Track
(1) Background
    As described in the CY 2024 PFS final rule (88 FR 79223), we have 
considered a higher risk Shared Savings Program track under which the 
shared savings/loss rate would be somewhere between 80 percent and 100 
percent (that is, a rate higher than that currently offered under the 
ENHANCED track) and that builds on the experience of the Next 
Generation ACO (NGACO) and ACO REACH Models. A higher risk track would 
offer ACOs increased incentives to generate savings, which would help 
improve care delivery by promoting innovations in the delivery of high-
quality care that is more patient-centered. In other words, by 
increasing sharing rates for ACOs, ACOs will be better incentivized to 
develop innovations in the delivery of high-quality care and, 
therefore, improve the care they offer to their beneficiaries. A 
revised ENHANCED track could be implemented in accordance with section 
1899(i)(3) of the Act, provided the Secretary determines that such 
other payment model enhances the quality and efficiency of items and 
services furnished under the Medicare program and does not result in 
program expenditures greater than those that would result under the 
statutory payment model.

[[Page 98203]]

    In the CY 2024 PFS final rule (88 FR 79223), we summarized public 
comments received in response to our Request for Information (RFI) 
regarding a potential track within the Shared Savings Program with 
higher risk than the current ENHANCED track. For a full summary of the 
comments submitted in response to our comment solicitation, we refer 
readers to the relevant discussion in the CY 2024 PFS final rule (88 FR 
79225 through 79227). Commenters were broadly supportive of such an 
approach and referenced existing policies under the ACO REACH Model, 
and the NGACO Model. Some commenters suggested features of such a track 
that would serve to encourage more participation in the Shared Savings 
Program and help ACOs deliver more person-centered care to 
beneficiaries in Traditional Medicare. These features included 
prospective payments, full sharing rates (a sharing rate of 100 
percent, similar to the Global Risk Sharing Option in the ACO REACH 
Model) as well as a benchmark discount rate (a reduction of the 
benchmark by a predetermined percentage) to protect the Medicare Trust 
Funds.
    A higher risk sharing arrangement could incentivize participating 
ACOs to improve performance in the program as they would receive a 
greater share of any gross savings. That improved performance may, in 
turn, result in reduced healthcare costs for Medicare and more 
effective, efficient care for beneficiaries. In addition, higher risk 
sharing could incentivize ACOs to develop new care delivery strategies 
to improve their financial performance, such as a focus on specialty 
care integration and reduced care fragmentation. Offering a higher risk 
sharing track may also help CMS reach our goal of having all 
beneficiaries in the traditional Medicare program in a care 
relationship with a healthcare provider who is accountable for the 
costs and quality of their care by 2030 by encouraging currently 
participating ACOs to continue participation in the Shared Savings 
Program, as well as encourage ACOs not participating in the Shared 
Savings Program to join as a result of increased potential reward.
    A recent CBO report \617\ proposed that higher sharing rates might 
incentivize providers to decrease spending as they would stand to gain 
a larger portion of the savings generated. While in the short term this 
might diminish CMS savings, the report postulates that this would 
increase participation in the Shared Savings Program and provide a 
means for CMS to manage long-term healthcare spending growth. The 
report also highlights the necessity of striking a delicate balance: 
devising financial incentives enticing enough for ACOs to participate 
actively in the Shared Savings Program, while ensuring that such 
participation leads to savings for the Medicare program.
---------------------------------------------------------------------------

    \617\ For more details, please refer to Congressional Budget 
Office (CBO), ``Medicare Accountable Care Organizations: Past 
Performance and Future Directions'', April 2024, available at 
https://www.cbo.gov/system/files/2024-04/59879-Medicare-ACOs.pdf.
---------------------------------------------------------------------------

    In the CY 2025 PFS proposed rule (89 FR 61916 through 61921), we 
solicited comment on a participation option that would allow for higher 
risk and reward than currently available under the ENHANCED track. A 
participation option of this type would replace the existing ENHANCED 
track in order to avoid the self-selection issues that would occur if a 
higher risk track were to be included alongside the ENHANCED track. If 
both participation options were made available to ACOs, we have 
concerns that only the highest-performing ACOs would self-select into 
the higher of the two risk tracks. While we included an RFI on the 
topic in CY 2024 PFS rulemaking, we are concerned that ACOs did not 
have enough detailed information to appropriately weigh the tradeoffs 
associated with a higher risk/reward option than the current ENHANCED 
track, and that the additional information we have generated since then 
will allow ACOs and other interested parties to provide more forthright 
and helpful feedback. We sought public comments on the design of a 
higher risk option within the Shared Savings Program that could be 
enacted under our authority granted by section 1899(i)(3) of the Act 
and that would encourage ACOs to participate actively in the Shared 
Savings Program while ensuring that such participation leads to savings 
for the Medicare program.
(a) Current ENHANCED Track
    Currently, under the Shared Savings Program, ACOs may enter 
participation agreements under the ENHANCED track. The ENHANCED track 
is a two-sided model that represents the highest level of risk and 
potential reward currently offered under the Shared Savings Program. 
The rules governing the participation options available to ACOs and the 
progression from lower to higher risk for ACOs entering the program are 
described in Sec.  425.600 of the regulations. To qualify for a shared 
savings payment, an ACO must meet a MSR requirement, meet the quality 
performance standard or alternative quality performance standard 
established under Sec.  425.512, and otherwise maintain its eligibility 
to participate in the Shared Savings Program under 42 CFR part 425, 
subpart B (Sec. Sec.  425.100 through 425.118). For ACOs meeting the 
applicable quality performance standard established under Sec.  
425.512(a)(2) or (a)(5)(i) (for PY 2024 and subsequent performance 
years), the final shared savings rate is equal to the maximum sharing 
rate of 75 percent, or savings at a rate of 75 percent multiplied by 
the ACO's health equity adjusted quality performance score if the ACO 
meets the alternative quality performance standard at Sec.  
425.512(a)(5)(ii). CMS computes an ACO's shared savings payment by 
applying the final sharing rate to the ACO's savings on a first dollar 
basis (meaning the final sharing rate is applied to the ACO's full 
total savings amount), with the payment subject to a cap that is equal 
to 20 percent of the updated benchmark (Sec.  425.610(e)(2)).
    ACOs that operate under a two-sided model and have losses that meet 
or exceed a MLR must share losses with the Medicare program (Sec.  
425.100(c)). Once this MLR is met or exceeded, the ACO will share in 
losses at a rate determined according to the ACO's track/level of 
participation, up to a loss recoupment limit (also referred to as the 
loss sharing limit) (Sec.  425.605(d); Sec.  425.610(f), (g)). In 
determining shared losses, ACOs participating in the ENHANCED track are 
subject to losses at a rate determined using a sliding scale based on 
ACO's health equity adjusted quality performance score, if the 
applicable quality performance standard established in Sec.  
425.512(a)(2) or (a)(5)(i) or the alternative quality performance 
standard at Sec.  425.512(a)(5)(ii) is met; with minimum shared loss 
rate of 40 percent and maximum of 75 percent. If the ACO fails to meet 
the applicable quality performance standard established in Sec.  
425.512 or the alternative quality performance standard, the ACO is 
subject to 1st dollar losses at a rate of 75 percent (Sec.  
425.610(f)(4)(ii)). Shared losses are subject to a cap that is equal to 
15 percent of updated benchmark (Sec.  425.610(g)).
    CMS adjusts historical benchmark expenditures by Medicare 
enrollment type by a percentage of the difference between the average 
per capita expenditure amount for the ACO's regional service area and 
the ACO's historical benchmark amount (referred to herein as the 
``regional adjustment'') (Sec.  425.652(a)(8)). The weights used in the 
regional adjustment calculation are determined in accordance withSec.  
425.656(e) and are dependent on whether the ACO has lower or higher

[[Page 98204]]

spending compared to the ACO's regional service area and the agreement 
period for which the ACO is subject to the regional adjustment. The 
first time that an ACO's benchmark is adjusted based on the ACO's 
regional service area expenditures, CMS calculates the regional 
adjustment using either 35 percent of the difference between the 
average per capita amount of expenditures for the ACO's regional 
service area and the average per capita amount of the ACO's initial or 
rebased historical benchmark, if the ACO is determined to have lower 
spending than the ACO's regional service area (Sec.  425.656(e)(1)(i)); 
or 15 percent of the difference between the average per capita amount 
of expenditures for the ACO's regional service area and the average per 
capita amount of the ACO's initial or rebased historical benchmark, if 
the ACO is determined to have higher spending than the ACO's regional 
service area (Sec.  425.656(e)(1)(ii)). The second time that an ACO's 
benchmark is adjusted based on the ACO's regional service area 
expenditures, CMS calculates the regional adjustment using either the 
50 percent of the difference between the average per capita amount of 
expenditures for the ACO's regional service area and the average per 
capita amount of the ACO's rebased historical benchmark if the ACO is 
determined to have lower spending than the ACO's regional service area 
(Sec.  425.656(e)(2)(i)); or 25 percent of the difference between the 
average per capita amount of expenditures for the ACO's regional 
service area and the average per capita amount of the ACO's rebased 
historical benchmark if the ACO is determined to have higher spending 
than the ACO's regional service area (Sec.  425.656(e)(2)(ii)). The 
third time that an ACO's benchmark is adjusted based on the ACO's 
regional service area expenditures, CMS calculates the regional 
adjustment using the 50 percent of the difference between the average 
per capita amount of expenditures for the ACO's regional service area 
and the average per capita amount of the ACO's rebased historical 
benchmark if the ACO is determined to have lower spending than the 
ACO's regional service area (Sec.  425.656(e)(3)(i)); or the 35 percent 
of the difference between the average per capita amount of expenditures 
for the ACO's regional service area and the average per capita amount 
of the ACO's rebased historical benchmark if the ACO is determined to 
have higher spending than the ACO's regional service area (Sec.  
425.656(e)(3)(ii)). The fourth or subsequent time that an ACO's 
benchmark is adjusted based on the ACO's regional service area 
expenditures, CMS calculates the regional adjustment to the historical 
benchmark using 50 percent of the difference between the average per 
capita expenditures for the ACO's regional service area and the average 
per capita amount of the ACO's rebased historical benchmark (Sec.  
425.656(e)(4)). Among the ACOs participating in PY 2024, 78 percent of 
BASIC track ACOs (176 of 227) received a positive regional adjustment, 
whereas 95 percent (155 of 163) of ACOs in the ENHANCED track received 
a positive regional adjustment. A positive regional adjustment 
indicates that their expenditures were less than that of their regional 
service area. For ACOs receiving a positive regional adjustment, the 
average regional adjustment amount was 2.21 percent ($237) of 
historical benchmark expenditures.
    As of January 1, 2024, 43 percent (207 of 480) Shared Savings 
Program ACOs are participating under the ENHANCED track. Under Shared 
Savings Program policies, all ACOs participating in a two-sided model 
can select a symmetrical MSR and MLR which applies for the duration of 
its agreement period (Sec.  425.605(b)(2); Sec.  425.610(b)(1)). Among 
ACOs participating in the ENHANCED track for PY 2024, 61 percent (126 
of 207) have selected an MSR/MLR of 0.5 percent or greater while 39 
percent (81 of 207) have selected an MSR/MLR of 0.0 percent. Among ACOs 
that participated in the ENHANCED track for PY 2022, 38 percent (55 of 
146) generated gross savings between zero and 5 percent of their 
updated benchmark expenditures, and 12 percent (17 of 146) generated 
gross savings of 10 percent or more of their benchmark expenditures.
(b) Other CMS Innovation Center Models
    In the NGACO Model, NGACOs were offered the choice between two risk 
arrangements, partial risk or full risk. Under both arrangements, the 
NGACO was responsible for 100 percent of performance year expenditures 
for services rendered to the NGACO's aligned beneficiaries. Under the 
partial risk arrangement, the NGACO could receive or owe up to 80 
percent of savings/losses, whereas under the full risk arrangement, the 
NGACO could receive or owe up to 100 percent of savings/losses. To 
mitigate the ACO's risk of large shared losses, as well as to protect 
the Medicare Trust Funds against paying out excessive shared savings, 
NGACOs were required to choose a cap on gross savings/losses. The cap, 
expressed as a percentage of the benchmark, ranged from 5 percent to 15 
percent. The risk arrangement chosen by the NGACO (80 or 100 percent) 
was applied to gross savings or losses after the application of the 
cap. In PYs 1-3, a discount was applied to the NGACO's benchmark that 
was set at a standard 3 percent, with various adjustments, that allowed 
the final discount to vary from 0.5 percent to 4.5 percent. In PYs 4-6, 
a discount of 0.5 percent was applied to the benchmark under the 
partial risk arrangement, and a discount of 1.25 was applied to the 
benchmark under the full risk arrangement. The purpose of the discount 
was to increase the likelihood that any savings achieved by the NGACOs 
participating in the model would also result in savings for the 
Medicare Program. The NGACO Model evaluation found that while NGACOs 
reduced gross Medicare Parts A and B expenditures relative to a 
comparison group of similar fee-for-service Medicare beneficiaries in 
their markets, they did not generate savings to the Medicare Trust 
Funds. ACOs that elected a risk cap greater than 5 percent and 
participated in model population-based payment mechanisms achieved 
greater declines in spending, suggesting that the combination of risk 
and payment flows is impactful. Spending reductions grew larger almost 
every year, reflecting a combination of NGACOs' improvements in 
infrastructure and clinical processes, exit by poorer-performing 
NGACOs, and the COVID-19 pandemic. While the NGACO Model reduced 
spending in Medicare Parts A and B, CMS paid back these reductions in 
the form of shared savings payments to ACOs. These results highlight 
the need to balance the tradeoff between incentivizing participation in 
higher levels of risk and reward, in alternative payment models such as 
the Shared Savings Program and ACO models tested by the Innovation 
Center, and reducing the risk of loss to the Medicare Trust Funds.
    Under the ACO REACH Model, REACH ACOs are offered the choice of 
participating under the Global or the Professional Risk Sharing 
Options. As in the NGACO Model, under both risk sharing options, the 
REACH ACO is responsible for 100 percent of performance year 
expenditures for services rendered to aligned beneficiaries. Because 
ACOs electing the Global Risk Sharing Option retain up to 100 percent 
of the savings/losses on all savings up to 25 percent of their 
benchmark, with reduced sharing rates for savings exceeding 25 percent 
of their benchmark, a discount is applied to the benchmark to ensure 
savings are also generated for CMS. For ACOs in the Global Risk Sharing 
Option, the

[[Page 98205]]

benchmark is reduced by a fixed percentage based on the performance 
year.\618\ The discount rate for PYs 2021 and 2022 was 2 percent, for 
PYs 2023 and 2024 is 3 percent, and for PYs 2025 and 2026 will be above 
3.5 percent. The benchmark for ACOs participating in the Professional 
Risk Sharing Option does not include this discount, and these ACOs are 
only eligible to retain 50 percent of savings or owe 50 percent of any 
losses.
---------------------------------------------------------------------------

    \618\ For more details, refer to CMS, ACO Realizing Equity, 
Access, and Community Health (REACH) Model, PY2023 Financial 
Settlement Overview, available at https://innovation.cms.gov/media/document/aco-reach-py2023-fncl-settlement (see Table 4: Schedule of 
Discounts by Risk Arrangement).
---------------------------------------------------------------------------

    Preliminary evaluation results of the first 2 performance years of 
the Global and Professional Direct Contracting Model, before its 
transition to the ACO REACH Model, suggest that participating ACOs had 
mixed results in gross spending but consistent, significant increases 
in net spending relative to a comparison group of similar FFS Medicare 
beneficiaries in their markets, which included beneficiaries assigned 
to ACOs participating in the Shared Savings Program. Standard ACOs, 
comprised of organizations that generally have experience serving 
Medicare FFS beneficiaries, increased gross spending. Standard ACOs 
also reduced acute care spending and utilization but comparison 
providers had larger reductions in acute care spending and utilization. 
Increased spending among Standard ACOs was concentrated among the 
integrated delivery system/hospital system ACOs in the model. High 
Needs ACOs that serve Medicare FFS beneficiaries with complex needs, 
including dually eligible beneficiaries, decreased gross spending. High 
Needs ACOs comprised of organizations that have not traditionally 
provided services to Medicare FFS beneficiaries favorably reduced acute 
and post-acute care utilization and spending. New Entrant ACOs had 
declines in gross spending but these declines were similar to those of 
providers within their same markets. Standard and New Entrant ACOs 
showed statistically significant improvement on at least one quality 
measure. These interim evaluation results are mixed, and additional 
analyses and years of experience with the Model will inform which 
features of ACO REACH could drive continued growth and innovation in 
the Shared Savings Program and the focus of future Innovation Center 
ACO models.
(2) Considerations for Incorporating Higher Risk and Potential Reward 
Under the ENHANCED Track
    As we explained in the CY 2024 PFS final rule (88 FR 79223 through 
79225), when considering a higher risk track, CMS would need to balance 
the incentives for ACOs to transition to higher levels of risk and 
potential reward and increase ACO participation in the Shared Savings 
Program and in two-sided risk tracks, all while ensuring sufficient 
financial safeguards to protect against inappropriately large shared 
losses for ACOs coordinating and improving quality of care for high-
cost beneficiaries. Considerations must also be directed towards 
safeguarding the Medicare Trust Funds and ensuring that CMS satisfies 
any statutory requirements under section 1899(i)(3) of the Act.
    In the CY 2025 PFS proposed rule (89 FR 61918 through 61919), we 
explained that a revised ENHANCED track could be implemented in 
accordance with section 1899(i)(3) of the Act, provided the Secretary 
determines that such other payment model enhances the quality and 
efficiency of items and services furnished under the Medicare program 
and does not result in program expenditures greater than those that 
would result under the statutory payment model. We also stated that 
increasing the sharing rate in the ENHANCED track may need to be 
accompanied by other modifications to prevent spending from increasing 
and possibly jeopardizing compliance with section 1899(i)(3) of the 
Act. One factor we stated we would consider is selective participation 
with regard to which ACOs would choose to participate in a higher risk 
track, if offered. For example, Shared Savings Program ACOs that have a 
history of high levels of earned shared savings or have received a 
favorable high regional adjustment to their benchmark may be more 
likely than other ACOs to switch to the higher risk track upon renewing 
or early renewing their participation in the program so they can 
receive additional benefit from the higher levels of potential reward 
offered in a higher risk track. This could result in increased spending 
on the part of CMS which may jeopardize compliance with section 
1899(i)(3) of the Act. If a higher risk track were to be offered in the 
Shared Savings Program in the future, we stated CMS would consider 
replacing the existing ENHANCED track in order to prevent further 
selective participation and maintain the balance between increased 
participation and compliance with applicable statutory requirements.
    In the CY 2025 PFS proposed rule (89 FR 61919), we solicited 
comment on the following potential features of a revised ENHANCED 
track:
(a) Benchmark Discount Rate
    Both the NGACO Model and the Global Risk Sharing Option of the ACO 
REACH Model feature a discount rate that is applied to benchmarks. The 
discount rate serves to protect the Medicare Trust Funds by reducing 
benchmarks and thereby improves the likelihood of achieving savings for 
the Medicare program for risk tracks that can feature up to 100 percent 
shared savings rates, such as the Global Risk Sharing Option in the ACO 
REACH Model. A discount would be applied to an ACO's updated historical 
benchmark before gross savings/losses are calculated, which increases 
the likelihood of savings for CMS and the Medicare program. If an ACO 
were to participate in a potential higher risk track and potentially 
share in 100 percent of gross savings, this discount would serve as the 
primary means for CMS to capture savings from ACOs participating in 
this option, as in the absence of a discount any and all gross savings 
would go to ACOs in the form of a shared savings payment. For example, 
consider an ACO with an updated benchmark of $10,000 and mean per-
capita performance year expenditures of $9,500. Applying a discount 
rate of 1 percent to the benchmark would reduce the ACO's benchmark to 
$9,900. Gross savings would then be calculated based on the discounted 
benchmark, and the ACO's shared saving rate would be applied to the 
savings, provided these savings met or exceeded the ACO's selected MSR.
    A discount to the benchmark could also include a guardrail policy 
similar to the guardrail implemented in the three-way blended update 
factor that was finalized in the CY 2023 PFS final rule (87 FR 69881). 
Under such an approach, if an ACO were to be liable for shared losses 
after discounting the benchmark, then gross savings or losses would be 
recalculated using a benchmark without the discount. However, if the 
ACO were to generate gross savings in excess of their MSR under the 
benchmark without the discount, they would still not be considered 
eligible to share in savings. This approach would help ensure that CMS 
shares in any savings generated by ACOs participating in a potential 
revised ENHANCED track while also not increasing downside risk for ACOs 
that may be liable for shared losses.
    In the CY 2025 PFS proposed rule (89 FR 61919), we solicited 
comment on what rate would be appropriate for a

[[Page 98206]]

discount to the benchmark that would protect the Medicare Trust Funds 
while providing an adequate incentive for ACOs to participate in a 
potential revised ENHANCED track. We also solicited comment on whether 
the model features described in following subsections might replace a 
discount to the benchmark while balancing financial incentives for ACOs 
and risk to CMS. Additionally, we also solicited comments from 
interested parties, including ACOs, on the discount to the benchmark 
and what level of discount would be acceptable to ACOs participating in 
the Shared Savings Program, as well as what would be considered too 
high of a discount.
(b) Tapered Sharing Arrangements
    Currently in the ENHANCED track, ACOs can receive a shared savings 
payment of up to 20 percent of their updated benchmark (once the MSR is 
met or exceeded) (Sec.  425.610(e)(2)) or be liable for losses not to 
exceed 15 percent of their updated benchmark (once the MLR is met or 
exceeded) (Sec.  425.610(g)). Alternatively, CMS could set up marginal 
savings bands or risk corridors under which shared savings or losses 
rates would vary with the amount of gross savings or losses. As gross 
savings/losses increase, the ACO will retain a progressively smaller 
portion of the total savings or will be responsible for a progressively 
smaller portion of the total losses. For example, consider hypothetical 
marginal savings bands shown in Table 50. Under this arrangement, an 
ACO would share in all savings up to 10 percent of their updated 
benchmark at a rate of 100 percent. For savings between 10 to 15 
percent, the ACO would share in 60 percent of savings and CMS would 
retain the remaining 40 percent. For savings between 15 to 20 percent, 
the ACO would share in 40 percent of savings and CMS would retain the 
remaining 60 percent. In case of losses, ACOs would be responsible for 
50-100 percent of the losses, depending on the ACO's quality 
performance score.
[GRAPHIC] [TIFF OMITTED] TR09DE24.092

    In the CY 2025 PFS proposed rule (89 FR 61919 and 61920), we 
solicited comment on whether the hypothetical marginal shared savings 
bands shown in Table 50 represent an appropriate tapering schedule that 
would provide sufficient incentive for an ACO to participate in a 
potential revised ENHANCED track, as well as whether the tapering 
schedule should begin with lower shared savings rates and feature 
increasing rates as an ACO generates greater amounts of savings. We 
also solicited comment on whether a potential tapering schedule should 
be symmetrical with respect to shared loss rates. Finally, we solicited 
comment on whether marginal shared savings bands provide the right 
incentives to ACOs relative to the fixed savings rate in the current 
ENHANCED track.
(c) MSR/MLR
    As we explained in the CY 2025 PFS proposed rule (89 FR 61920), we 
are considering the option for all ACOs under a revised ENHANCED track 
to be subject to a symmetric MSR/MLR of 0 percent. This would increase 
many ACOs' exposure to both positive savings and negative risk. While 
this approach would guarantee that any ACO generating savings would 
share in those savings (provided they meet the quality performance 
standard established under Sec.  425.512 and otherwise maintain their 
eligibility to participate in the Shared Savings Program), ACOs with 
performance year expenditures greater than their historical benchmark 
would be liable for those losses due to the 0 percent MLR. We solicited 
comment on whether a potential revised ENHANCED track should retain the 
existing symmetric MSR/MLR selection options that currently exist for 
ACOs in a two-sided risk model under Sec.  425.610(b)(1).
(d) Cap On Regional Adjustment Weight
    We solicited comment on adjusting the weights used to calculate the 
regional adjustment amounts under Sec.  425.656(e) for ACOs in the 
revised ENHANCED track. This may take the form of applying a cap of 35 
percent to all the weights used to calculate regional adjustment 
amounts. This would impact any ACOs in a second or subsequent agreement 
period subject to a regional adjustment if their historical benchmark 
spending is lower than their regional service area. If the cap were to 
apply to an ACO with lower spending than their regional service area, 
then this would result in a decreased regional adjustment to that ACO's 
historical benchmark. Overall, this feature would reduce the cost to 
CMS associated with high regional adjustments by reducing an ACO's 
historical benchmark in the event that an ACO in a second or subsequent 
agreement period receives a large positive regional adjustment, which 
may decrease the need for higher benchmark discount rates or lower 
tapered shared savings rates that are less favorable to ACOs and limit 
incentives for ACOs to transition from the BASIC track to the revised 
ENHANCED track. This feature may also increase the relative impact of 
the prior savings adjustment and the health equity benchmark adjustment 
proposed in section III.G.7.b. of the CY 2025 PFS proposed rule. We 
solicited comment on whether further reductions to or the removal of 
the regional adjustment to the historical benchmark would be 
appropriate as part of a potential revised ENHANCED track. We also 
solicited comment on whether maintaining the regional adjustment in its 
current State would warrant further changes to the revised ENHANCED 
track features described above, including, but not limited to, a 
discount to the benchmark or lower tapered shared savings rates.

[[Page 98207]]

(e) Payment Mechanisms
    We solicited comments on alternative payment mechanisms the 
Innovation Center has tested and their ability to help transform care 
delivery and improve health outcomes for ACOs participating in the 
Shared Savings Program. These payment mechanisms test whether 
alternative payment flows (that is, those other than fee for service 
reimbursement) facilitate better investment in infrastructure and care 
coordination and encourage innovative downstream payment arrangements 
that can improve health outcomes for Medicare beneficiaries. The 
alternative payment mechanisms on which we solicited comments are 
described below:
     Infrastructure Payments: Under these arrangements, CMS 
makes a payment to the ACO, in addition to FFS reimbursement to the 
providers and suppliers participating in the ACO, that is unrelated to 
claims. Infrastructure payments have been distributed either as a lump 
sum or per beneficiary per month payments. Infrastructure payments are 
recouped during the payment reconciliation process.
     Population-Based Payment, All-Inclusive Population-Based 
Payment, or Advance Payment Option: In this arrangement, CMS provides a 
percentage of FFS reimbursement to the ACO in the form of a monthly 
payment to support ongoing ACO activities and provide the ACO 
flexibility in the types of arrangements it enters into with provider/
suppliers. The ACO and providers with whom it has a written business 
arrangement determine percentage reductions to the base FFS payments to 
the providers interested in this payment arrangement. Providers 
participating in this option have their FFS payments reduced by the 
agreed upon percentage, which range from 1-100 percent. CMS pays the 
projected total annual amount taken out of the base FFS rates to the 
ACO in monthly payments. At the end of each performance year, the 
amount of payment paid to ACOs participating in this type of payment 
option is reconciled against the reductions actually made to claims 
payments to providers participating in these arrangements, linking the 
amount of these payments directly to utilization and FFS payment.
     Capitation: The ACO REACH Model \619\ tests two capitation 
payment options--Primary Care Capitation and Total Care Capitation.
---------------------------------------------------------------------------

    \619\ Refer to the ACO REACH Model Request for Applications, 
available at https://www.cms.gov/priorities/innovation/media/document/aco-reach-rfa, and the ACO REACH Model PY2024 Participant 
and Preferred Provider Management Guide (August 2023; v3), 
previously available at https://www.cms.gov/files/document/aco-reach-py24-part-pref-provider-mgmt-guide.pdf.
---------------------------------------------------------------------------

    The Primary Care Capitation Payment is the payment for primary care 
services provided to aligned REACH beneficiaries by all Participant 
Providers and those Preferred Providers who have selected Primary Care 
Capitation Payment. In Primary Care Capitation, a per beneficiary, per 
month capitated payment is provided to an ACO for its aligned 
beneficiaries for the primary care services provided by the ACO's 
Participant Providers and its Preferred Providers who have opted to 
participate in Primary Care Capitation Payment. The Primary Care 
Capitation payment amount is generally equal to seven percent of the 
estimated total cost of care for the ACO's aligned population (that is, 
the risk adjusted, trended, and regionally blended benchmark).
    The Primary Care Capitation payment includes two components, Base 
Primary Care Capitation and Enhanced Primary Care Capitation. The Base 
Primary Care Capitation amount is intended to cover primary care 
services furnished to aligned beneficiaries by Participant Providers 
and those Preferred Providers who have agreed to participate in Primary 
Care Capitation Payment that are thus subject to fee reductions under 
Primary Care Capitation Payment. The Enhanced Primary Care Capitation 
amount, which will be recouped by CMS in full during final financial 
settlement, is intended to enable ACOs to make upfront investments in 
infrastructure, technology, tools, and resources to support increased 
access to primary care, provision of care, and care coordination. The 
Primary Care Capitation Payment is expected to encourage greater 
flexibility in payment and innovative primary care service delivery as 
a means of improving the quality and cost effectiveness of care 
overall.
    In Total Care Capitation, a per-beneficiary, per month capitated 
payment is provided to an ACO for all Medicare Part A and Part B 
services provided to aligned beneficiaries by the ACO's Participant 
Providers and its Preferred Providers who have opted to participate in 
Total Care Capitation payment. The Total Care Capitation payment amount 
reflects the estimated total cost of care for the ACO's aligned 
population (that is, the risk adjusted, trended, and regionally blended 
benchmark) and is only available to ACOs participating in the Global 
risk option. Participant Providers and those Preferred Providers that 
have elected to participate in the ACO's selected capitation payment 
mechanism continue to submit claims to CMS for services provided to 
aligned beneficiaries. The CMS FFS claims processing system reduces 
claims payment amounts according to the payment reduction arrangements 
with their providers. More details on ACO REACH Model's capitation 
payment mechanisms are available here: https://www.cms.gov/files/document/aco-reach-py24-financial-ops-capitation-and-payment-mechanisms.pdf.
    Additionally, we solicited feedback on the following questions 
related to implementation of a revised ENHANCED track with higher risk 
and potential reward, as well as comments that could inform changes to 
the Shared Savings Program and future Innovation Center ACO models:
    1. What would the option of a revised ENHANCED track allow an ACO 
to do that they are unable to do currently?
    2. How would higher downside risk impact an ACO's care delivery 
strategies, including advanced primary care, behavioral health, 
specialty integration, and integration with community-based 
organizations to improve health outcomes or advance health equity?
    3. How does higher downside risk impact an ACO's downstream 
provider arrangements to further advance incentives to reduce delivery 
of low value services and the total cost of care, and to increase 
savings performance?
    4. What types of organizations, including but not limited to ACOs 
and providers, are interested in a higher risk and reward option in the 
Shared Savings Program?
    5. What additional flexibilities or features (for example, benefit 
enhancements, advance payments, capitation payments, etc.) would ACOs 
in a revised ENHANCED track with higher risk and potential reward want 
CMS to offer to help them be successful in improving the quality of 
care and reducing costs?
    6. How should a revised ENHANCED track with higher risk and 
potential reward also require additional accountability for quality? 
Should ACOs in this revised track be required to report all payer/all 
patient quality measures?
    7. Should a revised ENHANCED track with higher risk and potential 
reward require ACOs with earned shared savings to share savings with 
beneficiaries or spend a flat dollar amount or a certain percentage on 
beneficiaries in the form of items or services not covered by original 
Medicare (for example, meals, dental,

[[Page 98208]]

vision, hearing, or Part B cost-sharing reductions)?
    8. How should CMS consider the discount, sharing rate, and risk 
corridors or marginal savings bands in the design of a higher risk 
option that can realize savings for Medicare? Are there special 
considerations that CMS should bear in mind when thinking through such 
features for different types of ACOs (for example, low revenue, high 
revenue, health system-based, safety net, etc.)?
    9. How might we improve beneficiary assignment and are there 
different considerations for different types of ACOs (for example, low 
revenue, high revenue, health system-based, safety net, etc.)?
    10. What other features should CMS consider in designing financial 
benchmarks that balance prospectivity and accuracy, and that can lead 
to savings for both ACOs and Medicare? How might administratively set 
benchmarks achieve these goals and what considerations should we bear 
in mind if we test administrative benchmarking?
    11. We are interested in ways to increase participation by 
healthcare providers and suppliers in the Shared Savings Program and 
future Innovation Center ACO models, including how an ACO model 
requiring provider participation or stronger participation incentives 
might be designed.
    The following is a summary of the comments we received in response 
to the comment solicitation on establishing higher risk and potential 
reward under the ENHANCED track and our response.
    Comment: The majority of commenters supported a higher risk track 
option in the Shared Savings Program. Commenters offered a variety of 
reasons for their support of a higher risk track, including that it 
would help encourage and sustain ACO participation in the Shared 
Savings Program and provide increased financial incentives that would 
allow ACOs to ``maintain or increase their level of investment in 
patient care and providers'' and ``increase staffing to support care 
management or establish initiatives for high-risk patients,'' and could 
serve as a track for ACO REACH Model participants to transition into 
after the ACO REACH Model expires at the end of 2026. Multiple 
commenters suggested that CMS use the experience and design features of 
the ACO REACH Model and the NGACO Model when introducing a higher risk 
track in the Shared Savings Program. Specifically, commenters pointed 
to the Part B cost sharing support, Nurse Practitioner Services Benefit 
Enhancement, and other benefit enhancements as features they would like 
to see in a potential higher risk track. Commenters also requested that 
a higher risk track be optional, not mandatory, for ACOs participating 
in the Shared Savings Program.
    Nearly all commenters were opposed to a higher risk track replacing 
the existing ENHANCED track. Commenters supported a higher risk track 
being offered alongside the current ENHANCED track and other existing 
participation options. Commenters stated their belief that the current 
ENHANCED track is a stable and popular participation option and if CMS 
were to replace it with a revised higher risk track, then this may be 
counterproductive to ACOs taking on more risk. Specifically, commenters 
stated that some ACOs may be unwilling or unable to take on the higher 
risk associated with a higher risk track and would either participate 
in Level E of the BASIC track or voluntarily terminate their 
participation in the Shared Savings Program.
    Many commenters provided feedback on the specific model design 
features that we described in the CY 2025 PFS proposed rule. Several 
commenters suggested that ACOs should have the option of choosing 
between a 100 percent sharing rate with a discount to the benchmark or 
a sharing rate between 85-90 percent and no discount to the benchmark. 
Several commenters said that a reasonable benchmark discount rate of 
1.5 percent to 2 percent would be acceptable and that a discount rate 
of 3 percent would be prohibitively large. Several commenters were 
opposed to a benchmark discount rate entirely. Some commenters 
preferred tapered sharing rates over the adoption of a discount to the 
benchmark. Several commenters suggested that a higher risk track should 
allow ACOs to continue enjoying the flexibility they currently have 
when selecting their symmetrical MSR/MLR. One commenter argued that 
requiring ACOs participating in a higher risk track to spend a portion 
of their earned shared savings payments on beneficiaries would cause 
them to incur prohibitively large costs in connection with complying 
with Shared Savings Program monitoring and reporting requirements.
    Several commenters requested that ACOs be offered the option of 
capitated payments, infrastructure payments, advance payments, or 
population-based payments. Commenters argued that these payments would 
mitigate the delay that ACOs face in receiving earned shared savings 
payments for a PY, and that access to such alternative payment 
mechanisms would provide ACOs the flexibility they need to ``ease 
provider burden and provide more consistent cash flow''.
    One commenter suggested that CMS provide ACOs with a participation 
option similar to ACO REACH's High Needs Track. They argued that such a 
track would provide a bridge for current ACO REACH participants to join 
the Shared Savings Program after the ACO REACH Model expires at the end 
of 2026 and better support current Shared Savings Program ACOs that 
serve high needs or other underserved beneficiary populations.
    Commenters expressed concerns about various Shared Savings Program 
policies that were not specific to a potential higher risk track. 
Several commenters expressed concern about the negative impact of the 
ratchet effect on long-term participation in the Shared Savings 
Program. Several commenters suggested that CMS allow beneficiaries to 
voluntarily align to ACOs under Sec.  425.402(e) in writing (rather 
than only electronically), as is done in the ACO REACH Model. Several 
commenters also suggested that CMS allow Shared Savings Program 
participation at the NPI level rather than exclusively at the TIN 
level. One commenter expressed their opposition to the regional 
adjustment to an ACO's historical benchmark and argued that it 
``maintains undesirable participation incentives and distorts the 
calculation of the prior-savings adjustment''.
    Response: We appreciate the feedback we received in response to 
this comment solicitation. We will consider this information to inform 
future rulemaking.
f. Technical Change for Consistency in Financial Calculations
(1) Background
    For the benchmarking methodology applicable to agreement periods 
beginning on January 1, 2024, and in subsequent years, we cap ACO 
prospective hierarchical condition category (HCC) risk score growth 
between BY3 and the performance year (as finalized in the CY 2023 PFS 
final rule, refer to 87 FR 69932 through 69946), as well as prospective 
HCC risk score growth in an ACO's regional service area between BY3 and 
the performance year (as finalized in the CY 2024 PFS final rule, refer 
to 88 FR 79174 through 79185).The policy to cap ACO prospective HCC 
risk score growth between BY3 and the performance year relied on our 
authority granted by section 1899(d)(1)(B)(ii) of the Act to adjust the 
benchmark for beneficiary characteristics and such other factors as

[[Page 98209]]

the Secretary determines appropriate (see 87 FR 69934). The policy to 
cap prospective HCC risk score growth in an ACO's regional service area 
between BY3 and the performance year by applying an adjustment factor 
in calculating the regional component of the three-way blended 
benchmark update factor required use of our statutory authority under 
section 1899(i)(3) of the Act (see 88 FR 79182 and 79183).
    The current regulations describe how we cap ACO prospective HCC 
risk score growth at Sec. Sec.  425.605(a)(1) and 425.610(a)(2). As 
specified, positive adjustments in prospective HCC risk scores are 
subject to a cap equal to the ACO's aggregate growth in demographic 
risk scores between BY3 and the performance year (positive or negative) 
plus 3 percentage points. The cap applies to prospective HCC risk score 
growth for any Medicare enrollment type only if the ACO's aggregate 
growth in prospective HCC risk scores between BY3 and the performance 
year across all of the Medicare enrollment type exceeds this cap. 
Growth in an ACO's risk scores by enrollment type is expressed as the 
ratio of the ACO's performance year risk score for that enrollment type 
to the ACO's BY3 risk score for that enrollment type. The aggregate 
growth in demographic and prospective HCC risk scores risk scores is 
calculated by taking a weighted average of the risk ratio for 
demographic risk scores or prospective HCC risk scores, as applicable, 
for each Medicare enrollment type using specified weights.
    The current regulations further describe how we cap prospective HCC 
risk score growth in the ACO's regional service area at Sec.  425.655. 
As specified, CMS determines aggregate growth in regional prospective 
HCC and demographic risk scores by calculating growth in prospective 
HCC and demographic risk scores between BY3 and the performance year 
for each Medicare enrollment type, where growth in an ACO's regional 
risk score by enrollment type is expressed as the ratio of the 
performance year regional risk score for a Medicare enrollment type to 
the BY3 regional risk score for that enrollment type. We then calculate 
aggregate risk score growth by taking a weighted average of the 
regional prospective HCC or demographic risk ratios, as applicable, 
across the four Medicare enrollment types, using specified weights. We 
next determine the cap on regional risk score growth (refer to Sec.  
425.655(e)),\620\ and then determine if the ACO's regional risk score 
growth is subject to a cap and apply a regional risk score growth cap 
adjustment factor for each Medicare enrollment type, as applicable 
(refer to Sec.  425.655(f)).\621\
---------------------------------------------------------------------------

    \620\ To determine the cap on regional risk score growth, we 
calculate the non-market share adjusted cap on the ACO's regional 
risk score growth as the sum of the aggregate growth in regional 
demographic risk scores and 3 percentage points, then adjust the cap 
to reflect the ACO's aggregate market share.
    \621\ If the aggregate regional prospective HCC risk score 
growth does not exceed the cap on regional risk score growth, the 
ACO's regional risk score growth is not subject to the cap. For 
these ACOs we set the risk score growth cap adjustment factor equal 
to 1 for each Medicare enrollment type. If the aggregate regional 
prospective HCC risk score growth exceeds the market share adjusted 
cap, the ACO's regional risk score growth is subject to the cap. For 
these ACOs we next determine whether the cap on regional risk score 
growth applies for each Medicare enrollment type.
---------------------------------------------------------------------------

    When describing how we will cap prospective HCC risk score growth 
in the ACO's regional service area in the CY 2024 PFS final rule, we 
included a footnote (see 88 FR 79178) that indicated that the weights 
to be used to compute aggregate risk score growth for this calculation 
are the same as the weights to be used when calculating weighted 
average ACO prospective HCC and demographic risk ratios under the risk 
adjustment methodology for capping ACO risk score growth adopted in the 
CY 2023 PFS final rule and codified in Sec. Sec.  425.605(a)(1)(ii)(C) 
and 425.610(a)(2)(ii)(C). That is, it was our intention to use the same 
weights in both the regional risk score growth cap calculation and the 
ACO risk score growth cap calculation. However, in codifying the 
methodology for the regional risk score growth cap in the new section 
of the regulations, Sec.  425.655, we inadvertently introduced a 
discrepancy.
    In Sec. Sec.  425.605(a)(1)(ii)(C) and 425.610(a)(2)(ii)(C), where 
we codified how we will calculate aggregate risk score growth used in 
determining the cap to apply to ACO prospective HCC risk score growth, 
we describe the weight applied to the growth in demographic or 
prospective HCC risk scores for each Medicare enrollment type as equal 
to the product of the historical benchmark expenditures for that 
enrollment type and the performance year person years for that 
enrollment type. In Sec.  425.655(d)(2), where we codified how we will 
calculate aggregate risk score growth used in determining the cap to 
apply to regional prospective HCC risks score growth, we describe the 
weight applied to the growth in demographic or prospective HCC risk 
scores for each Medicare enrollment type as equal to product of the 
ACO's regionally adjusted historical benchmark expenditures (emphasis 
added) for that enrollment type and the ACO's performance year assigned 
beneficiary person years for that enrollment type.
    The regulations at Sec. Sec.  425.605(a)(1)(ii)(C) and 
425.610(a)(2)(ii)(C) provide that we will use the ACO's historical 
benchmark expenditures in calculating the weights used to cap ACO risk 
score growth. By contrast, the regulations at Sec.  425.655(d)(2) 
provide that we will use an ACO's regionally adjusted historical 
expenditures in calculating the weights used in the calculation of 
regional risk score growth cap. In the CY 2025 PFS proposed rule (89 FR 
61922), we explained that, as written, the regulations at Sec.  
425.655(d)(2) is inconsistent with the language used at Sec. Sec.  
425.605(a)(1)(ii)(C) and 425.610(a)(2)(ii)(C) despite the fact that we 
indicated in the CY 2024 PFS final rule that we would use the same 
weights in both calculations. Additionally, it is unclear how we would 
apply the calculation described at Sec.  425.655(d)(2) in practice. As 
we described in the CY 2025 PFS proposed rule, for agreement periods 
beginning on January 1, 2024, and in subsequent years, in computing an 
ACO's historical benchmark, CMS determines the per capita Parts A and B 
fee-for-service expenditures for beneficiaries that would have been 
assigned to the ACO in any of the 3 most recent years prior to the 
start of the agreement period using the ACO participant TINs identified 
before the start of the agreement period as required under Sec.  
425.118(a) and the beneficiary assignment methodology selected by the 
ACO for the first performance year of the agreement period as required 
under Sec.  425.400(a)(4)(ii). An ACO's historical benchmark may then 
be subject to a regional adjustment (refer to Sec.  425.656), a prior 
savings adjustment (refer to Sec.  425.658), or no adjustment (refer to 
Sec.  425.652(a)(8) and (c)). This methodology, based on policies 
finalized in the CY 2023 and CY 2024 PFS final rules, under which an 
ACO may receive a prior savings adjustment, a regional adjustment, and 
or no adjustment at all, differs from the methodology that was in 
effect for ACOs in an agreement period beginning on or after July 1, 
2019, but before January 1, 2024, under which all ACO historical 
benchmarks incorporated a regional adjustment (see Sec.  425.601). 
Furthermore, in section III.G.7.b. of the CY 2025 PFS proposed rule (89 
FR 61885 through 61892), we proposed to add a third type of adjustment 
that

[[Page 98210]]

could be applied to an ACO's historical benchmark, the health equity 
benchmark adjustment. We explained that if the health equity benchmark 
adjustment was to be finalized as proposed, an ACO may receive a 
regional adjustment, a prior savings adjustment, a health equity 
benchmark adjustment, or no adjustment to its historical benchmark.
(2) Revisions
    As discussed in the CY 2025 PFS proposed ruled (89 FR 61923), it 
was our intention at the time of the CY 2024 PFS rulemaking (see 88 FR 
79178) to use the same weights to calculate the cap for prospective HCC 
risk score growth in an ACO's regional service area as the weights used 
to calculate the cap on prospective HCC risk score growth for the ACO. 
We explained our belief that the same weights should apply to both 
calculations. However, the regulation text language is not currently 
aligned among the relevant provisions or with the preamble discussion 
and may also create confusion with respect to how CMS will compute the 
weights used in setting the caps on ACO and regional prospective HCC 
risk score growth, given that some ACOs will receive a regional 
adjustment to their benchmarks, some will receive a prior savings or, 
if finalized, a health equity benchmark adjustment, and some will 
receive no adjustment at all.
    To address these issues, we proposed technical changes to the 
regulation text at Sec. Sec.  425.605(a)(1)(ii)(C), 
425.610(a)(2)(ii)(C), and 425.655(d)(2) to align the language 
describing the calculation of the weights that will be used to compute 
aggregate risk score growth across the three provisions and to clarify 
that the weight applied to the growth in ACO and regional risk scores 
for each Medicare enrollment type, respectively, would be equal to the 
product of the ACO's historical benchmark expenditures, adjusted in 
accordance with Sec.  425.652(a)(8), for that enrollment type and the 
ACO's performance year assigned beneficiary person years for that 
enrollment type. That is, we would use the ACO's historical benchmark 
expenditures that would have already been adjusted to reflect a prior 
savings adjustment, a regional adjustment, a health equity benchmark 
adjustment, if finalized, or no adjustment. Aligning the description of 
the weight calculation across the three provisions would address the 
discrepancy that exists between the current regulation text and the 
preamble discussion in the CY 2024 PFS final rule. Additionally, 
providing additional detail in the description of the weight 
calculation, namely by indicating that we will use an ACO's historical 
benchmark expenditures adjusted in accordance with Sec.  425.652(a)(8), 
clarifies how we will operationalize the calculation which we believe 
is important, especially given the proposed health equity benchmark 
adjustment, which, if finalized, would add greater complexity to this 
historical benchmark calculation.
    The technical changes that we proposed in section III.G.7.f. of the 
CY 2025 PFS proposed rule relate to benchmark calculations for ACOs in 
agreement periods beginning on or after January 1, 2024. We explained 
that although we will not implement the proposed methodologies for the 
first time until summer 2025 when we reconcile PY 2024, these policies, 
if finalized, would constitute retroactive rulemaking because they are 
the standards under which we will score ACOs that are currently 
participating in agreement periods that began on January 1, 2024, for 
PY 2024. Section 1871(e)(1)(A)(ii) of the Act permits a substantive 
change in regulations, manual instructions, interpretive rules, 
statements of policy, or guidelines of general applicability under 
Title XVIII of the Act to be applied retroactively to items and 
services furnished before the effective date of the change if the 
failure to apply the change retroactively would be contrary to the 
public interest. Here, we proposed a technical change that would align 
the regulation text with our stated intention as described in previous 
rulemaking. The current regulation text, in combination with related 
discussion in the CY 2024 PFS final rule, fails to provide sufficient 
clarity with regard to how CMS will calculate the weights used to 
calculate aggregate ACO or regional risk score growth. While the 
discussion in the CY 2024 PFS final rule indicates that the same 
weights should be use in both calculations, the related regulation text 
does not make this clear and, furthermore, could raise questions for 
how CMS will perform calculations given that not all ACO historical 
benchmarks will include a regional adjustment. Failure to apply the 
proposed changes to our regulations at Sec. Sec.  425.605(a)(1)(ii)(C), 
425.610(a)(2)(ii)(C), and 425.655(d)(2) retroactively would be contrary 
to the public interest because it creates unintended ambiguity in the 
standard CMS will use when calculating risk score growth. Such 
ambiguity may make it difficult for ACOs and other interested parties 
to understand how CMS will perform these calculations or be interpreted 
to suggest that CMS would calculate risk score growth in a different 
manner, which was not the agency's intention.
    We solicited comments on these proposals.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters addressing the proposal were supportive of this 
change as it updates benchmarking calculations to reflect new policies, 
explaining their understanding that the proposal clarifies the use of 
an ACO's benchmark that has been adjusted for prior savings, the HEBA, 
and the regional adjustment to align the three percent cap on HCC risk 
score growth with that of the ACO's region. The commenters also noted 
that if finalized this change would be reflected in PY 2024 financial 
reconciliation calculations.
    Response: We thank commenters for their support of the proposed 
technical change and the retroactive applicability of said change.
    After consideration of public comments, we are finalizing as 
proposed technical changes to the regulation text at Sec. Sec.  
425.605(a)(1)(ii)(C), 425.610(a)(2)(ii)(C), and 425.655(d)(2) to align 
the language describing the calculation of the weights that will be 
used to compute aggregate risk score growth across the three provisions 
and to clarify that the weight applied to the growth in ACO and 
regional risk scores for each Medicare enrollment type, respectively, 
would be equal to the product of the ACO's historical benchmark 
expenditures, adjusted in accordance with Sec.  425.652(a)(8), for that 
enrollment type and the ACO's performance year assigned beneficiary 
person years for that enrollment type.
8. Beneficiary Notification Requirements
a. Modifying the Requirements for When ACOs Must Provide the 
Beneficiary Information Follow-Up Communication
    Under Sec.  425.312(a), ACOs are required to notify beneficiaries 
about the ACO's participation in the Shared Savings Program, the 
beneficiary's ability to decline claims data sharing, and the 
beneficiary's ability to select a provider for the purposes of 
voluntary alignment. In the CY 2023 PFS final rule (87 FR 69961), we 
added the beneficiary information follow-up communication requirement 
under Sec.  425.312(a)(2)(v), which requires an additional follow-up 
with a beneficiary who has received the beneficiary notification. In 
the CY 2023

[[Page 98211]]

PFS final rule (87 FR 69960 through 69963), CMS noted that the follow-
up communication promotes transparency and empowers beneficiaries to 
make an informed decision in choosing a primary care physician and how 
they share their health data. The beneficiary information follow-up 
communication affords the opportunity for additional direct engagement 
between the beneficiary and the ACO, or ACO participant, and provides a 
chance for a meaningful dialog between the patient and provider about 
the coordination of their care, the benefits of receiving care from an 
ACO provider/supplier (as defined at Sec.  425.20), the organizational 
operations of the ACO, and how data is used to improve care and report 
quality outcomes.
    Currently, at Sec.  425.312(a)(2)(v)(A), ``The follow-up 
communication must occur no later than the earlier of the beneficiary's 
next primary care service visit or 180 days from the date the 
standardized written notice was provided.'' Regulations at Sec.  
425.312(a)(2)(v)(B) require ACOs to document the beneficiary 
information follow-up communication. and to make the information 
available to CMS upon request.
    Since CMS implemented the beneficiary information follow-up 
communication requirement, we have received feedback from ACOs that 
requiring the follow-up communication no later than the earlier of the 
beneficiary's next primary care service visit or 180 days from the date 
the standardized written notice was provided is difficult for ACOs to 
operationalize as they do not always know when the beneficiary's next 
primary care service will be and in some cases it can be very soon 
after the beneficiary receives the original beneficiary notification.
    To address this issue and the burden it creates, in the CY 2025 PFS 
proposed rule (89 FR 61923), we proposed to remove the requirement that 
ACOs must provide this follow-up at the beneficiary's next primary care 
visit. Specifically, we proposed to modify Sec.  425.312(a)(2)(v)(A) to 
read ``The follow-up communication must occur no later than 180 days 
from the date the standardized written notice was provided.'' This will 
provide ACOs with more flexibility to implement their strategy for 
following up with beneficiaries after they receive the beneficiary 
notice, while still providing the opportunity for a meaningful dialog 
between a beneficiary and their provider. We solicited comment on this 
proposal. This proposal will be effective beginning January 1, 2025.
    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: Most commentors expressed support for CMS' proposal to 
modify the follow-up communication requirement to require ACOs to 
follow-up on the beneficiary notification within 180 days of when the 
ACO furnished the initial beneficiary notification, and believed it 
would be less burdensome for ACOs to operationalize.
    Response: We agree with commenters that modifying requirements for 
furnishing the follow-up communication may reduce burden for ACOs.
    Comment: A few commenters disagreed with the removal of this 
requirement and believe ACOs should have a follow-up communication 
requirement tied to the timing of a beneficiary's primary care visit, 
as they believe that will improve beneficiary understanding of these 
notices.
    Response: We appreciate these commenters' point of view that tying 
beneficiary notices to primary care visits may improve beneficiary 
understanding. The current requirement for the initial beneficiary 
notice, which must be distributed to beneficiaries before or at the 
first primary care visit of the agreement period, allows beneficiaries 
an opportunity to ask questions at a primary care visit. Additionally, 
under the proposed policy, the follow-up communication may still occur 
at the beneficiary's follow-up primary care visit as long as it is 
provided no later than 180 days from the date the standardized written 
notice was provided.
    Comment: Some commenters encouraged CMS to do more to minimize 
administrative burden for ACOs. Specifically, commenters noted 
operational challenges, unnecessary administrative burden, and 
continued lack of understanding from beneficiaries about ACO objectives 
and the impact of their providers participation, caused by mandated, 
standardized beneficiary notifications.
    Response: We understand that some commenters find the beneficiary 
notification burdensome, however, all current components of the 
beneficiary notification requirements are important for appropriately 
informing beneficiaries about their provider's participation in an ACO. 
In the CY 2023 PFS final rule (87 FR 69960 through 69963), CMS noted 
that the follow-up communication promotes transparency and empowers 
beneficiaries to make an informed decision in choosing a primary care 
physician and how they share their health data. The beneficiary 
information follow-up communication affords the opportunity for 
additional direct engagement between the beneficiary and the ACO, or 
ACO participant, and provides a chance for a meaningful dialog between 
the patient and provider about the coordination of their care, the 
benefits of receiving care from an ACO provider/supplier (as defined at 
Sec.  425.20), the organizational operations of the ACO, and how data 
is used to improve care and report quality outcomes. At this time, 
additional modifications to the beneficiary notification are not 
appropriate, but we will continue to consider feedback from interested 
parties in order to improve beneficiary comprehension of these 
notifications. In 2023, CMS conducted focus groups with beneficiaries 
and interested parties to improve the beneficiary notification template 
and improve beneficiary comprehension of the communicated materials. 
Our efforts to revise the notification templates, based on feedback 
from the focus groups, empowers beneficiaries and engages them in 
managing their health care and clearly communicates the benefits of 
value-based care.
    After consideration of public comments, we are finalizing our 
policy to modify when ACOs must provide the beneficiary information 
follow-up communication as proposed, as specified in revisions to Sec.  
425.312(a)(2)(v)(A).
b. Limiting the Distribution of the Beneficiary Notification to 
Beneficiaries Likely To Be Assigned for ACOs Under Preliminary 
Prospective Assignment With Retrospective Reconciliation
    ACOs that select preliminary prospective assignment with 
retrospective reconciliation are assigned beneficiaries in a 
preliminary manner and before the start of the performance year. 
Beneficiary assignment for these ACOs is then updated quarterly based 
on the most recent 12 or 24 months of data, as applicable. This 
assignment methodology is codified at Sec.  425.400(a)(2). In the CY 
2025 PFS proposed rule (89 FR 61924), we proposed to limit the 
distribution of the beneficiary notification at Sec.  
425.312(a)(2)(iii) to beneficiaries who are more likely be assigned to 
ACOs that select preliminary prospective assignment with retrospective 
reconciliation, when compared to the population of beneficiaries who 
must receive the beneficiary notification under current Sec.  
425.312(a)(2)(iii). Please note that this was not a proposal to

[[Page 98212]]

modify the Shared Savings Program's assignment methodology.
    Currently, ACOs that select preliminary prospective assignment with 
retrospective reconciliation are required to send a beneficiary notice 
to ``each fee-for-service beneficiary'' under Sec.  425.312(a)(2)(iii). 
At Sec.  425.312(a)(2)(iii), the standardized written notice must be 
furnished to ``all fee-for-service beneficiaries prior to or at the 
first primary care service visit during the first performance year in 
which the beneficiary receives a primary care service from an ACO 
participant.'' This can result in ACOs sending notices each year to 
beneficiaries who may not ultimately be assigned to the ACO, as there 
are ``fee-for-service beneficiar[ies]'' to whom ACOs must send notices 
under Sec.  425.312(a)(2)(iii) and who are not eligible to be assigned 
to those ACOs for a variety of reasons. This policy was intended to 
ensure that all beneficiaries who receive a primary care visit from a 
ACO provider/supplier receive the beneficiary notice. However, we have 
heard feedback from ACOs that this creates confusion for the 
beneficiary and unnecessary administrative work for the ACO.
    To reduce burden on ACOs and confusion for beneficiaries, we 
proposed to update the beneficiary notice requirement for ACOs that 
select preliminary prospective assignment with retrospective 
reconciliation to focus on beneficiaries that are likely to be assigned 
to the ACO. These beneficiaries are those who received at least one 
primary care service during the assignment window or applicable 
expanded window for assignment (as defined at Sec.  425.20) from a 
physician who is an ACO professional in the ACO and who is a primary 
care physician as defined at Sec.  425.20 or who has one of the primary 
specialty designations included at Sec.  425.402(c), a FQHC or RHC that 
is part of the ACO, or an ACO professional in the ACO whom the 
beneficiary designated as responsible for coordinating their overall 
care at Sec.  425.402(e).
    This proposed policy would reduce the burden of sending the 
beneficiary notice to all ``fee for service beneficiar[ies],'' 
including those who ultimately would not be eligible to be assigned to 
ACOs that select preliminary prospective assignment with retrospective 
reconciliation. Specifically, we proposed to modify Sec.  
425.312(a)(2)(iii) to state in the case of an ACO that has selected 
preliminary prospective assignment with retrospective reconciliation, 
the beneficiary notice must be provided by the ACO or ACO participant 
to each beneficiary who received at least one primary care service 
during the assignment window or applicable expanded window for 
assignment (as defined at Sec.  425.20) from a physician who is an ACO 
professional in the ACO and who is a primary care physician as defined 
at Sec.  425.20 or who has one of the primary specialty designations 
included at Sec.  425.402(c), a FQHC or RHC that is part of the ACO, or 
an ACO professional in the ACO whom the beneficiary designated as 
responsible for coordinating their overall care at Sec.  425.402(e). 
Each such beneficiary must receive a standardized written notice at 
least once during an agreement period in the form and manner specified 
by CMS. The standardized written notice must be furnished to all of 
these beneficiaries prior to or at the first primary care service visit 
during the first performance year in which the beneficiary receives a 
primary care service from an ACO participant.
    For ACOs that select prospective assignment, beneficiaries are 
prospectively assigned to the ACO at the beginning of each benchmark or 
performance year based on the beneficiary's use of primary care 
services in the most recent 12 or 24 months, as applicable, for which 
data are available, using the assignment methodology described at 
Sec. Sec.  425.402 and 425.404. See Sec.  425.400(a)(3)(i). 
Beneficiaries that are prospectively assigned to an ACO at Sec.  
425.400(a)(3)(i) remain assigned to the ACO at the end of the benchmark 
or performance year unless they meet any of the exclusion criteria at 
Sec.  425.401(b). See Sec.  425.400(a)(3)(ii). We note that ACOs that 
select prospective assignment are subject to Sec.  425.312(a)(2)(iv). 
Under this regulation, ACOs that select prospective assignment are 
required to furnish the beneficiary notice to all prospectively 
assigned beneficiaries once during an agreement period.
    This proposed change will be effective beginning on January 1, 
2025.
    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters were generally appreciative of CMS' proposal 
for better targeting beneficiaries to receive the beneficiary notice 
for ACOs that have selected preliminary prospective assignment with 
retrospective reconciliation, and they supported the proposal.
    Response: We appreciate the commenters' support and agree that this 
proposal will better target the beneficiary notice to appropriate 
beneficiaries.
    Comment: A few commenters expressed concern that this proposal does 
not fully resolve their issues with identifying beneficiaries that 
require the beneficiary notice at or before their first primary care 
visit of the agreement period and note that it requires frontline 
primary care practices to manage the administrative burden of providing 
these notices to beneficiaries. These commenters suggested that CMS 
remove the beneficiary notification requirement entirely, provide ACOs 
with additional information on potential beneficiary assignment 
overlaps between ACOs, or provide additional flexibility for when and 
how these notices are provided.
    Response: We appreciate commenters' feedback on the operational 
challenges of distributing the beneficiary notices. For ACOs that 
select preliminary prospective assignment with retrospective 
reconciliation, the proposed policy reduces the selection of 
beneficiaries who must receive the beneficiary information notice from 
any FFS beneficiary to only those beneficiaries who are likely to be 
assigned to the ACO.
    We note that these ACOs will receive a report that identifies the 
initial population of assignable beneficiaries who must receive the 
beneficiary information notice in December, prior to the start of each 
performance year, to support the ACO's ability to distribute 
beneficiary notices as soon as a new performance year begins. ACOs will 
also receive an updated report on a quarterly basis through the 
performance year, to facilitate the distribution of the beneficiary 
notice to any beneficiaries newly identified on the report.
    We acknowledge that it is possible a beneficiary may receive the 
beneficiary information notice from more than one ACO, and we are 
considering potential options to update the files received by ACOs to 
reduce this potential confusion.
    Additionally, as noted earlier, we understand that some commenters 
find the beneficiary notification burdensome, however, all current 
components of the beneficiary notification requirement are important 
for appropriately informing beneficiaries about their provider's 
participation in an ACO, beneficiary data sharing, and freedom to 
choose where they receive their care. At this time, we do not think 
additional modifications are appropriate, but we will continue to 
consider feedback from stakeholders.
    After consideration of public comments, we are finalizing our 
policy limiting the distribution of the

[[Page 98213]]

beneficiary notification to beneficiaries likely to be assigned for 
ACOs under preliminary prospective assignment with retrospective 
reconciliation as proposed, as specified in revisions to Sec.  
425.312(a)(2)(iii).

H. Medicare Part B Payment for Preventive Services (Sec. Sec.  410.10, 
410.57, 410.64, 410.152)

1. Part B Preventive Vaccines and Their Administration
a. Statutory Background
    Under section 1861(s)(10) of the Act, Medicare Part B covers both 
the vaccine and vaccine administration for the specified preventive 
vaccines--pneumococcal, influenza, hepatitis B and COVID-19 vaccines. 
Section 1861(s)(10)(B) of the Act specifies that the hepatitis B 
vaccine and its administration is only covered for those who are at 
high or intermediate risk of contracting hepatitis B, as defined at 
Sec.  410.63. Under section 1833(a)(1)(B) of the Act (pneumococcal, 
influenza and COVID-19 vaccines) and section 1833(a)(1)(Y) of the Act 
(hepatitis B vaccines), there is no applicable beneficiary coinsurance 
for these vaccines or the services to administer them. Under section 
1833(b)(1) of the Act, the annual Part B deductible does not apply to 
Part B preventive vaccines. Please see 75 FR 73415 for more information 
on the applicability of Part B coinsurance and deductible to preventive 
vaccines.
    Per section 1842(o)(1)(A)(iv) of the Act, payment for these 
vaccines is based on 95 percent of the Average Wholesale Price (AWP) 
for the vaccine product, except when furnished in the settings for 
which payment is based on reasonable cost, such as a hospital 
outpatient department (HOPD), rural health clinic (RHC), or federally 
qualified health center (FQHC). Some other preventive vaccines, such as 
the zoster vaccine for the prevention of shingles, are not specified 
for Medicare Part B coverage under section 1861(s)(10) of the Act and 
are instead covered under Medicare Part D.
b. Pneumococcal, Influenza and Hepatitis B Vaccine Administration
    In the CY 2022 PFS final rule (86 FR 65185), we finalized a uniform 
payment rate of $30 for the administration of a pneumococcal, influenza 
or hepatitis B vaccine covered under the Medicare Part B preventive 
vaccine benefit. We explained that since payment policies for the 
administration of the preventive vaccines described under section 
1861(s)(10) of the Act are independent of the PFS, these payment rates 
will be updated as necessary, independent of the valuation of any 
specific codes under the PFS. (Please see COVID-19 vaccine 
administration payment information in the next section.) The CY 2022 
PFS final rule (86 FR 65180 through 65182) provides a detailed 
discussion on the history of the valuation of the three Level II 
Healthcare Common Procedure Coding System (HCPCS) codes, G0008, G0009, 
and G0010, which describe the services to administer an influenza, 
pneumococcal, and hepatitis B vaccine, respectively.
    In the CY 2023 PFS final rule (87 FR 69984), we finalized a policy 
to annually update the payment amount for the administration of Part B 
preventive vaccines based upon the percentage increase in the Medicare 
Economic Index (MEI). Additionally, we finalized the use of the PFS 
Geographical Adjustment Factor (GAF) to adjust the payment amount to 
reflect cost differences for the geographic locality based upon the fee 
schedule area where the preventive vaccine is administered. These 
adjustments and updates apply to HCPCS codes G0008, G0009, G0010.
    These adjustments and updates also apply to Current Procedural 
Terminology (CPT) code 90480 (Immunization administration by 
intramuscular injection of coronavirus disease [COVID-19] vaccine, 
single dose) that describe the service to administer COVID-19 vaccines 
and HCPCS code M0201 (Administration of pneumococcal, influenza, 
hepatitis b, and/or covid-19 vaccine inside a patient's home; reported 
only once per individual home per date of service when such vaccine 
administration(s) are performed at the patient's home), discussed below 
in section III.H.1.c and III.H.1.d, respectively, of this final rule.
    The current payment rates for G0008, G0009, and G0010, as finalized 
in the CY 2024 PFS final rule, can be found on the CMS Vaccine Pricing 
website under the ``Seasonal Flu Vaccines'' tab, and then under the 
heading ``Locality-Adjusted Payment Rates.'' \622\ As we stated in the 
proposed rule (89 FR 61925), the final rates for CY 2025 will be based 
on the final CY 2025 MEI increase factor. The final CY 2025 MEI 
increase factor, based on the 2017-based MEI, reflecting historical 
data through the 2nd quarter of 2024, is 3.5 percent. Tables 51 and 52 
in section III.H.1.f. of this final rule provide the CY 2025 payment 
rates for G0008, G0009, and G0010, with the 3.5 percent annual update 
applied for CY 2025.
---------------------------------------------------------------------------

    \622\ https://www.cms.gov/medicare/payment/fee-for-service-providers/part-b-drugs/average-drug-sales-price/vaccine-pricing, 
under the tab ``Seasonal Flu Vaccines'', and then under the header 
``Locality-Adjusted Payment Rates.''
---------------------------------------------------------------------------

    We solicited comments on these proposed rates. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters supported our CY 2025 proposed payment rates 
for Part B vaccine administration of pneumococcal, influenza and 
hepatitis B vaccines. We received several comments thanking CMS for 
annually updating the Part B preventive vaccine administration payment 
rate with the MEI. Commenters stated that this helps ensure that 
Medicare beneficiaries continue to have access to essential vaccines, 
and it supports CMS' ongoing commitment to preventive care and public 
health.
    Response: We thank commenters for their support of our proposals 
and for partnering with CMS in our efforts to improve access to 
vaccines and preventive care for Medicare enrollees and all Americans.
    After consideration of public comments, we are finalizing these 
rates as proposed. Tables 51 and 52 in section III.H.1.f. of this final 
rule provide the CY 2025 payment rates for G0008, G0009, and G0010, 
with the 3.5 percent annual update applied for CY 2025.
c. COVID-19 Vaccine Administration
    In the CY 2022 PFS final rule (86 FR 65181 and 65182), we provided 
a detailed history regarding the determinations of initial payment 
rates for the administration of COVID-19 vaccines, and an explanation 
of how the payment policy evolved to a rate of $40 per dose. For CY 
2022, we maintained the payment policy for the administration of COVID-
19 vaccines and stated that while we believe it is appropriate to 
establish a single, consistent payment rate for the administration of 
all four Part B preventive vaccines in the long term, we will pay a 
higher, $40 payment rate for administration of COVID-19 vaccines in the 
short term, while pandemic conditions persisted (86 FR 65185).
    In the CY 2023 PFS final rule (87 FR 69988 through 69993), we 
stated that due to timing distinctions between a PHE declared under 
section 319 of the Public Health Service (PHS) Act and an Emergency Use 
Authorization (EUA) declaration under section 564 of the Federal Food, 
Drug, and Cosmetic Act (FD&C Act), we reconsidered the policies 
finalized in the CY 2022 PFS final rule in light of our goal to promote 
broad and timely access to COVID-19 vaccines. We explained that our 
goal would be better served if our policies

[[Page 98214]]

with respect to payment for administration of these products, as 
addressed in the November 6, 2020 COVID-19 IFC (85 FR 71142) and CY 
2022 PFS final rule (85 FR 18250), continue until the EUA declaration 
for drugs and biological products with respect to COVID-19 is 
terminated. Therefore, we finalized that we would maintain the current 
payment rate of $40 per dose for the administration of COVID-19 
vaccines through the end of the calendar year in which the March 27, 
2020 EUA declaration under section 564 of the FD&C Act (EUA 
declaration) for drugs and biological products ends. Effective January 
1 of the year following the year in which the EUA declaration ends, the 
COVID-19 vaccine administration payment would be set at a rate to align 
with the payment rate for the administration of other Part B preventive 
vaccines, that is, approximately $30 per dose. As mentioned above, we 
also finalized that, beginning January 1, 2023, we would annually 
update the payment amount for the administration of all Part B 
preventive vaccines based upon the percentage increase in the MEI, and 
that we would use the PFS GAF to adjust the payment amount to reflect 
cost differences for the geographic locality based upon the fee 
schedule area where the vaccine is administered.
    On September 11, 2023, the Food and Drug Administration (FDA) 
announced its recommendation to shift to a monovalent coronavirus 
disease 2019 [COVID-19] vaccine that targets the predominant XBB 
lineage virus strain for the 2023-2024 vaccine administration 
season.\623\ In anticipation of this recommendation, in August 2023, 
the CPT Editorial Panel approved five new monovalent COVID-19 vaccine 
product codes for Pfizer and Moderna vaccines. In addition, they 
approved a new vaccine administration code (90480) for reporting the 
administration of any COVID-19 vaccine for any patient (pediatric or 
adult), replacing all previously approved specific vaccine 
administration codes. All previously approved COVID-19 vaccine product 
and vaccine administration codes were deleted from the CPT code set 
effective November 1, 2023, except for product code 91304, which 
represents the Novavax COVID-19 vaccine product and remains 
active.\624\
---------------------------------------------------------------------------

    \623\ https://www.fda.gov/news-events/press-announcements/fda-takes-action-updated-mrna-covid-19-vaccines-better-protect-against-currently-circulating.
    \624\ CPT[supreg] Assistant Special Edition: August Update/
Volume 33/2023. https://www.ama-assn.org/system/files/cpt-assistant-guide-coronavirus-august-2023-updated.pdf.
---------------------------------------------------------------------------

    The current payment rate for CPT code 90480 is available on the CMS 
COVID-19 Vaccine Pricing website, under ``COVID-19 Vaccines & 
Monoclonal Antibodies''.\625\ As we stated in the proposed rule (89 FR 
61926), the final rates for CY 2025 will be based on the final CY 2025 
MEI increase factor. As noted above, the final CY 2025 MEI increase 
factor, based on the 2017-based MEI, is based on historical data 
through the 2nd quarter of 2024 and is 3.5 percent. Tables 51 and 52 in 
section III.H.1.f. of this final rule provide the CY 2025 payment rates 
for 90480 with the 3.5 percent annual update applied for CY 2025. Due 
to the uncertainty surrounding the future of the EUA declaration for 
drugs and biological products for COVID-19, Tables 51 and 52, at the 
end of section III.H.1.f. of this final rule, reflect the potential 
alternative payment amounts for Part B preventive vaccine 
administration for CY 2025. Table 51 displays the CY 2025 Part B 
payment rates for preventive vaccine administration if the EUA 
declaration continues into CY 2025, and Table 52 displays the CY 2025 
Part B payment rates for preventive vaccine administration if the EUA 
declaration ends on or before December 31, 2024.
---------------------------------------------------------------------------

    \625\ https://www.cms.gov/medicare/payment/fee-for-service-providers/part-b-drugs/average-drug-sales-price/vaccine-pricing, 
under ``COVID-19 Vaccines & Monoclonal Antibodies''.
---------------------------------------------------------------------------

    We solicited comments on these proposed rates. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters supported our CY 2025 proposed payment rates 
for COVID-19 vaccine administration. We received several comments 
thanking CMS for annually updating the payment rate for the 
administration of preventive vaccines covered under Medicare Part B 
with the MEI. Commenters stated that this helps ensure that Medicare 
beneficiaries continue to have access to essential vaccines, and it 
supports CMS' ongoing commitment to preventive care and public health. 
Commenters also thanked CMS for providing a clear path forward on 
payment for both EUA declaration scenarios for 2025.
    Response: We thank commenters for their support of our proposals 
and for partnering with CMS in our efforts to improve access to 
vaccines and preventive care for Medicare enrollees and all Americans.
    Comment: Some commenters had feedback regarding our existing policy 
to maintain the current payment rate of $40 per dose for the 
administration of COVID-19 vaccines through the end of the calendar 
year in which the EUA declaration ends.
    Several commenters supported this existing policy and thanked CMS 
for maintaining the higher payment rate relative to other Part B 
vaccine administration payments. One commenter requested that, when the 
EUA declaration is terminated, CMS communicate any changes in payment 
and allow for a transition time to adjust claims systems. Another 
commenter asked that CMS continue the $40 payment rate for COVID-19 
vaccine administration beyond the end of CY 2024 and extend it to all 
Medicare preventive vaccines. Other commenters requested that CMS 
maintain the higher payment rate through the end of the 2024-2025 
respiratory disease season, even if the EUA declaration ends before the 
end of the season. One commenter suggested that CMS finalize one 
payment rate for administration of the COVID-19 vaccine for CY 2025, 
regardless of the date that the EUA declaration is terminated.
    Response: We thank commenters for their feedback. In last year's CY 
2024 PFS final rule (88 FR 79233-34), we explained that the CY 2022 PFS 
final rule (87 FR 65184-86) contains an extensive discussion on our 
rationale for initially setting the $40 COVID-19 vaccine administration 
rate, and for eventually aligning the COVID-19 vaccine administration 
rate with the rate for administration of the other Part B preventive 
vaccines, that is, $30 per vaccine administered. In the CY 2023 final 
rule (87 FR 69988-93), we set this transition to occur on January 1 of 
the year following the year in which the Secretary ends the March 27, 
2020, EUA declaration under section 564 of the FD&C Act (EUA 
declaration) for drugs and biological products, and we also gave a 
detailed explanation of this decision. We also stated that when the 
transition to a calendar year post-EUA declaration does arrive, we plan 
to provide both vaccine providers and Medicare enrollees with 
sufficient notice and thorough guidance regarding the transition (88 FR 
79233-34). As of the publication of this final rule, the EUA 
declaration has not yet ended.
    Additionally, CMS is dedicated to the goal of promoting vaccine 
access for Medicare enrollees. We appreciate that these commenters 
share CMS' priorities in this area.
    Comment: We received several comments that were outside of the 
scope of our proposals for Part B preventive vaccines for CY 2025. 
Several commenters requested that CMS evaluate coverage and payment 
policies

[[Page 98215]]

for potential combination vaccines under Medicare Part B, and to 
determine those policies. Other commenters requested that all ACIP-
recommended vaccines transition to coverage under Medicare Part B, 
including vaccines for mpox and RSV. Some commenters asked CMS to 
continue working with Congress to achieve Medicare Part B provider 
status for pharmacists. Another commenter suggested policy changes that 
would encourage emergency departments to administer vaccines.
    Response: We thank commenters for their feedback. These comments 
are outside of the scope of our proposals in the CY 2025 PFS proposed 
rule. We note that, in accordance with statute, Part B payment can be 
made only for the preventive vaccines specified at section 1861(s)(10) 
of the Act, as well as their administration (please see section III.H.1 
of this final rule for more information). Therefore, we did not make 
any proposals regarding expanding the Part B preventive vaccine benefit 
to additional vaccines. We did not address vaccine administration in 
other health care settings, and we did not make any proposals regarding 
the scope of practice for those who would administer the vaccines.
    However, as noted above, CMS is dedicated to the goal of promoting 
vaccine access for Medicare enrollees. We appreciate that these 
commenters share CMS' priorities in this area. We are actively taking 
these comments into consideration for future policymaking, as 
appropriate under our statutory authority.
    After consideration of public comments, we are finalizing these 
rates as proposed. Tables 51 and 52 in section III.H.1.f. of this final 
rule provide the CY 2025 payment rates for CPT code 90480, with the 3.5 
percent annual update applied for CY 2025.
d. In-Home Additional Payment for Administration of Preventive Vaccines
    In the CY 2022 PFS final rule (86 FR 65187 and 65190), we provide a 
detailed discussion on the payment policy for COVID-19 vaccine 
administration in the home. In summary, providers and suppliers that 
administer a COVID-19 vaccine in the home, under certain circumstances, 
could bill Medicare for one of the existing COVID-19 vaccine 
administration CPT codes along with HCPCS code M0201 (COVID-19 vaccine 
administration inside a patient's home; reported only once per 
individual home per date of service when only COVID-19 vaccine 
administration is performed at the patient's home). For CY 2022, we 
continued to make an additional payment when a COVID-19 vaccine was 
administered in a beneficiary's home under certain circumstances and 
stated that we would make this payment until the end of the year in 
which the PHE expires.
    In the CY 2023 PFS final rule (87 FR 69984 through 69986), we 
discussed that we had received many comments and requests from 
interested parties that the in-home add-on payment be applied more 
broadly to all preventive vaccines. Commenters also expressed concerns 
that discontinuation of the in-home additional payment would negatively 
impact access to the COVID-19 vaccine for underserved homebound 
beneficiaries. Therefore, we continued the policy of making an 
additional payment when a COVID-19 vaccine is administered in a 
beneficiary's home, under certain circumstances for the duration of CY 
2023. We explained that we were continuing the policy of additional 
payment for at-home COVID-19 vaccinations for another year to provide 
us time to track utilization and trends associated with its use, in 
order to inform the Part B preventive vaccine policy on payments for 
in-home vaccine administration for CY 2024. In addition, for CY 2023 we 
updated the payment amount by the CY 2023 MEI percentage increase and 
adjusted for geographic cost differences as we do the payment for the 
preventive vaccine administration service, that is, based upon the fee 
schedule area where the COVID-19 vaccine is administered, by using the 
PFS GAF (87 FR 69986).
    In the CY 2024 PFS final rule (88 FR 79235 through 79237), we 
discussed the policy for the in-home additional payment for COVID-19 
vaccine administration under the Part B preventive vaccine benefit for 
CY 2024 and subsequent years. We maintained the payment policy for 
COVID-19 vaccine administration and extended the additional payment to 
the administration of the other three preventive vaccines included in 
the Part B preventive vaccine benefit--the pneumococcal, influenza, and 
hepatitis B vaccines. As described at Sec.  410.152(h)(3), effective 
January 1, 2024, the payment amount for the in-home administration of 
all four vaccines is identical, that is, Medicare Part B pays the same 
additional payment amount to providers and suppliers that administer a 
pneumococcal, influenza, hepatitis B, or COVID-19 vaccine in the home. 
This additional payment amount is annually updated using the percentage 
increase in the MEI and is adjusted to reflect geographic cost 
variations with the PFS GAF.
    We stated that the in-home additional payment is limited to one 
payment per home visit, even if multiple vaccines are administered 
during the same home visit. We noted that every vaccine dose that is 
furnished during a home visit still receives its own unique vaccine 
administration payment. The additional payment for in-home Part B 
vaccine administration is only made if certain circumstances are met, 
as outlined at Sec.  410.152(h)(3)(iii). Providers and suppliers that 
administer one of the Part B preventive vaccines in the home, under 
those circumstances, can bill Medicare for one of the existing Part B 
vaccine administration CPT codes along with HCPCS code M0201 
(Administration of pneumococcal, influenza, hepatitis b, and/or covid-
19 vaccine inside a patient's home; reported only once per individual 
home per date of service when such vaccine administration(s) are 
performed at the patient's home) (88 FR 79235 through 79237).
    The current payment rate for M0201 can be found on the CMS Vaccine 
Pricing website under ``COVID-19 Vaccines & Monoclonal 
Antibodies''.\626\ As we stated in the proposed rule (89 FR 61926), the 
final rates for CY 2025 will be based on the final CY 2025 MEI increase 
factor. The final CY 2025 MEI increase factor, based on the 2017-based 
MEI, is based on historical data through the 2nd quarter of 2024 and is 
3.5 percent. Tables 51 and 522 in section III.H.1.f. of this final rule 
provide the CY 2025 projected payment rate for M0201 with the 3.5 
percent annual update applied for CY 2025.
---------------------------------------------------------------------------

    \626\ https://www.cms.gov/medicare/payment/fee-for-service-providers/part-b-drugs/average-drug-sales-price/vaccine-pricing, 
under ``COVID-19 Vaccines & Monoclonal Antibodies''.
---------------------------------------------------------------------------

    We solicited comments on this proposed rate. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters supported our proposed rate for the in-home 
additional payment for Part B preventive vaccines. We received several 
comments thanking CMS for annually updating the payment rate for the 
in-home additional payment with the MEI. One commenter stated they 
believe that, despite the end of the COVID-19 public health emergency 
(PHE), there are still many Medicare enrollees who can benefit from in-
home vaccinations who are challenged by mobility or geographic 
distance.
    Response: We thank commenters for their support of our proposals 
and for partnering with CMS in our efforts to promote access to 
vaccines and preventive care for Medicare enrollees.

[[Page 98216]]

    Comment: Some commenters requested that we expand the in-home 
additional payment to all vaccines recommended by the CDC's Advisory 
Committee on Immunization Practices (ACIP) (https://www.cdc.gov/acip/index.html).
    Response: We thank commenters for their feedback. These comments 
are outside of the scope of our proposals in the CY 2025 PFS proposed 
rule. We note that, in accordance with statute, Part B payment can be 
made only for the preventive vaccines specified at section 1861(s)(10) 
of the Act, and their administration (please see section III.H.1 of 
this final rule for more information). Therefore, we did not make any 
proposals regarding expanding the Part B in-home additional payment to 
other vaccines.
    After consideration of public comments, we are finalizing this rate 
as proposed. Tables 51 and 52 in section III.H.1.f. of this final rule 
provide the CY 2025 payment rate for M0201, with the 3.5 percent annual 
update applied for CY 2025.
e. COVID-19 Monoclonal Antibodies and Their Administration
    In CY 2023 PFS final rule (87 FR 69987 through 69993), we discussed 
that all COVID-19 monoclonal antibody products and their administration 
are covered and paid for under the Part B preventive vaccine benefit 
through the end of year in which the Secretary terminates the EUA 
declaration for drugs and biological products with respect to COVID-19. 
In addition, we explained that, under the authority provided by section 
3713 of the CARES Act, we have established specific coding and payment 
rates for the COVID-19 vaccine, as well COVID-19 monoclonal antibodies 
and their administration, through technical direction to Medicare 
Administrative Contractors (MACs) and information posted publicly on 
the CMS website (87 FR 69987).
    In the CY 2023 PFS final rule, we also established a policy to 
continue coverage and payment for monoclonal antibodies that are used 
for pre-exposure prophylaxis (PrEP) of COVID-19 under the Part B 
preventive vaccine benefit if they meet applicable coverage 
requirements (87 FR 69992). We explained that we will continue to pay 
for these products and their administration even after the EUA 
declaration for drugs and biological products is terminated, so long as 
after the EUA declaration is terminated, such products have market 
authorization. Additionally, we established that payments for the 
administration of monoclonal antibodies that are used for PrEP of 
COVID-19 would be adjusted for geographic cost variations using the PFS 
GAF. In the CY 2024 PFS rule (88 FR 79239 through 79240), we codified 
these policies in regulations at Sec. Sec.  410.10(l) and 410.57(c).
    In CY 2024 PFS final rule (88 FR 79239 through 79240), we noted 
that we did not finalize any payment regulations regarding monoclonal 
antibodies for PrEP of COVID-19, since at the time of the publication 
of the CY 2024 PFS final rule, there were no COVID-19 monoclonal 
antibodies approved or authorized for use against the dominant strains 
of COVID-19 in the United States. We stated that if a new monoclonal 
antibody for PrEP of COVID-19 became authorized for use, we would use 
the authority provided by section 3713 of the CARES Act, as discussed 
in the CY 2023 PFS final rule (87 FR 69987), to establish specific 
coding and payment rates for the administration of that product through 
technical direction to MACs and information posted publicly on the CMS 
website. We explained that we would subsequently propose coding and 
payment rates for the administration of that product via rulemaking.
    We also noted that, for the purposes of the in-home additional 
payment discussed above in section III.H.1.d. of this final rule, that 
additional payment is not applicable to the administration of 
monoclonal antibodies for PrEP of COVID-19. For monoclonal antibodies 
for PrEP of COVID-19, we set the coding and payment rates for the 
administration of COVID-19 monoclonal antibodies in the home (when 
applicable) to be higher than those in other health care settings, and 
therefore such amounts already account for the higher costs of 
administering the product in the home.
    On March 22, 2024, the FDA issued an EUA for Pemgarda (pemivibart) 
injection, for intravenous use.\627\ Pemgarda is a monoclonal antibody 
product authorized for emergency use for pre-exposure prophylaxis to 
help prevent COVID-19 in adults and children 12 years of age and older 
who weigh at least 88 pounds (40 kg) who:
---------------------------------------------------------------------------

    \627\ https://www.fda.gov/media/177068/download?attachment.
---------------------------------------------------------------------------

     Are not currently infected with SARS-CoV-2 and who have 
not been known to be exposed to someone who is infected with SARS-CoV-2 
and
     Have moderate-to-severe immune compromise because of a 
medical condition or because they receive medicines or treatments that 
suppress the immune system and they are unlikely to have an adequate 
response to COVID-19 vaccination.
    Therefore, under the authority provided by section 3713 of the 
CARES Act, we established specific coding and payment rates for the 
administration of Pemgarda through technical direction to MACs and 
information posted publicly on the CMS website. Since Pemgarda is 
authorized for use in pre-exposure prophylaxis of COVID-19, and since 
CMS is continuing to cover and pay authorized or approved products used 
for pre-exposure prophylaxis of COVID-19 under the Part B preventive 
vaccine benefit, we plan to propose long-term coding and payment rates 
for the administration of this product in future rulemaking, so long as 
the product meets these requirements. The current payment rates for 
Pemgarda and its administration can be found on the CMS Vaccine Pricing 
website under ``COVID-19 Vaccines & Monoclonal Antibodies''.\628\ These 
payment rates are also listed below in Tables 51 and 52.
---------------------------------------------------------------------------

    \628\ https://www.cms.gov/medicare/payment/fee-for-service-providers/part-b-drugs/average-drug-sales-price/vaccine-pricing, 
under ``COVID-19 Vaccines & Monoclonal Antibodies''.
---------------------------------------------------------------------------

    More information on our coding and payment policies for COVID-19 
monoclonal antibodies is available at https://www.cms.gov/monoclonal.
    We solicited comments on these policies. The following is a summary 
of the comments we received and our responses.
    Comment: Commenters supported our payment policies for COVID-19 
monoclonal antibodies, and specifically our payment policies on 
monoclonal antibodies for PrEP for COVID-19. One commenter stated that 
they hope a code for therapeutic care can be implemented in the future.
    Response: We thank commenters for their support of our policy and 
for partnering with CMS in our efforts to improve access to vaccines, 
monoclonal antibodies used for PrEP of COVID-19, and general preventive 
care for Medicare enrollees.
f. Summary of Payment Amounts for CY 2025
    Due to the uncertainty surrounding the future of the EUA 
declaration for drugs and biological products for COVID-19, we are 
including Tables 51 and 52, which summarize the potential alternative 
preventive vaccine administration payment amounts under Medicare Part B 
at the time of the publication of this final rule. If the EUA 
declaration continues to be in effect on January 1, 2025, the payment 
rates in Table 51 will apply. If the EUA

[[Page 98217]]

declaration is terminated before January 1, 2025, the payment rates in 
Table 52 will apply.
    For CY 2025, the growth rate of the 2017-based MEI is 3.5 percent 
with historical data through second quarter 2024. We proposed that if 
more recent data are subsequently available (for example, a more recent 
estimate of the MEI percentage increase), we would use such data, if 
appropriate, to determine the CY 2025 MEI percentage increase in the CY 
2025 PFS final rule; we would apply that updated MEI percentage 
increase to the rates found in the Tables 51 and 52 where applicable. 
Therefore, in this final rule, the rates in Tables 51 and 52 represent 
our CY 2024 rates for the listed items, multiplied by 1.035
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR09DE24.093


[[Page 98218]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.094

BILLING CODE 4120-01-C
2. Revised Payment Policies for Hepatitis B Vaccine Administration
    In section III.M of this final rule, we are finalizing our proposal 
to expand the list of individuals who are determined to be at high or 
intermediate risk of contracting hepatitis B at Sec.  410.63 in order 
to improve access and utilization of hepatitis B vaccines. 
Specifically, we proposed to expand coverage of hepatitis B 
vaccinations by revising Sec.  410.63(a)(2), Intermediate Risk Groups, 
by adding a new paragraph (a)(2)(iv) to include individuals who have 
not previously received a completed hepatitis B vaccination series and 
individuals whose previous vaccination history is unknown. We believe 
that this final rule coverage change will help protect Medicare 
beneficiaries from acquiring hepatitis B infection, contribute to 
eliminating viral hepatitis as a public health threat in the United 
States, and is in the best interest of the Medicare program and its 
beneficiaries. Below, we discuss how the proposal to expand coverage 
may impact Part B payment policy for hepatitis B vaccines and 
administration.
a. Background
    Section 2323 of the Deficit Reduction Act of 1984 (Pub. L. 98-369) 
amended section 1861(s)(10) of the Act by adding subparagraph (B) to 
provide Medicare Part B coverage for the hepatitis B vaccine and its 
administration for those individuals who are at high or intermediate 
risk of contracting hepatitis B. The statute required the Secretary to 
determine, by regulations, criteria for identifying individuals who are 
at high or intermediate risk of contracting hepatitis B. In addition, 
section 2323 of the Deficit Reduction Act of 1984 added section 1833(k) 
of the Act, which states that the Secretary may provide for payment of 
such an amount or amounts as reasonably reflects the general cost of 
efficiently providing such services, instead of the amount of payment 
otherwise provided under Part B for the hepatitis B vaccine and its 
administration.
    In the June 4, 1990 Federal Register, we issued a final rule to 
implement section 2323 of the Deficit Reduction Act of 1984 and the 
coverage provisions were codified in regulation at Sec.  410.63(a) (55 
FR 22785). In the preamble to the1990 rule, we stated that, ``[f]or 
Medicare payment purposes, the hepatitis B vaccine may be 
administered--upon the order of a doctor of medicine or osteopathy--by 
qualified staff of home health agencies, skilled nursing facilities, 
ESRD facilities, hospital outpatient departments, HMOs, persons 
recognized under the `incident to physician's services' provision of 
the law (section 1861(s)(2)(A) of the Act), as well as doctors of 
medicine and osteopathy.'' This policy is included in the Medicare 
Claims Processing Manual, Chapter 18, section 10.1.3.
    In the CY 2013 PFS final rule (77 FR 69363), CMS amended the 
regulations at Sec.  410.63(a) to include those diagnosed with diabetes 
mellitus in the list of groups at high risk of contracting hepatitis B. 
In the November 6, 2020 COVID-19 IFC (85 FR 71145), in preamble 
discussions surrounding the implementation of coverage and payment for 
the COVID-19 vaccine, we mentioned the unique coverage and payment 
requirements related the hepatitis B vaccine under Part B. We noted 
that, unlike pneumococcal, influenza and COVID-19 vaccines, hepatitis B 
vaccines require an assessment of a patient's risk of contracting 
hepatitis B. Because hepatitis B vaccinations claims needed a 
physician's order, they could not be

[[Page 98219]]

roster billed by mass immunizers. More information on the physician's 
order policy that is in effect for the administration of hepatitis B 
vaccines through CY 2024 can be found in the Medicare Benefit Policy 
Manual, Chapter 15, Section 50.4.4.2.
b. Revisions to Payment Policies for Hepatitis B Vaccinations
    As discussed above, in section III.M of this final rule, we are 
finalizing a policy to provide coverage under Part B for hepatitis B 
vaccines and their administration for an expanded range of Medicare 
enrollees, as reflected in the revised Sec.  410.63(a). We explain that 
Medicare coverage of hepatitis B vaccination is outdated in light of 
recent information about the risks of contracting hepatitis B, and that 
current research indicates that individuals who remain unvaccinated 
against hepatitis B are at intermediate risk of contracting hepatitis B 
virus. Under the new policy, an assessment of an individual's 
vaccination status can now be made without the clinical expertise of a 
physician. Thus, we will remove our policy in the manual that the 
administration of a Part B-covered hepatitis B vaccine be preceded by a 
doctor's order. A doctor's order will no longer be necessary for the 
administration of a hepatitis B vaccine under Part B, and we will also 
change our procedures to allow mass immunizers to use the roster 
billing process to submit Medicare Part B claims for hepatitis B 
vaccines and their administration.
    Currently, instructions regarding hepatitis B vaccine 
administration under Part B are contained in CMS manual guidance. As 
there are changes to Sec.  410.63(a) finalized in this rulemaking, we 
will make corresponding changes to guidance in the Medicare Benefit 
Policy Manual and Medicare Claims Processing Manual. Moreover, 
additional information on roster billing is available on the CMS web 
page at https://www.cms.gov/roster-billing.
    We note that the current payment rates for HCPCS code G0010, 
``Administration of hepatitis b vaccine,'' as finalized in the CY 2024 
PFS final rule, can be found on the CMS Vaccine Pricing website under 
``Seasonal Flu Vaccines''.\629\ The payment rates for G0010, with the 
annual update applied for CY 2025, are available in Tables 51 and 52 in 
section III.H.1.f. of this final rule. More information on other 
policies related to the administration of G0010 can be found in the 
section preceding this one (section III.H.1. of this final rule), and 
revisions to payment policies for the administration of G0010 in RHCs 
and FQHCs can be found in the section immediately below (section 
III.H.2.c. of this final rule).
---------------------------------------------------------------------------

    \629\ https://www.cms.gov/medicare/payment/fee-for-service-providers/part-b-drugs/average-drug-sales-price/vaccine-pricing, 
under ``Seasonal Flu Vaccines;'' see links to the relevant year 
under ``Locality-Adjusted Payment Rates.''
---------------------------------------------------------------------------

c. Revisions to Payment Policies for Hepatitis B Vaccinations in Rural 
Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs)
    When section 2323 of the Deficit Reduction Act of 1984 added 
section 1861(s)(10)(B) to the Act to add Medicare Part B coverage for 
the hepatitis B vaccine and its administration, it limited that 
coverage to certain settings. In RHCs and FQHCs, the law specified at 
section 1833(a)(3)(A) of the Act that the vaccines mentioned at section 
1861(s)(10)(A) of the Act--namely, pneumococcal and influenza (and 
later, COVID-19) vaccines--are not included in the all-inclusive 
payment rate for an RHC or FQHC visit but are reimbursed as a separate 
payment. Pneumococcal, influenza and COVID-19 vaccines and their 
administration are paid at 100 percent of reasonable cost when 
administered in an RHC or FQHC, in accordance with section 
1833(a)(1)(B) of the Act. By contrast, hepatitis B vaccines and the 
cost of administration have been included in the capitated payment for 
an RHC or FQHC visit. RHCs and FQHC visits are generally paid at 80 
percent of reasonable costs, and thus, they are subject to coinsurance 
for Medicare Part B enrollees. The Deficit Reduction Act of 1984 also 
added section 1833(k) to the Act, which states that, for hepatitis B 
vaccines and their administration as described at section 
1861(s)(10)(B), the Secretary may provide for payment that ``reasonably 
reflects the general cost of efficiently providing such services,'' 
instead of the amount of payment otherwise dictated in statute.
    In CY 2011 PFS final rule (75 FR 73418), we addressed the issue of 
coinsurance for hepatitis B vaccines and their administration in FQHCs. 
The CY 2011 PFS final rule, which implemented the expansion of 
preventive services in Medicare as mandated by the ACA, stated that 
effective January 1, 2011, Part B coinsurance on hepatitis B 
vaccinations was waived, as the vaccine and its administration were 
deemed ``preventive services'' per section 1861(ddd)(3)(A) of the Act 
as cross-referenced to section 1861(ww)(2) of the Act. (More 
information on preventive services is provided immediately below at 
section III.H.3. of this final rule). The CY 2011 PFS final rule 
codified this FQHC policy in regulation at Sec.  405.2449. In the CY 
2014 FQHC PPS final rule (79 FR 25474), at Sec.  405.2410(b), we 
codified regulations regarding coinsurance in RHCs and FQHCs which 
exempt from coinsurance ``preventive services for which Medicare pays 
100 percent under Sec.  [thinsp]410.152(l) of this chapter'', which 
explicitly includes the hepatitis B vaccine. In the CY 2016 PFS final 
rule (80 FR 71088), we clarified that these waivers of cost-sharing 
(both coinsurance and deductible) for preventive services applied to 
RHCs as well, and we subsequently clarified in sub-regulatory guidance 
that these waivers apply to the administration of hepatitis B vaccines 
in RHC and FQHCs.\630\ We note that FQHC services are always exempt 
from the Part B deductible, per section 1833(b)(4) of the Act.
---------------------------------------------------------------------------

    \630\ Updates were made to Chapter 13, section 220.1 of Medicare 
Benefit Policy Manual via Change Request 9864, R2186CP, December 9, 
2016, ``Rural Health Clinic (RHC) and Federally Qualified Health 
Center (FQHC) Updates:'' https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R230BP.pdf. Updates were 
also made to Chapter 9, section 60.3 of the Medicare Claims 
Processing Manual via Change Request 9397, R3434CP, December 31, 
2015, ``Reorganization of Chapter 9:'' https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R3434CP.pdf.
---------------------------------------------------------------------------

    Even though hepatitis B vaccines and their administration are 
deemed preventive services for which coinsurance (and deductible in 
RHCs) is waived, hepatitis B vaccines are still currently paid 
differently than other Part B vaccines in RHCs and FQHCs. Due to the 
statutory differences explained above, pneumococcal, influenza and 
COVID-19 vaccines and their administration are paid at 100 of 
reasonable cost in RHCs and FQHCs--that is, they are paid separately 
from the FQHC PPS or the RHC All-Inclusive Rate (AIR) methodology--
while hepatitis B vaccines and their administration are paid as part of 
the FQHCs PPS or the RHC AIR, which means that they are paid through 
changes to the facilities' capitated rate.
    In light of the proposal to expand coverage for hepatitis B 
vaccination in section III.M. of this final rule, we proposed to use 
the aforementioned authority at section 1833(k) of the Act to align 
payment for hepatitis B vaccinations in RHCs and FQHCs with the payment 
for pneumococcal, influenza and COVID-19 vaccinations in those 
settings. That is, we proposed to pay for hepatitis B vaccines and 
their administration in RHCs and FQHCs at 100 percent of reasonable 
cost, separate

[[Page 98220]]

from the FQHCs PPS and the RHC AIR methodology, for all populations 
identified for coverage at Sec.  410.63(a). As is the case for 
pneumococcal, influenza and COVID-19 vaccine administration, under this 
proposal, a hepatitis B vaccine administration would not be considered 
an RHC or FQHC visit. We proposed that effective January 1, 2025, RHCs 
and FQHCs would bill for Part B hepatitis B vaccines in the same manner 
as they currently bill for pneumococcal, influenza and COVID-19 
vaccines, that is, on their cost report.
    We note that we are finalizing a policy above, in section III.B.5 
of this final rule, to allow for billing and payment of all Part B 
preventive vaccines and their administration at the time of service in 
RHCs and FQHCs, with annual reconciliation on the facilities' cost 
reports. As explained there, the policy will be effective for dates of 
service on or after July 1, 2025, in order to allow time for 
implementation and necessary systems changes. Both the policy in 
section III.B.5 and this policy together support our goal of 
streamlining payment for all Part B vaccines across Part B settings of 
care. We believe that streamlining Part B vaccine and vaccine 
administration payments among care settings aligns with the stated 
goals of section 1833(k) of the Act, since those payment policy changes 
will allow for increased efficiency in Part B claims processing on both 
the part of the RHCs and FQHCs and on the part of CMS. We also believe 
that the increased efficiency will promote vaccine access, and thus 
health equity in general, in RHCs and FQHCs that already serve 
vulnerable populations.
    To implement this policy regarding payment for hepatitis B vaccines 
and their administration in RHCs and FQHCs, we are also amending the 
regulations at Sec.  405.2466(b)(1)(iv), to add hepatitis B vaccines to 
the list of vaccines covered in RHCs and FQHCs at 100 percent of 
reasonable cost. We are finalizing that regulation text as proposed. We 
plan to make corresponding changes to guidance in the Medicare Benefit 
Policy Manual, Chapter 13 and Medicare Claims Processing Manual, 
Chapter 9 and facilitate the necessary operational systems updates 
needed to implement these changes.
d. Regulations Concerning Hepatitis B Vaccines and Their Administration
    Listed below are several Medicare Part B regulations that mention 
the hepatitis B vaccine and refer to Sec.  410.63(a) for a definition 
of hepatitis B vaccine coverage. Since we proposed to revise Sec.  
410.63(a) in section III.M. of this final rule, we do not believe 
additional regulation text changes are needed to conform to the 
coverage proposal, as the update to the definition at Sec.  410.63(a) 
will apply to the use of the definition in these regulations:
     Section 410.10(p).
     Section 410.57(d).
     Section 411.15(e)(3) and (k)(5).
     Section 414.707(a)(2)(iii).
     Section 414.904(e)(1).
    In addition, we noted that there are no conforming regulation text 
changes needed to the payment regulations at Sec.  410.152, paragraphs 
(h) and (l)(1), to conform to the coverage proposal.
    We received public comments on all of these proposals regarding 
Hepatitis B vaccines and their administration. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters overwhelmingly supported these proposals 
regarding payment for Hepatitis B vaccines and their administration. 
Commenters noted that removing the physician order requirement 
alleviates a long-standing barrier to hepatitis B vaccine coverage. One 
commenter noted that the payment change for hepatitis B vaccines in 
RHCs and FQHCs will provide easier access to those vaccines, and thus 
improve quality of life, for Medicare enrollees and those with 
disabilities who live in rural areas where accessing primary care is 
difficult.
    Response: We thank commenters for their support of our proposals 
and for partnering with CMS in our efforts to improve equity and access 
to hepatitis B vaccines, especially for those vulnerable populations 
that are served by RHCs and FQHCs. We agree that finalizing these 
proposals will alleviate barriers to accessing hepatitis B vaccinations 
for Medicare enrollees.
    Comment: Some commenters voiced concerns about our proposal to 
remove the physician's order requirement for Hepatitis B vaccine 
administration under Part B. One commenter believes that this change 
will cause retail pharmacies to face greater compliance challenges, and 
the commenter asked CMS to provide examples of the medical 
documentation that a retail pharmacy may rely upon before deciding to 
administer the Hepatitis B vaccine to a Medicare enrollee. Other 
commenters voiced concerns about possible consequences of the removal 
of the physician order requirement, including the concern that a 
patient's primary or regular physician may not be aware of the 
administration of the Hepatitis B vaccine to their patient.
    Response: As explained in section II.M. of this final rule, an 
individual whose vaccination history is unknown may receive the 
hepatitis B vaccine under these changes in coverage, meaning that a 
vaccination record is not needed. Therefore, no documentation is needed 
for a retail pharmacy to provide a Hepatitis B vaccine to a Medicare 
enrollee. In fact, we explained above that mass immunizers will be able 
to roster bill for hepatitis B vaccines and their administration. We 
advise mass immunizers to check the CMS roster billing web page at 
https://www.cms.gov/roster-billing for updates regarding the timing and 
implementation of roster billing for Hepatitis B vaccines.
    Regarding commenters' concern that a patient's physician may not be 
aware of the administration of a hepatitis B vaccine by a mass 
immunizer, we note that CMS continually encourages and aims to 
facilitate care coordination between providers and other practitioners, 
and we do so in this case as well. We also note that in section II.M. 
of this final rule, we reference the CDC's guidance that it is not 
harmful to vaccinate people who are immune to hepatitis B virus because 
of current or previous infection or vaccination, nor does it increase 
the risk for adverse events.\[1]\ Therefore, individuals may receive a 
covered vaccination series when their medical history is not available.
---------------------------------------------------------------------------

    \[1]\ CDC. Viral hepatitis. FAQ for health professionals. 
Atlanta, GA: U.S. HHS, CDC; 2022. Retrieved from https://www.cdc.gov/hepatitis/hbv/hbvfaq.htm.
---------------------------------------------------------------------------

    Comment: Some commenters asked that CMS expand the mass immunizer 
program to include all future Part B preventive vaccines.
    Response: We did not make any proposals regarding future expansions 
of the Part B preventive vaccine benefit. Legislation would be 
necessary to expand Part B coverage for additional preventive vaccines 
under section 1861(s)(10) of the Act. These comments are outside the 
scope of our proposals.
3. Payment for Drugs Covered as Additional Preventive Services (Sec.  
410.152)
a. Statutory Background
    Section 101 of the Medicare Improvements for Patients and Providers 
Act (MIPPA) of 2008 (Pub. L. 110-275) added section 1861(ddd)(1) and 
(2) of the Act to effectuate ``improvements to coverage of preventive 
services'' in the Medicare program. Under section 1861(ddd)(1) of the 
Act, Medicare Part B covers

[[Page 98221]]

``additional preventive services'' that identify medical conditions or 
risk factors and that the Secretary determines are reasonable and 
necessary for: (A) the prevention or early detection of an illness or 
disability; (B) that are recommended with a grade of A or B by the 
United States Preventive Services Task Force (USPSTF); and (C) that are 
appropriate for individuals entitled to benefits under Part A or 
enrolled under Part B. Section 1861(ddd)(2) of the Act states that, in 
making determinations under section 1861(ddd)(1) of the Act, the 
Secretary shall use the process for making National Coverage 
Determinations (NCD) in the Medicare program.
    Section 101 of MIPPA also added section 1833(a)(1)(W) of the Act, 
which provides requirements for payment of additional preventive 
services. Section 1833(a)(1)(W)(i) establishes requirements for payment 
of additional preventive services that are clinical diagnostic 
laboratory tests, and section 1833(a)(1)(W)(ii) establishes 
requirements for payment of all other services. Section 
1833(a)(1)(W)(ii) (as amended by section 4104 of the Affordable Care 
Act (Pub. L. 111-148) requires that the amount paid for the provision 
of all other additional preventive services is 100 percent of the 
lesser of the actual charge for the service, or the amount determined 
under a fee schedule established by the Secretary for purposes of this 
subparagraph.
    We noted that ``additional preventive services'' are a subset of 
``preventive services'' under Medicare Part B, per section 1861(ddd)(3) 
and 1861(ww)(2)(O) of the Act, respectively. Section 1833(b)(1) of the 
Act states that the annual Part B deductible does not apply to 
preventive services that are recommended with a grade of A or B by the 
USPSTF for any indication or population, and section 1833(a)(1)(Y) of 
the Act waives coinsurance for preventive services that are recommended 
with a grade of A or B by the USPSTF for any indication or population. 
Based on all the above statutory authorities, there is no cost-sharing 
under Part B for additional preventive services for Medicare enrollees, 
that is, there is no applicable beneficiary coinsurance or deductible 
for these services.
    The term ``preventive services'' is defined at Sec.  410.2, and 
coverage for ``additional preventive services'' is delineated at Sec.  
410.64. At Sec.  410.152(l), we list the Part B preventive services 
that are paid at 100 percent of the Medicare payment amount, that is, 
for which zero coinsurance is charged. There, at Sec.  410.152(l)(11), 
we include ``additional preventive services identified for coverage 
through the national coverage determination (NCD) process''. At Sec.  
410.160(b), we list the Part B services that are not subject to the 
Part B annual deductible and do not count toward meeting that 
deductible, and ``additional preventive services identified for 
coverage through the national coverage determination (NCD) process'' is 
included there at Sec.  410.160(b)(13).
    The payment authority under section 1833(a)(1)(W)(ii) of the Act 
has not been utilized to date because CMS has not yet covered any 
additional preventive service that would require use of that payment 
authority. While CMS currently covers certain screenings and therapies 
as additional preventive services under the section 1861(ddd) of the 
Act, those screenings and therapies are currently paid under the 
existing PFS fee schedule for physician services. Furthermore, the 
Medicare Diabetes Prevention Program, described at section III.E of 
this final rule, uses section 1833(a)(1)(W)(ii) of the Act authority to 
waive the coinsurance and deductible as described above, but its 
payment policy is based on separate authorities under the model.
    Specifically, we noted that CMS has not yet covered or paid for any 
drugs or biologicals (hereinafter, referred to as drugs) under the 
benefit category of additional preventive services. This was 
highlighted when CMS released a Proposed NCD for Pre-Exposure 
Prophylaxis (PrEP) for Human Immunodeficiency Virus (HIV) Infection 
Prevention on July 12, 2023. This proposed NCD announced CMS' intention 
to cover and pay for those drugs under section 1861(ddd) of the Act's 
additional preventive services authority, and the final NCD was 
released on September 30, 2024. For more information on the final NCD 
for PrEP for HIV drugs, please see https://www.cms.gov/medicare/coverage/prep.
    We also noted that CMS covers and pays for Part B vaccines, which 
are also considered preventive services under sections 1861(ddd)(3) and 
1861(ww)(2)(A) of the Act, but they have unique payment rates specified 
in statute at section 1842(o)(1)(A)(iv) of the Act (for more 
information, see above at section III.H.1.a. of this final rule).
b. Fee Schedule for Drugs Covered as Additional Preventive Services 
(DCAPS)
    As discussed above, the authority at section 1833(a)(1)(W)(ii) of 
the Act provides for payment for additional preventive services, 
including drugs. This authority differs from the authority used to pay 
for drugs that are separately paid as drugs and biologicals under other 
Part B payment authorities. Specifically, payment for most drugs 
separately payable under Part B is authorized at section 1833(a)(1)(S) 
of the Act and outlined at section 1842(o)(1)(C) of the Act, and those 
payments are generally made according to the methodology described at 
section 1847A of the Act, which typically reflects a payment limit 
based on the Average Sales Price (ASP). In addition, because drugs 
covered as additional preventive services (hereinafter, DCAPS; we will 
use the term ``DCAPS drugs'' for the ease of the reader) are not 
described in section 1842(o)(1)(C) of the Act, provisions under section 
1847A of the Act would not apply, including requirements for 
manufacturers to report ASP data to CMS on a quarterly basis (see 
sections 1847A(f) and 1927(b)(3)(A)(iii) of the Act). When 
manufacturers are not required to report the manufacturer's ASP for a 
drug, they may do so voluntarily, but the availability of voluntarily 
reported ASP data cannot be guaranteed, and the data may not reflect 
all available NDCs for the drug. However, we emphasize that DCAPS drugs 
that are also covered under Part B for non-preventive indications (that 
is, are also used for diagnosis or treatment) would be subject to ASP 
reporting requirements.
    Above, we mentioned that section 1833(a)(1)(W)(ii) of the Act 
requires that the amount paid for the provision of additional 
preventive services is 100 percent of the lesser of the actual charge 
for the service, or the amount determined under a fee schedule 
established by the Secretary for purposes of this subparagraph. For 
purposes of this policy, we refer to the amount determined under the 
fee schedule as the payment limit, which we discuss in detail below.
    In the CY 2025 PFS proposed rule (89 FR 61931), we proposed a fee 
schedule for DCAPS drugs that uses existing Part B drug pricing 
mechanisms, because we believe that it is preferable to set all drug 
payment limits under Part B, including those for DCAPS, as consistently 
as possible. Accordingly, we proposed that the payment limit for a 
DCAPS drug be determined using the methodology described in section 
1847A of the Act, or, if ASP data is not available for a particular 
drug, to use an alternative pricing mechanism, as described below. We 
proposed to update the fee schedule quarterly, on the same schedule as 
the ASP pricing file, which is updated each calendar quarter.

[[Page 98222]]

(1) Payment Limit Based on Section 1847A of the Act
    To determine the payment limit for the applicable billing and 
payment code for a DCAPS drug under the fee schedule, we proposed to 
apply ASP methodology described in section 1847A of the Act when ASP 
data is available for the drug. We believe the use of ASP data would be 
preferable for determining the payment limit for DCAPS drug billing and 
payment codes for two reasons. First, this approach would determine the 
payment limit for these drugs in the same way as the payment limit is 
usually determined for other drugs that are separately payable under 
Part B, when possible. This would include the application of payment 
limit calculations for multiple source drugs, single source drugs and 
biologicals, and biosimilar biological products, as is done for 
products under section 1847A of the Act, for each applicable billing 
and payment code. Second, because section 1847A(c)(3) of the Act 
requires that calculation of the manufacturer's ASP for an NDC must 
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, 
discounts under the 340B Program, and rebates under the Part B and Part 
D Medicare inflation rebate program), this would set a payment limit 
that would likely better reflect acquisition cost of the drug than list 
prices in available compendia (such as Wholesale Acquisition Cost 
(WAC)).
    We proposed that CMS would determine the payment limit for DCAPS 
drugs as the amount that would result from application of ASP 
methodology in section 1847A of the Act only if ASP data for the drug 
is available for a given quarter (that is, positive manufacturer's ASP 
data is reported by the drug manufacturer, as explained in section 
III.A.2 of this final rule). We proposed that if ASP data is available 
for a DCAPS drug, the payment limit would be the amount described in 
section 1847A(b) of the Act, which is usually 106 percent of ASP.
(2) Payment Limit Based on National Average Drug Acquisition Cost 
(NADAC) Pricing
    If ASP data for a DCAPS drug (as described in the previous section) 
is not available (as defined in the prior paragraph), we proposed to 
determine the payment limit for the applicable billing and payment code 
using the most recently published amount for the drug in Medicaid's 
NADAC survey (OMB control number 0938-1041).\631\ When using NADAC 
data, we proposed to determine the payment limit per billing unit, 
which would be an average of NADAC prices for all NDCs for the drug. If 
a drug is available in generic and brand formulations, we proposed all 
NDCs will be averaged together to determine the payment limit.
---------------------------------------------------------------------------

    \631\ https://www.medicaid.gov/medicaid/prescription-drugs/retail-price-survey/index.html.
---------------------------------------------------------------------------

    Since the timing of ASP reporting and publishing has a two-quarter 
lag (for example, payment limits calculated using data reported from 
the first quarter of sales become effective two quarters later), we 
proposed that ``most recently published'' for purposes of this policy 
means the most recently updated NADAC survey available 30 days after 
the close of the quarter for which ASP data would have been reported if 
it were available.\632\ For example, in the calculation of the payment 
limit for dates of service in the third calendar quarter, if NADAC is 
used to determine the payment limit, we will use the most recent NADAC 
survey update available on the 30th day after the close of the first 
calendar quarter to determine the payment limit for the third quarter.
---------------------------------------------------------------------------

    \632\ 42 CFR 414.804(a)(5).
---------------------------------------------------------------------------

    The NADAC survey provides a national drug pricing benchmark for 
certain drugs that is adequately comprehensive to serve as the first 
alternative pricing source in the case that ASP data is not available. 
CMS conducts surveys of retail community pharmacy prices to develop the 
NADAC pricing benchmark in the annual NADAC pricing file. The pricing 
benchmark is reflective of the prices paid by retail community 
pharmacies to acquire prescription and over-the-counter covered 
outpatient drugs. NADAC data is publicly available, and it can be 
accessed at https://data.medicaid.gov/nadac.
    In the CY 2020 PFS final rule (84 FR 62655), we similarly finalized 
the use of NADAC pricing as a pricing alternative for oral drugs under 
the Part B Opioid Treatment Program (OTP) benefit when ASP data is not 
available. There, we stated that ``[s]urvey data on invoice prices 
provide the closest pricing metric to ASP that we are aware of.'' 
Because the previous statement continues to be true, it is an 
appropriate alternative in the pricing framework for DCAPS drugs when 
ASP data is not available.
(3) Payment Limit Based on the Federal Supply Schedule (FSS)
    Since NADAC pricing is only available for drugs typically dispensed 
through retail community pharmacies, there could be circumstances in 
which ASP and NADAC data are not available for DCAPS drugs. Therefore, 
if both ASP and NADAC pricing data are not available for a DCAPS drug, 
we propose to use the most recently published and listed prices for 
pharmaceutical products in the FSS to calculate the payment limit for 
the applicable billing and payment code. In the same manner as 
discussed in the previous section, we propose that ``most recently 
published'' for purposes of this policy means the most recently updated 
FSS survey available 30 days after the close of the quarter for which 
ASP data would have been reported if it were available.\633\ For 
example, in the calculation of the payment limit for dates of service 
in the third calendar quarter, if FSS is used to determine the payment 
limit, we will use the most recent FSS update available on the 30th day 
after the close of the first calendar quarter to determine the payment 
limit for the third quarter. When using the FSS, we will calculate the 
average price per billing unit (as described in the billing and payment 
code for the drug) for all NDCs listed for a drug.
---------------------------------------------------------------------------

    \633\ 42 CFR 414.804(a)(5).
---------------------------------------------------------------------------

    Drug pricing information from the Veterans Affairs' (VA's) FSS 
pharmaceutical pricing database is publicly available at the NDC level 
and published at https://www.va.gov/opal/nac/fss/pharmPrices.asp. We 
proposed to use FSS data when ASP and NADAC data are not available 
because FSS data is one of the few existing options for drug pricing 
that includes a wide variety of drug formulations, including both self-
administered drugs typically dispensed through retail community 
pharmacies and drugs administered incident to a physician's service. We 
believe that using FSS data to calculate the payment limit for DCAPS 
drugs is preferable to instructing MACs to determine DCAPS drug payment 
limits according to invoice (as discussed below), because invoice-based 
pricing requires MACs to manually process claims and is therefore 
burdensome to the MACs.
(4) Invoice Pricing
    Finally, if ASP, NADAC, and FSS pricing are not available for a 
particular drug covered as an additional preventive service, then MACs 
will determine the payment for that drug according to invoice. Since 
one of the three above pricing mechanisms should be available in nearly 
all cases, we expect that invoice pricing would be necessary only in 
rare situations. Specifically, we believe that invoice

[[Page 98223]]

pricing would likely only be necessary for new drugs before pricing 
data is available.
    To summarize, we proposed to establish a fee schedule using the 
following pricing mechanisms to determine the payment limit for DCAPS 
drugs under Part B, which would be updated quarterly:
    (1) If ASP data is available for the DCAPS drug, the payment limit 
would be determined based on the methodology under section 1847A(b) of 
the Act (usually 106 percent of ASP);
    (2) If ASP data is not available, the payment limit would be 
calculated using NADAC prices for the drug;
    (3) If ASP data and NADAC prices are not available, the payment 
limit would be calculated using the FSS prices for the drug; and
    (4) If ASP data, NADAC prices, and FSS prices are not available, 
payment limit would be the invoice price determined by the MAC.
    We proposed to amend Sec.  410.152 by adding paragraph (o) to 
establish the fee schedule and the pricing methodologies used to 
determine the payment limit for DCAPS drugs under Part B. In addition, 
to highlight that coinsurance does not apply to DCAPS drugs, we 
proposed to publish the payment limits for DCAPS drugs along with other 
separately payable Part B drugs on the ASP pricing file.
    We solicited public comment on the proposed fee schedule for drugs 
paid as additional preventive services.
    The following is a summary of the comments we received and our 
responses.
    Comment: Commenters were supportive of the general approach 
represented by our payment proposals for DCAPS drugs. Commenters 
supported potential expansions of coverage and payment for preventive 
services under Medicare Part B. Some commenters specifically noted and 
appreciated the waiver of cost-sharing for certain preventive services. 
Other commenters noted that they believe strengthening access to 
preventive services helps to ameliorate medical crises later 
downstream, especially for Medicare enrollees living with mental health 
and substance use conditions. Another commenter appreciated that once a 
DCAPS fee schedule is finalized, CMS can cover and pay for drugs 
without delay if CMS determines that a drug meets the criteria under 
section 1861(ddd)(1) of the Act.
    Commenters also specifically supported our proposed fee schedule. 
Commenters noted that they appreciated our alignment of the fee 
schedule with payment policies for other Part B drugs. Many commenters 
supported our proposal to pay for DCAPS drugs based on section 1847A of 
the Act, if ASP data is available for the DCAPS drug. Commenters also 
supported our proposal to direct MACs to use invoice pricing as a last 
alternative for payment of DCAPS drugs.
    Response: We thank commenters for their support of our proposals 
and for partnering with CMS in our efforts to promote access to 
preventive health care for Medicare enrollees.
    Comment: Several commenters requested that we reconsider our 
proposals regarding alternative payment mechanisms for DCAPS drugs if 
ASP data is not available for the drug. These commenters stated that 
they believe payment calculated according to NADAC or FSS pricing would 
likely result in underpayments that would not reflect the costs 
incurred by providers to acquire DCAPS drugs. Instead, these commenters 
recommended that we use pricing based on WAC as an alternative to 
payment according to ASP methodology. They stated that WAC is a 
publicly available benchmark, and that they believe WAC plus 3 percent 
provides a more predictable payment amount compared to other pricing 
metrics CMS proposed, including NADAC, FSS, and invoice pricing. 
Commenters noted that setting a price using WAC plus 3 percent is 
consistent with CMS payment policy for Part B drugs during the initial 
sales period when ASP data is not yet available, and thus they believe 
it is most sensible alternative for DCAPS drug payment.
    Some commenters argued that the predictability of WAC would help 
providers manage their finances better, which they state is especially 
important for smaller practices or those in underserved areas. Other 
commenters claimed that WAC is a more accurate representation of the 
price paid by a pharmacy relative to NADAC pricing, since NADAC prices 
are based on pricing data that CMS receives from pharmacies, and thus 
they believe that the pricing data is somewhat lagged and inconsistent. 
These commenters also stated that, since FSS pricing is a negotiated 
price specifically for certain government programs, they believe that 
it does not reflect broader market prices and may be significantly 
lower than market prices. These commenters also believe that using WAC-
based pricing will more effectively meet our stated goal of setting 
drug payment limits for DCAPS as consistently as possible with other 
payment mechanisms used in Part B.
    One commenter specifically recommended that, if we do finalize the 
use of FSS pricing as an alternative pricing mechanism for DCAPS drugs, 
that we use the ``other government agencies'' (OGA) price, as opposed 
to other pricing used in the FSS.
    Some commenters recommended that, in cases where a HCPCS code and/
or ASP data is not available for a new DCAPS drug, CMS pay for the drug 
in the physician office setting at WAC plus 3 percent, in the same 
manner as separately payable Part B drugs as described above. 
Commenters explained that this would also ensure consistency for all 
drugs paid under Medicare Part B.
    Other commenters generally called for CMS to ensure that the DCAPS 
fee schedule provides adequate payment to cover pharmacy acquisition 
and dispensing costs, and asked CMS to promote increased access to 
preventive drugs.
    Response: We thank commenters for their feedback. We agree with 
commenters that an ASP-based payment limit is preferrable for DCAPS 
drugs, and the proposed DCAPS fee schedule is designed with that goal 
in mind. As mentioned above, section 1847A(c)(3) of the Act requires 
that calculation of the manufacturer's ASP for an NDC must 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, discounts 
under the 340B Program, and rebates under the Part B and Part D 
Medicare inflation rebate program). Therefore, an ASP-based payment 
limit likely better reflects acquisition cost of the drug than list 
prices in available compendia, such as WAC.
    Above, we mentioned that we stated in the CY 2020 PFS final rule 
(84 FR 62655) that we believe NADAC survey data on invoice prices 
provides the closest pricing metric to ASP-based payment limits that is 
available. We also mentioned above that FSS data is one of the few 
existing options for drug pricing that includes a wide variety of drug 
formulations, which is why we chose it as an additional alternative for 
DCAPS drug fee schedule pricing. Thus, our proposal explained that ASP, 
NADAC and FSS are all drug pricing options that aim to estimate the 
accurate acquisition cost of a drug, rather than WAC, which is a list 
price often higher than acquisition cost.
    With regard to the comment that asked for clarification regarding 
FSS pricing, we clarify that the FSS price is the indeed the ``other 
government agencies'' (OGA) price. We also reiterate that both NADAC 
and FSS OGA pricing

[[Page 98224]]

are publicly available, and we provide website information earlier in 
this section of the final rule.
    In addition, we reiterate that NADAC pricing is used as a payment 
alternative to ASP-based payment for drugs used in the Part B OTP 
benefit, and thus, our use of NADAC pricing aligns with payment 
policies under Part B. Section 1847A of the Act specifies that payment 
should be made for drugs under Medicare Part B using WAC in limited 
circumstances such as (1) during an initial period of when the first 
quarter of sales is unavailable for a drug or (2) for single-source 
drugs or biologicals whose ASP exceeds WAC. WAC is generally not used 
when ASP is unavailable beyond those circumstances.
    However, we encourage drug manufacturers to submit ASP data to CMS 
(that is, positive manufacturer's ASP data is reported by the drug 
manufacturer, as explained in section III.A.2 of this final rule). We 
continue to believe that ASP-based payment limits are the most accurate 
drug pricing methodology that is available to CMS. Drug manufacturers 
can report manufacturer's ASP data to CMS on a quarterly basis in order 
ensure that payment limits are set based on ASP. More information on 
ASP reporting is available at https://www.cms.gov/medicare/payment/part-b-drugs/asp-reporting.
    Comment: One commenter requested that CMS make pricing publicly 
available.
    Response: We direct the commenter to section III.H.3.c. below, 
regarding DCAPS drug supply and administration fees. There, we state 
that CMS intends to make the DCAPS fee schedule publicly available by 
publishing the DCAPS fee schedule quarterly on the CMS website.
    Comment: One commenter mentioned that our proposed payment 
calculations for DCAPS drugs included averaging across brand and 
generic drugs, where applicable. This commenter stated that they 
generally support CMS bundling items and services to the extent 
possible, but they requested that CMS monitor conditions to ensure that 
this does not have any unintended consequence on patient access to 
DCAPS drugs.
    Response: We thank the commenter for raising this concern. In 
Chapter 17, section 20.1.3 and 20.4 of the Medicare Claims Processing 
Manual, we discuss calculations for pricing multiple-source drugs in 
Part B, as defined at section 1847A(c)(6)(C) of the Act, when the 
payment limits are not included in the ASP Medicare Part B Drug Pricing 
File or Not Otherwise Classified (NOC) Pricing File. In those sections 
of the Medicare Claims Processing Manual, the pricing calculation for 
WAC and AWP respectively, is described as the lesser price of:
     The median of all generic forms of the drug or biological; 
or
     The lowest brand name product.
    Based on the commenter's remarks and our historical Part B drug 
policies, we are persuaded to amend our proposed policy as to DCAPS 
pricing calculations. We proposed to average together all NDCs of a 
drug if a drug is available in generic and brand formulations to 
determine the payment limit. However, in light of commenters' feedback, 
we are finalizing a DCAPS drug pricing policy to treat brand and 
generic drugs in a similar manner to the description in the Medicare 
Claims Processing Manual, Chapter 17, sections 20.1.3 and 20.4, as 
described above. We believe this will avoid the unintended consequences 
referenced by the commenter, and thus not create a differential pricing 
barrier for patients between brand and generic DCAPS drugs, and that 
pricing for those drugs is not unintentionally inflated. We believe 
that this longstanding payment approach will appropriately use NADAC 
and FSS pricing to determine payment limits for DCAPS drugs for which 
brands and generics are marketed.
    Therefore, when calculating the price for multiple-source DCAPS 
drugs using NADAC or FSS OGA pricing, we will use the lesser price of:
     The median of all generic forms of the drug; or
     The lowest brand name product.
    Comment: Many commenters provided suggestions, feedback, and 
comments on the Proposed NCD for Pre-Exposure Prophylaxis (PrEP) for 
Human Immunodeficiency Virus (HIV) Infection Prevention, published on 
July 12, 2023, as the NCD was not yet finalized as of the end of the 
comment period for the CY 2025 PFS proposed rule on September 9, 2024. 
Comments included requests to ease the transition of PrEP for HIV drugs 
from Part D to Part B, the role of pharmacies and pharmacists in 
supplying PrEP for HIV drugs under Part B, and concerns regarding 
access to, adequate coverage for, and beneficiary protections for PrEP 
for HIV drugs. One commenter expressed concern regarding payment for 
PrEP for HIV drugs under Part B in the interim period between the 
commencement of coverage and the DCAPS payment policy taking effect on 
January 1, 2025. Another commenter requested that CMS clarify 340B 
reporting requirements for PrEP for HIV drugs covered and paid under 
Part B. Some commenters also requested that CMS simplify coding and 
billing for PrEP for HIV drugs and supply fees. One commenter requested 
that CMS extend these DCAPS coverage and payment policies to all 
provider-administered HIV treatments. Another commenter asked that CMS 
align coverage policies with the USPSTF's 2023 recommendation for the 
Prevention of Acquisition of HIV: Preexposure Prophylaxis, and asked 
CMS to create a safe harbor for PrEP products in the first year 
following transition from Part D to Part B.
    Response: This DCAPS fee schedule has been established to apply to 
any current and future drugs covered as additional preventive services 
under 1861(ddd)(1) of the Act, effective January 1, 2025. These 
proposals did not address specifics regarding the NCD for PrEP for HIV 
drugs, and therefore, the additional comments on the proposed NCD are 
out of the scope of these proposals. The public comment period on the 
proposed NCD for PrEP for HIV drugs was from January 12, 2023-February 
11, 2023. The final NCD was released on September 30, 2024, and is 
available at https://www.cms.gov/medicare/coverage/prep.
    We thank commenters for their feedback regarding Medicare Part B 
payment for PrEP for HIV drugs. We direct interested parties to https://www.cms.gov/medicare/coverage/prep for more information on the final 
NCD and the transition of PrEP for HIV coverage and payment from Part D 
to Part B. This CMS PrEP web page contains and/or will contain 
additional guidance on implementation of PrEP for HIV coverage under 
Part B, including coding and billing information, payments for PrEP for 
HIV for the period of September 30-December 31, 2024, and the 
implementation of the DCAPS fee schedule for PrEP for HIV drugs, which 
will be effective January 1, 2025, upon this final rule's publication. 
Payment information for the period of September 30-December 31, 2024, 
is out of scope of this final rule because this final rule is effective 
January 1, 2025. However, we will continue to update the CMS PrEP web 
page as we prepare to implement the DCAPS fee schedule beginning 
January 1, 2025. We share commenters' priority of ensuring patient 
access to DCAPS drugs, and as we continue to implement the final NCD, 
we will continue to communicate updates regarding payment for PrEP for 
HIV drugs under Part B.
    We note that comments regarding USPSTF recommendations for coverage 
of PrEP for HIV drugs, ``safe harbor''

[[Page 98225]]

regulations, the role of pharmacists in supplying PrEP for HIV drugs, 
and 340B reporting requirements, are out of the scope of these payment 
policy proposals.
    Comment: Commenters had additional suggestions regarding the 
``additional preventive services'' benefit category. One commenter 
suggested that CMS should consult with interested parties to determine 
what other services should be considered ``preventive.'' Some 
commenters had questions regarding coverage and payment for DCAPS drugs 
under Medicare Advantage and Medicare Prescription Drug Plans.
    Response: We did not make any proposals regarding expanding 
preventive coverage under Medicare Part B, and we did not make any 
proposals regarding DCAPS drug coverage in Medicare Parts C and D. 
These comments are outside of the scope of our proposals.
    After consideration of public comments, we are finalizing these 
DCAPS drugs policies mostly as proposed, with the modification to our 
policy regarding brand and generic drugs, as described in the responses 
above, and summarized below. We are establishing a fee schedule using 
the following pricing mechanisms to determine the payment limit for 
DCAPS drugs under Part B, which will be updated and published on the 
CMS website quarterly:
    (1) If ASP data is available for the DCAPS drug, the payment limit 
would be determined based on the methodology under section 1847A(b) of 
the Act (usually 106 percent of ASP);
    (2) If ASP data is not available, the payment limit would be 
calculated using NADAC prices for the drug;
    (3) If ASP data and NADAC prices are not available, the payment 
limit would be calculated using the FSS prices for the drug; and
    (4) If ASP data, NADAC prices, and FSS prices are not available, 
payment limit would be the invoice price determined by the MAC.
    In this final rule, we are clarifying that the FSS price is the 
``other government agencies'' price. We are also finalizing the policy 
we described above, that for purposes of NADAC and FSS price 
calculations for DCAPS drugs pricing, we will treat brand and generic 
drugs in a similar manner to the description in the Medicare Claims 
Processing Manual, Chapter 17, sections 20.1.3 and 20.4. Thus, when 
calculating the price for multiple-source DCAPS drugs using NADAC or 
FSS OGA pricing, we will use the lesser price of:
     The median of all generic forms of the drug; or
     The lowest brand name product.
    We are amending Sec.  410.152 by adding paragraph (o) to establish 
this fee schedule and the pricing methodologies used to determine the 
payment limits for DCAPS drugs under Part B. In addition, to highlight 
that coinsurance does not apply to DCAPS drugs, we will publish the 
payment limits for DCAPS drugs along with other separately payable Part 
B drugs on the ASP pricing file.
c. Payment for Supplying and Administration of Drugs Under the 
Additional Preventive Services Benefit
    As explained above, DCAPS drugs are subject to payment under 
section 1833(a)(1)(W)(ii) of the Act. Because the fee schedule 
authorized under such section has not yet been established, and since 
DCAPS drugs are not covered by Part B under the same authority as other 
separately payable Part B drugs that would provide for administration 
or supplying fees, there is no existing policy regarding payment for 
the administration of DCAPS drugs or the supplying of DCAPS drugs by 
suppliers and providers. In a similar manner to the DCAPS drug pricing 
mechanisms described above, we proposed administration and supplying 
fees for DCAPS drugs that mirror existing policies under the PFS and 
Part B drug payment. We anticipate that an NCD that adds drugs to the 
additional preventive services benefit would include coverage for the 
supplying or administration of the drug, as appropriate, and those fees 
would therefore be considered payment for additional preventive 
services as well. (For example, supply and administration fees are 
included as part of the final NCD for PrEP for HIV drugs, found at 
https://www.cms.gov/medicare/coverage/prep.) Therefore, we proposed 
payment limits for the supply and administration of DCAPS drugs to be 
included on the DCAPS fee schedule. As stated above, section 
1833(a)(1)(W)(ii) of the Act requires that the amount paid for the 
provision of additional preventive services is 100 percent of the 
lesser of the actual charge for the service, or the amount determined 
under a fee schedule established by the Secretary for purposes of this 
subparagraph. That is, the amount paid for the administration or 
supplying of the DCAPS drug will be the lesser of either the actual 
charge for the service or the payment limit.
    For drugs that are supplied by a pharmacy, we proposed that the fee 
schedule include a payment limit for a supplying fee that is similar to 
the supplying fee for other Part B-covered drugs dispensed from a 
pharmacy, to allow for consistency among similar payments in Part B. 
These other groups of drugs covered under Part B include 
immunosuppressives, oral anti-cancer, and oral anti-emetic drugs, and 
supplying fees for these drugs are described at 42 CFR part 414, 
subpart L (Sec. Sec.  414.1000 and 414.1001). Generally, Medicare pays 
$24 for the first prescription of one of these drugs supplied by a 
pharmacy in a 30-day period, and pays $16 for each subsequent 
prescription, after the first one, supplied in that 30-day period.\634\ 
We proposed similar payment limits for supplying fees for DCAPS drugs. 
Specifically, we proposed that CMS will establish payment limit of $24 
to a pharmacy for the first DCAPS prescription that the pharmacy 
supplies to a beneficiary in a 30-day period, and a payment limit of 
$16 to a pharmacy for all subsequent DCAPS prescriptions that the 
pharmacy supplies to a beneficiary in that 30-day period. We proposed 
that the same fees would apply regardless of the number of days' supply 
that is dispensed.
---------------------------------------------------------------------------

    \634\ https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c17.pdf.
---------------------------------------------------------------------------

    As discussed in section III.A.4.c of this final rule, further study 
regarding the supplying fees for certain drugs paid under Part B (for 
example, immunosuppressive drugs) is needed and we did not propose to 
make any changes to the supplying fee amounts at this time (meaning the 
current 30-day supplying fees would apply to any amount of days' 
supply). The dispensing and supplying fees under Part B (Sec.  
414.1001) have been shown to be higher than dispensing fees paid in the 
commercial market.\635\ So, until additional study is done regarding 
input costs for dispensing drugs billed to Medicare Part B and 
subsequent notice-and-comment rulemaking can be done, if appropriate, 
in response to such information, we aim to continue the current fee 
schedule for such Part B drugs regardless of the days' supply 
dispensed. Therefore, we proposed to use the same approach for payment 
limits that are paid to pharmacies that supply DCAPS prescriptions.
---------------------------------------------------------------------------

    \635\ https://www.pcmanet.org/rx-research-corner/mandating-pharmacy-reimbursement-increase-spending/08/31/2021/#:#:text=The%20average%20dispensing%20fee%20in,the%20state's%20Medica
id%20FFS%20rate..
---------------------------------------------------------------------------

    For drugs that are administered by a physician or a non-physician 
practitioner, we proposed that the fee schedule include a payment limit 
for

[[Page 98226]]

such administration that aligns with the administration fee for other 
drugs provided as incident to physician services, as paid according to 
the PFS. To operationalize this, we proposed that CMS determine the 
payment limit for administration of a DCAPS drug provided incident to a 
physician service via a crosswalk to an existing, corresponding drug 
administration code under the PFS. Exact details on coding and 
corresponding crosswalks would be included on the published DCAPS fee 
schedule once DCAPS drugs are finalized for coverage via the NCD 
process. The fee schedule will be published quarterly on the CMS 
website and implemented in the Medicare claims processing systems.
    No cost sharing would apply for the administration or supplying of 
DCAPS drugs, because we proposed that such administration or supplying 
will be considered an additional preventive service, and as explained 
above, there is no cost-sharing for any additional preventive services 
under section 1833(a)(1)(W) of the Act. We proposed to codify these 
policies at the newly added Sec.  410.152(o).
    We noted that with regard to the July 12, 2023 Proposed NCD for 
Pre-Exposure Prophylaxis (PrEP) for Human Immunodeficiency Virus (HIV) 
Infection Prevention, in section II.E.4.b. of this final rule, in item 
37, we proposed national rates for HCPCS code G0012 (Injection of pre-
exposure prophylaxis (PrEP) drug for HIV prevention, under skin or into 
muscle) that are crosswalked from CPT code 96372 (Therapeutic, 
prophylactic, or diagnostic injection (specify substance or drug); 
subcutaneous or intramuscular). Please see that section of the final 
rule for more information on finalized coding for PrEP for HIV 
administration. For more information on the final NCD for PrEP for HIV 
drugs, please see https://www.cms.gov/medicare/coverage/prep.
    We solicited comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters were supportive of our proposals to set 
payment limits for DCAPS drug supplying fees that are similar to the 
supplying fees for other Part B-covered drugs dispensed from a 
pharmacy. Commenters appreciated our efforts to align payments across 
health care settings and to allow for consistency among similar 
payments in Part B.
    Response: We thank commenters for their support of our proposals 
and for partnering with CMS in our efforts to improve access to 
preventive health care for Medicare enrollees.
    Comment: One commenter noted the Medicare Payment Advisory 
Commission's (MedPAC) 2016 Report to the Congress, in which MedPAC 
recommended that CMS reduce Part B drug supply fees to match those of 
other payers, as Medicare supply fees have been found to be 
substantially higher than those paid by other payers.\636\ This 
commenter recommended that CMS revisit its Part B drug supplying and 
dispensing fee rates and reduce them to levels similar to other payers.
---------------------------------------------------------------------------

    \636\ Medicare Payment Advisory Commission. 2016. Report to the 
Congress: Medicare and the health care delivery system. Washington, 
DC: MedPAC. https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/reports/june-2016-report-to-the-congress-medicare-and-the-health-care-delivery-system.pdf.
---------------------------------------------------------------------------

    Response: In section III.A.4.c of this final rule, further study 
the supplying fees for certain drugs paid under Part B in needed. We 
take this comment into consideration for future policymaking. Any 
future changes to supply fees will be proposed via notice-and-comment 
rulemaking.
    Comment: One commenter, commenting specifically on the NCD for PrEP 
for HIV drugs, asked CMS to consider a higher supplying fee to help 
cover pharmacy costs inflicted by the coverage transition. The 
commenter recommended that CMS consider the existing supply fees for 
immunosuppressive therapy during the first 30-day period following a 
transplant. This commenter also recommended that supply fees be 
regularly updated and that CMS ensure that the fees reasonably and 
accurately reflect the additional effort necessary for pharmacies to 
acquire and dispense DCAPS drugs.
    Response: Further study the supplying fees for certain drugs paid 
under Part B is needed. We will take this comment into consideration as 
part of that further study. Any future changes to supply fees will be 
proposed via notice-and-comment rulemaking.
    For more information on supply fees for PrEP for HIV drugs, please 
see https://www.cms.gov/medicare/coverage/prep. This CMS PrEP for HIV 
web page contains information on the final NCD, the transition of PrEP 
for HIV coverage and payment from Part D to Part B, and additional 
guidance on implementation of PrEP for HIV coverage under Part B, 
including supply fees.
d. Payment for Drugs Covered as Additional Preventive Services in RHCs 
and FQHCs
    Above, we mentioned that section 4104 of the ACA amended payment 
for additional preventive services, to increase payment to the lesser 
of 100 percent of charges, or the amount determined under a fee 
schedule established by the Secretary, per section 1833(a)(1)(W)(ii) of 
the Act. This change waived coinsurance for additional preventive 
services. Section 4104 of the ACA also removed several other barriers 
to access to preventive services in Medicare. Specifically, section 
4104 of the ACA amended section 1833 of the Act to waive the deductible 
for preventive services at section 1833(b)(1) of the Act, and to waive 
coinsurance for preventive services that are recommended with a grade 
of A or B by the USPSTF for any indication or population by adding 
section 1833(a)(1)(Y) of the Act. We also mentioned above that 
``additional preventive services'' are a subset of ``preventive 
services'' under Medicare Part B, per section 1861(ddd)(3) and 
1861(ww)(2)(O) of the Act, respectively.
    In the CY 2011 PFS final rule, we interpreted the above waivers of 
cost-sharing for preventive services to apply to FQHCs (75 FR 73417); 
we note that FQHC services were already exempt from the Part B 
deductible, per section 1833(b)(4) of the Act. The CY 2011 PFS final 
rule codified this FQHC policy in regulation at Sec.  405.2449 (75 FR 
73613), and in sub-regulatory guidance, we clarified that these waivers 
of cost-sharing for preventive services applied to RHCs as well.\637\ 
In the CY 2014 FQHC PPS final rule (79 FR 25474), at Sec.  405.2410(b), 
we codified regulations regarding coinsurance in RHCs and FQHCs, 
``[E]xcept for preventive services for which Medicare pays 100 percent 
under Sec.  410.152(l) of this chapter.'' In the CY 2016 PFS final rule 
(80 FR 71088), we clarified explicitly that these waivers of cost-
sharing (that is, both coinsurance and deductible) for preventive 
services applied to RHCs.
---------------------------------------------------------------------------

    \637\ Change Request 7208, R2186CP, 03/28/2011 Waiver of 
Coinsurance and Deductible for Preventive Services in Rural Health 
Clinics (RHCs), Section 4104 of Affordable Care Act (ACA): https://www.cms.gov/regulations-and-guidance/guidance/transmittals/downloads/r2186cp.pdf.
---------------------------------------------------------------------------

    In the previous sections of III.H.3. of this final rule, we 
discussed drugs covered as additional preventive services (henceforth 
``DCAPS drugs,'' for the ease of the reader). In this section, we 
clarify that drugs covered as additional preventive services, and any 
accompanying administration and

[[Page 98227]]

supplying fees, are not subject to cost-sharing in RHCs and FQHCs. 
Since DCAPS drugs and the services to administer and supply them are 
all considered additional preventive services, as explained in the 
previous section, they are paid at 100 percent of the Medicare payment 
amount in RHCs and FQHCs per Sec. Sec.  405.2410 and 410.152(l) and 
they are paid on a claim-by-claim basis.
    In addition, we proposed that DCAPS drugs, when administered and 
supplied in an RHC or FQHC, as well as any administration and supply 
fee for those drugs, will be paid according to the fee schedule payment 
limits described above at section III.H.3.b. of this final rule. Since 
regulations at Sec.  405.2460 allow the payment limitations set out in 
Part 410 to apply to payment for services provided by RHCs and FQHCs, 
we believe it is consistent with our current RHC and FQHC payment 
policies to apply the proposed DCAPS fee schedule payment limits, as 
discussed above, to those same DCAPS drugs when furnished in an RHC or 
FQHC. Those payment limits are described earlier in section III.H.3.b. 
and will be codified at Sec.  410.152(o)(1). We proposed to codify this 
RHC/FQHC DCAPS policy in regulation as well, at a new Sec.  
405.2464(h).
    The following is a summary of the comments we received and our 
responses.
    Comment: Commenters supported this DCAPS policy for RHCs and FQHCs. 
Some commenters specifically noted and appreciated the waiver of cost-
sharing for additional preventive services in RHCs and FQHCs. One 
commenter stated that the proposed DCAPS fee schedule would ensure that 
RHCs and FQHCs are adequately reimbursed for providing PrEP for HIV 
drugs to their clients, and this could reduce disparities, since RHCs 
and FQHCs serve clients from communities with disproportionately low 
rates of PrEP for HIV drug access. Another commenter noted that RHCs 
and FQHCs did not receive separate payment for other physician-
administered drugs in the past, and this DCAPS payment policy supports 
RHCs and FQHCs and ensures their financial sustainability.
    Response: We thank commenters for partnering with CMS in our 
efforts to improve access to preventive health care for Medicare 
enrollees, especially for those vulnerable populations that are served 
by RHCs and FQHCs. We look forward to continuing our work with all our 
partners to continue facilitating increased access to preventive health 
care for both Medicare enrollees and all Americans.
    Comment: Some commenters aligned their comments with those on the 
DCAPS fee schedule in general, as described above in section III.H.3.b. 
These commenters agreed with our proposal to apply the proposed DCAPS 
fee schedule payment limits to DCAPS drugs when furnished in the RHC or 
FQHC setting, though they support WAC-based payment as an alternative 
to ASP methodology when ASP data is not available for a DCAPS drug.
    Response: Please see our response to similar comments mentioned in 
section III.H.3.b. There, we mentioned that we stated in the CY 2020 
PFS final rule (84 FR 62655) that we believe NADAC survey data on 
invoice prices provides the closest pricing metric to ASP methodology 
that is available. We also mentioned above that FSS data is one of the 
few existing options for drug pricing that includes a wide variety of 
drug formulations, which is why we chose it as an additional 
alternative for DCAPS drug fee schedule pricing. Thus, our proposal 
explained that ASP, NADAC and FSS are all drug pricing options that aim 
to estimate the accurate acquisition cost of a drug, rather than WAC, 
which is a list price.
    At the outset, we encourage drug manufacturers to submit ASP data 
to CMS (that is, positive manufacturer's ASP data is reported by the 
drug manufacturer, as explained in section III.A.2 of this final rule). 
We continue to believe that ASP is the most accurate drug pricing 
source available to CMS because it reflects the sale price net of 
discounts as described in section 1847A(c)(3) of the Act. Since other 
pricing sources (that is, NADAC, FSS, and invoice pricing) are only 
used in the absence of ASP data, commenters' concerns about these other 
sources can be mitigated by reporting manufacturer's ASP data to CMS on 
a quarterly basis. More information on ASP reporting at https://www.cms.gov/medicare/payment/part-b-drugs/asp-reporting.
    Comment: Several commenters requested that CMS clarify certain 
operational aspects of the provision of DCAPs drugs in RHCs and FQHCs. 
These commenters asked if there are a specific ways health centers will 
be able to access DCAPS drugs. These commenters also asked if any other 
drugs are being considered for coverage as DCAPS drugs, and if there 
are other drugs, will CMS publish a list. One commenter asked if there 
are other DCAPS policies that community health centers and other safety 
net providers should be aware of. Another commenter asked if RHC and 
FQHC DCAPS claims should be submitted on a UB-04 or a 1500, and they 
also asked CMS to clarify if DCAPS would generate additional 
reimbursement if performed on the same day as another qualifying RHC 
encounter. Other commenters asked CMS to ensure that RHCs and FQHCs are 
paid for DCAPS drugs and any administration and supplying fee at 100% 
of the Medicare payment amount.
    Response: As described above in section III.H.3.a. of this final 
rule, section 1861(ddd)(2) of the Act states that, in making 
determinations under section 1861(ddd)(1) of the Act, the Secretary 
should use the process for making National Coverage Determinations 
(NCD) in the Medicare program. Therefore, any drugs that are being 
considered for DCAPS coverage will be announced via a proposed NCD and 
posted for public comment in the Medicare Coverage Database, found at 
https://www.cms.gov/medicare-coverage-database/search.aspx.
    All other guidance for RHCs and FQHCs regarding DCAPS drugs will be 
provided in sub-regulatory guidance and posted on the CMS RHC (https://www.cms.gov/center/provider-type/rural-health-clinics-center) and FQHC 
(https://www.cms.gov/medicare/payment/prospective-payment-systems/federally-qualified-health-centers-fqhc-center) websites. For example, 
current guidance for RHC and FQHC coverage and payment for PrEP for HIV 
drugs, which are currently the only DCAPS drugs, can be found at the 
top of each of those websites as of the publication of this final rule.
    We also note that we state above in section III.H.3.c., regarding 
DCAPS drug supply and administration fees, that CMS intends to make the 
DCAPS fee schedule publicly available by publishing the DCAPS fee 
schedule quarterly on the CMS website.
    Above, we explain that since DCAPS drugs and the services to 
administer and supply them are all considered additional preventive 
services, as explained in the previous section, they are paid at 100 
percent of the Medicare payment amount in RHCs and FQHCs per Sec. Sec.  
405.2410 and 410.152(l) and they are paid on a claim-by-claim basis. 
Therefore, we have finalized a policy that payment to RHCs and FQHCs 
for DCAPS drugs and their supplying and administration, and fees is 
separate from, that is, paid in addition to the RHC AIR and FQHC PPS. 
Finally, we note that DCAPS drugs and their supplying and 
administration fees, when provided by RHCs and FQHCs, would be reported 
on the UB 04.
    Comment: Similar to the general comments on the proposed DCAPS fee 
schedule, as described above in section

[[Page 98228]]

III.H.3.b, several commenters provided feedback on the Proposed NCD for 
Pre-Exposure Prophylaxis (PrEP) for Human Immunodeficiency Virus (HIV) 
Infection Prevention, published on July 12, 2023, as the NCD was not 
yet finalized as of the end of the comment period for the CY 2025 PFS 
proposed rule on September 9, 2024. These comments included concerns 
regarding the transition of PrEP for HIV drugs from Part D to Part B, 
and concerns regarding access to, adequate coverage for, and 
beneficiary protections for PrEP for HIV drugs.
    Response: This DCAPS fee schedule has been established to apply to 
any current and future drugs covered as additional preventive services 
under section 1861(ddd)(1) of the Act. These proposals do not address 
specifics regarding the NCD for PrEP for HIV drugs, and therefore, 
additional comments on the proposed NCD are out of the scope of these 
proposals. The public comment period on the proposed NCD for PrEP for 
HIV coverage under Medicare Part B was from January 12, 2023-February 
11, 2023. Additional comments on the proposed NCD are out of the scope 
of this proposal. The final NCD was released on September 30, 2024, and 
is available at https://www.cms.gov/medicare/coverage/prep. We direct 
interested parties to https://www.cms.gov/medicare/coverage/prep for 
more information on the final NCD and the transition of PrEP for HIV 
coverage and payment from Part D to Part B.
    After consideration of public comments, we are finalizing these 
policies as proposed. Finalized DCAPS fee schedule information can be 
found in section III.H.3.b. of this final rule. DCAPS drugs and the 
services to administer and supply them are paid at 100 percent of the 
Medicare payment amount, that is, the amounts on the DCAPS fee 
schedule, in RHCs and FQHCs, and they are paid on a claim-by-claim 
basis. We are codifying this RHC/FQHC DCAPS policy in regulation at a 
new Sec.  405.2464(h).

I. Medicare Prescription Drug Inflation Rebate Program

1. Background
a. Overview of the Medicare Prescription Drug Inflation Rebate Program
    The Inflation Reduction Act of 2022 (IRA) (Pub. L. 117-169, enacted 
August 16, 2022) established new requirements under which drug 
manufacturers must pay inflation rebates if they raise their prices for 
certain drugs covered under Part B and Part D faster than the rate of 
inflation. Drug manufacturers are required to pay rebates to Medicare 
if prices for certain drugs covered under Part B increase faster than 
the rate of inflation for a calendar quarter beginning with the first 
quarter of 2023; drug manufacturers are required to pay rebates to 
Medicare if prices for certain drugs covered under Part D increase 
faster than the rate of inflation over a 12-month period, starting with 
the 12-month period that began October 1, 2022.
    Section 11101 of the IRA amended section 1847A of the Act by adding 
a new subsection (i), which establishes a requirement for drug 
manufacturers to pay rebates into the Federal Supplementary Medical 
Insurance Trust Fund for Part B rebatable drugs if the specified amount 
exceeds the inflation-adjusted payment amount, which is calculated as 
set forth in section 1847A(i)(3)(C) of the Act. The IRA also provides 
for an adjustment to the beneficiary coinsurance amount in cases where 
the price of a Part B rebatable drug increases faster than the rate of 
inflation such that the beneficiary coinsurance is calculated based on 
the lower inflation-adjusted payment amount instead of the applicable 
payment amount. Section 1847A(i)(2) of the Act defines a ``Part B 
rebatable drug,'' in part, as a single source drug or biological 
product (as defined in section 1847A(c)(6)(D) of the Act), including a 
biosimilar biological product (as defined in section 1847A(c)(6)(H) of 
the Act), but excluding a qualifying biosimilar biological product (as 
defined in section 1847A(b)(8)(B)(iii) of the Act) for which payment is 
made under Part B.
    Section 11102 of the IRA added section 1860D-14B of the Act, which 
requires drug manufacturers to pay rebates into the Medicare 
Prescription Drug Account in the Federal Supplementary Medical 
Insurance Trust Fund for each 12-month applicable period, starting with 
the applicable period that began on October 1, 2022, for Part D 
rebatable drugs if the annual manufacturer price (AnMP) of such drug 
exceeds the inflation-adjusted payment amount, which is calculated as 
set forth in section 1860D-14B(b)(3) of the Act. Section 1860D-
14B(g)(1)(A) of the Act defines a ``Part D rebatable drug,'' in part, 
as a drug or biological described at section 1860D-14B(g)(1)(C) of the 
Act that is a ``covered Part D drug'' as that term is defined in 
section 1860D-2(e) of the Act. The definition of a Part D rebatable 
drug includes drugs approved under a new drug application under section 
505(c) of the Federal Food, Drug, and Cosmetic (FD&C) Act (that is, 
brand name drugs), generic drugs approved under section 505(j) of the 
FD&C Act that meet certain statutory criteria (that is, sole source 
generic drugs), and biologicals licensed under section 351 of the 
Public Health Service Act (PHS), including biosimilars.
    Under the IRA, certain statutory requirements vary for 
implementation of the Medicare Part B Drug Inflation Rebate Program and 
the Medicare Part D Drug Inflation Rebate Program. For example, section 
1847A(i) of the Act requires CMS to calculate Part B drug inflation 
rebates for a calendar quarter, whereas section 1860D-14B of the Act 
requires CMS to calculate Part D drug inflation rebates for a 12-month 
applicable period. With respect to invoicing manufacturers for the 
rebate amount owed, under section 1847A(i)(1) of the Act, CMS must 
report rebate amounts to each manufacturer of a Part B rebatable drug 
no later than 6 months after the end of each calendar quarter, except 
that for calendar quarters beginning in 2023 and 2024, CMS has until 
September 30, 2025, to invoice manufacturer for rebates. In contrast, 
under section 1860D-14B(a) of the Act, CMS must report rebate amounts 
to each manufacturer of a Part D rebatable drug no later than 9 months 
after the end of each applicable period, except that for the first two 
applicable periods (that is, October 1, 2022, to September 30, 2023, 
and October 1, 2023, to September 30, 2024), CMS has until December 31, 
2025, to invoice manufacturers for Part D inflation rebates. 
Additionally, there are statutory differences in the inputs used to 
calculate the rebate amounts for Part B and Part D. As a result, CMS 
proposed to use different methodologies to calculate inflation rebates 
for Part B rebatable drugs and Part D rebatable drugs. However, CMS has 
attempted to align policies across the Medicare Part B Drug Inflation 
Rebate Program and Medicare Part D Drug Inflation Rebate Program to the 
extent possible.
b. Summary of Proposed Policies for the Medicare Prescription Drug 
Inflation Rebate Program
    In the CY 2025 Physician Fee Schedule (PFS) proposed rule (89 FR 
61934), we proposed to codify policies established in the revised 
guidance for the Medicare Part B Drug Inflation Rebate Program and the 
Medicare Part D Drug Inflation Rebate Program \638\

[[Page 98229]]

(collectively referred to as the ``Medicare Prescription Drug Inflation 
Rebate Program'') in regulatory text. Specifically, we proposed to 
codify with limited modification policies set forth in guidance for the 
Medicare Prescription Drug Inflation Rebate Program by adding new parts 
427 and 428 to title 42, chapter IV of the Code of Federal Regulations 
for Part B and Part D, respectively, and welcomed comments on these 
proposed provisions.
---------------------------------------------------------------------------

    \638\ Medicare Part B Drug Inflation Rebate Revised Guidance: 
https://www.cms.gov/files/document/medicare-part-b-inflation-rebate-program-revised-guidance.pdf; Medicare Part D Drug Inflation Rebate 
Revised Guidance: https://www.cms.gov/files/document/medicare-part-d-inflation-rebate-program-revised-guidance.pdf (collectively 
referred to as the ``revised guidance''). These revised guidance 
documents, published December 14, 2023, implemented policies 
relating to the Medicare Prescription Drug Inflation Rebate Program 
for 2022, 2023, and 2024. CMS also published guidance on the use of 
the 340B modifier to report separately payable Part B drugs and 
biologicals acquired under the 340B program (Revised Part B 
Inflation Rebate Guidance: Use of the 340B Modifier, https://www.cms.gov/files/document/revised-part-b-inflation-rebate-340b-modifier-guidance.pdf).
---------------------------------------------------------------------------

    In addition, we proposed new policies for the Medicare Part B Drug 
Inflation Rebate Program as follows:
     Proposed Sec.  427.201(b) provided that CMS will compare 
the payment amount in the quarterly pricing files published by CMS to 
the inflation-adjusted payment amount for a given quarter when 
determining whether the criteria for a coinsurance adjustment are met.
     Proposed Sec.  427.302(c)(3) provided that for a Part B 
rebatable drug first approved or licensed by the FDA on or before 
December 1, 2020 but with a first marketed date after December 1, 2020, 
the payment amount benchmark quarter for such drug is the third full 
calendar quarter after the drug's first marketed date. Proposed Sec.  
427.302(c)(4) further provided that for a Part B rebatable drug that 
was billed under a NOC code during the calendar quarter beginning July 
1, 2021, or the third full calendar quarter after such drug's first 
marketed date, whichever is later, the payment amount benchmark quarter 
is the third full calendar quarter after the drug is assigned a billing 
and payment code other than a NOC code.
     Proposed Sec.  427.303(b)(1)(i) provided that CMS will 
remove 340B units for professional claims with dates of service during 
2024 (in addition to 2023) submitted by Medicare suppliers that are 
covered entities listed by the Health Resources and Services 
Administration (HRSA) 340B Office of Pharmacy Affairs Information 
System as participating in the 340B Program, by using National Provider 
Identifiers and/or Medicare Provider numbers to identify these 
suppliers and the claims submitted with such identifiers.
     Proposed Sec.  427.303(b)(5) provided that CMS will remove 
units of refundable single-dose container or single-use package drugs 
subject to discarded drug refunds, from the calculation of rebate 
amounts, generally in the reconciliation process.
     Proposed Sec.  427.501 described CMS' method and process 
for reconciliation of a rebate amount for a Part B rebatable drug, 
including the circumstances that may trigger such a reconciliation.
     Proposed Sec.  427.600 established a civil money penalty 
process in accordance with section 1847A(i)(7) of the Act to address 
when a manufacturer of a Part B rebatable drug fails to pay the rebate 
amount in full by the payment deadline for such drug for such 
applicable calendar quarter.
     Proposed Sec.  427.10 provided that, were any provision of 
part 427 to be held invalid or unenforceable by its terms, or as 
applied to any person or circumstance, such provisions will be 
severable from part 427 and the invalidity or unenforceability will not 
affect the remainder thereof or any other part of this subchapter or 
the application of such provision to other persons not similarly 
situated or to other, dissimilar circumstances.
    We also proposed new policies for the Medicare Part D Drug 
Inflation Rebate Program as follows:
     Proposed Sec.  428.202(c)(3) provided that if a Part D 
rebatable drug first approved or licensed by the FDA on or before 
October 1, 2021, does not have AMP data reported under section 
1927(b)(3) of the Act for any quarters during the period beginning on 
January 1, 2021 and ending on September 30, 2021, CMS will identify the 
payment amount benchmark period as the first calendar year, which would 
be no earlier than calendar year 2021, in which such drug has at least 
1 quarter of AMP reported. Proposed Sec.  428.202(c)(4) further 
provided that for a Part D rebatable drug first approved or licensed 
after October 1, 2021 (that is, a subsequently approved drug), for 
which there are no quarters during the first calendar year beginning 
after the drug's first marketed date for which AMP has been reported 
under section 1927(b)(3), the payment amount benchmark period will be 
the first calendar year in which such drug has at least 1 quarter of 
AMP reported. We also solicited comments on alternative policies to 
address certain instances in which AMP are not reported for certain 
NDC-9s of a Part D rebatable drug.
     Proposed Sec.  428.203(b)(2) provided that, for claims 
with dates of service on or after January 1, 2026, and with respect to 
an applicable period, CMS will exclude from the total number of units 
used to calculate the total rebate amount for a Part D rebatable drug 
those units of the Part D rebatable drug for which a manufacturer 
provided a discount under the 340B Program. To determine the total 
number of such units for which a manufacturer provided a discount under 
the 340B Program, we proposed that CMS will use data reflecting the 
total number of units of a Part D rebatable drug for which a discount 
was provided under the 340B Program and that were dispensed during the 
applicable period. We proposed that CMS may apply adjustment(s) to 
these data as needed. We also solicited comments on alternative 
policies for collecting and using 340B data to calculate rebate amounts 
for Part D rebatable drugs.
     Proposed Sec.  428.401 described CMS' method and process 
for reconciliation of a rebate amount for a Part D rebatable drug, 
including the circumstances that may trigger such a reconciliation.
     Proposed Sec.  428.500 established a civil money penalty 
process in accordance with section 1860D-14B(e) of the Act to address 
when a manufacturer of a Part D rebatable drug fails to pay the rebate 
amount in full by the payment deadline for such drug for such 
applicable period.
     Proposed Sec.  428.10 provided that, were any provision of 
part 428 to be held invalid or unenforceable by its terms, or as 
applied to any person or circumstance, such provisions will be 
severable from this part and the invalidity or unenforceability will 
not affect the remainder thereof or any other part of this subchapter 
or the application of such provision to other persons not similarly 
situated or to other, dissimilar circumstances.
    In the CY 2025 PFS proposed rule (89 FR 61936), we proposed that 
unless otherwise specified, the provisions herein will apply, with 
respect to Part B rebatable drugs, for all calendar quarters beginning 
with January 1, 2023, and with respect to Part D rebatable drugs, for 
all applicable periods beginning with October 1, 2022. We stated that 
the IRA directs the Secretary to calculate rebate amounts for Part B 
rebatable drugs beginning on January 1, 2023, and Part D rebatable 
drugs beginning on October 1, 2022, using pricing data from past 
periods of time, including benchmark data from periods prior to the 
statute's enactment. In some cases, the time periods during which 
prices are subject to rebates began as early as several weeks after the 
IRA was enacted. In recognition of this timing, section 1860D-14B(h) of 
the Act specifically requires CMS to use program instruction to 
implement the Medicare Part D Drug Inflation Rebate Program for 2022, 
2023, and 2024. Similarly, the existing provision at

[[Page 98230]]

section 1847A(c)(5)(C) of the Act, provides authority for CMS to 
implement the Medicare Part B Drug Inflation Rebate Program using 
program instruction or other guidance. In addition, sections 
1847A(i)(1)(C) and 1860D-14B(a)(3) of the Act, as added by the IRA, 
permit the Secretary to delay the issuance of Rebate Reports for 
certain initial calendar quarters and applicable periods until 2025.
    We further stated in the CY 2025 PFS proposed rule (89 FR 61936) 
that section 1871(e)(1)(A) of the Act provides that a substantive 
change in regulations, manual instructions, interpretative rules, 
statements of policy, or guidelines of general applicability under 
Title XVIII of the Act may not apply retroactively unless the Secretary 
has determined that such retroactive application is necessary to comply 
with statutory requirements or that failure to apply such policies 
retroactively would be contrary to the public interest. To the extent 
any proposed provisions in this section III.I. of this rule are 
considered to apply retroactively, we stated in the CY 2025 PFS 
proposed rule that CMS has determined that such retroactive application 
would be both necessary to establish policies to implement the 
statutory requirements that CMS perform various calculations that 
involve pricing activities from prior periods and also consistent with 
the statutory provisions expressly allowing the agency to delay the 
issuance of rebate reports for initial applicable periods until 2025. 
In addition, such retroactive application will be in the public 
interest because it would ensure that the proposed regulations address 
the same time periods and manufacturer pricing conduct addressed in the 
IRA and will promote consistency and continuity in program 
implementation.
    We received public comments on the proposed provisions, as well as 
general comments on the CY 2025 PFS proposed rule. The following is a 
summary of the general comments we received and our responses; comments 
and responses on specific provisions are discussed in the subsections 
below.
    Comment: A couple of commenters offered general support for CMS' 
proposed policies for the Medicare Part B Drug Inflation Rebate 
Program. One commenter supported CMS' proposed policies--and the IRA 
more broadly--to help address the prices of prescription drugs 
furnished to Medicare beneficiaries. One commenter expressed concern 
about potential unintentional effects of the IRA on certain 
specialties. However, this commenter did not expand on this statement.
    Response: We thank the commenters who expressed support for CMS' 
proposed policies for the Medicare Part B Drug Inflation Rebate 
Program. We refer the commenter that expressed concern about the IRA's 
potential unintentional effects to the CMS IRA mailbox 
([email protected]), which CMS established to receive 
queries related to the implementation of the Medicare Part B and Part D 
Drug Inflation Rebate Programs and the Medicare Drug Price Negotiation 
Program.
    Comment: One commenter urged CMS to continue to evaluate the full 
impact of the IRA on access to medicine, including the Medicare 
Prescription Drug Inflation Rebate Program and the Medicare Drug Price 
Negotiation Program, noting specifically that the Medicare Drug Price 
Negotiation Program may have unintended consequences on the economic 
incentives to develop medicines.
    Response: We appreciate this commenter's concern. As discussed in 
later sections of this final rule, we will monitor certain provisions 
of the Medicare Part B and Part D Drug Inflation Rebate Programs, 
including the status of Part B and Part D rebatable drugs on the FDA's 
shortage list. The commenter's suggestion to monitor the full impact of 
the IRA, including the impact of the Medicare Drug Price Negotiation 
Program, on access to medicine is beyond the scope of this final rule.
    Comment: One commenter wrote that CMS did not provide sufficient 
detail for interested parties to meaningfully comment on various 
proposed policies, including but not limited to the definition of 
``misreporting'' at Sec.  427.501(d)(2)(ii) and alternative 
methodologies for calculating the benchmark period in cases where AMP 
is not reported. This commenter recommended CMS publish a second 
proposed rule containing concrete policy proposals that would allow 
interested parties to meaningfully comment.
    Response: We disagree with the commenter's assertion that the 
proposed rule did not include sufficient detail to allow interested 
parties to meaningfully comment on our proposed Medicare Prescription 
Drug Inflation Rebate Program policies, and, where applicable, the 
alternative approaches considered. Under the Administrative Procedure 
Act (APA), in proposed rulemaking, agencies are required to include 
either the terms or substance of the proposal or a description of the 
subjects and issues involved. The CY 2025 PFS proposed rule contained 
sufficient information on our policy proposals to implement the rebate 
provisions set forth in statute and the alternatives considered to put 
interested parties on notice of the policies that might be adopted in 
this final rule and afford them a meaningful opportunity to comment. As 
evidenced by the comments received in response to the CY 2025 PFS 
proposed rule, interested parties had a full opportunity to share their 
views on our proposals and the alternatives considered. We have 
considered these public comments in developing our policies for this 
final rule.
    After consideration of the public comments received, we are 
finalizing, with modifications, the proposed policies for the Medicare 
Prescription Drug Inflation Rebate Program.
c. Timeline of Key Dates for the Medicare Prescription Drug Inflation 
Rebate Program
    As sections 1847A(i)(2)(C) and 1860D-14B(a)(3) of the Act allow for 
delayed reporting and invoicing of rebates amounts for applicable 
calendar quarters in 2023 and 2024 for Part B rebatable drugs and the 
first two applicable periods for Part D rebatable drugs, as proposed, 
Figures B-I 1 and B-I 2 provide example timelines for how rebates will 
be calculated for applicable calendar quarters and one applicable 
period in calendar year 2025. Figures B-I1 and B-I2 also depict how the 
rebate period and components of the rebate calculation may shift based 
on the marketing and approval dates for a Part B or Part D rebatable 
drug.

[[Page 98231]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.096

[GRAPHIC] [TIFF OMITTED] TR09DE24.095

    As proposed, Table 53 describes a summary timeline for inflation 
rebate amount reports and deadlines for applicable calendar quarters in 
calendar year 2025 and thereafter for Part B rebates and for the Part D 
rebate applicable period beginning on October 1, 2024, and applicable 
periods thereafter.

[[Page 98232]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.097

    We did not receive public comments on the summary timelines. We are 
adding an amendment to section II.I.1.c. of this final rule to update 
Figure B-I3: Summary of Proposed Data Timelines for Part B Drug 
Inflation Rebate Provisions for Calendar Year 2025 as follows. We are 
adding an example to Figure B-I3 to illustrate how rebates for quarters 
in calendar year 2025 will be calculated for drugs billed under a NOC 
code during calendar quarter July 1,

[[Page 98233]]

2021 and assigned to a unique billing and payment code on April 1, 
2024.
[GRAPHIC] [TIFF OMITTED] TR09DE24.098

2. Medicare Part B Drug Rebates for Single Source Drugs and Biological 
Products With Prices That Increase Faster Than the Rate of Inflation
a. Definitions (Sec.  427.20)
    At Sec.  427.20, we proposed to codify the definitions of terms 
consistent with the meanings given in section 1847A(i) of the Act or 
established in the revised Medicare Part B Drug Inflation Rebate 
Guidance, as applicable, as well as new definitions based on policies 
detailed in the proposed rule.
    We proposed definitions for the following terms found in section 
1847A of the Act:
     ``Benchmark period CPI-U''.
     ``Biosimilar biological product''.
     ``Inflation-adjusted payment amount''.
     ``Manufacturer''.
     ``Part B rebatable drug''.
     ``Payment amount benchmark quarter''.
     ``Payment amount in the payment amount benchmark 
quarter''.
     ``Rebate period CPI-U''.
     ``Single source drug or biological product''.
     ``Specified amount''.
     ``Subsequently approved drug''.
     ``Unit''.
    Further, we proposed to codify at Sec.  427.20 definitions 
established in the revised Medicare Part B Drug Inflation Rebate 
Guidance and new definitions based on policies detailed in the proposed 
rule for the following terms:
     ``Allowed charges''.
     ``Applicable calendar quarter''.
     ``Applicable threshold''.
     ``Average sales price (ASP)''.
     ``Billing and payment code''.
     ``Billing unit''.
     ``CPI-U''.\639\
---------------------------------------------------------------------------

    \639\ These data are referenced to 1982-84=100--that is, the 
average of pricing data for the 36 months from 1982 through 1984 
serve as the basis for the index and are assigned a value of 100. 
These data are not seasonally adjusted.
---------------------------------------------------------------------------

     ``FDA application''.
     ``Final action claim''.
     ``First marketed date''.
     ``Grouped billing and payment code''.
     ``National Drug Code'' (NDC).
     ``Not Otherwise Classified (NOC) code''.
    We have added definitions for the following terms to make a 
technical clarification as described in section III.I.2.d.iii. of this 
final rule and based on public comments received and summarized under 
section III.I.2.d.ii. of this final rule.
     ``Billing and payment code FDA approval or licensure 
date''.
     ``Sold or marketed''.
    After consideration of public comments, we are finalizing, with 
modifications, the definitions proposed at Sec.  427.20.
b. Determination of Part B Rebatable Drugs (Sec. Sec.  427.100 Through 
427.101)
i. Definitions
    In proposed Sec.  427.100, we proposed to define the following 
terms applicable to subpart B (Sec. Sec.  427.100 through 427.101):
     ``EUA Declaration''.
     ``Individual who uses such a drug or biological''.
    We did not receive comments on these proposed definitions. We are 
finalizing these definitions as proposed at Sec.  427.100.

[[Page 98234]]

ii. Identification of Part B Rebatable Drugs
    Section 1847A(i)(2) of the Act defines a ``Part B rebatable drug,'' 
in part, as a single source drug or biological product (as defined in 
section 1847A(c)(6)(D) of the Act), including a biosimilar biological 
product (as defined in section 1847A(c)(6)(H) of the Act), but 
excluding a qualifying biosimilar biological product (as defined in 
section 1847A(b)(8)(B)(iii) of the Act), for which payment is made 
under Part B. The definitions for a biosimilar biological product and a 
qualifying biosimilar biological product are codified at Sec.  414.902.
    At Sec.  427.101(a), we proposed to codify the policies established 
in section 30.1 of the revised Medicare Part B Drug Inflation Rebate 
Guidance to identify Part B rebatable drugs by (1) identifying the 
applicable billing and payment code for each single source drug or 
biological product, including biosimilar biological products, for which 
payment is made under Part B and (2) excluding any billing and payment 
code corresponding to a drug or biological product in excluded product 
categories or that have average total allowed charges below an 
applicable threshold, to be codified at Sec.  427.101(b) and (c), 
respectively.\640\
---------------------------------------------------------------------------

    \640\ The billing and payment codes used to identify drugs 
covered under Part B are Healthcare Common Procedure Coding System 
(HCPCS) codes. For more information on HCPCS codes and how they are 
applied, see ``HEALTHCARE COMMON PROCEDURE CODING SYSTEM (HCPCS) 
LEVEL II CODING PROCEDURESHCPCS'' at https://www.cms.gov/medicare/coding/medhcpcsgeninfo/downloads/2018-11-30-hcpcs-level2-coding-procedure.pdf.
---------------------------------------------------------------------------

    We did not receive public comments on this proposed provision, and 
we are finalizing as proposed at Sec.  427.101(a).
iii. Excluded Product Categories
    Section 1847A(i)(2)(A) of the Act excludes qualifying biosimilar 
biological products (as defined in section 1847A(b)(8)(B)(iii) of the 
Act) from the definition of a Part B rebatable drug. As such, at Sec.  
427.101(b)(1) we proposed to codify the policy established in section 
30.2 of the revised Medicare Part B Drug Inflation Rebate Guidance to 
exclude such products from the definition of a Part B rebatable drug 
and not subject them to Part B inflation rebates.
    Section 1847A(i)(2)(A) of the Act defines a Part B rebatable drug 
as a ``single source drug or biological (as defined in [section 
1847A(c)(6)(D) of the Act]),'' which requires that a single source drug 
not be a multiple source drug. We have interpreted section 
1847A(c)(6)(C)(ii) of the Act to mean that single source drugs or 
biological products are treated as multiple source drugs if they were 
within the same billing and payment code as of October 1, 2003. 
Accordingly, at Sec.  427.101(b)(2), we proposed to codify the existing 
policy established in section 30.1 of the revised Medicare Part B Drug 
Inflation Rebate Guidance to exclude drugs and biological products set 
forth in section 1847A(c)(6)(C)(ii) of the Act from the definition of a 
Part B rebatable drug and not subject them to Part B inflation rebates.
    For drugs and biological products that are billed using a HCPCS 
code that represents a Not Otherwise Classified (NOC) code, we have a 
process to determine the allowed payment amount for such billing and 
payment codes; however, current Medicare claims data do not allow CMS 
to determine the average total allowed charges for such drug or 
biological product for a year per individual that uses such a drug or 
biological product or to identify units billed. CMS must perform these 
steps to determine if a drug or biological product is a Part B 
rebatable drug. Therefore, at Sec.  427.101(b)(3), we proposed to 
codify the policy in section 30.1 of the revised Medicare Part B Drug 
Inflation Rebate Guidance to exclude drugs and biological products that 
are billed using a billing and payment code that represents a NOC code 
or claims for such drugs and biological products when no other billing 
and payment code is applicable. We noted that few Part B drugs and 
biological products are billed with such codes and the quarterly 
process for updating billing and payment codes, including establishing 
new billing and payment codes, provides an existing mechanism for CMS 
to minimize the number of Part B rebatable drugs that are billed with 
such codes. As discussed at Sec. Sec.  90.2 and 90.3 in Chapter 17 of 
the Medicare Claims Processing Manual, NOC codes are generally used to 
bill Medicare for new-to-market, FDA-approved drug products until a 
specific billing and payment code is assigned; and so, CMS expects that 
the impact of this exclusion will be limited.\641\
---------------------------------------------------------------------------

    \641\ See: https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c17.pdf.
---------------------------------------------------------------------------

    Consistent with section 303(h) of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003, radiopharmaceutical drugs 
and biologicals are not paid under section 1847A of the Act. 
Manufacturers of radiopharmaceutical drugs and biologicals are 
therefore not required to report ASP under section 1927(b)(3) of the 
Act and are not otherwise required to report ASP data to CMS for 
separately payable radiopharmaceutical drugs and biologicals. In 
addition, different payment methodologies across the outpatient setting 
result in data variations that could inappropriately trigger an 
inflation rebate amount due to methodological differences in 
reimbursement. Therefore, at Sec.  427.101(b)(4) we proposed to codify 
the revised Medicare Part B Drug Inflation Rebate Guidance policy (as 
set forth in section 30.1) that excludes separately payable 
radiopharmaceutical drugs and biologicals for the purposes of 
identifying Part B rebatable drugs. Additionally, we proposed to codify 
the existing policy not to subject these units to the inflation-
adjusted beneficiary coinsurance at Sec.  427.201(c) as described 
further in the following section of this rule.\642\
---------------------------------------------------------------------------

    \642\ In the CY 2025 PFS proposed rule, we also proposed to 
clarify how radiopharmaceuticals are paid for in the physician's 
office and to codify these policies in regulation. Specifically, we 
proposed to clarify that for radiopharmaceuticals furnished in a 
setting other than the hospital outpatient department, MACs can 
determine payment limits for radiopharmaceuticals based on any 
methodology in place on or prior to November 2003.
---------------------------------------------------------------------------

    We aim to create a consistent coding and payment approach for the 
suite of products currently referred to as skin substitutes as stated 
in section 30.1 of revised Medicare Part B Drug Inflation Rebate 
Guidance. In the CY 2024 PFS proposed rule, CMS solicited comments on 
potential changes to payment for skin substitutes. In the CY 2024 PFS 
final rule, we acknowledged the comments received in response to this 
solicitation and stated that CMS would take these comments into 
consideration for future rulemaking.\643\ At Sec.  427.101(b)(5) we 
proposed to codify existing policy to exclude cellular- and tissue-
based products that aid wound healing, currently referred to as skin 
substitutes, for the purposes of identifying Part B rebatable drugs. In 
addition, we proposed not to subject these products to the beneficiary 
coinsurance adjustment at Sec.  427.201(c).
---------------------------------------------------------------------------

    \643\ See 88 FR 78818, November 16, 2023 (https://www.federalregister.gov/public-inspection/2023-24184/medicare-and-medicaid-programs-calendar-year-2024-payment-policies-under-the-physician-fee-schedule).
---------------------------------------------------------------------------

    Section 1847A(i)(2)(A) of the Act excludes from the definition of a 
Part B rebatable drug a drug or biological if, as determined by the 
Secretary, the average total allowed charges for such drug or 
biological product under Part B for a year per individual who uses such 
a drug or biological product are less than $100. Section 1847A(i)(2)(B) 
of the Act

[[Page 98235]]

provides that the $100 amount for 2023 will be increased for 2024 and 
subsequent years by the percentage change in the CPI-U for the 12-month 
period ending with June of the previous year, rounded to the nearest 
multiple of $10. Therefore, at Sec.  427.101(b)(6) we proposed to 
codify the policy established in revised Medicare Part B Drug Inflation 
Rebate Guidance to exclude from the definition of a Part B rebatable 
drug those drugs and biologicals for which the Part B average total 
allowed charges for a year per individual who uses such drug or 
biological is below the applicable threshold.
    Section 1847A(i)(2)(A)(ii) of the Act excludes vaccines set forth 
in subparagraph (A) or (B) of section 1861(s)(10) of the Act from the 
definition of a Part B rebatable drug. Such vaccines include the 
pneumococcal vaccine, the influenza vaccine, the COVID-19 vaccine; and 
the hepatitis B vaccine when furnished to an individual who is at high 
or intermediate risk of contracting hepatitis B (as determined by the 
Secretary under regulations). As such, at Sec.  427.101(b)(7), we 
proposed to codify the existing policy established in section 30.3 of 
the revised Medicare Part B Drug Inflation Rebate Guidance to exclude 
vaccines set forth in subparagraph (A) or (B) of section 1861(s)(10) of 
the Act from the definition of a Part B rebatable drug and not subject 
them to Part B inflation rebates. In addition, with respect to 
monoclonal antibodies used for treatment or post-exposure prophylaxis 
of COVID-19, which are covered and paid for under section 1861(s)(10) 
of the Act, we proposed to exclude these products from the definition 
of Part B rebatable drugs for applicable quarters through the end of 
the calendar year in which the EUA declaration under section 564 of the 
FD&C Act for drugs and biological products is terminated. For 
monoclonal antibodies that are used for pre-exposure prophylaxis of 
COVID-19 that are covered and paid for under section 1861(s)(10) of the 
Act, we proposed to exclude these products from the definition of Part 
B rebatable drug for applicable calendar quarters even after the year 
in which the EUA Declaration ends, as long as these products have an 
FDA-approved application or license after the EUA Declaration is 
terminated.
    Finally, Part B drugs approved under an Abbreviated New Drug 
Application (ANDA) submitted under 505(j) of the FD&C Act do not meet 
the definition of ``single source drug or biological product,'' as 
defined under section 1847A(c)(6)(D) of the Act, and thus, are not Part 
B rebatable drugs. We proposed to codify this exclusion at Sec.  
427.101(b)(8).
    We received public comments on these proposed provisions to exclude 
skin substitutes and separately payable radiopharmaceutical drugs and 
biologicals from the identification of a Part B rebatable drug. The 
following is a summary of the comments we received and our responses.
    Comment: One commenter appreciated CMS' proposal regarding the 
suite of products referred to as skin substitutes for the purposes of 
identifying Part B rebatable drugs. This commenter recommended CMS 
finalize this proposal to not consider skin substitutes Part B 
rebatable drugs. Additionally, this commenter recommended CMS clarify 
that because skin substitutes are not single source drugs, biological 
products, or biosimilar biological products they cannot be considered 
Part B rebatable drugs.
    Response: We thank this commenter for their input and are 
finalizing as proposed. At this time, skin substitutes are excluded 
from the regulatory definition of a Part B rebatable drug.
    Comment: One commenter supported CMS' proposal to codify existing 
policy that separately payable radiopharmaceutical products are 
excluded from the definition of a Part B rebatable drug and, as such, 
are not subject to the inflation-adjusted beneficiary coinsurance, and 
recommended CMS finalize this proposal.
    Response: We thank this commenter for their feedback. As described 
in the CY 2025 PFS proposed rule, we will exclude separately payable 
radiopharmaceutical drugs and biologicals for the purposes of 
identifying Part B rebatable drugs and not subject these products to 
the inflation-adjusted beneficiary coinsurance.
    After consideration of public comments, we are finalizing as 
proposed our proposal at Sec.  427.101(b) to exclude certain product 
categories from the definition of a Part B rebatable drug.
iv. Drugs and Biological Products With Average Total Allowed Charges 
Below the Applicable Threshold
    Under section 1847A(i)(2) of the Act, drugs and biological 
products, for which the average total allowed charges for such drug or 
biological under Part B for a year per individual who uses such drug or 
biological are below the applicable threshold, as determined by the 
Secretary, are excluded from the definition of Part B rebatable drugs. 
As explained in section 30.2 of the revised Medicare Part B Drug 
Inflation Rebate Guidance, CMS uses the term ``applicable threshold'' 
to mean $100 for all 4 calendar quarters in 2023. For all 4 calendar 
quarters in 2024, the applicable threshold will be $100 as increased in 
accordance with section 1847A(i)(2)(B) of the Act. For calendar 
quarters in 2025 and beyond, the applicable threshold will be equal to 
the unrounded applicable threshold calculated for the prior calendar 
year, increased by the percentage increase in the CPI-U for the 12-
month period ending with June of the previous year.
    At Sec.  427.101(c), we proposed to codify policies from the 
revised Medicare Part B Drug Inflation Rebate Guidance to exclude these 
drugs from the definition of a Part B rebatable drug. To do so, in 
accordance with the statute, for each applicable calendar quarter, we 
proposed to identify drugs and biological products with Part B average 
total allowed charges for a year per individual that uses such a drug 
or biological product below the applicable threshold.
    At Sec.  427.101(c)(1), we proposed that to identify the average 
total allowed charges for a year per individual, for each Part B 
rebatable drug, CMS will:
     For single source drugs and biological products assigned 
to only one billing and payment code, sum the allowed charges from 
final action claims greater than $0 and divide the summed amount by the 
number of individuals who use such a drug or biological.
     For single source drugs and biological products assigned 
to more than one billing and payment code, sum the allowed charges from 
final action claims greater than $0 for all billing and payment codes 
and divide the summed amount by the number of individuals who use such 
a drug or biological.
    CMS may move a drug or biological product from a grouped billing 
and payment code to a unique billing and payment code in instances 
where the drug is either approved through the pathway established under 
section 505(b)(2) of the FD&C Act (hereinafter ``section 505(b)(2) drug 
products'') that CMS initially assigned to the same billing and payment 
code as its reference drug for a period of time, or the drug was 
previously a multiple source drug but is now a single source drug that 
was moved to its own billing and payment code. There may be instances 
where a single source drug or biological product was previously 
crosswalked to a grouped billing and payment code (other than a NOC 
code) during the full year. In such instances, we proposed to calculate 
the average

[[Page 98236]]

total allowed charges per individual per year for the drug using 
allowed charges and the number of individuals who used the drug or 
biological product based on claims for the previously grouped billing 
and payment code during the year. Such instances will apply to section 
505(b)(2) drug products, drugs that were previously multiple source 
drugs where all other drugs under the same billing and payment code 
were discontinued (applicable only if the sole remaining product was 
not approved under an ANDA), and to any other situations where a drug 
was previously in a grouped billing and payment code (other than a NOC 
code).
    Finally, there may be instances where a single source drug or 
biological product was initially billed under a grouped billing and 
payment code (other than a NOC code) and was later billed under a 
unique billing and payment code for some of the year. In such 
instances, we proposed to calculate the average total allowed charges 
per individual for a year by: summing the total allowed charges billed 
under the unique billing and payment code for the drug with dates of 
service on or after the Medicare effective date for this unique billing 
and payment code and identifying the individuals on those claims; 
summing the total allowed charges on claims billed under the previously 
grouped billing and payment code and identifying the individuals with 
claims prior to the unique billing and payment code's effective date; 
and then summing the total allowed charges under both billing and 
payment codes across the full year and dividing by the total number of 
individuals (de-duplicated for those individuals identified under both 
the previously grouped billing and payment code and the unique billing 
and payment code). If the average total allowed charges for a year per 
individual who uses such drug or biological product are less than the 
applicable threshold, we proposed to exclude the billing and payment 
code for that calendar quarter. We solicited comment on this proposed 
implementation of the exclusion for drugs and biologicals with average 
total allowed charges below the applicable threshold.
    We proposed at Sec.  427.101(c)(2) to calculate the applicable 
threshold as follows:
     For applicable calendar quarters in 2023, the applicable 
threshold is equal to $100.
     For applicable calendar quarters in 2024, the applicable 
threshold is equal to $100 increased by the percentage increase in the 
CPI-U for the 12-month period ending with June of 2023.
     For applicable calendar quarters in each subsequent 
calendar year, the applicable threshold is equal to the unrounded 
applicable threshold calculated for the prior calendar year increased 
by the percentage increase in the CPI-U for the 12-month period ending 
with June of the previous year.
     If the resulting amount from these calculations is not a 
multiple of $10, CMS will round that amount to the nearest multiple of 
$10.\644\
---------------------------------------------------------------------------

    \644\ CMS will round down any amount less than $5 over a 
multiple of $10 to that multiple of $10, and round up any amount $5 
or more over a multiple of $10 to the next multiple of $10.
---------------------------------------------------------------------------

    Accordingly, the formula to determine the applicable threshold for 
calendar quarters in 2024 is $100 multiplied by (CPI-U for June 2023 
divided by CPI-U for June 2022) (apply rounding to the nearest multiple 
of $10). To illustrate, the 2024 threshold is: 100 x (305.109/296.311) 
= 102.969178 (which rounds down to $100 after applying CMS rounding) so 
the threshold for calendar quarters in 2024 = $100.
    For the purposes of this calculation, we proposed that ``a year'' 
means the 4 consecutive calendar quarters beginning 6 calendar quarters 
before the applicable calendar quarter. We also proposed using final 
action claims from the Medicare fee-for-service claims repository to 
identify claims where separate payment was allowed for the applicable 
HCPCS code for dates of service within a year. Drugs and biological 
products that do not meet the applicable threshold are not considered 
Part B rebatable drugs. For example, for the calendar quarter beginning 
July 1, 2025, CMS will use available final action Medicare Part B 
claims with dates of service beginning January 1, 2024, and ending 
December 31, 2024, because January 1, 2024, is the beginning of the 
calendar quarter that is 6 quarters before the applicable calendar 
quarter beginning on July 1, 2025.
    At Sec.  427.101(c)(3), we proposed to codify the policies and 
methodological steps as described in section 30.2 of the revised 
Medicare Part B Drug Inflation Rebate Guidance for excluding drugs and 
biological products with average total allowed charges below the 
applicable threshold at the billing and payment code level. For each 
applicable calendar quarter, we will identify the applicable billing 
and payment codes for drugs and biological products with average total 
allowed charges for a year per individual less than the applicable 
threshold and exclude such drugs and biological products from the 
definition of Part B rebatable drug in accordance with proposed Sec.  
427.101(b)(6). When a single source drug or biological product with 
average total allowed charges below the applicable threshold is 
assigned to a unique billing and payment code, we will exclude the 
assigned billing and payment code for the applicable calendar quarter. 
There also may be instances where a single source drug or biological 
product is assigned to more than one billing and payment code during a 
year and the average total allowed charges for a year per individual 
that uses such drug or biological product are less than the applicable 
threshold. In such instances, we proposed to exclude all assigned 
billing and payment codes for such single source drug or biological 
product for that applicable calendar quarter.
    We did not receive public comments on this proposed provision, and 
we are finalizing as proposed at Sec.  427.101(c).
c. Inflation-Adjusted Beneficiary Coinsurance Adjustment and Adjusted 
Medicare Payment for Part B Rebatable Drugs With Price Increases Faster 
Than Inflation (Sec. Sec.  427.200 Through 427.201)
    Section 1847A(i)(5) of the Act requires that for Part B rebatable 
drugs, as defined in section 1847A(i)(2)(A) of the Act, furnished on or 
after April 1, 2023, in quarters in which the payment amount described 
in section 1847A(i)(3)(A)(ii)(I) of the Act (or, in the case of 
selected drugs described under section 1192(c) of the Act, the payment 
amount described in section 1847A(b)(1)(B) of the Act), exceeds the 
inflation-adjusted payment amount determined in accordance with section 
1847A(i)(3)(C) of the Act, the coinsurance will be 20 percent of the 
inflation-adjusted payment amount for such quarter (hereafter, the 
inflation-adjusted coinsurance amount). This inflation-adjusted 
coinsurance amount is applied as a percent, as determined by the 
Secretary, to the payment amount that would otherwise apply for such 
calendar quarter in accordance with section 1847A(b)(1)(B) or (C) of 
the Act, as applicable, including in the case of a selected drug. In 
the CY 2024 Hospital Outpatient Prospective Payment System (OPPS) final 
rule and the CY 2024 PFS final rule, CMS codified this inflation-
adjusted coinsurance amount at Sec. Sec.  419.41(e), 410.152(m), and 
489.30(b)(6), respectively.
    Beginning with the April 2023 quarterly pricing files, the 
applicable beneficiary coinsurance percentage is shown for each HCPCS 
code in the pricing files that are posted on the CMS website. For 
example, the ASP Pricing files are posted at https://www.cms.gov/

[[Page 98237]]

medicare/payment/part-b-drugs/asp-pricing-files. The applicable 
beneficiary coinsurance percentage for certain drugs and biologicals 
used predominantly in the hospital outpatient setting are listed in the 
Hospital Outpatient Prospective Payment System (OPPS) Addenda A and B, 
which can be found at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/addendum-a-b-updates. The 
applicable beneficiary coinsurance percentage for certain drugs and 
biologicals used predominantly in the ambulatory surgical center 
setting are listed in the ASC Addendum, which can be found at https://www.cms.gov/medicare/payment/prospective-payment-systems/ambulatory-surgical-center-asc/asc-payment-rates-addenda. The percentage is 
expressed as two digits with three decimal places, for example, 18.760. 
If an adjusted beneficiary coinsurance does not apply, the percentage 
would show as 20.000.
    Section 11101(b) of the IRA amended section 1833(a)(1) of the Act 
by adding a new subparagraph (EE), which requires that if the payment 
amount under section 1847A(i)(3)(A)(ii)(I) of the Act or, in the case 
of a selected drug, the payment amount described in section 
1847A(b)(1)(B) of the Act, for that drug exceeds the inflation-adjusted 
payment amount for a Part B rebatable drug, the Part B payment amount 
would, subject to the Part B deductible and sequestration, equal the 
difference between the payment limit and the inflation-adjusted 
coinsurance amount. Consistent with the clarification in section 40 of 
the revised Medicare Part B Drug Inflation Rebate Guidance and with the 
application of sequestration in the context of Medicare payment and 
beneficiary coinsurance in general, we note that the calculation to 
determine the applicable beneficiary coinsurance amount would not be 
adjusted for sequestration. CMS codified the Medicare payment for Part 
B rebatable drugs in the CY 2024 PFS final rule by adding new paragraph 
(m) to Sec.  410.152.
    In the CY 2025 PFS proposed rule (89 FR 61942), we proposed to 
adopt new provisions at Sec. Sec.  427.200 and 427.201 to codify the 
policies regarding the computation of the inflation-adjusted 
beneficiary coinsurance, defined at Sec.  427.200, for Part B rebatable 
drugs as required by section 1847A(i)(5) of the Act. This new provision 
includes references to the existing provisions at Sec. Sec.  
410.152(m), 419.41(e), and 489.30(b)(6). We further proposed at Sec.  
427.201(c) that any category of products that is excluded from the 
identification of Part B rebatable drugs at Sec.  427.101(b) is not 
subject to the inflation-adjusted beneficiary coinsurance. Examples of 
these excluded products include separately payable 
radiopharmaceuticals, skin substitute products, and qualifying 
biosimilar biological products.
    Additionally, we proposed at Sec.  427.201(b) that CMS will use the 
published payment amount in quarterly pricing files 
645 646 647 to determine if a Part B rebatable drug should 
have an adjusted beneficiary coinsurance equal to 20 percent of the 
inflation-adjusted payment amount as described in section 
1847A(i)(3)(C) of the Act for a calendar quarter. This proposed 
approach deviates from the rebate calculation approach proposed at 
Sec.  427.302, which relies on the specified amount defined at Sec.  
427.20 even when the specified amount and the published payment amount 
in quarterly pricing files differ. The approach proposed at Sec.  
427.201(b) will be used only to determine whether there should be a 
coinsurance adjustment and will not impact the applicability or 
calculation of inflation rebates. We believe this approach is 
consistent with the statutory language and appropriately reflects the 
differences in the statutory text of section 1847A(i)(5) of the Act, 
which sets forth the payment amount that is used to determine whether 
coinsurance should be adjusted, and section 1847A(i)(3)(A) of the Act, 
which sets forth the ``specified amount'' used to determine rebate 
amounts.
---------------------------------------------------------------------------

    \645\ See: https://www.cms.gov/medicare/payment/part-b-drugs/asp-pricing-files.
    \646\ See: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/addendum-a-b-updates.
    \647\ See: https://www.cms.gov/medicare/payment/prospective-payment-systems/ambulatory-surgical-center-asc/asc-payment-rates-addenda.
---------------------------------------------------------------------------

    As stated in the CY 2025 PFS proposed rule (89 FR 61942), our 
intent with this proposed policy is to hold beneficiaries harmless in 
situations where the payment amount is calculated differently from the 
specified amount. Though the payment amount is generally based on the 
same provisions as the specified amount, there may be situations where 
the payment amount is updated or adjusted under other provisions of 
1847A of the Act, such as when ASP data are not available under section 
1847A(c)(5)(B). For example, if the specified amount is very low due to 
negative ASP data and the payment amount is updated using other 
available data resulting in a payment amount that exceeds the 
inflation-adjusted payment amount, beneficiaries will not receive the 
benefit of adjusted coinsurance. There may also be situations where the 
payment amount is lower than the inflation-adjusted payment amount, but 
the specified amount is higher than the inflation-adjusted payment 
amount. In such a situation, if the ``specified amount'' was used as 
the comparator to determine whether coinsurance should be adjusted, 
beneficiaries will pay a coinsurance higher than 20 percent, because 20 
percent of the inflation-adjusted payment amount will be higher than 20 
percent of the payment amount. As such, we proposed to codify at Sec.  
427.201(b) that we will compare the published payment amount in the 
quarterly pricing files published by CMS to determine whether a 
coinsurance adjustment applies. This policy will provide an adjusted 
beneficiary coinsurance amount only when the payment amount for a Part 
B rebatable drug exceeds the inflation-adjusted payment amount in a 
given quarter.
    We believe this approach is valid and gives effect to the differing 
statutory language in sections 1847A(i)(3)(A), 1847A(i)(5), and 
1833(a)(1)(EE) of the Act, which sets forth the coinsurance adjustment 
for Part B rebatable drugs. Unlike the ``specified amount'' in section 
1847A(i)(3)(A) of the Act, sections 1847A(i)(5) and 1833(a)(1)(EE) of 
the Act both refer to a ``payment amount.'' Fundamentally, a payment 
amount cannot be a negative number; if the specified amount and payment 
amount were the same amount, it would result in situations where the 
payment amount at section 1833(a)(1)(EE) of the Act was a negative 
number. Rather, we believe that the term ``payment amount'' in both 
sections 1847A(i)(5) and 1833(a)(1)(EE) of the Act is most naturally 
read to include the amount, as updated and adjusted for the purposes of 
providing payment to providers, that CMS publishes as the payment 
amount in quarterly pricing files; and that section 1833(a)(1)(EE) of 
the Act operates to adjust the percentage of such payment amount. 
Furthermore, section 1847A(i)(5)(B) of the Act provides the Secretary 
with discretion to apply the adjusted coinsurance percentage to the 
payment amount that would otherwise apply under section 1847A(b)(1)(B) 
or (C) of the Act. Lastly, sections 1847A(i)(8)(D) and (E) of the Act 
preclude administrative and judicial review of the computation of the 
adjusted coinsurance and amounts paid to the provider under section 
1833(a)(1)(EE) of the Act.
    In summary, we proposed CMS will use the payment amount in 
quarterly pricing files to determine if a Part B rebatable drug should 
have an adjusted beneficiary coinsurance, the calculation to determine 
the adjusted Medicare

[[Page 98238]]

payment (if applicable) will not be adjusted for sequestration, and 
drugs excluded from the identification of Part B rebatable drugs will 
not be subject to the inflation-adjusted beneficiary coinsurance.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: A few commenters supported CMS' proposal to adjust 
beneficiary coinsurance when applicable. Additionally, one of these 
commenters noted that CMS' intent to hold beneficiaries harmless in 
situations where the payment amount is calculated differently from the 
specified amount could be particularly important in situations where 
the ASP is very low or negative and CMS must use other data to 
calculate the payment amount.
    Response: We thank commenters for their support.
    Comment: One commenter recommended that CMS use the manufacturer-
calculated specified amount for inflation rebate amounts and when 
calculating payment amounts for coinsurance adjustment, noting that 
using consistent sources across these calculations would avoid 
triggering inflation rebates in scenarios when there was no price 
increase.
    Response: We believe our proposed methodology for calculating the 
inflation-adjusted beneficiary coinsurance, which deviates from the 
rebate calculation approach proposed at Sec.  427.302, is consistent 
with the statutory language and appropriately reflects the differences 
in the statutory text of section 1847A(i)(5) of the Act, which sets 
forth the payment amount that is used to determine whether coinsurance 
should be adjusted, and section 1847A(i)(3)(A) of the Act, which sets 
forth the ``specified amount'' used to determine rebate amounts. As 
previously described, there may be situations where the payment amount 
is updated or adjusted under other provisions of 1847A of the Act, such 
as when ASP data are not available under section 1847A(c)(5)(B) of the 
Act. Such a situation could occur if the payment amount is lower than 
the inflation-adjusted payment amount, but the specified amount is 
higher than the inflation-adjusted payment amount, which could cause 
beneficiaries to pay a coinsurance greater than 20 percent.
    Comment: One commenter expressed concern that the proposed change 
to the methodology for determining whether coinsurance should be 
adjusted focuses too heavily on the volume of Part B drugs dispensed 
instead of on the impact of inflation on a person enrolled in Medicare. 
This commenter encouraged CMS to consider a similar strategy used in 
the Medicare Part D Drug Inflation Rebate Program that uses the CPI-U 
during a specific period to calculate an inflation-based rebate.
    Response: We thank the commenter for this feedback. We did not 
propose to determine whether to adjust the beneficiary coinsurance 
based on the volume of Part B drugs administered. As noted, CMS 
proposed to compare the published payment amount in CMS quarterly 
pricing files to the inflation-adjusted payment amount to determine 
which is higher. We believe our proposed methodology is consistent with 
sections 1847A(i)(5) of the Act, which sets forth the payment amount 
that is used to determine whether coinsurance should be adjusted, and 
section 1847A(i)(3)(A) of the Act, which sets forth the ``specified 
amount'' used to determine rebate amounts. We also note that similar to 
the Medicare Part D Drug Inflation Rebate Program, CMS uses CPI-Us for 
specific periods to calculate the inflation rebate for the Medicare 
Part B Drug Inflation Rebate Program.
    Comment: One commenter recommended that CMS provide additional 
guidance to Medicare Advantage (MA) plans on how Part B rebatable drugs 
will be reimbursed. The same commenter stated that CMS should increase 
payments to MA plans for the reduced coinsurance collected from 
beneficiaries under the adjusted beneficiary coinsurance policy 
described in section 1847A(i)(5) of the Act. The commenter asked CMS to 
establish a mechanism to reimburse MA plans for these losses.
    Response: As part of MA rate development, CMS assumes prices for 
drugs covered under Part B will not materially exceed the inflation-
adjusted payment amounts under section 1847A(i) of the Act. Therefore, 
no adjustments to projected Part B FFS expenditures to account for 
inflation rebates are necessary. Any potential losses from inflation 
rebates should be accounted for in the bids MA organizations submit to 
CMS.
    Comment: One commenter requested CMS provide additional guidance to 
MA plans on how to operationalize the coinsurance adjustment as the 
rebatable drug price changes quarterly. The commenter did not specify 
any particular clarification that CMS should provide. The commenter 
also stated it would be helpful to understand how CMS will account for 
the reduction in cost sharing in MA plan reimbursements.
    Response: MA plans should consult the HPMS memoranda, ``Inflation 
Reduction Act Changes to Cost Sharing for Part B Drugs for Contract 
Year 2023 Medicare Advantage and Section 1876 Cost Plans,'' dated 
November 7, 2022,\648\ and ``Frequently Asked Questions: Inflation 
Reduction Act Changes to Cost Sharing for Part B Drugs for Medicare 
Advantage and Section 1876 Cost Plans,'' dated July 13, 2023,\649\ for 
information. MA organizations must account for Part B rebatable drug 
coinsurance adjustments under section 1847A(i) of the Act in the bids 
MA organizations submit to CMS. Section 1853 of the Act sets forth how 
the MA capitation rates and benchmarks are set based on FFS per capita 
costs.
---------------------------------------------------------------------------

    \648\ https://mabenefitsmailbox.lmi.org/MABenefitsMailbox/S3Browser/GetFile?path=CY2023%20Part%20C%20IRA%20Memorandum%2011-7-2022.pdf.
    \649\ https://www.cms.gov/files/document/ira-part-b-rebatable-drugs-and-insulin-faq.pdf.
---------------------------------------------------------------------------

    After consideration of public comments, we are finalizing our 
proposal as proposed at Sec. Sec.  427.200 and 427.201.
d. Determination of the Rebate Amount for Part B Rebatable Drugs 
(Sec. Sec.  427.300 Through 427.304)
i. Definitions
    In proposed Sec.  427.300, we proposed to define the following 
terms applicable to subpart D (Sec. Sec.  427.300 through 427.304):
     ``340B Program''.
     ``Refundable single-use dose container or single-use 
package drug''.
    We did not receive comments on these proposed definitions. We are 
finalizing these definitions as proposed at Sec.  427.100.
ii. Calculation of the Total Part B Rebate Amount To Be Paid by 
Manufacturers
    Section 1847A(i)(3) of the Act specifies the calculation of the 
rebate amount for a Part B rebatable drug assigned to a billing and 
payment code for an applicable calendar quarter for which a 
manufacturer must pay a rebate. We proposed to codify the rebate 
calculation, as established in revised Medicare Part B Drug Inflation 
Rebate Guidance,\650\ as the estimated amount is equal to the product 
of the total number of billing units determined in accordance with 
section 1847A(i)(3)(B) of the Act (proposed at Sec.  427.303) and the 
amount (if any) by which the specified amount (proposed at Sec.  
427.302(b)) exceeds the inflation-adjusted payment amount determined

[[Page 98239]]

in accordance with section 1847A(i)(3)(C) of the Act (proposed at Sec.  
427.302(g)) for the drug or biological product for an applicable 
calendar quarter. The Part B drug inflation rebate amount calculated in 
accordance with this subpart is subject to adjustment based on any 
reductions in accordance with subpart E of this part or any 
reconciliations in accordance with subpart F of this part.
---------------------------------------------------------------------------

    \650\ See: https://www.cms.gov/files/document/medicare-part-b-inflation-rebate-program-revised-guidance.pdf.
---------------------------------------------------------------------------

    Because Part B rebatable drugs are single source drugs or 
biologicals, they typically will have one manufacturer. However, a Part 
B rebatable drug could have more than one manufacturer. For example, a 
Part B rebatable drug could be produced by one or more manufacturer(s) 
that is a repackager or relabeler. Multiple manufacturers of a 
rebatable drug also could occur in the case of one or more authorized 
generic products that are marketed under the same FDA-approval as the 
original FDA applicant. In such instances, all the NDCs for the drug 
typically are assigned to the same billing and payment code(s), and 
each manufacturer is responsible for reporting ASP data to CMS. When 
calculating the rebate owed by manufacturers for a rebatable drug that 
has more than one manufacturer, we proposed to codify the policy from 
section 50.13 of the revised Medicare Part B Drug Inflation Rebate 
Guidance to multiply the total rebate amount calculated for the billing 
and payment code by the following quotient:

(Sum of the individual manufacturer's billing units sold during the 
applicable calendar quarter for all NDCs of the manufacturer assigned 
to the billing and payment code, as reported in the ASP data 
submissions) divided by (Sum of all manufacturers' total billing units 
sold during the applicable calendar quarter for all NDCs of the Part B 
rebatable drug assigned to the billing and payment code, as reported in 
the ASP data submissions)

    We received public comments on this calculation approach. The 
following is a summary of the comments we received and our responses.
    Comment: Some commenters expressed concern that CMS' proposal to 
allocate Part B inflation rebates when there are multiple manufacturers 
in a billing and payment code does not appropriately assign rebate 
liability. One commenter noted that the proposed methodology assumes 
that each NDC is equally responsible for driving the amount of an 
increase in the payment amount for the benchmark period and that the 
policy has the potential to assign rebate liability to a manufacturer 
whose individual pricing for its respective NDC(s) increased at or 
below the rate of inflation. One commenter recommended CMS revise its 
methodology to assess rebate liability against each manufacturer only 
in proportion to its actual responsibility for triggering the inflation 
rebate. A few commenters opposed the proposed methodology, which they 
noted could result in a manufacturer owing a rebate even when ASP 
growth for the manufacturer's own NDC has been lower than inflation.
    Some commenters offered more specific recommendations, stating CMS 
should calculate inflation rebate liability at the NDC-11 level for 
billing and payment codes comprised of NDCs from multiple 
manufacturers. Additionally, these commenters recommended CMS require 
providers to report associated product NDC-11s on Part B claim forms 
and to reject claims without NDC-11s. These commenters maintained that 
requiring NDC-11s on Part B claim forms would mitigate situations in 
which one manufacturer would be subject to an inflation rebate due to 
the ASP growth of another manufacturer.
    Response: We appreciate commenters sharing their concerns and 
recommendations. As we stated in the revised Medicare Part B Drug 
Inflation Rebate Guidance \651\ on page 37, CMS maintains that it will 
apportion the Part B rebate amount among manufacturers by dividing the 
sum of each manufacturer's reported ASP units sold during the rebate 
quarter by the sum of all manufacturer-reported ASP units sold during 
the rebate quarter for all NDCs of the rebatable drug assigned to the 
billing and payment code. We believe this approach appropriately 
apportions rebate liability for NDCs assigned to a grouped billing and 
payment code using data available to CMS. We also believe that 
calculating Part B inflation rebates at the billing and payment code 
level, rather than at the NDC-11 level as some commenters recommended, 
is consistent with section 1847A(i)(3)(A) of the Act, which specifies 
how the rebate amount is calculated. Additionally, single source drugs 
are typically assigned unique HCPCS codes.
---------------------------------------------------------------------------

    \651\ See: https://www.cms.gov/files/document/medicare-part-b-inflation-rebate-program-revised-guidance.pdf.
---------------------------------------------------------------------------

    Additionally, calculating Part B inflation rebates at the NDC-11 
level would require imposing new requirements on the claims submission 
process to require reporting of the NDC-11 on Part B claims, which 
would increase the administrative burden associated with the claims 
submission process. At this time, we will not require NDC-11s on Part B 
claims and we will continue to calculate Part B rebates at the HCPCS 
level per our proposed approach. We will continue to evaluate the 
potential for NDC-11 reporting in connection with our ongoing 
assessment of potential changes to Part B claims and billing. The 
comment regarding the use of NDC-11s in situations in which a provider 
inadvertently submits a claim for payment under Part B for a self-
administered formulation rather than the physician-administered 
formulation is outside the scope of this final rule.
    Comment: One commenter reported that it identified at least one 
circumstance where the majority of ASP units for an NDC in a billing 
and payment code are packaged into a payment amount that includes 
another item or service and are not separately payable (such as those 
paid under the End-Stage Renal Disease (ESRD) Prospective Payment 
System (PPS)), and noted that units attributed to that NDC should not 
be used to apportion rebate liability. The commenter recommended CMS 
clarify its methodology to exclude NDCs for which the number of ASP-
reported units are subject to bundled payment.
    Response: We thank the commenter for sharing this information. We 
are aware of the circumstance the commenter raised. Under such a 
circumstance, we will apportion the Part B rebate amount as described 
at Sec.  427.301(b) and section 50.13 of the revised Medicare Part B 
Drug Inflation Rebate Guidance. In this particular circumstance, the 
NDCs in the bundled code are also in the non-bundled code, thus the ASP 
reporting for the NDCs will be applied to only the non-bundled code, 
since the bundled code is not separately payable. CMS will use this 
information to apportion liability since CMS cannot determine how many 
units by NDC are being administered in the bundled vs. non-bundled 
code. Further, at this time, we will not require NDC-11s on Part B 
claims because CMS has not fully assessed the breadth of changes to 
Part B claims and billing. CMS also notes that as proposed at Sec.  
427.303(b)(3) and as stated in the revised Medicare Part B Drug 
Inflation Rebate Guidance on page 38, in accordance with section 
1847A(i)(3)(B)(ii)(II) of the Act, CMS will exclude units of drugs 
``that are packaged into the payment amount for an item or service and 
are not separately payable.'' We also note that claim lines

[[Page 98240]]

for drugs for which payment is bundled under the ESRD PPS would not 
have a Medicare allowed amount that is greater than zero, and so such 
units will be excluded.
    After consideration of public comments, for the reasons stated 
above, we believe that calculating Part B inflation rebates at the 
billing and payment code level is consistent with section 
1847A(i)(3)(A) of the Act. Therefore, we are finalizing our proposals 
as proposed at Sec.  427.301(b).
    As discussed in the CY 2025 PFS proposed rule (89 FR 61943), based 
on further review, we have observed that there are several instances 
where there are multiple manufacturers in a billing and payment code 
and the ASP data, including the number of units sold, for all or some 
manufacturers' NDCs within a billing and payment code may be negative, 
zero, or missing. To enable CMS to calculate the respective rebate 
amounts attributable to each manufacturer when the ASP units are 
negative, zero, or missing, we solicited comments on the new proposed 
policies outlined below and any other alternative options.
(1) Scenarios in Which All NDCs Within a Billing and Payment Code Have 
Missing, Negative, or Equal to Zero ASP Units
    If there are NDCs of multiple manufacturers in a billing and 
payment code, to determine the respective rebate amount when the 
manufacturer-reported ASP units for all NDCs are either missing, 
negative, or equal to zero but there is a positive rebate amount 
calculated for the Part B rebatable drug, we proposed to: (1) apportion 
a $0 rebate amount when the manufacturer-reported units for all NDCs 
are missing for NDCs not sold or marketed during the applicable 
calendar quarter, NDCs with negative manufacturer-reported ASP units 
during the applicable calendar quarter, and/or NDCs with manufacturer-
reported ASP units equal to zero during the applicable calendar 
quarter; and (2) equally apportion a positive rebate amount to each NDC 
that was sold or marketed during the applicable calendar quarter and 
that lack manufacturer-reported ASP units for the applicable calendar 
quarter. If the NDCs within a billing and payment code have a mix of 
missing ASP units, negative ASP units, and/or zero ASP units, CMS will 
apportion a $0 rebate amount to each NDC with missing units that are 
not sold or marketed during the applicable calendar quarter, each NDC 
with negative units, and each NDC with units equal to zero, and CMS 
will equally apportion a positive rebate amount to NDCs with missing 
units that were sold or marketed during the applicable quarter by 
dividing the total rebate amount for the grouped billing and payment 
code by the total number of such NDCs within the billing and payment 
code. We understand that this approach would treat missing units for 
NDCs not sold or marketed during the applicable calendar quarter, 
negative units, and units equal to zero as representing zero sales, and 
we solicited comments on the extent to which this approach could 
potentially exclude from rebate liability a manufacturer of a drug that 
did have sales in that quarter (for example, if negative units 
represent price concessions). In addition, we solicited comments on the 
extent to which, in a scenario with a billing and payment code with 
multiple manufacturers, a single manufacturer that lacks reported ASP 
units could assume full rebate liability for the entire billing and 
payment code if the manufacturer's NDCs lack reported ASP units and 
were sold or marketed during the applicable calendar quarter.
    We also considered several alternative policies for attributing 
rebate amounts to each respective manufacturer in this scenario, 
including: (1) using the reported ASP units from the calendar quarter 
prior to the applicable calendar quarter; (2) using an average of units 
sold based on sales data for several calendar quarters prior to the 
applicable calendar quarter (for example, an average of the previous 4 
calendar quarters); and (3) validation of ASP data based on review of 
AMP data in combination with one of the aforementioned alternative 
proposed policies to determine inflation rebate amounts. However, we 
have observed that ASP units are often missing, negative, or equal to 
zero for several quarters in a four-quarter lookback, so including 
additional quarters may not necessarily yield additional data that 
could be used to apportion inflation rebate amounts (and could 
complicate the calculation of an average by introducing a mix of 
missing units, negative units, or units equal to zero within a single 
NDC). In addition, the AMP validation of ASP sales could add another 
layer of complexity and potential bias as AMP data represent only sales 
to retail community pharmacies, and ASP data represent all sales of a 
drug. We solicited comments on these alternatives.
(2) Scenarios in Which Some (But Not All) NDCs Have Missing, Negative, 
or Equal to Zero ASP Units
    When some NDCs within a grouped billing and payment code lack 
manufacturer-reported ASP units, have negative manufacturer-reported 
units, or have manufacturer-reported ASP units equal to zero, we 
proposed to: (1) apportion a $0 rebate amount to each NDC that was not 
sold or marketed during the applicable calendar quarter that lacks 
manufacturer-reported ASP units during the applicable calendar quarter, 
each NDC with negative manufacturer-reported ASP unit for the 
applicable calendar quarter, and each NDC with manufacturer-reported 
ASP units equal to zero for the applicable calendar quarter; (2) assign 
ASP units equal to the lowest positive number of manufacturer-reported 
ASP units for any NDC in the grouped billing and payment code to each 
NDC that was sold or marketed during the applicable calendar quarter 
and for which the respective NDC lacks manufacturer-reported ASP units; 
and (3) apportion rebate amounts across NDCs that were sold or marketed 
during the applicable calendar quarter and for which each respective 
NDC lacks manufacturer-reported ASP units during the applicable 
calendar quarter and NDCs that were sold or marketed during the 
applicable calendar quarter and for which respective NDCs have positive 
manufacturer-reported units in accordance with the policy outlined in 
section 50.13 of the revised Medicare Part B Drug Inflation Rebate 
Guidance. We solicited comments on the extent to which, in a scenario 
where NDCs of multiple manufacturers are assigned to the same billing 
and payment code, a single manufacturer that accounts for all positive 
ASP units could potentially be responsible for the full rebate amount 
for the entire billing and payment code.
    We also considered proposing other alternative policies for 
attributing rebate amounts to each respective manufacturer in this 
scenario, including: (1) review of historical ASP data to identify the 
most recent calendar quarter with positive ASP units for any of the 
NDCs with missing units, negative units, or units equal to zero in the 
applicable calendar quarter and allocation of financial responsibility 
across NDCs with positive ASP units in that quarter (excluding NDCs 
without positive units in that quarter); (2) using an average of units 
sold based on sales data for several calendar quarters prior to the 
applicable quarter (for example, an average of the previous four 
calendar quarters); (3) apportionment of rebates based on units at the 
NDC-9 level rather than the NDC-11 level; and (4) apportionment of 
rebates to only those manufacturers within a HCPCS code

[[Page 98241]]

that reported positive ASP units for the applicable calendar quarter.
    We elected not to propose use of a historical lookback approach 
(under options 1 and 2) because ASP units are often missing, negative, 
or equal to zero for the most recent calendar quarter and/or over 
several quarters in a four-quarter lookback period, and so including 
additional quarters may not necessarily yield additional data that 
could be used to apportion inflation rebate amounts (and could 
complicate the calculation of an average by introducing a mix of 
missing units, negative units, or units equal to zero, and positive 
units within a single NDC). We also understand that a historical 
lookback approach could create outliers that could affect the resulting 
allocation. When evaluating option 3, CMS observed that ASP units are 
often missing, negative, or equal to zero for several calendar quarters 
when aggregating units sold at the NDC-9 level. Consequently, this 
approach may not necessarily yield additional data that could be used 
to apportion inflation rebate amounts and doing so would differ from 
our general policy on using NDC-11s as set forth in the revised 
guidance. Finally, we decided not to propose apportioning the full 
rebate amount to only those manufacturers that reported positive ASP 
units within a billing and payment code under option 4, as we 
questioned whether that policy could inadvertently disfavor 
manufacturers that reported units while benefiting manufacturers that 
did not report ASP data. We stated that we would continue to evaluate 
these alternative policy approaches for apportioning rebate liability 
and may adopt changes to this proposed policy in the final rule.
    CMS reminded manufacturers of their reporting obligations under 
sections 1847A(f)(2) and 1927(b) of the Act and that failure to provide 
timely information may result in penalties as detailed in sections 
1847A(d)(4)(B) and (C) and 1927(b)(3)(C)(i) of the Act.
    We solicited comments on these proposals as well as alternative 
policy options on how CMS could apportion rebate amounts among multiple 
manufacturers' NDCs that lacked ASP units, reported negative units, 
and/or reported units equal to zero for NDCs.
    We received public comments on these proposals and alternatives 
considered. The following is a summary of the comments we received and 
our responses.
    Comment: A few commenters noted that their recommendation to 
require NDC-11s on Part B claim forms would allow CMS to validate ASP 
units for NDCs in a billing and payment code comprised of drugs from 
multiple manufacturers, particularly for drugs with negative or zero 
reported ASP but with sales during the applicable quarter. One of these 
commenters added that collecting NDC-11s would negate the need for CMS 
to develop an approach to allocate rebate amounts across multiple 
manufacturers in a billing and payment code with all or some negative, 
zero, or missing ASP units because CMS would have the actual number of 
units dispensed in Part B during applicable quarter for each 
manufacturer.
    Response: CMS thanks the commenters for sharing this information. 
As we previously responded, calculating Part B inflation rebates at the 
NDC-11 level would require imposing new requirements on the claims 
submission process to require reporting of the NDC-11 and corresponding 
quantities on Part B claims, which would increase the administrative 
burden associated with the claims submission process. Additionally, 
modifications to Medicare systems would be needed to capture this 
information. At this time, we will not require NDC-11s on Part B claims 
and we will continue to calculate Part B rebates at the HCPCS level per 
our proposed approach that we are finalizing in this rule.
    Comment: A couple of commenters recommended CMS provide greater 
clarity on how it plans to apportion the rebate amount in situations in 
which all or some NDCs within a billing and payment code have missing 
ASP units, negative ASP units, or ASP units equal to zero. In 
particular, these commenters requested that CMS define the terms sold 
or marketed, noting that CMS' proposal depends on whether NDCs are sold 
or marketed during the applicable quarter, however, CMS did not define 
when a drug is considered sold or marketed during the applicable 
calendar quarter in the proposed rule.
    Response: We appreciate this feedback. We agree with the 
commenter's suggestion to define when a drug is considered sold or 
marketed during the applicable calendar quarter and are modifying the 
list of definitions at Sec.  427.20. In this final rule, we have 
defined ``sold or marketed'' at Sec.  427.20 as follows: means, with 
respect to an NDC, that the NDC has either a date of first sale 
identified using ASP data reported by NDC-11 to CMS by a manufacturer 
required under sections 1927(b)(3)(A)(iii)(I) and 1847A(f)(2) of the 
Act, or an NDC Directory start marketing date prior to or during the 
applicable calendar quarter and meets any of the following criteria: 
(1) the NDC has units reported for the rebate quarter; (2) the end 
marketing date is during the rebate quarter; (3) the end marketing date 
is after the rebate quarter; or (4) the end marketing date is missing.
    After consideration of public comments, in this final rule, we are 
finalizing a methodology to calculate the respective rebate amounts 
attributable to each manufacturer when the ASP units are missing, 
negative, or equal to zero for the applicable calendar quarter. For 
this final rule, we are adding Sec.  427.301(c) to describe how CMS 
will apportion the Part B rebate amount when there are multiple NDCs in 
a grouped billing and payment code and when manufacturer-reported ASP 
units for such NDCs lack manufacturer-reported ASP units during the 
applicable calendar quarter, have negative manufacturer-reported ASP 
units during the applicable calendar quarter, or have manufacturer-
reported ASP units equal to zero during the applicable calendar 
quarter.
iii. Calculation of the Per Unit Part B Drug Rebate Amount
(1) Identification of the Specified Amount for the Applicable Calendar 
Quarter
    In the calculation of the rebate amount for a Part B rebatable 
drug, we are statutorily required to compare the inflation-adjusted 
payment amount to the specified amount, which is the amount set forth 
in section 1847A(i)(3)(A)(ii)(I) of the Act. The statute requires CMS 
to impose an inflation rebate if the specified amount exceeds the 
inflation-adjusted payment amount. We proposed to codify at Sec.  
427.302(a) the policy established in revised Medicare Part B Drug 
Inflation Rebate Guidance to calculate the Part B per unit rebate 
amount for the applicable calendar quarter by determining the amount by 
which the specified amount exceeds the inflation-adjusted payment 
amount, after accounting for exclusions under Sec.  427.303(b). We 
proposed to codify the current operational steps for calculating Part B 
inflation rebates as described in section 50 of the revised Medicare 
Part B Drug Inflation Rebate Guidance.
    At Sec.  427.302(b), we proposed to codify the policy established 
in section 50.2 of the revised Medicare Part B Drug Inflation Rebate 
Guidance on how to calculate the specified amount for the applicable 
calendar quarter. The ``specified amount'' refers to the amount 
specified in section 1847A(i)(3)(A)(ii)(I)(aa) or (bb) of the Act, as 
applicable. In general, section

[[Page 98242]]

1847A(i)(3)(A)(ii)(I)(aa) and (bb) of the Act cross-reference 
provisions governing quarterly payment limits for single source drugs 
and biological products that are typically, but not always, reflected 
in the quarterly pricing files. Specifically, the specified amount for 
single source drugs and biological products is 106 percent of the 
amount determined under section 1847A(b)(4) of the Act--that is, the 
lesser of ASP or WAC--for the applicable calendar quarter. For 
biosimilar biological products, the specified amount is the payment 
amount under section 1847A(b)(1)(C) of the Act, which is based on 100 
percent of the ASP for the biosimilar biological product plus 6 percent 
of the lesser of ASP or WAC for the reference biological product.
    At Sec.  427.302(b)(1), we proposed that the first applicable 
calendar quarter for a Part B rebatable drug will be the earliest 
applicable calendar quarter that follows the payment amount benchmark 
quarter identified at Sec.  427.302(c)(1) through (5).
    Additionally, for the purposes of determining the rebate amount for 
a Part B rebatable drug, based on further consideration of data 
availability in specific circumstances, we proposed to clarify the 
policy established in section 50 of the revised Medicare Part B Drug 
Inflation Rebate Guidance and use the most updated price information 
reported by manufacturers, determined in accordance with section 
1847A(i)(3)(A)(ii)(I)(aa) or (bb) of the Act as applicable, as the 
specified amount for the applicable calendar quarter for each HCPCS 
code identified in accordance with Sec.  427.101. That is, we will use 
the most updated price information reported by manufacturers to compare 
whether 106 percent of WAC or 106 percent of ASP is less, and will use 
the lower value for the specified amount. In circumstances in which all 
NDCs in the HCPCS code have neither manufacturer-reported ASP nor WAC 
price data available for the applicable calendar quarter, we proposed 
to use WAC price data from other public sources, if available, to 
calculate 106 percent of WAC, which will serve as the specified amount. 
We proposed to adopt this approach regardless of whether there is a 
price substitution for Medicare's payment during the quarter or whether 
other policies cause the published payment limit to differ from the 
specified amount. In circumstances in which negative or zero 
manufacturer ASP data is reported for all NDCs for a given quarter, 
that negative or zero ASP amount will be used to compare 106 percent of 
WAC to 106 percent of ASP to determine the lower value for use as the 
specified amount. CMS believes these proposals on treatment of missing 
pricing data and treatment of pricing differences between reported 
prices and the published payment limit for a billing and payment code 
will further clarify the application of the specified amount in the 
calendar quarter and are consistent with the requirements set forth in 
section 1847A(i)(3)(A)(ii)(I) of the Act. CMS solicited comments on 
this policy.
    We received public comment on these proposals. The following is a 
summary of the comment we received and our response.
    Comment: One commenter expressed support for CMS' proposal to 
determine the specified amount by comparing whether 106 percent of ASP 
or 106 percent of WAC is lower. However, this commenter disagreed with 
CMS using WAC when determining a product's specified amount when 
reported ASP is zero or negative because the specified amount refers to 
the payment amount determined in accordance with section 
1847A(i)(3)(A)(ii)(I) of the Act, which directs CMS to use the lesser 
of the product's ASP or WAC plus 6 percent. The commenter noted that 
using WAC in the context of inflation rebates is inappropriate because 
inflation rebates are intended to address rising drug prices.
    Response: We believe this commenter misunderstood our proposal. In 
the CY 2025 PFS proposed rule (89 FR 61945), we proposed to compare 
whether 106 percent of WAC or 106 percent of ASP is less using the most 
updated price information reported by manufacturers, and then to use 
the lower value for the specified amount. We also proposed that, in 
circumstances in which negative or zero manufacturer ASP data is 
reported for all NDCs for a given quarter, the negative or zero ASP 
amount will be used when comparing 106 percent of WAC to 106 percent of 
ASP to determine the lower value for use as the specified amount. That 
is, the specified amount in such circumstances will be the lower of 106 
percent of the negative or zero ASP or 106 percent of WAC. We believe 
the proposals on the treatment of missing or negative pricing data for 
a billing and payment code clarify the application of the specified 
amount in the calendar quarter and are consistent with the requirements 
set forth in section 1847A(i)(3)(A)(ii)(I) of the Act.
    After consideration of public comments, we are finalizing our 
proposal as proposed with modifications at Sec.  427.302(b). We are 
making a technical correction to Sec.  427.302(b)(1) to clarify that 
the first applicable calendar quarter for a Part B rebatable drug will 
be the later of the third full calendar quarter after the payment 
amount benchmark quarter identified in Sec.  427.302(c)(1) through (5) 
or the calendar quarter beginning January 1, 2023. We also are making a 
technical correction by adding Sec.  427.302(b)(2) to state that for a 
Part B rebatable drug that was billed under a NOC code during the 
calendar quarter beginning July 1, 2021, or the third full calendar 
quarter after the effective date of the drug's assigned billing and 
payment code other than a NOC code, whichever is later, the first 
applicable calendar quarter will be the first full calendar quarter 
that follows the payment amount benchmark quarter identified in Sec.  
427.302(c)(1) through (5). Finally, with the addition of Sec.  
427.302(b)(2) as previously described, we are revising a paragraph 
reference to be Sec.  427.302(b)(3).
(2) Identification of the Payment Amount Benchmark Quarter
    At Sec.  427.302(c), we proposed to codify policies from section 
50.3 of the revised Medicare Part B Drug Inflation Rebate Guidance to 
identify the applicable payment amount benchmark quarter. Specifically, 
for drugs first approved or licensed by the FDA on or before December 
1, 2020, and with a first marketed date on or before December 1, 2020, 
the payment amount benchmark quarter would be the calendar quarter 
beginning July 1, 2021. For subsequently approved drugs--that is, drugs 
approved or licensed by the FDA after December 1, 2020--the payment 
amount benchmark quarter would be the third full calendar quarter after 
a drug's first marketed date. Additionally, there may be cases where a 
drug was first approved or licensed on or before December 1, 2020, but 
with a first marketed date after December 1, 2020, and the drug lacks 
ASP or WAC data to calculate the payment amount for the applicable 
calendar quarter beginning July 1, 2021. Under the policy applicable to 
drugs approved or licensed and with a first marketed date before 
December 1, 2020, such drugs would not have data to calculate the 
payment amount in the payment amount benchmark quarter. In these cases, 
we proposed to treat such drugs in the same manner as we would treat 
subsequently approved drugs and identify the payment amount benchmark 
quarter as the third full calendar quarter after a drug's first 
marketed date. We solicited comments on this policy proposal and 
specifically on our proposal to treat drugs approved

[[Page 98243]]

or licensed on or before December 1, 2020, but with a first marketed 
date after December 1, 2020 as subsequently approved drugs.
    For Part B rebatable drugs that were billed under a NOC code during 
the payment amount benchmark quarter, CMS stated in the revised 
Medicare Part B Drug Inflation Rebate Guidance that it would use the 
third full quarter after a drug was assigned a unique HCPCS code as the 
payment amount benchmark quarter. In this rulemaking, we proposed to 
determine the payment amount benchmark quarter as follows: for a Part B 
rebatable drug that was billed under a NOC code during the calendar 
quarter beginning July 1, 2021, or the third full calendar quarter 
after such drug's first marketed date, whichever is later, we proposed 
that the payment amount benchmark quarter be the third full calendar 
quarter after the Part B rebatable drug is assigned a billing and 
payment code other than a NOC code. We solicited comments on these 
proposals.
    We noted in the CY 2025 PFS proposed rule (89 FR 61945) that we 
continue to consider whether there is a need to identify additional or 
modified methodologies to appropriately determine the payment amount 
benchmark quarter for products with insufficient pricing data in the 
payment amount benchmark quarter or that otherwise do not fall squarely 
into the categories otherwise described at Sec.  427.302(c) and in a 
manner that enables the calculation of rebate amounts consistent with 
section 1847A(i)(3) of the Act.
    In the CY 2025 PFS proposed rule (89 FR 61945), we noted that we 
have determined that ASP data are the most appropriate for identifying 
(1) the day on which the drug was first marketed and (2) which calendar 
quarter is the third full calendar quarter thereafter as the payment 
amount benchmark quarter for drugs first approved or licensed by the 
FDA after December 1, 2020, or licensed on or before December 1, 2020, 
but with a first marketed date after December 1, 2020. We also noted 
that we have determined that it is most appropriate and 
administratively feasible to identify the first marketed date as the 
date of first sale of any NDC-11 within a billing and payment code 
among all products and package sizes under the same FDA application.
    Additionally, we noted in the CY 2025 PFS proposed rule (89 FR 
61945) that we believe ASP data are accurate and reliable because 
manufacturers attest to the accuracy of their submitted data and have 
the ability to update these data quarterly. Therefore, at Sec.  
427.302(c), we proposed to codify existing policy from the revised 
Medicare Part B Drug Inflation Rebate Guidance on the identification of 
the payment amount benchmark quarter for each Part B rebatable drug. 
CMS will use the earliest first marketed date of any NDC ever marketed 
under any FDA application under which any NDCs that have ever been 
assigned to the billing and payment code for that Part B rebatable drug 
as of the applicable calendar quarter have ever been marketed. The 
earliest first marketed date will apply to all NDCs within a billing 
and payment code and to all products and package sizes marketed under 
the same FDA-approved application. If the original NDC on which the 
first marketed date is based is terminated, the first marketed date for 
the associated billing and payment code would remain the same. By 
defining the first marketed date for the Part B rebatable drug at the 
level of the product's FDA approval, CMS will retain the same first 
marketed date for the billing and payment code even if the NDCs and/or 
billing and payment codes used to bill for the Part B rebatable drug 
change over time. In addition, when the date of first sale is missing 
from ASP data, we proposed to identify the first marketed date from 
alternative public sources, such as the National Institutes of Health's 
DailyMed.
    Table 54 in this section provides an example, for illustration 
purposes only, of the application of first marketed date based on the 
earliest date of first sale of any NDC ever marketed under any NDA or 
BLA under which any NDCs that have ever been assigned to the billing 
and payment code as of the applicable calendar quarter have ever been 
marketed. In the example, NDC1 (marketed under NDA 000000) is first 
sold on January 15, 2022, and NDC2 (also marketed under NDA 000000) is 
first sold on October 15, 2023. Both NDCs are assigned to HCPCS code 
X0000, and no other NDCs are or have been assigned to HCPCS code X0000. 
NDC1 and NDC2 are the only NDCs marketed under NDA 000000. The first 
marketed date for HCPCS code X0000 would be January 15, 2022, because 
that date is the earliest date of first sale for any NDC marketed under 
any NDA or BLA under which any NDC ever assigned to that HCPCS code was 
marketed as of the calendar quarter. If NDC2 was subsequently assigned 
to a new HCPCS code Y0000, the first marketed date for HCPCS Y0000 
would similarly be January 15, 2022, because that is the earliest date 
of first sale for any NDC (NDC1) marketed under any NDA (NDA 000000) 
under which any NDC ever assigned to HCPCS code Y0000 (NDC2) was 
marketed. In cases when NDCs that are marketed under different NDA/BLAs 
are assigned to the same HCPCS code, using the example in the table in 
this section, NDC3 (the only NDC marketed under NDA 111111) was first 
sold on November 1, 2024, and first billed under HCPCS Y0000. The first 
marketed date for HCPCS Y0000 would remain January 15, 2022, as noted, 
given that HCPCS Y0000 includes NDC2, marketed under NDA 000000, for 
which the earliest date of first sale for any NDC marketed thereunder 
is NDC1's date of first sale (January 15, 2022). NDC3 was later 
assigned to a new HCPCS code Z0000. The first marketed date for HCPCS 
code Z0000 would be November 1, 2024, because that is the earliest date 
of first sale for any NDC ever marketed under NDA 111111, which is the 
only NDA ever associated with Z0000 as of the calendar quarter.

[[Page 98244]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.099

    We did not receive public comments on this provision to identify 
the payment amount benchmark quarter for each Part B rebatable drug.
    After further consideration of the provision, we are finalizing, 
with modification, an amendment to Sec.  427.302(c) to specify that to 
identify the applicable payment amount benchmark quarter, we also will 
use the earliest approval or licensure date for any FDA application 
associated with any NDC ever assigned to the billing and payment code. 
We are making this modification because we identified an example 
scenario in which an NDC previously assigned to a billing and payment 
code had a first marketed date in June 1992 (that is, before December 
1, 2020), but the FDA applications with NDCs currently in the billing 
and payment code were approved after December 1, 2020. Prior to CMS 
adding the modification, this billing and payment code would have met 
the definition of a subsequently approved drug under Sec.  427.20 and 
been subject to the payment amount benchmark quarter identification 
method at Sec.  427.302(c)(2), which would have meant the payment 
amount benchmark quarter would be the third full calendar quarter after 
the first marketed date--that is, a payment amount benchmark quarter in 
1993. This outcome would have been inconsistent with the policy 
described in the proposed rule. By defining and referencing the billing 
and payment code FDA approval or licensure date using the same FDA 
applications used to identify the first marketed date for associated 
NDCs, the regulatory text better reflects our original intent to avoid 
incongruous results and retain the same approval or licensure date for 
the billing and payment code even if an NDC is removed from the billing 
and payment code. As finalized with such modification, the billing and 
payment code in the above scenario will have a first marketed date in 
1992 and a first approval date before December 1, 2020, and thus will 
have a payment amount benchmark quarter of July 1-September 30, 2021 
under Sec.  427.302(c)(1).
(3) Identification of Payment Amount in the Payment Amount Benchmark 
Quarter
    Section 1847A(i)(3)(C) of the Act specifies use of the ``payment 
amount for the billing and payment code for such drug in the payment 
amount benchmark quarter'' (``payment amount in the payment amount 
benchmark quarter'') in the determination of the inflation-adjusted 
payment amount. While the specified amount and the payment amount in 
the payment amount benchmark quarter are similar, the statutory 
requirements for determining these two amounts differ. The specified 
amount for a Part B rebatable drug, as set forth in section 
1847A(i)(3)(A)(ii)(I) of the Act, is based on item (aa) (that is, 
lesser of ASP+6 percent or WAC+6 percent) or (bb) (that is, 100 percent 
of the ASP for the biosimilar biological product plus 6 percent of the 
lesser of ASP or WAC for the reference biological product). The payment 
amount in the payment amount benchmark quarter under section 
1847A(i)(3)(C)(i) of the Act is based on various provisions within 
section 1847A of the Act (for example, the lesser of 106 percent ASP or 
WAC, WAC+3 percent, and price substitutions). To identify the payment 
amount in the payment amount benchmark quarter for the Part B rebatable 
drug by billing and payment code, at Sec.  427.302(d), we proposed to 
codify the policies established in section 50.4 of the revised Medicare 
Part B Drug Inflation Rebate Guidance. CMS will use the published 
payment limit (as available) for the billing and payment code for the 
applicable payment amount benchmark quarter determined in accordance 
with section 1847A of the Act. If a published payment limit is not 
available for the applicable payment amount benchmark quarters, CMS 
will use the lower of 106 percent of manufacturer-reported ASP or 106 
percent of manufacturer-reported WAC. If neither a published payment 
limit nor manufacturer-reported ASP or WAC data are available, CMS will 
use WAC data from other public sources to calculate 106 percent of WAC, 
which, solely for the purposes of identifying the payment amount in the 
payment amount benchmark quarter, CMS will consider to be the payment 
amount for the payment amount benchmark quarter. Table 55 and Figure B-
I4 illustrate the specified amount and payment amount in the payment 
amount benchmark quarter.

[[Page 98245]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.100

[GRAPHIC] [TIFF OMITTED] TR09DE24.101

    We note that there may be situations when a Part B rebatable drug 
was previously billed under a grouped billing and payment code during 
the benchmark quarter and later billed under a unique billing and 
payment code, such as certain section 505(b)(2) drug products and 
single source drugs that were previously multiple source drugs. For 
example, a multiple source drug approved under an NDA may become a 
single source drug if all other therapeutically equivalent drugs are no 
longer marketed and the now-single source NDA is later shifted into a 
separately payable code. To identify the payment amount in the payment 
amount benchmark quarter for such drugs, we proposed to codify policy 
established in section 50.4 of the Medicare Part B Drug Inflation 
Rebate Guidance and identify the grouped billing and payment code 
payment limit used by CMS for the payment amount in the payment amount 
benchmark quarter and use that payment limit for the benchmark quarter.
    Finally, consistent with the policy established in section 50.4 of 
the revised Medicare Part B Drug Inflation Rebate Guidance, we will not 
apply a sequestration reduction to the payment amount in the payment 
amount benchmark quarter as part of the methodology to calculate a Part 
B inflation rebate amount.
    Comment: A couple of commenters expressed concern about the metric 
CMS is using to determine the payment amount in the payment amount 
benchmark quarter. One commenter expressed concern about Part B 
rebatable drugs that were not in a grouped billing and payment code as 
of October 1, 2003, but were in a grouped billing and payment code as 
of July 1, 2021 and were later assigned to a unique billing and payment 
code. For these drugs, the commenter wrote that the benchmark payment 
amount reflects the grouped billing and payment code; however, the 
drug's price in any given quarter reflects the drug's unique billing 
and payment code payment amount. The implications of this, according to 
the commenter, are that the payment amount in the payment amount

[[Page 98246]]

benchmark quarter may be low because it accounts for all drugs in a 
grouped billing and payment code, making it seem like the drug's price 
has increased more than it actually has. Further, this commenter wrote 
that CMS is measuring the drug's current payment amount (based on 
unique billing and payment code) against the past, lower grouped 
billing and payment code. To address this concern, the commenter 
recommended CMS apply a drug-specific benchmark measurement for Part B 
rebatable drugs that moved from a grouped billing and payment code to a 
unique code and then calculate the payment amount in the payment amount 
benchmark quarter based on how the calculation would have been made if 
the drug had been assigned to a unique code before the payment amount 
benchmark quarter. The commenter added that this approach would more 
accurately reflect real price increases for drugs previously in grouped 
billing and payment codes. Additionally, another commenter recommended 
that CMS use the manufacturer calculated specified amount instead of 
the ``published payment limit'' for grouped billing and payment codes.
    Response: We appreciate these commenters raising these concerns. We 
believe that in situations when a Part B rebatable drug was previously 
billed under a grouped billing and payment code during the benchmark 
quarter and later billed under a unique billing and payment code, using 
the payment limit for the grouped billing and payment code payment is 
in accordance with section 1847A(i)(3)(C)(i) of the Act. This provision 
sets forth the payment amount in the payment amount benchmark quarter 
and is based on various provisions within section 1847A of the Act (for 
example, the lesser of 106 percent ASP or WAC, WAC+3 percent, and price 
substitutions). We also note that single source drugs or biological 
products that were within the same billing and payment code as of 
October 1, 2003 are treated as multiple-source drugs, per section 
1847A(c)(6)(C)(ii) of the Act, and will be excluded from the definition 
of a Part B rebatable drug as proposed at Sec.  427.101(b)(2).
    After consideration of public comments on this proposed provision, 
we are finalizing our proposal as proposed at Sec.  427.302(d).
(4) Identification of the Benchmark Period CPI-U
    For each Part B rebatable drug by HCPCS code, the statute requires 
CMS to identify the applicable benchmark period CPI-U. In accordance 
with section 1847A(i)(3)(E) of the Act, the benchmark period CPI-U for 
drugs first approved or licensed by the FDA on or before December 1, 
2020, and with a first marketed date on or before December 1, 2020, is 
the CPI-U for January 2021, which is 261.582.\652\ We proposed to 
codify at Sec.  427.302(e) policies established in section 50.5 of the 
revised Medicare Part B Drug Inflation Rebate Guidance. Specifically, 
the benchmark period CPI-U for drugs first approved or licensed on or 
before December 1, 2020, with a first marketed date after December 1, 
2020, will be the CPI-U for the first month of the third full calendar 
quarter after a drug's first marketed date. Additionally, we proposed 
to codify policies in revised guidance that the benchmark period CPI-U 
for subsequently approved drugs will be the first month of the first 
full calendar quarter after a drug's first marketed date in accordance 
with section 1847A(i)(4)(A) of the Act. Furthermore, we proposed to 
determine the benchmark period CPI-U for certain drugs previously 
billed under NOC codes as follows: For a Part B rebatable drug that was 
billed under a NOC code during the calendar quarter beginning July 1, 
2021, or the third full calendar quarter after such drug's first 
marketed date, whichever is later, we proposed that the benchmark 
period CPI-U will be first month of the third full calendar quarter 
after the drug is assigned a billing and payment code other than a NOC 
code.
---------------------------------------------------------------------------

    \652\ CMS retrieved the January 2021 CPI-U from bls.gov on March 
22, 2024.
---------------------------------------------------------------------------

    We received public comments on these proposed provisions. The 
following is a summary of the comments we received and our responses.
    Comment: A couple of commenters recommended that CMS align the 
payment amount benchmark quarter and the benchmark quarter CPI-U for 
drugs approved on or before December 1, 2020, but with a first marketed 
date after December 1, 2020. CMS proposed that for a Part B rebatable 
drug first approved or licensed by the FDA on or before December 1, 
2020, but with a first marketed date after December 1, 2020, the 
payment amount benchmark quarter is the third full calendar quarter 
after a drug's first marketed date. Specifically, these commenters 
recommended CMS treat the benchmark quarter CPI-U in the same manner as 
CMS' approach for subsequently approved drugs. For subsequently 
approved drugs, CMS proposed that the benchmark period CPI-U is the 
CPI-U for the first month of the first full calendar quarter after a 
drug's first marketed date in accordance with section 1847A(i)(4)(A) of 
the Act. One commenter noted that revising the policy to align the 
benchmark quarter CPI-Us for such drugs would provide consistency for 
manufacturers.
    One of these commenters also made a similar recommendation for Part 
B rebatable drugs previous billed under a NOC code--that CMS should 
take a consistent approach for such drugs and identify the benchmark 
period CPI-U as the first full calendar quarter after the day on which 
the drug was first marketed as it does for subsequently approved drugs.
    Response: We thank these commenters for their feedback. We agree 
with these commenters' recommendations. We have revised this policy to 
align the payment amount benchmark period CPI-U and to maintain a 
consistent approach for all Part B rebatable drugs. For example, both 
for drugs first approved or licensed by the FDA on or before December 
1, 2020, and with a first marketed date on or before December 1, 2020 
(Sec.  427.302(e)(1)) and for subsequently approved drugs (Sec.  
427.302(e)(2)), there are two quarters between the payment amount 
benchmark quarter and the benchmark period CPI-U identified under 
statute. To align the approaches, we are revising the CPI-U date at 
Sec.  427.302(e)(3) and (e)(4) to reflect the same two-quarter 
difference. We consider this revision a correction rather than a 
material policy change. At Sec.  427.302(e)(3), CMS is finalizing the 
policy that for a Part B rebatable drug first approved or licensed by 
FDA on or before December 1, 2020, and with a first marketed date after 
December 1, 2020, the benchmark period CPI-U is the CPI-U for the first 
month of the first full calendar quarter after a drug's first marketed 
date. Also, at Sec.  427.302(e)(4), for a Part B rebatable drug that 
was billed under a NOC code during the calendar quarter beginning July 
1, 2021, or the third full calendar quarter after such drug's first 
marketed date, whichever is later, the benchmark period CPI-U is the 
CPI-U for the first month of the first full calendar quarter after the 
Part B rebatable drug is assigned a billing and payment code other than 
a NOC code.
    Comment: One commenter recommended that CMS clarify that it will 
provide timely notification to manufacturers when CMS assigns a drug to 
a new billing and payment code to allow manufacturers to prepare for 
any impact to inflation rebate calculation for that drug.
    Response: We appreciate this suggestion. We refer manufacturers to 
CMS' HCPCS Quarterly Update website,

[[Page 98247]]

where we post all HCPCS Level II updates.\653\ These files are fully 
searchable and sortable. We also note that additional information about 
HCPCS coding procedures \654\ also is available on the CMS' HCPCS 
Quarterly Update website.
---------------------------------------------------------------------------

    \653\ See: https://www.cms.gov/medicare/coding-billing/healthcare-common-procedure-system/quarterly-update.
    \654\ CMS, HEALTHCARE COMMON PROCEDURE CODING SYSTEM (HCPCS) 
LEVEL II CODING PROCEDURES, December 2022, https://www.cms.gov/medicare/coding/medhcpcsgeninfo/downloads/2018-11-30-hcpcs-level2-coding-procedure.pdf.
---------------------------------------------------------------------------

    After consideration of public comments, we are finalizing the 
provision at Sec.  427.302(d) as proposed and are finalizing, with 
modifications, an amendment to Sec.  427.302(e)(3), to use the first 
month of the first full calendar quarter after a drug's first marketed 
date as the benchmark period CPI-U for drugs first approved or licensed 
on or before December 1, 2020, and with a first marketed date after 
December 1, 2020. Additionally, we are finalizing, with modifications, 
an amendment to Sec.  427.302(e)(4), to use the first month of the 
first full calendar quarter after the drug is assigned a billing and 
payment code other than a NOC code as the benchmark period CPI-U for a 
Part B rebatable drug that was billed under a NOC code during the 
calendar quarter beginning July 1, 2021, or the third full quarter 
after such drug's first marketed date, whichever is later.
(5) Identification of the Rebate Period CPI-U
    As specified in section 1847A(i)(3)(F) of the Act, at Sec.  
427.302(f), we proposed to codify the policy described in section 50.6 
of the revised Medicare Part B Drug Inflation Rebate Guidance, that the 
rebate period CPI-U means the greater of the benchmark period CPI-U 
index level and the CPI-U index level for the first month of the 
calendar quarter that is 2 calendar quarters prior to the applicable 
calendar quarter in which the Part B rebatable drug is furnished. CMS 
will retrieve the CPI-U index level information from bls.gov.
    We did not receive public comments on this proposed provision, and 
we are finalizing as proposed at Sec.  427.302(f).
(6) Determination of the Inflation-Adjusted Payment Amount
    Section 1847A(i)(3)(C) of the Act specifies the determination of 
the inflation-adjusted payment amount. At Sec.  427.302(g), we proposed 
to codify the policy established in section 50.7 of revised Medicare 
Part B Drug Inflation Rebate Guidance for determining the inflation-
adjusted payment amount in accordance with this section of the Act. For 
each applicable calendar quarter and for each Part B rebatable drug by 
billing and payment code, we proposed to use the payment amount in the 
payment amount benchmark quarter (per Sec.  427.302(d)), benchmark 
period CPI-U (per Sec.  427.302(e)), and rebate period CPI-U (per Sec.  
427.302(f)) to identify the inflation-adjusted payment amount. 
Specifically, we will calculate the inflation-adjusted payment amount 
by dividing the rebate period CPI-U by the benchmark period CPI-U and 
then multiplying the quotient by the payment amount in the payment 
amount benchmark quarter.
    We did not receive public comments on this proposed provision, and 
we are finalizing as proposed at Sec.  427.302(g).
iv. Determination of Total Number of Billing Units
    For calendar quarters starting on or after January 1, 2023, we 
proposed at Sec.  427.303 to codify policies established in section 
50.8 of the revised Medicare Part B Drug Inflation Rebate Guidance to 
determine the number of billing units for each Part B rebatable drug by 
HCPCS code. Section 1847A(i)(3)(B) of the Act describes the total 
number of billing units of Part B rebatable drugs that should be 
included in the rebate calculation. These billing units include the 
number of billing units for the HCPCS code of the Part B rebatable drug 
furnished during the relevant calendar quarter minus billing units of 
drugs with respect to which the manufacturer provides a discount under 
the 340B Program, billing units with respect to which the manufacturer 
could have paid a Medicaid rebate, and billing units that are packaged 
into the payment amount for an item or service and are not separately 
payable. We further proposed codifying policy set forth in revised 
Medicare Part B Drug Inflation Rebate Guidance at Sec.  427.303 to 
exclude billing units when a drug is no longer a Part B rebatable drug.
    After identifying Part B rebatable drugs by HCPCS code (in 
accordance with policy proposed at Sec. Sec.  427.10, 427.20, and 
427.100 through 427.101) using final action claims in the CMS Medicare 
fee-for-service claims repository, we proposed to codify existing 
policy in the revised Medicare Part B Drug Inflation Rebate Guidance at 
Sec.  427.303 to determine the total number of billing units for each 
HCPCS code as follows. We proposed to identify claim lines for such 
HCPCS code for dates of service in the calendar quarter, exclude 
billing units in claim specified in section 1847A(i)(3)(B)(ii) of the 
Act, as applicable, and sum the number of billing units in the 
remaining claim lines for which Medicare payment was allowed and 
greater than zero. Including billing units where Medicare payment was 
allowed would ensure that billing units for which Medicare and some 
beneficiaries have financial liability would be counted in the total 
number of billing units.
    We proposed to codify the policy in the revised Medicare Part B 
Drug Inflation Rebate Guidance at Sec.  427.303 and will perform this 
process at least 3 months after the end of a calendar quarter to allow 
time for claims to be submitted, processed, and finalized. Subpart F 
described the proposed rebate process, including reports of rebate 
amounts, suggestion of error, and restatements. We solicited comment on 
the following proposed policies, including whether any additional units 
should be excluded from the rebate amount calculation.
    We received public comments on these proposed provisions. The 
following is a summary of the comments we received and our responses.
    Comment: One commenter recommended CMS also exclude units from 
other federal programs such as units purchased under the Federal Supply 
Schedule, as these units already have statutory discounts.
    Response: In response to the request that CMS also exclude units 
from other Federal programs, section 1847A(i)(3)(B) of the Act 
prescribes that the total number of units is based on the number of 
units furnished in a calendar quarter, excluding units of drugs with 
respect to which the manufacturer provides a discount under the 340B 
Program, units with respect to which the manufacturer pays a Medicaid 
rebate, or units that are packaged into the payment amount for an item 
or service and are not separately payable. In addition, CMS will 
exclude units when a drug is no longer a Part B rebatable drug. CMS 
declines to adopt the commenter's recommendation to exclude units from 
other federal programs, such as units purchased under the Federal 
Supply Schedule.
    After consideration of public comments, we are finalizing our 
proposal as proposed at Sec.  427.303 to exclude specified units from 
Part B inflation rebate calculations. We note that, in the Medicare 
Part D Drug Inflation Rebate Program provisions, we finalized at Sec.  
428.203(b)(3) that CMS will exclude units from the total number of 
units dispensed of a Part D rebatable drug when those units are 
associated with a Part D rebatable drug that has been billed as 
compounded. We have not made equivalent modifications in

[[Page 98248]]

the Medicare Part B Drug Inflation Rebate Program provisions because 
drugs covered under Part B that are billed as compounds should be 
reported with HCPCS code J7999, which is a NOC code.\655\ Because 
products billed under a NOC code are not considered Part B rebatable 
drugs, as finalized at Sec.  427.101(b)(3), drugs covered under Part B 
that are billed as compounds are by default already excluded from Part 
B inflation rebate calculations. For the same reason, it is unnecessary 
to modify Sec.  427.101(c) to explicitly exclude drugs covered under 
Part B that are billed as compounds from the calculation of the average 
total allowed charges used to exclude drugs and biological products 
with average total allowed charges below the applicable threshold.
---------------------------------------------------------------------------

    \655\ See: https://www.cms.gov/medicare-coverage-database/view/article.aspx?articleId=59576&ver=7.
---------------------------------------------------------------------------

(1) Units of Drugs Acquired Through the 340B Program
    Section 1847A(i)(3)(B)(ii)(I) of the Act specifically excludes 
billing units of drugs for which the manufacturer provides a discount 
under the 340B Program from the billing units of drugs for which a 
manufacturer may otherwise have a Part B inflation rebate liability. We 
proposed codifying the policy described in section 50.8.1 of the 
revised Medicare Part B Drug Inflation Rebate Guidance at Sec.  427.303 
to remove separately payable billing units in claim lines that are 
billed with the ``JG'' or ``TB'' modifiers from identified final action 
claim lines.
    In the CY 2025 PFS proposed rule, CMS sought to codify the removal 
of units of drugs for which the manufacturer provides a discount under 
the 340B Program from Part B inflation rebate calculations based on 
certain prior CMS policies set forth in this paragraph related to the 
identification of claims for such drugs. On December 20, 2022, CMS 
issued program guidance that requires all 340B covered entities to 
include the ``JG'' or ``TB'' modifier, as applicable, on separately 
payable claim lines for drugs acquired through the 340B Program with 
dates of service beginning no later than January 1, 2024.\656\ 
Furthermore, in the CY 2024 OPPS final rule (88 FR 81791 through 
81792), CMS finalized a policy to utilize a single 340B modifier 
(``TB''), requiring hospitals that currently report the ``JG'' modifier 
to use the ``TB'' modifier beginning January 1, 2025. As described in 
the final rule, in CY 2024, these hospitals can choose to continue to 
use the ``JG'' modifier or choose to transition to the use of ``TB'' 
modifier during that year. On December 14, 2023, CMS updated the 
December 20, 2022 guidance titled ``Part B Inflation Rebate Guidance: 
Use of the 340B Modifiers'' to align with the updated single modifier 
requirement.\657\
---------------------------------------------------------------------------

    \656\ See: https://www.cms.gov/files/document/part-b-inflation-rebate-guidance340b-modifierfinal.pdf.
    \657\ See: https://www.cms.gov/files/document/revised-part-b-inflation-rebate-340b-modifier-guidance.pdf.
---------------------------------------------------------------------------

    We proposed at Sec.  427.303(b)(1)(i) to exclude separately payable 
billing units in claim lines for professional claims with dates of 
service during 2023 from suppliers that are covered entities listed by 
the HRSA 340B Office of Pharmacy Affairs Information System (OPAIS) as 
participating in the 340B Program. CMS will use National Provider 
Identifier (NPI) numbers and/or Medicare Provider Numbers (MPN) to 
identify these suppliers and the claims submitted with such 
identifiers. We proposed to continue this approach for professional 
claims with dates of service during 2024. For institutional claims 
through 2024, we proposed to remove units in all institutional claim 
lines that were billed with the ``JG'' or ``TB'' modifiers. Consistent 
with the CMS updated 340B modifier guidance, we proposed at Sec.  
427.303(b)(1)(iii) to exclude separately payable billing units in claim 
lines for institutional providers with the ``JG'' and ``TB'' modifiers 
from identified final action claims with dates of service through 
December 31, 2024. We proposed to codify policies established in 
section 50.8.1 of the revised Medicare Part B Drug Inflation Rebate 
Guidance at Sec.  427.303(b)(1)(iii) by excluding separately payable 
billing units in claim lines with the ``TB'' modifier from identified 
final action claims with dates of service on or after January 1, 2025. 
We proposed to use these modifiers to identify and exclude billing 
units for which a discount was acquired under the 340B Program because 
the ``TB'' modifier is an existing mechanism used to identify drugs 
acquired through the 340B Program and familiar to most 340B covered 
entities paid under the OPPS.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: One commenter recommended CMS provide manufacturers with 
claim-level data so that manufacturers may verify rebate reports and 
validate that 340B units are not included in inflation rebate 
calculations. Another commenter asked CMS to share claim-level data to 
prevent duplicate discounts and noted that the commenter found 
modifiers did not consistently identify duplicate claims.
    Response: CMS declines to provide claim-level data to manufacturers 
regarding the 340B Program or other statutory exclusions of units from 
rebate counts as CMS does not believe this is necessary to operate the 
program at this time. Providing manufacturers with extracts of claim-
level data regarding the 340B Program or other statutory exclusions of 
units from rebate counts at a cadence that aligns with timing for 
Rebate Reports such that a manufacturer could use the data to validate 
their Reports would be a complex undertaking for the agency. 
Additionally, providing claim-level data raises considerations on 
potential impact to other interested parties such as pharmacies and 
plans or Pharmacy Benefit Managers (PBMs). Based on CMS' engagement 
with interested parties, there is no consensus on what they consider to 
be essential data fields to verify rebate reports and validate removal 
of 340B units without risk of disclosure of protected health 
information or other sensitive or confidential information. Finally, 
while the statute requires manufacturers to pay a Part B inflation 
rebate on drugs with prices that exceed inflation for an applicable 
calendar quarter, there are no statutory requirements for the provision 
of claim-level data or 340B data to manufacturers to fulfill their 
obligation to pay a Part B inflation rebate. The Rebate Reports and 
reconciliation policy described at Sec.  427.502 of this final rule 
will allow manufacturers to review results of rebate calculations and 
raise a mathematical error during the Suggestion of Error period 
described at Sec.  427.503, thereby not requiring validation of 340B 
data.
    Comment: A couple of commenters requested CMS specify that accurate 
use of the ``JG'' or ``TB'' modifier is required for a Part B claim to 
be complete and reimbursable. Some commenters suggested that CMS 
require Medicare Administrative Contractors (MACs) to reject claims as 
incomplete if they do not include a 340B or non-340B modifier (that is, 
to identify that a drug was not purchased under the 340B Program).
    Some commenters recommended that CMS conduct audits to ensure 
covered entities' adherence to program requirements and to 
comprehensively exclude the appropriate units from inflation rebate 
calculations. A few commenters suggested the audit process include 
penalties for non-compliant covered entities and recalculations of 
inflation rebate obligations when needed. One commenter asked CMS to

[[Page 98249]]

publish specific penalties for non-compliance with program 
requirements, instead of providing a statement that covered entities 
are subject to the False Claims Act.
    Response: We thank commenters for their feedback. The December 20, 
2022 Part B Inflation Rebate Guidance: 340B Modifier \658\ program 
guidance requires all 340B covered entities to include the ``JG'' or 
``TB'' modifier, as applicable, on separately payable claim lines for 
drugs acquired through the 340B Program with dates of service beginning 
no later than January 1, 2024. This guidance was revised in the 
December 14, 2023 Revised Part B Inflation Rebate Guidance: 340B 
Modifier \659\ program guidance, which maintains the modifier 
requirement but aligns it to policy in the CY 2024 OPPS final rule (88 
FR 81791 through 81792).
---------------------------------------------------------------------------

    \658\ See: https://www.cms.gov/files/document/part-b-inflation-rebate-guidance340b-modifierfinal.pdf.
    \659\ See: https://www.cms.gov/files/document/revised-part-b-inflation-rebate-340b-modifier-guidance.pdf.
---------------------------------------------------------------------------

    Providers and suppliers are required to maintain current knowledge 
of Medicare billing policies and to submit accurate claims. Providers 
and suppliers are also required to maintain all documentation to 
support the validity of the services reported on the claim and ensure 
this information is available upon request. CMS expects providers and 
suppliers to submit accurate claims, to utilize the correct modifiers, 
and to correct any claim that omits a required modifier. CMS believes 
existing penalties are sufficient to promote provider and supplier 
compliance with these requirements. CMS intends for all rebate 
calculations to be as accurate and is providing a process for 
manufacturers to review rebate calculations, as described at Sec.  
427.501. Section 1847A(i)(8) of the Act precludes administrative or 
judicial review of the determination of units under this program, the 
determination of whether a drug is a Part B rebatable drug, and the 
calculation of the rebate amount.
    Comment: Some commenters recommended that CMS adopt use of a non-
340B modifier to identify Part B drugs not acquired through the 340B 
Program. Commenters stated that a non-340B modifier paired with the 
existing ``JG'' \660\ and ``TB'' modifiers will allow for program 
integrity and comprehensive identification and removal of 340B units 
from Part B inflation rebate calculations. Commenters stated this 
approach would align with CMS' approach for the Part B discarded drug 
modifier JZ, where providers and suppliers submit a claim with the JZ 
modifier if there are no discarded amounts from single-dose container 
or single-use package drugs. One commenter stated that in the absence 
of a claims clearinghouse to identify and verify 340B claims, CMS 
should continue investigating methods to improve identification of 340B 
claims at the point of sale and to require modifiers for non-340B 
claims.
---------------------------------------------------------------------------

    \660\ The ``JG'' modifier will be discontinued on December 31, 
2024. All covered entities must transition to use the ``TB'' 
modifier for dates of service on or after January 1, 2025.
---------------------------------------------------------------------------

    Response: At this time, CMS does not believe a modifier is needed 
to report drugs or biological products that were not purchased under 
the 340B Program. Based on available data at the time of this 
rulemaking, CMS does not have evidence that providers and suppliers are 
frequently omitting the ``JG'' and ``TB'' modifiers on a claim for a 
Part B drug purchased under the 340B Program. CMS continues to believe 
the requirement under the updated 340B modifier guidance and CY 2024 
OPPS/ASC final rule for providers and suppliers to use a 340B modifier 
will provide the data required to identify and exclude 340B units from 
Part B inflation rebates.661 662
---------------------------------------------------------------------------

    \661\ See: https://www.federalregister.gov/public-inspection/2023-24293/medicare-program-hospital-outpatientprospective-payment-and-ambulatory-surgical-center-payment. See: https://www.federalregister.gov/public-inspection/2023-24293/medicare-program-hospital-outpatientprospective-payment-and-ambulatory-surgical-center-payment.
    \662\ See: https://www.cms.gov/files/document/revised-part-b-inflation-rebate-340b-modifier-guidance.pdf. See: https://www.cms.gov/files/document/revised-part-b-inflation-rebate-340b-modifier-guidance.pdf.
---------------------------------------------------------------------------

    Comment: A few commenters asked CMS to establish a clearinghouse 
model to identify 340B units and exclude these units from inflation 
rebate calculations. One commenter stated their ideal approach would be 
an independent entity serving as a clearinghouse for claims data. 
Commenters stated a clearinghouse would facilitate the identification 
of 340B claims, prevent duplicate discounts, and provide transparency. 
One commenter requested that CMS take an active role in ensuring the 
validity of data submitted to the clearinghouse and not rely only on 
attestations from covered entities. The same commenter recommended CMS 
provide covered entities with a set of data fields they must submit to 
the clearinghouse.
    Response: We believe that requiring a claims modifier, as described 
in the December 20, 2022 Part B Inflation Rebate Guidance: 340B 
Modifier \663\ program guidance and revised in the December 14, 2023 
Revised Part B Inflation Rebate Guidance: 340B Modifier \664\ program 
guidance, will provide the necessary data to exclude 340B units from 
Part B inflation rebates for institutional claims with dates of service 
starting in calendar year 2024. For professional claims with dates of 
service during 2023 and 2024, CMS will also remove all units in claims 
from suppliers that are covered entities listed by the HRSA 340B OPAIS 
as participating in the 340B Program. CMS will use NPIs and/or MPNs to 
identify these suppliers and the claims submitted with such 
identifiers. In this final rule, CMS clarified that we will use other 
fields in the OPAIS (such as name and address) to identify covered 
entities submitting professional claims with separately payable 340B 
units if NPI or MPN is not available. For institutional claims with 
dates of service during 2023, CMS will remove units in all 
institutional claim lines that were billed with the ``JG'' or ``TB'' 
modifiers and all other units in institutional claims submitted by 340B 
covered entities not paid under OPPS billing separately payable claim 
lines for drugs acquired under the 340B Program.
---------------------------------------------------------------------------

    \663\ See: https://www.cms.gov/files/document/part-b-inflation-rebate-guidance340b-modifierfinal.pdf.
    \664\ See: https://www.cms.gov/files/document/revised-part-b-inflation-rebate-340b-modifier-guidance.pdf.
---------------------------------------------------------------------------

    We decline to adopt the commenters' suggestion to adopt a 
clearinghouse model for identification and removal of 340B units from 
Part B claims on the basis that covered entities are knowledgeable of 
the 340B modifier requirements and current billing patterns reveal 
these modifiers are being reported on professional and institutional 
claims in CY 2023 and CY 2024. At this time, we do not have evidence to 
suggest a change in approach is necessary.
    Comment: One commenter noted that CMS' proposed policy for 
excluding 340B units on professional claims with dates of service in 
2023 and 2024 relies on NPIs and asked CMS to clarify that claims 
submitted without NPIs would be excluded from the calculation of 
inflation rebates.
    Response: All providers and suppliers are required to report an NPI 
on a Medicare claim as required under Sec.  424.506(c). For 
professional claims with dates of service in CY 2023 and CY 2024, CMS 
will use NPIs and/or MPNs to identify covered entities submitting 
professional claims with separately payable 340B units so that these 
units

[[Page 98250]]

can be excluded from rebate calculations. In this final rule, CMS is 
clarifying that we will use other fields in the OPAIS (such as name and 
address) to identify covered entities submitting professional claims 
with separately payable 340B units if NPI or MPN is not available.
    Comment: A few commenters requested CMS coordinate with HRSA to 
prevent the duplication of 340B discounts and possibly overstated 
inflation rebate obligations due to 340B units not being wholly 
excluded.
    Response: CMS intends to continue to consult with HRSA for 
technical assistance with the 340B pricing databases and to ensure that 
the inflation rebate policies remove 340B units as required by statute.
    Comment: A few commenters asked that CMS clarify that the 340B 
claims modifier requirement applies to all drugs covered under Medicare 
Part B, including Human Immunodeficiency Virus (HIV) pre-exposure 
prophylaxis (PrEP) drugs if an NCD is finalized for these drugs.
    Response: On September 30, 2024 CMS determined that PrEP using 
antiretroviral drugs to prevent HIV is reasonable and necessary for the 
prevention of an illness or disability and will cover these drugs as an 
additional preventive service under Medicare Part B.\665\ We clarify 
that the 340B modifier requirement applies to such antiretroviral drugs 
when covered under Part B for non-preventive purposes (that is, when 
used for diagnosis or treatment). Given the timing of the NCD in 
connection with the timing for development of this rulemaking, CMS 
intends to address whether Drugs Covered as Additional Preventive 
Services (DCAPS) would be Part B rebatable drugs in future 
policymaking.
---------------------------------------------------------------------------

    \665\ See: https://www.cms.gov/medicare-coverage-database/view/ncacal-decision-memo.aspx?proposed=N&ncaid=310&fromTracking=Y&doctype=all&timeframe=30&sortBy=updated&bc=20.
---------------------------------------------------------------------------

    Comment: One commenter expressed concern that the removal of 340B 
units from calculations could lead to higher costs for drugs commonly 
used by HIV patients.
    Response: We appreciate the commenter's concern about drug costs 
for HIV patients. Section 1847A(i)(3)(B)(ii)(I) of the Act establishes 
that 340B units are removed from the Part B inflation rebate 
calculation.
    After consideration of public comments, we are finalizing this 
provision with a few modifications.
    We proposed at Sec.  427.303(b)(1)(i) to exclude separately payable 
billing units in claim lines for professional claims with dates of 
service during 2023 from suppliers that are covered entities listed by 
the HRSA 340B OPAIS as participating in the 340B Program. CMS will use 
NPIs and/or MPNs to identify these suppliers and the claims submitted 
with such identifiers. In this final rule, CMS is noting that if NPIs 
and MPNs are not available from these suppliers and claims, it will use 
other fields available in OPAIS, such as name and address. As some 
covered entities in the OPAIS do not provide an NPI or MPN, using other 
fields in OPAIS will allow CMS to identify those covered entities and 
exclude their claims for separately payable drugs acquired under the 
340B Program. CMS is further clarifying in this final rule that we will 
also remove units in all professional claim lines for dates of service 
during 2023 that were billed with the ``JG'' or ``TB'' modifiers. As 
use of the JG or TB modifier was not required for some covered entities 
until January 1, 2024, this approach will allow CMS to comprehensively 
exclude units of separately payable drugs acquired under the 340B 
Program from professional claims. In our proposal to codify policies 
described in the revised guidance, we inadvertently omitted a reference 
to our exclusion policy for all professional claims; the clarification 
herein is intended to ensure consistency with the policy described in 
the revised guidance. As we proposed in the CY 2025 PFS proposed rule, 
we will continue this approach for professional claims with dates of 
service during 2024.
    We are adding language specifying that for institutional claims 
with dates of service during 2023, in addition to removing units in all 
institutional claim lines that were billed with the ``JG'' or ``TB'' 
modifiers, we will remove units in institutional claims from covered 
entities that are critical access hospitals and Maryland waiver 
hospitals. As critical access hospitals and Maryland waiver hospitals 
were not required to use the JG or TB modifier before January 1, 2024, 
CMS cannot use these modifiers to accurately remove units in 
institutional claims with dates of service during 2023 for these 
hospital types. In our proposal to codify prior policies described in 
the Part B revised guidance, we inadvertently omitted a reference to 
the exclusion of units in institutional claims submitted by covered 
entity critical access hospitals, Maryland waiver hospitals, and non-
excepted off-campus provider-based departments (PBDs) billing 
separately payable claim lines for drugs acquired under the 340B 
Program for claims with dates of service from January 1, 2023 through 
December 31, 2023. Because critical access hospitals and Maryland 
waiver hospitals were not required to report ``JG'' or ``TB'' modifiers 
during 2023, the omission of such reference in the proposed regulatory 
text at Sec.  427.303(b)(1)(ii) would not capture 340B units by such 
covered entities. Beginning January 1, 2024, all covered entities were 
required to report the ``JG'' or ``TB'' modifier. We do not 
specifically reference non-excepted off-campus provider-based 
departments (PBDs) in Sec.  427.303(b)(1)(ii) and in this final rule 
because these entities were required to use a modifier for separately 
payable drugs before the December 20, 2022 program guidance requiring 
use of the ``JG'' or ``TB'' modifier for all 340B covered entities 
beginning on January 1, 2024. Therefore, separately payable drugs 
acquired under the 340B Program billed by non-excepted off-campus PBDs 
in 2023 can be identified with the ``JG'' or ``TB'' modifier and would 
be excluded from rebate calculations.
    We are also finalizing an amendment to Sec.  427.303(b)(1)(iii) to 
state that we will exclude from rebate calculations separately payable 
billing units in claim lines for institutional claims that are billed 
with the ``JG'' or ``TB'' modifiers for claims with dates of service 
from January 1, 2024 through December 31, 2024. We are also finalizing 
an amendment to Sec.  427.303(b)(1)(iv) to state that we will exclude 
from rebate calculations separately payable billing units in claim 
lines for institutional claims that are billed with the ``TB'' modifier 
for claims with dates of service on or after January 1, 2025.
    CMS views these amendments as merely technical changes to improve 
operations in fulfillment of our statutory obligation to exclude 340B 
units under the Medicare Part B Drug Inflation Rebate Program; 
therefore, CMS believes that the revised regulatory text of Sec.  
427.303(b)(1) more accurately reflects our policies described in the 
Medicare Part B Drug Inflation Rebate Revised Guidance.
(2) Units With a Rebate Under Section 1927 of the Social Security Act
    To receive payment under Medicaid for covered outpatient drugs, 
manufacturers must participate in the Medicaid Drug Rebate Program 
(MDRP) (that is, have a drug rebate agreement in effect with the 
Secretary of HHS) and are required to report certain pricing and drug 
product information and pay Medicaid drug rebates for covered 
outpatient drugs furnished and paid for under the Medicaid State plan. 
States

[[Page 98251]]

invoice manufacturers no later than 60 days after the end of each 
calendar quarter on the number of units of each dosage form and 
strength of each covered outpatient drug furnished and paid for under 
the State plan. This invoice includes units of covered outpatient drugs 
that are furnished to dually eligible beneficiaries when the claim for 
the drug is paid for by Medicare Part B and the beneficiary's cost 
sharing is covered by Medicaid. To determine unit counts for rebate 
calculations, at this time, at Sec.  427.303(b)(2), we proposed 
codifying our policy described in revised Medicare Part B Drug 
Inflation Rebate Guidance in section 50.8.2 to exclude billing units 
from claims with dates of service during a month within a calendar 
quarter when the Medicare beneficiary has Medicaid coverage that may 
provide cost-sharing assistance. These are Qualified Medicare 
Beneficiary (QMB) Plus, Specified Low-Income Medicare Beneficiary 
(SLMB) Plus, QMB-only beneficiaries, and other full dually eligible 
beneficiaries. We further proposed codifying the policy in revised 
guidance that billing units for Part B rebatable drugs furnished to 
Medicare beneficiaries with Medicaid coverage that does not include 
cost-sharing assistance (that is, SLMB Only, Qualified Disabled and 
Working Individuals (QDWI), and Qualifying Individuals (QI) 
beneficiaries) be included in rebate calculations. CMS will identify 
the months for which a beneficiary has Medicaid coverage with cost-
sharing assistance using available information (for example the State 
MMA File of dually eligible beneficiaries) at the time the rebate 
amount is being calculated for a calendar quarter. We proposed 
codifying this policy as manufacturers pay rebates through the Medicaid 
Drug Rebate Program on units of covered outpatient drugs that are 
furnished to dually eligible beneficiaries when the claim for the drug 
is paid for by Medicare Part B and the beneficiary's cost sharing is 
covered by Medicaid.
    We also considered excluding all units furnished to dually eligible 
individuals but did not propose this alternative because it would 
result in the over exclusion of units.
    Comment: One commenter supported the proposal to exclude units 
subject to rebates under the MDRP that are furnished to dually eligible 
beneficiaries when the claim is paid by Medicare Part B and the 
beneficiary's cost sharing is covered by Medicaid.
    Response: We appreciate this commenter's support.
    After consideration of public comments, we are finalizing as 
proposed at Sec.  427.303(b)(2).
(3) Units That Are Packaged Into the Payment Amount for an Item or 
Service and Are Not Separately Payable
    As described earlier in this section, we proposed codifying our 
policy in section 50.8.3 of revised Medicare Part B Drug Inflation 
Rebate Guidance and only include claim lines with a Medicare allowed 
amount greater than zero. Because we proposed at Sec.  427.303(b)(3) 
identifying billing units for separately payable claim lines for Part B 
rebatable drugs only, no further action would be necessary to exclude 
billing units that are packaged into the payment amount for an item or 
service and are not separately payable, such as drugs for which payment 
is packaged under the OPPS, or the Ambulatory Surgical Center (ASC) 
payment system, or those furnished in the Federally qualified health 
centers (FQHC) or rural health clinics (RHC) setting. CMS notes that 
claim lines for drugs for which payment is bundled under the ESRD PPS 
would not have a Medicare allowed amount that is greater than zero and 
such units would therefore be excluded.
    We also noted in the CY 2025 PFS proposed rule (89 FR 61949) that 
in accordance with policies established in the CY 2024 OPPS/ASC final 
rule and codified in regulatory text at 88 FR 81540, CMS will except 
biosimilar biological products from the OPPS threshold packaging policy 
when their reference biological products are separately paid. This 
means that CMS will pay separately for these biosimilar biological 
products even if their per-day cost is below the threshold packaging 
policy. Because units of these biosimilar biological products are not 
packaged into the payment amount for an item or service and are 
separately payable, they will be included in the Part B inflation 
rebate calculation if they are not qualifying biosimilar biological 
products.
    Comment: One commenter supported CMS' proposal to exclude bundled 
units from the calculation of the Medicare Part B inflation rebate.
    Response: We appreciate this commenter's support.
    After consideration of public comments, we are finalizing as 
proposed at Sec.  427.303(b)(3).
(4) Units When a Drug Is No Longer a Part B Rebatable Drug
    As described in section 1847A(i)(2) of the Act, multiple source 
drugs are not Part B rebatable drugs. A single source drug that is a 
Part B rebatable drug could become a multiple source drug at the start 
of or during a calendar quarter. In such cases, at Sec.  427.303(b)(4), 
we proposed codifying policy in section 50.8.4 of the revised Medicare 
Part B Drug Inflation Rebate Guidance to identify the first marketed 
date, as described at Sec.  427.20, of a drug product that is rated as 
therapeutically equivalent to such a drug under FDA's most recent 
publication of Approved Drug Products with Therapeutic Equivalence 
Evaluations (commonly known as the FDA Orange Book \666\) and determine 
whether the drug is no longer a Part B rebatable drug. At Sec.  
427.303(b)(4), we proposed to exclude billing units of such drug 
furnished on and after the first day of the calendar month in which the 
therapeutically equivalent drug was first sold or marketed during the 
applicable calendar quarter. We further proposed codifying policy that 
CMS may consult with the FDA for technical assistance in instances 
where there is ambiguity as to whether a new product is therapeutically 
equivalent. Units furnished on or after the calendar month of the first 
marketed date will be excluded from the units identified in accordance 
with Sec.  427.303(b)(4)(iii).
---------------------------------------------------------------------------

    \666\ Accessible via https://www.fda.gov/drugs/drug-approvals-and-databases/approved-drug-products-therapeutic-equivalence-evaluations-orange-book.
---------------------------------------------------------------------------

    We did not receive public comments on this proposed provision, and 
we are finalizing as proposed at Sec.  427.303(b)(4).
(5) Operational Considerations Related to the Inclusion of Units 
Furnished to Beneficiaries Who Are Enrolled in Medicare Advantage (MA) 
Plans
    Section 1847A(i) of the Act requires the manufacturer of a Part B 
rebatable drug to pay a rebate that, generally, is calculated based on 
the total number of billing units of that drug that were furnished in a 
calendar quarter, multiplied by the excess specified amount for the 
drug over a statutorily defined inflation-adjusted payment amount. The 
inclusion in this calculation of billing units of drugs that are 
furnished to Medicare beneficiaries who are enrolled in MA plans poses 
significant operational complexities. We did not propose to establish a 
policy on treatment of MA units in the calculation of Part B inflation 
rebates due to operational considerations, but we stated that we may 
establish policy on this issue in future rulemaking. We solicited 
comments on this approach.
    We did not make any proposals associated with the treatment of MA 
units for Part B rebate calculations;

[[Page 98252]]

however, we received public comments on this topic from interested 
parties. The following is a summary of the comments we received and our 
responses.
    Comment: Some commenters recommended CMS clarify in final 
rulemaking that MA units cannot be included in Part B inflation rebates 
and that CMS does not intend to issue rulemaking in the future to the 
contrary.
    Response: At this time, CMS will not include MA units in Part B 
inflation rebates. CMS may revisit the inclusion of billing units of 
drugs that are furnished to Medicare beneficiaries who are enrolled in 
MA plans under Medicare Part C in future rulemaking.
    Comment: Some commenters interpreted section 1847(i)(2)(A) of the 
Act to expressly define a Part B rebatable drug as a drug for which 
payment is made under Medicare Part B and, therefore, in the view of 
the commenters, to exclude units of drugs furnished under MA. Some 
commenters also asserted that CMS has set precedent through other 
Agency policy that interprets the scope of section 1847A to cover only 
Part B, not Part C. As an example, one commenter notes that section 
1847A(a)(1) of the Act says that the ASP-based methodology in this 
section of the statute applies to drugs described in section 
1842(o)(1)(C) of the Act. This reference applies to certain types of 
drugs furnished after 2004 ``for which payment has been made under this 
part.'' The commenter says that CMS interpreted this language to apply 
to only drugs paid for under Part B and did not interpret it to mean 
requiring MA plans use the ASP-based methodology to pay for drugs 
furnished to plan enrollees. One commenter stated that CMS does not 
explain the basis for its belief that the statute could extend to Part 
C.
    Response: Because CMS believes that operational changes would 
likely be necessary to include MA units, at this time, CMS will not 
include MA units in the calculation of Part B rebates. CMS may address 
the issue of whether to include MA units in the calculation of Part B 
rebates in future policymaking and would solicit and consider public 
comments on this issue at that time.
    Comment: Some commenters stated that units of rebatable drugs 
furnished under MA should be excluded from Part B rebatable drugs 
because they are not separately payable. These commenters noted that 
under section 1847A(i)(1)(B) of the Act, units that are packaged into 
the payment amount for an item or service and are not separately 
payable are excluded from the calculation of the total number of units 
to apply Part B rebates. Commenters stated that Part B drugs are not 
separately payable within MA, as CMS makes capitated payments to plans.
    Response: As noted in the response above, CMS will not include MA 
units in the calculation of Part B rebates at this time due to 
operational considerations. CMS may address this issue in future 
policymaking and would solicit and consider public comments on this 
issue at that time.
(6) Units Subject to Discarded Drug Refunds
    At Sec.  427.303(b)(5), we proposed a policy addressing the 
interaction between Part B inflation rebates and billing units of 
discarded drugs. Under the Infrastructure Investment and Jobs Act of 
2021, section 90004, manufacturers are required to provide a refund to 
CMS for certain discarded amounts from separately payable single-dose 
container or single-use package drugs beginning January 1, 2023. To 
implement the discarded drugs refund provision of the Infrastructure 
Investment and Jobs Act of 2021, in the CY 2023 PFS final rule (87 FR 
69711 through 69719), CMS finalized the requirement that providers and 
suppliers use the ``JW'' claim modifier for all separately payable 
drugs with discarded amounts of drugs from a single-dose container or 
from a single-use package for Part B claims that bill for drugs and 
biological products to report discarded amounts. CMS also finalized a 
requirement for providers and suppliers to use the ``JZ'' modifier on 
claims that bill for drugs from single-dose containers that are 
separately payable under Medicare Part B when there are no discarded 
amounts to attest that no amount of drug was discarded and eligible for 
payment.\667\ As of October 1, 2023, claims for drugs from single-dose 
containers that do not use the modifiers as appropriate may be returned 
until claims are properly resubmitted.
---------------------------------------------------------------------------

    \667\ See 87 FR 2512, November 18, 2022 (https://www.federalregister.gov/d/2022-23873/p-2512).
---------------------------------------------------------------------------

    Although section 1847A(i)(3)(B)(ii) of the Act does not require 
that billing units of discarded drugs be excluded from Part B inflation 
rebates, we proposed to exclude billing units of discarded drugs that 
are subject to discarded drug refunds from Part B inflation rebates. 
CMS believes not applying Part B inflation rebates to billing units of 
discarded drugs for which a refund is owed would balance fairness for 
manufacturers that owe refunds for billing units of discarded drugs 
with the need to fulfill the requirements of section 11101 of the IRA.
    As new policy not established in section 50.8.6 of the revised 
Medicare Part B Drug Inflation Rebate Guidance, we proposed to exclude 
billing units of a refundable single-dose container or single-use 
package drug as defined at Sec.  414.902 (hereinafter referred to as 
``refundable drug'') subject to discarded drug refunds, from the 
calculation of rebate amounts during the reconciliation process except 
for calendar quarters in calendar year 2023. In the CY 2024 PFS final 
rule (codified at Sec.  414.940), CMS finalized a policy to send annual 
refund reports for discarded drug refunds for the 4 quarters of a 
calendar year at or around the time it sends Part B Inflation Rebate 
Reports for the first quarter of the following calendar year. 
Therefore, CMS invoices manufacturers for discarded drug refunds on an 
annual basis but CMS is required to invoice manufacturers for Part B 
inflation rebates on a quarterly basis.
    Under the timeline for processing discarded drug refunds, data to 
determine which billing units of discarded drugs are subject to 
discarded drug refunds generally will not be available until after CMS 
issues the Rebate Report to the manufacturer. Due to these data 
limitations, we proposed to include all discarded billing units, 
including units of a refundable drug subject to the discarded drug 
refund (as defined at Sec.  414.940), in the calculation of billing 
units for the Preliminary Rebate Report and the Rebate Report. We 
proposed to use data available during the reconciliation process to 
exclude billing units of discarded drugs that are subject to discarded 
drug refunds from the calculation of the rebate amount.
    For calendar quarters in calendar year 2023, we proposed to exclude 
billing units of a refundable drug subject to discarded drug refunds 
from the calculation of the rebate amount before CMS issues the Rebate 
Report to the manufacturer. As permitted by section 1847A(i)(1)(C) of 
the Act, CMS is delaying reporting of rebate information required by 
section 1847A(i)(1)(A) of the Act for calendar quarters in calendar 
years 2023 and 2024 until no later than September 30, 2025. Under this 
timeline for calendar quarters in calendar year 2023, CMS will have 
data available regarding which billing units are subject to discarded 
drug refunds when CMS sends the Preliminary Rebate Report and Rebate 
Report in 2025 for calendar quarters in calendar year 2023 and can 
exclude these billing units from the

[[Page 98253]]

calculation of the rebate amount in these reports.
    We solicited comments on the proposed approach to excluding billing 
units of a refundable drug subject to discarded drug refunds from the 
calculation of Part B inflation rebate amounts during the 
reconciliation process, except for calendar quarters in calendar year 
2023.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters supported or recommended CMS finalize its 
proposal to exclude billing units of a refundable drug subject to a 
discarded drug refunds from the calculation of Part B inflation rebate 
amounts during the reconciliation process, except for calendar quarters 
in calendar year 2023.
    Response: We thank these commenters for their input and support for 
the proposed policy.
    Comment: A few commenters noted that under section 1847A(i)(2)(A) 
of the Act, a Part B rebatable drug is defined as ``a single-source 
drug or biological . . . for which payment is made under this part.'' 
These commenters claimed that, since manufacturers provide refunds to 
CMS for Part B payment on these units through the discarded drug refund 
under section 1847A(h) of the Act, these units should not be eligible 
for inclusion in Part B rebates. A couple of commenters noted that the 
calculation of total units subject to Part B rebates is based on units 
``furnished'' to Medicare beneficiaries during an applicable calendar 
quarter. Commenters contended that, since the units of discarded drugs 
subject to refunds are not furnished to Medicare beneficiaries, these 
units should be excluded from the calculation of units subject to Part 
B rebates.
    Response: We thank these commenters for the input. However, as we 
stated in revised Medicare Part B Drug Inflation Rebate Guidance on 
page 31, we disagree with the commenters' interpretation of the statute 
that because manufacturers refund CMS for some of the allowed payment 
for discarded drugs, these units of drugs are not eligible for 
inclusion in Part B inflation rebates. Section 1847A(i)(3)(B) of the 
Act prescribes that the total number of units of a rebatable drug is 
determined by the number of units furnished in an applicable calendar 
quarter, excluding units of drugs with respect to which the 
manufacturer provides a discount under the 340B Program, units with 
respect to which the manufacturer pays a Medicaid rebate, or units that 
are packaged into the payment amount for an item or service and are not 
separately payable. Discarded units of Part B rebatable drugs are not 
detailed in the exclusions from the total number of units under section 
1847A(i)(3)(B)(ii) of the Act. Moreover, Medicare payment is made to 
providers for discarded units of drugs. As CMS stated in section 
III.I.2.d.iv. of this final rule, including units where Medicare 
payment was allowed would ensure that billing units for which Medicare 
and some beneficiaries have financial liability would be counted in the 
total number of units.
    Comment: A couple of commenters noted that excluding billing units 
subject to discarded drug refunds during the Part B annual 
reconciliation process will not capture the discarded units ``updated 
refund quarters'' for which reports are sent after the Part B inflation 
rebate reconciliation process. A couple of commenters recommended that 
CMS establish a second reconciliation process for the Medicare Part B 
Drug Inflation Rebate Program to account for updated refund reports 
under Discarded Drug Refund Program.
    Response: We thank these commenters for the input. However, while 
the provisions in section 1847A(i) of the Act do not expressly provide 
for reconciliation in the Medicare Part B Drug Inflation Rebate 
Program, we have determined that a process for reconciling the rebate 
amount for updated information is necessary and appropriate to promote 
the accuracy of the rebate amount for each drug for each applicable 
calendar quarter.
    While we considered a longer period until a revision is completed, 
such as the 36-month period provided by the MDRP for AMP restatements 
at Sec.  447.510(d)(3), we believe that a 12-month reconciliation 
period is appropriate for the Part B rebate program because of 
requirements to submit timely and accurate ASP data (specified at Sec.  
414.806(b)), and it provides sufficient time to capture the majority of 
updates to the data specified at Sec.  427.301 while closing out 
(except for the proposed circumstances at Sec.  427.501(d)(2) regarding 
CMS' identification of mathematical errors or manufacturer 
misreporting) the calculation of the rebate amount for a Part B 
rebatable drug for an applicable calendar quarter within a reasonable 
time period after the Rebate Report is issued. While we proposed a 12- 
and 36-month reconciliation period in the Medicare Part D Drug 
Inflation Rebate Program, due largely to the 36-month restatement 
period provided for MDRP AMP restatements (specified at Sec.  
447.510(d)(3)), we do not believe a second or longer restatement 
process is needed for Part B rebatable drugs because, as described 
previously, the ASP and claims run out periods correspond with 
sufficient claims run out and ASP restatement timing for Part B 
(particularly when considering penalties associated with failure to 
submit timely and accurate ASP data (specified at Sec.  414.806(b)).
    Under the timeline for processing discarded drug refunds, annual 
reports to determine which billing units of discarded drugs are subject 
to discarded drug refunds generally will not be available until after 
CMS issues the Rebate Report to the manufacturer. Due to these data 
limitations, we proposed to use data available during the 
reconciliation process to exclude billing units of discarded drugs that 
are subject to discarded drug refunds from the calculation of the 
rebate amount.
    The Discarded Drug Refund Program includes lagged claims data in 
annual reports, subsequent to initial reports. Although this lagged 
data will generally not be available when we conduct reconciliation in 
the Medicare Part B Drug Inflation Rebate Program, in the CY 2024 PFS 
final rule (88 FR 79047 through 79049) we stated that CMS estimates 
that over 99 percent of claims will be final when a given quarter is 
first included in a discarded drug refund report. Therefore, CMS 
anticipates that there will not be significant revisions to the 
calculation of the rebate amount based on the determination of which 
billing units of discarded drugs are subject to discarded drug refunds 
after we conduct reconciliation in the Medicare Part B Drug Inflation 
Rebate Program. We intend to monitor the lagged claims data included in 
updated refund quarters on the annual discarded drug refund reports and 
to consider potential changes to the timing of reconciliation in the 
Medicare Part B Drug Inflation Rebate Program in the future if 
necessary.
    Comment: A couple of commenters recommended CMS consider excluding 
a quarterly estimated amount of billing units subject to discarded drug 
refunds from the calculation of rebate amounts for the Preliminary 
Rebate Report and Rebate Report. One commenter noted that applying an 
estimated amount would help streamline manufacturer refund payment 
obligations and reduce manufacturer refund overpayments. One commenter 
recommended that CMS then reconcile, if needed, the quarterly estimated 
amount of billing units subject to discarded drug refunds with the 
actual amount of billing units subject to discarded drug refunds during

[[Page 98254]]

the reconciliation process. One commenter recommended CMS provide 
details to manufacturers on exclusion determinations on claims for 
billing units subject to discarded drug refunds.
    Response: We thank these commenters for the input and 
recommendations. Data to determine which billing units of discarded 
drugs are subject to discarded drug refunds generally will not be 
available until after CMS issues the Rebate Report to the manufacturer 
and none of the data available at the time of this report offer a 
reliable basis to estimate the amount of billing units that will be 
subject to discarded drug refunds. Due to this data limitation, CMS 
will include all discarded billing units, including units of a 
refundable drug subject to the discarded drug refund (as defined at 
Sec.  414.940), in the calculation of billing units for the Preliminary 
Rebate Report and the Rebate Report. CMS will use data available during 
the reconciliation process to exclude billing units of discarded drugs 
that are subject to discarded drug refunds from the calculation of the 
rebate amount. CMS will use information from discarded drug refund 
reports to determine the billing units of discarded drugs that are 
subject to discarded drug refunds and should be excluded from Part B 
inflation rebates. Information on how discarded drug refunds will be 
calculated is specified in regulation at Sec.  414.940 (87 FR 69731).
    After consideration of public comments, we are finalizing the 
policy proposed at Sec.  427.303(b)(5) with a modification to align the 
policy described at Sec.  427.303(b)(5) with the policy as described in 
the CY 2025 PFS proposed rule (89 FR 61950). CMS will exclude billing 
units of a refundable drug for which a refund is owed, rather than for 
which a refund has been paid, from the calculation of Part B inflation 
rebate amounts during the reconciliation process, except for calendar 
quarters in calendar year 2023.
v. Adjustments for Changes to Billing and Payment Codes
    Changes to billing and payment codes, including new code 
assignments and dose description changes, may occur. When a new billing 
and payment code is assigned for a Part B rebatable drug and the code 
dose description, which determines that amount of drug in each billing 
unit, remains the same, we proposed to codify at Sec.  427.304(b) the 
existing policy set forth in revised Medicare Part B Drug Inflation 
Rebate Guidance to use the benchmark quarter's payment amount, the 
payment amount benchmark quarter, and the benchmark quarter CPI-U of 
the prior billing and payment code to calculate the per unit Part B 
rebate amount. For example, a single source drug or biological product 
may be assigned a new billing and payment code if it was initially 
assigned to a billing and payment code with other products and then 
later assigned a unique billing and payment code. In this situation, a 
multiple source drug marketed under an NDA may become a single source 
drug if all its other therapeutically equivalent drugs are discontinued 
and the now-single source drug marketed under an NDA is later shifted 
into a separately payable code.
    When a Part B rebatable drug's code dose description changes, we 
proposed to codify at Sec.  427.304(a) policies established in section 
50.9 of the revised Medicare Part B Drug Inflation Rebate Guidance and 
apply a conversion factor within the rebate calculation, when 
applicable. For example, a billing and payment code dose description 
that determines the amount of drug in each billing unit could be 
changed from 10mg to 5mg. If a billing and payment code dose 
description changes from 10mg to 5mg, the payment amount in the payment 
amount benchmark quarter for such drug was $200 based on 10mg, and the 
rebate period payment amount is based on 5mg, then CMS would apply a 
conversion factor of 0.5 to the payment amount in the payment amount 
benchmark quarter (yielding $100). In this example, the conversion 
factor would be based on the ratio of the current billing unit 
description to the prior billing unit description (5mg/10mg = 0.5). In 
addition, to ensure consistency in how CMS is calculating a rebate when 
a billing and payment code's dose description changes, we proposed to 
apply a conversion factor before applying the percentage by which the 
rebate period CPI-U for the calendar quarter exceeds the benchmark 
period CPI-U to determine the inflation-adjusted payment amount.
    In situations where a new billing and payment code is assigned for 
a Part B rebatable drug and the code dose description changes, we will 
apply a conversion factor, as appropriate, and use the benchmark 
quarter's payment amount, the payment amount benchmark quarter, and the 
benchmark quarter CPI-U of the prior billing and payment code to 
calculate the per unit Part B rebate amount--consistent with the policy 
in revised guidance that we proposed to codify at Sec.  427.304(a) and 
(b).
    To apply the provisions in section 1847A(i) of the Act 
appropriately, we also proposed at Sec.  427.304(c) to codify existing 
policy to maintain a crosswalk between such changes or codes.
    We solicited comments on these proposals.
    We did not receive public comments on this proposed provision, and 
we are finalizing as proposed at Sec.  427.304.
e. Reducing the Rebate Amount for Part B Rebatable Drugs in Shortage 
and When There Is a Severe Supply Chain Disruption (Sec. Sec.  427.400 
Through 427.402)
    Section 1847A(i)(3)(G) of the Act requires the Secretary to reduce 
or waive the rebate amount owed by a manufacturer for a Part B 
rebatable drug with respect to a calendar quarter in two cases: (1) 
when a Part B rebatable drug is described as currently in shortage on a 
shortage list in effect under section 506E of the FD&C Act at any point 
during the applicable period; and (2) when CMS determines there is a 
severe supply chain disruption during the applicable quarter for a Part 
B rebatable biosimilar biological product, such as a disruption caused 
by a natural disaster or other unique or unexpected event. The statute 
does not describe how CMS should reduce or waive inflation rebates in 
each of these cases.
    To implement the statutory requirement under section 1847A(i)(3)(G) 
of the Act, we proposed to codify in subpart E of part 427 existing 
policies described in sections 50.10, 50.11, and 50.12 of the revised 
Medicare Part B Drug Inflation Rebate Guidance to reduce the total 
rebate amount owed by a manufacturer in each of these cases, as 
summarized in Table 56 and discussed later in this section.

[[Page 98255]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.102

    In the CY 2025 PFS proposed rule (89 FR 61951), we described that 
the rebate amount owed will not be fully waived in either of the cases 
previously described. We stated in the proposed rule that we believe 
the proposed rebate reduction policies balance providing appropriate 
financial relief for manufacturers in certain circumstances, including 
when there is a severe supply chain disruption resulting from exogenous 
circumstances outside of a manufacturer's control, while not 
incentivizing manufacturers to delay taking appropriate steps to 
resolve a drug shortage or severe supply chain disruption to avoid an 
obligation to pay rebates. Additionally, we stated in the CY 2025 PFS 
proposed rule (89 FR 61951) that we will continue to evaluate these 
policies and may update them in future years. We noted that most 
shortages involve multiple source generic drugs,\668\ which are not 
Part B rebatable drugs and thus are not subject to Part B drug 
inflation rebates.
---------------------------------------------------------------------------

    \668\ See: https://www.iqvia.com/insights/the-iqvia-institute/reports-and-publications/reports/drug-shortages-in-the-us2023.
---------------------------------------------------------------------------

    We solicited comments on these proposals. The following is a 
summary of the comments we received and our responses. We note that the 
comments and responses below generally apply to both the Medicare Part 
B and Part D Drug Inflation Rebate Programs, as commenters made their 
recommendations with respect to both programs.
    Comment: Some commenters recommended CMS fully waive the inflation 
rebate for drugs currently in shortage and generic drugs and biosimilar 
biological products experiencing severe supply chain disruptions. One 
commenter recommended CMS implement a waiver process for a subset of 
drugs in currently in shortage, such as out-of-stock drugs entirely 
unavailable to the market. A couple of commenters stated that shortages 
and severe supply chain disruptions can cause swings in the ASP of a 
Part B rebatable drug or the AMP of a Part D rebatable drug that are 
beyond a manufacturer's control, and manufacturers should not be 
penalized by an inflation rebate in such a situation. A few commenters 
noted that by failing to waive the rebate amount, CMS risks 
jeopardizing patient access by taking away manufacturer resources that 
could be otherwise used to address the cause of a shortage or severe 
supply chain disruption. One commenter supported CMS' policy to reduce 
rather than waive rebate amounts but recommended that CMS consider 
providing a waiver in situations where shortages are caused by factors 
outside of a manufacturer's control.
    Response: We thank these commenters for their input. Consistent 
with our response on page 35 of the revised Medicare Part B Drug 
Inflation Rebate Guidance and page 23 of the revised Medicare Part D 
Drug Inflation Rebate Guidance,\669\ CMS will not provide a full waiver 
of the rebate amount for any Part B or Part D rebatable drugs that are 
described as ``currently in shortage'' or when CMS determines there is 
a severe supply chain disruption, as providing a full waiver of the 
rebate amount could incentivize manufacturers to delay taking 
appropriate steps to resolve a shortage or severe supply chain 
disruption to avoid an obligation to pay rebates for an extended 
period. As set forth in Sec. Sec.  427.401 and 428.301, CMS will 
provide a variable reduction in the rebate amount based on the length 
of time a Part B or Part D rebatable drug is ``currently in shortage,'' 
with the reduction decreasing over time. As set forth in Sec. Sec.  
427.402 and 428.302, when CMS determines there is a severe supply chain 
disruption during the applicable calendar quarter or applicable period, 
such as that caused by a natural disaster or other unique or unexpected 
event, CMS will provide a time-limited standard reduction in the rebate 
amount of 75 percent. As set forth in Sec.  428.303, when CMS 
determines a generic Part D rebatable drug is likely to be in shortage, 
CMS will provide a time-limited standard reduction in the rebate amount 
of 75 percent.
---------------------------------------------------------------------------

    \669\ See: https://www.cms.gov/files/document/medicare-part-b-inflation-rebate-program-revised-guidance.pdf and https://www.cms.gov/files/document/medicare-part-d-inflation-rebate-program-revised-guidance.pdf.
---------------------------------------------------------------------------

    As described later in this final rule, CMS will provide the same 
reduction in the rebate amount for Part B and Part D rebatable drugs 
that are currently in shortage regardless of the cause of the shortage. 
CMS understands that some drugs may face supply chain disruptions due 
to exogenous factors such as a natural disaster or other unique or 
unexpected event, and manufacturers of such drugs may temporarily 
increase the price of such drugs to account for increased costs 
associated with resolving a severe supply chain disruption. To provide 
financial relief to manufacturers in such situations, CMS will provide 
a standard time-limited reduction of 75 percent in the rebate amount 
for a Part B rebatable biosimilar biological product or generic Part D 
rebatable drug or biosimilar when CMS determines there is a severe 
supply

[[Page 98256]]

chain disruption during an applicable calendar quarter or applicable 
period, such as that caused by a natural disaster or other unique or 
unexpected event.
    We understand commenters' concerns regarding the effect of supply 
chain disruptions on ASP and AMP and consistent with the statute, will 
provide a reduction of the rebate amount (if any) when a Part B or Part 
D rebatable drug is ``currently in shortage'' or when CMS determines 
there is a severe supply chain disruption during an applicable calendar 
quarter or applicable period.
i. Definitions
    We proposed at Sec.  427.400 to define the following terms 
applicable to proposed subpart E (Sec. Sec.  427.400 through 427.402)--
     ``Drug shortage'' or ``shortage''.
     ``Plasma-derived product''.
    We also proposed at Sec.  427.400 to codify definitions established 
in the revised Medicare Part B Drug Inflation Rebate Guidance for the 
following terms:
     ``Currently in shortage''.
     ``Natural disaster''.
     ``Other unique or unexpected event''.
     ``Severe supply chain disruption''.
    The following is a summary of the comments we received on the 
definitions and our responses.
    Comment: One commenter stated CMS does not define what constitutes 
a severe supply chain disruption, natural disaster, or unique or 
unexpected event, leaving these terms open to interpretation. This 
commenter recommended CMS define these terms, such as through 
illustrative examples.
    Response: We disagree with the commenter that CMS has not defined 
these terms. We refer the reader to section 50.12 of the revised 
Medicare Part B Drug Inflation Rebate guidance and section 40.5.2 of 
the revised Medicare Part D Drug Inflation Rebate guidance where we 
defined the terms ``severe supply chain disruption,'' ``natural 
disaster,'' and ``other unique or unexpected events.'' We also refer 
the commenter to the CY 2025 PFS proposed rule (89 FR 62237, 62245) in 
which CMS proposed to codify these definitions and included examples of 
events that would meet the definition of a natural disaster or unique 
or unexpected event.
    After consideration of the comments received, we are finalizing 
these definitions as proposed at Sec. Sec.  427.400 and 428.300.
ii. Reducing the Rebate Amount for Part B Rebatable Drugs Currently in 
Shortage
    At Sec.  427.401, we proposed to codify the policy established in 
section 50.11 of the revised Medicare Part B Drug Inflation Rebate 
Guidance whereby CMS will reduce the total rebate amount for a Part B 
rebatable drug that is currently in shortage based on the length of 
time the drug is in shortage during a calendar quarter and decrease the 
amount of the reduction over time. We stated in the CY 2025 PFS 
proposed rule (89 FR 61952) that CMS will use the shortage lists 
maintained by the FDA Center for Biologics Evaluation and Research 
(CBER) and Center for Drug Evaluation and Research (CDER) to determine 
whether a Part B rebatable drug is currently in shortage \670\ during a 
calendar quarter. We also stated that CMS will not consider an NDC-10 
in the status of ``to be discontinued,'' ``discontinued,'' or 
``resolved'' to be ``currently in shortage'' and that CMS would provide 
the same reduction in the rebate amount for Part B rebatable drugs 
currently in shortage regardless of the cause of the shortage.
---------------------------------------------------------------------------

    \670\ For the purposes of this final rule, we use the term 
``currently in shortage'' to refer to Part B rebatable drugs that 
are in the status of ``currently in shortage'' on the CDER shortage 
list, as well as biological products listed on CBER's current 
shortages list.
---------------------------------------------------------------------------

    We proposed that CMS will not provide a full waiver of the rebate 
amount for drugs currently in shortage, as providing a full waiver of 
the rebate amount could further incentivize manufacturers to delay 
taking appropriate steps that may resolve a shortage more expeditiously 
simply to maintain having the drug listed on FDA's drug shortage list 
to avoid an obligation to pay rebates for an extended period. Further, 
as explained in the CY 2025 PFS proposed rule (89 FR 61952), in a 
report analyzing the root causes of drug shortages between 2013 and 
2017, FDA found that more than 60 percent of drug shortages were the 
result of manufacturing or product quality issues, and providing a full 
waiver of the rebate amount in situations that may be within a 
manufacturer's control could be perceived as rewarding manufacturers 
for poor quality management.\671\
---------------------------------------------------------------------------

    \671\ See: https://www.fda.gov/media/131130/download?attachment#page=33.
---------------------------------------------------------------------------

    We stated in the CY 2025 PFS proposed rule (89 FR 61952) that CMS 
will be responsible for monitoring the status of a Part B rebatable 
drug on an FDA shortage list, and manufacturers would not need to 
submit any information to CMS to be eligible for a reduction of the 
rebate amount for a Part B rebatable drug that is currently in 
shortage.
    To calculate the reduced total rebate amount for a Part B rebatable 
drug, at Sec.  427.401(b), we proposed the following formula:

Reduced Total Rebate Amount = total rebate amount multiplied by (1 
minus applicable percent reduction) multiplied by (percentage of time 
drug was currently in shortage during the calendar quarter) added to 
the total rebate amount multiplied by (1 minus percentage of time drug 
was currently in shortage during the calendar quarter)

    For the purpose of this formula, for a Part B rebatable drug that 
is a plasma-derived product, at Sec.  427.401(b)(2)(i), we proposed an 
applicable percent reduction of 75 percent for the first 4 consecutive 
calendar quarters such Part B rebatable drug is currently in shortage, 
50 percent for the second 4 consecutive calendar quarters, and 25 
percent for each subsequent calendar quarter. For a Part B rebatable 
drug (including a biosimilar biological product) that is not a plasma-
derived product, at Sec.  427.401(b)(2)(ii), we proposed an applicable 
percent reduction of 25 percent for the first 4 consecutive calendar 
quarters such Part B rebatable drug is currently in shortage, 10 
percent for the second 4 consecutive calendar quarters, and 2 percent 
for each subsequent calendar quarter.
    Because drugs and biologicals on the FDA shortage lists are 
maintained at the NDC-10 level, and Part B drug inflation rebates are 
calculated at the HCPCS level, we proposed at Sec.  427.401(c) that if 
any NDC-10 assigned to the HCPCS code(s) is currently in shortage, we 
will apply the rebate reduction to all of the NDCs under the relevant 
HCPCS code(s). CMS will closely monitor market data for the Part B 
rebatable drugs for which the rebate is reduced to ensure the integrity 
of the application of the rebate reduction policy.
    We proposed to provide a reduction in the rebate amount for as long 
as a Part B rebatable drug is currently in shortage. We stated in the 
CY 2025 PFS proposed rule (89 FR 61952) that we believe the rebate 
reduction should be proportional to the time the drug is currently in 
shortage and decrease over time to balance providing financial relief 
to manufacturers experiencing a drug shortage while not incentivizing 
manufacturers to delay taking appropriate steps to resolve a shortage 
simply to maintain having the drug listed on an FDA shortage list to 
avoid an obligation to pay rebates for an extended period.
    To determine the percentage of time a Part B rebatable drug was 
currently in shortage during the calendar quarter, as

[[Page 98257]]

proposed at Sec.  427.401(b)(3), we proposed to determine the number of 
days such drug is currently in shortage in a calendar quarter and 
divide by the total number of days in that calendar quarter.
    At Sec.  427.401(b)(2), we proposed to codify the policy set forth 
in section 50.11 of the revised Medicare Part B Drug Inflation Rebate 
Guidance to apply a greater applicable percent reduction for plasma-
derived products than non-plasma derived products because the former 
rely on a variable supply of donated blood plasma that can impact 
downstream production and therefore hamper the ability to promptly 
resolve a shortage.
    When the status of a Part B rebatable drug changes from currently 
in shortage to resolved during a calendar quarter and then changes to 
currently in shortage during one or more of the subsequent 3 calendar 
quarters, we stated in the CY 2025 PFS proposed rule (89 FR 61952) that 
CMS would apply the shortage reduction as if there was a continuous 
shortage beginning with the quarter in which the drug has re-entered a 
shortage and move to the percent reduction applicable for the second 4 
consecutive quarters. (In this scenario, once this drug enters its 
fifth quarter of shortage from the first quarter in which it was listed 
as currently in shortage, the applicable percent reduction would be 50 
percent for the fifth through eighth calendar quarters for a Part B 
rebatable drug that is a plasma-derived product and 10 percent for a 
Part B rebatable drug that is not a plasma-derived product.) When the 
status of a Part B rebatable drug changes from currently in shortage to 
resolved and either remains in the status of resolved or is removed 
from the list for at least 4 full consecutive calendar quarters and 
then subsequently reemerges on a shortage list, we proposed to treat 
the subsequent shortage as a new shortage and would apply the 
applicable percent reduction for the first 4 consecutive calendar 
quarters.
    We received public comments on our proposal to not provide a waiver 
of the rebate amount for drugs currently in shortage. We refer readers 
to section III.I.2.e. of this final rule for a summary of these 
comments and our responses.
    After consideration of the comments received, we are finalizing 
this policy as proposed with an additional provision at Sec.  
427.401(b)(2)(iii) to clarify the starting point for application of the 
rebate reduction. CMS adopted this provision to clarify CMS' intended 
policy, as highlighted by examples in the CY 2025 PFS proposed rule, 
that while CMS will generally apply the shortage reduction starting 
with the first applicable calendar quarter that a Part B drug or 
biological product is described as currently in shortage, CMS 
acknowledges that for a Part B drug or biological that has been granted 
a rebate reduction for a severe supply chain disruption, it would be 
appropriate to delay the start of the applicable percent reduction for 
being in shortage until after the conclusion of the severe supply chain 
disruption reduction if the shortage continues. The section below 
discusses this clarification in detail. Specifically, and as shown in 
Table 58, we are clarifying in this final rule that CMS will apply the 
greatest rebate reduction to the first applicable calendar quarter that 
a drug or biological product is described as currently in shortage 
regardless of whether the drug meets the definition of a Part B 
rebatable drug or whether a rebate amount is owed for that applicable 
period, starting with the calendar quarter that begins January 1, 2023. 
For example, if a plasma-derived product was currently in shortage from 
October 15, 2022 through December 15, 2024, CMS would apply an 
applicable percent reduction of 75 percent for the applicable calendar 
quarters beginning January 1, 2023, April 1, 2023, July 1, 2023, and 
October 1, 2023, followed by a 50 percent reduction for the applicable 
calendar quarters beginning January 1, 2024, April 1, 2024, July 1, 
2024, and October 1, 2024, even if such drug did not meet the 
definition of a Part B rebatable drug or there was no rebate amount 
owed to which to apply the reduction for those applicable calendar 
quarters. Similarly, for a drug that is not a plasma-derived product, 
in this example, CMS would apply an applicable percent reduction of 25 
percent for the applicable calendar quarters beginning January 1, 2023, 
April 1, 2023, July 1, 2023, and October 1, 2023, followed by a 10 
percent reduction for the applicable calendar quarters beginning 
January 1, 2024, April 1, 2024, July 1, 2024, and October 1, 2024, even 
if such drug did not meet the definition of a Part B rebatable drug or 
there was no rebate amount owed to which to apply the reduction.

[[Page 98258]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.103

    We believe this clarification helps ensure clarity on CMS' policy 
in applying rebate reductions, which is intended to provide appropriate 
financial relief for drugs currently in shortage while limiting 
opportunities for manufacturers to manipulate a shortage start date to 
align with future price increases that coincide with the application of 
the reduction, as well as to decrease the amount of the rebate 
reduction the longer a drug is in shortage as set forth in the CY 2025 
PFS proposed rule (89 FR 61974).
iii. Reducing the Rebate Amount for Part B Rebatable Biosimilar 
Biological Products When There Is a Severe Supply Chain Disruption
    At Sec.  427.402, we proposed to codify the policy established in 
section 50.12 of the revised Medicare Part B Drug Inflation Rebate 
Guidance for rebate reductions when CMS determines there is a severe 
supply chain disruption during a calendar quarter. We proposed at Sec.  
427.402(b)(1) to provide a time-limited standard reduction of 75 
percent in the total rebate amount for a Part B rebatable biosimilar 
biological product when CMS determines there is a severe supply chain 
disruption during the calendar quarter, such as that caused by a 
natural disaster or other unique or unexpected event. We proposed that 
to receive a rebate reduction in accordance with Sec.  427.402(b)(1), 
the manufacturer will have to submit to CMS a rebate reduction request 
that meets the eligibility requirements at Sec.  427.402(c). A rebate 
reduction request should specify each NDC-11 and HCPCS code to which 
the request applies and if CMS grants a manufacturer's request for an 
NDC-11, we proposed at Sec.  427.402(b)(3) that the rebate reduction 
will apply to all the NDC-11s under the relevant HCPCS code(s). We 
refer manufacturers to the approved collection of information approved 
under OMB control number 0938-1474, for further instructions for 
submitting rebate reduction requests.
    We proposed at Sec.  427.402(c)(4) to grant a reduction in the 
rebate amount owed if a manufacturer of an eligible drug submits to CMS 
a request in writing demonstrating that (1) a severe supply chain 
disruption has occurred during the calendar quarter, (2) the severe 
supply chain disruption directly affects the manufacturer itself, a 
supplier of an ingredient or packaging, a contract manufacturer,\672\ 
or a method of shipping or distribution that the manufacturer uses in a 
significant capacity to make or distribute the Part B rebatable 
biosimilar biological product, and (3) the severe supply chain 
disruption was caused by a natural disaster or other unique or 
unexpected event.\673\ We proposed at Sec.  427.402(c)(2), for a 
natural disaster or other unique or unexpected event occurring on or 
after August 2, 2024, that the manufacturer believes caused a severe 
supply chain disruption, the manufacturer must submit the rebate 
reduction request within 60 calendar days from the first day that the 
natural disaster or other unique or unexpected event occurred or began 
in order for CMS to consider a rebate reduction.
---------------------------------------------------------------------------

    \672\ A contract manufacturer is a party that performs one or 
more manufacturing operations on behalf of a manufacturer(s) of 
active pharmaceutical ingredients (APIs), drug substances, in-
process materials, finished drug products, including biological 
products, and combination products. See ``Contract Manufacturing 
Arrangements for Drugs: Quality Agreements Guidance for Industry,'' 
November 2016: https://www.fda.gov/media/86193/download.
    \673\ Consistent with the collection of information approved 
under OMB control number 0938-1474, for a natural disaster or other 
unique or unexpected event that occurred or began on or after 
January 1, 2023 but before August 2, 2024 that the manufacturer 
believes caused a severe supply chain disruption, the manufacturer 
must have submitted the rebate reduction request no later than 11:59 
p.m. PT on October 1, 2024 for CMS to consider a rebate reduction 
for the Part B rebatable biosimilar biological product.
---------------------------------------------------------------------------

    In the CY 2025 PFS proposed rule (89 FR 61953), we stated that 
severe supply chain disruptions generally take time to resolve and 
proposed at Sec.  427.402(a) to codify the policy established in 
section 50.12 of the revised Medicare Part B Drug Inflation Rebate 
Guidance whereby a determination that a severe supply chain disruption 
has occurred would be deemed to disrupt the supply chain for the 
quarter in which the event occurred and the 3 subsequent calendar 
quarters. We proposed that if a manufacturer makes a timely request 
that includes all the supporting documentation and CMS

[[Page 98259]]

determines, based on its review of the reduction request and supporting 
documentation, that a reduction should be granted, CMS will reduce the 
total rebate amount owed by a manufacturer by 75 percent for the 
calendar quarter in which the event that caused the severe supply chain 
disruption occurred or began, or the following calendar quarter if the 
request is submitted less than 60 calendar days before the end of a 
calendar quarter, and the three calendar quarters thereafter.
    We proposed at Sec.  427.402(c)(5) that if the manufacturer 
believes a severe supply chain disruption continues into a fifth 
consecutive calendar quarter after the start of the natural disaster or 
other unique or unexpected event, the manufacturer may request a 
reduction of the rebate amount for the fifth through eighth calendar 
quarters by submitting a rebate reduction extension request to CMS 
along with any new supporting documentation. We refer manufacturers to 
the approved collection of information approved under OMB control 
number 0938-1474, for further instructions for submitting rebate 
reduction extension requests. At Sec.  427.402(c)(5)(ii), we proposed 
that a rebate reduction extension request and any new supporting 
documentation must be submitted at least 60 calendar days before the 
start of the fifth calendar quarter in order for CMS to consider a 
rebate reduction extension.
    We further proposed that if a manufacturer submits a complete and 
timely extension request, and CMS determines that the information 
submitted warrants an extension of the rebate reduction, the total 
rebate amount would be reduced by 75 percent for the fifth through 
eighth calendar quarters for that manufacturer's Part B rebatable 
biosimilar biological product, in accordance with Sec.  427.402(b)(2).
    Consistent with the policy established in section 50.12 of the 
revised Medicare Part B Drug Inflation Rebate Guidance, we proposed at 
Sec.  427.402(c)(5) that a manufacturer may receive only one extension 
of the rebate reduction per Part B rebatable biosimilar biological 
product per CMS determination of a severe supply chain disruption. Said 
differently, the severe supply chain disruption rebate reduction would 
be limited to 8 consecutive calendar quarters total per Part B 
rebatable biosimilar biological product per CMS determination of a 
severe supply chain disruption.
    At Sec.  427.402(b)(4)(i), we proposed that if the manufacturer 
believes there are multiple events causing severe supply chain 
disruptions during the same 4 calendar quarters for the same Part B 
rebatable biosimilar biological product and submits multiple rebate 
reduction requests for the same product, CMS will grant no more than 
one rebate reduction for that Part B rebatable biosimilar biological 
product for those 4 consecutive calendar quarters. For example, if the 
manufacturer of a Part B rebatable biosimilar biological product is 
granted a severe supply chain disruption rebate reduction request for 
its product due to a natural disaster that occurred in January 2025 and 
then experiences a second severe supply chain disruption caused by a 
second, distinct natural disaster in July 2025, CMS will not grant the 
second rebate reduction request. That is, the manufacturer will receive 
the 75 percent reduction for 4 calendar quarters for the severe supply 
chain disruption caused by the first natural disaster but will not 
receive a reduction for the second natural disaster. However, if the 
second natural disaster exacerbated the severe supply chain disruption 
caused by the first natural disaster, the manufacturer may reflect such 
circumstances in its request for an extension of the rebate reduction 
for the fifth through eighth calendar quarters.
    At Sec.  427.402(b)(4)(ii), we proposed that if CMS grants a severe 
supply chain disruption rebate reduction request for a Part B rebatable 
biosimilar biological product, and the product appears as currently in 
shortage during one of the same 4 calendar quarter(s) as for which the 
severe supply chain disruption reduction was granted, CMS will apply 
the 75 percent reduction to the four calendar quarters for which the 
severe supply chain disruption request was granted and would not grant 
any additional reduction for the shortage status during those quarters. 
For any subsequent calendar quarters that the Part B rebatable 
biosimilar biological product appears as currently in shortage, CMS 
will reduce the rebate amount in accordance with the drug shortage 
reduction proposed at Sec.  427.401, starting with the highest 
reduction (that is, 75 percent for a plasma-derived product and 25 
percent for a Part B rebatable drug that is not a plasma-derived 
product). We provided as an example in the CY 2025 PFS proposed rule 
(89 FR 61953) the following: if CMS grants a severe supply chain 
disruption request for a Part B rebatable biosimilar biological product 
that was submitted on February 15, 2024, and that product is currently 
in shortage from December 15, 2024 until May 15, 2025, CMS would apply 
a 75 percent reduction in the total rebate amount to all 4 calendar 
quarters in 2024,\674\ and then would apply the shortage reduction as 
proposed in Sec.  427.401, beginning with a reduction of 25 percent for 
a Part B rebatable biosimilar biological product or 75 percent in the 
case of a plasma-derived product that is a Part B rebatable biosimilar 
biological product for the first 2 calendar quarters of 2025.At Sec.  
427.402(b)(4)(iii), we proposed that if a Part B rebatable biosimilar 
biological product that is currently in shortage experiences a severe 
supply chain disruption, the manufacturer may submit a request for a 
severe supply chain disruption rebate reduction. If CMS grants the 
rebate reduction request, the rebate amount will be reduced by 75 
percent for the duration of 4 consecutive calendar quarters (that is, 
the calendar quarter in which the event that caused the severe supply 
chain disruption occurred and the 3 calendar quarters thereafter), and 
CMS will not grant any additional reduction under Sec.  427.401 for the 
currently in shortage status during those 4 calendar quarters. If CMS 
receives the request and all supporting documentation describing the 
natural disaster or other unique or unexpected event causing the severe 
supply chain disruption less than 60 days before the end of a calendar 
quarter, CMS will apply the 75 percent rebate reduction to the next 
calendar quarter and to the three subsequent calendar quarters 
thereafter. We refer readers to the CY 2025 PFS proposed rule (89 FR 
61953) for an example of how CMS would apply the rebate reduction in 
this scenario.
---------------------------------------------------------------------------

    \674\ We have provided a correction to this example later in 
this final rule. Specifically, because in this example the rebate 
reduction request was submitted less than 60 days before the end of 
the calendar quarter, the severe supply chain disruption rebate 
reduction would apply to the next calendar quarter (that is, the 
calendar quarter beginning April 1, 2024) and the 3 subsequent 
calendar quarters rather than the calendar quarter in which the 
event occurred (that is, the calendar quarter beginning January 1, 
2024) and the 3 subsequent calendar quarters.
---------------------------------------------------------------------------

    At Sec.  427.402(c)(6), we proposed to review rebate reduction 
requests and rebate reduction extension requests within 60 calendar 
days of receipt of all documentation, if feasible, beginning with the 
calendar quarter that begins on October 1, 2024. If a manufacturer's 
rebate reduction request does not meet the criteria in proposed Sec.  
427.402(c)(4) or if the rebate reduction request is incomplete or 
untimely based on the requirements at Sec.  427.402(c), we proposed 
that CMS will deny the request. We also proposed that if a 
manufacturer's rebate reduction extension request does not meet the 
criteria at Sec.  427.402(c)(5), is incomplete

[[Page 98260]]

or untimely based on the requirements at Sec.  427.402(c)(5), or if a 
reduction under proposed Sec.  427.402(b)(1) was not provided for such 
Part B rebatable biosimilar biological product, CMS will deny the 
rebate reduction extension request. At Sec.  427.402(c)(6)(iii), we 
proposed that CMS' decision to deny a request will be final and not be 
subject to an appeals process.
    As proposed at Sec.  427.402(c)(7), we will keep confidential, to 
the extent allowable under law, any requests for a rebate reduction, 
including supporting documentation. We proposed that information 
provided as part of a severe supply chain disruption rebate reduction 
request that the submitter indicates is a trade secret or confidential 
commercial or financial information would be protected from disclosure 
if CMS determines the information meets the requirements set forth 
under Exemptions 3 and/or 4 of the Freedom of Information Act (FOIA). 
In addition to the protections under the FOIA for trade secrets and 
commercial or financial information obtained from a person that is 
privileged or confidential, the Trade Secrets Act at 18 U.S.C. 1905 
requires executive branch employees to protect such information. We 
will protect confidential and proprietary information as required by 
applicable law.
    The following is a summary of the comments we received on rebate 
reduction requests and our responses. Some of the comments received 
were not specific to rebate reduction requests for Part B rebatable 
drugs or Part D rebatable drugs. Other comments received addressed both 
Part B rebatable drugs and Part D rebatable drugs. We addressed these 
comments in the following summary of comments and do not repeat this 
summary of comments and our responses further below in the discussion 
of Part D drug inflation rebate policies.
    Comment: One commenter stated that requiring manufacturers to 
submit a request to CMS to receive consideration for a rebate reduction 
is duplicative of the FDA's existing processes for addressing drug 
shortages and increases administrative burden on manufacturers. This 
commenter recommended CMS leverage existing tools such as the FDA 
shortage database rather than establishing new reporting requirements. 
One commenter recommended CMS coordinate with the FDA to ensure 
accuracy of the drug shortages lists.
    Response: We appreciate commenters sharing their concerns about the 
reporting requirements and recommendations regarding existing resources 
that CMS may use for determining rebate reductions.
    Consistent with our response in the information collection request 
approved under OMB control number 0938-1474, the FDA Center for 
Biologics Evaluation and Research (CBER) and the Center for Drug 
Evaluation and Research (CDER) each maintain publicly available drug 
shortages lists via web pages for drugs and biological products within 
their respective jurisdictions. We believe these FDA shortage lists can 
readily be used to determine whether a drug is currently in shortage. 
In accordance with sections 1847A(i)(3)(G)(i) and 1860D-14B(b)(1)(C) of 
the Act, CMS will use the FDA drug shortage lists to determine whether 
to grant a rebate reduction for a Part B or Part D rebatable drug 
described as ``currently in shortage.'' As described elsewhere in this 
final rule, CMS will monitor the status of Part B and Part D rebatable 
drugs on an FDA shortage list, and manufacturers do not need to submit 
any information to CMS to be eligible for a reduction of the rebate 
amount for a Part B or Part D rebatable drug described as ``currently 
in shortage.''
    However, the IRA also instructs CMS to grant a rebate reduction or 
waiver when CMS determines there is a severe supply chain disruption 
for a Part B rebatable biosimilar biological product or generic Part D 
rebatable drug or biosimilar. The statute does not instruct CMS to use 
FDA's drug shortages lists in making determinations regarding severe 
supply chain disruptions. As such, we consider severe supply chain 
disruptions to be generally distinct from current drug shortages 
identified on FDA's drug shortage lists for purposes of providing a 
rebate reduction for an eligible biosimilar biological product.
    We understand that manufacturers must report to FDA certain 
information related to drug and biological product discontinuances and 
manufacturing interruptions under section 506C of the FD&C Act (``506C 
notification''). We understand that manufacturers are also encouraged 
to voluntarily notify FDA of other circumstances that are likely to 
lead to a meaningful disruption in supply of certain finished drugs or 
biological products, although such notifications are not expressly 
required by section 506C of the FD&C Act. However, the criteria for 
determining whether a request qualifies for a rebate reduction differ 
from the requirements for submission of a 506C notification to FDA, and 
manufacturers requesting a rebate reduction may not have submitted a 
voluntary notification to FDA. We believe that the information required 
in a 506C notification submitted to FDA would not be sufficient to make 
a rebate reduction determination because while 506C notifications must 
include information related to permanent discontinuances or 
manufacturing interruptions of a drug, they are not required to include 
information about other changes in production or distribution that may 
be relevant for CMS' determination of whether a severe supply chain 
disruption has occurred. In addition, 506C notifications and voluntary 
shortage notifications submitted to FDA by manufacturers are not made 
public, so even if such notifications included sufficient information 
for CMS to determine whether a severe supply chain disruption occurred, 
CMS would not have access in the ordinary course to the information in 
such notifications. For these reasons, we are requiring that a 
manufacturer submit a request to CMS to receive consideration for a 
rebate reduction when the manufacturer believes there is a severe 
supply chain disruption.
    We appreciate commenters' feedback that it should partner with FDA 
to obtain the information CMS needs to review rebate reductions 
requests. As indicated in the revised Medicare Part B Drug Inflation 
Rebate Guidance, the revised Medicare Part D Drug Inflation Rebate 
Guidance, and this final rule, CMS may consult with FDA for technical 
assistance in implementing the severe supply chain disruption and 
likely shortages provisions, as needed. However, for the reasons stated 
above, we maintain that there is a distinct informational need 
associated with severe supply chain disruptions and that manufacturers 
are well positioned to provide CMS with the information needed to 
review rebate reduction requests associated with severe supply chain 
disruptions.
    Comment: One commenter stated CMS does not specify the evaluation 
criteria it will use to determine rebate reductions, how CMS will 
ensure requests are timely, complete, and accurate, or whether CMS will 
conduct any audits or investigations to verify the information. This 
same commenter recommended that CMS require manufacturers to 
demonstrate efforts taken to resolve or mitigate a drug shortage and 
establish consequences for manufacturers submitting false or misleading 
statements or documentation.
    Response: We disagree with the commenter that CMS has not specified 
evaluation criteria for rebate reduction requests. In the CY 2025 PFS 
proposed rule (89 FR 62238, 62247, and 62248) and this final rule, we 
have described

[[Page 98261]]

the criteria that must be satisfied for CMS to grant a rebate reduction 
request. For example, as set forth in Sec. Sec.  427.402(c)(4) and 
428.302(c)(4), CMS will grant a severe supply chain disruption rebate 
reduction request if a manufacturer submits to CMS a request in writing 
for an eligible drug demonstrating that: (1) a severe supply chain 
disruption has occurred during the applicable calendar quarter or 
applicable period; (2) the severe supply chain disruption directly 
affects the manufacturer itself, a contract manufacturer, a supplier of 
an ingredient or packaging, or a method of shipping or distribution 
that the manufacturer uses in a significant capacity to make or 
distribute the Part B rebatable biosimilar biological product or 
generic Part D rebatable drug or biosimilar; and (3) the severe supply 
chain disruption was caused by a natural disaster or other unique or 
unexpected event. CMS further describes the required elements of a 
rebate reduction request at Sec. Sec.  427.402(c)(3) and 428.302(c)(3), 
and specifies the timing for submission of a rebate reduction request 
at Sec. Sec.  427.402(c)(2) and 428.302(c)(2). Similarly, for likely to 
be in shortage rebate reduction requests, CMS specifies the evaluation 
criteria at Sec.  428.303(c)(4), including a demonstration that the 
manufacturer is taking actions to avoid the potential drug shortage, as 
well as the elements of a rebate reduction Sec.  428.303(c)(3), 
including information and supporting documentation regarding actions 
the manufacturer is taking to avoid the potential drug shortage. CMS 
also specifies the timing for submission for likely to be in shortage 
rebate reduction requests at Sec.  428.303(c)(2).
    As specified in the approved collection of information approved 
under OMB control number 0938-1474, a manufacturer submitting a rebate 
reduction request form must describe and provide any relevant 
supporting documentation regarding actions the manufacturer has taken 
to resolve or mitigate a severe supply chain disruption or to avoid the 
potential shortage and explain why those actions may not be sufficient. 
If CMS determines that the rebate reduction request does not meet the 
criteria stated above or is incomplete or untimely, CMS will deny the 
request. CMS reiterates that decisions to deny a request are final and 
will not be subject to an appeals process. CMS expects manufacturers to 
ensure the information they submit to the government is complete and 
accurate. Submitting false information may result in liability, 
including without limitation under the False Claims Act.
    Comment: One commenter recommended CMS provide greater transparency 
by detailing what information CMS will share with stakeholders 
pertaining to rebate reduction requests and potential severe supply 
chain disruptions.
    Response: We thank this commenter for their recommendation. As 
described in the CY 2025 PFS proposed rule (89 FR 62238, 62247) and as 
we are finalizing at Sec.  427.402(c)(7) and Sec.  428.302(c)(7), CMS 
will keep confidential, to the extent allowable under law, any requests 
for a rebate reduction, including supporting documentation. Information 
provided as part of a severe supply chain disruption rebate reduction 
request that the submitter indicates is a trade secret or confidential 
commercial or financial information will be protected from disclosure 
if CMS determines the information meets the requirements set forth 
under Exemptions 3 and/or 4 of the Freedom of Information Act (FOIA). 
In addition to the protections under the FOIA for trade secrets and 
commercial or financial information obtained from a person that is 
privileged or confidential, the Trade Secrets Act at 18 U.S.C. 1905 
requires executive branch employees to protect such information. We 
will protect confidential and proprietary information as required by 
applicable law.
    After consideration of comments received, we are finalizing this 
provision as proposed, with a modification. For alignment with language 
in the preamble of the CY 2025 PFS proposed rule (89 FR 61954), we 
clarified at Sec.  427.402(b)(1) that CMS will apply a severe supply 
chain disruption rebate reduction to the applicable calendar quarter in 
which the event occurred or began, or the following applicable calendar 
quarter if the request is submitted less than 60 calendar days before 
the end of an applicable calendar quarter, and the 3 subsequent 
applicable calendar quarters. This application of a rebate reduction 
(initial or extension) applies regardless of whether a biosimilar 
biological product meets the definition of a Part B rebatable drug 
during that applicable calendar quarter or whether a rebate amount is 
owed for such biosimilar biological product for that applicable 
calendar quarter. That is, regardless of whether the biosimilar 
biological product meets the definition of a Part B rebatable drug or 
whether a rebate amount is owed for such biosimilar biological product 
for that applicable calendar quarter, CMS will apply the 75 percent 
reduction in the total rebate amount as set forth in Sec.  
427.402(b)(1), even if there is no rebate amount owed to reduce. For 
example, as shown in Table 59, if CMS grants a severe supply chain 
disruption rebate reduction request for a Part B biosimilar biological 
product for 4 calendar quarters, CMS will apply the rebate reduction 
beginning with the first applicable calendar quarter for which the 
reduction request was granted, regardless of whether the biosimilar 
biological product meets the definition of a Part B rebatable drug or 
is subject to a rebate amount in that calendar quarter.

[[Page 98262]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.104

    We believe this clarification helps ensure clarity on CMS' policy 
in applying rebate reductions, which is intended to provide appropriate 
financial relief to a manufacturer experiencing a severe supply chain 
disruption while limiting opportunities for manufacturers to plan 
future price increases to coincide with the application of the 
reduction. If the reduction is applied to 4 applicable calendar 
quarters in which there is no rebate amount to reduce, the manufacturer 
could still apply for an extension of the reduction, which would apply 
to the fifth through eighth applicable calendar quarters.
    In this final rule, we are also providing further clarification to 
the policy in the CY 2025 PFS proposed rule intended to address 
situations in which CMS grants a severe supply chain disruption rebate 
reduction request for a Part B rebatable biosimilar biological product, 
and the product appears as currently in shortage during one of the same 
4 calendar quarters as the period the severe supply chain disruption 
rebate reduction was granted. In the CY 2025 PFS proposed rule (89 FR 
61953), we included an example in which CMS receives a severe supply 
chain disruption rebate reduction request for a Part B rebatable 
biosimilar biological product on February 15, 2024, and that product is 
currently in shortage from December 15, 2024 until May 15, 2025. We 
stated that in this example, CMS would apply a 75 percent reduction in 
the total rebate amount to all 4 calendar quarters in 2024, and then 
would apply the shortage reduction at Sec.  427.401, beginning with a 
reduction of 25 percent for a non-plasma-derived Part B rebatable 
biosimilar biological product or 75 percent in the case of a plasma-
derived product that is a Part B rebatable biosimilar biological 
product for the first two calendar quarters of 2025. First, we are 
correcting this example to clarify that the severe supply chain 
disruption rebate reduction would apply for the calendar quarter 
beginning April 1, 2024 and the 3 subsequent calendar quarters (rather 
than all 4 calendar quarters of 2024), followed by the shortage 
reduction set forth in Sec.  427.401, illustrated as ``Example 1'' in 
Table 60. For purposes of applying the shortage reduction, the highest 
reduction (25 percent for a non-plasma-derived Part B rebatable 
biosimilar biological product or 75 percent in the case of a plasma-
derived product that is a Part B rebatable biosimilar biological 
product) would apply to the second calendar quarter in 2025. We made 
this correction because, in the example given, the severe supply chain 
disruption rebate reduction 60 calendar days before the end of the 
calendar quarter, and thus the reduction would apply to the next 
calendar quarter (and the 3 subsequent calendar quarters) rather than 
the calendar quarter in which the severe supply chain disruption-
causing event occurred (and the 3 subsequent calendar quarters). The 
shortage reduction would begin to apply once the severe supply chain 
disruption rebate reduction ends and for as long as the Part B 
rebatable biosimilar biological product is currently in shortage (that 
is, until May 15, 2025 in this example), gradually decreasing over 
time. We believe this gradually decreasing rebate reduction would 
provide appropriate financial relief to manufacturers to mitigate the 
severity of a shortage or recover from a shortage following a severe 
supply chain disruption, while not incentivizing manufacturers to delay 
taking appropriate steps to resolve a drug shortage or severe supply 
chain disruption to avoid an obligation to pay rebates.
    Second, we are also providing a second, modified version of this 
example to reflect a situation in which the severe supply chain 
disruption rebate reduction is granted for the same calendar quarter as 
the Part B rebatable biosimilar biological product is currently in 
shortage, and the application of the shortage reduction precedes 
application of the severe supply chain disruption reduction due to the 
timing of the shortage and submission of the rebate reduction request, 
illustrated as ``Example 2'' in the table. For example, if CMS receives 
a severe supply chain disruption rebate reduction request for a Part B 
rebatable biosimilar biological product on February 15, 2024, and the 
product is currently in shortage beginning March 15, 2024 instead of 
December 15, 2024, through May 15, 2025 (as in the first example), CMS 
would apply a 25 percent reduction for the first calendar quarter in 
2024 for a non-plasma-derived Part B rebatable biosimilar biological 
product or 75 percent for a plasma-derived product, which would be 
prorated based on the numbers of the days the drugs is currently in 
shortage in that calendar quarter. CMS would then apply the severe 
supply chain disruption rebate reduction of 75 percent for the calendar 
quarter beginning April 1, 2024 and the 3 subsequent calendar quarters, 
followed by a shortage reduction of 10 percent for the second calendar 
quarter in 2025 for a non-plasma-derived Part B rebatable biosimilar 
biological product or 50 percent for a plasma-derived product.

[[Page 98263]]

    Finally, we are providing a third example, which, similar to the 
second example above, reflects a situation in which the severe supply 
chain disruption rebate reduction is granted for the same calendar 
quarter as the Part B rebatable biosimilar biological product is 
currently in shortage, but the application of the severe supply chain 
disruption reduction precedes the application of the shortage reduction 
due to the timing of the submission of the rebate reduction request, 
illustrated as ``Example 3'' in the table. For example, if CMS receives 
a severe supply chain disruption rebate reduction request for a Part B 
rebatable biosimilar biological product on January 15, 2024 instead of 
February 15, 2024 such that the reduction applies to the calendar 
quarter that begins on January 1, 2024 and the 3 subsequent calendar 
quarters, and the product is currently in shortage beginning March 15, 
2024 until May 15, 2025 (consistent with the second example above), CMS 
would apply the reduction of 75 percent under the severe supply chain 
disruption policy for all 4 calendar quarters in 2024, followed by a 25 
percent shortage reduction for the first calendar quarter in 2025 for a 
non-plasma-derived Part B rebatable biosimilar biological product or a 
75 percent shortage reduction for a plasma-derived product.
    In all of these examples, regardless of whether the timing of the 
shortage and submission of the rebate reduction request results in the 
severe supply chain disruption rebate reduction preceding or following 
the shortage reduction, CMS intends to continue the shortage reduction 
clock once it starts for as long as a drug is currently in shortage. In 
each of these examples, the shortage reduction clock would start (that 
is, the calendar quarter would be the first of the four consecutive 
applicable calendar quarters as set forth in paragraph (b)(2)(i)(A) or 
(b)(2)(ii)(A) of Sec.  427.401) with the applicable calendar quarter to 
which the shortage reduction first applies, as set forth in Sec.  
427.401(b)(4)(iii), unless the shortage reduction clock would start in 
a calendar quarter subject to a severe supply chain disruption 
reduction, in which case the shortage reduction clock will instead 
start with the applicable calendar quarter subsequent to the fourth 
quarter (or eighth quarter, if extended) of the severe supply chain 
disruption reduction. We have revised the regulation text to reflect 
this clarification by adding paragraph (b)(4)(iv) at Sec.  427.401.
[GRAPHIC] [TIFF OMITTED] TR09DE24.105

    We believe this clarification is consistent with the policy set 
forth in Sec. Sec.  427.402(b)(4) whereby CMS will not apply multiple 
rebate reductions for the same Part B rebatable drug and applicable 
calendar quarter. We believe this clarification is also consistent with 
the policy articulated in the CY 2025 PFS proposed rule and throughout 
this final rule to continue the shortage reduction clock once it begins 
in other scenarios such as for drugs that fluctuate on and off the 
shortage list within a timespan less than four full calendar quarters. 
Further, we believe this clarification is consistent with CMS' policy 
goals of providing a time-limited standard reduction of 75 percent in 
the rebate amount when there is a severe supply chain disruption, which 
supersedes the reduction under the shortage policy to mitigate the 
likelihood or severity of a shortage, and providing gradually 
decreasing financial relief to manufacturers of a drug currently in 
shortage. We believe transitioning the manufacturer from the severe 
supply chain disruption reduction to the shortage reduction, by 
beginning the shortage reduction clock as set forth in Sec.  
427.401(b)(2)(i)(A) or (b)(2)(ii)(A) after the severe supply chain 
disruption reduction no longer applies, and gradually declining the 
rebate reduction over time could help prevent exacerbation of the 
shortage. Because the timing of the application of a severe supply 
chain disruption rebate reduction depends on the timing of

[[Page 98264]]

submission of the rebate reduction request, the highest reduction under 
the shortages policy may be applied for an applicable calendar quarter 
that precedes or follows the severe supply chain disruption reduction. 
As stated above, CMS will not start the shortage reduction clock during 
a quarter subject to a severe supply chain disruption reduction as set 
forth in Sec.  427.401(b)(2)(iv), but intends to continue the shortage 
reduction clock once it starts for as long as a drug is currently in 
shortage, regardless of whether a severe supply chain disruption 
follows or precedes a shortage.
f. Reports of Rebate Amounts, Reconciliation, Suggestion of Error, and 
Payments (Sec. Sec.  427.500 Through 427.505)
    Section 1847A(i)(1)(A) of the Act requires the Secretary to provide 
a report to each manufacturer of a Part B rebatable drug with the 
following information not later than 6 months after the end of an 
applicable calendar quarter: (1) the total number of billing units for 
each Part B rebatable drug; (2) the amount, if any, of the excess 
average sales price increase (the amount by which the specified amount 
exceeds the inflation-adjusted payment amount as calculated at Sec.  
427.301(g)) for an applicable calendar quarter; and (3) the rebate 
amount for the Part B rebatable drug. In compliance with section 
1847A(i)(1)(B) of the Act, manufacturers of a Part B rebatable drug 
must provide a rebate for each Part B rebatable drug no later than 30 
calendar days after the receipt of the information provided by the 
Secretary in section 1847A(i)(1)(A) of the Act.
    To fulfill this statutory requirement, we proposed to provide a 
Preliminary Rebate Report followed by a Rebate Report, as set forth in 
Sec.  427.501(b) and (c), to all manufacturers of a Part B rebatable 
drug, even if the amount due is $0; all rebate amounts will be subject 
to reconciliation as determined under Sec.  427.501(d). As proposed at 
Sec.  427.501(d)(4), we will not perform a reconciliation for 
manufacturers of drugs that are not considered rebatable as set forth 
in Sec.  427.20.
    Additionally, to address the completeness and accuracy of the 
rebate amount, we proposed to conduct one regular reconciliation to 
determine whether the rebate amount will be adjusted due to updated 
claims and payment data used in the calculation of such rebate amount 
(determined under Sec.  427.501(c)(1)) to occur 12 months after the 
issuance of the Rebate Report. The reporting process for reconciliation 
will be the same process described for the original Rebate Report, with 
payment due for any outstanding rebate amount 30 days after receipt of 
a report with a reconciled rebate amount. In addition to regular 
reconciliation, we proposed a process to conduct reconciliation of the 
rebate amount as needed to correct agency error and when CMS determines 
that the information used by CMS to calculate a rebate amount was 
inaccurate due to manufacturer misreporting.
    We believe conducting a reconciliation for the Part B Rebate 
Program is important to ensure the accuracy of the rebate amount and 
for programmatic alignment with the Part D Rebate Program.
    We solicited comments on these proposed policies. Some of the 
comments received addressed both the Medicare Part B and Part D Drug 
Inflation Rebate Programs. We addressed these comments in the relevant 
sections and do not repeat these summaries of comments and our 
responses in the discussion of Part D drug inflation rebate policies.
i. Definitions
    At Sec.  427.500, we proposed the following term applicable to 
proposed subpart F (Sec. Sec.  427.500 through 427.505):
     ``Date of receipt'' is the calendar day following the day 
on which a report of a rebate amount (as set forth in Sec. Sec.  
427.501(b) through (d) and 427.502 (b) and (c)) is made available to 
the manufacturer of a Part B rebatable drug by CMS.
    For example, if CMS issues a Rebate Report through the method and 
process set forth in Sec.  427.504 on June 30, 2026, then July 1, 2026, 
will be the date of receipt and day one of the 30-calendar-day payment 
period.
    We did not receive comment on this proposed provision and, we are 
finalizing as proposed as set forth in Sec.  427.500.
ii. Reports of Rebate Amounts and Suggestion of Error
    Consistent with the process specified in section 60 of the revised 
Medicare Part B Drug Inflation Rebate Guidance involving preliminary 
and final reports, we proposed to codify a multi-step process to 
provide a manufacturer as set forth in Sec.  427.20 with the rebate 
information specified in section 1847A(i)(1)(A) of the Act. As stated 
in the CY 2025 PFS proposed rule (89 FR 61955), we considered the 
following factors in determining a method and process for providing the 
rebate information: meeting statutorily provided deadlines in section 
1847A(i) of the Act (for example, dates by which to provide the rebate 
amount to the manufacturer); the operational time to acquire the 
relevant information specified in part 427; the operational time to 
calculate the rebate amount specified in subpart D of part 427; clarity 
of the information provided as well as potential burden on 
manufacturers; and how to ensure accuracy of the rebate amount.
    We proposed at Sec.  427.501 the use of an initial Preliminary 
Rebate Report and a subsequent Rebate Report, with an opportunity for 
manufacturers to identify certain mathematical errors (see Sec.  
427.503 and discussed in further detail later in this section) and one 
regular reconciliation of the rebate amount to account for data 
revisions 12 months after the Rebate Report is provided. We proposed at 
Sec.  427.501(d)(1), to conduct a reconciliation 12 months after 
issuance of the subsequent Rebate Report as set forth in Sec.  
427.501(c) to include restatements that have occurred in the drug 
pricing data and claims billing data reported to CMS and used in the 
rebate calculation specified in subpart D of the part.
    We proposed at Sec.  427.501 that the multi-step reporting process 
for providing rebate information to a manufacturer would include: (1) 
an initial report, which we proposed to entitle the ``Preliminary 
Rebate Report'' as set forth in Sec.  427.501(b) and (2) a second 
report, which we proposed to entitle the ``Rebate Report'' as set forth 
in Sec.  427.501(c). The Rebate Report serves as the invoice for the 
rebate amount due, if any, for each NDC that has been assigned to a 
billing and payment code for a product determined to be a Part B 
rebatable drug for the applicable calendar quarter, as set forth in 
Sec.  427.101. We stated in the CY 2025 PFS proposed rule (89 FR 61955) 
that manufacturers of Part B rebatable drugs will receive a Rebate 
Report for their rebatable drugs even if the amount due is $0. We 
proposed at Sec.  427.501(d)(1) a regular reconciliation of the rebate 
amount to occur 12 months after issuance of the subsequent Rebate 
Report as set forth in Sec.  427.501(c).
    As the first step in the reporting process, as set forth in Sec.  
427.501(b) and consistent with section 60 of the revised Medicare Part 
B Drug Inflation Rebate Guidance, we will provide the manufacturer of a 
Part B rebatable drug with the preliminary rebate amount through a 
Preliminary Rebate Report that is provided to each manufacturer of a 
Part B rebatable drug at least 1 month prior to the issuance of the 
Rebate Report as set forth in Sec.  427.501(c) for an applicable 
calendar quarter (that is, not more than 5 months after the end of the

[[Page 98265]]

applicable calendar quarter). To facilitate manufacturer understanding 
of the Preliminary Rebate Report, we proposed at Sec.  427.501(b)(1) 
that the Preliminary Rebate Report will include the following 
information: the NDC(s) and billing and payment code for the Part B 
rebatable drug as set forth in Sec.  427.20, the total number of 
billing units as determined under Sec.  427.303; the payment amount in 
the payment amount benchmark quarter as set forth in Sec.  427.302(d); 
the applicable calendar quarter specified amount as set forth in Sec.  
427.302(b); the applicable benchmark period and rebate period CPI-Us as 
set forth in Sec.  427.302(e) and (f); the inflation-adjusted payment 
amount as determined under Sec.  427.302(g); the amount, if any, by 
which the specified amount as set forth in Sec.  427.302(b) exceeds the 
inflation-adjusted payment amount as determined under Sec.  427.302(g) 
for the Part B rebatable drug for the applicable calendar quarter as 
determined under Sec.  427.302; any applied reduction as determined 
under Sec. Sec.  427.401 and 427.402; and the rebate amount due as set 
forth in Sec.  427.301(a).
    In the CY 2025 PFS proposed rule (89 FR 61955), we stated that when 
determining what information should be included on rebate reports, we 
considered the statutory requirements outlined in section 
1847A(i)(1)(A) of the Act to determine which data elements are 
necessary to review the Preliminary Rebate Report for error (described 
later in this section) and to protect proprietary information. In 
response to comments on the initial Medicare Part B Drug Inflation 
Rebate Guidance, we proposed to disclose data elements as suggested by 
interested parties that are not enumerated in the statute, such as the 
applicable benchmark period and rebate period CPI-Us. We acknowledged 
requests from interested parties to provide additional data elements 
such as claim-level data at the NDC-11 level, that are not included in 
this proposal. We considered these requests in development of the CY 
2025 PFS proposed rule, but we do not believe it necessary to provide 
further information to fulfill CMS' statutory obligation and believe 
that the potential benefit to manufacturers of additional data is 
outweighed by the administrative burdens additional reporting will 
impose to the agency. We also stated that the elements listed 
previously provide sufficient information for a manufacturer to review 
the Preliminary Rebate Report for mathematical error, while protecting 
proprietary information, and these elements are operationally feasible 
for CMS to provide. We believe the elements as set forth in Sec.  
427.501(b)(1) satisfy these considerations.
    As explained in the CY 2025 PFS proposed rule (89 FR 61955), by 
structuring the Rebate Report process to include a Preliminary Rebate 
Report before the Rebate Report, CMS is able to provide manufacturers 
with an opportunity to review the Preliminary Rebate Report before the 
rebate amount is invoiced via the Rebate Report. While CMS is not 
required to provide a preliminary report, we stated in the CY 2025 PFS 
proposed rule that we seek to facilitate manufacturer understanding of 
the report and believe it would be beneficial for manufacturers to 
review the report for mathematical errors that can be corrected before 
invoicing via the Rebate Report. Further, a Preliminary Rebate Report 
would provide additional notice to manufacturers regarding whether they 
may owe a rebate amount.
    As set forth in Sec.  427.503, we proposed a process in which a 
manufacturer may suggest to CMS that the manufacturer believes the 
Preliminary Rebate Report includes a mathematical error within 10 
calendar days after the date of receipt of the Preliminary Rebate 
Report. For example, if the Preliminary Rebate Report is provided on 
May 31, 2026, then June 1, 2026, will be the date of receipt and, 
therefore, day one of the 10-calendar-day period to submit a Suggestion 
of Error. In this example, Suggestions of Error would be due by 11:59 
p.m. PT on June 10, 2026. We reviewed comments on the 10-day Suggestion 
of Error period submitted in response to the initial Medicare Part B 
Drug Inflation Rebate Guidance, many of which suggested that 
manufacturers receive at least 30 days to review the Preliminary Rebate 
Report. We considered a 10-day, 15-day, and 30-day Suggestion of Error 
period and we believe the 10-calendar-day period as set forth in Sec.  
427.503(c) is sufficient after considering the volume of the data to be 
provided to manufacturers, the narrow scope of items that may be 
identified as a Suggestion of Error, and the operational time necessary 
for CMS to provide a Rebate Report within 6 months of the end of the 
applicable calendar quarter as required under section 1847A(i)(1)(A) of 
the Act. However, we proposed at Sec.  427.502(c)(1)(ii) to expand the 
Suggestion of Error period to 30 calendar days for the Preliminary 
Rebate Report for CY 2023 and CY 2024. As explained in the CY 2025 PFS 
proposed rule (89 FR 61955), this extended Suggestion of Error period 
will provide additional time and flexibility during the first invoicing 
cycle of the Part B Rebate Program.
    Section 1847A(i)(8) of the Act precludes administrative or judicial 
review on the determination of units, whether a drug is a Part B 
rebatable drug, and the calculation of the rebate amount as determined 
under Sec.  427.503(a)(1). Therefore, we stated in the CY 2025 PFS 
proposed rule at 89 FR 61955 that the Suggestion of Error process will 
be limited to mathematical steps involved in determining the rebate 
amount and the elements precluded from administrative or judicial 
review will not be considered in-scope for the Suggestion of Error 
process. Additionally, we stated in the CY 2025 PFS proposed rule that 
we will not provide an administrative dispute resolution process. We 
intend to consider all in-scope submissions under the Suggestion of 
Error process as set forth in Sec.  427.503(a) (for example, 
suggestions regarding a mathematical error). We do not intend to review 
suggestions of error that are out-of-scope or submissions for a 
rebatable drug with an amount due of $0.
    As the second step in the reporting process, we proposed at Sec.  
427.501(c) to provide the rebate amount to the manufacturer through the 
Rebate Report no later than 6 months after the end of the applicable 
calendar quarter. As proposed at Sec.  427.501(c)(1), the Rebate Report 
will include the same data elements as the Preliminary Rebate Report 
(as set forth in Sec.  427.501(b)(1)) and include any recalculations 
based on CMS acceptance of a manufacturer's Suggestion of Error as 
determined under Sec.  427.503, or any CMS-determined recalculations as 
determined under Sec.  427.501(d)(2), if applicable. Manufacturers must 
pay the rebate amount within 30 calendar days from the date of receipt 
of the Rebate Report (as set forth in Sec.  427.505(a)). For example, 
if the Rebate Report is provided on June 30, 2026, then July 1, 2026, 
would be the date of receipt and therefore day one of the 30-calendar-
day payment period; payment would be due no later than 11:59 p.m. PT on 
July 30, 2026.
    As set forth in Sec. Sec.  427.504 and 427.505, we proposed to 
establish a standard method and process to issue Rebate Reports and 
accept manufacturer rebate payments. This method and process may 
include an online portal administered by a CMS contractor which will 
provide manufacturers with access to their Rebate Reports, submit 
Suggestions of Error, and pay a rebate amount due. We intend to provide 
technical instructions separate from this rulemaking to manufacturers 
of Part B

[[Page 98266]]

rebatable drugs regarding how to access Rebate Reports and how to 
receive notifications alerting the manufacturer when information is 
available. We stated in the CY 2025 PFS proposed rule (89 FR 61956) 
that CMS also intends to issue reminder notices to manufacturers 
regarding the due date of rebate payments. As set forth in Sec.  
427.504(a), the manufacturer that may access Rebate Reports and make 
applicable rebate amount payments is the manufacturer responsible for 
paying a rebate, and as stated above, we proposed to identify the 
manufacturer that is responsible for paying a rebate using the same 
approach used for reporting ASP and Medicaid Drug Rebate Program data.
    We solicited comments on these proposals.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses. We note that the 
comments and responses below generally apply to both the Medicare Part 
B and Part D Drug Inflation Rebate Programs, as commenters made their 
recommendations with respect to both programs.
    Comment: A couple of commenters requested that we provide a 
predictable date during each rebate cycle for when the preliminary 
report will be provided to help manufacturers ensure timely review of 
Preliminary Rebate Reports.
    Response: We appreciate commenters' request for specific dates for 
the release of Preliminary Rebate Reports and how this may assist 
manufacturers in preparing for report review. We intend to publish a 
regular release schedule or calendar of release dates in future years 
of the rebate program, as we indicated on page 78 of the revised 
Medicare Part B Drug Inflation Rebate Guidance and page 66 of the 
revised Medicare Part D Drug Inflation Rebate Guidance. We also note 
that for the first two Part B Rebate Reports, which will include 
calendar quarters in calendar years 2023 and 2024, and the first two 
Part D Rebate Reports, which will include Rebate Reports for the 
applicable periods beginning October 1, 2022, and October 1, 2023, we 
are finalizing the proposal to extend the Suggestion of Error review 
period to 30 days as set forth in Sec.  427.503 for the Medicare Part B 
Inflation Rebate Program and Sec.  428.403 for the Medicare Part D 
Inflation Rebate Program. Our aim in extending this review period for 
the first reports issued is to provide additional time for 
manufacturers to become familiar with the rebate process and develop 
internal review procedures.
    Comment: A few commenters suggested that claim-level data be 
provided for each period for review. Specifically, one commenter stated 
that data should include the percent increase in inflation calculated 
by CMS and a detailed description of the types of data included in each 
Preliminary Rebate Report. Another commenter urged CMS to include in 
the preliminary reports all information, calculations, and supporting 
documentation necessary for a manufacturer to be able to make an 
informed determination as to whether the intended invoicing is correct 
or incorrect.
    Response: We appreciate the comments to provide claim-level data 
for review. As stated in the revised guidance, we considered the 
statutory requirements outlined in section 1847(i)(1)(A) of the Act for 
Part B rebatable drugs and section 1860D-14B(a)(1) of the Act for Part 
D rebatable drugs to determine what data elements are necessary to 
review the Preliminary Rebate Report for a Suggestion of Error. Upon 
consideration of these comments and review of proposed Sec. Sec.  
427.501 and 428.401, we believe that the data listed to be provided in 
the Part B and Part D Preliminary Rebate Reports are sufficient for 
manufacturers to review the Preliminary Rebate Report for a Suggestion 
of Error. In addition to being sufficient for manufacturer review, we 
believe including additional data elements would not be feasible from 
an operational perspective given statutory timelines and the need for 
sufficient claims run-out.
    Comment: A couple of commenters asked that CMS consider more than 
just mathematical errors in the suggestion of error process. A couple 
of commenters requested that CMS accept feedback from the manufacturer 
and supporting documentation regarding the data. A couple of commenters 
also asked CMS to establish an administrative dispute resolution 
process to consider feedback and errors in the data elements provided 
to manufacturers. These commenters stated that the statutory 
preclusions to administrative review at section 1847A(i)(8) of the Act 
do not prevent CMS from establishing an informal review process.
    Response: Section 1847A(i)(8) of the Act precludes administrative 
or judicial review on the determination of units, whether a drug is a 
Part B rebatable drug, and the calculation of the rebate amount (as 
determined under Sec.  427.503(a)(1)). Section 1860D-14B(f) of the Act 
precludes administrative or judicial review on the determination of 
units, whether a drug is a Part D rebatable drug, and the calculation 
of the rebate amount (see subparts B and C of part 428). We do not 
believe additional review is necessary and therefore, we are finalizing 
our proposal as set forth in Sec. Sec.  427.503 and 428.403 for Part B 
and Part D, respectively, to provide an opportunity for manufacturers 
to informally review and provide feedback to CMS of manufacturer-
identified mathematical errors.
    Comment: Some commenters requested that we extend the Suggestion of 
Error period because commenters do not believe 10 calendar days is a 
sufficient amount of time for manufacturers to review the Preliminary 
Rebate Report and the preliminary report of the revised rebate amount. 
Among these commenters, a few suggested we provide at least 30 days for 
manufacturers to review and submit a Suggestion of Error; a couple of 
commenters suggested extending the review period to 45 days. One 
commenter requested a 45-day period for manufacturers to submit a 
Suggestion of Error rather than the proposed 10 calendar days.
    Response: We appreciate commenters' feedback on the Suggestion of 
Error process. As we discussed on page 41 of the revised Medicare Part 
B Inflation Rebate Guidance and page 29 of the revised Medicare Part D 
Drug Inflation Rebate Guidance, in setting the review period of 10 
calendar days we considered the volume of the data to be provided to 
manufacturers, the narrow set of items that may be identified as a 
Suggestion of Error, and the operational time period necessary for CMS 
to complete the process to publish a Rebate Report and the revised 
rebate amount, if applicable. Given these factors, we believe that a 
review period of 10 calendar days is sufficient.
    Comment: One commenter requested that CMS clarify that 
manufacturers are not required to submit payment on disputed claims 
until the disputes are resolved.
    Response: As set forth in proposed Sec.  427.501 for Part B and 
Sec.  428.401 for Part D, manufacturers will receive a Preliminary 
Rebate Report to include a preliminary rebate amount. Manufacturers 
will have 10 days to review the Preliminary Rebate Report and submit a 
Suggestion of Error, if applicable, as set forth in in proposed 
Sec. Sec.  427.503 and 428.403. The Suggestion of Error process will be 
completed prior to issuance of the Rebate Report or a reconciled Rebate 
Report and therefore will include any revisions resulting from CMS' 
review of a Suggestion of Error in the rebate amount. Subsequently, 
payment is required within 30 days after the date of receipt of the 
Rebate Report as set forth in

[[Page 98267]]

Sec.  427.501(c) (and a reconciled Rebate Report as set forth in Sec.  
427.501(d)(1) and (2)) for a Part B rebate amount and within 30 days 
after the date of receipt of the Rebate Report set forth in Sec.  
428.401(c) (and a reconciliation of the Rebate Report as determined 
under Sec.  428.401(d)(1) and (2)) for a Part D rebate amount.
    Comment: One commenter requested that CMS provide an electronic 
payment system.
    Response: We thank the commenters for the suggestions. CMS will 
establish a standard method and process for the payment of rebate 
amount owed (as set forth in Sec. Sec.  427.505 and 428.405 which 
provide the deadline and process for payment of a rebate amount), and 
CMS is planning to provide an electronic payment mechanism similar to 
other existing systems used in the Medicare program.
    After consideration of public comments, we are finalizing 
Sec. Sec.  427.500 through 427.505 regarding Reports of Rebate Amounts, 
Reconciliation, Suggestion of Error, and Payments as proposed.
iii. Reconciliation of a Rebate Amount
    As discussed in section 60 of the revised Medicare Part B Drug 
Inflation Rebate Guidance, we considered options for establishing a 
standardized method and process at regular intervals to determinate any 
appropriate adjustments to the rebate amount for a Part B rebatable 
drug for an applicable calendar quarter to account for revised 
information as well as options for recalculation based on CMS 
identifying an agency error or determining manufacturer data was 
misreported. While the provisions in section 1847A(i) of the Act do not 
expressly provide for reconciliation in the Medicare Part B Drug 
Inflation Rebate Program, as explained in the CY 2025 PFS proposed rule 
(89 FR 61956), we have determined that a process for reconciling the 
rebate amount for updated information is necessary and appropriate to 
promote the accuracy of the rebate amount for each drug for each 
applicable calendar quarter. We proposed policies for reconciliation, 
including with respect to enforcement of payment of any reconciled 
rebate amount, consistent with both the statutory framework for the 
Medicare Part B Drug Inflation Rebate Program and the express authority 
in sections 1102 and 1871 of the Act to adopt regulations for the 
proper administration of the Medicare Prescription Drug Inflation 
Rebate Program.
    As we proposed at Sec.  427.501(d) and noted in the CY 2025 PFS 
proposed rule (89 FR 61956), we believe it is necessary and appropriate 
for CMS to recalculate the rebate amount for an applicable calendar 
quarter at a regular interval to include updated information about key 
data elements included in the calculation of the rebate amount. These 
data elements as set forth in Sec.  427.501(d)(1)(i) include: total 
units; the payment amount in the payment amount quarter; and any 
applied reductions as determined under Sec. Sec.  427.401 and 427.402. 
Updating these calculation inputs at a regular reconciliation interval 
will result in a rebate amount that more fully reflects the majority of 
shifts in the underlying data following additional time for claims run-
out, which refers to the maturation of claims in the claims processing 
system. Because the information accessed represents the claims' status 
in the claims processing system at that moment in time, additional 
claims run-out may yield different information, either because more 
claims with dates of service during the applicable calendar quarter 
were finalized and added to the claims processing system or because the 
status of the existing claims changed. CMS refers to ``X months of run-
out'' as the period between the end of the applicable calendar quarter 
and the date when CMS accesses information about the claims; for 
example, ``3 months of run-out'' means that claims data are accessed 
for claims with service dates during an applicable calendar quarter 3 
months after the end of such applicable calendar quarter. Conducting a 
reconciliation of the rebate amount with additional claims run-out will 
improve the accuracy of the rebate amount. Additionally, reconciliation 
of payment amounts is consistent with the approach to the calculation 
of payment amounts in other CMS programs (such as the Coverage Gap 
Discount Program) that provide for a reconciliation period.
    As noted in the CY 2025 PFS proposed rule (89 FR 61956), the 
reconciliation of a rebate amount, whether the regular reconciliation 
as set forth in Sec.  427.501(d)(1) or a discretionary reconciliation 
as set forth in Sec.  427.501(d)(2) discussed further below, will not 
create a separately payable and distinct rebate amount. Rather, 
reconciliation updates the prior rebate amount owed to CMS, if any, by 
a manufacturer of a Part B rebatable drug so that the rebate amount 
ultimately reflects a more precise calculation of the rebate amount, as 
required by section 1847A(i) of the Act, to account for shifts in the 
underlying data following additional time for claims run-out after the 
Rebate Report is issued as well as subsequently identified data 
integrity issues. Moreover, because the reconciled rebate amount is an 
adjustment to the prior rebate amount, we proposed at Sec.  
427.501(d)(1)(i)(F) for the report of a reconciled rebate amount to 
also identify the difference between the rebate amount due as specified 
on the Rebate Report set forth in Sec.  427.501(c) and the reconciled 
rebate amount. We noted in the CY 2025 PFS proposed rule (89 FR 61957) 
that we will only collect the net rebate amount due, if any, upon 
reconciliation, to prevent any duplicate payments. We also proposed to 
refund any overpayment made by a manufacturer, as determined during 
reconciliation, as set forth in Sec.  427.505(c).
    Additionally, as suggested in section 60 of the revised Medicare 
Part B Drug Inflation Rebate Guidance, we considered multiple options 
for establishing a standardized method and process to occur at regular 
intervals to determine any appropriate adjustment to the rebate amount 
for a Part B rebatable drug for an applicable calendar quarter to 
account for revised information prior to proposing the policy described 
here for a 12-month reconciliation of the Part B inflation rebate 
amount. We considered the length of time needed to capture relevant 
changes to data inputs for recalculation, whether the timing should 
align with the reconciliation of Part D rebate amounts, and 
manufacturer burden. Specifically, we considered the average time span 
needed to ensure submission of the majority of revisions from claims 
run-out periods for Part B,\675\ and how such unit revisions compare to 
the Part D plan unit revisions specified in section 1860D-14B(b)(6) of 
the Act. We also considered the average time span needed to ensure the 
majority of Part B claims submitted would already be adjudicated and 
determined to be final action claims, CMS' policies related to the 
frequency of ASP restatements, the reporting timeline for refunds on 
discarded drug units, and reporting timelines for 340B claims and 
claims for beneficiaries dually eligible for Medicare and Medicaid. 
Without a reconciliation process, the Part B rebate amount will include 
units of discarded drugs on which manufacturers potentially owe a 
refund, thereby potentially requiring manufacturers to pay both a 
discarded drug refund and a

[[Page 98268]]

rebate amount on certain units of a Part B rebatable drug due to the 
timing of revisions to discarded drug units discussed in further detail 
in section II.I.2.d.iv. of this final rule.
---------------------------------------------------------------------------

    \675\ See the CCW White Paper: Medicare Claims Maturity, https://www2.ccwdata.org/documents/10280/19002256/medicare-claims-maturity.pdf.
---------------------------------------------------------------------------

    We noted in the CY 2025 PFS proposed rule (89 FR 61957) that we 
believe a longer period of claims run-out (at least 12 months of run-
out time in the proposed approach) will ensure that CMS more fully 
accounts for capturing of revised units. We considered that penalties 
associated with failure to submit timely and accurate ASP data 
(specified at Sec.  414.806(b)) encourage timely submission of ASP data 
with the submission timeline in accordance with Sec.  414.804(a)(5) 
when considering the completeness of 12 months of claims run-out. While 
we considered a longer period until a revision is completed, such as 
the 36-month period provided by the MDRP for AMP restatements as set 
forth in Sec.  447.510(d)(3), we believe that a 12-month reconciliation 
period is appropriate for the Part B rebate program because of 
requirements to submit timely and accurate ASP data (specified at Sec.  
414.806(b)), and it provides sufficient time to capture the majority of 
updates to the data as set forth in Sec.  427.301 while closing out 
(except for the proposed circumstances as set forth in Sec.  
427.501(d)(2) regarding CMS' identification of mathematical errors or 
manufacturer misreporting) the calculation of the rebate amount for a 
Part B rebatable drug for an applicable calendar quarter within a 
reasonable time period after the Rebate Report is issued. While we 
proposed a 12- and 36-month reconciliation period in the Medicare Part 
D Drug Inflation Rebate Program, due largely to the 36-month 
restatement period provided for MDRP AMP restatements (specified at 
Sec.  447.510(d)(3)), we explained in the CY 2025 PFS proposed rule 
that we do not believe a second or longer restatement process is needed 
for Part B rebatable drugs because, as described previously, the ASP 
and claims run-out periods correspond with sufficient claims run-out 
and ASP restatement timing for Part B (particularly when considering 
penalties associated with failure to submit timely and accurate ASP 
data (specified at Sec.  414.806(b)).
    Further, as discussed in the CY 2025 PFS proposed rule (89 FR 
61957), in considering whether consistency across CMS programs is 
critical, we believe that consideration for the completeness of data, 
as discussed above, should be prioritized over consistency across 
program timelines. That is, when examining timelines from other CMS 
programs that collect data contributing to calculation of the rebate 
amount, we prioritized, to the extent feasible, completeness and 
accuracy of the data elements contributing to the calculation of the 
rebate amount rather than prioritizing consistency among the data 
collection and reconciliation timelines themselves. Finally, we noted 
in the CY 2025 PFS proposed rule (89 CFR 61981) that we believe that a 
restatement of each data element set forth in Sec.  427.501(d) to 
reconcile the rebate amount provided in the Rebate Report as set forth 
in Sec.  427.501(c) and drugs acquired through the 340B Program as set 
forth in Sec.  427.303(b)(1)(i) is appropriate to capture an updated 
rebate amount and is in line with other CMS programs that provide for a 
reconciliation period, including ASP restatements (see Sec.  414.806). 
While some data points may not change, we proposed to review the data 
to determine if there are any updates in the data and use the updated 
data in the reconciliation to provide a reconciled rebate amount to the 
manufacturer.
    Based on these considerations, similar to the multi-step process 
for the Rebate Report as set forth in Sec.  427.501(b) and (c), in 
summary, we proposed a multi-step process to provide each manufacturer 
of a Part B rebatable drug with a reconciled rebate amount on a regular 
basis. At the 12-month reconciliation, we proposed a reconciliation 
process will include: (1) a preliminary reconciliation of the rebate 
amount, which we will provide to manufacturers of Part B rebatable 
drugs as set forth in proposed Sec.  427.501(d)(1) and (2) a reconciled 
rebate amount, which we will provide to manufacturers of a Part B 
rebatable drug as determined under proposed Sec.  427.501(d)(1)(ii). We 
also proposed to apply the Suggestion of Error process as set forth in 
Sec.  427.503 to the preliminary reconciliation.
    In detail, first, as set forth in Sec.  427.501(d)(1) and similar 
to the Preliminary Rebate Report process as set forth in proposed Sec.  
427.501(b), we proposed to provide the manufacturer with information 
about the preliminary reconciliation of the rebate amount at least 1 
month prior to the issuance of the reconciled rebate amount (as set 
forth in Sec.  427.501(d)(1)) to each manufacturer of a Part B 
rebatable drug for an applicable calendar quarter. We proposed at Sec.  
427.501(d)(1) that the preliminary reconciliation will include, at a 
minimum, the same information outlined for the Rebate Report and the 
following updated information, if applicable: updated total number of 
rebatable units as specified at Sec.  427.303; the payment amount in 
the payment amount benchmark quarter, if any inputs are restated within 
the reconciliation run-out period, as set forth in Sec.  427.302(d); 
applicable calendar quarter specified amount (as set forth in Sec.  
427.302(b)), if any inputs are restated within the reconciliation run-
out period; the excess amount by which the specified amount exceeds the 
inflation-adjusted payment amount, if any inputs are restated within 
the reconciliation run-out period, as determined under Sec.  427.302; 
the reconciled total rebate amount calculated as set forth in Sec.  
427.301; and the difference between the total rebate amount due as 
specified on the Rebate Report set forth in Sec.  427.501(d)(1)(i)).
    As set forth in Sec.  427.503(a), similar to the Suggestion of 
Error process proposed for the Preliminary Rebate Report at Sec.  
427.501(a), within 10 calendar days after date of receipt of the 
information about the preliminary reconciliation of the rebate amount, 
we proposed that a manufacturer may suggest to CMS that the 
manufacturer believes the preliminary reconciled rebate amount contains 
a mathematical error. As stated in the CY 2025 PFS proposed rule (89 FR 
61958), we believe a 10-calendar-day period is sufficient due to the 
same considerations of data volume, the narrow set of reviewable items, 
and the operational time period necessary for CMS to complete the 
process to publish the reconciled rebate amount. The preclusions in 
section 1847A(i)(8) of the Act on administrative and judicial review 
apply to the reconciliation process.
    Second, in detail, we proposed at Sec.  427.501(d) to provide the 
reconciled rebate amount to the manufacturer 12 months after the Rebate 
Report was issued for an applicable calendar quarter. As set forth in 
Sec.  427.501(d)(1)(i), the information in the report for the 
reconciled rebate amount would include the same data elements as 
provided in the information provided to the manufacturer of a Part B 
rebatable drug regarding the preliminary reconciliation of a rebate 
amount (set forth in Sec.  427.501(d)(1)) and include any 
recalculations based on CMS acceptance of a manufacturer's Suggestion 
of Error from Sec.  427.503. A reconciliation of the rebate amount may 
result in an increase, decrease, or no change to the rebate amount, 
compared to the Rebate Report for an applicable calendar quarter (as 
determined under Sec.  427.501(d)(3)) or amount described in a previous 
reconciliation (as determined under Sec.  427.501(d)(2)).
    Additionally, as we suggested in section 60 of the revised Medicare 
Part B Drug Inflation Rebate Guidance, CMS considered options for 
establishing circumstances where a recalculation of

[[Page 98269]]

the rebate amount may be appropriate for an applicable calendar quarter 
after issuing the Rebate Report and/or a reconciled rebate amount based 
on CMS identifying an error or CMS determining that the information 
used to calculate a rebate amount was inaccurate due to false reporting 
or similar fault by the manufacturer (for example, manufacturer pricing 
or product data under section 1927(b)(3) of the Act). We also 
considered potential time limits for revisions and whether certain 
circumstances, such as instances of false reporting, should be exempt 
from such time limits.
    As explained in the CY 2025 PFS proposed rule (89 FR 61958), based 
on these considerations, we believe that, to capture an accurate rebate 
amount and consistent with reconciliations of pricing data otherwise 
submitted to CMS that provide for revisions when necessary due to 
errors, including mathematical errors, and manufacturer misreporting, 
certain circumstances may merit a recalculation of the rebate amount 
separate from the 12-month reconciliation set forth in Sec.  
427.501(d)(1). Specifically, we proposed at Sec.  427.501(d)(2) that 
CMS may recalculate a rebate amount, when CMS identifies either: (1) an 
agency error such as a mathematical error or an error in the 
information specified in a Rebate Report set forth in Sec.  427.501(c) 
or report of a reconciled rebate amount set forth in Sec.  
427.501(d)(1) including reporting system or coding errors, or (2) CMS 
determining that information used to calculate the rebate amount was 
inaccurate due to manufacturer misreporting. Examples of agency errors 
could include CMS incorrectly assigning a billing or payment code or 
incorrectly calculating the billing units per package, or the mechanism 
that provides a Rebate Report to the manufacturer or the Rebate Report 
incorrectly displays a rebate amount. Examples of manufacturer 
misreporting could include instances in which the manufacturer has made 
a correction to previously submitted data as well as instances in which 
the individual or entity reporting data or information to CMS on behalf 
of the manufacturer knows or should know is inaccurate or misleading 
(for example, inaccurate ASP data as specified at Sec.  414.806). This 
does not include standard restatements to ASP or other data outside of 
the standard process of issuing the reconciled rebate amount. In 
addition to manufacturer-initiated corrections, CMS may become aware of 
manufacturer misreporting based on fact finding and conclusions of 
enforcement authorities, for example, the HHS Office of Inspector 
General, the CMS Center for Program Integrity, or the Department of 
Justice. In a situation where an error or manufacturer misreporting is 
identified prior to the 12-month reconciliation of the rebate amount as 
set forth in proposed Sec.  427.501(d)(1), CMS may choose to include a 
correction based on the circumstances proposed at Sec.  427.501(d)(2) 
concurrently with the 12-month reconciliation. When CMS reconciles data 
due to an instance of agency error or manufacturer misreporting, we 
proposed that the agency would limit the scope of the reconciliation to 
the specific information that is the basis for the reconciliation and 
not update or otherwise revise any other data elements in the Rebate 
Report (as set forth in Sec.  427.501(c)) or the report of the 
reconciled rebate amount (as set forth in Sec.  427.501(d)(1)) unless 
the correction directly impacts additional data fields. For example, we 
believe corrections to an ASP quarterly file may not change the 
specified amount for the applicable calendar quarter.
    In addition, as noted in the CY 2025 PFS proposed rule (89 FR 
61958), because reconciling a rebate amount imposes substantial 
administrative burden on CMS to reprocess the rebate amount, retest the 
reporting system, and reissue a rebate report, we proposed at Sec.  
427.501(d)(2) that CMS may exercise discretion not to initiate a 
recalculation of the rebate amount in these situations which are 
outside of the regular reconciliation process set forth in Sec.  
427.501(d)(1).
    We proposed that for a recalculation due to agency error, the error 
must be identified within 3 years of the date of receipt of the 
reconciled rebate amount for the applicable calendar quarter (set forth 
in Sec.  427.501(d)(2)(i)). Identification means that CMS has knowledge 
of the error; CMS does not need to have completed its revision of the 
impacted data or determined if the revision impacts the rebate amount 
within the 3-year period. CMS will timely complete these steps and 
determine, when the reconciliation does impact the rebate amount, 
whether the reconciliation must be included in a discretionary revision 
or within an upcoming reconciled rebate amount for an applicable 
calendar quarter. We stated in the CY 2025 PFS proposed rule that we 
believe a 3-year period dating from the issuance of a reconciliation 
aligns broadly with the timeframe in which most manufacturers provide 
Part B ASP restatements.
    We proposed at Sec.  427.501(d)(2)(ii) that for a circumstance in 
which a manufacturer misreports data, we will not be bound by the 3-
year time limit for revision of the rebate amount. For example, if a 
determination is made that a manufacturer misreported ASP data, then 
CMS may recalculate the rebate amount owed for a Part B rebatable drug. 
We solicited comments on the proposals related to manufacturer 
misreporting.
    We proposed at Sec.  427.505(a)(1) that upon receipt of the 
reconciled rebate amount manufacturers must pay the rebate within 30 
calendar days from the date of receipt of the reconciled rebate amount. 
A 30-day payment deadline aligns with the payment period set forth in 
statute at section 1847A(i)(1)(B) of the Act. As set forth in Sec.  
427.504, we will use the same method and process for issuing Rebate 
Reports and submission of payments for reports with a reconciled rebate 
amount. We stated that we will provide notice to manufacturers when a 
report with a reconciled rebate amount, which will include the 
information set forth at Sec.  427.501(d), is available for the 
manufacturer's Part B rebatable drugs. We proposed at Sec.  427.505(c) 
that if a refund is owed to a manufacturer based on a reconciled rebate 
amount, we will initiate the process to issue such a refund within 60 
days from the date of receipt of the reconciled rebate amount (set 
forth at Sec.  427.501(d)). CMS will issue additional information on 
this method and process through additional program communications.
    We received public comment on these proposals. The following is a 
summary of the comment we received and our response.
    Comment: One commenter asked CMS to establish a minimum threshold 
amount it will use in determining if a reconciled rebate amount is 
owed, and to clarify that amount to manufacturers in the final rule. 
The commenter provided an example wherein a manufacturer could owe a 
rebate amount of 1 cent but did not suggest a specific minimum 
threshold.
    Response: We thank the commenter for their suggestion. Section 
1847A(i)(1)(A) of the Act requires the Secretary to provide a report to 
each manufacturer of a Part B rebatable drug with the following 
information not later than 6 months after the end of an applicable 
calendar quarter: (1) the total number of billing units for each Part B 
rebatable drug; (2) the amount, if any, of the excess average sales 
price increase (the amount by which the specified amount exceeds the 
inflation-adjusted payment amount as determined under Sec.  427.301(g)) 
for an applicable calendar quarter; and (3) the rebate amount for

[[Page 98270]]

the Part B rebatable drug. The goal of the reconciliation process is to 
ensure the rebate amount is complete and accurate. The statute does not 
direct CMS to only collect rebate amounts above a specific threshold. 
As such, we decline to provide a minimum threshold for a rebate amount 
owed for a reconciled rebate amount in the report as set forth in Sec.  
427.501(d)(1).
    Comment: One commenter expressed support for the proposed 12-month 
reconciliation process. One commenter suggested that CMS finalize the 
reconciliation period of one year in order to appropriately capture 
restatements of ASP. Another commenter urged CMS to provide 
reconciliation for up to 3 years as ASP restatements can occur after 
the 1-year mark. The commenter also suggested that CMS establish a 
clear and consistent process for manufacturers to notify the agency of 
ASP restatements that occur after initial rebate invoices are issued, 
and for those ASP restatements to be fully accounted for in the Part B 
inflation rebate reconciliation.
    Response: We thank these commenters for their feedback. As part of 
the 12-month reconciliation, we will incorporate updates to the data as 
set forth in Sec. Sec.  427.501(b)(1) and 427.501(d)(1). This will 
include updates to ASP data that have been processed by CMS prior to 
the 12-month reconciliation. Section 414.806(b) requires timely and 
accurate reporting of ASP data,\676\ including a requirement that 
manufacturers submit corrections to ASP data by the correction 
deadline, which is the 10th day of the month preceding the effective 
date of the payment limits. Further, CMS may issue restatements for up 
to four previous quarters; manufacturers have until the 30th day of the 
month after the end of the previous quarter to submit corrected data. 
In the Medicare Part B Inflation Rebate Program, the Rebate Report will 
be issued no later than 6 months after the end of each calendar 
quarter, followed by reconciliation which will occur 12 months after 
the Rebate Report is issued. This is after the timeframe in which ASP 
is restated.
---------------------------------------------------------------------------

    \676\ The CMS ``Average Sales Price (ASP) Restatement Policy 
Overview'' is available at: https://www.cms.gov/files/document/average-sales-price-asp-restatement-policy-overview.pdf.
---------------------------------------------------------------------------

    We also noted previously that the Discarded Drug Refund Program 
includes lagged claims data in annual reports, subsequent to the 
initial report. Although this lagged data will generally not be 
available when we conduct reconciliation in the Medicare Part B Drug 
Inflation Rebate Program, CMS has estimated that over 99 percent of 
claims will be final when a given quarter is first included in a 
discarded drug refund report.\677\ Therefore, CMS anticipates that 
there will not be significant revisions to the number of units of 
discarded drugs subject to refunds for rebatable drugs after we conduct 
reconciliation in the Medicare Part B Drug Inflation Rebate Program. As 
such, we believe that as a general matter the reconciliation 12 months 
after the Report is issued, as set forth in Sec.  427.501(d)(1), also 
enables CMS to majority of updates to the data specified set forth in 
Sec.  427.301. Reconciliation 12 months after the Rebate Report is 
issued, after the Rebate Report as set forth in Sec.  427.501(d)(1), 
also enables CMS to close out the calculation of the rebate amount for 
a Part B rebatable drug for an applicable calendar quarter within a 
reasonable time period after the Rebate Report is issued. We believe 
the reconciliation set forth in Sec.  427.501(d)(2) regarding 
manufacturer misreporting is sufficient to account for ASP restatements 
that occur after 12 months. We do not believe a second or longer 
restatement process is needed for Part B rebatable drugs to account for 
ASP restatements in the ordinary course, because, as described 
previously, the reconciliation timing as set forth at Sec.  
427.501(d)(1) would allow sufficient time for ASP restatement and 
claims run-out before the reconciliation as set forth in Sec.  
427.501(d)(1) would occur. We will monitor the data specified at Sec.  
427.301 and consider changing the timing of reconciliation in the 
Medicare Part B Drug Inflation Rebate Program in the future if 
necessary.
---------------------------------------------------------------------------

    \677\ https://www.federalregister.gov/d/2023-24184/p-2172.
---------------------------------------------------------------------------

    Comment: A couple of commenters requested that CMS clarify the 
definition of ``manufacturer misreporting.'' These commenters suggested 
that CMS limit the application to situations of manufacturer fraud or 
similar fault.
    Response: We thank the commenters for their feedback. We provided 
examples of manufacturer misreporting within the CY 2025 PFS proposed 
rule to illustrate the scope of the proposal. These examples are 
instances in which the manufacturer has made a correction to previously 
submitted data, as well as instances in which the individual or entity 
reporting data or information to CMS on behalf of the manufacturer 
knows or should know is inaccurate or misleading (for example, 
inaccurate ASP data as specified at Sec.  414.806). We decline to apply 
these instances of reconciliation only to circumstances where fraud has 
been identified as this approach would remove reconciliation when 
manufacturer misreporting due to a manufacturer correction occurred. 
Additionally, we decline to further define manufacturer misreporting. 
We believe that a prescriptive definition may not fully capture the 
range of circumstances within the Medicare Part B or Medicare Part D 
Drug Inflation Rebate Programs in which we may conclude the information 
a manufacturer reported was inaccurate or misleading.
    Comment: A couple of commenters suggested that CMS provide limited 
time parameters to a reconciliation due to manufacturer misreporting, 
as set forth in proposed Sec.  427.501(d)(2). Specifically, these 
commenters suggested that CMS use an end date of 3 or 4 years and 
mirror the standards provided at 42 CFR 405.980(b) regarding revisions 
to Medicare contractor determinations of Part A and Part B benefit 
eligibility.
    Response: We thank commenters for their feedback. We have 
considered other Medicare and Medicaid program parameters regarding 
reconciliation of program data, and we are finalizing our proposal as 
proposed because we believe it consistent with other CMS programs that 
do not include time parameters on certain revisions (for example, the 
Medicaid Drug Rebate Program obligations for reporting revised 
quarterly AMP, best price, customary prompt pay discounts, or nominal 
prices are not limited to 12 quarters in instances in which the change 
is to address an internal, Office of Inspector General, or Department 
of Justice investigation as specified at Sec.  447.510(b)(1)(v)). We 
believe this approach appropriately accounts for the significant 
periods of time that may be necessary to accomplish fact finding and 
investigations that may be present in some instances of manufacturer 
misreporting. Additionally, we recognize that other authorities may 
include statutory timing limitations that overlay Sec.  427.501(d)(2), 
as applicable.
    In response to some commenters that suggested a 3- or 4-year end 
date for reconciliation in order to align our policy with the claim 
reopening rules at 42 CFR 405.980(b), we note our polices for 
reconciliation are more consistent with the reopening rules than the 
commenters' recommendation. Our policy for recalculation in the context 
of manufacturer misreporting is consistent with 42 CFR 405.980(b) which 
allows for exceptions to the otherwise applicable end date for 
recalculation in

[[Page 98271]]

certain instances that could include misreporting (see 42 CFR 
405.980(b)(3)). Additionally, we note that the Medicare Part B Drug 
Inflation Rebate Program does provide end dates for reconciliation of 
restated data for any reason, within the reconciliation set forth at 
Sec.  427.501(c), and for reconciliation related to CMS technical 
errors, within the reconciliation specified at Sec.  427.501(d)(1), 
which are substantially similar to the reopening policies stated in 42 
CFR 405.980(b)(1) and (2).
    Comment: One commenter suggested that we employ a preliminary 
report process for reconciled rebate amounts, aligned with the process 
proposed for Rebate Reports. The commenter recommended preliminary 
reconciled reports include data that manufacturers will need for a 
meaningful review of the report.
    Response: It is unclear from the comment whether the commenter was 
referring to the reconciliation as set forth at Sec.  427.501(d)(1) 
and/or at Sec.  457.501(d)(2). We proposed to provide a preliminary 
report for a reconciled rebate amount set forth at Sec.  427.501(d)(1). 
We decline to provide a preliminary report for a reconciled amount due 
to CMS identification of error or manufacturer misreporting set forth 
at Sec.  427.501(d)(2) because the circumstances captured for these ad 
hoc reconciliations will likely be specific to a manufacturer and 
communication will reflect the facts and circumstances of the data 
revision.
    After consideration of public comments, we are finalizing our 
proposal as proposed at Sec.  427.501, with modification. In this final 
rule, we are revising Sec.  427.501(b)(iii) and Sec.  427.501(d)(i)(B) 
to reflect that the Rebate Report will include the payment amount 
benchmark quarter, in addition to the payment amount in the payment 
amount benchmark quarter, the corresponding cross-reference at Sec.  
427.302(c) to identify both the benchmark period and the price in the 
benchmark period within the report information. Additionally, we are 
including technical edits to Sec.  427.501(d)(1) to clarify that a 
reconciliation will include any changes incorporated in the Rebate 
Report specified at Sec.  427.501(c)(1).
iv. Rebate Report for Applicable Calendar Quarters in CY 2023 and CY 
2024
    Section 1847A(i)(1)(C) of the Act provides CMS with the option to 
delay sending the information required by section 1847A(i)(1)(A) of the 
Act for applicable calendar quarters in calendar years 2023 and 2024 
until not later than September 30, 2025. At Sec.  427.502, consistent 
with section 60.2 of the revised Medicare Part B Drug Inflation Rebate 
Guidance, we proposed consolidating the Preliminary Rebate Reports and 
Rebate Reports for CYs 2023 and 2024 into two reports: one report for 
the 4 applicable calendar quarters in CY 2023 and one report for the 4 
applicable calendar quarters in CY 2024. This approach allows for at 
least 12 months of claims run-out for each applicable calendar quarter 
in CY 2023 and at least 3 months of claims run-out for each applicable 
calendar quarter in CY 2024. For these combined reports, we proposed at 
Sec.  427.502 to provide an extended 30 calendar day Suggestion of 
Error period for the Preliminary Rebate Report.
    In the CY 2025 PFS proposed rule (89 FR 61959), we proposed to send 
a reconciled rebate amount for the four applicable calendar quarters in 
CY 2024 9 months after the Rebate Report, to allow for 12 months of 
claims run-out for each applicable calendar quarter; in proposed Sec.  
427.502(b) we noted that we do not intend to conduct reconciliation for 
the 4 applicable calendar quarters in CY 2023 since the Rebate Report 
would already reflect 12 months of claims run-out. We stated in the CY 
2025 PFS proposed rule that this approach aligns claims and payment 
data run-out with the run-out used during a regular reconciliation 
cycle. The Suggestion of Error period for the report containing the 
reconciled rebate amount for applicable calendar quarters in CY 2024 
will be 10 calendar days.
    As noted in the CY 2025 PFS proposed rule (89 FR 61959), this 
approach also minimizes the number of reports issued to manufacturers 
as a result of the delay in reporting and simplifies payment 
procedures, thereby minimizing manufacturer burden. Starting with the 
first applicable calendar quarter of CY 2025, reporting will begin a 
standard cadence and follow the procedures otherwise proposed in 
subpart F of this part 427.
    We received public comment on this proposal. The following is a 
summary of the comment we received and our response.
    Comment: One commenter suggested that CMS provide a 45-day 
suggestion of error review period in CY 2023 and CY 2024 instead of a 
30-day review period, given that these are the first two periods that 
review will be effective.
    Response: We appreciate this commenter's feedback. Similar to our 
response in suggestion of error review period for the Preliminary 
Rebate Report, in setting the review period of 30 calendar days, we 
considered the volume of the data to be provided to manufacturers, the 
narrow set of items that may be identified as a Suggestion of Error, 
and the operational time period necessary for CMS to complete the 
process to publish the CY 2023 and CY 2024 Rebate Reports. Given these 
factors, we believe that a review period of 30 calendar days is 
sufficient.
    After consideration of public comment on this proposed provision, 
we are finalizing as proposed at Sec.  427.502(c).
    We proposed that manufacturers that do not pay the Medicare Part B 
inflation rebate amount owed for a Part B rebatable drug within 30 
calendar days of receiving a Rebate Report, including reports 
containing a reconciled rebate amount, may be subject to a civil money 
penalty of 125 percent of the rebate amount, as applicable, for such 
drug for the applicable calendar quarter. We noted that the civil money 
penalty is in addition to the rebate amount.
g. Enforcement of Manufacturer Payment of Rebate Amounts (Sec.  
427.600)
    Section 1847A(i)(7) of the Act gives CMS the authority to impose a 
civil money penalty equal to at least 125 percent of the rebate amount 
for each drug for each applicable calendar quarter on a manufacturer 
that fails to pay the rebate amount for each rebatable Part B drug. In 
the CY 2025 PFS proposed rule (89 FR 61959) we stated that subpart G 
would implement this section of the Act and establish the procedures 
for determining and collecting a civil money penalty.
    In accordance with section 1847A(i)(1)(B) of the Act and as set 
forth in Sec.  427.505(a), manufacturers must provide to CMS a rebate 
amount owed within 30 calendar days of receipt of the Rebate Report 
containing the rebate amount due. As set forth in Sec.  427.600(a), we 
proposed that CMS may impose a civil money penalty when a manufacturer 
fails to pay the rebate amount in full by the payment deadlines 
proposed at Sec.  427.505(a). This means a manufacturer may be subject 
to a civil money penalty if the manufacturer fails to pay the full 
rebate amount as invoiced in the Rebate Report or any reconciled rebate 
amount that is greater than the amount invoiced in the Rebate Report. 
More specifically, as described in the CY 2025 PFS proposed rule (89 FR 
61959), a manufacturer could be subject to a civil money penalty when a 
manufacturer fails to pay a rebate amount due by any payment deadline 
proposed at Sec.  427.505(a)(1) and (2) for: (1) a Rebate Report as set 
forth at Sec.  427.501(c); (2) a

[[Page 98272]]

reconciled rebate amount greater than the rebate amount reflected in 
the Rebate Report as set forth at Sec.  427.501(d); or (3) a Rebate 
Report and a reconciled rebate amount greater than the amount reflected 
in the Rebate Report, if applicable, for the applicable calendar 
quarters in calendar years 2023 and 2024 as set forth at Sec.  427.502. 
We noted that the reconciled rebate amount is not a separately payable 
and distinct rebate amount. Rather, the reconciled rebate amount is an 
update to the rebate amount owed to CMS by a manufacturer of a Part B 
rebatable drug.
    As stated in the CY 2025 PFS proposed rule (89 FR 61959), we 
explained that civil money penalties are a point-in-time penalty tied 
to the rebate amount due at the applicable payment deadline, which 
occurs 30 days after the date of receipt of a Rebate Report. At Sec.  
427.600(b), we proposed to establish the methodology for determining 
the amount of the civil money penalty as equal to 125 percent of the 
rebate amount for such drug for such applicable calendar quarter, and 
that this penalty would be due in addition to the rebate amount due. 
That is, a manufacturer will be responsible for paying the full rebate 
amount due in addition to any civil money penalty imposed because of 
late payment. While CMS has the statutory authority to impose a civil 
money penalty greater than 125 percent of the rebate amount in the 
Medicare Part B Drug Inflation Rebate Program under section 
1847(A)(i)(7) of the Act, we proposed a penalty amount of 125 percent 
of the rebate amount to align with the penalty amount in the Medicare 
Part D Drug Inflation Rebate Program. We proposed this approach to 
civil money penalties based on section 1847A(i)(1)(B) of the Act, which 
establishes a requirement by the manufacturer to provide CMS with a 
rebate not later than 30 days after receipt from CMS of the report on 
the amount of the excess average sales price increase. As noted in the 
proposed rule, we believe that the ability to assess civil money 
penalties is necessary in all circumstances where a payment is due for 
a rebate amount to CMS to ensure compliance with the rebate program's 
requirements. The civil money penalty would be calculated based on the 
outstanding rebate amount due at the payment deadline, which is defined 
at Sec.  427.505(a) as 30 calendar days after the date of receipt of a 
Rebate Report containing any rebate amount due; once a civil money 
penalty is assessed due to a late payment, the penalty would remain in 
effect even if the manufacturer pays the outstanding amount as the 
penalty is initiated due to a missed payment deadline. Because the 
payment deadline is clearly defined in section 1847A(i)(1)(B) of the 
Act, any late payments of a rebate amount due, including late payment 
of any reconciled rebate amounts greater than the amount reflected in 
the Rebate Report, would be considered a violation potentially subject 
to a civil money penalty. Any civil money penalty will be assessed 
before the next reconciliation process.
    We proposed at Sec.  427.600(b) that civil money penalties may be 
calculated at several points in time associated with missing a payment 
deadline for the rebate amount due reflected in the Rebate Report or 
missing a payment deadline associated with any rebate amount determined 
after a reconciliation to be greater than the amount invoiced in the 
Rebate Report. As these separate events can result in distinct 
assessments of civil money penalties, this means that CMS will not 
modify a civil money penalty from a prior missed payment deadline based 
on changes to the rebate amount due following reconciliation, including 
scenarios where the rebate amount is reduced following reconciliation. 
However, in the event that the rebate amount due on a Rebate Report was 
not paid and a civil money penalty was issued for violation of the 
payment deadline, CMS will not issue a second civil money penalty on a 
reconciled rebate amount if reconciliation decreased the rebate amount 
stated on the Rebate Report. As stated in the CY 2025 PFS proposed rule 
(89 FR 61959), we believe that enforcing this requirement after each 
payment deadline, regardless of what rebate amount a manufacturer may 
or may not owe at a future payment deadline, is necessary to maintain 
the integrity of the program and consistency of the implementation of 
the program. Further, we proposed this approach to ensure an 
enforcement approach that is operationally feasible and applied 
consistently in all cases.
    As an example of this approach in practice, in the CY 2025 PFS 
proposed rule (89 FR 61960), we presented a scenario where the rebate 
amount due on the Rebate Report is $100. Following reconciliation 12 
months after the Rebate Report was issued, CMS calculates a reconciled 
rebate amount for the applicable calendar quarter of $120 (an increase 
of $20 from the rebate amount identified in the Rebate Report due to 
updated claims run-out and payment data). Under this scenario, in the 
event the manufacturer does not pay the $100 rebate amount owed within 
the 30-day deadline following receipt of the Rebate Report, a civil 
money penalty for $125 ($100 x 1.25) could be assessed against the 
manufacturer due to their failure to meet the payment deadline. If the 
manufacturer pays the $100 before the reconciliation is completed, and 
then timely pays the $20 due within the 30-day payment deadline 
following the reconciliation 12 months after the Rebate Report or does 
not pay the $100 before the reconciliation is completed but timely pays 
the $120 due within the 30-day payment deadline following 
reconciliation 12 months after the Rebate Report, no further civil 
money penalty would be assessed.
    Alternatively, in the event the manufacturer pays the $100 rebate 
amount due within the 30-day deadline following receipt of the Rebate 
Report but fails to meet the payment deadline for the net $20 rebate 
amount due following reconciliation, a civil money penalty of $25 ($20 
x 1.25) could be assessed against the manufacturer due to their failure 
to meet the payment deadline for the updated rebate amount due 
following reconciliation. Finally, under this scenario in the event the 
manufacturer fails to meet any payment deadline throughout the full 
reconciliation cycle of this rebate amount; that is, the deadline is 
missed for the $100 amount due stated in the Rebate Report, and the $20 
net rebate amount due following reconciliation, we may assess a 
separate civil money penalty on the rebate amount due at each of these 
missed deadlines. In this example, violations of each of these payment 
deadlines would result in a penalty of $125 ($100 x 1.25), followed by 
a penalty of $25 ($20 x 1.25), each of which would be assessed 
following the manufacturer's failure to meet the related payment 
deadline for the outstanding rebate amount due.
    In an alternative possible scenario, consider the following. The 
rebate amount due on the Rebate Report is $100. Following 
reconciliation 12 months after the Rebate Report was issued, CMS 
calculates a reconciled rebate amount owed for the applicable period of 
$80 (a decrease of $20 from the rebate amount identified in the Rebate 
Report). In this scenario, if a manufacturer does not pay the $100 by 
the payment deadline for the rebate amount due in the Rebate Report, a 
civil money penalty for $125 ($100 x 1.25) may be assessed against the 
manufacturer due to its failure to meet the payment deadline for the 
rebate amount due identified in the Rebate Report. This civil money 
penalty is not affected if the manufacturer pays the rebate amount once 
it is past the

[[Page 98273]]

deadline, nor is it impacted by the reconciled rebate amount, because 
at the payment deadline missed by the manufacturer, the manufacturer 
owed a rebate of $100 to CMS and that rebate amount was not paid 
timely. As noted previously, under this scenario, given that there is 
no additional rebate amount due upon reconciliation compared to the 
rebate amount stated on the Rebate Report, there would not be a civil 
money penalty assessed on the reconciled rebate amount.
    Further, we noted in the CY 2025 PFS proposed rule that payment of 
any civil money penalty does not obviate the requirement for the 
manufacturer to pay any outstanding rebate amount due, including any 
rebate amount due following a reconciliation. Therefore, paying a civil 
money penalty does not satisfy the obligation to pay the underlying 
rebate amount on which the civil money penalty is calculated. In 
addition, CMS will evaluate all available options to ensure 
manufacturers' timely compliance with their rebate payment obligations, 
including, without limitation, potential recovery approaches and 
enforcement actions. For example, CMS may refer manufacturers to the 
Department of Justice, Department of the Treasury, and/or the 
Department of Health and Human Services Office of Inspector General for 
further review and investigation.
    At Sec.  427.600(c), we proposed that if CMS makes a determination 
to impose a civil money penalty on a manufacturer for violation of a 
payment deadline, we will send a written notice of the decision to 
impose a civil money penalty that includes a description of the basis 
for the determination, the basis for the penalty, the amount of the 
penalty, the date the penalty is due, the manufacturer's right to a 
hearing, and information about where to file the request for a hearing. 
To ensure a consistent approach to civil money penalties, we proposed 
applying existing appeal procedures for civil money penalties in 42 CFR 
423, subpart T of this title to manufacturers appealing a civil money 
penalty imposed under the Medicare Part B Drug Inflation Rebate 
Program. We have utilized this appeals process for many years for civil 
money penalty determinations affecting MA organizations and Part D 
sponsors. Therefore, we proposed to use this well-established process 
for civil money penalty appeals from manufacturers that do not make 
inflation rebate payments by the payment deadline. We also proposed at 
Sec.  427.600(e)(1) that the scope of appeals is limited to: (1) CMS 
determinations relating to whether the rebate payment was made by the 
payment deadline; and (2) the calculation of the penalty amount. 
Section 1847A(i)(8) of the Act precludes judicial review of specific 
data inputs or calculations related to the underlying Rebate Report and 
reconciliation; therefore, such data and calculations are not 
appealable through this process.
    Section 1847A(i)(7) of the Act states that the provisions of 
section 1128A of the Act (except subsections (a) and (b)) apply to 
civil money penalties under this subpart to the same extent that they 
apply to a civil money penalty or procedure under section 1128A(a) of 
the Act. We proposed to codify this requirement at Sec.  427.600(f). In 
alignment with the procedure outlined in section 1128A of the Act, we 
proposed at Sec.  427.600(d) that collection of the civil money penalty 
will follow expiration of the timeframe for requesting an appeal, which 
is 60 calendar days from the civil money penalty determination in cases 
where the manufacturer did not request an appeal. In cases where a 
manufacturer requests a hearing and the decision to impose the civil 
money penalty is upheld, we will initiate collection of the civil money 
penalty once the administrative decision is final. We solicited comment 
on proposals related to the violations of payment deadlines and 
issuance of a civil money penalty.
    We proposed at Sec.  427.600(g) that in the event that a 
manufacturer declares bankruptcy, as described in title 11 of the 
United States Code, and as a result of the bankruptcy, fails to pay 
either the full rebate amount owed or the total sum of civil money 
penalties imposed, the government reserves the right to file a proof of 
claim with the bankruptcy court to recover the unpaid rebate amount 
and/or civil monetary penalties owed by the manufacturer.
    We received public comment on these proposals. The following is a 
summary of the comment we received and our response. Some of the 
comments received addressed both Part B rebatable drugs and Part D 
rebatable drugs. We addressed these comments below and do not repeat 
these summaries of comments and our responses in the discussion of Part 
D drug inflation rebate policies.
    Comment: A few commenters stated that CMS does not have the 
statutory authority to issue CMPs for reconciled amounts in the 
Medicare Part B Drug Inflation Rebate Program and the Medicare Part D 
Drug Inflation Rebate Program. One of these commenters stated that 
sections 1847A(i)(7) and 1860D-14B(e) of the Act only mention CMPs 
related to late payments of the rebate amount and no language in the 
IRA provides CMS with the authority to issue a CMP for reconciled 
amounts.
    Response: We thank the commenters for their input but disagree with 
their assessment of the agency's CMP authority under the Medicare Part 
B Drug Inflation Rebate Program and the Medicare Part D Drug Inflation 
Rebate Program.
    In the Part B Inflation Rebate Program, section 1847A(i)(7) of the 
Act provides that ``[i]f a manufacturer of a part B rebatable drug has 
failed to comply with the requirements under paragraph (1)(B) for such 
drug for a calendar quarter, the manufacturer shall be subject to . . . 
a civil money penalty equal to at least 125 percent of the amount 
specified in paragraph (3) for such drug for such calendar quarter. 
Section 1847A(i)(1)(B) of the Act establishes that the manufacturer of 
a Part B rebatable drug is required to provide to CMS a rebate for such 
drug for the calendar quarter ``not later than 30 days after the date 
of receipt from the Secretary of the information described in [section 
1847A(i)(1)(A)].'' Section 1847A(i)(1)(A) of the Act in turn 
establishes the information CMS must report to the manufacturer of the 
Part B rebatable drug to trigger the payment obligation, including the 
rebate amount and other data specified in section 1847A(i)(3) of the 
Act. Section 1847A(i)(1)(A) of the Act also reflects a date by which 
CMS shall provide information to the manufacturer for each calendar 
quarter.
    Consistent with the strong support from commenters, CMS is 
implementing section 1847A(i)(1)(A) of the Act with a reporting process 
that complies with this date and also incorporates a reconciliation 
process to ensure the agency's provision of information to each 
manufacturer of a Part B rebatable drug and the manufacturers' 
requirements to provide rebates are in accordance with section 
1847A(i)(3) of the Act. Specifically, as set forth in Sec. Sec.  
427.500 through 427.505, CMS will provide the information described in 
section 1847A(i)(1)(A) of the Act through a Rebate Report as well as 
through subsequent reports in a reconciliation process to ensure this 
information, including the rebate amount, are in accordance with 
section 1847A(i)(3) of the Act. The reconciled rebate amount provided 
to the manufacturer in the report of reconciliation is not a separately 
payable and distinct rebate amount. Rather, the reconciled rebate 
amount is an update to the rebate amount owed to CMS by a manufacturer 
of a Part B rebatable drug. However, the report with

[[Page 98274]]

the reconciled rebate amount is a separate provision of the information 
described in section 1847A(i)(1)(A) of the Act and the provision of the 
information described in section 1847A(i)(1)(A) of the Act triggers the 
timely payment requirements in section 1847A(i)(1)(B) of the Act. 
Section 1847A(i)(7) of the Act gives CMS the authority to impose a 
civil money penalty on a manufacturer of a part B rebatable drug that 
fails to comply with the requirements under section 1847A(i)(1)(B) of 
the Act. In this rulemaking, CMS is simply affirming that Sec.  
427.600(a), which restates the express authority to impose CMPs if a 
manufacturer of a Part B rebatable drug fails to comply with the 
requirement to timely pay rebates, applies with an appropriate CMP 
amount when the requirements under section 1847A(i)(1)(B) of the Act 
are triggered by the receipt of reconciled information.
    Similarly, in the Part D Inflation Rebate Program, section 1860D-
14A(e) of the Act provides that ``[i]f a manufacturer of a part D 
rebatable drug has failed to comply with the requirements under 
paragraph (a)(2) with respect to such drug for an applicable period, 
the manufacturer shall be subject to a civil money penalty in an amount 
equal to 125 percent of the amount specified in subsection (b) for such 
drug for such period.'' Section 1860D-14B(a)(2) of the Act establishes 
the manufacturer requirement to provide a rebate within 30 calendar 
days of receipt from CMS of ``the information described in [section 
1860D-14B(a)(1)]'' for the Part D rebatable drug for the applicable 
period. Section 1860D-14B(a)(1) of the Act establishes the information 
CMS must report to the manufacturer of the Part D rebatable drug to 
trigger the payment obligation, including the rebate amount and other 
data specified in section 1860D-14B(b) of the Act. Section 1860D-
14B(a)(1) of the Act also reflects a date by which CMS shall provide 
information to the manufacturer for each applicable period. In this 
rulemaking, Sec. Sec.  428.400 through 428.405 implements section 
1860D-14B(a)(1) of the Act with a reconciliation process that reflects 
the reconciliation described in section 1860D-14B(b)(6) of the Act and 
otherwise ensures that the agency's provision of information to each 
manufacturer of a Part D rebatable drug and the manufacturers' 
requirements to provide rebates are in accordance with section 1860D-
14B(b) of the Act. Section 1860D-14B(e) of the Act gives CMS the 
authority to impose a civil money penalty on a manufacturer of a Part D 
rebatable drug that fails to comply with the requirements under 
section1860D-14B(a)(2) of the Act. In this rulemaking, CMS is simply 
affirming that Sec.  428.500(a), which restates the express authority 
to impose CMPs if a manufacturer of a Part D rebatable drug fails to 
comply with the requirement to timely pay rebates, applies with an 
appropriate CMP amount when the requirements under section 1860D-
14B(a)(2) of the Act are triggered by the receipt of reconciled 
information.
    In sum, the regulations describing the agency's CMP authority in 
Sec. Sec.  427.600 and 428.500 are fully consistent with the express 
authority granted to CMS by statute to impose a civil money penalty 
when a manufacturer fails to meet statutory requirements to timely pay 
the rebate owed following the receipt from CMS of information from the 
agency regarding the rebate amount, including requirements triggered by 
the receipt of reconciled information.
    The regulations are also fully consistent with the purpose of 
granting the agency CMP authority. If CMS did not have the ability to 
impose CMPs when a manufacturer does not meet requirements triggered 
based on the receipt of reconciled information, the CMPs would not 
accurately reflect extent to which a manufacturer had failed to timely 
pay the rebate amount owed. Congress directed CMS to reconcile 
inflation rebate amounts to account for revised information. See, for 
example, section 1860D-14B(b)(6) of the Act. It would frustrate the 
purpose of the statute if CMS did not have the ability to hold 
manufacturers accountable for providing a rebate in instances in which 
the reconciliation identifies a manufacturer underpayment. The 
imposition of CMPs on manufacturers that do not pay reconciled rebate 
amounts appropriately incentivizes manufacturers to comply with CMS 
requirements.
    Comment: One commenter supports the CMP structure and recommended 
that CMS establish an ``escalating'' CMP structure for failing to 
timely pay the rebate amount.
    Response: We appreciate this comment. We assume the commenter means 
that an ``escalating'' CMP structure would provide for increasing CMP 
amounts due as more time passes CMS is retaining its policy as proposed 
to assess CMPs for a late rebate payment in a fixed amount equal to 125 
percent of the rebate amount for both the Medicare Part B and Part D 
Drug Inflation Rebate Programs. CMS believes this approach is best to 
create consistency across the two programs; and that a fixed CMP amount 
resulting from a simple, clear calculation is more effective than 
escalating CMPs to put manufacturers on notice of the potential penalty 
that will be assessed if a rebate payment is not made by the payment 
deadline. CMS will monitor the effectiveness of this CMP approach on 
manufacturer compliance as the program is implemented, and reconsider 
the CMP structure if necessary in the future.
    Comment: One commenter stated that there is not enough time allowed 
to review and contest the rebate amount before payment is due. The 
commenter suggested that CMS establish a grace period wherein, if a 
manufacturer timely submits a Suggestion of Error and does not pay the 
rebate amount then CMS would not assess a CMP on that rebate amount 
until after the reconciliation process, at which time CMS would make a 
final determination on the Suggestion of Error. The commenter suggested 
that after reconciliation, if CMS determines that the manufacturer is 
liable for all or part of the rebate amount, the manufacturer would 
then be liable for the rebate amount plus interest; the commenter 
recommended that interest be ``a reasonable rate, such as the yield 
rates of 13-Week Treasury bills.''
    Response: We reiterate that sections 1847A(i)(1)(B) and 1860D-
14B(a)(2) of the Act dictate the payment due date for the rebate amount 
is 30 days after the date of receipt of the information included in a 
Rebate Report, as described in proposed Sec. Sec.  427.505(a) and 
428.405(a)(1). CMS notes that the Suggestion of Error process 
established in these regulations allows for enough time for 
manufacturers to review the preliminary rebate amount and voice 
concerns about the calculation before the rebate amount is due. We also 
note that, should a CMP be assessed for failure to meet an applicable 
payment deadline, the Primary Manufacturer has 60 days to appeal the 
CMP as described in proposed Sec.  427.600(e) for Part B Drug Inflation 
Rebates and Sec.  428.500(e) for Part D Drug Inflation Rebates. CMS 
further notes that at this time, we do not plan to assess interest on 
either overdue rebate amounts or CMP payments.
    Comment: One commenter stated that CMS should establish a policy 
for manufacturers to contest a rebate amount. Under the commenter's 
proposal, during the time of the dispute the CMP will not be imposed 
but if the manufacturer is found liable, they will have a late payment 
interest at a reasonable rate.
    Response: We appreciate this comment. CMS believes the Suggestion

[[Page 98275]]

of Error process established in these regulations provides 
manufacturers a means to voice concerns about the calculation of the 
rebate amount before it is finalized. We reiterate that sections 
1847A(i)(8) and 1860D-14B(f) of the Act preclude administrative and 
judicial review of CMS determination of the rebate amount. CMS further 
notes that at this time, we do not plan to assess interest on either 
overdue rebate amounts or CMP payments.
    After consideration of public comments, we are finalizing this 
policy as proposed at Sec. Sec.  427.600 and 428.500.
h. Severability (Sec.  427.10)
    At Sec.  427.10, we proposed that were any provision of part 427 to 
be held invalid or unenforceable by its terms, or as applied to any 
person or circumstance, such provisions would be severable from the 
other provisions in part 427, and the invalidity or unenforceability 
would not affect the remainder thereof or any other part of this 
subchapter or the application of such provision to other persons not 
similarly situated or to other, dissimilar circumstances. As stated in 
the CY 2025 PFS proposed rule (89 FR 61961), while the provisions in 
part 427 are intended to present a comprehensive approach to 
implementing the Medicare Part B Drug Inflation Rebate Program, we 
intend that each of them is a distinct, severable provision. We also 
stated our intent that a finding that a provision of part 427 is 
invalid or unenforceable would not affect similar provisions in the 
Medicare Part D Drug Inflation Rebate Program.
    As discussed in the CY 2025 PFS proposed rule, the Part B drug 
inflation rebate proposals are intended to operate independently of 
each other, even if each serves the same general purpose or policy 
goal. For example, we stated that we intended the proposed policies 
related to reducing the rebate amount for Part B rebatable drugs 
currently in shortage and when there is a severe supply chain 
disruption (Sec. Sec.  427.401 and 427.402) to be distinct and 
severable from the proposals related to the determination of Part B 
rebatable drugs subject to rebates (Sec.  427.101). As another example, 
we stated our intent that the proposed policy for using the payment 
limit for purposes of calculating the beneficiary coinsurance 
adjustment (Sec.  427.201(b)) would be distinct and severable from the 
proposals to use the specified amount for purposes of the Part B rebate 
calculation (Sec.  427.301). Even where one provision refers to a 
second provision, the preamble and the regulatory text clarify the 
intent of the agency that the two provisions would be severable if one 
provision were to be invalidated in whole or in part. For example, we 
would still be able to calculate drugs and biological products with 
average total allowed charges below the applicable threshold as 
described at Sec.  427.101(c)(1), for exclusion from inflation rebate 
calculations, even if the provision to apply the applicable threshold 
at the billing and payment code level were deemed invalid (Sec.  
427.101(c)(3)).
    We received public comments on our proposed severability policy. 
The following is a summary of the comments we received and our 
responses.
    Comment: A couple of commenters disagreed with CMS' proposal that 
each regulatory provisions in part 427 is severable and distinct. One 
of these commenters stated that the preamble seeks to dictate to the 
courts how each regulatory provision should be evaluated for the 
purposes of severability. This commenter recommended CMS indicate an 
intent for severability but delete preamble or regulatory language 
related to the courts' evaluation of the issue. One of these commenters 
wrote that courts have rejected similar severability clauses, 
particularly in instances where a regulation's provisions were too 
intertwined to sever. This commenter also noted that CMS does not 
provide a legal or policy rationale for how it believes the Part B 
inflation rebates regulations can operate independently from one 
another. As a result, the commenter writes, a court would likely find 
the Part B inflation rebate regulations should be treated as a 
``single, integrated proposal.''
    Response: We appreciate these commenters sharing their feedback. We 
disagree with the commenters' contention that the policies in this 
final rule are not individual and severable. Under the Administrative 
Procedure Act (APA), an ``agency action'' may be either ``the whole or 
a part of an agency rule.'' 5 U.S.C. Sec.  551(13). Thus, the APA 
permits a court to sever a rule by setting aside only the portion of 
the rule found invalid.\678\ Courts have stated that in determining if 
an agency action is severable, they look at the agency intent,\679\ and 
if parts of the action are ``intertwined'' or if ``they operate 
entirely independently of one another.'' \680\ Even if a court were to 
strike down some provision of this final rule, CMS' intent is that 
other portions of this rule would remain in effect. CMS' intent is 
evidenced by Sec.  427.10, which states that were any provision of part 
427 to be held invalid or unenforceable by its terms, or as applied to 
any person or circumstance, such provisions would be severable from 
part 427 and the invalidity or unenforceability would not affect the 
remainder thereof or any other part of this subchapter or the 
application of such provision to other persons not similarly situated 
or to other, dissimilar circumstances. CMS believes severability 
applies to each provision of the Part B drug inflation rebate 
regulation, because deeming any particular provision to be invalid or 
illegal would not result in a material change to the Medicare Part B 
Drug Inflation Rebate Program so as to cause all of the requirements 
that compose the program to be invalid.
---------------------------------------------------------------------------

    \678\ Carlson v. Postal Regulatory Comm'n, 938 F.3d 337 (D.C. 
Cir. 2019).
    \679\ Davis Cnty. Solid Waste Mgmt. v. U.S. E.P.A., 108 F.3d 
1454, 1459 (D.C. Cir. 1997).
    \680\ Wilmina Shipping AS v. United States Dep't of Homeland 
Sec., 75 F. Supp. 3d 163, 171 (D.D.C. 2014).
---------------------------------------------------------------------------

    Contrary to the commenter's assertion, CMS did explain how the Part 
B inflation rebate regulations can operate independently from one 
another. As noted above, CMS provided two examples that are 
illustrative of how the provisions of part 427 will operate 
independently from one another: (1) the proposed policies related to 
reducing the rebate amount for Part B rebatable drugs currently in 
shortage and when there is a severe supply chain disruption (Sec. Sec.  
427.401 and 427.402) are distinct and severable from the proposals 
related to the determination of Part B rebatable drugs subject to 
rebates (Sec.  427.101), and (2) the proposed policy for using the 
payment limit for purposes of calculating the beneficiary coinsurance 
adjustment (Sec.  427.201(b)) is distinct and severable from the 
proposals to use the specified amount for purposes of the Part B rebate 
calculation.
    After consideration of public comments, CMS is finalizing this 
policy as proposed at Sec.  427.10.
3. Medicare Part D Drug Rebates for Drugs, Biologicals, and Sole Source 
Generic Drugs with Prices that Increase Faster than the Rate of 
Inflation
a. Definitions (Sec.  428.20)
    At Sec.  428.20, we proposed to codify definitions of terms with 
meanings given in section 1860D-14B of the Act and established in the 
revised Medicare Part D Drug Inflation Rebate Guidance, as well as new 
definitions based on policies detailed in the CY 2025 PFS proposed 
rule.
    We proposed that the following terms in section 1860D-14B of the 
Act be defined:

[[Page 98276]]

     ``Annual manufacturer price (AnMP)''.
     ``Applicable period''.
     ``Applicable period Consumer Price Index for All Urban 
Consumers (CPI-U)''.
     ``Benchmark period CPI-U''.
     ``Part D rebatable drug''.
     ``Payment amount benchmark period''.
     ``Unit''.
    Further, we proposed to codify at Sec.  428.20 definitions 
established in the revised Medicare Part D Drug Inflation Rebate 
Guidance and new definitions based on policies detailed in this final 
rule for the following terms:
     ``Applicable threshold''.
     ``Average manufacturer price (AMP)''.
     ``Benchmark period manufacturer price''.
     ``Covered Part D drug''.
     ``CPI-U''.\681\
---------------------------------------------------------------------------

    \681\ These data are referenced to 1982-84 = 100--that is, the 
average of pricing data for the 36 months from 1982 through 1984 
serve as the basis for the index and are assigned a value of 100. 
These data are not seasonally adjusted.
---------------------------------------------------------------------------

     ``First marketed date''.
     ``Inflation-adjusted payment amount''.
     ``Manufacturer''. We proposed that manufacturer 
identification in the Medicare Prescription Drug Inflation Rebate 
Program, inclusive of communications and rebate liability, will be 
consistent with the policies and practices adopted at Sec.  447.502 for 
purposes of manufacturer obligations under the Medicaid Drug Rebate 
Program. We stated we believe this approach will provide clarity and 
allow for consistency in the agency's treatment of financial 
transactions, including in the contexts of debt collection, bankruptcy, 
and changes in ownership. We solicited feedback on this proposed 
approach and whether there are alternative approaches that may better 
achieve the agency's goals for application of rebate liability and 
collection of rebate amount, including whether additional policies and/
or a Medicare Prescription Drug Inflation Rebate Program agreement are 
needed to clarify financial accountability for rebate amounts in 
situations where there are changes in ownership of a manufacturer or of 
a rebatable drug.
     ``National Drug Code (NDC)''.
     ``Subsequently approved drug''.
    We solicited comments on these definitions. The following is a 
summary of the comments we received and our responses.
    Comment: A couple of commenters recommended CMS provide greater 
clarity on the proposed definition of manufacturer. Specifically, these 
commenters noted that CMS did not indicate in the CY 2025 PFS proposed 
rule whether it would adopt potential revisions to the Medicaid 
definition of manufacturer for purposes of the Medicare Part D Drug 
Inflation Rebate Program. If CMS is considering incorporating Medicaid 
proposals into the Medicare Part D Drug Inflation Rebate Program, these 
commenters suggested CMS should clearly forecast this possibility to 
commenters.
    Response: We appreciate the commenters sharing this feedback. 
Because CMS operationalizes the Medicare Part D Drug Inflation Rebate 
Program based on data reported under the MDRP, certain policies adopted 
under the MDRP may affect manufacturer obligations under the Medicare 
Part D Drug Inflation Rebate Program. We note that in the final 
Medicaid Program; Misclassification of Drugs, Program Administration 
and Program Integrity Updates Under the Medicaid Drug Rebate Program 
rule released on September 20, 2024, CMS did not finalize the agency's 
proposed revisions to the Medicaid Drug Rebate Program definition of 
manufacturer.\682\ As such, the commenter's suggestion is moot.
---------------------------------------------------------------------------

    \682\ See https://www.federalregister.gov/documents/2024/09/26/2024-21254/medicaid-program-misclassification-of-drugs-program-administration-and-program-integrity-updates.
---------------------------------------------------------------------------

    Comment: One commenter asserted that CMS' request for comments on a 
potential agreement for purposes of the Medicare Part B and Part D Drug 
Inflation Rebate Programs is inconsistent with the statute. This 
commenter stated that the Act is silent on agreements between 
manufacturers and CMS for the Medicare Part B and Part D Drug Inflation 
Rebate Programs, in contrast to other sections of the Act that 
establish agreements for other CMS programs, and thus does not 
authorize CMS to require manufacturer agreements for these programs.
    Response: We appreciate the commenter sharing these concerns. CMS 
has determined not to require manufacturers to enter into agreements 
with CMS for purposes of the Medicare Part B or Part D Drug Inflation 
Rebate Programs at this time.
    After consideration of public comments, we are finalizing these 
definitions as proposed at Sec.  428.20, with modification to the 
definition of National Drug Code (NDC). Because the provisions of the 
Medicare Part D Drug Inflation Rebate program apply at the NDC-9 level 
unless otherwise specified, CMS omitted reference to the package size 
and type in the definition of NDC for purposes of the Medicare Part D 
Drug Inflation Rebate Program.
b. Determination of Part D Rebatable Drugs (Sec. Sec.  428.100 through 
428.101)
i. Definitions
    At Sec.  428.100, we proposed to define the following terms 
applicable to subpart B (Sec. Sec.  428.100 through 428.101):
     ``Individual who uses such a drug or biological''.
     ``Gross covered prescription drug costs''.
    We did not receive public comments on these proposed definitions, 
and we are finalizing as proposed at Sec.  428.100.
ii. Identification of Part D Rebatable Drugs
    Section 1860D-14B(g)(1)(A) of the Act defines a ``Part D rebatable 
drug,'' in part, as a drug or biological described at section 1860D-
14B(g)(1)(C) of the Act that is a ``covered Part D drug'' as that term 
is defined in section 1860D-2(e) of the Act. A drug or biological set 
forth in section 1860D-14B(g)(1)(C) of the Act means a drug or 
biological that, as of the first day of the applicable period involved, 
is: (1) a drug approved under an NDA under section 505(c) of the FD&C 
Act (that is, a brand name drug); (2) a drug approved under an ANDA 
under section 505(j) of the FD&C Act that meets the criteria in section 
1860D-14B(g)(1)(C)(ii) (that is, a generic drug that meets certain sole 
source criteria); or (3) a biological licensed under section 351 of the 
PHS Act (that is, a biological product, including a biosimilar).
    At Sec.  428.101(a), we proposed to identify a Part D rebatable 
drug \683\ for each applicable period by determining which covered Part 
D drugs, as defined in section 1860D-2(e) of the Act, meet the 
requirements in section 1860D-14B(g)(1)(C) of the Act (that is, are 
brand name drugs approved under an NDA, biologicals licensed under a 
biologics license application (BLA), or generic drugs approved under an 
ANDA). As noted, a Part D rebatable drug must meet the requirements in 
section 1860D-14B(g)(1)(C) of the Act as of the first day of the 
applicable period.
---------------------------------------------------------------------------

    \683\ For purposes of this final rule, we use the term ``Part D 
rebatable drug'' to refer to the dosage form and strength with 
respect to such drug for which Part D drug inflation rebates are 
calculated.
---------------------------------------------------------------------------

    To evaluate whether a generic drug approved under an ANDA meets all 
the criteria in section 1860D-14B(g)(1)(C)(ii) of the Act, we proposed 
at Sec.  428.101(a)(3) to codify the policy established in section 30 
of the revised Medicare Part D Drug Inflation Rebate Guidance whereby 
CMS would use

[[Page 98277]]

specified FDA resources such as the ``Approved Drug Products with 
Therapeutic Equivalence Evaluations'' (commonly known as the Orange 
Book) \684\ and NDC Directory \685\ to determine whether a generic drug 
meets the definition of a Part D rebatable drug. At Sec.  
428.101(a)(3)(i) and (ii), we proposed to clarify the policy 
established in revised Medicare Part D Drug Inflation Rebate Guidance 
by adding that, for purposes of Sec.  428.101, we consider historical 
information from NDC Directory files, such as discontinued, delisted, 
and expired listings, provided by FDA to CMS or published by FDA on its 
website to be included in the NDC Directory. As proposed at Sec.  
428.101(a)(3)(iii), to determine whether the manufacturer of the 
generic drug is a first applicant during the 180-day exclusivity 
period, or whether the manufacturer of the generic drug is a first 
approved applicant for a competitive generic drug therapy, CMS would 
refer to FDA website resources such as the Orange Book and may consult 
with FDA for technical assistance as needed. We proposed that CMS will 
determine whether a generic drug that is a covered Part D drug meets 
the definition of a Part D rebatable drug based on the status of the 
drug on the first day of the applicable period.
---------------------------------------------------------------------------

    \684\ FDA Orange Book: https://www.fda.gov/drugs/drug-approvals-and-databases/approved-drug-products-therapeuticequivalence-evaluations-orange-book.
    \685\ National Drug Code Directory: https://dps.fda.gov/ndc.
---------------------------------------------------------------------------

    While generic drugs that do not meet the sole source criteria in 
section 1860D-14B(g)(1)(C)(ii) of the Act (that is, multiple source 
generic drugs) are excluded from the definition of a Part D rebatable 
drug, we understand that a generic drug may meet the definition of a 
Part D rebatable drug on the first day of an applicable period and then 
cease to meet such definition later in the applicable period if, for 
example, the FDA approves another therapeutically equivalent generic 
drug under a 505(j) ANDA and that drug is marketed during such 
applicable period. As described later in this final rule, CMS proposed 
at Sec.  428.203(b)(1) to exclude from the rebate calculation any units 
of a generic drug dispensed on or after the date that such generic drug 
no longer meets the definition of a Part D rebatable drug.
    We did not receive public comments on these proposed provisions, 
and we are finalizing as proposed at Sec.  428.101(a).
iii. Drugs and Biologicals with Average Annual Total Cost Under Part D 
Below the Applicable Threshold
    Under section 1860D-14B(g)(1)(B) of the Act, a drug or biological 
is excluded from the definition of a Part D rebatable drug if the 
``average annual total cost'' under Part D for such period per 
individual who uses such a drug or biological product is less than $100 
per year, as determined by the Secretary using the most recent data 
available, or, if data are not available, as estimated by the 
Secretary. The statute provides that the $100 annual amount for the 
applicable period beginning October 1, 2022, is to be increased by 
percentage changes in the CPI-U for subsequent applicable periods. At 
Sec.  428.101(b), we proposed to codify the policy established in 
section 30.2 of the revised Medicare Part D Drug Inflation Rebate 
Guidance for determining the applicable threshold and excluding from 
the definition of a Part D rebatable drug, and thus Part D drug 
inflation rebates, drugs and biologicals for which the average annual 
total cost under Part D for such applicable period per individual who 
uses such drug or biological product is below that applicable 
threshold.
    Consistent with the approach described in the revised Medicare Part 
D Drug Inflation Rebate Guidance, we proposed to calculate the average 
annual total cost based on gross covered drug costs for the Part D 
rebatable drug at the NDC-9 level. We proposed CMS would divide the 
gross covered drug costs for the drug by the number of unique Part D 
beneficiaries that were dispensed the drug in that applicable period. 
For this calculation, CMS proposed to use Prescription Drug Event (PDE) 
data with gross covered drug costs greater than zero that are available 
for the drug with dates of service during that applicable period. Drugs 
that are determined to have average annual total costs under Part D of 
less than $100 per individual using such drug per year, adjusted by 
changes in the CPI-U, will be excluded from Part D drug inflation 
rebate calculations for the applicable period in question.
    Comment: One commenter expressed concern that implementation of the 
Medicare Part D Drug Inflation Rebate Program could impose new 
administrative or financial burdens on community pharmacies. This 
commenter requested that CMS clarify that any provisions related to the 
reporting of PDE data would not require additional reporting by 
community pharmacies for tracking and calculating drugs or biologicals 
below the applicable threshold, or any additional reporting or change 
to existing claim submission by community pharmacies for tracking and 
calculating Part D rebatable drugs.
    Response: We thank the commenter for sharing these concerns. 
Consistent with CMS' response on page 10 of the revised Medicare Part D 
Drug Inflation Rebate Guidance, we affirm that Sec.  428.101(b) does 
not impose additional reporting requirements on pharmacies related to 
the exclusion of drugs where the average annual total cost under Part D 
is less than $100 per individual per year. CMS will calculate and 
determine which Part D rebatable drugs fall below, meet, or exceed the 
$100 per individual per year threshold based on PDE data. We also 
affirm that this final rule does not impose additional reporting 
requirements on pharmacies related to tracking Part D rebatable drugs 
and calculating Part D drug inflation rebates.
    After consideration of comments received, we are finalizing as 
proposed at Sec.  428.101(b) with a modification at Sec.  
428.101(b)(1). Specifically, we note below that, for operational 
reasons at this time, we are finalizing at Sec.  428.203(b)(3) that CMS 
will exclude from the total number of units dispensed of a Part D 
rebatable drug when those units are associated with a Part D rebatable 
drug that has been billed as compounded. For alignment, we are 
finalizing at Sec.  428.101(b)(1) that, when calculating the gross 
covered prescription drug costs for the drug or biological, CMS will 
exclude PDE records indicating the drug or biological was billed as a 
compound.
c. Determination of the Rebate Amount for Part D Rebatable Drugs 
(Sec. Sec.  428.200 through 428.204)
i. Definitions
    At Sec.  428.200, we proposed to define the following terms 
applicable to subpart C (Sec. Sec.  428.200 through 428.204):
     ``340B Program''.
     ``Line extension''.
     ``New formulation''.
     ``Oral solid dosage form''.
    We received public comment on these proposed definitions. The 
following is a summary of the comment we received and our response.
    Comment: One commenter argued that the MDRP regulatory definitions 
of ``line extension'' and ``new formulation'' are inconsistent with the 
Medicaid rebate statute, exceed CMS' authority, and would cause 
significant harm to pharmaceutical innovation by undermining the 
incentives to produce innovative new drugs. For these reasons, the 
commenter argued that

[[Page 98278]]

CMS should not extend the MDRP ``line extension'' and ``new 
formulation'' regulatory definitions to the Medicare Part D Drug 
Inflation Rebate Program regulations.
    Response: CMS appreciates the commenter's perspective. As we stated 
below and in revised Medicare Part D Drug Inflation Rebate Guidance on 
page 20, section 1860D-14B(b)(5)(B)(ii) of the Act defines the term 
``line extension'' as ``a new formulation of the drug, such as 
extended-release formulation, but does not include abuse-deterrent 
formulations of the drug (as determined by the Secretary), regardless 
of whether such abuse-deterrent formulation is an extended-release 
formulation.'' Because section 1927(c)(2)(C) of the Act uses identical 
language to define the term ``line extension'' for purposes of the 
MDRP, CMS believes that, for the purposes of identifying new 
formulations of Part D rebatable drugs in the Medicare Part D Drug 
Inflation Rebate Program, it is appropriate to use the regulatory 
definitions of ``line extension'' and ``new formulation'' that were 
adopted through rulemaking \686\ for the MDRP, which can be found at 
Sec.  447.502.
---------------------------------------------------------------------------

    \686\ Medicaid Program Final Rule (0938-AU96), 85 FR 87,000, 
87,039 (Dec. 31, 2020): https://www.govinfo.gov/content/pkg/FR-2020-12-31/pdf/2020-28567.pdf.
---------------------------------------------------------------------------

    After consideration of public comments, we are finalizing these 
definitions as proposed at Sec.  428.200.
ii. Calculation of the Total Rebate Amount To Be Paid by Manufacturers
    Under section 1860D-14B(b)(1) of the Act, the Part D drug inflation 
rebate for each Part D rebatable drug and applicable period, subject to 
certain considerations, is the estimated amount that is equal to the 
product of: (1) the amount, if any, by which the annual manufacturer 
price (AnMP) for such Part D rebatable drug for the applicable period 
exceeds the inflation-adjusted payment amount for the Part D rebatable 
drug for the applicable period, and (2) the total number of units of 
the Part D rebatable drug dispensed under Part D and covered and paid 
by Part D plan sponsors during the applicable period. To calculate the 
Part D drug inflation rebate consistent with section 1860D-14B(b)(1) of 
the Act, we proposed at Sec.  428.201(a)(1) to codify the calculation 
methodology described in section 40 of the revised Medicare Part D Drug 
Inflation Rebate Guidance, which provides that the total Part D drug 
inflation rebate amount is equal to the per unit Part D drug inflation 
rebate amount, as determined under Sec.  428.202(a), multiplied by the 
total number of units of a Part D rebatable drug dispensed under Part D 
and covered by Part D plan sponsors, as determined in accordance with 
Sec.  428.203. We proposed at Sec.  428.201(a)(2) that the total Part D 
drug inflation rebate amount for a Part D rebatable drug that is a line 
extension of a Part D rebatable drug that is an oral solid dosage form 
is equal to the amount specified at Sec.  428.204. We further proposed 
the Part D drug inflation rebate amount calculated in accordance with 
this subpart is subject to adjustment based on any reductions in 
accordance with subpart D of this part or any reconciliations in 
accordance with subpart E of this part.
    At Sec.  428.201(b), we proposed to exclude from the calculation 
performed under subpart C drugs and biologicals that meet the 
definition of a Part D rebatable drug, but which are missing AMP data 
for the entire duration of the applicable period because, for the 
reasons specified below, there were no quarters during that period in 
which their manufacturers were required to report AMP data under 
section 1927(b)(3) of the Act. We noted in the CY 2025 PFS proposed 
rule (89 FR 61963) that the calculations for the rebate amount set 
forth in section 1860D-14B(b) of the Act contemplate use of AMP and 
unit data reported by manufacturers under section 1927 of the Act. 
Similarly, section 1860D-14B(d) of the Act indicates CMS should use, 
for purposes of carrying out the Medicare Part D Drug Inflation Rebate 
Program, information submitted by manufacturers under section 
1927(b)(3) of the Act. Section 1927 requires manufacturers that 
participate in the Medicaid Drug Rebate Program (MDRP) to enter into 
agreements with the HHS Secretary and submit price and drug product 
information to CMS for each covered outpatient drug (COD), as defined 
in sections 1927(k)(2)-(4) of the Act and at Sec.  447.502 of this 
title. Not every drug that satisfies the definition of a Part D 
rebatable drug may be marketed by a manufacturer that has an MDRP 
agreement in effect with the Secretary during the applicable period. 
Similarly, there may be limited instances in which a drug or biological 
satisfies the definition of a Part D rebatable drug but is not a COD 
under the MDRP. As a result, information may not be reported under 
section 1927(b)(3) of the Act for all Part D rebatable drugs, and thus 
may not be available to CMS for purposes of calculating Part D drug 
inflation rebates under section 1860D-14B of the Act. Said differently, 
in limited cases where a Part D rebatable drug is marketed by a 
manufacturer that does not have an obligation to report pricing and 
drug product data under section 1927(b)(3) of the Act for the reasons 
noted, the manufacturer does not currently report information needed 
for CMS to be able to calculate Part D drug inflation rebates.
    Due to this operational issue, we proposed at Sec.  428.201(b) to 
codify the policy established in section 30.1 of the revised Medicare 
Part D Drug Inflation Rebate Guidance whereby CMS would exclude from 
Part D drug inflation rebate calculations drugs and biologicals that 
meet the definition of a Part D rebatable drug but for which the 
manufacturer does not have an MDRP agreement in effect with the HHS 
Secretary under section 1927 of the Act at any point during the 
applicable period, or the Part D rebatable drug is one that does not 
meet the definition of a COD. We noted this would effectively exclude 
from rebate calculations Part D rebatable drugs for which there is 
missing AMP data for the entire duration of the applicable period for 
the sole reason that there were no quarters during that period in which 
the manufacturer was required to report AMP data for the drug or 
biological under section 1927(b)(3) of the Act. In either of these 
situations, we noted a manufacturer does not have an obligation to 
report pricing and drug product data under section 1927(b)(3) of the 
Act and thus the information required to calculate Part D drug 
inflation rebates for these drugs is not available to CMS. If there 
were no quarters for which the manufacturer was required to report AMP 
under section 1927(b)(3) of the Act in the applicable period for a drug 
or biological that meets the definition of a Part D rebatable drug, we 
proposed CMS would exclude such drug or biological from Part D drug 
inflation rebate calculations. We also clarified that the proposed 
exclusion at Sec.  428.201(b) relates only to the calculation of the 
rebate amount and does not affect the determination of whether a drug 
or biological meets the definition of a Part D rebatable drug. When 
performing the reconciliation described at Sec.  428.401(d), we 
proposed that CMS would reexamine whether the manufacturer was required 
to report AMP for any part of the applicable period for the Part D 
rebatable drug; if at reconciliation the manufacturer was required to 
report AMP for any part of the applicable period, CMS would calculate a 
Part D rebate amount for this Part D rebatable drug. We stated in the 
CY 2025 PFS

[[Page 98279]]

proposed rule (89 FR 61963) that CMS intends to monitor how these 
exclusions from the Part D drug inflation rebate calculation may impact 
manufacturer behavior and may revisit this exclusion in the future.
    In the initial Medicare Part D Drug Inflation Rebate Guidance, we 
solicited comments on the proposed approach and alternative approaches. 
We stated in the proposed rule that we continued to be interested in 
comments on this topic and thus welcomed additional comments on this 
approach and alternative approaches--specifically, how CMS should 
address the situations in which the manufacturer of a Part D rebatable 
drug does not have an MDRP agreement in effect for any part of the 
applicable period or when a Part D rebatable drug may be excluded from 
the definition of a COD and manufacturers may not be required to report 
pricing and drug product information under section 1927(b)(3) of the 
Act.
    We received public comments on these proposed provisions. The 
following is a summary of the comments we received and our responses.
    Comment: One commenter expressed support for the exclusion of drugs 
for which the manufacturer does not have an MDRP agreement in effect, 
including vaccines.
    Response: We thank the commenter for their support.
    Comment: One commenter recommended CMS consider a waiver process to 
exclude from Part D inflation rebate calculations a drug or biological 
that is essential to public health or that would cause economic 
hardship to the manufacturer, similar to the provisions included in the 
Prescription Drug User Fee Act.
    Response: We thank the commenter for this recommendation and refer 
the commenter to the policies set forth in Sec. Sec.  428.301, 428.302, 
and 428.303 and discussed later in this final rule regarding rebate 
reductions for certain Part D rebatable drugs currently in shortage, 
likely to be in shortage, or experiencing a severe supply chain 
disruption, as authorized under section 1860D-14B of the Act. In 
contrast to the Prescription Drug User Fee Act, which instructs FDA to 
waive or reduce certain user fees if, for example, such waiver or 
reduction is necessary to protect the public health or if the 
assessment of the fee would present a significant barrier to innovation 
because of limited resources available to such person or other 
circumstances,\687\ section 1860D-14B of the Act does not expressly 
authorize CMS to waive or reduce inflation rebates in such 
circumstances.
---------------------------------------------------------------------------

    \687\ FD&C Act Section 736(d).
---------------------------------------------------------------------------

    After consideration of public comments, CMS is finalizing this 
policy as proposed at Sec.  428.201(b).
iii. Calculation of the Per Unit Part D Drug Rebate Amount
    To calculate the total rebate amount in accordance with Sec.  
428.201(a), we stated in the CY 2025 PFS proposed rule that CMS will 
first calculate the per unit Part D drug rebate amount as described at 
Sec.  428.202. Consistent with the revised Medicare Part D Drug 
Inflation Rebate Guidance, we proposed at Sec.  428.202(a) that CMS 
will calculate the per unit Part D drug inflation rebate amount by 
determining the amount by which the AnMP for a Part D rebatable drug 
exceeds the inflation-adjusted payment amount for such drug for the 
applicable period. We stated that to determine the per unit Part D 
inflation rebate amount for a Part D rebatable drug, CMS must calculate 
the AnMP for the drug, identify the payment amount benchmark period and 
calculate the benchmark period manufacturer price for the drug, 
identify the benchmark period CPI-U, and calculate the inflation-
adjusted payment amount for the drug.
(1) Calculation of the AnMP for the Applicable Period
    To determine the AnMP for a Part D rebatable drug and applicable 
period, we proposed at Sec.  428.202(b) to codify the policy described 
in the revised Medicare Part D Drug Inflation Rebate Guidance whereby 
CMS would use the AMP reported by a manufacturer to the Medicaid Drug 
Programs system under sections 1927(b)(3)(A)(i) and (ii) of the Act for 
each calendar quarter of the applicable period, as well as the units 
reported by a manufacturer under section 1927(b)(3)(A)(iv) of the Act 
for each month of the applicable period. The manufacturer-reported AMP 
units represent the total units of a drug sold by the manufacturer each 
month to retail community pharmacy and wholesaler purchasers as 
described under section 1927(k)(1)(A) of the Act. Manufacturers may 
include under certain circumstances non-retail community pharmacy sales 
units in the calculation of their AMPs for 5i drugs.\688\
---------------------------------------------------------------------------

    \688\ 5i drugs are CODs that are inhaled, infused, instilled, 
implanted, or injected. Manufacturers are instructed to calculate 
the AMP for 5i drugs that are not generally dispensed through a 
retail community pharmacy using the methodology described at Sec.  
447.504(d) and (e). Section 447.507(b)(1) provides that a 5i drug is 
not generally dispensed through a retail community pharmacy if 70 
percent or more of the sales (based on units at the NDC-9 level) of 
the 5i drug, were to entities other than retail community pharmacies 
or wholesalers for drugs distributed to retail community pharmacies.
---------------------------------------------------------------------------

    As specified in section 1860D-14B(b)(2) of the Act, the AnMP for a 
Part D rebatable drug for an applicable period is equal to the sum of 
the products for each calendar quarter of the applicable period of: (1) 
the AMP for the Part D rebatable drug reported for the calendar quarter 
and (2) the total units of the Part D rebatable drug reported for the 
corresponding calendar quarter divided by the total units of the Part D 
rebatable drug reported for the 4 calendar quarters in the applicable 
period. We proposed the following formula to illustrate how CMS would 
calculate the AnMP for a Part D rebatable drug as at Sec.  428.202(b):

(AMP for calendar quarter beginning October) multiplied by (sum of 
monthly units for October calendar quarter divided by total units 
for 12-month applicable period) +
(AMP for calendar quarter beginning January) multiplied by (sum of 
monthly units for January calendar quarter divided by total units 
for 12-month applicable period) +
(AMP for calendar quarter beginning April) multiplied by (sum of 
monthly units for April calendar quarter divided by total units for 
12-month applicable period) +
(AMP for calendar quarter beginning July) multiplied by (sum of 
monthly units for July calendar quarter divided by total units for 
12-month applicable period)

    At Sec.  428.202(b)(2), we proposed that the first applicable 
period for a Part D rebatable drug will be the earliest applicable 
period that follows the payment amount benchmark period identified at 
Sec.  428.202(c)(1) through (4). For a Part D rebatable drug first 
approved or licensed on or before October 1, 2021, with a payment 
amount benchmark period identified at Sec.  428.202(c)(1), we proposed 
that the first applicable period will begin on October 1, 2022 and end 
on September 30, 2023. For a Part D rebatable drug first approved or 
licensed on or before October 1, 2021 with a payment amount benchmark 
period identified at Sec.  428.202(c)(3), or a subsequently approved 
drug with a payment amount benchmark period identified at Sec.  
428.202(c)(2) or (4), we proposed that the first applicable period will 
begin on October 1 of the year following the payment amount benchmark 
period identified at Sec.  428.202(c)(2) through (4). In the case of a 
Part D rebatable drug that was previously a selected drug as described 
at Sec.  428.202(c)(5) for which the payment amount benchmark period is 
reset as the last calendar year of the price applicability period for 
such drug,

[[Page 98280]]

we proposed that the earliest applicable period that follows the reset 
payment amount benchmark period will begin on October 1 of the year 
following the payment amount benchmark period identified at Sec.  
428.202(c)(5). We stated in the CY 2025 PFS proposed rule that the date 
that CMS will use to determine when a drug is first approved or 
licensed is the FDA approval date that the manufacturer reports to the 
Medicaid Drug Programs system under section 1927(b)(3)(A)(v) of the 
Act.
    We received public comments on these proposed provisions. The 
following is a summary of the comments we received and our responses:
    Comment: One commenter agreed with CMS' proposal to define the 
first applicable period for subsequently approved drugs as ``the 
earliest applicable period that follows the payment amount benchmark 
period identified in proposed Sec.  428.202(c)(1) through (4).'' This 
commenter stated this proposal aligns with the statute and recommended 
CMS finalize this policy as proposed.
    Response: We thank this commenter for their support.
    Comment: Two commenters opposed CMS calculating inflation rebates 
using AMP, noting that AMP may fluctuate even when list prices do not 
increase. One commenter stated that rebate calculations should be based 
on WAC rather than AMP. Another commenter suggested CMS should consider 
comparing changes in WAC with corresponding AMP changes to confirm the 
list prices did not increase prior to calculating a Part D drug rebate 
amount to help more accurately determine when a rebate should be 
assessed.
    Response: We thank the commenters for expressing their concerns. 
Consistent with CMS' response on page 15 of the revised Medicare Part D 
Drug Inflation Rebate Guidance, CMS recognizes that there are certain 
circumstances in which AMP can fluctuate for reasons that that may be, 
at least to some degree, outside of the control of a manufacturer. 
Sections 1860D-14B(b)(2) and (4) of the Act specify that CMS shall use 
AMP data and units reported under section 1927 of the Act for the 
purpose of calculating the AnMP and benchmark period manufacturer 
price, respectively. Section 1860D-14B(d)(1) of the Act also requires 
that CMS use information submitted by manufacturers under section 
1927(b)(3) of the Act. CMS is implementing these statutory criteria.
    After consideration of comments received, we are finalizing this 
policy as proposed at Sec.  428.202(b).
(2) Identification of the Payment Amount Benchmark Period
    Consistent with section 1860D-14B(g)(3) of the Act and as described 
in sections 40.2.2 and 40.3 of the revised Medicare Part D Drug 
Inflation Rebate Guidance, we proposed at Sec.  428.202(c)(1) that for 
a drug first approved or licensed by the FDA on or before October 1, 
2021, the payment amount benchmark period is the period beginning on 
January 1, 2021 and ending on September 30, 2021. For a subsequently 
approved drug, we proposed at Sec.  428.202(c)(2) that the payment 
amount benchmark period would be the first calendar year beginning 
after the drug's first marketed date, as specified under section 1860D-
14B(b)(5)(A) of the Act. To identify the payment amount benchmark 
period for a Part D rebatable drug, we proposed that CMS will use the 
FDA approval date or the first marketed date reported under section 
1927(b)(3)(A)(v) of the Act, as applicable. As described below, we 
solicited comments on proposed and alternative policies for determining 
the payment amount benchmark period in certain instances where an NDC 
is missing reported AMP.
(a) Establish a Payment Amount Benchmark Period in Certain Instances of 
Missing AMP
    As discussed in the CY 2025 PFS proposed rule, section 1860D-14B of 
the Act does not expressly address how CMS should calculate the 
benchmark period manufacturer price for a Part D rebatable drug when a 
manufacturer has not reported AMP during the payment amount benchmark 
period identified by statute. For example, as described in the revised 
Medicare Part D Drug Inflation Rebate Guidance, while section 1860D-
14B(g)(3) of the Act contemplates that drugs first approved or licensed 
by the FDA on or before October 1, 2021, would have a payment amount 
benchmark period of January 1, 2021, through September 30, 2021, the 
statute does not address circumstances in which such drugs are not 
marketed until after October 1, 2021, and thus lack reported AMP from 
January 1, 2021, through September 30, 2021, to calculate the benchmark 
period manufacturer price. In response to comments, we stated in 
section 40.1.2 of the revised Medicare Part D Drug Inflation Rebate 
Guidance that Part D rebatable drugs first approved or licensed on or 
before October 1, 2021, that were not marketed until after that date 
and thus did not have AMP in the statutorily defined payment amount 
benchmark period (that is, January 1, 2021, through September 30, 2021) 
would be treated in the same manner as subsequently approved drugs for 
purposes of establishing the payment amount benchmark period, benchmark 
period CPI-U, first applicable period, and first applicable period CPI-
U. In the revised guidance, we also stated that we intended to address 
this policy in future rulemaking and would solicit comments on this 
policy at that time.
    As stated in the CY 2025 PFS proposed rule (89 FR 61964), based on 
further review, we observed that a number of NDC-9s of Part D rebatable 
drugs approved on or before October 1, 2021, do not have AMP reported 
in the period of January 1, 2021, through September 30, 2021, and a 
number of NDC-9s of subsequently approved drugs do not have AMP 
reported in the first calendar year beginning after the drug's first 
marketed date. To enable CMS to calculate the benchmark period 
manufacturer price and inflation rebate amounts for these NDC-9s, we 
proposed at Sec.  428.202(c)(3) that for a Part D rebatable drug first 
approved or licensed on or before October 1, 2021, for which there are 
no quarters during the period beginning on January 1, 2021, and ending 
on September 30, 2021, for which AMP has been reported under section 
1927(b)(3) of the Act, we would identify the payment amount benchmark 
period as the first calendar year, which would be no earlier than 
calendar year 2021, in which such drug has at least 1 quarter of AMP 
reported. Said differently, to identify the payment amount benchmark 
period for the purpose of calculating the benchmark period manufacturer 
price for a Part D rebatable drug first approved or licensed on or 
before October 1, 2021, CMS would first look to the period from January 
1, 2021, to September 30, 2021 and if no AMP was reported under the 
MDRP for that 3-quarter period, CMS would then identify the payment 
amount benchmark period as the first calendar year no earlier than 
calendar year 2021 in which such drug has at least 1 quarter of AMP 
reported. Similarly, at Sec.  428.202(c)(4), we proposed that for a 
subsequently approved drug for which there are no quarters during the 
first calendar year beginning after the drug's first marketed date for 
which AMP has been reported under section 1927(b)(3) of the Act, the 
payment amount benchmark period would be the first calendar year in 
which such drug has at least 1 quarter of AMP reported. To identify the 
payment amount benchmark period for the purpose of calculating the 
benchmark period manufacturer price

[[Page 98281]]

for a subsequently approved drug, we would look to the first calendar 
year beginning after the drug's first marketed date and if no AMP was 
reported under the MDRP for such NDC-9 for that 4-quarter period, we 
would then identify the payment amount benchmark period as the first 
calendar year in which such drug has at least 1 quarter of AMP 
reported. We stated in the CY 2025 PFS proposed rule (89 FR 61965) that 
this approach (or the alternative approaches described below), if 
finalized, would replace the policy in the revised Medicare Part D Drug 
Inflation Rebate Guidance to treat Part D rebatable drugs first 
approved or licensed on or before October 1, 2021, that were not 
marketed until after that date in the same manner as subsequently 
approved drugs. At Sec.  428.202(b)(2), we proposed the first 
applicable period for such drug would begin on October 1 of the year 
following the payment amount benchmark period identified under Sec.  
428.202(c)(3) or (4). We stated in the CY 2025 PFS proposed rule (89 FR 
61965) that this policy would apply to Part D rebatable drugs first 
approved or licensed on or before October 1, 2021, drugs first approved 
or licensed on or before October 1, 2021, but not marketed until after 
that date, as well as subsequently approved drugs.
    As an example of how CMS proposed to identify the payment amount 
benchmark period at Sec.  428.202(c)(3), if a Part D rebatable drug 
that was first approved or licensed by the FDA on July 7, 2021 and has 
a first marketed date of September 15, 2021 does not have AMP reported 
in the period beginning January 1, 2021 and ending September 30, 2021, 
but does have AMP reported for the second calendar quarter of 2022, CMS 
would identify the payment amount benchmark period for such drug as 
calendar year 2022 (that is, January 1, 2022, through December 31, 
2022). In this example, the benchmark period CPI-U would be the CPI-U 
for January 2022, the first applicable period would be the applicable 
period beginning October 1, 2023, and ending September 30, 2024, and 
the applicable period CPI-U would be the CPI-U for October 2023. 
Similarly, as an example of how CMS would identify the payment amount 
benchmark period as proposed at Sec.  428.202(c)(4), if a subsequently 
approved drug with a first marketed date of December 15, 2021 does not 
have AMP reported for any quarters in calendar year 2022 (that is, the 
first calendar year after the drug's first marketed date) but does have 
AMP reported for the first calendar quarter of 2023, CMS would identify 
the payment amount benchmark period as calendar year 2023 (that is, 
January 1, 2023, through December 31, 2023). In this example, the 
benchmark period CPI-U would be the CPI-U for January 2023, the first 
applicable period for this drug would be the applicable period 
beginning October 1, 2024, and ending September 30, 2025, and the 
applicable period CPI-U would be the CPI-U for October 2024.
    We solicited comments on this approach, as well as alternative 
approaches, as described below.
(b) Comment Solicitation on Alternatives Considered for Calculating the 
Benchmark Period Manufacturer Price When AMP Is Missing
    As stated in the CY 2025 PFS proposed rule (89 FR 61965), CMS is 
aware that one reason why a manufacturer may not report AMP for any 
quarters of a payment amount benchmark period described at Sec.  
428.202(c)(1) or (2), as applicable, is that a manufacturer may acquire 
a Part D rebatable drug from another manufacturer and, due to that 
acquisition and the use of a new labeler code, obtain a new NDC-9 for 
that Part D rebatable drug. In this instance, the NDC-9 of the selling 
manufacturer and the NDC-9 of the buying manufacturer belong to the 
same dosage form and strength and therefore the same Part D rebatable 
drug. Although the buying manufacturer may not have AMP for the new 
NDC-9 to report to the Medicaid Drug Programs system for the Part D 
rebatable drug's payment amount benchmark period described at Sec.  
428.202(c)(1) or (2), the buying manufacturer is required under the 
MDRP to report for the new NDC-9 the base date AMP associated with the 
dosage form and strength to which the new NDC-9 belongs. This base date 
AMP is equal to the quarterly AMP that a manufacturer reports as 
described at Sec.  447.509(a)(7)(ii)(B). There also may be instances 
outside of the acquisition context in which a new NDC-9 for an existing 
dosage form and strength is reported under the MDRP. To prevent a 
manufacturer from resetting the payment amount benchmark period and 
therefore the benchmark period manufacturer price by obtaining a new 
NDC-9 for the Part D rebatable drug, CMS stated in section 40.2.2 of 
the revised Medicare Part D Drug Inflation Rebate Guidance that it will 
use the benchmark period manufacturer price of the earliest NDC-9 of 
the Part D rebatable drug.
    As explained in the CY 2025 PFS proposed rule (89 FR 61965), after 
further consideration of this policy and the data that are available to 
CMS in the Medicaid Drug Programs system, we do not believe that 
calculating the benchmark period manufacturer price using the 3 or 4 
quarters, as applicable, of AMP reported in the payment amount 
benchmark period described at Sec.  428.202(c)(1) or (2) of the 
earliest NDC-9 of the Part D rebatable drug is operationally feasible 
at this time. Although the buying manufacturer is required under the 
MDRP to report for the new NDC-9 the base date AMP associated with the 
earliest NDC-9 of the dosage form and strength, and to report the first 
marketed date associated with the earliest NDC-9 of the dosage form and 
strength as the first marketed date for the new NDC-9, the buying 
manufacturer is not required to report which NDC-9 was used to 
determine the base date AMP and first marketed date. We may therefore 
lack the information necessary to identify the earliest NDC-9 of the 
Part D rebatable drug for purposes of determining the benchmark period 
manufacturer price to be used in calculating the inflation rebate 
amount.
    We stated in the CY 2025 PFS proposed rule (89 FR 61965) that we 
understand that statutory provisions at section 1860D-14B of the Act 
require that CMS establish the payment amount benchmark period at the 
dosage form and strength level, and that allowing manufacturers to 
reset the payment amount benchmark period for a new NDC-9 of an 
existing Part D rebatable drug may not fully align with this directive. 
Simultaneously, and as described in the CY 2025 PFS proposed rule (89 
FR 61965-61967), we understand there may be a gap in the AMP data 
available to calculate the benchmark period manufacturer price at the 
dosage form and strength level for certain drugs. To enable CMS to 
calculate the benchmark period manufacturer price when a new NDC-9 of 
an existing Part D rebatable drug is reported under the MDRP and that 
NDC-9 lacks AMP data for the time period described at Sec.  
428.202(c)(1) or (2), we solicited comments on alternative policy 
options that are described in more detail below.
    First, we solicited comments on a modified version of the policy 
described in section 40.1.2 of the revised Medicare Part D Drug 
Inflation Rebate Guidance. Under this modified policy, we proposed that 
if a new NDC-9 of an existing Part D rebatable drug is reported under 
the MDRP, CMS would calculate the benchmark period manufacturer price 
for such NDC-9 using the base date AMP reported by a manufacturer under 
section 1927(b)(3) of the Act for such Part D rebatable

[[Page 98282]]

drug, if such base date AMP was reported for a calendar quarter that 
overlaps with the time period described at Sec.  428.202(c)(1) or (2), 
as applicable for that Part D rebatable drug. We believed this modified 
policy would be operationally feasible because CMS could calculate the 
benchmark period manufacturer price using the base date AMP that is 
reported with the new NDC-9; therefore, CMS would not need to identify 
the earliest NDC-9 of the Part D rebatable drug. Under this proposed 
policy, we stated CMS could only use the base date AMP to calculate the 
benchmark period manufacturer price if the base date AMP was associated 
with a calendar quarter that overlapped with the time period described 
at Sec.  428.202(c)(1) or (2), as applicable for that Part D rebatable 
drug. We stated in the CY 2025 PFS proposed rule (89 FR 61966) that if 
we were to adopt this alternative approach, we would expect to 
operationalize it through conforming changes to proposed Sec.  
428.202(c) and other applicable proposed regulatory text. We also noted 
that if we were to finalize this alternative approach, CMS would be 
unable to use this approach to calculate the benchmark period 
manufacturer price in the case of a new NDC-9 of an existing Part D 
rebatable drug with base date AMP that does not overlap with the time 
period described at Sec.  428.202(c)(1) or (2). In such instances, CMS 
would have to either establish a future payment amount benchmark period 
using an approach similar to that described at Sec.  428.202(c)(3) and 
(4) or apply one of the other proposed alternative policies.
    The second alternative we considered was to require manufacturers 
of Part D rebatable drugs to submit to CMS AMP data for the time period 
identified at Sec.  428.202(c)(1) or (2) in cases where the 
manufacturer did not report AMP under section 1927(b)(3) of the Act for 
such period but AMP data are available either for the NDC-9 or for 
another NDC-9 within the same dosage form and strength. For example, if 
the quarter for which a manufacturer reports base date AMP for a new 
NDC-9 of an existing dosage form and strength does not overlap with the 
time period identified at Sec.  428.202(c)(1) or (2), but the earliest 
NDC-9 of the dosage form and strength that served as the basis for the 
base date AMP has AMP data available during any quarter of that time 
period, we would require manufacturers to report such AMP data. For a 
Part D rebatable drug with a payment amount benchmark period identified 
at Sec.  428.202(c)(1), a manufacturer would be required to submit to 
CMS AMP data for the calendar quarters in the period beginning January 
1, 2021, and ending on September 30, 2021, to the extent such drug was 
first marketed before September 30, 2021. For a subsequently approved 
drug with a payment amount benchmark period identified under Sec.  
428.202(c)(2), a manufacturer would be required to submit to CMS AMP 
data for the first calendar year beginning after the drug's first 
marketed date. In the CY 2025 PFS proposed rule (89 FR 61966), we 
acknowledged the intersection between a potential reporting requirement 
under the Medicare Part D Drug Inflation Rebate Program for 
manufacturers to provide AMP data and existing AMP data reporting 
requirements for manufacturers under the MDRP.
    We stated in the CY 2025 PFS proposed rule (89 FR 61966) that 
should we pursue this option, we would explore using existing AMP 
reporting processes for the MDRP to operationalize any new AMP 
reporting requirement. This approach of requiring manufacturers to 
report such information would be consistent with CMS' understanding of 
the provisions of section 1860D-14B of the Act requiring CMS to 
establish the payment amount benchmark period at the dosage form and 
strength level, and with CMS' authority under sections 1102(a) and 
1871(a)(1) of the Act to make rules and regulations as necessary for 
the efficient administration of programs, including the Medicare Part D 
Drug Inflation Rebate Program. We welcomed comments on the method by 
which CMS could collect such information, the timing of the potential 
collection and deadlines, and whether information reported by 
manufacturers should be taken into account for purposes of compiling 
the Rebate Reports for a Part D rebatable drug or instead only be 
included in the reconciliation processes specified in at Sec.  
428.401(d) and described later in this final rule.
    We also considered a third alternative policy whereby CMS would 
calculate the benchmark period manufacturer price for a new NDC-9 of an 
existing Part D rebatable drug that lacks AMP data for the time period 
described at Sec.  428.202(c)(1) or (2) using a reasonable proxy 
metric. We asked for comments on potential proxy metrics CMS could use 
to calculate the benchmark period manufacturer price for a new NDC-9 of 
an existing dosage form and strength for which no AMP data are reported 
for such periods.
    As stated in the CY 2025 PFS proposed rule (89 FR 61966), these 
alternative policy options would be intended to achieve the same goal 
as the policy described in section 40.2.2 of the revised Medicare Part 
D Drug Inflation Rebate Guidance (that is, to disincentivize a 
manufacturer from resetting its payment amount benchmark period by 
obtaining a new NDC-9 for an existing Part D rebatable drug). Finally, 
we solicited comments on the policy described in the revised Medicare 
Part D Drug Inflation Rebate Guidance whereby CMS would treat drugs 
first approved or licensed on or before October 1, 2021, that were not 
marketed until after that date in the same manner as subsequently 
approved drugs for purposes of establishing the payment amount 
benchmark period, benchmark period CPI-U, first applicable period, and 
first applicable period CPI-U. We solicited comments on these 
alternatives and stated in the CY 2025 PFS proposed rule that we may 
adopt one or more of such alternatives in the final rule based on 
comments received. Additionally, we solicited comments on other 
policies that CMS should consider to prevent manufacturers from 
inappropriately resetting the payment amount benchmark period by 
obtaining a new NDC-9 for an existing Part D rebatable drug.
    As stated in the CY 2025 PFS proposed rule (89 FR 61966), under 
CMS' proposed policy at Sec. Sec.  428.202(c)(3) and (4) to identify a 
payment amount benchmark period in certain instances of missing AMP and 
each alternative considered, CMS would consider any restatements to the 
AMP data used to calculate the benchmark period manufacturer price 
during reconciliation, as specified at Sec.  428.401(d) and described 
later in this final rule. Furthermore, we stated CMS would monitor the 
extent to which manufacturers obtain a new NDC-9 for the same Part D 
rebatable drug in a manner that could result in inappropriately 
resetting the payment amount benchmark period or otherwise affect the 
calculation of the benchmark period manufacturer price. We reminded 
manufacturers of their reporting obligations under section 1927(b) of 
the Act and Sec.  447.510 of this title and that failure to provide 
timely information may result in penalties as detailed in section 
1927(b)(3)(C)(i) of the Act.
    We proposed that CMS would apply the policies described in the CY 
2025 PFS proposed rule to rebate calculations beginning with the 
applicable period that began on October 1, 2022. As explained in the CY 
2025 PFS proposed rule (89 FR 61967), CMS determined that, consistent 
with the policy described in section III.I.1. of this final

[[Page 98283]]

rule, in order to calculate inflation rebates for Part D rebatable 
drugs that do not have AMP or other pricing data available under 
section 1927(b)(3) of the Act on which to base the benchmark period 
manufacturer price, CMS' policy must apply for applicable periods 
beginning with the applicable period that began on October 1, 2022.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: One commenter expressed support for CMS' proposal to 
establish a new payment amount benchmark period for drugs approved on 
or before October 1, 2021 when no AMP is reported for the period that 
begins on January 1, 2021 and ends on September 30, 2021. One commenter 
did not express support or opposition to CMS' proposal for establishing 
a payment amount benchmark period in certain instances of missing AMP 
but stated that to the extent CMS finalizes its proposed policy, the 
policy should apply prospectively only. This commenter asserted that 
the statute does not expressly permit retroactive regulations, nor does 
it permit CMS to revoke final guidance after the relevant applicable 
periods have concluded and that revoking established policies creates 
uncertainty in the Medicare Prescription Drug Inflation Rebate Program. 
This commenter also recommended CMS clarify whether it would consider a 
Part D rebatable drug to have ``at least 1 quarter of AMP reported'' if 
AMP was not reported for each month of a quarter (for example, if AMP 
is reported for November and December, but not October of a quarter).
    Response: In this final rule, we are finalizing our proposal to 
apply the policies described at Sec. Sec.  428.202(c)(3) and (4) to 
rebate calculations beginning with the applicable period that began on 
October 1, 2022. We are also finalizing at Sec.  428.202(d)(3), with 
modifications to Sec. Sec.  428.202(c)(3) and (4), the alternative for 
CMS to identify the payment amount benchmark period and calculate the 
benchmark period manufacturer price of a new NDC-9 of a Part D 
rebatable drug by using other information reported by a manufacturer 
under section 1927(b)(3) of the Act for the Part D rebatable drug, as 
available, such as the base date AMP if such base date AMP is reported 
for a calendar quarter that overlaps with the period described in 
Sec. Sec.  428.202(c)(1) or (2). We will also apply this alternative 
policy to rebate calculations beginning with the applicable period that 
began on October 1, 2022. If these policies were not applied to rebate 
calculations beginning with the applicable period that began on October 
1, 2022, CMS would be unable to calculate a benchmark period 
manufacturer price for certain new NDC-9s of Part D rebatable drugs 
using the policy described in the revised Medicare Part D Drug 
Inflation Rebate Guidance since, as explained in the CY 2025 PFS 
proposed rule (89 FR 61768), the policy described in the revised 
guidance is not operationally feasible at this time. CMS also would not 
be able to calculate a benchmark period manufacturer price for other 
NDC-9s missing AMP data in the period described at Sec. Sec.  
428.202(c)(1) and (2). Without a benchmark period manufacturer price, 
CMS could not calculate Part D drug inflation rebates for these NDC-9s. 
We disagree with the commenter that the statute does not permit the 
application of this policy to rebate calculations beginning with the 
applicable period that began on October 1, 2022. As of this rulemaking, 
CMS has not yet performed rebate calculations or determined rebate 
liabilities for Part D rebatable drugs for any applicable period, 
including the applicable periods starting October 1, 2022 and October 
1, 2023. The policy described herein will be used in the agency's 
future rebate calculations for those applicable periods and for 
subsequent applicable periods. To the extent the policy described 
herein is considered to apply retroactively for an applicable period, 
consistent with CMS's authority under section 1871(e)(1)(A) of the Act, 
CMS has determined that such retroactive application would be both 
necessary to implement the requirements of the IRA and in the public 
interest because it ensures that the regulations address the time 
periods and manufacturer pricing conduct addressed in the IRA. The 
statute directs CMS to perform various calculations involving pricing 
activities from prior periods for applicable periods ``beginning with 
October 1, 2022'' (per the definition in section 1860D-14B(g)(7) of the 
Act). With respect to Part D rebatable drugs, the time periods during 
which prices are subject to rebates began as early as several weeks 
after the statute's enactment. At the same time, the IRA specifically 
requires CMS to use program instruction to implement the Part D 
inflation rebate program for 2022, 2023, and 2024, contemplating that 
CMS would establish policies for prior periods in time. Further, the 
statutory provision expressly allowing the agency to delay the issuance 
of rebate reports for the applicable periods beginning October 1, 2022 
and October 1, 2023 until 2025 contemplates CMS performing calculations 
for these prior periods.
    With respect to the commenter's request for clarification regarding 
whether CMS would consider a Part D rebatable drug to have at least 1 
quarter of AMP reported if AMP was not reported for each month of a 
quarter, we note that under section 1927(b)(3) of the Act, AMP is 
reported to the Medicaid Drug Programs system as a quarterly value 
while AMP units are reported as a monthly value. As such, we do not 
believe the scenario proposed by the commenter is applicable.
    Comment: A few commenters expressed support for the first 
alternative proposed in the CY 2025 PFS proposed rule to calculate the 
payment amount benchmark period for an NDC-9 using base date AMP 
reported for the earliest NDC-9 of the Part D rebatable drug. One 
commenter stated that of the three alternative options proposed, the 
first alternative would be most preferred and suitable for CMS to 
accurately calculate the benchmark period manufacturer price in cases 
of missing AMP data. Another commenter stated that the first 
alternative is a reasonable approach but noted that it would not apply 
to cases where a base date AMP quarter does not happen to fall within 
the payment amount benchmark period. One commenter opposed this 
proposal, asserting this approach is inconsistent with the Part D drug 
inflation rebate statute, which does not permit CMS to base the payment 
amount benchmark period off the AMP reported by a different 
manufacturer for a different NDC-9.
    Response: We thank the commenters for their feedback. We disagree 
with the commenter's assertion that our proposal to calculate the 
benchmark period manufacturer price of a new NDC-9 using the base date 
AMP reported for the earliest NDC-9 of the Part D rebatable drug is 
inconsistent with the Part D drug inflation rebate statute. The 
calculations for the rebate amount set forth in section 1860D-14B(b) of 
the Act contemplate use of AMP and unit data reported by manufacturers 
under section 1927(b)(3) of the Act. Similarly, section 1860D-14B(d) of 
the Act indicates CMS should use, for purposes of carrying out the 
Medicare Part D Drug Inflation Rebate Program, information submitted by 
manufacturers under section 1927(b)(3) of the Act, which includes base 
date AMP. As described in the CY 2025 PFS proposed rule (89 FR 61965), 
under the MDRP, if a manufacturer acquires a drug from another 
manufacturer and, due to that acquisition and the use of a new labeler 
code, obtains a new NDC-9 for the drug,

[[Page 98284]]

the NDC-9 of the selling manufacturer and the NDC-9 of the buying 
manufacturer belong to the same dosage form and strength and therefore 
the same Part D rebatable drug. The buying manufacturer is required by 
the MDRP under section 1927(b)(3) of the Act to report for the new NDC-
9 the base date AMP associated with the dosage form and strength to 
which the new NDC-9 belongs. Consistent with CMS' statements in the CY 
2025 PFS proposed rule regarding the potential alternative of requiring 
manufacturers to report AMP, the use of base date AMP described herein 
is consistent with CMS' understanding of the provisions of section 
1860D-14B of the Act requiring CMS to establish the payment amount 
benchmark period at the dosage form and strength level and with CMS' 
authority under sections 1102(a) and 1871(a)(1) of the Act to make 
rules and regulations as necessary for the efficient administration of 
programs, including the Medicare Part D Drug Inflation Rebate Program.
    In this final rule, we are finalizing at Sec.  428.202(d)(3), with 
modifications to Sec. Sec.  428.202(c)(3) and (4), the alternative 
proposed in the CY 2025 PFS proposed rule (89 FR 61966) for CMS to 
calculate the benchmark period manufacturer price of a new NDC-9 of an 
existing Part D rebatable drug by using other information reported by a 
manufacturer under the MDRP for such Part D rebatable drug as 
available, such as base date AMP, if such base date AMP was reported 
for a calendar quarter that overlaps with the time period described at 
Sec.  428.202(c)(1) or (2). We agree with the commenter that this 
approach would not apply to cases where a base date AMP quarter does 
not overlap with the payment amount benchmark period described at Sec.  
428.202(c)(1) or (2) and as such, we are also finalizing at Sec. Sec.  
428.202(c)(3) and (4) our proposal to identify the payment amount 
benchmark period as the first calendar year, which would be no earlier 
than calendar year 2021, in which such drug has at least 1 quarter of 
AMP data reported. As indicated in the CY 2025 PFS proposed rule, CMS 
will consider any restatements to the information used to identify the 
payment amount benchmark period and calculate the benchmark period 
manufacturer price during reconciliation, as set forth in Sec.  
428.401(d) and described later in this rule.
    CMS also will monitor the extent to which manufacturers obtain a 
new NDC-9 for the same Part D rebatable drug in a manner that could 
result in inappropriately resetting the payment amount benchmark period 
or otherwise affect the calculation of the benchmark period 
manufacturer price. Consistent with the alternative considered and not 
finalized in this rulemaking, CMS continues to explore the potential 
for a new AMP reporting requirement in the future. We note that if CMS 
were to implement new AMP reporting requirements in future 
policymaking, CMS would likely explore an approach that would allow the 
agency to recalculate the benchmark period manufacturer price if a 
manufacturer reported AMP data for the period described at Sec. Sec.  
428.202(c)(1) or (2). That is, if CMS establishes the payment amount 
benchmark period for a drug as described at Sec.  428.202(c)(3) or (4), 
as applicable, and CMS later obtains AMP data for the period described 
at Sec.  428.202(c)(1) or (2) based on new AMP reporting requirements, 
CMS would likely explore recalculating the benchmark period 
manufacturer price based on the AMP data reported for the period 
described at Sec.  428.202(c)(1) or (2). We believe such an approach 
could prevent manufacturers from inappropriately resetting the payment 
amount benchmark period by obtaining a new NDC-9 for an existing Part D 
rebatable drug.
    Comment: One commenter stated that CMS does not address how it will 
determine the threshold issue of whether an NDC-9 represents a new NDC-
9 of a Part D rebatable drug. This commenter noted that manufacturers 
participating in the MDRP already determine whether their products 
represent the same dosage form and strength of the same drug and where 
this is the case for a new NDC-9, the Medicaid ``Market Date'' in the 
Medicaid Drug Programs system will precede the ``Package Size Intro 
Date.'' This commenter recommended CMS rely on these existing 
manufacturer-provided fields and where such MDRP data are not 
available, CMS should develop a process by which manufacturers that do 
not participate in the MDRP can voluntarily self-identify that an NDC-9 
is a new NDC-9 of an existing drug for purposes of calculating the 
benchmark period manufacturer price.
    Response: We appreciate this commenter's feedback and 
recommendation. CMS agrees with the commenter that manufacturers 
participating in the MDRP determine whether their products represent 
the same dosage form and strength of the same drug, and CMS will use 
existing information reported by manufacturers under the MDRP to 
determine whether an NDC-9 represents a new NDC-9 of a Part D rebatable 
drug, where such data are available, consistent with Sec.  
428.202(d)(3). If a manufacturer does not participate in the MDRP and 
does not have an obligation to report pricing and drug product data 
under section 1927(b)(3) of the Act, the information required to 
calculate Part D drug inflation rebates for these drugs is not 
available to CMS, and CMS will not calculate Part D drug inflation 
rebates for these drugs at this time, as described at Sec.  428.201(b). 
If the existing information reported by manufacturers participating in 
the MDRP indicates that an NDC-9 does represent a new NDC-9 of a Part D 
rebatable drug, but there are no quarters during the period set forth 
in Sec.  428.202(c)(1) or (c)(2) for which AMP has been reported under 
section 1927(b)(3) of the Act for the NDC-9, including information as 
set forth in Sec.  428.202(d)(3), CMS will apply the payment amount 
benchmark period identification policies finalized at Sec.  
428.202(c)(3) or (4), as applicable, at this time. As noted above, CMS 
is exploring the potential for a new AMP reporting requirement in the 
future.
    Comment: A few commenters opposed the second alternative policy 
considered by CMS, which would require manufacturers of Part D 
rebatable drugs to submit to CMS AMP data for the payment amount 
benchmark period in cases where the manufacturer did not report AMP 
under the MDRP for such period, but AMP data are available either for 
the NDC-9 or for another NDC-9 within the same dosage form and 
strength. These commenters asserted CMS does not have authority to 
require reporting of AMP in the manner proposed. One commenter stated 
that this proposal raises confidentiality concerns and that if CMS were 
to move forward with this proposal, CMS should confirm that the same 
confidentiality provisions of the Medicaid rebate statute would apply 
to reporting of AMP data for the Part D rebate program.
    Response: We thank these commenters for sharing their concerns 
regarding a new AMP reporting requirement. We are not finalizing this 
alternative at this time. Instead, we are finalizing our proposal to 
apply the policies described at Sec. Sec.  428.202(c)(3) and (4) to 
rebate calculations beginning with the applicable period that began on 
October 1, 2022. We are also finalizing at Sec.  428.202(d)(3), with 
modifications to Sec. Sec.  428.202(c)(3) and (4), the alternative 
proposed in the CY 2025 PFS proposed rule for CMS to calculate the 
benchmark period manufacturer price of a new NDC-9 of an existing Part 
D rebatable drug by using the base date AMP reported under the MDRP for 
such Part D rebatable drug and will apply this

[[Page 98285]]

policy to rebate calculations beginning with the applicable period that 
began on October 1, 2022. As indicated in the CY 2025 PFS proposed 
rule, and as discussed above, CMS will monitor the extent to which 
manufacturers obtain a new NDC-9 for the same Part D rebatable drug in 
a manner that could result in inappropriately resetting the payment 
amount benchmark period or otherwise affect the calculation of the 
benchmark period manufacturer price. CMS also is exploring the 
potential for a new AMP reporting requirement in the future, consistent 
with the alternative considered and not finalized in this rulemaking. 
We note that if CMS were to implement new AMP reporting requirements in 
future policymaking, CMS would likely explore an approach that would 
allow the agency to recalculate the benchmark period manufacturer price 
if a manufacturer reported AMP data for the period described at Sec.  
428.202(c)(1) or (2), as discussed above. CMS will also consider any 
restatements to the information used to identify the payment amount 
benchmark period and calculate the benchmark period manufacturer price 
during reconciliation, as set forth in Sec.  428.401(d) and described 
later in this rule.
    Comment: A few commenters stated CMS did not provide sufficient 
detail regarding the third alternative considered to use a reasonable 
proxy metric for interested parties to meaningfully comment. These 
commenters recommended CMS not move forward with the third alternative 
until CMS has put forth a specific proxy metric in rulemaking and 
sought public comment on a specific proposal. In response to CMS' 
request for potential proxy metrics that could be used for purposes of 
calculating the benchmark period manufacturer price, a couple of 
commenters recommended WAC since it is a publicly available metric. One 
commenter recommended that in the acquisition context, CMS use as a 
reasonable proxy metric the AnMP for the first full calendar year after 
a buyer acquires and first markets the drug under the NDC-9.
    Response: We appreciate the commenters sharing this feedback. At 
this time, we are not moving forward with the alternative proposal to 
use a reasonable proxy metric for purposes of calculating the benchmark 
period manufacturer price.
    After consideration of public comments, we are finalizing at 
Sec. Sec.  428.202(c)(3) and (4) the proposal to identify the payment 
amount benchmark period for NDC-9s of Part D rebatable drugs missing 
reported AMP as the first calendar year, which would be no earlier than 
calendar year 2021, in which such NDC-9 has at least 1 quarter of AMP 
reported. We are also finalizing at Sec.  428.202(d)(3), with 
modifications to Sec. Sec.  428.202(c)(3) and (4), the first 
alternative policy described in the CY 2025 PFS proposed rule (89 FR 
61966) to calculate the benchmark period manufacturer price for a new 
NDC-9 of a Part D rebatable drug using information reported by a 
manufacturer under section 1927(b)(3) of the Act for the Part D 
rebatable drug, as available, including base date AMP if such base date 
AMP is reported for a calendar quarter that overlaps with the period 
described at Sec.  428.202(c)(1) or (2). In such circumstances, the new 
NDC-9 would not be subject to payment amount benchmark period 
identification as described in Sec.  428.202(c)(3) or (4). These 
policies will apply to rebate calculations beginning with the 
applicable period that began on October 1, 2022.
(c) Identification of the Payment Amount Benchmark Period for a Part D 
Rebatable Drug No Longer Considered To Be a Selected Drug
    At Sec.  428.202(c)(5), we proposed to codify policies described in 
section 40.2.2 of the revised Medicare Part D Drug Inflation Rebate 
Guidance relating to the identification of the payment amount benchmark 
period for a selected drug (as defined in section 1192(c) of the Act) 
with respect to a price applicability period (as defined in section 
1191(b)(2) of the Act) in the case such Part D rebatable drug is no 
longer considered to be a selected drug. As stated in the CY 2025 PFS 
proposed rule (89 FR 61968), the Medicare Part D Drug Inflation Rebate 
Program applies to selected drugs notwithstanding the status of the 
drug as a selected drug. However, the calculation of certain components 
of the rebate amount formula for selected drugs depends upon whether 
the selected drug has reached the end of its price applicability period 
and is no longer considered to be a selected drug under section 1192(c) 
of the Act. Specifically, section 1860D-14B(b)(5)(C) of the Act 
specifies a different payment amount benchmark period and benchmark 
period CPI-U for a Part D rebatable drug in the case such drug is no 
longer considered to be a selected drug under section 1192(c) of the 
Act, for each applicable period beginning after the price applicability 
period with respect to such drug. Accordingly, in such a case where a 
Part D rebatable drug is no longer a selected drug, we proposed at 
Sec.  428.202(c)(5) that the payment amount benchmark period will be 
reset as the last calendar year of such price applicability period for 
such selected drug.
    We did not receive any comments on this proposed provision, and we 
are finalizing as proposed at Sec.  428.202(c)(5).
(3) Calculation of the Benchmark Period Manufacturer Price
    We proposed at Sec.  428.202(d) that, subject to Sec.  428.202(g), 
to determine the benchmark period manufacturer price for a Part D 
rebatable drug, CMS will use the AMP reported by a manufacturer to the 
Medicaid Drug Programs system under sections 1927(b)(3)(A)(i) and (ii) 
of the Act for each calendar quarter of the payment amount benchmark 
period, as identified in accordance with Sec.  428.202(c), as well as 
the units reported by a manufacturer under section 1927(b)(3)(A)(iv) of 
the Act for each month of such payment amount benchmark period. For a 
Part D rebatable drug first approved or licensed on or before October 
1, 2021, section 1860D-14B(b)(4) of the Act specifies that the 
benchmark period manufacturer price is the sum of the products for each 
calendar quarter of the payment amount benchmark period (that is, 
January 1, 2021, through September 30, 2021) of (1) the AMP for the 
Part D rebatable drug reported for the calendar quarter), and (2) the 
total units reported for the corresponding calendar quarters divided by 
the total units of the Part D rebatable drug reported for the 3 
calendar quarters in the payment amount benchmark period. We proposed 
at Sec.  428.202(d)(1) the following formula to illustrate how CMS will 
calculate the benchmark period manufacturer price for a Part D 
rebatable drug with a payment amount benchmark period identified at 
Sec.  428.202(c)(1):

(AMP for calendar quarter beginning January 2021) multiplied by (sum 
of monthly AMP units for January 2021 calendar quarter divided by 
sum of the units reported for the 3 quarters of the payment amount 
benchmark period) +
(AMP for calendar quarter beginning April 2021) multiplied by (sum 
of monthly AMP units for April 2021 calendar quarter divided by sum 
of the units reported for the 3 quarters of the payment amount 
benchmark period) +
(AMP for calendar quarter beginning July 2021) multiplied by (sum of 
monthly AMP units for July 2021 calendar quarter divided by sum of 
the units reported for the 3 quarters of the payment amount 
benchmark period)

    For a Part D rebatable drug with a payment amount benchmark period 
identified at Sec.  428.202(c)(2) through (5), we proposed the 
following formula at Sec.  428.202(d)(2) to illustrate how CMS will 
calculate the benchmark period

[[Page 98286]]

manufacturer price for a Part D rebatable drug:

(AMP for calendar quarter beginning January) multiplied by (sum of 
monthly AMP units for January calendar quarter divided by sum of the 
monthly units reported for the 4 quarters of the payment amount 
benchmark period) +
(AMP for calendar quarter beginning April) multiplied by (sum of 
monthly AMP units for April calendar quarter divided by sum of the 
monthly units reported for the 4 quarters of the payment amount 
benchmark period) +
(AMP for calendar quarter beginning July) multiplied by (sum of 
monthly AMP units for July calendar quarter divided by sum of the 
monthly units reported for the 4 quarters of the payment amount 
benchmark period) +
(AMP for calendar quarter beginning October) multiplied by (sum of 
monthly AMP units for October calendar quarter divided by sum of the 
monthly units reported for the 4 quarters of the payment amount 
benchmark period)

    CMS received public comments in response to the comment 
solicitation in the CY 2025 PFS proposed rule on alternatives 
considered for calculating the benchmark period manufacturer price when 
AMP is missing (89 FR 61965-61967). As described earlier in this final 
rule, after consideration of comments received, we revised Sec.  
428.202(d) to add a paragraph (3), which provides that to the extent 
that a new NDC-9 of a Part D rebatable drug is reported under section 
1927 of the Act and AMP has not been reported for such NDC-9 under 
section 1927(b)(3)(A)(i)(I) or (ii) of the Act during the period 
described Sec.  428.202(c)(1) or (2), as applicable, CMS will identify 
the payment amount benchmark period and calculate the benchmark period 
manufacturer price for such NDC-9 using other information reported by a 
manufacturer under section 1927(b)(3) of the Act for the Part D 
rebatable drug, as available, such as the base date AMP if such base 
date AMP is reported for a calendar quarter that overlaps with the 
period described at Sec.  428.202(c)(1) or (2), as applicable. Base 
date AMP has the meaning set forth at Sec.  447.509(a)(7)(ii)(B) of 
this title.
(4) Identification of the Benchmark Period CPI-U
    To calculate the inflation-adjusted payment amount in accordance 
with section 1860D-14B(b)(3) of the Act, CMS must identify the 
benchmark period CPI-U. As described in the revised Medicare Part D 
Drug Inflation Rebate Guidance and in accordance with section 1860D-
14B(g)(4) of the Act, we proposed at Sec.  428.202(e)(1) that the 
benchmark period CPI-U for a Part D rebatable drug first approved or 
licensed by the FDA on or before October 1, 2021, would be the CPI-U 
for January 2021. For a subsequently approved drug, we proposed at 
Sec.  428.202(e)(2) that the benchmark period CPI-U will be the CPI-U 
for January of the first calendar year beginning after the drug's first 
marketed date, as required under section 1860D-14B(b)(5)(A) of the Act.
    As stated in the CY 2025 PFS proposed rule (89 FR 61964), we have 
observed that a number of NDC-9s of Part D rebatable drugs approved or 
licensed on or before October 1, 2021, do not have AMP reported in the 
period beginning January 1, 2021, and ending September 30, 2021, and a 
number of NDC-9s of subsequently approved drugs do not have AMP 
reported in the first calendar year following the drug's first marketed 
date. To enable CMS to calculate the benchmark period manufacturer 
price and inflation rebate amounts for these NDC-9s, we proposed at 
Sec.  428.202(c)(3) and (4) to identify the payment amount benchmark 
period for such NDC-9s as the first calendar year, which would be no 
earlier than calendar year 2021, in which such drug has at least 1 
quarter of AMP data reported. As previously discussed, we solicited 
comments on alternative methodologies to identify the payment amount 
benchmark period and calculate the benchmark period manufacturer price 
to address certain instances in which AMP has not been reported. To 
identify the benchmark period CPI-U for an NDC-9 described at Sec.  
428.202(c)(3), we further proposed at Sec.  428.202(e)(3) that for a 
Part D rebatable drug first approved on or before October 1, 2021, for 
which there are no quarters during the period beginning on January 1, 
2021, and ending on September 30, 2021, for which AMP has been reported 
under the MDRP, the benchmark period CPI-U will be the CPI-U for 
January of the calendar year in which such drug has at least 1 quarter 
of AMP reported. We proposed at Sec.  428.202(e)(4) that for a 
subsequently approved drug for which there are no quarters during the 
first calendar year beginning after the drug's first marketed date for 
which AMP has been reported under the MDRP, the benchmark period CPI-U 
is the CPI-U for January of the calendar year in which such drug has at 
least 1 quarter of AMP reported.
    As discussed previously, the Medicare Part D Drug Inflation Rebate 
Program applies to selected drugs notwithstanding the status of the 
drug as a selected drug. However, the calculation of certain components 
of the applicable rebate amount formula for selected drugs depends upon 
whether the selected drug has reached the end of its price 
applicability period and is no longer considered to be a selected drug 
under section 1192(c) of the Act. In accordance with section 1860D-
14B(b)(5)(C) of the Act, in such a case where a Part D rebatable drug 
is no longer a selected drug, we proposed at Sec.  428.202(e)(5) that 
the benchmark period CPI-U will be the CPI-U for January of the last 
calendar year of such price applicability period.
    While we received public comments on CMS' proposed and alternative 
policies, as discussed above, we did not receive comments on CMS' 
further proposals specific to the benchmark period CPI-U. Nevertheless, 
as described in more detail in section III.I.3.c.iii.2. of this final 
rule, we have revised Sec.  428.202(d) to add a paragraph (3), which 
provides that to the extent that a new NDC-9 of a Part D rebatable drug 
is reported under section 1927 of the Act and AMP has not been reported 
for such NDC-9 under section 1927(b)(3)(A)(i)(I) or (ii) of the Act 
during the period described at Sec.  428.202(c)(1) or (2), as 
applicable, CMS will identify the payment amount benchmark period and 
calculate the benchmark period manufacturer price for such NDC-9 using 
other information reported by a manufacturer under section 1927(b)(3) 
of the Act for the Part D rebatable drug, as available, such as the 
base date AMP if such base date AMP is reported for a calendar quarter 
that overlaps with the period described at Sec.  428.202(c)(1) or (2), 
as applicable. Therefore, in this final rule, we have modified proposed 
Sec.  428.202(e)(3) and (4) to specify that a Part D rebatable drug for 
which no AMP has been reported under section 1927(b)(3) of the Act 
includes a Part D rebatable drug for which no information as described 
at Sec.  428.202(d)(3) has been reported.
(5) Calculation of the Inflation-Adjusted Payment Amount
    As specified in section 1860D-14B(b)(3) of the Act and described in 
section 40.2.3 of the revised Medicare Part D Drug Inflation Rebate 
Guidance, the inflation-adjusted payment amount with respect to a Part 
D rebatable drug and applicable period is the benchmark period 
manufacturer price increased by the percentage by which the applicable 
period CPI-U exceeds the benchmark period CPI-U. We proposed at Sec.  
428.202(f) to calculate the inflation-adjusted payment amount for a 
Part D rebatable drug by dividing the applicable period CPI-U by the 
benchmark period CPI-U and then multiplying the quotient by the 
benchmark period manufacturer price.

[[Page 98287]]

We proposed the following formula at Sec.  428.202(f) to illustrate how 
CMS will calculate the inflation-adjusted payment amount for a Part D 
rebatable drug:

(Benchmark period manufacturer price) multiplied by (applicable period 
CPI-U divided by benchmark period CPI-U).

    We proposed at Sec.  428.202(a) that CMS will use the inflation-
adjusted payment amount to calculate the per unit Part D drug inflation 
rebate amount by determining the amount by which the AnMP for a Part D 
rebatable drug exceeds the inflation-adjusted payment amount for a Part 
D rebatable drug for an applicable period.
    We did not receive comments on this proposed provision, and we are 
finalizing as proposed at Sec.  428.202(f).
(6) Situations in Which Manufacturers Do Not Report Units Under Section 
1927(b)(3)(A)(iv) of the Act
    Section 1860D-14B of the Act generally requires CMS to determine 
the per unit Part D drug inflation rebate amount using the monthly 
units reported by manufacturers to the Medicaid Drug Programs system 
under section 1927(b)(3)(A)(iv) of the Act. We understand it is 
possible that a manufacturer may not have sales or monthly units of a 
COD to report to the Medicaid Drug Programs system for a calendar 
quarter because, for example, there may be a temporary interruption in 
sales of the COD, or there may be no sales immediately after the drug 
is first approved or licensed by the FDA. We proposed at Sec.  
428.202(g)(1) to codify the policy described in section 40.1.2 of the 
revised Medicare Part D Drug Inflation Rebate Guidance, whereby in 
cases where there are 1 or more quarter(s) in the payment amount 
benchmark period or applicable period for which a manufacturer has not 
reported units under section 1927(b)(3)(A)(iv) of the Act but has 
reported AMP under sections 1927(b)(3)(A)(i) and (ii) of the Act, CMS 
would calculate the benchmark period manufacturer price or AnMP, as 
applicable, using data only from quarter(s) with units. That is, 
quarter(s) in the payment amount benchmark period or applicable period 
for which a manufacturer has not reported units under section 
1927(b)(3)(A)(iv) of the Act would be excluded from the calculation. We 
proposed at Sec.  428.202(g)(2) to codify the policy described in 
section 40.1.2 of the revised guidance whereby if there are no quarters 
of the payment amount benchmark period or applicable period for which a 
manufacturer has reported units under section 1927(b)(3)(A)(iv) of the 
Act, but the manufacturer has reported AMP under sections 
1927(b)(3)(A)(i) and (ii) of the Act for at least 1 quarter of such 
period, CMS would use the average of the AMP over the calendar quarters 
of the payment amount benchmark period or applicable period for which 
AMP is reported to calculate the benchmark period manufacturer price or 
AnMP, respectively.
    We did not receive any comments on this proposed provision, and we 
are finalizing as proposed at Sec.  428.202(g). Nevertheless, as 
described in more detail in section III.I.3.c.iii.2. of this final 
rule, we have revised Sec.  428.202(d) to add a paragraph (3), which 
provides that to the extent that a new NDC-9 of a Part D rebatable drug 
is reported under section 1927 of the Act and AMP has not been reported 
for such NDC-9 under section 1927(b)(3)(A)(i)(I) or (ii) of the Act 
during the period described at Sec.  428.202(c)(1) or (2), as 
applicable, CMS will identify the payment amount benchmark period and 
calculate the benchmark period manufacturer price for such NDC-9 using 
other information reported by a manufacturer under section 1927(b)(3) 
of the Act for the Part D rebatable drug, such as the base date AMP if 
such base date AMP is reported for a calendar quarter that overlaps 
with the period described at Sec.  428.202(c)(1) or (2), as available. 
Therefore, in this final rule, we have modified proposed Sec.  
428.202(g)(2) to specify that if there are no quarters of the payment 
amount benchmark period for which a manufacturer has reported units 
under section 1927(b)(3)(A)(iv) of the Act, and Sec.  428.202(d)(3) 
applies, CMS will use the information determined under Sec.  
428.202(d)(3) to calculate the benchmark period manufacturer price.
iv. Determination of the Total Number of Units Dispensed Under Part D
    At Sec.  428.203(a), we proposed to codify the existing policy 
established in the revised Medicare Part D Drug Inflation Rebate 
Guidance whereby CMS would determine the total number of units of each 
Part D rebatable drug dispensed under Part D and covered by Part D 
sponsors based on information reported to CMS by Part D plan sponsors 
on the Part D PDE records for the 12-month applicable period. More 
specifically, we proposed CMS would determine the total number of units 
from the Quantity Dispensed field on the PDE record for each Part D 
rebatable drug with gross covered prescription drug costs greater than 
zero. Because the PDE record does not provide the unit type used to 
determine Quantity Dispensed, we proposed at Sec.  428.203(a)(2) that 
CMS would crosswalk the information from the PDE record to a drug 
database that provides the unit type for an NDC, such as Medi-Span or 
the FDA's Comprehensive NDC Structured Product Labeling (SPL) Data 
Element (NSDE) file, matching on the NDC of the Part D rebatable drug. 
We understand that in limited instances, the unit type obtained from 
such drug databases may not match the AMP unit type reported by 
manufacturers to the Medicaid Drug Programs system, and in these cases, 
CMS would convert the total units reported on the PDE record to the AMP 
units reported to the Medicaid Drug Program system.
    As explained in the CY 2025 PFS proposed rule (89 FR 61968-61969), 
CMS conducts a thorough review of PDE records, which includes the 
identification of outliers in the quantity dispensed field of PDE 
records, as part of the Part D payment reconciliation process that 
occurs between CMS and plan sponsors each year.\689\ We stated in the 
CY 2025 PFS proposed rule that CMS intends to rely on this payment 
reconciliation process, through which Part D plan sponsors have an 
opportunity to correct PDE records flagged by CMS as containing 
potential outliers, to resolve outliers that would otherwise impact the 
Part D drug inflation rebate amount calculated under Sec.  428.201(a). 
Because PDE records are not updated to reflect the resolution of 
outliers identified through the Part D payment reconciliation process 
for a given calendar year until after CMS plans to send Rebate Reports 
for the applicable period (capturing data that include the first three 
quarters of that calendar year), the Rebate Report will not reflect the 
resolution of unit outliers identified through the Part D payment 
reconciliation process. However, because CMS intends to conduct a 
reconciliation of the rebate amount with additional PDE run-out (as set 
forth in Sec.  428.401(d) and described later in this final rule), the 
reconciled rebate amounts will reflect the resolution of any unit 
outliers corrected by Part D plan sponsors through the Part D payment 
reconciliation process. As stated in the CY 2025 PFS proposed rule (89 
FR 61969), we do not intend to conduct separate outlier analysis of PDE 
for the purposes of the Medicare Part D Drug Inflation Rebate Program, 
but we did consider several adjustments to reduce the effect of 
outliers not resolved through the Part D payment reconciliation 
process, including

[[Page 98288]]

removal of PDE records that were identified by CMS as having potential 
outlier quantity dispensed fields but were neither corrected nor 
verified by Part D plan sponsors, removal of the quantity dispensed 
field for certain records at or above a certain statistically derived 
threshold, and imputing quantity dispensed values for such records. We 
solicited comments on this proposed approach to rely on CMS' existing 
review of PDE records, as well as on the adjustments considered to 
reduce the effect of outliers not resolved through the Part D payment 
reconciliation process.
---------------------------------------------------------------------------

    \689\ See https://www.hhs.gov/guidance/document/pde-analysis-process-withheld-and-invoiced-outlier-pdes.
---------------------------------------------------------------------------

    As we proposed at Sec.  428.203(b), CMS will remove from the total 
number of units any units of a generic drug dispensed on or after the 
date that such generic drug no longer meets the definition of a Part D 
rebatable drug, as well as units acquired through the 340B Program, as 
described in section III.I.3.c.iv.2. of this final rule.
    We received public comments on this proposed provision. We also 
solicited comments on any additional units that should be excluded from 
the rebate amount calculation. The following is a summary of the 
comments we received on these proposals and this comment solicitation 
and our responses.
    Comment: One commenter stated that CMS has not provided sufficient 
detail to meaningfully comment on CMS' process for eliminating outliers 
in PDE data not resolved through the Part D reconciliation process. 
This commenter suggested CMS publish a second proposed rule containing 
concrete policy proposals for comment.
    Response: We appreciate the comment. To meet the invoicing 
timelines of the Medicare Part D Drug Inflation Rebate Program, we are 
finalizing the approach described in the CY 2025 PFS proposed rule (89 
FR 61968-61969) whereby CMS will rely on the Part D payment 
reconciliation process that occurs between CMS and plan sponsors each 
year to resolve outliers that would otherwise impact the Part D drug 
inflation rebate amount calculated at Sec.  428.201(a). At this time, 
CMS will not perform additional adjustments to reduce the effect of 
outliers not resolved through the Part D payment reconciliation 
process. We believe relying on the Part D payment reconciliation 
process that occurs between CMS and plan sponsors each year is 
sufficient to resolve unit outliers for purposes of the Medicare Part D 
Drug Inflation Rebate Program and results in consistency across the 
Part D program. If in the future CMS determines that outliers not 
resolved through the Part D payment reconciliation process should be 
addressed for purposes of the Medicare Part D Drug Inflation Rebate 
Program, CMS may consider adjustments to reduce the effect of these 
outliers and would solicit comments on such adjustments at that time.
    Comment: One commenter recommended CMS also exclude from the rebate 
amount calculation units from other federal programs such as units 
purchased under the Federal Supply Schedule, as these units already 
have statutory discounts.
    Response: We appreciate the comment. In response to the request 
that CMS exclude from the rebate calculation units from other federal 
programs, section 1860D-14B(b) of the Act prescribes that the total 
number of units is based on the number of units for each Part D 
rebatable drug dispensed under Part D during the applicable period, 
excluding units of Part D rebatable drugs with respect to which the 
manufacturer provides a discount under the 340B Program. In addition, 
CMS will exclude units when a drug is no longer a Part D rebatable 
drug. CMS declines to adopt the commenter's recommendation to exclude 
units from other federal programs, such as units purchased under the 
Federal Supply Schedule.
    Additionally, CMS is aware that a PDE record for a Part D rebatable 
drug that was billed as a compound would reflect the quantity dispensed 
of the compounded drug product as a whole and not the Part D rebatable 
drug individually. To ensure that the total number of units is 
determined only using PDE records that accurately reflect the actual 
quantity dispensed of the Part D rebatable drug, we are finalizing at 
Sec.  428.203(b)(3) that, for operational reasons at this time, CMS 
will exclude PDE records for Part D rebatable drugs that were billed as 
compounds when determining the total number of units of each Part D 
rebatable drug dispensed under Part D and covered by Part D sponsors. 
Specifically, to determine the total number of units of a Part D 
rebatable drug, CMS will only use PDE records with a compound code 
indicating that the PDE record is not a compound (that is, PDE records 
with a compound code field equal to ``1=Not a Compound''). For 
alignment, CMS has also finalized at Sec.  428.101(b)(1) that, when 
calculating the gross covered prescription drug costs for a drug or 
biological for the purpose of calculating the average annual total cost 
for that drug or biological, CMS will exclude PDE records indicating 
the drug or biological was billed as a compound.
    CMS is exploring operational changes to the PDE record layout that 
would provide CMS with visibility into data on the quantity dispensed 
for a Part D rebatable drug when that Part D rebatable drug is billed 
as part of a compound, at which point such PDE records may be used to 
allow for inclusion in calculating the total number of units dispensed 
under Part D. These operational changes may also facilitate the 
inclusion of PDE records for drugs or biologicals that are billed as 
compounds in CMS' calculation of the gross covered prescription drug 
costs for a drug or biological for the purpose of calculating the 
average annual total cost for that drug or biological.
    After consideration of comments received, CMS is finalizing Sec.  
428.203(b) as proposed, with an additional provision at Sec.  
428.203(b)(3) to specify that CMS will exclude units from the total 
number of units dispensed of a Part D rebatable drug when those units 
are associated with a Part D rebatable drug that has been billed as 
compounded.
(1) Removal of Units When a Generic Drug Is No Longer a Part D 
Rebatable Drug
    At Sec.  428.203(b)(1), we proposed to codify the policy 
established in section 40.2.8 of the revised Medicare Part D Drug 
Inflation Rebate Guidance to exclude from the rebate calculation any 
units of a generic drug dispensed on or after the date that such 
generic drug no longer meets the definition of a Part D rebatable drug. 
To determine whether a generic drug that meets the definition of a Part 
D rebatable drug on the first day of an applicable period ceases to 
meet such definition later in the applicable period, we proposed that 
CMS will use the most recent version of the downloadable FDA Orange 
Book to identify whether FDA has approved a 505(j) ANDA for a drug that 
is rated as therapeutically equivalent to such generic drug. If CMS 
determines that FDA has approved such a therapeutically equivalent drug 
under a 505(j) ANDA, CMS will then use the NDC Directory, including 
historical information from NDC Directory files such as discontinued, 
delisted, and expired listings provided by FDA or published on the FDA 
website to determine the marketing status of such therapeutically 
equivalent drug and to determine whether, during the applicable period, 
the therapeutically equivalent drug was marketed. Similarly, we 
proposed CMS will use the NDC Directory to identify whether the 
reference listed drug, or an authorized generic of the reference listed 
drug was marketed during the

[[Page 98289]]

applicable period. CMS will exclude from the rebate calculation any 
units dispensed on or after the first day of the calendar month that a 
generic drug no longer meets the definition of a Part D rebatable drug. 
CMS proposed to apply this unit exclusion at the month level and would 
exclude all units of a generic drug that ceases to meet the definition 
of a Part D rebatable drug beginning with the first day of the first 
month when a therapeutically equivalent drug approved under a 505(j) 
ANDA is marketed based on the marketing start date in the NDC Directory 
or when the reference listed drug, or an authorized generic of the 
reference listed drug is marketed based on the marketing start date in 
the NDC Directory. We proposed to apply this exclusion each calendar 
month because the Orange Book downloadable data files are updated 
monthly.
    We did not receive public comments on this proposed provision, and 
we are finalizing as proposed at Sec.  428.203(b)(1).
(2) Exclusion of 340B Acquired Units From Part D Rebatable Drug 
Requirements
    Section 1860D-14B(b)(1)(B) of the Act requires that beginning with 
plan year 2026, CMS shall exclude from the total number of units for a 
Part D rebatable drug, with respect to an applicable period, those 
units for which a manufacturer provides a discount under the 340B 
Program. Because this requirement starts after the first quarter of the 
applicable period that begins on October 1, 2025, the exclusion of 340B 
units would only apply for the last three quarters of this applicable 
period. That is, CMS will exclude 340B units starting on January 1, 
2026.
    As we stated in the CY 2025 PFS proposed rule (89 FR 61969), data 
on which units dispensed under Part D and covered by Part D plan 
sponsors were purchased under the 340B Program is unavailable under the 
data sources specified at section 1860D-14B(d) of the Act (that is, 
information submitted by manufacturers, States, and Part D plan 
sponsors), and CMS does not currently have access to this data through 
other means. CMS understands that the 340B status of a Part D drug is 
usually not known by the dispenser at the point-of-sale, and that 340B 
covered entities (hereinafter ``covered entities'') typically identify 
the 340B status of a Part D drug retrospectively. Because the covered 
entity and CMS do not exchange dispensed Part D drug information 
confirming the 340B status of a Part D rebatable drug, CMS is unable to 
identify 340B units at the claim-level at this time. For these reasons, 
CMS proposed to establish an estimation methodology to remove 340B 
units from the total number of units for a Part D rebatable drug, as 
described in this section. CMS also solicited comments on alternative 
approaches.
(a) Estimation Methodology To Remove 340B Units From Rebate 
Calculations
    To fulfill the statutory requirement to remove 340B units from 
rebate calculations beginning on January 1, 2026, we proposed at Sec.  
428.203(b)(2) a new policy to remove units from the total number of 
units dispensed of a Part D rebatable drug for each applicable period 
based on a calculated percentage that reflects the portion of 340B 
purchasing relative to total sales. We proposed the percentage 
(hereinafter, ``estimation percentage'') to equal the total number of 
units purchased by covered entities under the 340B Program for an NDC-
9, divided by the total units sold of that NDC-9. We proposed the 
following example calculation for a Part D rebatable drug for a given 
applicable period for illustrative purposes:
    Total number of units dispensed under Part D determined at Sec.  
428.203(a), minus the units determined at Sec.  428.203(b)(1): 1,000.
    Estimation percentage:
    Total number of units purchased by covered entities under the 340B 
Program: 5,000.
    Total units sold: 50,000.
    5,000 divided by 50,000 = 10 percent.
    340B units excluded at Sec.  428.203(b)(2): 10 percent multiplied 
by 1,000 = 100.
    The proposed estimation policy is consistent with CMS' authority 
under sections 1860D-14B(b)(1)(B), 1102(a), and 1871(a)(1) of the Act, 
the latter of which provide the authority to make rules and regulations 
as necessary for the efficient administration of programs, including 
the Medicare Part D Drug Inflation Rebate Program. Because the 
statutory requirement to remove 340B units from rebate calculations 
does not begin until January 1, 2026, for the applicable year that 
begins on October 1, 2025, we proposed to apply the estimation 
percentage only to those units associated with claims with dates of 
service in the last 3 quarters of the applicable period (that is, 
January 1, 2026, through September 30, 2026).
    To identify the numerator of the estimation percentage (that is, 
the total number of units purchased under the 340B Program for an NDC-
9), we proposed to use data from HRSA's 340B Prime Vendor Program 
(PVP). Certain supply chain entities report 340B unit data to the PVP 
at the NDC-11 level, and based on the data received, we proposed to 
aggregate these data at the NDC-9 level \690\ to identify the total 
number of 340B units of a Part D rebatable drug that covered entities 
purchased in a given time period. We proposed that CMS would work with 
HRSA to obtain the necessary data from the PVP. We described in the CY 
2025 PFS proposed rule (89 FR 61970) that we understand that there are 
limitations of using the PVP data, including that some covered entities 
may choose not to participate in the PVP, and CMS will not have access 
to 340B purchases reported by supply chain entities for this share of 
covered entities. Further, certain 340B purchases may not be reported 
to the PVP if those purchases were made through alternative 
distribution models such as a covered entity purchasing directly from a 
manufacturer, certain specialty distribution channel purchases, or 
drugs that receive a 340B rebate under the Ryan White HIV/AIDS 
Program's AIDS Drug Assistance Program. We solicited comments on what 
other data sources may be available to calculate the numerator of the 
estimation percentage. We also solicited comments on how it could 
account for potential underreporting of 340B units if data are not 
available on certain 340B purchases, such as those described above, 
that may not be reported to the PVP.
---------------------------------------------------------------------------

    \690\ NDC-9 and NDC-11 numbers are identical except for two 
numbers in NDC-11s that indicate package size. Because of this, NDC-
11 is more granular than NDC-9, and multiple NDC-11 numbers can 
aggregate under a single NDC-9 number.
---------------------------------------------------------------------------

    To identify the denominator of the estimation percentage (that is, 
the total units sold of an NDC-9), we proposed to use existing 
manufacturer reporting under the Medicaid Drug Rebate Program (MDRP) of 
unit sales. Specifically, we proposed to use the total number of units 
that are used to calculate the monthly AMP and which manufacturers are 
required to report to CMS for each covered outpatient drug (COD) in 
accordance with section 1927(b)(3)(A)(iv) of the Act. We believed that 
using these unit data to calculate an estimation percentage would be 
consistent with the use of these same data to calculate the AnMP at 
Sec.  428.202(b) and the benchmark period manufacturer price at Sec.  
428.202(d).
    In the CY 2025 PFS proposed rule (89 FR 61970), we stated that we 
recognize the importance of ensuring that the numerator and denominator 
of the proposed estimation percentage reflect the same time period of 
sales for units dispensed in the same settings. We also acknowledged in 
the proposed rule that

[[Page 98290]]

the proposed data source for the numerator (PVP data) reflects 
purchases by covered entities that dispense or administer 340B-eligible 
drugs in retail community pharmacies and in outpatient settings. The 
proposed data source for the denominator (unit sales used to calculate 
AMP) represents, in accordance with the definition of AMP at section 
1927(k)(1) of the Act, (1) manufacturer sales to wholesalers for drugs 
distributed to retail community pharmacies, and (2) manufacturer sales 
to retail community pharmacies that purchase drugs directly from the 
manufacturer. Therefore, the numerator of the proposed estimation 
percentage represents 340B units dispensed in multiple settings, 
whereas the denominator represents units typically dispensed only in 
the retail community pharmacy setting. We welcomed evidence 
demonstrating how 340B dispensing rates differ between the retail 
community pharmacy setting versus multiple settings and may consider 
adjusting the estimation percentage to reflect variation between the 
percentage of 340B units dispensed in multiple settings (that is, 
retail community pharmacies and outpatient settings) and the percentage 
of 340B units dispensed in only the retail community pharmacy setting. 
We stated that the proposed regulatory text at Sec.  428.203(b)(2) 
would be subject to any such adjustment factor that may be adopted.
    We also recognized that the proposed estimation percentage 
represents the total number of 340B units dispensed as a proportion of 
total units dispensed, irrespective of insurance/payor type. We 
solicited comments on whether the agency should further adjust the 
percentage of 340B units dispensed to the general population to 
estimate the percentage of 340B units dispensed to Part D beneficiaries 
for claims with dates of service on or after January 1, 2026, including 
comments on how the percentage of 340B units dispensed to the general 
population compares with the percentage of 340B units dispensed to Part 
D beneficiaries. We welcomed evidence that demonstrates how these 
percentages differ. We noted that CMS would consider this information 
in developing its final policies and may consider adjusting the 
estimation percentage to reflect variation between the percentage of 
340B units dispensed to Part D beneficiaries and the percentage of 340B 
units dispensed to the general population. We stated that the proposed 
regulatory text at Sec.  428.203(b)(2) would be subject to any such 
adjustment factor that may be adopted. We solicited comments on whether 
there are other circumstances for which CMS should apply an adjustment 
factor to the estimation percentage.
    We considered using alternative data sources to calculate the 
estimation percentage. To identify the total number of units purchased 
under the 340B Program to use in the numerator of the estimation 
percentage, CMS considered requiring other entities throughout the 
pharmaceutical supply chain, including manufacturers, to report these 
data to CMS. We noted that an advantage of this approach is that 
manufacturers could provide data directly on total 340B units sold; in 
other words, this data would capture the limited 340B sales that the 
PVP data does not capture. A disadvantage of this approach is that not 
all manufacturers of Part D rebatable drugs may have existing 
mechanisms for tracking 340B sales for Medicare Part D, which could 
necessitate that new tracking and reporting mechanisms be created. We 
did not propose this alternative because we preferred to rely on data 
that are already reported to the PVP, as using these data would help to 
minimize reporting burdens and may result in cleaner and more accurate 
data due to the quality checks performed on the PVP data for purposes 
of compliance with the 340B Program. For example, audit and price 
integrity checks are performed on the PVP data to ensure the 
distributors submit and code the data correctly.
    To identify the total units sold to use in the denominator of the 
estimation percentage, we similarly considered establishing a new 
requirement for other entities throughout the pharmaceutical supply 
chain, including manufacturers, to report these data to CMS. We noted 
that an advantage of this approach is that the denominator would 
represent sales that are ultimately dispensed in retail community 
pharmacy settings and in outpatient settings (whereas, as mentioned 
previously, unit reporting under the MDRP represents units typically 
dispensed only in the retail community pharmacy setting). A 
disadvantage of this approach is that it could necessitate that new 
tracking and reporting mechanisms be created. We did not propose this 
alternative as we believed that relying upon existing manufacturer 
reporting of unit sales reported with AMP under the MDRP would be 
preferable to a new reporting option and would help minimize reporting 
burden. Further, the use of unit sales reported with AMP may provide 
cleaner and more accurate data than establishing a new manufacturer 
reporting requirement since manufacturers must certify their AMP 
reporting, in accordance with Sec.  447.510(e), and are subject to 
civil money penalties for false or inaccurate reporting, in accordance 
with section 1927(b)(3)(B) of the Act. We also considered using data on 
unit sales available in a nationally representative and commercially 
available database, but one disadvantage of this option would be that 
CMS would be unable to audit the quality of data available through such 
a database.
    We solicited comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters strongly objected to the proposed 
estimation methodology and urged CMS to not finalize this approach. 
Many of these commenters stated that the estimation methodology 
conflicts with section 1860D-14B(b)(1)(B) of the Act, which states that 
the Secretary ``shall exclude'' 340B units from the total number of 
units used to calculate the Part D drug inflation rebate amount. The 
commenters asserted that estimating the number of 340B units would not 
comply with this provision because it would be ``highly doubtful'' that 
the 340B units excluded via the estimation percentage would be 
reasonably correct and would likely underestimate the number of 340B 
units; the commenters stated that, in contrast, the Act requires CMS to 
exclude all 340B units. The commenters objected to CMS proposing to use 
data with known limitations when, according to the commenters, there is 
case law that supports the notion that the agency must use the ``most 
reliable'' data available. A couple of commenters asserted that the 
estimation methodology would offend principles of due process and basic 
fairness.
    Conversely, many commenters agreed with CMS' approach of developing 
an estimation percentage because this approach would not place 
unreasonable burden on covered entities and would be preferable to any 
methodology that requires point-of-sale or retrospective identification 
by covered entities or pharmacies through the use of a claims-based 
indicator. One commenter stated that the estimation methodology would 
be preferable to requiring the use of a Medicare Part D claims data 
repository (a topic discussed later in this section).
    Response: CMS thanks the commenters for their feedback. After 
further consideration and taking into account the comments received on 
the proposed estimation methodology, CMS is not finalizing the 
estimation methodology for the applicable period that begins on October 
1, 2025. Instead,

[[Page 98291]]

as discussed later in this section, CMS will explore avenues to 
implement section 1860D-14B(b)(1)(B) of the Act, which requires the 
exclusion from the total number of units for a Part D rebatable drug 
those units for which a manufacturer provides a discount under the 340B 
Program starting January 1, 2026, through the establishment of a 
Medicare Part D claims data repository.
    Comment: CMS received many comments on the proposed data sources 
for the estimation percentage. Many commenters stated that the PVP data 
is sufficient to help CMS calculate the estimated total number of units 
purchased under the 340B Program but raised concerns about using a 
broad data set from the PVP that would include hospitals and other 
covered entity outpatient purchases such as clinician-administered 
drugs. These commenters recommended that CMS only include retail 
pharmacy data from the PVP data to avoid any overestimates of the 
estimation percentage. Another commenter also supported the use of PVP 
data but cautioned that this data does not include certain purchases 
and could therefore deflate the true number of units purchased under 
the 340B Program. Many commenters objected to any use of the PVP data, 
stating that it would undercount a Part D rebatable drug's total 340B 
sales because some covered entities do not participate in the PVP and 
alternate distribution channels are not captured in the data. Some of 
these commenters claimed that the PVP is opaque and not validated, and 
interested parties would therefore be unable to fully verify the 
accuracy of the data. A few commenters raised concerns that potential 
undercounting of 340B units will be more pronounced for HIV therapies 
since a significant portion of 340B utilization for HIV therapies comes 
from AIDS Drug Assistance Programs (ADAPs).
    Some commenters also raised concerns with the use of AMP data to 
capture the total number of units sold. These commenters were concerned 
that AMP excludes 340B sales to covered entities and excludes most 
units not purchased by retail community pharmacies. One commenter 
stated that this latter exclusion could have a not insignificant impact 
on therapeutic classes frequently administered by clinicians, such as 
oncology products. A couple of commenters also asked how CMS would 
treat drugs with no reported AMP units but for which there is reported 
AMP when determining the number of units to exclude from Part D 
inflation rebate amounts.
    Response: CMS thanks the commenters for providing their feedback. 
As previously stated, after further consideration and taking into 
account the comments received on the proposed estimation methodology, 
CMS is not finalizing the estimation methodology for the applicable 
period that begins on October 1, 2025.
    Comment: Many commenters agreed with the limitations of the 
estimation percentage that CMS described in the CY 2025 PFS proposed 
rule (89 FR 61969-61971) but did not offer recommendations on how CMS 
could adjust the estimation percentage. In response to CMS' comment 
solicitation on how the 340B dispensing rate may differ in the general 
population versus in the Part D population, a couple of commenters 
stated that estimating the percentage of Part D 340B units based on the 
percentage of overall 340B sales may underestimate 340B Part D units 
because many drug units dispensed to Medicaid beneficiaries are carved 
out of the 340B program, whereas Medicare Part D does not have an 
equivalent carve-out; therefore, the percentage of Part D units that 
are 340B would be greater than the percentage of overall sales that 
includes Medicaid units in its calculation.
    Although no commenters offered specific recommendations on how CMS 
could adjust the estimation percentage, many commenters recommended 
changes that CMS should make to the estimation approach. One commenter 
recommended that CMS should at minimum permit manufacturers to submit 
data on the 340B utilization of their products to inform the numerator 
of the estimation percentage, whereas a few commenters strongly opposed 
any approach that would shift the responsibility of identifying 340B 
units to manufacturers. A couple of commenters stated that the 
estimation methodology does not account for the complexity of the 
structure of 340B organizations and their purchasing processes. A few 
commenters advised that CMS validate its calculations carefully and 
periodically audit the estimation percentage with covered entities, as 
overestimating the number of 340B units could have negative downstream 
impacts by artificially decreasing the inflation rebate amount for a 
Part D rebatable drug.
    Response: CMS thanks the commenters for providing their feedback. 
As previously stated, after further consideration and taking into 
account the comments received on the proposed estimation methodology, 
CMS is not finalizing the estimation methodology for the applicable 
period that begins on October 1, 2025.
    After consideration of public comments, CMS is not finalizing the 
estimation methodology for the applicable period that begins on October 
1, 2025. Instead, as discussed later in this section, CMS will explore 
avenues to implement section 1860D-14B(b)(1)(B) of the Act, which 
requires the exclusion from the total number of units for a Part D 
rebatable drug those units for which a manufacturer provides a discount 
under the 340B Program starting January 1, 2026, through the 
establishment of a Medicare Part D claims data repository.
(b) Comment Solicitation on a Medicare Part D Claims Data Repository
    In the initial Medicare Part D Drug Inflation Rebate Guidance, CMS 
solicited comments on the best mechanism to identify 340B units 
dispensed under Part D.\691\ CMS discussed requiring the dispensing 
entity to include a 340B claims indicator on the Part D drug claim to 
be included in PDE records. Many commenters disagreed that the PDE 
record was the most accurate way to identify 340B discounts for Part D 
drugs. A few commenters highlighted the operational challenges, 
administrative burden, and potential for increased dispensing fees and 
reimbursement issues with both point-of-sale modifiers and 
retrospective 340B identifiers. In addition, a wide array of interested 
parties recommended that CMS create a mechanism through which covered 
entities would retrospectively submit data to CMS identifying 340B 
claims dispensed under Part D. Interested parties urged that this 
mechanism allow covered entities to submit these data directly to CMS, 
rather than through claims that dispensers submit via Part D plan 
sponsors.
---------------------------------------------------------------------------

    \691\ See: https://www.cms.gov/files/document/medicare-part-d-inflation-rebate-program-initial-guidance.pdf.
---------------------------------------------------------------------------

    In response to this feedback from interested parties, in the CY 
2025 PFS proposed rule (89 FR 61971-61972) we solicited comments on 
establishing a Medicare Part D claims data repository (hereinafter, 
``repository'') in a future year of the Medicare Part D Drug Inflation 
Rebate Program to comply with the requirement under section 1860D-
14B(1)(B) of the Act that CMS shall exclude from the total number of 
units for a Part D rebatable drug those units for which a manufacturer 
provides a discount under the 340B Program. This approach would require 
that covered entities submit certain data elements from 340B-identified 
Part D claims to

[[Page 98292]]

the repository. CMS solicited comments on such a requirement later in 
this section.
    As described in the CY 2025 PFS proposed rule (89 FR 61971) and 
later in this section, CMS stated that a repository could receive data 
elements submitted by covered entities from 340B-identified claims for 
all drugs covered under Medicare Part D billed to Medicare. As 
requested by interested parties in comments on the initial Medicare 
Part D Drug Inflation Rebate Guidance, the repository could allow 
covered entities to submit these data directly to CMS (or a 
contractor), rather than through claims that dispensers submit to Part 
D plan sponsors. CMS could consider all data elements received by the 
repository to be associated with 340B-identified claims; that is, the 
repository would not further verify the 340B status of a claim but 
rather would serve solely to store these data. Under this process, CMS 
could require an attestation from covered entities that the data 
elements from all claims submitted to the repository are from verified 
340B claims. CMS stated that it is exploring approaches to confirming 
completeness and accuracy of the submission, and we solicited comments 
on methods to review and ensure the accuracy of reported data. CMS 
could then match the stored data elements to PDE records for each Part 
D rebatable drug dispensed during the applicable period. Units 
associated with PDE records that match to data elements stored in the 
repository could be considered those for which the manufacturer 
provides a discount under the 340B Program and therefore removed from 
the total number of units used to calculate the total rebate amount.
    We received public comments in response to this comment 
solicitation. The following is a summary of the comments we received 
and our responses.
    Comment: Many commenters stated support for CMS to implement the 
Part D claims repository as soon as possible or prior to January 1, 
2026. A couple of commenters recommended that CMS allow manufacturers 
to submit data on 340B utilization for their products if CMS is not 
able to implement a repository or modifier process for identifying and 
excluding 340B units before 2026. A few commenters recommended that CMS 
temporarily pause invoicing for Part D inflation rebates until a 340B 
claims repository is operational, unless it adopts a 340B claims 
indicator policy. These commenters recommended that CMS account for 
repository data in the reconciliation process for past applicable 
periods beginning with 2026 if it does not pause invoicing until the 
repository is operational.
    A couple of commenters recommended that CMS ensure that the 
repository is an independent entity, free from conflicts of interest 
related to relationships with parties involved with the 340B Program, 
including manufacturers and covered entities. One commenter recommended 
that the vendor selected for the repository be an entity currently 
active in the market that has extensive experience with data storage, 
exchange, and facilitation that is used to working with covered 
entities. A couple of commenters recommended that CMS ensure the 
protection of 340B-related claims information, as well as other 
sensitive or proprietary information that covered entities submit to 
the repository, including protection from potential cybersecurity 
threats. One commenter recommended CMS limit the scope of the 
repository to the collection of 340B-identified Part D claims to remove 
340B units from the calculation of Part D inflation rebates. One 
commenter stated that if CMS considers additional uses for the 
repository beyond the Part D inflation rebate program, it should engage 
in notice-and-comment rulemaking.
    Response: We appreciate the comments and recommendations. We will 
explore the establishment of a Medicare Part D claims data repository 
for removal of 340B units starting January 1, 2026 and may consider 
these comments for use in future rulemaking.
    Comment: A couple of commenters opposed the repository because it 
relies on data submitted by covered entities without including a 
process to verify 340B data reported by covered entities or 
guaranteeing the exclusion of all 340B units from inflation rebate 
calculations.
    Response: We appreciate the feedback in response to our comment 
solicitation and may consider these comments for use in future 
rulemaking.
    Comment: Some commenters recommended CMS work with an independent, 
neutral entity that would serve as a clearinghouse for not only Part D 
claims data, but other payer claims data as well, and create full 
transparency to facilitate the exchange of information to identify 340B 
claims, prevent duplicate discounts across Medicaid and Medicare and 
other programs, and resolve disputes or other issues. Many commenters 
recommended that the repository would or should be like the model used 
in Oregon to identify 340B claims to avoid duplicate discounts between 
the 340B price and Medicaid rebates. One commenter provided detailed 
recommendations for a clearinghouse approach related to the 
registration process, account management, and data submission, 
resubmission, and validation requirements. The commenter noted that 
such service models are currently available on the market and could 
meet the January 1, 2026 timeline.
    Response: We appreciate the comments and recommendations. We will 
explore the establishment of a Medicare Part D claims data repository 
for removal of 340B units starting January 1, 2026 and may consider 
these comments for use in future rulemaking.
    After consideration of public comments, we plan to explore the 
establishment of a Medicare Part D claims data repository to use for 
removal of 340B units from the calculation of Part D inflation rebates 
starting January 1, 2026 to implement section 1860D-14B(b)(1)(B) of the 
Act. We plan to continue exploring the development of detailed policies 
and requirements related to any such repository for future rulemaking 
related to this topic and the exclusion of 340B units. We will also 
continue to explore requiring that covered entities and their 
contracted 340B third-party administrators (340B TPAs) report 
retrospectively at a minimum the 4 elements we described and solicited 
comment on in the CY 2025 PFS proposed rule (89 FR 61971). We welcome 
engagement with interested parties as we further review the comments on 
data submission requirements and timing. If CMS were to establish a 
Medicare Part D claims data repository in the future, we believe an 
important consideration would be consulting with HRSA as applicable 
about the need for guidance and education for covered entities 
regarding the final selected data elements for reporting and compliance 
measures.
(c) Comment Solicitation on Requiring Covered Entities To Submit 340B 
Claims Data to the Repository
    We solicited comments on using our authority under section 1860D-
14B(b)(1)(B) of the Act, as well as our authorities under sections 
1102(a) and 1871(a)(1) of the Act, to require covered entities to 
enroll in a repository and submit certain data elements from 340B-
identified claims for all covered Part D drugs billed to Medicare to 
this repository. CMS understands covered entities typically contract 
with 340B TPAs to determine 340B eligibility of claims using data 
submitted by covered entities and their contract

[[Page 98293]]

pharmacies.\692\ CMS solicited comments on whether or how, to the 
extent a covered entity uses a 340B TPA, CMS could require or encourage 
TPAs to submit certain data elements to the repository on behalf of 
that covered entity.
---------------------------------------------------------------------------

    \692\ Covered entities may elect to dispense 340B drugs to 
patients through contract pharmacy services, an arrangement in which 
the covered entity enters a contract with the pharmacy to provide 
pharmacy services.
---------------------------------------------------------------------------

    Requiring covered entities to submit data elements from 340B-
identified Part D claims to the repository could allow CMS to receive 
data directly from the entities that participate in the 340B Program to 
identify 340B units to exclude from Part D drug inflation rebate 
calculations without intermediary entities needing to develop processes 
to capture these data and relay it to CMS. We described in the CY 2025 
PFS proposed rule (89 FR 61971) that we are considering requiring 
covered entities to submit the following data elements from Part D 
claims for covered Part D drugs that are purchased under the 340B 
Program and dispensed to Medicare Part D beneficiaries: (1) Date of 
Service (that is, the date the prescription was filled by the 
pharmacy); (2) Prescription or Service Reference Number; (3) Fill 
Number (that is, the code indicating whether the prescription is an 
original or a refill; if a refill, the code indicates the refill 
number); and (4) Dispensing Pharmacy NPI. CMS believes that these would 
be the minimum data elements required to match claims and remove 340B 
units from Part D drug inflation rebate calculations. We solicited 
comments from interested parties on this list of data elements and 
whether these data elements would be accessible to covered entities to 
submit to CMS.
    We received public comments in response to this comment 
solicitation. The following is a summary of the comments we received 
and our responses.
    Comment: A few commenters recommended CMS minimize the data 
elements it requires covered entities to report to the repository and 
only require data elements that are necessary for identification and 
matching of 340B information with Part D claims. Many commenters 
recommended CMS require covered entities to submit the National Drug 
Code (NDC) or other product information to the repository in addition 
to the data elements CMS included in the comment solicitation in the 
proposed rule. Many commenters noted that the NDC would help CMS better 
crosswalk between the data submitted by the covered entity and the PDE 
records for Part D rebatable drugs dispensed during the applicable 
period. A few commenters recommended CMS collect other data elements 
from covered entities, including quantity dispensed, covered entity 
340B ID, Part D Contract ID, and Part D Plan Benefit Package ID to help 
identify if two covered entities claimed a 340B discount for the same 
dispensed prescription and to verify that a 340B claim was dispensed to 
a Part D beneficiary. One commenter recommended that CMS require 
covered entities to submit the unit type data element to accurately 
identify 340B units to exclude them from Part D drug inflation rebate 
calculations. One commenter recommended that CMS require covered 
entities to submit the NCPDP Processor ID Number/Processor Control 
Number data element to the repository.
    Response: We plan to explore the establishment of a Medicare Part D 
claims data repository to use for removal of 340B units from the 
calculation of Part D inflation rebates starting January 1, 2026. We 
appreciate the comments and recommendations and may consider them for 
use in any future rulemaking regarding policies and requirements 
related to the repository, including a potential requirement that 
covered entities and their contracted 340B TPAs retrospectively report, 
at a minimum, the 4 elements we described and solicited comment on in 
the CY 2025 PFS proposed rule (89 FR 61971). We welcome engagement with 
interested parties as we further review the comments on data submission 
requirements and timing.
    Comment: A few commenters supported the repository leveraging 
existing data sources and allowing 340B TPAs to submit data in addition 
to covered entities and recommended CMS minimize burdens related to 
data sharing on covered entities. One commenter stated that the 
repository is similar to the existing process under which covered 
entities submit limited data elements to a commercially available 340B 
technology platform to continue receiving 340B discounts through 
contract pharmacy arrangements. One commenter noted concerns with the 
repository, arguing it would be an administrative burden for covered 
entities to provide data to CMS when many states already require data 
submission from covered entities.
    One commenter recommended that, if data is needed from Part D plan 
sponsors, CMS should leverage existing data submitted by Part D plan 
sponsors, such as PDE data, and not impose additional reporting 
requirements on Part D plan sponsors for data submission to the 
repository. One commenter recommended CMS clarify how a retrospective 
claims repository model would function. One commenter thanked CMS for 
soliciting comments on a repository model rather than imposing a 340B 
indicator submission requirement on Part D participating pharmacies.
    Response: We appreciate the comments and recommendation and may 
consider them for use in future rulemaking.
    Comment: A few commenters supported CMS using the authority 
outlined in the CY 2025 PFS proposed rule (89 FR 61971-61972) to 
require covered entities to submit certain data elements from 340B-
identified claims to a repository. A few commenters stated that CMS' 
statutory mandate to exclude 340B units from Part D drug inflation 
rebate calculations provides it with the authority to enact such a 
requirement. One commenter recommended that CMS explore authorities to 
ensure covered entity compliance with submission to a repository and 
remind covered entities of obligations to comply with statutes, 
regulations, and program instructions.
    Response: We appreciate the comments and recommendations and will 
consider them for use in future rulemaking.
    After consideration of public comments, we will explore avenues to 
implement section 1860D-14B(b)(1)(B) of the Act, which requires the 
exclusion from the total number of units for a Part D rebatable drug 
those units for which a manufacturer provides a discount under the 340B 
Program, through the establishment of a Medicare Part D claims data 
repository for removal of 340B units starting January 1, 2026 and may 
consider these comments for use in future rulemaking. We plan to 
continue exploring the development of detailed policies and 
requirements related to any such repository for future rulemaking 
related to this topic and the exclusion of 340B units. We will also 
continue to explore requiring that covered entities and their 
contracted 340B third-party administrators (340B TPAs) report 
retrospectively at a minimum the 4 elements we described and solicited 
comment on in the CY 2025 PFS proposed rule (89 FR 61971). We welcome 
engagement with interested parties as we further review the comments on 
data submission requirements and timing. If CMS were to establish a 
Medicare Part D claims data repository in the future, we believe an 
important consideration would be consulting with HRSA as applicable

[[Page 98294]]

about the need for guidance and education for covered entities 
regarding the final selected data elements for reporting and compliance 
measures.
(d) Comment Solicitation on Timing Requirements for Potential 
Submissions to a Medicare Part D Claims Data Repository
    We solicited comments on requiring covered entities to submit the 
fields specified by CMS to the repository within 3 months of the end of 
a given calendar quarter. For example, for claims with dates of service 
between October 1, 2027, through December 31, 2027, covered entities 
would be required to submit data elements from 340B-identified claims 
to CMS no later than March 31, 2028. The 340B units identified from 
these quarterly submissions could be removed from the total number of 
units and total rebate amount specified in the Preliminary Rebate 
Report and Rebate Report detailed at Sec. Sec.  428.401(b) and (c), 
respectively.
    In accordance with the proposed Sec.  428.401(d) to reconcile the 
rebate amount in the case of revised information, including a 
reconciliation of the total number of units detailed at Sec.  428.401, 
we solicited comments on providing covered entities with additional 
time to submit data to reflect a revision to the 340B determination of 
claims with dates of service throughout an applicable period. A 
revision could come in one of two forms: (1) resubmission of data for a 
claim that the covered entity previously submitted to a repository in 
error or with errors in the requested data fields, or (2) new 
submission of data for a claim that the covered entity had previously 
determined was not purchased under the 340B Program, but later 
identified was purchased under such program. For the first type of 
revision, we solicited comments on requiring that the covered entity 
resubmit the data from such claim using a field to indicate that such 
data should be removed from the repository's dataset of 340B-identified 
claims; if applicable, the covered entity could resubmit the claim with 
the correct information. We solicited comments on the process and 
timing for covered entities to submit this revised data to the 
repository after the end of the applicable period. Updates to the total 
number of units and total rebate amount based on this revised 
information from covered entities would be reflected in the 
reconciliation process detailed at Sec.  428.401(d).
    We solicited comments from interested parties on the feasibility of 
the proposed quarterly reporting timeline for covered entities to 
submit data elements from Part D 340B claims, as well as the additional 
time to submit data to reflect a revision to the 340B determination of 
claims.
    We received public comments in response to this comment 
solicitation. The following is a summary of the comments we received 
and our responses.
    Comment: Many commenters supported the data submission timing CMS 
detailed in its comment solicitation on the repository, stating that 
providing 3 months after the end of a given calendar quarter would 
provide sufficient time to compile required data. A couple of 
commenters recommended CMS provide ample time for covered entities to 
submit data to a repository. Many commenters supported CMS allowing 
covered entities to revise data previously submitted to the repository 
or submit new data for claims that are newly identified as 340B-
eligible. A couple of commenters recommended that CMS verify that any 
data submitted to the repository retroactively be final adjudicated 
claim information to ensure that information sent to the repository is 
final. One commenter recommended that covered entities share 340B 
claims data on a real-time basis or as close to real-time as possible 
with the repository.
    Response: We appreciate the comments and recommendation and will 
consider them for use in future rulemaking.
    After consideration of public comments, we will explore avenues to 
implement section 1860D-14B(b)(1)(B) of the Act, which requires the 
exclusion from the total number of units for a Part D rebatable drug 
those units for which a manufacturer provides a discount under the 340B 
Program, through the establishment of a Medicare Part D claims data 
repository for removal of 340B units starting January 1, 2026 and may 
consider these for use in future rulemaking. We will also continue to 
explore requiring that covered entities and their contracted 340B 
third-party administrators (340B TPAs) report retrospectively at a 
minimum the 4 elements we described and solicited comment on in the CY 
2025 PFS proposed rule (89 FR 61971). We welcome engagement with 
interested parties as we further review the comments on data submission 
requirements and timing. If CMS were to establish a Medicare Part D 
claims data repository in the future, we believe an important 
consideration would be consulting with HRSA as applicable about the 
need for guidance and education for covered entities regarding the 
final selected data elements for reporting and compliance measures.
(e) Alternative Policy Considered: 340B Claims Identifier
    As described in section 40.2.7 of the initial Medicare Part D Drug 
Inflation Rebate Guidance, CMS considered requiring that a 340B 
indicator be included on the PDE record at the time of dispense to 
identify drugs purchased under the 340B Program that were dispensed 
under Medicare Part D. As described in the ``Summary of Public Comments 
on the Initial Medicare Part D Drug Inflation Rebates Memorandum and 
CMS' Responses'' in the revised Medicare Part D Drug Inflation Rebate 
Guidance, many commenters--including covered entities, pharmacies, Part 
D plan sponsors, and pharmacy benefit managers--disagreed that the PDE 
record would be the most accurate way to identify 340B discounts for 
Part D drugs. A few commenters highlighted the operational challenges, 
administrative burden, and potential for increased dispensing fees and 
reimbursement issues with 340B claim identifiers. After further 
consideration of comments received in response to the initial guidance 
and of the process through which a claim is determined to have 340B 
status, we noted in the CY 2025 PFS proposed rule (89 FR 61972) that 
CMS is no longer pursuing this policy at this time but may consider it 
in future rulemaking.
    We received public comments on this alternative considered. The 
following is a summary of the comments we received and our responses.
    Comment: Many commenters expressed support for CMS' decision to not 
pursue a 340B claims indicator at this time and urged that CMS should 
not revisit the idea. These commenters explained that 340B-eligibility 
determinations are made after the point of sale and that 340B claims 
indicators are incompatible with the retrospective replenishment model 
\693\ and would be unworkable for most 340B pharmacies.
---------------------------------------------------------------------------

    \693\ Covered entities and their contract pharmacies can use a 
replenishment model in which they do not need to maintain a separate 
physical inventory for 340B-eligible drugs. Rather than maintain a 
physical inventory, they maintain a virtual inventory and a contract 
pharmacy can receive a replacement product, paid by the covered 
entity, after a full package size of the product has been dispensed 
to 340B-eligible patients.
---------------------------------------------------------------------------

    Response: CMS thanks these commenters for their support. In this 
final rule, CMS maintains that we are not pursuing a 340B claims 
indicator policy at this time but may consider it in future rulemaking.
    Comment: Many commenters supported use of a 340B claims

[[Page 98295]]

indicator to identify 340B units and stated that the use of such an 
indicator would be operationally feasible, accurate, and consistent 
with the statutory requirement to remove 340B units from Part D drug 
inflation rebate calculations. Some commenters recommended that CMS 
require use of 340B and non-340B indicators (that is, to identify that 
a drug was not purchased under the 340B Program) on claims and that 
Part D plans reject claims if they do not include one of the two 
indicators. A couple of commenters stated that CMS' statutory mandate 
to exclude 340B units from Part D drug inflation rebate calculations 
provides it with the authority to enact such a requirement. A few 
commenters noted that CMS stated in the initial Medicare Part D Drug 
Inflation Rebate Guidance that requiring a 340B indicator be included 
on the PDE record is the most reliable way to identify drugs that are 
subject to a 340B discount that were dispensed under Medicare Part D; 
these commenters were concerned that CMS has moved away from an 
approach it previously stated was the most reliable.\694\ A few 
commenters noted that a 340B modifier is utilized in the Part B program 
and argued that this indicates that employing a similar process in Part 
D is feasible. One commenter acknowledged the difficulty for some 
dispensing entities of identifying 340B eligibility at the point of 
sale and noted the discriminatory practices of payers when a 340B 
indicator is used, but urged CMS to continue to explore ways to improve 
identification of 340B claims at the point of sale in the absence of a 
comprehensive claims ``clearinghouse.'' Another commenter acknowledged 
the difficulties of implementing a 340B claims indicator but stated 
that the statute does not include any provision suggesting that 
minimizing disruptions for covered entities should take precedence.
---------------------------------------------------------------------------

    \694\ See: https://www.cms.gov/files/document/medicare-part-d-inflation-rebate-program-initial-guidance.pdf.
---------------------------------------------------------------------------

    Response: CMS appreciates the feedback. As stated in the CY 2025 
PFS proposed rule (89 FR 61972), CMS understands that the 340B status 
of a Part D drug may not be known by the dispensing entity at the point 
of sale, and that covered entities may identify the 340B status of a 
Part D drug retrospectively. Although the current NCPDP 
Telecommunications Standard Version D.0 for pharmacy claims does 
include a field where a 340B indicator could be provided in a ``B1'' 
transaction,\695\ it is optional for pharmacies to use, based on 
agreements with trading partners (for example, health plans, 
manufacturers, state Medicaid agencies). In addition, the standard 
specifies that the indicator in the ``B1'' transaction can only be used 
prospectively, so a pharmacy that makes the retrospective determination 
that the drug was purchased at or below the 340B ceiling price cannot 
apply this modifier retrospectively to the claim. The NCPDP does allow 
use of an ``N1'' transaction \696\ to retrospectively identify drugs 
purchased under the 340B program, but CMS understands that requiring 
use of the N1 transaction would not be feasible as it has not been 
adopted by pharmacy information systems. CMS therefore believes there 
may be more reliable ways to identify drugs that are subject to a 340B 
discount that were dispensed under Medicare Part D than requiring a 
340B indicator be included on the PDE record. In contrast, CMS requires 
340B modifiers under Part B because dispensing entities are generally 
able to identify the 340B status of a Part B claim at or soon after the 
point of dispense.
---------------------------------------------------------------------------

    \695\ A pharmacy would use the value of ``20'' in the Submission 
Clarification Code (420-DK) field to indicate use of a 340B drug at 
the time of the adjudication or dispensing of the claim. See: 
National Council on Prescription Drug Program (NCPDP) 340B 
Information Exchange Reference Guide Version 2.0, June 2019, https://www.ncpdp.org/NCPDP/media/pdf/340B_Information_Exchange_Reference_Guide.pdf.
    \696\ If it is determined that a 340B drug was dispensed after 
the claim has been adjudicated, then an N1 transaction can be 
submitted with the 420-DK submission.
---------------------------------------------------------------------------

    Comment: Many commenters recommended that CMS use data submitted to 
a Part D 340B repository for purposes of implementing nonduplication 
between the Maximum Fair Price and the 340B ceiling price in the 
Medicare Drug Price Negotiation Program. One commenter stated that drug 
pricing changes under the Inflation Reduction Act could have mixed 
effects on people with HIV, including the removal of 340B units from 
certain calculations. The commenter noted that any affordability 
challenges to people with HIV are concerning. One commenter stated 
support for transparency for health plans when a drug is 340B-eligible 
and for legislation related to creating a 340B claims clearinghouse. 
One commenter recommended that CMS work with HRSA to issue guidance 
requiring identification of 340B units to facilitate a 36-month 
reconciliation timeline for excluding 340B units from Part D inflation 
rebates.
    Response: While these comments are out of scope for this final rule 
because they address other programs and topics beyond the scope of the 
Medicare Part D Drug Inflation Rebate Program, we appreciate the 
feedback and may consider these recommendations for the Medicare Drug 
Negotiation Program.
    After consideration of public comments, CMS maintains that we are 
not pursuing a 340B claims indicator requirement at this time but may 
consider it in future rulemaking.
v. Treatment of New Formulations of Part D Rebatable Drugs
    Section 1860D-14B(b)(5)(B)(i) of the Act requires CMS to determine 
a formula for the rebate amount and the inflation-adjusted payment 
amount for a Part D rebatable drug that is a line extension of a Part D 
rebatable drug that is an oral solid dosage form for an applicable 
period that is consistent with the formula applied under section 
1927(c)(2)(C) of the Act for determining a rebate obligation for a 
rebate period under such section. Section 1927(c)(2)(C) of the Act 
provides for an alternative rebate calculation for line extension drugs 
under the MDRP, and CMS issued guidance on how this calculation is 
performed for these purposes.\697\
---------------------------------------------------------------------------

    \697\ See: https://www.medicaid.gov/medicaid/prescription-drugs/medicaid-drug-rebate-program/unit-rebate-calculation/unit-rebate-amount-calculation-for-line-extension-drugs-with-example/index.html.
---------------------------------------------------------------------------

    Section 1860D-14B(b)(5)(B)(ii) of the Act further states that for a 
Part D rebatable drug, the term line extension means, ``a new 
formulation of the drug, such as extended release formulation, but does 
not include an abuse-deterrent formulation of the drug (as determined 
by the Secretary), regardless of whether such abuse-deterrent 
formulation is an extended release formulation.'' This language is 
identical to the definition of ``line extension'' in section 
1927(c)(2)(C) of the Act. Regulatory definitions of ``line extension'' 
and ``new formulation'' for the MDRP were adopted through rulemaking 
\698\ and can be found at Sec.  447.502. In alignment with CMS' policy 
in section 40.4 of the revised Medicare Part D Drug Inflation Rebate 
Guidance, we proposed at Sec.  428.200 to adopt the definitions of 
``line extension'' and ``new formulation'' at Sec.  447.502 of this 
title for the purposes of identifying new formulations of Part D 
rebatable drugs.
---------------------------------------------------------------------------

    \698\ See: 85 FR 87000, 87101 (December 31, 2020).
---------------------------------------------------------------------------

    At Sec.  428.204, we proposed CMS will determine the total rebate 
amount to be paid by manufacturers by taking the greater of (1) the 
total rebate amount

[[Page 98296]]

calculated at Sec.  428.201(a) for the applicable period for the Part D 
rebatable drug that is a line extension, or (2) the alternative total 
rebate amount. This proposal is a modification to policy established in 
revised Medicare Part D Drug Inflation Rebate Guidance. While the 
revised guidance stated that CMS will compare the per unit rebate 
amount to the alternative per unit rebate amount, as described at Sec.  
428.204, we proposed that CMS will compare the total rebate amount 
calculated in at Sec.  428.201(a) to the alternative total rebate 
amount, which we believe is consistent with the existing regulations 
for new formulations at Sec.  447.509(a)(4), as explained in the CY 
2025 PFS proposed rule (89 FR 61972). We further proposed at Sec.  
428.204 to codify the policy described in section 40.4 of the revised 
guidance to calculate the alternative inflation rebate amount for a 
Part D rebatable drug that is a line extension consistent with the 
formula applied under section 1927(c)(2)(C) of the Act. That is, CMS 
will determine an inflation rebate amount ratio for the initial drug 
identified by the manufacturer in accordance with Sec.  
447.509(a)(4)(i)(B) by dividing the inflation rebate amount for that 
initial drug for the applicable period by the AnMP for that initial 
drug for the applicable period, as calculated under Sec.  428.202(b).
    We stated in the CY 2025 PFS proposed rule (89 FR 61972-61973) that 
to identify the initial drug for the line extension, CMS will use 
information from the Medicaid Drug Program system and identify line 
extensions based on manufacturer reporting of drugs as line extensions 
and related pricing and product data in that system. We noted that 
Medicaid rebates are calculated quarterly, and a different initial drug 
may be identified in different quarters by the manufacturer for a 
particular line extension drug. Part D drug inflation rebates are 
calculated based on a 12-month applicable period, meaning there may be 
instances where a Part D rebatable line extension drug has multiple 
potential initial drugs during the applicable period that could be used 
for the alternative inflation rebate amount calculation. In such 
situations, for consistency, CMS will use the initial drug identified 
by the manufacturer in the last quarter of the Part D inflation rebate 
applicable period to identify the initial drug for the line extension 
drug alternative inflation rebate calculation. If an initial drug was 
not identified in the last quarter for a drug that is a line extension, 
we stated CMS will use the initial drug identified for a quarter most 
recently in that applicable period to identify the initial drug for the 
line extension drug alternative inflation rebate calculation.
    We received public comments specific to the proposed definitions of 
``line extension'' and ``new formulation'' at Sec.  428.200 and 
responded to these comments above. We did not receive comments specific 
to the proposed provision at Sec.  428.204, and we are finalizing as 
proposed at Sec.  428.204.
d. Reducing the Rebate Amount for Part D Rebatable Drugs in Shortage 
and When There Is a Severe Supply Chain Disruption or Likely Shortage 
(Sec. Sec.  428.300 Through 428.303)
    Section 1860D-14B(b)(1)(C) of the Act requires the Secretary to 
reduce or waive the rebate amount owed by a manufacturer for a Part D 
rebatable drug with respect to an applicable period in three distinct 
cases: (1) when a Part D rebatable drug is described as currently in 
shortage on a shortage list in effect under section 506E of the FD&C 
Act at any point during the applicable period; (2) when CMS determines 
there is a severe supply chain disruption during the applicable period 
for a generic Part D rebatable drug or biosimilar, such as a disruption 
caused by a natural disaster or other unique or unexpected event; and 
(3) when CMS determines that without such a reduction or waiver, a 
generic Part D rebatable drug is likely to be described as in shortage 
on such shortage list during a subsequent applicable period. The 
statute does not describe how CMS should reduce or waive inflation 
rebates.
    To implement the statutory requirement under section 1860D-
14B(b)(1)(C) of the Act, we proposed to codify in subpart D of part 428 
existing policies described in sections 40.5, 40.5.1, 40.5.2, and 
40.5.3 of the revised Medicare Part D Drug Inflation Rebate Guidance to 
reduce the total rebate amount owed by a manufacturer in each of these 
three cases, as summarized in Table 60 and discussed later in this 
section.
[GRAPHIC] [TIFF OMITTED] TR09DE24.106


[[Page 98297]]


    In the CY 2025 PFS proposed rule (89 FR 61973), we described that 
CMS would not fully waive the rebate amount owed in any case. We stated 
that we believe the proposed rebate reduction policies balance 
providing appropriate financial relief for manufacturers in certain 
circumstances, including when there is a severe supply chain disruption 
resulting from exogenous circumstances outside of a manufacturer's 
control, while not incentivizing manufacturers to delay taking 
appropriate steps to resolve a drug shortage or severe supply chain 
disruption, or maintain a situation in which a generic would be at risk 
of shortage to avoid an obligation to pay rebates. Additionally, we 
stated in the CY 2025 PFS proposed rule that we will continue to 
evaluate these policies and may update them in future years. We noted 
that most shortages involve multiple source generic drugs,\699\ which 
are not Part D rebatable drugs and thus are not subject to Part D drug 
inflation rebates.
---------------------------------------------------------------------------

    \699\ See: https://www.iqvia.com/insights/the-iqvia-institute/reports-and-publications/reports/drug-shortages-in-the-us2023.
---------------------------------------------------------------------------

    We solicited comments on these proposals. Comments regarding rebate 
reductions for drugs currently in shortage and drugs experiencing a 
severe supply chain disruption that are applicable to both Part B 
rebatable drugs and Part D rebatable drugs (for example, comments 
recommending a full waiver of the rebate amount and comments on the 
definitions) are summarized in the Part B drug inflation rebate section 
of this final rule. Rebate reduction comments specific to the Medicare 
Part D Drug Inflation Rebate Program (for example, comments on the 
likely to be in shortage policy) are summarized later in this section.
i. Definitions
    We proposed at Sec.  428.300 to define the following terms 
applicable to subpart D (Sec. Sec.  428.300 through 428.303):
     ``Biosimilar''.
     ``Drug shortage'' or ``shortage''.
     ``Generic Part D rebatable drug''.
     ``Likely to be in shortage''.
     ``Plasma-derived product''.
    We also proposed at Sec.  428.300 to codify definitions established 
in the revised Medicare Part D Drug Inflation Rebate Guidance for the 
following terms:
     ``Currently in shortage''.
     ``Natural disaster''.
     ``Other unique or unexpected event''.
     ``Severe supply chain disruption'' .
    We received public comments on these proposed definitions, which 
are applicable to both Part B rebatable drugs and Part D rebatable 
drugs and are summarized in the Part B drug inflation rebate section of 
this final rule. After consideration of comments received, we are 
finalizing the definitions as proposed at Sec. Sec.  428.300 and 
427.400.
ii. Reducing the Rebate Amount for Part D Rebatable Drugs Currently in 
Shortage
    At Sec.  428.301, we proposed to codify the policy established in 
section 40.5.1 of the revised Medicare Part D Drug Inflation Rebate 
Guidance whereby CMS would reduce the total rebate amount for a Part D 
rebatable drug that is currently in shortage based on the length of 
time the drug is in shortage during an applicable period and decrease 
the amount of the reduction over time. We stated in the CY 2025 PFS 
proposed rule (89 FR 61974) that CMS intends to use the shortage lists 
maintained by the FDA Center for Biologics Evaluation and Research 
(CBER) and Center for Drug Evaluation and Research (CDER) to determine 
whether a Part D rebatable drug is currently in shortage \700\ during 
an applicable period. We also stated that CMS will not consider an NDC-
10 in the status of ``to be discontinued,'' ``discontinued,'' or 
``resolved'' to be ``currently in shortage'' and that CMS would provide 
the same reduction in the rebate amount for Part D rebatable drugs 
currently in shortage regardless of the cause of the shortage.
---------------------------------------------------------------------------

    \700\ For the purposes of this final rule, CMS uses the term 
``currently in shortage'' to refer to Part D rebatable drugs that 
are in the status of ``currently in shortage'' on the CDER shortage 
list, as well as biological products listed on CBER's current 
shortages list.
---------------------------------------------------------------------------

    We proposed that CMS will not provide a full waiver of the rebate 
amount for drugs currently in shortage, as providing a full waiver of 
the rebate amount could further incentivize manufacturers to delay 
taking appropriate steps that may resolve a shortage more expeditiously 
simply to maintain having the drug listed on FDA's drug shortage list 
to avoid an obligation to pay rebates for an extended period. Further, 
as explained in the CY 2025 PFS proposed rule (89 FR 61974), in a 
report analyzing the root causes of drug shortages between 2013 and 
2017, FDA found that more than 60 percent of drug shortages were the 
result of manufacturing or product quality issues, and providing a full 
waiver of the rebate amount in situations that may be within a 
manufacturer's control could be perceived as rewarding manufacturers 
for poor quality management.\701\
---------------------------------------------------------------------------

    \701\ See: https://www.fda.gov/media/131130/download?attachment#page=33.
---------------------------------------------------------------------------

    We stated in the CY 2025 PFS proposed rule (89 FR 61974) that CMS 
will be responsible for monitoring the status of a Part D rebatable 
drug on an FDA shortage list, and manufacturers would not need to 
submit any information to CMS to be eligible for a reduction of the 
rebate amount for a Part D rebatable drug that is currently in 
shortage.
    To calculate the reduced total rebate amount for a Part D rebatable 
drug, at Sec.  428.301(b)(1), we proposed the following formula:

Reduced Total Rebate Amount = the total rebate amount multiplied by (1 
minus applicable percent reduction) multiplied by (percentage of time 
drug was currently in shortage during the applicable period) added to 
the total rebate amount multiplied by (1 minus percentage of time drug 
was currently in shortage during the applicable period)

    For the purpose of this formula, for a Part D rebatable drug that 
is a generic drug or a plasma-derived product, at Sec.  
428.301(b)(2)(i), we proposed an applicable percent reduction of 75 
percent for the first applicable period such Part D rebatable drug is 
currently in shortage, 50 percent for the second applicable period, and 
25 percent for each subsequent applicable period. For a Part D 
rebatable drug (including a biosimilar) that is not a generic drug or a 
plasma-derived product, at Sec.  428.301(b)(2)(ii), we proposed an 
applicable percent reduction of 25 percent for the first applicable 
period such Part D rebatable drug is currently in shortage, 10 percent 
for the second applicable period, and 2 percent for each subsequent 
applicable period.
    Because drugs and biologicals on the FDA shortage lists are 
maintained at the NDC-10 level, and Part D drug inflation rebates are 
calculated at the NDC-9 level, we proposed at Sec.  428.301(c) that if 
any NDC-10 for a Part D rebatable drug is currently in shortage, CMS 
will apply the rebate reduction to the entire Part D rebatable drug at 
the NDC-9 level. CMS will closely monitor market data for the Part D 
rebatable drugs for which the rebate is reduced to ensure the integrity 
of the application of the rebate reduction policy.
    We proposed to provide a reduction in the rebate amount for as long 
as a Part D rebatable drug is currently in shortage. We stated in the 
CY 2025 PFS proposed rule (89 FR 61974) that we believe the rebate 
reduction should be proportional to the time the drug is currently in 
shortage and decrease over time to balance providing financial

[[Page 98298]]

relief to manufacturers experiencing a drug shortage while not 
incentivizing manufacturers to delay taking appropriate steps to 
resolve a shortage simply to maintain having the drug listed on an FDA 
shortage list to avoid an obligation to pay rebates for an extended 
period.
    To determine the percentage of time a Part D rebatable drug was 
currently in shortage during the applicable period, at Sec.  
428.301(b)(3), we proposed to determine the number of days such drug is 
currently in shortage in an applicable period and divide by the total 
number of days in that applicable period.
    At Sec.  428.301(b)(2), we proposed to codify the policy set forth 
in section 40.5.1 of the revised Medicare Part D Drug Inflation Rebate 
Guidance to apply a greater applicable percent reduction for generic 
Part D rebatable drugs, which, by definition, are sole source generic 
drugs, compared to brand-name drugs and biologicals, including 
biosimilars. CMS understands that generic drugs are often low-margin 
products whose prices are tied to the marginal cost of production and 
thus are vulnerable to potential market exit and shortage when input 
costs increase. CMS notes that the Medicare Part D Drug Inflation 
Rebate Program does not apply to multiple source generic drugs, which 
are the generic drugs most likely to be in shortage.\702\ We also 
proposed applying a greater applicable percent reduction for plasma-
derived products than non-plasma derived products because the former 
rely on a variable supply of donated blood plasma that can impact 
downstream production and therefore hamper the ability to promptly 
resolve a shortage.
---------------------------------------------------------------------------

    \702\ See: https://www.iqvia.com/insights/the-iqvia-institute/reports-and-publications/reports/drug-shortages-in-the-us2023.
---------------------------------------------------------------------------

    When the status of a Part D rebatable drug changes from currently 
in shortage to ``resolved'' and either remains in the status of 
``resolved'' or is removed from the list, and then reemerges on the 
list in the status of currently in shortage in the next applicable 
period, we proposed to apply the shortage reduction as if there was a 
continuous shortage and move to the applicable percent reduction for 
the second applicable period. (In this scenario, the applicable percent 
reduction would be 50 percent for the second applicable period for a 
generic Part D rebatable drug or plasma-derived product and 10 percent 
for a Part D rebatable drug that is not a generic drug or plasma-
derived product.) When the status of a Part D rebatable drug changes 
from currently in shortage to ``resolved'' and either remains in the 
status of ``resolved'' or is removed from the list for at least one 
applicable period, and then subsequently reemerges on a shortage list, 
the subsequent shortage will be treated as a new shortage. In such 
case, the applicable percent reduction for the first applicable period 
in which the drug reemerges on the shortage list would be 75 percent 
for a generic Part D rebatable drug or plasma-derived product and 25 
percent for a Part D rebatable drug that is not a generic or plasma-
derived product.
    We received public comments on these proposed provisions, which are 
applicable to rebate reductions for Part B rebatable drugs and Part D 
rebatable drugs and are summarized in the Part B drug inflation rebate 
section of this final rule.
    Consistent with the policy described for rebate reductions for Part 
B rebatable drugs currently in shortage, after consideration of the 
comments received, we are finalizing this policy as proposed at Sec.  
428.301 with an additional provision at Sec.  428.301(b)(2)(iii) to 
clarify the starting point for application of the rebate reduction. CMS 
adopted this provision to clarify CMS' intended policy, as highlighted 
by examples in the CY 2025 PFS proposed rule, that while CMS will 
generally apply the shortage reduction starting with the first 
applicable period that a drug or biological covered under Part D is 
described as currently in shortage, CMS acknowledges that for such drug 
or biological that has been granted a rebate reduction for a severe 
supply chain disruption or for such generic drug that has been granted 
a rebate reduction for a likely shortage, it would be appropriate to 
delay the start of the applicable percent reduction for being in 
shortage until after the conclusion of the severe supply chain 
disruption reduction or likely to be in shortage reduction if the 
shortage continues. The section below discusses this clarification in 
detail. Specifically, and as shown in Table 60, we are clarifying in 
this final rule that CMS will apply the greatest rebate reduction to 
the first applicable period that a drug or biological is described as 
currently in shortage regardless of whether the drug or biological 
meets the definition of a Part D rebatable drug or owes a rebate 
amount, starting with the applicable period that begins October 1, 
2022. For example, if a generic drug or plasma-derived product was 
currently in shortage from October 1, 2021 through December 15, 2023, 
CMS would apply an applicable percent reduction of 75 percent for the 
applicable period beginning October 1, 2022 and ending September 30, 
2023, followed by a 50 percent reduction for the applicable period 
beginning October 1, 2023 and ending September 30, 2024, even if such 
drug did not meet the definition of a Part D rebatable drug or there 
was no rebate amount owed to which to apply the reduction. Similarly, 
for a drug that is not a generic drug or plasma-derived product, in 
this example, CMS would apply an applicable percent reduction of 25 
percent for the applicable period beginning October 1, 2022 and ending 
September 30, 2023, followed by a 10 percent reduction for the 
applicable period beginning October 1, 2023 and ending September 30, 
2024, even if such drug did not meet the definition of a Part D 
rebatable drug or there was no rebate amount owed to which to apply the 
reduction.

[[Page 98299]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.107

    We believe this clarification helps ensure clarity on CMS' policy 
in applying rebate reductions, which is intended to provide appropriate 
financial relief for drugs currently in shortage while limiting 
opportunities for manufacturers to manipulate a shortage start date to 
align with future price increases that coincide with the application of 
the reduction, as well as to decrease the amount of the rebate 
reduction the longer a drug is in shortage as described in the CY 2025 
PFS proposed rule (89 FR 61974).
iii. Reducing the Rebate Amount for Generic Part D Rebatable Drugs and 
Biosimilars When There Is a Severe Supply Chain Disruption
    At Sec.  428.302, we proposed to codify the policy established in 
section 40.5.2 of the revised Medicare Part D Drug Inflation Rebate 
Guidance for rebate reductions when CMS determines there is a severe 
supply chain disruption during an applicable period. We proposed at 
Sec.  428.302(b)(1) to provide a time-limited standard reduction of 75 
percent in the total rebate amount for a generic Part D rebatable drug 
or biosimilar when CMS determines there is a severe supply chain 
disruption during the applicable period, such as that caused by a 
natural disaster or other unique or unexpected event. We proposed that 
to receive a rebate reduction in accordance with Sec.  428.302(b)(1), 
the manufacturer would have to submit to CMS a rebate reduction request 
that meets the eligibility requirements at Sec.  428.302(c). A rebate 
reduction request should specify each NDC-11 to which the request 
applies, and if CMS grants a manufacturer's severe supply chain 
disruption rebate reduction request for an NDC-11, we proposed at Sec.  
428.302(b)(3) that the rebate reduction will apply to the entire 
generic Part D rebatable drug or biosimilar at the NDC-9 level. We 
refer manufacturers to the collection of information approved under OMB 
control number 0938-1474, for further instructions for submitting 
rebate reduction requests.
    We proposed at Sec.  428.302(c)(4) to grant a reduction in the 
rebate amount owed if a manufacturer of an eligible drug submits to CMS 
a request in writing demonstrating that (1) a severe supply chain 
disruption has occurred during the applicable period, (2) the severe 
supply chain disruption directly affects the manufacturer itself, a 
supplier of an ingredient or packaging, a contract manufacturer,\703\ 
or a method of shipping or distribution that the manufacturer uses in a 
significant capacity to make or distribute the generic Part D rebatable 
drug or biosimilar, and (3) the severe supply chain disruption was 
caused by a natural disaster or other unique or unexpected event. CMS 
began accepting rebate reduction requests and rebate reduction 
extension requests upon completion of the Paperwork Reduction Act (PRA) 
process, including for severe supply chain disruptions caused by a 
natural disaster or other unique or unexpected event that occurred on 
or after October 1, 2022, but before completion of the PRA 
process.\704\ We proposed at Sec.  428.302(c)(2) that for a natural 
disaster or other unique or unexpected event occurring or beginning on 
or after August 2, 2024, that the manufacturer believes caused a severe 
supply chain disruption, the manufacturer must submit the rebate 
reduction request within 60 calendar days from the first day that the 
natural disaster or other unique or unexpected event occurred or began 
in order for CMS to consider a rebate reduction.
---------------------------------------------------------------------------

    \703\ A contract manufacturer is a party that performs one or 
more manufacturing operations on behalf of a manufacturer(s) of 
active pharmaceutical ingredients (APIs), drug substances, in-
process materials, finished drug products, including biological 
products, and combination products. See ``Contract Manufacturing 
Arrangements for Drugs: Quality Agreements Guidance for Industry,'' 
November 2016: https://www.fda.gov/media/86193/download.
    \704\ Consistent with the published collection of information 
approved under OMB control number 0938-1474, for a natural disaster 
or other unique or unexpected event that occurred or began on or 
after October 1, 2022 but before August 2, 2024 that the 
manufacturer believes caused a severe supply chain disruption, the 
manufacturer must have submitted the rebate reduction request no 
later than 11:59 p.m. PT on October 1, 2024 for CMS to consider a 
rebate reduction for the generic Part D rebatable drug or 
biosimilar.
---------------------------------------------------------------------------

    We proposed that if a manufacturer makes a timely request that 
includes all the supporting documentation, and CMS determines, based on 
its review of the reduction request and supporting documentation, that 
a reduction should be granted, CMS will reduce the total rebate amount 
owed by a manufacturer by 75 percent for the manufacturer's generic 
Part D rebatable drug or biosimilar for the applicable period in which 
the event that caused the severe supply chain disruption occurred or 
began or, the following applicable period if the request is submitted 
less than 60 calendar days before the end of an applicable period. CMS 
acknowledged that the 60-day advance submission requirement may pose a 
challenge to timing of the rebate reduction when the severe supply 
chain

[[Page 98300]]

disruption-causing event occurs late in one applicable period, and the 
request is not submitted until the next applicable period. In such 
circumstances, CMS will apply a rebate reduction to an applicable 
period based on the timing of the natural disaster or other unique or 
unexpected event causing a severe supply chain disruption and the 
timing of the submission of the request and may adjust the timing of 
the application of the rebate reduction as appropriate to meet the 
invoicing deadlines specified in statute and subpart E of proposed part 
428.
    We proposed at Sec.  428.302(c)(5) that if a manufacturer believes 
severe supply chain disruption continues into a second, consecutive 
applicable period after the start of the natural disaster or other 
unique or unexpected event, the manufacturer may request a reduction of 
the total rebate amount for that second applicable period by submitting 
a rebate reduction extension request to CMS, along with any new 
supporting documentation. We refer manufacturers to the collection of 
information approved under OMB control number 0938-1474, for further 
instructions for submitting rebate reduction requests. At Sec.  
428.302(c)(5)(ii), we proposed that a rebate reduction extension 
request and any new supporting documentation must be submitted at least 
60 calendar days before the start of that second applicable period in 
order for CMS to consider a rebate reduction extension, except for when 
the initial request is made less than 60 calendar days before the end 
of an applicable period such that the initial rebate reduction applied 
to the next applicable period rather than the applicable period in 
which the event that caused the severe supply chain disruption occurred 
or began. In these cases, the rebate reduction extension request must 
be submitted at least 60 calendar days prior to the end of the 
applicable period in which the initial reduction applied.
    We further proposed that if a manufacturer submits a complete and 
timely extension request, and CMS determines that the information 
submitted warrants an extension of the rebate reduction, the total 
rebate amount will be reduced by 75 percent for a second consecutive 
applicable period for that manufacturer's generic Part D rebatable drug 
or biosimilar in accordance with Sec.  428.302(b)(2).
    Consistent with the policy established in section 40.5.2 of the 
revised Medicare Part D Drug Inflation Rebate Guidance, we proposed at 
Sec.  428.302(c)(5) that a manufacturer may receive only one extension 
of the rebate reduction per generic Part D rebatable drug or biosimilar 
per CMS determination of a severe supply chain disruption. Said 
differently, CMS will limit the severe supply chain disruption rebate 
reduction to two consecutive applicable periods total per generic Part 
D rebatable drug or biosimilar per CMS determination of a severe supply 
chain disruption.
    At Sec.  428.302(b)(4)(i), we proposed that if the manufacturer 
believes there are multiple events causing severe supply chain 
disruptions during the same applicable period for the same generic Part 
D rebatable drug or biosimilar and submits multiple rebate reduction 
requests for the same generic drug or biosimilar, CMS will grant no 
more than one rebate reduction for that generic drug or biosimilar for 
the applicable period. For example, if the manufacturer of a generic 
Part D rebatable drug or biosimilar is granted a severe supply chain 
disruption rebate reduction request for its product due to a natural 
disaster that occurred in January 2025 and then experiences a second 
severe supply chain disruption caused by a second, distinct natural 
disaster in July 2025, CMS will not grant the second rebate reduction 
request. That is, the manufacturer would receive the 75 percent 
reduction for one applicable period for the severe supply chain 
disruption caused by the first natural disaster but would not receive a 
rebate reduction for the second natural disaster. However, if the 
second natural disaster exacerbated the severe supply chain disruption 
caused by the first natural disaster, the manufacturer may reflect such 
circumstances in its request for an extension of the rebate reduction 
for a second applicable period.
    At Sec.  428.302(b)(4)(ii), we proposed that if CMS grants a severe 
supply chain disruption rebate reduction request for a generic Part D 
rebatable drug or biosimilar, and the drug or biosimilar appears as 
currently in shortage during the same applicable period as the one for 
which the severe supply chain disruption reduction request was granted, 
CMS will apply the 75 percent reduction to the entire applicable period 
for which the severe supply chain disruption request was granted and 
would not grant any additional reduction for the shortage status during 
that applicable period. For any subsequent applicable periods that the 
generic Part D rebatable drug or biosimilar appears as currently in 
shortage, CMS will reduce the total rebate amount in accordance with 
the drug shortage reduction at Sec.  428.301, starting with the highest 
reduction (that is, 75 percent for a generic Part D rebatable drug or 
plasma-derived product and 25 percent for a Part D rebatable drug that 
is not a generic drug or plasma-derived product). As explained in the 
example in the CY 2025 PFS proposed rule (89 FR 61976), if CMS grants a 
severe supply chain disruption rebate reduction request for a generic 
Part D rebatable drug or biosimilar that was submitted on November 15, 
2024, and that generic Part D rebatable drug or biosimilar is currently 
in shortage from September 15, 2025, until May 15, 2026, CMS would 
apply a 75 percent reduction in the total rebate amount for the 
duration of the applicable period for which the severe supply chain 
disruption rebate reduction request was granted (that is, October 1, 
2024, to September 30, 2025), and then would apply the shortage 
reduction as proposed in Sec.  428.301, beginning with a reduction of 
25 percent for a biosimilar or 75 percent for a generic Part D 
rebatable drug or plasma-derived product that is a biosimilar for the 
applicable period beginning October 1, 2025.
    At Sec.  428.302(b)(4)(iii), we proposed that if a generic Part D 
rebatable drug or biosimilar that is currently in shortage experiences 
a severe supply chain disruption, the manufacturer may submit a severe 
supply chain disruption rebate reduction request. If CMS grants the 
rebate reduction request, the rebate amount would be reduced by 75 
percent for the applicable period, and we will not grant any additional 
reduction under Sec.  428.301 for the currently in shortage status 
during that applicable period. As described in the example in the CY 
2025 PFS proposed rule (89 FR 61976), if a generic Part D rebatable 
drug or biosimilar that is currently in shortage in the applicable 
period beginning October 1, 2024 is granted a severe supply chain 
disruption rebate reduction request as a result of a natural disaster 
that occurs on April 5, 2025, CMS would apply a 75 percent reduction in 
the rebate amount for the duration of the applicable period in which 
the natural disaster occurred (that is, October 1, 2024, to September 
30, 2025). In this same example, if the natural disaster instead occurs 
on September 5, 2025, CMS would apply the shortage reduction proposed 
in Sec.  428.301 for the duration of the applicable period beginning 
October 1, 2024 (that is, October 1, 2024, to September 30, 2025), and 
then a 75 percent reduction under the severe supply chain disruption 
policy to the next applicable period beginning October 1, 2025 (that 
is, October 1, 2025, to September 30, 2026).

[[Page 98301]]

    At Sec.  428.302(c)(6), we proposed to review rebate reduction 
requests and rebate reduction extension requests within 60 calendar 
days of receipt of all documentation, if feasible, beginning with the 
applicable period that begins on October 1, 2024. If a manufacturer's 
rebate reduction request does not meet the criteria at Sec.  
428.302(c)(4) or if the rebate reduction request is incomplete or 
untimely based on the requirements at Sec.  428.302(c), we proposed 
that CMS will deny the request. We also proposed that if a 
manufacturer's rebate reduction extension request does not meet the 
criteria at Sec.  428.302(c)(5), is incomplete or untimely based on the 
requirements at Sec.  428.302(c)(5), or if a reduction under Sec.  
428.302(b)(1) was not provided for such generic Part D rebatable drug 
or biosimilar, CMS will deny the rebate reduction extension request. At 
Sec.  428.302(c)(6)(iii), we proposed that CMS' decisions to deny a 
request will be final and not be subject to an appeals process.
    At Sec.  428.302(c)(7), we proposed CMS will keep confidential, to 
the extent allowable under law, any requests for a rebate reduction, 
including supporting documentation. We proposed that information 
provided as part of a severe supply chain disruption rebate reduction 
request that the submitter indicates is a trade secret or confidential 
commercial or financial information would be protected from disclosure 
if CMS determines the information meets the requirements set forth 
under Exemptions 3 or 4 of the Freedom of Information Act (FOIA). In 
addition to the protections under the FOIA for trade secrets and 
commercial or financial information obtained from a person that is 
privileged or confidential, the Trade Secrets Act at 18 U.S.C. 1905 
requires executive branch employees to protect such information. CMS 
will protect confidential and proprietary information as required by 
applicable law.
    We received public comments on these proposed provisions, which are 
applicable to both Part B rebatable drugs and Part D rebatable drugs 
and are summarized in the Part B drug inflation rebate section of this 
final rule.
    After consideration of comments received, we are finalizing this 
policy as proposed at Sec.  428.302, with a modification. For alignment 
with language in the preamble of the CY 2025 PFS proposed rule (89 FR 
61975) and Sec.  427.402(b)(1), we clarified at Sec.  428.302(b)(1) 
that CMS will apply a severe supply chain disruption rebate reduction 
to the applicable period in which the event occurred or began or the 
following applicable period if the request is submitted less than 60 
calendar days before the end of an applicable period. This application 
of a rebate reduction (initial or extension) applies regardless of 
whether a generic drug or biosimilar meets the definition of a Part D 
rebatable drug during that applicable period or whether a rebate amount 
is owed for such generic Part D drug or biosimilar for that applicable 
period. That is, regardless of whether the generic drug or biosimilar 
meets the definition of a Part D rebatable drug or whether a rebate 
amount is owed for such generic Part D drug or biosimilar for that 
applicable period, CMS will apply the 75 percent reduction in the total 
rebate amount as determined under Sec.  428.302(b)(1), even if there is 
no rebate amount owed to reduce. For example, as shown in Table 61, if 
CMS grants a severe supply chain disruption rebate reduction request 
for a generic Part D drug or biosimilar for an applicable period, CMS 
will apply the rebate reduction beginning with the applicable period 
for which the reduction request was granted, regardless of whether the 
drug meets the definition of a Part D rebatable drug or is subject to a 
rebate amount.
[GRAPHIC] [TIFF OMITTED] TR09DE24.108

    We believe this clarification helps ensure clarity on CMS' policy 
in applying rebate reductions, which is intended to provide appropriate 
financial relief to a manufacturer experiencing a severe supply chain 
disruption while limiting opportunities for manufacturers to plan 
future price increases to coincide with the application of the 
reduction. If the reduction is applied to an applicable period in which 
there is no rebate amount to reduce, the manufacturer could still apply 
for an extension of the reduction, which would apply to the following 
applicable period.
    In this final rule, we are also providing further clarification to 
the policy in the CY 2025 PFS proposed rule intended to address 
situations in which CMS grants a severe supply chain disruption rebate 
reduction request for a generic Part D rebatable drug or biosimilar, 
and the generic drug or biosimilar appears as currently in shortage 
during the same applicable period as for which the severe supply chain 
disruption rebate reduction was granted. This clarification is 
described in the next section in response to a comment regarding 
application of likely to be in shortage reductions.
iv. Reducing the Rebate Amount for Generic Part D Rebatable Drugs 
Likely To Be in Shortage
    At Sec.  428.303, we proposed to codify the policy established in 
section 40.5.3 of the revised Medicare Part D Drug Inflation Rebate 
Guidance for rebate reductions when a generic Part D rebatable drug is 
likely to be in shortage, as defined at Sec.  428.300. We proposed at 
Sec.  428.303(b)(1), to provide a time-limited standard reduction of 75 
percent in the total rebate amount for a generic Part D rebatable drug 
when CMS determines that the generic Part D rebatable drug is likely to 
be in shortage. We proposed that to receive a rebate

[[Page 98302]]

reduction in accordance with Sec.  428.303(b)(1), the manufacturer will 
have to submit to CMS a rebate reduction request that meets the 
eligibility requirements at Sec.  428.303(c). A rebate reduction 
request should specify each NDC-11 to which the request applies and if 
CMS grants a manufacturer's likely to be in shortage rebate reduction 
request for an NDC-11, we proposed at Sec.  428.303(b)(3) that the 
rebate reduction will apply to the entire generic Part D rebatable drug 
at the NDC-9 level. We refer manufacturers to the collection of 
information approved under OMB control number 0938-1474, for further 
instructions for submitting rebate reduction requests.
    We proposed at Sec.  428.303(c)(4) to grant a reduction in the 
rebate amount owed if a manufacturer of an eligible drug submits to CMS 
a request in writing demonstrating that (1) the generic Part D 
rebatable drug is likely to be in shortage, (2) the manufacturer is 
taking actions to avoid the potential drug shortage, and (3) the 
reduction of the rebate amount would reduce the likelihood of the drug 
appearing on an FDA shortage list. We proposed at Sec.  428.303(c)(2) 
that a manufacturer must submit the rebate reduction request before the 
start of the next applicable period in which the manufacturer believes 
the generic Part D rebatable drug is likely to be in shortage in order 
for CMS to consider a rebate reduction.
    We proposed that if the manufacturer makes a timely request that 
includes all the supporting documentation, and CMS determines, based on 
its review of the reduction request and supporting documentation, that 
a reduction should be granted, CMS will reduce the total rebate amount 
owed by a manufacturer by 75 percent for the manufacturer's generic 
Part D rebatable drug for the applicable period in which the request 
was submitted or the following applicable period, depending on the 
timing of the submission of the request.
    We proposed at Sec.  428.303(c)(5) that if a manufacturer believes 
the potential drug shortage continues for a second, consecutive 
applicable period, the manufacturer may request a reduction of the 
total rebate amount for that second applicable period by submitting a 
rebate reduction extension request to CMS, along with any new 
supporting documentation. We refer manufacturers to the collection of 
information approved under OMB control number 0938-1474, for further 
instructions for submitting rebate reduction extension requests. As 
proposed at Sec.  428.303(c)(5)(ii), a rebate reduction extension 
request and any new supporting documentation must be submitted at least 
60 calendar days before the start of the second applicable period in 
which the manufacturer believes the generic Part D rebatable drug is 
likely to be in shortage in order for CMS to consider a rebate 
reduction extension.
    We further proposed that if a manufacturer submits a complete and 
timely extension request, and CMS determines that the information 
submitted warrants an extension of the rebate reduction, the total 
rebate amount would be reduced by 75 percent for a second consecutive 
applicable period for that manufacturer's generic Part D rebatable drug 
in accordance with Sec.  428.303(b)(2).
    Consistent with the policies established in section 40.5.3 of the 
revised Medicare Part D Drug Inflation Rebate Guidance, we proposed at 
Sec.  428.303(c)(5) that a manufacturer may receive only one extension 
of the rebate reduction per generic Part D rebatable drug per CMS 
determination of likelihood of shortage. Said differently, CMS will 
limit the likely to be in shortage rebate reduction to two consecutive 
applicable periods total per generic Part D rebatable drug per CMS 
determination of likelihood of shortage.
    At Sec.  428.303(b)(4), we proposed that if CMS grants a rebate 
reduction request for a generic Part D rebatable drug that is likely to 
be in shortage, and the drug appears as currently in shortage during 
the same applicable period as the one for which the likely to be in 
shortage reduction request was granted, CMS will apply the 75 percent 
reduction to the entire applicable period for which the likely to be in 
shortage request was granted and would not grant any additional 
reduction for the shortage status during that applicable period. For 
any subsequent applicable periods that the generic Part D rebatable 
drug appears as currently in shortage, CMS will reduce the total rebate 
amount in accordance with the drug shortage reduction proposed at Sec.  
428.301, starting with the highest reduction (that is, 75 percent for a 
generic Part D rebatable drug). For example, as stated in the CY 2025 
PFS proposed rule (89 FR 61977), if CMS grants a likely to be in 
shortage rebate reduction request for a generic Part D rebatable drug 
that was submitted on August 15, 2024, and that generic Part D 
rebatable drug is currently in shortage from September 15, 2025, until 
May 15, 2026, CMS would apply a 75 percent reduction in the total 
rebate amount for the duration of the applicable period for which the 
likely to be in shortage rebate reduction request was granted (that is, 
October 1, 2024, to September 30, 2025), and then would apply the 
shortage reduction at Sec.  428.301, beginning with a reduction of 75 
percent for a generic Part D rebatable drug for the applicable period 
beginning October 1, 2025.
    We proposed that if the manufacturer of a generic Part D rebatable 
drug that is currently in shortage believes such generic drug is likely 
to continue to be in shortage in the next applicable period, the 
manufacturer may submit a likely to be in shortage rebate reduction 
request to CMS. If the request meets the criteria described at Sec.  
428.303(c)(4), CMS will reduce the total rebate amount owed by a 
manufacturer by 75 percent for the manufacturer's generic Part D 
rebatable drug. Consistent with the evaluation criteria at Sec.  
428.303(c)(4), we do not intend to consider a generic Part D rebatable 
drug as likely to be in shortage based solely upon the drug being 
currently in shortage. However, if the manufacturer believes there are 
circumstances that may exacerbate the current shortage such that 
without the reduction the generic Part D rebatable drug is likely to be 
in shortage in the next applicable period, the manufacturer may reflect 
such circumstances in its rebate reduction request. As described in the 
example in the CY 2025 PFS proposed rule (89 FR 61977), if a generic 
Part D rebatable drug is currently in shortage during the applicable 
period beginning October 1, 2023 because the manufacturer had trouble 
meeting demand for the drug and then in August 2024, the manufacturer 
faces difficulties securing the API for such drug and believes this may 
worsen the shortage situation and result in the generic Part D 
rebatable drug being currently in shortage in the next applicable 
period, the manufacturer may submit a likely to be in shortage rebate 
reduction request to CMS providing information on the severity of the 
likely shortage.
    At Sec.  428.303(c)(6), we proposed to review rebate reduction 
requests and rebate reduction extension requests within 60 calendar 
days of receipt of all documentation, if feasible, beginning with the 
applicable period that begins on October 1, 2024. If a manufacturer's 
rebate reduction request does not meet the criteria at Sec.  
428.303(c)(4) or if the rebate reduction request is incomplete or 
untimely based on the requirements at Sec.  428.303(c), we proposed 
that CMS will deny the request. We also proposed that if a 
manufacturer's rebate reduction extension request does not meet the 
criteria at Sec.  428.303(c)(5), is incomplete or untimely based on the 
requirements at Sec.  428.303(c)(5), or if a reduction under Sec.  
428.303(b)(1) was not provided for such generic Part D rebatable drug,

[[Page 98303]]

CMS will deny the rebate reduction extension request. At Sec.  
428.303(c)(6)(iii), we proposed that CMS' decisions to deny a request 
will be final and not be subject to an appeals process.
    At Sec.  428.303(c)(7), we proposed CMS will keep confidential, to 
the extent allowable under law, any requests for a rebate reduction, 
including supporting documentation. We proposed that information 
provided as part of a likely to be in shortage rebate reduction request 
that the submitter indicates is a trade secret or confidential 
commercial or financial information would be protected from disclosure 
if CMS determines the information meets the requirements set forth 
under Exemptions 3 or 4 of FOIA. In addition to the protections under 
the FOIA for trade secrets and commercial or financial information 
obtained from a person that is privileged or confidential, the Trade 
Secrets Act at 18 U.S.C. 1905 requires executive branch employees to 
protect such information. CMS will protect confidential and proprietary 
information as required by applicable law.
    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: One commenter requested CMS clarify how it will determine 
if a drug is likely to be in shortage during a subsequent applicable 
period. This commenter stated that one predictor of a drug vulnerable 
to shortage is a previous shortage and recommended CMS treat generic 
drugs exiting a shortage as being at risk of shortage and that CMS 
provide a transitional period of a gradually declining rebate reduction 
(that is, 75 percent in the first quarter, 50 percent in the second 
quarter, etc.).
    Response: We thank the commenter for their recommendation. 
Consistent with the policy described in the CY 2025 PFS proposed rule 
(89 FR 61977), CMS does not intend to consider a generic drug as likely 
to be in shortage based solely upon the drug being currently in 
shortage. However, if a manufacturer believes there are circumstances 
that may exacerbate a current shortage such that without the rebate 
reduction the generic drug is likely to be in shortage in the next 
applicable period, the manufacturer may reflect such circumstances in 
its rebate reduction request.
    If a generic drug is granted a likely to be in shortage reduction 
for an applicable period and such drug is currently in shortage in the 
following applicable period, CMS will apply the gradually declining 
reduction in the rebate amount under the shortage policy set forth in 
Sec.  428.301 for the subsequent applicable periods in which such drug 
is currently in shortage. As described in the example in the CY 2025 
PFS proposed rule (89 FR 61977), if CMS receives a likely to be in 
shortage rebate reduction request for a generic Part D rebatable drug 
that was submitted on August 15, 2024, and that generic Part D 
rebatable drug is currently in shortage from September 15, 2025, until 
May 15, 2028, CMS will apply a 75 percent reduction in the total rebate 
amount for the duration of the applicable period for which the likely 
to be in shortage rebate reduction request was granted (that is, 
October 1, 2024, to September 30, 2025), and then would apply the 
shortage reduction as set forth in Sec.  428.301, beginning with a 
reduction of 75 percent for a generic Part D rebatable drug for the 
applicable period beginning October 1, 2025, followed by a reduction of 
50 percent for the applicable period beginning October 1, 2026, and a 
25 percent reduction for the applicable period beginning October 1, 
2027.
    In response to this comment, we are also providing further 
clarification to the policy in the proposed rule intended to address 
situations in which CMS grants a likely to be in shortage rebate 
reduction request for a generic Part D rebatable drug, and the drug 
appears as currently in shortage during the same applicable period as 
for which the likely to be in shortage rebate reduction was granted. 
First, we are providing a second, modified version of the example above 
to reflect a situation in which the likely to be in shortage rebate 
reduction is granted for the same applicable period as the generic Part 
D rebatable drug is currently in shortage, and the application of the 
shortage reduction precedes application of the likely to be in shortage 
reduction. For example, if CMS receives a likely to be in shortage 
rebate reduction request for a generic drug on August 15, 2024, and the 
generic drug is currently in shortage beginning September 15, 2024 
instead of September 15, 2025 and until May 15, 2028, CMS would apply a 
75 percent reduction under the shortage policy for the applicable 
period that begins October 1, 2023. CMS would then apply the likely to 
be in shortage rebate reduction of 75 percent for the applicable that 
begins on October 1, 2024, followed by a shortage reduction of 25 
percent for the applicable periods that begin October 1, 2025, October 
1, 2026, and October 1, 2027. In this example, if the generic Part D 
rebatable drug was currently in shortage prior to receiving the likely 
to be in shortage reduction and was granted a reduction under the 
shortages policy set forth in Sec.  428.301 for that applicable period 
prior to receiving the likely to be in shortage reduction, the 
declining reduction in the rebate amount will continue for any 
subsequent applicable periods in which the drug is currently in 
shortage, as summarized in Table 63. For consistency, CMS is adopting 
the same approach for situations in which a generic Part D rebatable 
drug or biosimilar is currently in shortage prior to and following a 
severe supply chain disruption. That is, if a generic Part D rebatable 
drug that is currently in shortage from September 15, 2025, until May 
15, 2028 receives a 75 percent reduction under the shortages policy for 
the applicable period that begins October 1, 2024, receives a 75 
percent reduction under the severe supply chain disruption policy for 
the applicable period beginning October 1, 2025, then CMS would apply a 
shortage reduction percentage of 25 percent to the applicable periods 
beginning October 1, 2026 and October 1, 2027. For alignment with the 
Medicare Part D Drug Inflation Rebate Program, we have included 
parallel clarifications in the Part B rebate section of this final 
rule.

[[Page 98304]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.109

    We believe this clarification is consistent with the policy set 
forth in Sec. Sec.  428.302(b)(4) and 428.303(b)(4) whereby CMS will 
not apply multiple rebate reductions for the same Part D rebatable drug 
and applicable period. If CMS instead applied the shortage reduction 
beginning with the first applicable period in which a drug is in 
shortage (that is, applying the shortage reduction for the days 
beginning September 15, 2025 through September 30, 2025 for the first 
applicable period the drug is in shortage in the example above), this 
would result in CMS applying both the shortage reduction at Sec.  
428.301 and the likely to be in shortage reduction at Sec.  428.303 or 
the severe supply chain disruption reduction at Sec.  428.302 for the 
same drug for the same applicable period (that is, the applicable 
period beginning October 1, 2024 through September 30, 2025). We 
believe this clarification is also consistent with the policy 
articulated in the proposed rule and throughout this final rule to 
continue the shortage reduction clock once it begins in other scenarios 
such as for drugs that fluctuate on and off the shortage list within a 
timespan less than a full applicable period. Further, we believe this 
approach is consistent with CMS' policy goals of providing a time-
limited standard reduction of 75 percent in the rebate amount when 
there is a severe supply chain disruption or likely shortage, which 
supersede the reduction under the shortage policy to mitigate the 
likelihood or severity of a shortage, and providing gradually 
decreasing financial relief to manufacturers for a drug currently in 
shortage. We believe transitioning the manufacturer from the severe 
supply chain disruption reduction or the likely to be in shortage 
reduction to the shortage reduction, by beginning the shortage 
reduction clock as set forth in Sec.  428.301(b)(2)(i)(A) or 
(b)(2)(ii)(A) after the severe supply chain disruption reduction or 
likely to be in shortage reduction no longer applies, and gradually 
declining the rebate reduction over time could help prevent 
exacerbation of the shortage. Because the timing of the application of 
a severe supply chain disruption or likely to be in shortage rebate 
reduction depends on the timing of submission of the rebate reduction 
request, the highest reduction under the shortages policy may be 
applied for an applicable period that precedes or follows the severe 
supply chain disruption or likely to be in shortage reduction. CMS will 
not start the shortage reduction clock during an applicable period 
subject to a severe supply chain disruption reduction or a likely to be 
in shortage reduction as set forth in Sec.  428.301(b)(2)(iv), but 
intends to continue the shortage reduction clock once it starts for as 
long as a drug is currently in shortage.
    After consideration of comments received, we are finalizing this 
policy as proposed Sec.  428.303, with a modification. For alignment 
with language in the preamble of the CY 2025 PFS proposed rule (89 FR 
61977) and the clarification made to Sec.  428.302(b)(1) as described 
above, we have clarified in this final rule at Sec.  428.303(b)(1) that 
CMS will apply a likely to be in shortage rebate reduction to the 
applicable period in which the request was submitted or the following 
applicable period, depending on the timing of the submission of the 
request. CMS will not delay the application of the reduction until the 
generic drug meets the definition of a Part D rebatable drug or until a 
rebate amount is owed for such drug. For example, as shown in Table 64, 
if CMS grants a likely to be in shortage rebate reduction request for a 
generic Part D drug for an applicable period, CMS will apply the rebate 
reduction beginning with the applicable period for which the reduction 
request was granted, regardless of whether the drug meets the 
definition of a Part D rebatable drug or is subject to a rebate amount.

[[Page 98305]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.110

    We believe this clarification helps ensure clarity on CMS' policy 
in applying rebate reductions, which is intended to provide appropriate 
financial relief to a manufacturer experiencing a potential shortage 
while limiting opportunities for manufacturers to plan future price 
increases to coincide with the application of the reduction. If the 
reduction is applied to an applicable period in which there is no 
rebate amount to reduce, the manufacturer could still apply for an 
extension of the reduction, which would apply to the following 
applicable period.
e. Reports of Rebate Amounts, Reconciliation, Suggestion of Error, and 
Payments (Sec. Sec.  428.400 Through 428.405)
    Section 1860D-14B(a)(1) of the Act requires the Secretary to report 
to each manufacturer of a Part D rebatable drug the following 
information not later than 9 months after the end of the applicable 
period: (1) the amount, if any, of the excess AnMP increase described 
in section 1860D-14B(b)(1)(A)(ii) of the Act for each Part D rebatable 
drug and (2) the rebate amount for each Part D rebatable drug. In 
compliance with section 1860D-14B(a)(2) of the Act, the manufacturer of 
a Part D rebatable drug must provide a rebate for each Part D rebatable 
drug no later than 30 calendar days after the receipt of the 
information provided by the Secretary in section 1860D-14B(a)(1) of the 
Act.
    To fulfill this statutory requirement, we proposed to send a 
Preliminary Rebate Report followed by a Rebate Report, as set forth in 
Sec.  428.401(b) and (c), to all manufacturers of a Part D rebatable 
drug, even if the amount due is $0; all rebate amounts would be subject 
to reconciliation as set forth in Sec.  428.401(d). As proposed at 
Sec.  428.401(b), CMS will not send notice to manufacturers for drugs 
that are not considered rebatable under proposed Sec.  428.20.
    Additionally, section 1860D-14B(b)(6) of the Act states that CMS 
shall provide a method and process under which CMS adjusts the 
calculation of the rebate amount for a Part D rebatable drug for an 
applicable period if CMS determines such an adjustment is necessary 
based on revisions to the number of units of a rebatable covered Part D 
drug dispensed submitted by a PDP sponsor of a prescription drug plan 
or an MA organization offering an MA-PD plan. The statute also 
specifies that CMS must reconcile any underpayments in the rebate 
amount paid by the manufacturer of the applicable Part D rebatable drug 
due to such an adjustment and underpayments must be paid no later than 
30 days from the date of receipt of information from CMS about the 
adjustment. To fulfill this statutory obligation and to address the 
completeness and accuracy of the rebate amount, we proposed to conduct 
regular reconciliations at two points in time to determine whether the 
rebate amount must be adjusted due to updated claims and payment data 
used in the calculation of such rebate amount (specified at Sec.  
428.401(d)(1)): (1) 12 months after the issuance of the Rebate Report, 
and (2) 36 months after the issuance of the Rebate Report. As discussed 
in the CY 2025 PFS proposed rule (89 FR 61980-61981), the reporting 
process for each reconciliation will be the same process described for 
the original Rebate Report, with payment due for any outstanding rebate 
amount 30 days after receipt of a report with a reconciled rebate 
amount. In addition to regular reconciliations, we proposed a process 
to conduct reconciliations of the rebate amount as needed to correct 
agency error and when CMS determines that the information used by CMS 
to calculate a rebate amount was inaccurate due to manufacturer 
misreporting.
    Comments regarding Reports of Rebate Amounts, Suggestion of Error, 
Reconciliation of a Rebate Amount, and Enforcement of Manufacturer 
Payment of Rebate Amounts that are applicable to both Part B rebatable 
drugs and Part D rebatable drugs (for example, comments recommending 
that the Suggestion of Error period be extended) are summarized in the 
Part B drug inflation rebate section of this final rule. Comments 
specific to the Medicare Part D Drug Inflation Rebate Program on the 
aforementioned topics are summarized later in this section.
i. Definitions
    As set forth in Sec.  428.400, we proposed to define the following 
term applicable to subpart E (Sec. Sec.  428.400 through 428.405):
     ``Date of receipt'' is the calendar day following the day 
in which a report of a rebate amount (as set forth in Sec. Sec.  
428.401(b), (c), and (d) and 428.402(b) and (c)) is made available to 
the manufacturer of a Part D rebatable drug by CMS.
    For example, if CMS issues a Rebate Report through the method and 
process described in proposed Sec.  428.404 on June 30, 2026, then July 
1, 2026, will be the date of receipt and day one of the 30-calendar-day 
payment period.
    We did not receive public comments on this proposed definition, and 
we are finalizing as proposed in Sec.  428.400.
ii. Reports of Rebate Amounts and Suggestion of Error
    Consistent with the process specified in section 50 of the revised 
Medicare Part D Drug Inflation Rebate Guidance involving preliminary 
and final reports, we proposed to codify a multi-step process to 
provide a manufacturer as set forth in Sec.  428.20 with the rebate 
information specified under section 1860D-14B(a) of the Act. As stated 
in the CY 2025 PFS proposed rule (89 FR 61981), we considered the 
following factors in determining a method and process for providing the 
rebate information: meeting statutorily provided deadlines in section 
1860D-14B(a) of the Act (for example, dates by which to provide the 
rebate amount owed to the manufacturer); the operational time to 
acquire the relevant information specified in part 428; the operational 
time to calculate the rebate amount specified in subparts B and C of 
part 428; clarity of the information provided as well as potential 
burden on manufacturers; and how to ensure the accuracy of the rebate 
amount.
    We proposed at Sec.  428.401 the use of an initial Preliminary 
Rebate Report and a subsequent Rebate Report, with an

[[Page 98306]]

opportunity for manufacturers to identify certain mathematical errors 
(see Sec.  428.403 and discussed in further detail later in this 
section) and two regular reconciliations of the rebate amount to 
account for updates to claims and payment data at 12 months and 36 
months after the Rebate Report is issued as set forth in Sec.  
428.401(d).
    We proposed at Sec.  428.401 that the multi-step reporting process 
for providing rebate information to a manufacturer would include: (1) 
an initial report, which we proposed to entitle the ``Preliminary 
Rebate Report'' as set forth in Sec.  428.401(b) and (2) a second 
report, which we proposed to entitle the ``Rebate Report'' as set forth 
in Sec.  428.401(c). The Rebate Report would serve as the invoice for 
the rebate amount due, if any, for each product determined to be a Part 
D rebatable drug for the applicable period, as set forth in Sec.  
428.101. We stated in the CY 2025 PFS proposed rule (89 FR 61981) that 
manufacturers of Part D rebatable drugs would receive a Rebate Report 
for their rebatable drugs even if the amount due is $0. We proposed at 
Sec.  428.401(d)(1) two regular reconciliations of the rebate amount to 
occur 12 months and 36 months after issuance of the subsequent Rebate 
Report as set forth in Sec.  428.401(c), which will include 
restatements that have occurred in the drug pricing data and claims 
billing data reported to CMS and used in the rebate calculation 
specified in subpart C of this part.
    As we described in the CY 2025 PFS proposed rule (89 FR 61981), as 
the first step in the reporting process, as proposed at Sec.  
428.401(b) and consistent with section 50 of the revised Medicare Part 
D Drug Inflation Rebate Guidance, CMS will provide each manufacturer of 
a Part D rebatable drug with the preliminary rebate amount through a 
Preliminary Rebate Report at least 1 month prior to the issuance of the 
Rebate Report as set forth in Sec.  428.401(c) for an applicable period 
(that is, approximately 8 months after the end of the applicable period 
unless otherwise specified). To facilitate manufacturer understanding 
of the Preliminary Rebate Report, we proposed at Sec.  428.401(b)(1) 
that the Preliminary Rebate Report will include the following 
information: the NDC(s) for the Part D rebatable drug as determined 
under Sec.  428.20; the total number of units for the Part D rebatable 
drug for the applicable period as determined under Sec.  428.203 (which 
will remove units when a generic drug is no longer a Part D rebatable 
drug as determined under Sec.  428.203(b)(1) and will exclude units 
acquired through the 340B Program as determined under Sec.  
428.203(b)(2)); the benchmark period manufacturer price as determined 
under Sec.  428.202(d); the AnMP for the Part D rebatable drug for the 
applicable period as determined under Sec.  428.202(b); the applicable 
benchmark period and applicable period CPI-Us as determined under 
Sec. Sec.  428.202(e) and 428.20; the inflation-adjusted payment amount 
as determined under Sec.  428.202(f); the amount, if any, of the excess 
AnMP for the Part D rebatable drug for the applicable period as 
determined under Sec.  428.202(a); any applied reductions as determined 
under Sec. Sec.  428.301, 428.302, and 428.303; and the rebate amount 
due as determined under Sec.  428.201(a). As proposed under Sec.  
428.204, in cases where a Part D rebatable drug is a line extension, we 
proposed to include the same elements described above in the 
Preliminary Rebate Report as well as: the NDC for the initial drug; the 
inflation rebate amount ratio for the initial drug; and the alternative 
rebate amount (see Sec.  428.401(b)(2)).
    In the CY 2025 PFS proposed rule (89 FR 61979), we stated that when 
determining what information should be included on rebate reports, we 
considered the statutory requirements outlined in section 1860D-
14B(a)(1) of the Act to determine which data elements are necessary to 
review the Preliminary Rebate Report for error (described later in this 
section) and to protect proprietary information. In response to 
comments on the initial Medicare Part D Drug Inflation Rebate Guidance, 
we proposed to disclose data elements as suggested by interested 
parties that are not enumerated in the statute, such as NDCs for Part D 
rebatable drugs and the applicable period CPI-U. We acknowledged 
requests from interested parties to provide additional data elements 
including claim-level data such as days' supply, fill number, and 
prescription ID number on rebate reports that are not included in this 
proposal. We considered these requests in development of the proposed 
rule but do not believe it necessary to provide this further 
information to fulfill CMS' statutory obligation and believe that the 
potential benefit to manufacturers of additional data are outweighed by 
the administrative burdens additional reporting would impose to the 
agency. We also stated that the elements listed previously provide 
sufficient information for a manufacturer to review the Preliminary 
Rebate Report for mathematical error, while protecting proprietary 
information, and these elements are operationally feasible for CMS to 
provide. At Sec.  428.203(b)(2)(i)(A) and (B), we proposed CMS will 
exclude 340B units beginning with January 1, 2026, which is the second 
calendar quarter in the applicable period starting October 1, 2025, and 
beyond (as discussed in further detail in section III.I.3.c.iv.2. of 
this final rule). We proposed this exclusion applies to all Preliminary 
Rebate Reports, Rebate Reports, and reconciliations of a rebate amount 
that include the applicable period starting with October 1, 2025, and 
beyond with claims for service dates on or after January 1, 2026. As 
such, 340B units would not be excluded from the Rebate Reports for the 
applicable periods beginning October 1, 2022, October 1, 2023, and 
October 1, 2024, as determined under Sec.  428.402.
    As stated in the CY 2025 PFS proposed rule (89 FR 61979), by 
structuring the Rebate Report process to include a Preliminary Rebate 
Report before the Rebate Report, CMS is able to provide manufacturers 
with an opportunity to review the Preliminary Rebate Report before the 
rebate amount is invoiced via the Rebate Report. While CMS is not 
required to provide a preliminary report, we stated in the proposed 
rule that we seek to facilitate manufacturer understanding of the 
Rebate Report and believes it would be beneficial for manufacturers to 
review the report for mathematical errors that could be corrected 
before invoicing via the Rebate Report. Further, a Preliminary Rebate 
Report would provide additional notice to manufacturers regarding 
whether they may owe a rebate amount.
    At Sec.  428.403, we proposed a process in which a manufacturer may 
suggest to CMS that the manufacturer believes the Preliminary Rebate 
Report includes a mathematical error within 10 calendar days after the 
date of receipt of the Preliminary Rebate Report. For example, if the 
Preliminary Rebate Report is provided on May 31, 2026, then June 1, 
2026, will be the date of receipt and, therefore, day one of the 10-
calendar-day period to submit a Suggestion of Error; the Suggestion of 
Error would be due at 11:59 p.m. PT on June 10, 2026, in this example. 
We reviewed comments on the 10-day Suggestion of Error period submitted 
in response to the initial Medicare Part D Drug Inflation Rebate 
Guidance, many of which suggested that manufacturers receive at least 
30 days to review the Preliminary Rebate Report. We considered a 10-
day, 15-day, and 30-day Suggestion of Error period and believes a 10-
calendar-day period as (see Sec.  428.403(c)) is sufficient after 
considering the volume of the data to be provided to manufacturers, the 
narrow scope of items that may be identified as

[[Page 98307]]

a Suggestion of Error, and the operational time necessary for CMS to 
provide a Rebate Report within 9 months of the end of the applicable 
period as required under section 1860D-14B(a)(1) of the Act. However, 
we proposed at Sec.  428.402(c)(1)(i) to expand the Suggestion of Error 
period to 30 calendar days for the Preliminary Rebate Reports for the 
first two applicable periods (beginning October 1, 2022, and October 1, 
2023). As explained in the CY 2025 PFS proposed rule (89 FR 61979), 
this extended Suggestion of Error period will provide additional time 
and flexibility during the first invoicing cycle of the Medicare Part D 
Drug Inflation Rebate Program.
    Section 1860D-14B(f) of the Act precludes administrative or 
judicial review on the determination of units, whether a drug is a Part 
D rebatable drug, and the calculation of the rebate amount (see Sec.  
428.403(a)(1)). Therefore, we stated in the CY 2025 PFS proposed rule 
(89 FR 61980) that the Suggestion of Error process will be limited to 
mathematical steps involved in determining the rebate amount and the 
elements precluded from administrative or judicial review will not be 
considered in-scope for the Suggestion of Error process. Additionally, 
we stated in the proposed rule that we will not provide an 
administrative dispute resolution process. We intend to consider all 
in-scope submissions under the Suggestion of Error process (for 
example, suggestions regarding a mathematical error) as set forth in 
Sec.  428.403(a). We do not intend to review suggestions of error that 
are out-of-scope or submissions for a rebatable drug with an amount due 
of $0.
    As the second step in the reporting process, we proposed at Sec.  
428.401(c) to provide the rebate amount to the manufacturer through the 
Rebate Report no later than 9 months after the end of the applicable 
period. As proposed at Sec.  428.401(c)(1), the Rebate Report would 
include the same data elements as the Preliminary Rebate Report (as set 
forth in Sec.  428.401(b)(1)) and include any recalculations based on 
CMS acceptance of a manufacturer's Suggestion of Error as set forth in 
Sec.  428.403, or any CMS-determined recalculations as set forth in 
Sec.  428.401(d)(2), if applicable. Manufacturers must pay the rebate 
amount within 30 calendar days from the date of receipt of the Rebate 
Report (see Sec.  428.405(a)). For example, if the Rebate Report is 
provided on June 30, 2026, then July 1, 2026, would be the date of 
receipt and therefore day one of the 30-calendar-day payment period; 
payment would be due no later than 11:59 p.m. PT on July 30, 2026.
    At Sec. Sec.  428.404 and 428.405, we proposed to establish a 
standard method and process to issue Rebate Reports and accept 
manufacturer rebate payments. This method and process may include an 
online portal administered by a CMS contractor which would provide 
manufacturers with access to their Rebate Report, the ability to submit 
a Suggestions of Error, and pay a rebate amount due. We intend to 
provide technical instructions separate from this rulemaking to 
manufacturers of Part D rebatable drugs regarding how to access Rebate 
Reports and how to receive notifications alerting the manufacturer when 
information is available. We stated in the CY 2025 PFS proposed rule 
(89 FR 61980) that CMS also intends to issue reminder notices to 
manufacturers regarding the due date of rebate payments. At Sec.  
428.404(a), we noted that the manufacturer that may access Rebate 
Reports and make applicable rebate amount payments is the manufacturer 
responsible for paying a rebate, and as stated above, we proposed to 
identify the manufacturer that is responsible for paying a rebate using 
the same approach used for reporting AMP data.
    We received public comments on these proposals. Because the 
comments received are applicable to both the Medicare Part B and Part D 
Drug Inflation Rebate Programs, please refer to the corresponding 
section in Part B for a summary of comments and our responses on this 
topic.
    After consideration of public comments, we are finalizing Sec.  
428.401 as proposed, with modification. In this final rule, we are 
revising Sec.  428.401(b)(iii) and Sec.  428.401(d)(i)(B) to reflect 
that the Rebate Reports shall include the payment amount benchmark 
period, in addition to the benchmark period manufacturer price, and the 
corresponding cross-reference at Sec.  428.202(c) to identify both the 
payment amount benchmark period and the price in the benchmark period 
within the report information.
iii. Reconciliation of a Rebate Amount
    As discussed in section 50 of the revised Medicare Part D Drug 
Inflation Rebate Guidance, we considered options consistent with 
section 1860D-14B(b)(6) of the Act to establish a method and process to 
determine adjustment to the rebate amount in the case of a Part D plan 
sponsor submitting revisions to the number of units of a Part D 
rebatable drug. As is also discussed in section 50 of the revised 
Medicare Part D Drug Inflation Rebate Guidance, we considered options 
for establishing a standardized method and process at regular intervals 
to determinate any appropriate adjustments to the rebate amount for a 
Part D rebatable drug for an applicable period to account for 
additional revised information as well as options for recalculation 
based on CMS identifying an agency error or determining manufacturer 
data was misreported. We proposed policies for reconciliation, 
including with respect to enforcement of payment of any reconciled 
rebate amount, consistent with both the statutory framework for the 
Medicare Part D Drug Inflation Rebate Program and the express authority 
in sections 1102 and 1871 of the Act to adopt regulations for the 
proper administration of the Medicare Prescription Drug Inflation 
Rebate Program.
    As proposed at Sec.  428.401(d), we noted in the CY 2025 PFS 
proposed rule (89 FR 61980) that we believe that it is necessary and 
appropriate for CMS to recalculate the rebate amount for an applicable 
period at regular intervals to include updated information about key 
data elements included in the calculation of the rebate amount, not 
limited to those data described in section 1860D-14B(b)(6) of the Act. 
These data elements as set forth in Sec.  428.401(d)(1)(i) include: 
total units; the benchmark period manufacturer price; the payment 
amount in the payment amount benchmark period; the AnMP; and updated 
data on line extension calculations. Updating these calculation inputs 
at regular reconciliation intervals will result in a rebate amount that 
more fully reflects the majority of shifts in the underlying data 
following additional time for claims run-out, which refers to the 
maturation of PDE records in CMS' internal PDE database. Because the 
information extracted represents the PDE records' status in CMS' 
internal PDE database at that moment in time, additional run-out may 
yield different information, either because more PDE records with 
dispensing dates during the applicable period were finalized and added 
to the database or because the status of the existing PDE records 
changed. CMS refers to ``X months of run-out'' as the period between 
the end of the applicable period and the date when CMS accesses 
information about the PDE records; for example, ``3 months of run-out'' 
means that PDE records are accessed for PDE records with dispensing 
dates during an applicable period 3 months after the end of such 
applicable period. Conducting a reconciliation of the rebate amount 
with additional claims run-out will improve the accuracy of the rebate 
amount.

[[Page 98308]]

Additionally, reconciliation of payment amounts is consistent with the 
approach to the calculation of the payment amounts in other CMS 
programs (such as the Coverage Gap Discount Program) that provide for a 
reconciliation period.
    As noted in the CY 2025 PFS proposed rule (89 FR 61980), the 
reconciliation of a rebate amount, whether during a reconciliation as 
set forth in Sec.  428.401(d)(1) or a discretionary reconciliation as 
set forth in Sec.  428.401(d)(2) discussed further below, will not 
create a separately payable and distinct rebate amount. Rather, 
reconciliation updates the prior rebate amount owed to CMS, if any, by 
a manufacturer of a Part D rebatable drug so that the rebate amount 
ultimately reflects a more precise calculation of the rebate amount, as 
required by section 1860D-14B(a)(1) of the Act, to account for shifts 
in the underlying data following additional time for claims run-out 
after the Rebate Report is issued as well as subsequently identified 
data integrity issues. Moreover, because the reconciled rebate amount 
is an adjustment of the prior rebate amount, we proposed at Sec.  
428.405(a)(1) for a report of a reconciled rebate amount to also 
identify the difference between the rebate amount due as specified on 
the Rebate Report set forth in Sec.  428.401(c) and the reconciled 
rebate amount. We noted in the proposed rule that CMS will only collect 
the net rebate amount due, if any, upon reconciliation, so as to 
prevent any duplicate payments. We also proposed to refund any 
overpayment made by a manufacturer, as determined during 
reconciliation, as set forth in Sec.  428.405(b).
    Additionally, as suggested in section 50 of the revised Medicare 
Part D Drug Inflation Rebate Guidance, we considered multiple options 
for establishing a standardized method and process to occur at regular 
intervals to determine an appropriate adjustment to the rebate amount 
for a Part D rebatable drug for an applicable period to account for 
revised information prior to proposing the policy described here for 
two proposed regular reconciliations of the Part D inflation rebate 
amount. We considered the length of time needed to capture relevant 
changes to data inputs for recalculation, whether the timing should 
align with the reconciliation of Part B rebate amounts, and 
manufacturer burden. Specifically, we considered the average time span 
needed to ensure submission of the majority of Part D plan unit 
revisions specified in section 1860D-14B(b)(6) of the Act, and the 
average time span needed for the submission of the majority of 
manufacturer restatements of AMP data. We also considered the 36-month 
period provided by MDRP for AMP restatements as determined under Sec.  
447.510(d)(3) of this title and whether consistency among program 
reconciliation timelines is beneficial.
    As stated in the proposed rule, we believe a longer period of 
claims run-out (at least 12 and 36 months of run-out time in the 
proposed approach) would ensure that CMS more fully accounts for 
capturing of revised units. Further, the first reconciliation would be 
performed to include at least 13 months of claims run-out for the 
applicable period and would be issued 12 months after the Rebate Report 
for the same applicable period. The second reconciliation would include 
37 months of claims run-out for the applicable period and would be 
issued 36 months after the Rebate Report for the same applicable 
period. The first reconciliation, issued 12 months after the Rebate 
Report, would provide sufficient time to capture the majority of 
updates to the data determined under Sec.  428.401(b)(1). The second 
reconciliation, to be issued 36 months after the Rebate Report, is 
sufficient to capture the remainder of the run-out for MDRP AMP 
restatements (that do not require CMS review as set forth in Sec.  
447.510) while also closing out the calculation of the rebate amount 
for a Part D rebatable drug for an applicable period within a 
reasonable time period after the Rebate Report is issued (except for 
the circumstances set forth in Sec.  428.401(d)(2) regarding CMS' 
identification of mathematical errors or manufacturer misreporting).
    Further, as discussed in the CY 2025 PFS proposed rule (89 FR 
61981), in considering whether consistency across CMS programs is 
critical, we believe that consideration for the completeness of data, 
as discussed above, should be prioritized over consistency across 
program timelines. That is, when examining timelines from other CMS 
programs that collect data contributing to calculation of the rebate 
amount, we prioritized that, to the extent feasible, completeness and 
accuracy of the data elements contributing to the calculation of the 
rebate amount rather than prioritizing consistency among the data 
collection and reconciliation timelines themselves. Finally, we noted 
in the proposed rule that we believe that solely updating total units 
without updating other elements of the rebate calculation would lead to 
an inaccurate rebate amount, and therefore proposed to update 
additional calculation inputs as determined under Sec.  
428.401(d)(1)(i)(A) through (F). We believe that a restatement of each 
data element determined under Sec.  428.401(d)(1) to reconcile the 
rebate amount provided in the Rebate Report set forth in Sec.  
428.401(c) is appropriate to capture an updated rebate amount and is in 
line with other CMS programs that provide for a reconciliation period. 
While some data points may not change, we proposed to review the data 
to determine if there are any updates in the data and use the updated 
data in the reconciliation to provide a reconciled rebate amount to the 
manufacturer.
    Based on these considerations, similar to the multi-step process 
for the Rebate Report set forth in Sec.  428.401(b) and (c), we 
proposed a multi-step process to provide each manufacturer of a Part D 
rebatable drug with a reconciled rebate amount on a regular basis. At 
both the 12-month reconciliation point and the 36-month reconciliation 
point, we proposed a reconciliation process that will include: (1) a 
preliminary reconciliation of the rebate amount, which CMS will provide 
to manufacturers of Part D rebatable drugs as set forth in Sec.  
428.401(d)(1)(i) and (d)(2) a reconciled rebate amount, which CMS will 
provide to manufacturers of a Part D rebatable drug as set forth in 
Sec.  428.401(d)(1)(ii). We also proposed to apply the Suggestion of 
Error process as set forth in Sec.  428.403 to each preliminary 
reconciliation.
    In detail, first, as set forth in Sec.  428.401(d) and similar to 
the Preliminary Rebate Report process set forth in Sec.  428.401(b), 
for each reconciliation we proposed to provide the manufacturer with 
information about the preliminary reconciliation of the rebate amount 
at least 1 month prior to the issuance of the reconciled rebate amount 
(see Sec.  428.401(d)) to each manufacturer of a Part D rebatable drug 
for an applicable period. We proposed at Sec.  428.401(d)(1) that the 
preliminary reconciliation will include, at a minimum, the same 
information outlined for the Rebate Report and the following updated 
information, if applicable: updated total number of rebatable units, 
including updates submitted by a PDP or MA-PD plan sponsor and updates 
to 340B units (as applicable to the dates of service and applicable 
periods determined under Sec.  428.203(b)(2)(i)(A) and (B)), or units 
otherwise excluded as determined under Sec.  428.203(b); the benchmark 
period manufacturer price if any inputs are restated within the 
reconciliation run-out period as determined under Sec.  428.202(d); the 
AnMP if any inputs are restated within the reconciliation run-out 
period as determined under Sec.  428.202(b); the excess amount by which 
the AnMP exceeds the inflation-

[[Page 98309]]

adjusted payment amount for the applicable period as determined under 
Sec.  428.202(a), using the most recent AMP (if any inputs are restated 
within the reconciliation run-out period); updated data on line 
extension calculations, including the initial drug identified in 
accordance with Sec.  447.509(a)(4)(iii)(B), the inflation rebate 
amount ratio, and the alternative total rebate amount as set forth at 
Sec.  428.204 if any inputs are restated within the reconciliation run-
out period; the reconciled rebate amount as set forth at Sec.  
428.201(a); and the difference between the total rebate amount due as 
specified on the Rebate Report set forth at Sec.  428.201(a) and the 
reconciled rebate amount as set forth at Sec.  428.201(a). We also 
noted that changes to status of 5i drugs (defined at Sec.  447.507) are 
captured through AMP restatements.
    As set forth in Sec.  428.403(a), similar to the Suggestion of 
Error process proposed for the Preliminary Rebate Report set forth in 
Sec.  428.401(b), within 10 calendar days after date of receipt of the 
information about the preliminary reconciliation of the rebate amount, 
we proposed that a manufacturer may suggest to CMS that the 
manufacturer believes the preliminary reconciliation of the rebate 
amount contains a mathematical error. As stated in the CY 2025 PFS 
proposed rule (89 FR 61981), we believe a 10-calendar-day period is 
sufficient due to the same considerations of data volume, the narrow 
set of in-scope items for review, and the operational time necessary 
for CMS to publish the reconciled rebate amount. The preclusions in 
section 1860D-14B(f) of the Act on administrative and judicial review 
apply to the reconciliation process.
    Second, in detail, we proposed at Sec.  428.401(d)(1)(ii) to 
provide a reconciled rebate amount to the manufacturer within 12 months 
and 36 months after the Rebate Report was issued for each applicable 
period. As set forth in Sec.  428.401(d)(1)(ii), the information in the 
report for a reconciled rebate amount would include the same data 
elements as provided in the information provided to the manufacturer of 
a Part D rebatable drug regarding the preliminary reconciliation of a 
rebate amount (set forth in Sec.  428.401(d)(1)(i)) and will include 
any recalculations based on CMS acceptance of a manufacturer's 
Suggestion of Error set forth in Sec.  428.403. A reconciliation of the 
rebate amount may result in an increase, decrease, or no change to the 
rebate amount, compared to the Rebate Report for an applicable period 
or a previous reconciliation in the case of reconciliation conducted 36 
months after issuance of the Rebate Report (see Sec.  428.401(d)(3)).
    Additionally, as suggested in section 50 the revised Medicare Part 
D Drug Inflation Rebate Guidance, we considered options for 
establishing circumstances where a recalculation of the rebate amount 
may be appropriate for an applicable period after issuing the Rebate 
Report and/or a reconciled rebate amount based on CMS identifying an 
error or CMS determining that the information used by CMS to calculate 
a rebate amount was inaccurate due to false reporting or similar fault 
by the manufacturer. We also considered potential time limits for 
revisions and whether certain circumstances, such as instances of false 
reporting, should be exempt from such time limits.
    As stated in the CY 2025 PFS proposed rule (89 FR 61982), based on 
these considerations, we believe that, to capture an accurate rebate 
amount and consistent with reconciliations of pricing data submitted to 
CMS that provide for revisions when necessary due to errors, including 
mathematical errors, and manufacturer misreporting, certain 
circumstances merit reconciliation of the rebate amount separate from 
the 12- and 36-month reconciliations proposed at Sec.  428.401(d)(1). 
Specifically, we proposed at Sec.  428.401(d)(2) that CMS may reconcile 
a rebate amount of an issued Rebate Report when CMS identifies either: 
(1) an agency error such as a mathematical error or an error in the 
information specified in a Rebate Report as determined under Sec.  
428.401(c) or report of a reconciled rebate amount as determined under 
Sec.  428.401(d), including reporting system or coding errors; or (2) 
CMS determines that information used to calculate the rebate amount was 
inaccurate due to manufacturer misreporting. Examples of agency errors 
could include CMS incorrectly calculating the billing units per Part D 
rebatable drug or the mechanism that provides a Rebate Report to the 
manufacturer or the Rebate Report incorrectly displays a rebate amount. 
Examples of manufacturer misreporting could include instances in which 
the manufacturer has made a correction to previously submitted data as 
well as instances in which the reporting individual or entity reporting 
data or information to CMS on behalf of the manufacturer knows or 
should know is inaccurate or misleading (for example, inaccurate 
manufacturer pricing or product data under section 1927(b)(3) of the 
Act). This does not include standard restatements to AMP or other data 
outside of the standard process of issuing the reconciled rebate 
amount. In addition to manufacturer-initiated corrections, CMS may 
become aware of manufacturer misreporting based on fact finding and 
conclusions of enforcement authorities, for example, the HHS Office of 
Inspector General, the CMS Center for Program Integrity, or the 
Department of Justice. In a situation where an error or manufacturer 
misreporting is identified prior to the 12- or 36-month reconciliation 
of the rebate amount set forth in Sec.  428.401(d)(1), CMS may choose 
to include a correction based on the circumstances set forth in Sec.  
428.401(d)(2) concurrently with the 12- or 36-month reconciliation. 
When CMS reconciles data due to an instance of agency error or 
manufacturer misreporting, we proposed that the agency will limit the 
scope of the reconciliation to the specific information that is the 
basis for the reconciliation and not update or otherwise revise any 
other data elements in the Rebate Report (set forth in Sec.  
428.401(c)) or the report of the reconciled rebate amount (set forth in 
Sec.  428.401(d)) unless the correction directly impacts additional 
data fields. For example, corrections to an AMP file may not change the 
AnMP for the applicable period.
    In addition, as noted in the CY 2025 PFS proposed rule (89 FR 
61982), because reconciling a rebate amount imposes substantial 
administrative burden on CMS to reprocess the rebate amount, retest the 
reporting system, and reissue a Rebate Report, we proposed at Sec.  
428.401(d)(2) that CMS may exercise discretion not to initiate 
recalculation of the rebate amount in these situations which are 
outside of the regular reconciliation process proposed at Sec.  
428.401(d)(1).
    We proposed that for a recalculation due to an agency error, the 
error must be identified within 5 years of the date of receipt of the 
Rebate Report for the applicable period (see Sec.  428.401(d)(2)(i)). 
Identification means that CMS has knowledge the error; CMS does not 
need to have completed its revision of the impacted data or determined 
if the revision impacts the rebate amount within the 5-year period. CMS 
will timely complete these steps and determine, when reconciliation 
does impact the rebate amount, whether the reconciliation must be 
included in a discretionary revision or within an upcoming reconciled 
rebate amount for the applicable period. We proposed 5 years for Part D 
(as opposed to the 3-year limit proposed for Part B) to account for the 
additional time of the second reconciliation for Part D rebatable drugs 
to be conducted at 36-

[[Page 98310]]

months as set forth in Sec.  428.401(d)(1). We stated in the proposed 
rule that we believe a 5-year period dating from the issuance of the 
Rebate Report allows for sufficient time to include AMP restatements in 
the MDRP while also placing a reasonable time limit on potential 
discretionary reconciliations, after which a manufacturer of a Part D 
rebatable drug will not receive additional Rebate Reports for the 
applicable period.
    We proposed at Sec.  428.401(d)(2)(ii) that for a circumstance in 
which a manufacturer misreports data, CMS will not bound by the 5-year 
time limit for revision of the rebate amount. For example, if a 
determination is made that a manufacturer misreported AMP data, which 
affected the calculation of the AnMP, then CMS may recalculate the 
rebate amount owed for a Part D rebatable drug. We requested comments 
on the proposals related to manufacturer misreporting.
    We proposed at Sec.  428.405(a)(1) that upon receipt of a 
reconciled rebate amount, manufacturers must pay that reconciled rebate 
amount within 30 calendar days from the date of receipt of the 
reconciled rebate amount. A 30-day payment deadline aligns with the 
payment period set forth in statute at section 1860D-14B(b)(6) of the 
Act. As set forth in Sec.  428.404, we will use the same method and 
process for issuing Rebate Reports and submission of payments for 
reports with a reconciled rebate amount. We state that we will provide 
notice to manufacturers for reports with a reconciled rebate amount. We 
proposed at Sec.  428.405(b) that if a refund is owed to a manufacturer 
based on a reconciled rebate amount, we will initiate the process to 
issue such refund within 60 days from the date of receipt of the 
reconciled rebate amount (proposed at Sec.  428.401(d)). CMS will issue 
additional information on this method and process through additional 
program communications.
    We received public comments on these proposals. Please refer to the 
corresponding section in Part B for a summary of comments and our 
responses where the comments received are applicable to both the 
Medicare Part B and Medicare Part D Drug Inflation Rebate Programs. The 
following is a summary of the comments we received and our responses 
specific to this topic for the Medicare Part D Drug Inflation Rebate 
Program.
    Comment: A few commenters expressed support for the proposed 12-
month and 36-month reconciliation process. One commenter appreciated 
CMS having a reconciliation adjustment for underpayments and 
overpayments.
    Response: We thank the commenters for their feedback. As part of 
the 12-month reconciliation, CMS will incorporate updates to the data 
as set forth in Sec.  428.401(b)(1), and as set forth in Sec.  
428.401(d)(1). This will include any updates to AMP data that have been 
processed by CMS prior to the 12-month reconciliation and the 36-month 
reconciliation. We believe that having these reconciliation periods 
will capture the remainder of the run-out for MDRP AMP restatements and 
provide a more accurate rebate amount.
    After consideration of public comments, we are finalizing Sec.  
428.401 as proposed, with modification. In this final rule, we are 
revising Sec.  428.401(d)(1)(i)(C) to specify that the reconciliation 
will include updated payment amount benchmark period, in addition to 
the benchmark period manufacturer price, and the corresponding cross-
reference as determined under Sec.  428.202(c), to identify both the 
payment amount benchmark period and the price in the benchmark period 
within the report information. In this final rule, we also are revising 
Sec.  428.401(b)(iii) and Sec.  428.401(d)(1)(i)(B) to specify that the 
reconciliation will include any updated payment amount benchmark 
period, in addition to the benchmark period manufacturer price, and to 
clarify in Sec. Sec.  428.401(d)(1)(i)(B), (D), and (E) that updates to 
inputs included in the reconciliation calculations will include newly 
reported information, in addition to restated AMP. We believe that 
these revisions provide further clarity regarding how CMS will conduct 
the reconciliation process, including in the event that AMP data are 
missing when CMS issues the Rebate Report for a Part D rebatable drug, 
and further implement CMS' proposals described in the proposed rule. 
For example, with respect to missing AMP policies, we proposed to 
consider any restatements to the AMP data used to calculate the 
benchmark period manufacturer price during reconciliation, including 
where the benchmark period manufacturer price is identified under 
Sec. Sec.  [thinsp]428.202(c)(3) and (4). The revisions at Sec.  
428.401(b)(iii) and Sec.  428.401(d)(1)(i)(B) make clear that in the 
event a manufacturer has not reported AMP for any quarters during the 
payment amount benchmark period determined under Sec. Sec.  
[thinsp]428.202(c)(1) and (2) at the time CMS issues the Rebate Report, 
including information such as base date AMP overlapping with such 
period, but the manufacturer later reports such information, CMS would 
use such later reported information to identify the payment amount 
benchmark period as determined under Sec. Sec.  428.202(c)(1) and (2) 
and (d)(3), as well as calculate the benchmark period manufacturer 
price.
    Similarly, with respect to Part D rebatable drugs excluded from 
Part D rebate calculations, we proposed to reexamine whether the 
manufacturer was required to report AMP for any part of the applicable 
period for the Part D rebatable drug when performing the reconciliation 
set forth in Sec.  428.401(d). The revisions set forth in Sec. Sec.  
428.401(d)(1)(i)(B), (D), and (E) clarify that in the event CMS 
identifies a Part D rebatable drug as subject to exclusion from the 
Part D rebate calculations under Sec.  428.201(b) at the time CMS 
issues the Rebate Report, but the manufacturer later reports 
information under the MDRP, CMS may use that later reported information 
such as AMP and base date AMP to calculate the inflation-adjusted 
payment amount and the excess amount by which the AnMP exceeds the 
inflation-adjusted payment amount for the applicable period, as well as 
any line extension calculations that may be affected by such newly 
reported information.
iv. Rebate Reports for the Applicable Periods Beginning October 1, 
2022, and October 1, 2023
    Section 1860D-14B(a)(3) of the Act provides CMS with the option to 
delay sending the information required by section 1860D-14B(a)(1) of 
the Act for the applicable periods beginning October 1, 2022, and 
October 1, 2023, until not later than December 31, 2025. As set forth 
in Sec.  428.402, consistent with section 50.2 of the revised Medicare 
Part D Drug Inflation Rebate Guidance, we proposed to issue a 
Preliminary Rebate Report for each applicable period followed by 
issuance of the Rebate Report for each applicable period no later than 
December 31, 2025. For these reports, we proposed at Sec.  428.402 to 
provide an extended 30 calendar day Suggestion of Error period for 
these Preliminary Rebate Reports.
    As stated in the CY 2025 PFS proposed rule (89 FR 61982), because 
this approach provides for 13 months of claims run-out for the Rebate 
Report for the applicable period beginning October 1, 2022, we intend 
to conduct a single reconciliation 21 months after issuance of the 
Rebate Report for this applicable period (see Sec.  428.402(c)(1)(ii)). 
As set forth in Sec.  428.402(c)(2)(ii), for the applicable period 
beginning October 1, 2023, the rebate amount would be reconciled twice, 
in alignment with the reconciliation process discussed previously. The 
first reconciliation

[[Page 98311]]

would occur 9 months after issuance of the Rebate Report to include 13 
months of claims run-out and payment data; the second reconciliation 
will occur 24 months after the first reconciliation and will include 37 
months of claims run-out and payment data. We stated in the proposed 
rule that this approach aligns claims and payment data run-out with the 
run-out used during a regular invoicing cycle. The Suggestion of Error 
period would be 10 calendar days for the reconciliations of the rebate 
amount for the applicable periods beginning October 1, 2022, and the 
applicable period beginning October 1, 2023.
    As noted in the proposed rule, this approach also minimizes the 
number of reports issued to manufacturers as a result of the delay in 
reporting and simplifies payment procedures, thereby minimizing 
manufacturer burden. Starting with the applicable period beginning 
October 1, 2024, reporting will begin a standard cadence and follow the 
procedures otherwise proposed in subpart E of this part 428.
    We did not receive public comments on this proposed provision, and 
we are finalizing Sec.  428.402 as proposed.
f. Enforcement of Manufacturer Payment of Rebate Amounts (Sec.  
428.500)
    Section 1860D-14B(e) of the Act gives CMS the authority to impose a 
civil money penalty equal to 125 percent of the rebate amount for each 
drug for each applicable period on a manufacturer that fails to pay the 
rebate amount, for each dosage form and strength for each rebatable 
drug. Subpart F will implement this section of the Act and establish 
the procedures for determining and collecting a civil money penalty.
    In accordance with sections 1860D-14B(a)(2) and 1860D-14B(b) of the 
Act and Sec.  428.405(a), manufacturers must provide to CMS a rebate 
amount owed within 30 calendar days of receipt of the rebate amount 
due. As set forth in Sec.  428.500(a), we proposed CMS may impose a 
civil money penalty when a manufacturer fails to pay the rebate amount 
in full by the payment deadlines set forth in Sec.  428.405(a). This 
means a manufacturer may be subject to a civil money penalty if the 
manufacturer fails to pay the full rebate amount as invoiced in the 
Rebate Report or any reconciled rebate amount that is greater than the 
amount invoiced in the Rebate Report. More specifically, as described 
in the CY 2025 PFS proposed rule (89 FR 61983), a manufacturer could be 
subject to a civil money penalty when a manufacturer fails to pay a 
rebate amount due by any payment deadline set forth in Sec.  
428.405(a)(1), for: (1) a Rebate Report set forth in Sec.  428.401(c); 
(2) a reconciled rebate amount greater than the amount reflected in the 
Rebate Report set forth in at Sec.  428.401(d); or (3) a Rebate Report 
and a reconciled rebate amount greater than the amount reflected in the 
Rebate Report, if applicable, for the applicable periods beginning 
October 1, 2022, and October 1, 2023 set forth in Sec.  428.402. As 
discussed earlier in section III.I.3.e. of this final rule, we noted 
that the reconciled or corrected rebate amount is not a separately 
payable and distinct rebate amount. Rather, the reconciled rebate 
amount is an update to the rebate amount owed to CMS by a manufacturer 
of a Part D rebatable drug.
    As stated in the CY 2025 PFS proposed rule (89 FR 61983), civil 
money penalties are a point-in-time penalty tied to the rebate amount 
due at the applicable payment deadline, which occurs 30 days after the 
date of receipt of a Rebate Report. At Sec.  428.500(b), we proposed to 
establish the methodology for determining the amount of the civil money 
penalty as equal to 125 percent of the rebate amount for such drug for 
such applicable period, and that this penalty will be due in addition 
to the rebate amount due. That is, we proposed a manufacturer will be 
responsible for paying the full rebate amount due in addition to any 
civil money penalty imposed because of late payment. We proposed this 
approach to civil money penalties based on section 1860D-14B(a)(2) of 
the Act, which establishes a requirement by the manufacturer to provide 
CMS with a rebate not later than 30 days after receipt from CMS of the 
report on the amount of the excess annual manufacturer price increase. 
As noted in the proposed rule, we believe that the ability to assess 
civil money penalties is necessary in all circumstances where a payment 
is due for a rebate amount to CMS to ensure compliance with the rebate 
program's requirements. The civil money penalty would be calculated 
based on the outstanding rebate amount due at the payment deadline, 
which is defined at Sec.  428.405(a)(1) as 30 calendar days after the 
date of receipt of a Rebate Report containing any rebate amount due; 
once a civil money penalty is assessed due to a late payment, the 
penalty will remain in effect even if the manufacturer pays the 
outstanding rebate amount as the penalty is initiated due to a missed 
payment deadline. Because the payment deadline is clearly defined in 
section 1860D-14B(a)(2) of the Act, any late payments of a rebate 
amount due, including late payment of any reconciled rebate amounts 
greater than the amount reflected in the Rebate Report, would be 
considered a violation potentially subject to a civil money penalty. 
Any civil money penalty would be assessed before the next 12- or 36-
month reconciliation.
    We proposed at Sec.  428.500(b) that civil money penalties may be 
calculated at several points in time associated with missing a payment 
deadline for the rebate amount due reflected in the Rebate Report or 
missing a payment deadline associated with any rebate amount determined 
after a reconciliation to be greater than the amount invoiced in the 
Rebate Report. As these separate events can result in distinct 
assessments of civil money penalties, this means that CMS will not 
modify a civil money penalty from a prior missed payment deadline based 
on changes to the rebate amount due following reconciliation, including 
scenarios where the rebate amount is reduced following reconciliation. 
However, in the event that the rebate amount due on a Rebate Report was 
not paid and a civil money penalty was issued for violation of the 
payment deadline, CMS will not issue a second civil money penalty on a 
reconciled rebate amount if reconciliation decreased the rebate amount 
stated on the Rebate Report. As stated in the CY 2025 PFS proposed rule 
(89 FR 61983), we believe that enforcing this requirement after each 
payment deadline, regardless of what rebate amount a manufacturer may 
or may not owe at a future payment deadline, is necessary to maintain 
the integrity of the program and consistency of the implementation of 
the program. Further, we proposed this approach to ensure an 
enforcement approach that is operationally feasible and applied 
consistently in all cases.
    For examples of how this approach to civil money penalties will 
work in practice, see section III.I.2.g. of this final rule. We 
proposed that civil money penalties will function in the same way for 
both the Part B and Part D rebate programs. Given that the Part D 
rebate program has two proposed regular reconciliations, payment will 
be due no later than 30 days after issuance of a report of a reconciled 
rebate amount for each reconciliation under Part D.
    Further, we noted in the proposed rule that payment of any civil 
money penalty does not obviate the requirement for the manufacturer to 
pay any outstanding rebate amount due, including any rebate amount due 
following a reconciliation. Therefore, paying a civil money penalty 
does not satisfy the obligation to pay the underlying rebate amount on 
which the civil money penalty is calculated. In

[[Page 98312]]

addition, we are evaluating all available options to ensure 
manufacturers' timely compliance with their rebate payment obligations, 
including, without limitation, potential recovery approaches and 
enforcement actions. For example, CMS may refer manufacturers to the 
Department of Justice, Department of the Treasury, and/or the 
Department of Health and Human Services Office of Inspector General for 
further review and investigation.
    At Sec.  428.500(c), we proposed that if CMS makes a determination 
to impose a civil money penalty on a manufacturer for violation of a 
payment deadline, we will send a written notice of the decision to 
impose a civil money penalty that includes a description of the basis 
for the determination, the basis for the penalty, the amount of the 
penalty, the date the penalty is due, the manufacturer's right to a 
hearing, and information about where to file the request for a hearing. 
To ensure a consistent approach to civil money penalties, we proposed 
applying existing appeal procedures for civil money penalties in 42 CFR 
423, subpart T of this title to manufacturers appealing a civil money 
penalty imposed under the Medicare Part D Drug Inflation Rebate 
Program. CMS has utilized this appeals process for many years for civil 
money penalty determinations affecting MA organizations and Part D 
sponsors. Therefore, we proposed to use this well-established process 
for civil money penalty appeals from manufacturers that do not make 
inflation rebate payments by the payment deadline. We also proposed at 
Sec.  428.500(e)(1) that the scope of appeals is limited to: (1) CMS 
determinations relating to whether the rebate payment was made by the 
payment deadline; and (2) the calculation of the penalty amount. 
Section 1860D-14B(f) of the Act precludes judicial review of specific 
data inputs or calculations related to the underlying Rebate Report and 
reconciliation; therefore, such data and calculations are not 
appealable through this process.
    Section 1860D-14B(e) of the Act states that the provisions of 
section 1128A of the Act (except subsections (a) and (b)) apply to 
civil money penalties under this subpart to the same extent that they 
apply to a civil money penalty or procedure under section 1128A(a) of 
the Act. We proposed to codify this requirement at Sec.  428.500(f). In 
alignment with the procedure outlined in section 1128A of the Act, we 
proposed at Sec.  428.500(d) that collection of the civil money penalty 
will follow expiration of the timeframe for requesting an appeal, which 
is 60 calendar days from the civil money penalty determination in cases 
where the manufacturer did not request an appeal. In cases where a 
manufacturer requests a hearing and the decision to impose the civil 
money penalty is upheld, CMS will initiate collection of the civil 
money penalty once the administrative decision is final. We solicited 
comment on proposals related to the violations of payment deadlines and 
issuance of a civil money penalty.
    We proposed at Sec.  428.500(g) that in the event that a 
manufacturer declares bankruptcy, as described in title 11 of the 
United States Code, and as a result of the bankruptcy, fails to pay 
either the full rebate amount owed or the total sum of civil monetary 
penalties imposed, the government reserves the right to file a proof of 
claim with the bankruptcy court to recover the unpaid rebate amount 
and/or civil monetary penalties owed by the manufacturer.
    We received public comments on these proposals. Because the 
comments received are applicable to both the Medicare Part B and Part D 
Drug Inflation Rebate Programs, please refer to the corresponding 
section in Part B for a summary of comments and our responses on this 
topic.
    After consideration of public comments, we are finalizing Sec.  
428.500 as proposed.
g. Severability (Sec.  428.10)
    At Sec.  428.10, we proposed that were any provision of part 428 to 
be held invalid or unenforceable by its terms, or as applied to any 
person or circumstance, such provisions will be severable from this 
part and the invalidity or unenforceability would not affect the 
remainder thereof or any other part of this subchapter or the 
application of such provision to other persons not similarly situated 
or to other, dissimilar circumstances. As stated in the CY 2025 PFS 
proposed rule (89 FR 61984), while the provisions in part 428 are 
intended to present a comprehensive approach to implementing the 
Medicare Part D Drug Inflation Rebate Program, we intend that each of 
them is a distinct, severable provision. We also stated our intent that 
a finding that a provision of part 428 is invalid or unenforceable 
would not affect similar provisions in the Medicare Part B Drug 
Inflation Rebate Program. As discussed in the proposed rule, the Part D 
drug inflation rebate proposals are intended to operate independently 
of each other, even if each serves the same general purpose or policy 
goal. For example, we stated that we intended the policies we proposed 
related to exclusion of units acquired through the 340B Program (Sec.  
428.203(b)(2)) to be distinct and severable from the proposals related 
to determination of Part D Rebatable drugs (Sec. Sec.  428.100 and 
428.101). As stated in the proposed rule, even where one provision 
refers to a second provision, the preamble and the regulatory text 
clarify the intent of the agency that the two provisions will be 
severable if one provision were to be invalidated in whole or in part. 
For example, CMS would still be able to calculate a Part D drug 
inflation rebate even if the provision identifying the payment amount 
benchmark period for a Part D rebatable drug as the first calendar year 
in which such drug has at least 1 quarter of AMP in certain instances 
of missing AMP is deemed invalid (Sec. Sec.  428.202(c)(3) and (c)(4)).
    We solicited public comments on our proposed severability policy. 
The following is a summary of the comments we received and our 
responses.
    Comment: A couple of commenters disagreed with CMS' proposal that 
each regulatory provisions in part 428 are severable and distinct. One 
of these commenters stated that the preamble seeks to dictate to the 
courts how each regulatory provision should be evaluated for the 
purposes of severability. This commenter recommended CMS indicate an 
intent for severability but delete preamble or regulatory language 
related to the courts' evaluation of the issue. One of these commenters 
wrote that courts have rejected similar severability clauses, 
particularly in instances where a regulation's provisions were too 
intertwined to sever. This commenter also noted that CMS does not 
provide a legal or policy rationale for how it believes the Part D 
inflation rebates regulations can operate independently from one 
another. As a result, the commenter writes, a court would likely find 
the Part D inflation rebate regulations should be treated as a 
``single, integrated proposal.''
    Response: We appreciate these commenters sharing their feedback. We 
disagree with the commenters' contention that the policies in this 
final rule are not individual and severable. Under the Administrative 
Procedure Act (APA), an ``agency action'' may be either ``the whole or 
a part of an agency rule.'' 5 U.S.C. 551(13). Thus, the APA permits a 
court to sever a rule by setting aside only the portion of the rule 
found invalid. Courts have stated that in determining if an agency 
action is severable, they look at the agency

[[Page 98313]]

intent,\705\ and if parts of the action are ``intertwined'' or if 
``they operate entirely independently of one another.'' \706\ Even if a 
court were to strike down some provision of this final rule, CMS' 
intent is that other portions of this rule would remain in effect. CMS' 
intent is evidence by Sec.  428.10, which states that were any 
provision of part 428 to be held invalid or unenforceable by its terms, 
or as applied to any person or circumstance, such provisions would be 
severable from part 428 and the invalidity or unenforceability would 
not affect the remainder thereof or any other part of this subchapter 
or the application of such provision to other persons not similarly 
situated or to other, dissimilar circumstances. We believe severability 
applies to each provision of the Part D inflation drug rebate 
regulation, because deeming any particular provision to be invalid or 
illegal would not result in a material change to the Medicare Part D 
Inflation Rebate Program so as to cause all of the requirements that 
compose the program to be invalid.
---------------------------------------------------------------------------

    \705\ Davis Cnty. Solid Waste Mgmt. v. U.S. E.P.A., 108 F.3d 
1454, 1459 (D.C. Cir. 1997).
    \706\ Wilmina Shipping AS v. United States Dep't of Homeland 
Sec., 75 F. Supp. 3d 163, 171 (D.D.C. 2014).
---------------------------------------------------------------------------

    Contrary to the commenter's assertion, CMS did explain how the Part 
D inflation rebate regulations can operate independently from one 
another. As noted above, CMS provided examples that are illustrative of 
how the provisions of part 428 would operate independently from one 
another; for instance, CMS would still be able to calculate a Part D 
drug inflation rebate even if the proposed provision identifying the 
payment amount benchmark period for a Part D rebatable drug as the 
first calendar year in which such drug has at least 1 quarter of AMP in 
certain instances of missing AMP is deemed invalid (Sec. Sec.  
428.202(c)(3) and (c)(4)).
    After consideration of public comments, CMS is finalizing this 
policy as proposed at Sec.  428.10.

J. Request for Information: Building Upon the MIPS Value Pathways 
(MVPs) Framework To Improve Ambulatory Specialty Care

    In the CY 2025 PFS proposed rule (89 FR 61984 through 61991), we 
solicited comment on a Request for Information (RFI), Building upon the 
MIPS Value Pathways (MVPs) Framework to Improve Ambulatory Specialty 
Care. We refer readers to the CY 2025 PFS proposed rule to review this 
RFI.
    We received public comments in response to this RFI, and we 
appreciate the thoughtful input. We will consider the comments received 
for future rulemaking, technical assistance, and work related to the 
design of a future ambulatory specialty model.

K. Modifications to Coverage of Colorectal Cancer Screening

    Medicare coverage provisions for colorectal cancer (CRC) screening 
tests under Part B are described in statutes (sections 1861(s)(2)(R), 
1861(pp), 1862(a)(1)(H) and 1834(d) of the Social Security Act (the 
Act)), regulation (42 CFR 410.37), and a National Coverage 
Determination (NCD) (Section 210.3 of the Medicare National Coverage 
Determinations Manual). The statute and regulations expressly authorize 
the Secretary to add other tests and procedures (and make modifications 
to tests and procedures) for colorectal cancer screening with such 
frequency and payment limits as the Secretary finds appropriate based 
on consultation with appropriate organizations. (Section 1861(pp)(1)(D) 
of the Act; Sec.  410.37(a)(1)(v)). We proposed to exercise our 
authority at section 1861(pp)(1)(D) of the Act to update and expand 
coverage for CRC screening by:
     Removing coverage for the barium enema procedure in 
regulations at Sec.  410.37,
     Adding coverage for the computed tomography colonography 
(CTC) procedure in regulations at Sec.  410.37, and
     Expanding a ``complete colorectal cancer screening'' in 
Sec.  410.37(k) to include a follow-on screening colonoscopy after a 
Medicare covered blood-based biomarker CRC screening test (described 
and authorized in NCD 210.3).
1. Background
    The Center for Disease Control and Prevention (CDC) describes CRC 
as ``a disease in which cells in the colon or rectum grow out of 
control. . . Sometimes abnormal growths, called polyps, form in the 
colon or rectum. Over time, some polyps may turn into cancer. Screening 
tests can find polyps so they can be removed before turning into 
cancer. Screening also helps find colorectal cancer at an early stage, 
when treatment works best.'' \707\ The National Cancer Institute 
reports that CRC is the fourth most common type of cancer and estimates 
that the United States experienced 153,020 new cases and 52,550 new 
deaths from CRC in 2023. In addition, the rate of new cases and new 
deaths from CRC is more common in men than women and significantly 
greater for those of African American and Non-Hispanic American Indian/
Alaska Native descent compared to all races.\708\
---------------------------------------------------------------------------

    \707\ CDC website: https://www.cdc.gov/colorectal-cancer/about/?CDC_AAref_Val=https://www.cdc.gov/cancer/colorectal/basic_info/what-is-colorectal-cancer.htm.
    \708\ NCI website: https://seer.cancer.gov/statfacts/html/colorect.html.
---------------------------------------------------------------------------

    At Sec.  410.37(a)(4), we define the barium enema procedure as a 
screening double contrast barium enema of the entire colorectum 
(including a physician's interpretation of the results of the 
procedure); or in the case of an individual whose attending physician 
decides that he or she cannot tolerate a screening double contrast 
barium enema, a screening single contrast barium enema of the entire 
colorectum (including a physician's interpretation of the results of 
the procedure). The CDC describes CTC, (also called a virtual 
colonoscopy), as ``a screening test that uses X-rays and computers to 
produce images of the entire colon, which are displayed on a computer 
screen for the doctor to analyze.'' \709\
---------------------------------------------------------------------------

    \709\ CDC website: https://www.cdc.gov/colorectal-cancer/screening/?CDC_AAref_Val=https://www.cdc.gov/cancer/colorectal/basic_info/screening/tests.htm.
---------------------------------------------------------------------------

    The U.S. Preventive Services Task Force (USPSTF) first included CTC 
as a CRC screening method in their June 2016 revised Final 
Recommendation Statement.\710\ With respect to CTC, the USPSTF 
cautioned in the 2016 recommendation that ``[t]here is insufficient 
evidence about the potential harms of associated extracolonic findings, 
which are common.'' The USPSTF further wrote, ``[t]here are numerous 
screening tests to detect early-stage colorectal cancer, including 
stool-based tests (gFOBT, FIT, and FIT-DNA), direct visualization tests 
(flexible sigmoidoscopy, alone or combined with FIT; colonoscopy; and 
CT colonography), and serology tests (SEPT9 DNA test). The USPSTF found 
no head-to-head studies demonstrating that any of these screening 
strategies are more effective than others, although they have varying 
levels of evidence supporting their effectiveness, as well as different 
strengths and limitations.'' \711\ The USPSTF again included CTC as a 
CRC screening method in the most recent May 2021 revised Final 
Recommendation Statement, which

[[Page 98314]]

included the topline recommendations ``[t]he USPSTF recommends 
screening for colorectal cancer in all adults aged 50 to 75 years 
(Grade A)'' and ``[t]he USPSTF recommends screening for colorectal 
cancer in adults aged 45 to 49 years (Grade B)''.\712\ We described our 
consultations with additional organizations and our review of clinical 
guidelines later in our proposal.
---------------------------------------------------------------------------

    \710\ USPSTF June 2016 Revised Final Recommendation Statement 
https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/colorectal-cancer-screening-june-2016.
    \711\ USPSTF June 2016 Revised Final Recommendation Statement 
https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/colorectal-cancer-screening-june-2016.
    \712\ USPSTF January 2021 Revised Final Recommendation Statement 
https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/colorectal-cancer-screening.
---------------------------------------------------------------------------

2. Statutory Authority
    Section 4104 of the Balanced Budget Act of 1997 (Pub. L. 105-33) 
authorized the benefit colorectal cancer screening tests under Medicare 
Part B. Section 1861(s)(2)(R) of the Act includes CRC screening tests 
in the definition of medical and other health services that fall within 
the scope of Medicare Part B benefits described in section 1832(a)(1) 
of the Act. Section 1861(pp) of the Act defines colorectal cancer 
screening tests and specifically names the following tests:
     Screening fecal-occult blood test;
     Screening flexible sigmoidoscopy; and
     Screening colonoscopy.
    Section 1861(pp)(1)(D) of the Act also authorizes the Secretary to 
include in the definition of CRC screening tests ``other tests or 
procedures, and modifications to the tests and procedures described 
under this subsection, with such frequency and payment limits, as the 
Secretary determines appropriate, in consultation with appropriate 
organizations.''
3. Regulatory and NCD Authority
    In the CY 1998 PFS final rule (62 FR 59048), after consulting with 
appropriate organizations, we finalized regulations to cover barium 
enema procedures for CRC screening in Sec.  410.37. Barium enema 
screening examinations have to be ordered by the beneficiary's 
attending physician (Sec.  410.37(h)). Currently, the regulations cover 
barium enemas as a CRC screening test subject to frequency limitations 
and whether or not the individual was at high risk for colorectal 
cancer. As described in the CY 1998 PFS final rule (62 FR 59048), we 
consulted with a number of appropriate organizations such as the 
American Cancer Society, American College of Physicians, American 
Gastroenterological Association and USPSTF, and the decision to cover 
the barium enema procedure was based on the prevailing clinical 
guidelines and recommendations at the time. In the CY 2023 PFS final 
rule (87 FR 69404), we lowered the age limit for barium enema 
procedures for CRC screening to age 45 at Sec.  410.37(i)(1).
    In May 2009, we established a non-coverage policy for CTC in NCD 
210.3 CTC Screening Tests. We noted in the Final Decision Memorandum, 
``there is insufficient evidence on the test characteristics and 
performance of screening CTC in Medicare aged individuals and that the 
evidence is not sufficient to conclude that screening CTC improves 
health benefits for asymptomatic, average risk Medicare 
beneficiaries.'' \713\ At that time, the October 2008 USPSTF revised 
Final Recommendation Statement read, ``[t]he USPSTF concludes that the 
evidence is insufficient to assess the benefits and harms of computed 
tomographic colonography and fecal DNA testing as screening modalities 
for colorectal cancer. (Grade I)'' \714\ As described in the Final 
Decision Memorandum, guidelines from Professional Societies were mixed. 
A joint guideline from the American Cancer Society, the U.S. Multi-
Society Task Force on Colorectal Cancer, and the American College of 
Radiology concluded ``[i]n terms of detection of colon cancer and 
advanced neoplasia, which is the primary goal of screening for CRC and 
adenomatous polyps, recent data suggest CTC is comparable to Optical 
Colonoscopy for the detection of cancer and polyps of significant size 
when state-of-the-art techniques are applied.'' \715\ The American 
Gastroenterological Association issued the following recommendation 
statement in 2008, ``[t]he AGA does not endorse CTC as a first-line 
colon cancer screening test. While AGA supports CTC as a screening 
option, colonoscopy is the definitive test for colorectal cancer 
screening and prevention. Colonoscopy is the only test that can both 
detect cancer at an early curable stage and prevent cancer by removing 
pre-cancerous polyps. At this time, while CTC may be another technology 
for colorectal cancer screening, many questions about CTC remain to be 
answered.'' \716\ The American Society for Gastrointestinal Endoscopy 
published guidelines in 2006 that concluded ``virtual colonoscopy is an 
evolving technique and is not currently recommended as the primary 
method of screening for CRC.'' \717\
---------------------------------------------------------------------------

    \713\ National Coverage Analysis CAG-00396N Screening Computed 
Tomography Colonography (CTC) for Colorectal Cancer on Medicare 
Coverage Database: (https://www.cms.gov/medicare-coverage-database/view/ncacal-decision-memo.aspx?proposed=N&NCAId=220&NcaName=Screening+Computed+Tomography+Colonography+(CTC)+for+Colorectal+Cancer).
    \714\ USPSTF October 2008 Final Recommendation Statement: 
https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/colorectal-cancer-screening-2008.
    \715\ National Coverage Analysis CAG-00396N Screening Computed 
Tomography Colonography (CTC) for Colorectal Cancer on Medicare 
Coverage Database: (https://www.cms.gov/medicare-coverage-database/view/ncacal-decision-memo.aspx?proposed=N&NCAId=220&NcaName=Screening+Computed+Tomography+Colonography+(CTC)+for+Colorectal+Cancer).
    \716\ National Coverage Analysis CAG-00396N Screening Computed 
Tomography Colonography (CTC) for Colorectal Cancer on Medicare 
Coverage Database: (https://www.cms.gov/medicare-coverage-database/view/ncacal-decision-memo.aspx?proposed=N&NCAId=220&NcaName=Screening+Computed+Tomography+Colonography+(CTC)+for+Colorectal+Cancer).
    \717\ National Coverage Analysis CAG-00396N Screening Computed 
Tomography Colonography (CTC) for Colorectal Cancer on Medicare 
Coverage Database: (https://www.cms.gov/medicare-coverage-database/view/ncacal-decision-memo.aspx?proposed=N&NCAId=220&NcaName=Screening+Computed+Tomography+Colonography+(CTC)+for+Colorectal+Cancer).
---------------------------------------------------------------------------

    In the 2023 PFS final rule (87 FR 69404) we expanded the regulatory 
definition of CRC Screening to include a complete colorectal cancer 
screening, which includes a follow-on screening colonoscopy after a 
Medicare covered non-invasive stool-based colorectal cancer screening 
test returns a positive result (Sec.  410.37(k)). Although we have 
previously viewed a colonoscopy after a positive non-invasive stool-
based CRC screening test to be a diagnostic colonoscopy, the clinical 
recommendations and guidance of medical professional societies and 
screening experts have since evolved for stool-based colorectal cancer 
screening due to the relative number of false positive results, low 
follow-up colonoscopy rates and patient access barriers. Published 
evidence highlighted that individuals who did not get a follow-up 
colonoscopy were about twice as likely to die of colorectal cancer 
compared to individuals who had one. Since the overall goal of 
programmatic cancer screening using any CRC screening test is to 
prevent cancer, allowing for early detection and treatment and reducing 
cancer mortality, the follow-up colonoscopy was found to be integral 
with non-invasive stool-based CRC screening, since improvements in 
health outcomes would not be possible without the follow-up 
colonoscopy. Our goal was that the patient and their healthcare 
professional make the most appropriate choice in CRC screening, which 
included considerations of the risks, burdens and barriers presented 
with an invasive screening colonoscopy in a clinical setting as their 
first step. In that

[[Page 98315]]

final rule, we also described that CRC screening presents a unique 
scenario where there are significant differences between screening 
stool-based tests and screening colonoscopy tests in terms of 
invasiveness and burdens to the patient and healthcare system. We 
recognized there are several advantages to choosing a non-invasive 
stool-based CRC screening test as a first step compared to a screening 
colonoscopy, including relative ease of administering the test and 
potentially reducing the experience of unnecessary burdensome 
preparation and invasive procedures.
    We noted in preamble of the CY 2023 PFS final rule (87 FR 69404) 
that many commenters requested that CMS further expand our approach of 
a complete colorectal cancer screening. Many requested that we remove 
the text ``stool-based'' from our proposed regulations at Sec.  
410.37(k), resulting in a complete CRC screening including a follow-on 
screening colonoscopy after a Medicare covered non-invasive screening 
test. Many commenters requested that a complete CRC screening include a 
screening colonoscopy after a positive result from a blood-based 
biomarker test, as well as a stool-based test. We responded to these 
public comments by writing that ``we disagree with the commenters that 
requested a further expansion of a complete colorectal cancer screening 
that would include additional first step tests beyond a non-invasive 
stool-based test. We believe the stool-based tests are unique to other 
CRC screening tests in terms of their non-invasiveness, the fact that 
stool-based tests can be implemented by the patient at home and mailed 
into the lab, the absence of bowel preparation and anesthesia and the 
comparatively lighter burden and mitigated potential for over servicing 
of the patient and the healthcare system.'' We further wrote, ``[w]e 
agree that blood-based biomarker CRC screening tests have significant 
potential and we expanded coverage to include them in the reconsidered 
NCD 210.3, effective January 2021.'' We also recognized that blood-
based biomarker CRC screening tests continue to be an emerging and 
quickly evolving technology. However, we also noted that, as of 
September 2022, no blood-based biomarker tests for CRC screening had 
achieved the coverage requirements of NCD 210.3 and that the May 2021 
USPSTF revised Final Recommendation Statement did not include serum 
tests.
    In the CY 2023 PFS final rule (87 FR 69404) we also established 
regulations at Sec.  410.37(k) that the frequency limitations described 
for screening colonoscopy shall not apply in the instance of a follow-
on screening colonoscopy test. We wrote that we aimed to avoid 
disruption to the existing conditions of coverage and payment for CRC 
screening for this unique scenario and continuum of screening.
4. Proposed Revisions
    We proposed to exercise our authority in section 1861(pp)(1)(D) of 
the Act to remove coverage for the barium enema procedure from CRC 
screening in regulations at Sec.  410.37. We have consulted with 
appropriate organizations and heard that, while the barium enema 
procedure was reasonable and necessary for CRC screening when it was 
initially covered in the CY 1998 PFS final rule (62 FR 59048), 
circumstances have since changed. The organizations have expressed that 
barium enema procedures no longer meet modern clinical standards, are 
no longer recommended in clinical guidelines, and would not be an 
appropriate CRC screening test given the advancement of alternatives 
such as stool-based tests, colonoscopies, and CT colonography. In 
developing our proposal, we also considered that the June 2016 and the 
May 2021 USPSTF revised Final Recommendation Statements did not include 
the barium enema procedure as a CRC screening method in their revised 
Final Recommendation Statements.718 719 We also considered 
the 2017 U.S. Multi-Society Task Force of Colorectal Cancer (MSTF) 
recommendation statement, which reads, ``CT colonography has replaced 
double-contrast barium enema as the test of choice for colorectal 
imaging for nearly all indications. CT colonography is more effective 
than barium enema and better tolerated.'' \720\ The 2018 American 
Cancer Society (ACS) Colorectal Cancer Screening for Average-Risk 
Adults Guideline Update also reads, ``double-contrast barium enema is 
no longer included as an acceptable screening option.'' \721\
---------------------------------------------------------------------------

    \718\ USPSTF June 2016 Revised Final Recommendation Statement, 
https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/colorectal-cancer-screening-june-2016.
    \719\ USPSTF January 2021 Revised Final Recommendation 
Statement, https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/colorectal-cancer-screening.
    \720\ Am J Gastroenterol 2017; 112:1016-1030; doi: 10.1038/
ajg.2017.174; published online 6 June 2017.
    \721\ The 2018 American Cancer Society (ACS) Colorectal Cancer 
Screening for Average-Risk Adults Guideline Update, doi: 10.3322/
caac.21457. Available online at cacancerjournal.com.
---------------------------------------------------------------------------

    During the CY 2023 PFS, we received a joint public comment from the 
American College of Gastroenterology (ACG), American 
Gastroenterological Association (AGA) and the American Society for 
Gastrointestinal Endoscopy (ASGE) \722\ that brought to our attention 
that barium enema is not a recommended CRC screening modality in 
guidance from the USPSTF or the U.S. Multi-Society Task Force on 
Colorectal Cancer. The public comment also noted that while the barium 
enema procedure once was considered a CRC screening modality and has 
been included in guidelines in the past, barium enema is no longer 
included in any recent CRC guidelines and is rarely performed today as 
it is considered inadequate for the exclusion of CRC. They urged CMS to 
remove barium enema as a covered CRC screening test for all 
individuals. An internal claims analysis indicates that Medicare only 
paid claims for barium enema for CRC screening for 72 beneficiaries in 
CY 2022.
---------------------------------------------------------------------------

    \722\ CY 2023 PFS Public Comment CMS-2022-0113-
21851_attachment_1.
---------------------------------------------------------------------------

    A 2016 study titled ``[n]ew era of colorectal cancer screening,'' 
states, ``double-contrast barium enema (DCBE) is a non-invasive 
radiological test, which provides a complete evaluation of the large 
intestine. The sensitivity and specificity of barium enema for polyps 
of any size is 38 percent and 86 percent, respectively. One study 
comparing barium enema to CTC and colonoscopy showed that DCBE has the 
lowest sensitivity and specificity with sensitivity of 41 percent for 
lesions >= 6 mm and sensitivity and specificity of 48 and 90 percent 
respectively for lesions >= 10 mm. These results are consistent with a 
meta-analysis comparing the performance of barium enema to that of CTC 
showing CTC is more sensitive and more specific than barium enema for 
large polyps (>= 10 mm) and small polyps (6-9 mm) in average-risk and 
high-risk populations. In the United States, CTC has largely replaced 
DCBE as a radiographic option for CRC screening.'' \723\
---------------------------------------------------------------------------

    \723\ El Zoghbi M, Cummings LC. New era of colorectal cancer 
screening. World J Gastrointest Endosc. 2016 Mar 10;8(5):252-8. doi: 
10.4253/wjge.v8.i5.252. PMID: 26981176; PMCID: PMC4781905.
---------------------------------------------------------------------------

    In light of the new evidence and our consultations with appropriate 
organizations, we proposed to remove barium enema as a colorectal 
screening test under Sec.  410.37(a)(1)(iv). We solicited comments from 
the public and appropriate organizations. We also solicited public 
comment on the proposal to remove all references to barium enemas in 
Sec.  410.37.

[[Page 98316]]

    We also proposed to exercise our authority in section 
1861(pp)(1)(D) of the Act to add coverage for the CTC procedure for CRC 
screening in regulations at Sec.  410.37. We stated that if finalized, 
we will address and revise the current non-coverage policy for CTC in 
NCD 210.3. In developing our proposal to expand coverage for the CTC 
procedure, we consulted with appropriate organizations and considered a 
number of potential benefits, risks, and tradeoffs described in 
guidelines and recommendations by professional societies and government 
bodies.
    In developing the proposed rule, we considered that the USPSTF 
included the CTC procedure as a CRC screening method in their June 2016 
and May 2021 revised Final Recommendation Statements.724 725 
In terms of benefits, the USPSTF wrote in their May 2021 revised Final 
Recommendation Statement, that CTC usually allows for greater colon 
visualization compared to flexible sigmoidoscopy. In terms of risks and 
tradeoffs, USPSTF noted that CTC, like colonoscopy and flexible 
sigmoidoscopy, requires the burden of bowel preparation. The USPSTF 
wrote ``[u]nlike Colonoscopy and Flexible Sigmoidoscopy, CTC may reveal 
extracolonic findings that require additional workup, which could lead 
to other potential benefits or harms.'' The USPSTF went on to state, 
``[h]arms from CT colonography are uncommon (19 studies; n = 90 133), 
and the reported radiation dose for CT colonography ranges from 0.8 to 
5.3 mSv (compared with an average annual background radiation dose of 
3.0 mSv per person in the U.S.). Accurate estimates of rates of serious 
harms from colonoscopy following abnormal CTC results are not 
available.'' Regarding extracolonic findings, the USPSTF wrote, 
``[e]xtracolonic findings on CTC are common. Based on 27 studies that 
included 48,235 participants, 1.3 percent to 11.4 percent of 
examinations identified extracolonic findings that required workup. 
Three percent or less of individuals with extracolonic findings 
required definitive medical or surgical treatment for an incidental 
finding. A few studies suggest that extracolonic findings may be more 
common in older age groups. Long-term clinical follow-up of 
extracolonic findings was reported in few studies, making it difficult 
to know whether it represents a benefit or harm of CT colonography.'' 
The USPSTF recommends screening CTC frequency every 5 years.\726\
---------------------------------------------------------------------------

    \724\ USPSTF June 2016 Revised Final Recommendation Statement, 
https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/colorectal-cancer-screening-june-2016.
    \725\ USPSTF January 2021 Revised Final Recommendation 
Statement, https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/colorectal-cancer-screening.
    \726\ USPSTF January 2021 Revised Final Recommendation 
Statement, https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/colorectal-cancer-screening.
---------------------------------------------------------------------------

    In a study titled ``Incidental Extracolonic Findings on CT 
Colonography: The Impending Deluge and Its Implications,'' Lincoln L. 
Berland, MD, describes extracolonic findings as findings on CTC that 
have potential deleterious health effects and are asymptomatic, 
unsuspected, and unrelated to the colon. The study goes on to state, 
``as CT image quality has improved, there has been an increase in the 
frequency of detecting ``incidental findings,'' defined as findings 
that are unrelated to the clinical indication for the imaging 
examination performed. These `incidentalomas,' as they are also called, 
often confound physicians and patients with how to manage them. 
Although it is known that most incidental findings are likely benign 
and often have little or no clinical significance, the inclination to 
evaluate them is often driven by physician and patient unwillingness to 
accept uncertainty, even given the rare possibility of an important 
diagnosis.'' \727\ The potential for extracolonic findings, both 
clinically significant and insignificant, is an important tradeoff to 
be considered by the patient and clinician when considering CTC as a 
CRC screening option.
---------------------------------------------------------------------------

    \727\ Lincoln L. Berland, Incidental Extracolonic Findings on CT 
Colonography: The Impending Deluge and Its Implications, Journal of 
the American College of Radiology, Volume 6, Issue 1, 2009, Pages 
14-20, ISSN 1546-1440, https://doi.org/10.1016/j.jacr.2008.06.018.
---------------------------------------------------------------------------

    We also considered the 2018 ACS Colorectal Cancer Screening for 
Average-Risk Adults Guideline Update, which includes the CTC procedure 
with their recommended tests and procedures for CRC Screening.\728\ In 
terms of benefits, the ACS guideline describes CTC sensitivity and 
specificity for cancer and advanced adenomas comparable to colonoscopy, 
longer recommended screening intervals compared to stool-based tests, 
and no need for sedation (compared to colonoscopy). In terms of risks 
and tradeoffs, the ACS guideline notes incidental extracolonic findings 
may require workup (with unclear benefit-burden balance), exposure to 
low-dose radiation and requires full bowel cleansing. The ACS 
guidelines recommended screening CTC frequency of every 5 years.
---------------------------------------------------------------------------

    \728\ 2018 ACS Colorectal Cancer Screening for Average-Risk 
Adults Guideline Update, doi: 10.3322/caac.21457. Available online 
at cacancerjournal.com.
---------------------------------------------------------------------------

    We also considered the United States Multi-Society Task Force 
(MSTF) of Colorectal Cancer, which represents the American College of 
Gastroenterology, the American Gastroenterological Association, and the 
American Society for Gastrointestinal Endoscopy, 2017 Colorectal Cancer 
Screening recommendations \729\, which include CTC as a ``Tier 2'' 
procedure alongside FIT-fecal DNA and Flexible Sigmoidoscopy. The 
recommendation states that ``CRC screening tests are ranked in 3 tiers 
based on performance features, costs, and practical considerations. The 
first-tier tests are colonoscopy every 10 years and annual fecal 
immunochemical test (FIT). Colonoscopy and FIT are recommended as the 
cornerstones of screening regardless of how screening is offered. Thus, 
in a sequential approach based on colonoscopy offered first, FIT should 
be offered to patients who decline colonoscopy. Colonoscopy and FIT are 
recommended as tests of choice when multiple options are presented as 
alternatives. A risk-stratified approach is also appropriate, with FIT 
screening in populations with an estimated low prevalence of advanced 
neoplasia and colonoscopy screening in high prevalence populations. The 
second-tier tests include CTC every 5 years, the FIT-fecal DNA test 
every 3 years, and flexible sigmoidoscopy every 5 to 10 years. These 
tests are appropriate screening tests, but each has disadvantages 
relative to the tier 1 tests.'' In terms of benefits of CTC, the MSTF 
describes lower risk of perforation compared with colonoscopy and 
write, ``CTC appeals to a niche of patients who are willing to undergo 
bowel preparation and are concerned about the risks of colonoscopy.'' 
In terms of risks and tradeoffs, the MSTF describe the requirement for 
bowel preparation, extracolonic findings, and inferior sensitivity 
compared to other screening tests and radiation exposure. The MSTF 
writes, ``[e]vidence that CT colonography reduces CRC incidence or 
mortality is lacking.''
---------------------------------------------------------------------------

    \729\ Am J Gastroenterol 2017; 112:1016-1030; doi: 10.1038/
ajg.2017.174; published online 6 June 2017.
---------------------------------------------------------------------------

    We also considered the online resource 
RadiologyInfoTM,\730\ which is an online public information 
resource

[[Page 98317]]

developed by health care professionals in collaboration with patients. 
RadiologyInfo is sponsored by the Radiological Society of North America 
(RSNA) and the American College of Radiology (ACR). In terms of 
benefits of CTC, RadiologyInfo described CTC as less invasive than a 
colonoscopy, though for CTC a small tube is inserted into the rectum to 
allow for inflation with carbon dioxide or air. In addition, CTC does 
not require sedation (and transportation accommodations) and carries 
less risk of bowel perforation compared to colonoscopy. In addition, 
CTC can identify precancerous polyps that may not be detected by stool-
based and blood-based tests. CTC may be a less burdensome first option 
for patients who are medically fragile or have complex or unusual 
anatomy. In terms of risks and tradeoffs, RadiologyInfo describes a 
very small risk of perforated bowel (during inflation), a small risk of 
secondary cancer due to radiation exposure and it being not recommended 
for individuals who are pregnant. RadiologyInfo reports that CTC 
applies a patient radiation exposure similar to barium enema at 6 
millisieverts (mSv), which is greater than other preventive screenings, 
such as CT lung cancer screening at 1.5mSv and screening digital 
mammography at 0.21 mSv.\731\
---------------------------------------------------------------------------

    \730\ RadiologyInfo website: https://www.radiologyinfo.org/.
    \731\ https://www.radiologyinfo.org/en/info/safety-xray.
---------------------------------------------------------------------------

    After considering the above recommendations and guidelines from 
appropriate organizations, we stated that we believe CTC to be 
reasonable and necessary as CRC screening test, especially for patients 
and clinicians who seek a direct visualization procedure as a first 
step in CRC screening that is less invasive and less burdensome on the 
patient and healthcare system compared to screening colonoscopy. Our 
goal is that the patient and their clinician make the most appropriate 
choice in CRC screening, which includes considerations of the risks, 
burdens and tradeoffs for each covered test or procedure. We expect 
that clinicians who order CTC for CRC screening will educate their 
patients on risks and context of radiation exposure and potential 
extracolonic findings. A shared decision-making tool is not mandated 
but may be helpful for clinicians and patients to weigh their options 
for CRC screening.
    We proposed to add CTC as a covered CRC screening test at Sec.  
410.37. We proposed to describe in regulatory text that CTC means a 
test that uses X-rays and computers to produce images of the entire 
colon (including image processing and a physician's interpretation of 
the results of the procedure). We also proposed to codify in regulatory 
text that Medicare Part B pays for a screening computed tomography 
colonography if it is ordered in writing by the beneficiary's attending 
physician, physician assistant, nurse practitioner, or clinical nurse 
specialist. We also proposed the following limitations of coverage for 
CTC:
     In the case of an individual age 45 or over who is not at 
high risk of colorectal cancer, payment may be made for a screening 
computed tomography colonography performed after at least 59 months 
have passed following the month in which the last screening computed 
tomography colonography or 47 months have passed following the month in 
which the last screening flexible sigmoidoscopy or screening 
colonoscopy was performed.
     In the case of an individual who is at high risk for 
colorectal cancer, payment may be made for a screening computed 
tomography colonography performed after at least 23 months have passed 
following the month in which the last screening computed tomography 
colonography or the last screening colonoscopy was performed.
    Congress has eliminated Part B coinsurance (section 1833(a)(1)(Y) 
of the Act, Sec.  410.152(l)(5)) and deductibles (section1833(b)(1) of 
the Act) for covered prevention services recommended with a grade of A 
or B by the USPSTF. As described earlier in our proposal, the USPSTF 
included CTC as a screening method in their May 2021 revised Final 
Recommendation Statement on CRC screening (Grade A). Thus, if 
finalized, CTC will require no Part B coinsurance nor deductible when 
furnished as a CRC screening procedure. We clarify that CTC will 
continue to require Part B coinsurance and deductible when furnished as 
a diagnostic or other non-preventive/screening procedure.
    We also proposed to exercise our authority in section 
1861(pp)(1)(D) of the Act to expand our approach to a ``complete CRC 
screening'' finalized in Sec.  410.37(k). We proposed to add a Medicare 
covered blood-based biomarker CRC screening test (as described and 
authorized in NCD 210.3) alongside the Medicare covered non-invasive 
stool-based CRC screening test within our approach of a ``complete CRC 
screening.''
    Our goal is for the patient and their healthcare professional to 
make the most appropriate choice in CRC screening, which include 
considerations of the risks, burdens and barriers presented with an 
invasive screening colonoscopy in a clinical setting as their first 
step. CRC screening presents a unique scenario where there are 
significant differences between screening stool-based tests and direct 
visualization procedures such as colonoscopy, flexible sigmoidoscopy 
and CTC tests in terms of invasiveness and burdens to the patient and 
healthcare system. We recognize there are several advantages to 
choosing a non-invasive CRC screening test as a first step compared to 
a screening colonoscopy, including relative ease of administering the 
test and potentially reducing the experience of burdensome preparation 
and invasive procedures. Since the CY 2023 PFS final rule we have heard 
from many interested parties, including a number of professional 
societies, that Medicare covered blood-based biomarker tests would be 
appropriately placed alongside covered non-invasive stool-based tests 
within a complete colorectal cancer screening context. We have 
reconsidered our position that Medicare covered blood-based biomarker 
tests would not belong alongside covered non-invasive stool-based tests 
within our approach to a complete CRC screening. We consider that some 
patients may consider a blood test less uncomfortable than 
administering a stool-based test, especially if the blood draw is 
concurrent to a routine blood draw for other covered routine bloodwork. 
We have also heard that some patients may prefer a non-invasive test as 
their first step but view the stool sample collection process for 
stool-based tests as a meaningful barrier.\732\ We also consider that a 
blood test may be more accessible to many patients in rural and 
underserved communities than facilities that furnish screening 
colonoscopies, flexible sigmoidoscopies and CTC.
---------------------------------------------------------------------------

    \732\ Kolata, Gina. ``A Blood Test Shows Promise for Early Colon 
Cancer Detection'' The New York Times, March 13, 2024. https://www.nytimes.com/2024/03/13/health/colon-cancer-blood-test.html.
---------------------------------------------------------------------------

    NCD 210.3 requires that blood-based biomarker tests for CRC 
screening must have Food and Drug Administration (FDA) market 
authorization with an indication for colorectal cancer screening; and 
proven test performance characteristics for a blood-based screening 
test with both sensitivity greater than or equal to 74 percent and 
specificity greater than or equal to 90 percent in the detection of 
colorectal cancer compared to the recognized standard (accepted as 
colonoscopy at this time), as minimal threshold levels, based on the 
pivotal studies included in

[[Page 98318]]

the FDA labeling. We have heard from interested parties that blood-
based biomarker tests for CRC screening may achieve the coverage 
requirements described in NCD 210.3 within the near term and thereafter 
quickly become adopted as a non-invasive option within the healthcare 
system and patient community. Given our existing coverage policy for 
blood-based biomarker tests for CRC screening (NCD 210.3), we believe 
our proposal is appropriately proactive, provides for consistent 
regulatory treatment between blood and stool-based tests, and will 
ready our regulatory policies for the quickly evolving state of medical 
technology in methods for CRC screening. We note that while blood-based 
biomarker tests were not included as a screening method within the May 
2021 USPSTF revised Final Recommendation Statement on CRC Screening, 
they do not require beneficiary cost sharing (coinsurance and 
deductible) because blood-based biomarker tests will be paid under the 
Clinical Laboratory Fee Schedule (CLFS). For additional information, 
see the CMS website at https://www.cms.gov/medicare/payment/fee-schedules/clinical-laboratory-fee-schedule-clfs.
    We proposed to revise the regulatory text describing a complete CRC 
screening at Sec.  410.37(k) to state that colorectal cancer screening 
tests include a follow-on screening colonoscopy after a Medicare 
covered non-invasive stool-based colorectal cancer screening test or a 
Medicare covered blood-based biomarker CRC screening test returns a 
positive result. We also proposed to revise the regulatory text at 
Sec.  410.37(k) to state the instance of the follow-on colonoscopy in 
the context of a complete colorectal cancer screening shall not apply 
to the frequency limitations for colorectal cancer screenings. We 
believe this statement in regulatory text is clearer and recognizes, 
outside the context of a complete colorectal cancer screening, the 
instance of a screening colonoscopy is factored into the calculation of 
frequency limitations of other covered CRC screening tests and 
procedures in addition to a subsequent screening colonoscopy.
5. Proposal Summary
    In summary, we proposed to exercise our authority at section 
1861(pp)(1)(D) of the Act update and expand coverage for CRC screening 
by (1) removing coverage for the barium enema procedure for CRC 
screening; (2) adding coverage of the CTC procedure for CRC screening; 
and (3) expanding our approach to a ``Complete CRC Screening'' to 
include a covered blood-based biomarker test alongside a covered non-
invasive stool-based test.
    Our proposal to update and expand CRC screening aligns with the 
administration's strategic pillar to advance health equity by 
addressing the health disparities that underlie our health system. In 
addition, our proposal supports Executive Order 13985 by advancing 
racial equity and support for underserved communities in the Medicare 
program. We believe our proposal will directly advance health equity by 
promoting access and removing barriers for much needed cancer 
prevention and early detection within rural communities and communities 
of color that are especially impacted by the incidence of CRC. Our 
proposal to expand colorectal cancer screening directly supports the 
Administration's Cancer Moonshot Goal of reducing the deadly impact of 
cancer and improving patient experiences in the diagnosis, treatment, 
and survival of cancer.\733\
---------------------------------------------------------------------------

    \733\ https://www.whitehouse.gov/cancermoonshot/.
---------------------------------------------------------------------------

    Our proposal is also supportive of the Administration's 
Proclamation of March as National Colorectal Cancer Awareness Month in 
2024, which includes the statement, ``As a country, we have made 
impressive progress in the struggle to end cancer over the past several 
decades due to advancements in prevention, early-detection measures, 
and new medicines and therapies. Despite remarkable breakthroughs, 
every year, more Americans are diagnosed with cancer under the age of 
50. Earlier detection and improved treatment of colorectal cancer 
continue to be critical goals of medical research. Further progress is 
also needed to improve outcomes for those who are disproportionately 
impacted by this disease--including Americans over the age of 45, 
Native Americans, Black Americans, and people with a family history of 
colorectal cancer. There is still more work to be done to ensure more 
Americans can prevent, detect, treat, and survive colorectal cancer.'' 
\734\
---------------------------------------------------------------------------

    \734\ https://www.whitehouse.gov/briefing-room/presidential-actions/2024/02/29/proclamation-on-national-colorectal-cancer-awareness-month-2024/.
---------------------------------------------------------------------------

    We solicited comments with the public and appropriate organizations 
these several proposals.
7. Discussion of Comments and Final Policy
    We received public comments on each of the proposals discussed 
above. The following is a summary of the comments we received and our 
responses.
    Comment: Commenters supported our proposal to exercise our 
authority in section 1861(pp)(1)(D) of the Act to remove coverage for 
the barium enema procedure from the CRC screening regulations at Sec.  
410.37. They agreed that barium enema procedures no longer meet modern 
clinical standards, are no longer recommended in clinical guidelines, 
and would not be an appropriate CRC screening test given the 
advancement of alternatives. One commenter agreed that barium enema is 
an infrequently used screening method but also stated that it can be an 
important option for some patients.
    Response: We thank the majority of commenters for supporting our 
proposal to exercise our authority in section 1861(pp)(1)(D) of the Act 
to remove coverage for the barium enema procedure from CRC screening in 
the regulations at Sec.  410.37. While the barium enema procedure was 
once a CRC screening modality, it is no longer included in any recent 
CRC guidelines, including the USPSTF and the U.S. Multi-Society Task 
Force on Colorectal Cancer, and is rarely performed today as it is 
considered inadequate. Therefore, we will finalize removal of coverage 
for barium enema, as proposed. We are not adopting the policy 
recommended by a single commenter to retain coverage of screening 
barium enemas just in case it might provide another option for some 
patients.
    Comment: The majority of commenters supported our proposal to 
exercise our authority in section 1861(pp)(1)(D) of the Act to add 
coverage for the CTC procedure for CRC screening in regulations at 
Sec.  410.37. The commenters acknowledged that adding CTC is a 
significant advancement in preventive care and ensures equity in 
prevention and early detection of colon cancer.
    Response: We appreciate the majority of comments supporting the 
proposal to expand coverage to include CTC as a colorectal cancer 
screening test in the regulation at Sec.  410.37. We agree that CTC is 
included in current recommendations and guidelines as a recommended 
screening modality for detecting and preventing colorectal cancer and 
polyps. CTC provides an option for patients and clinicians who seek a 
direct visualization procedure as a first step in CRC screening that is 
less invasive and less burdensome on the patient. We strive to offer a 
variety of appropriate CRC screening options to ensure greater access. 
Patients and their clinician can choose from the appropriate CRC 
screening test for the individual. Therefore, we are finalizing the 
addition of CTC, as proposed.

[[Page 98319]]

    Comment: Three commenters did not support adding coverage for the 
CTC procedure for CRC screening. These commenters stated there is a 
lack of evidence supporting clinical benefit in the Medicare population 
and the impact of potential harms have not been adequately studied.
    Response: We disagree with the commenters that there is 
insufficient evidence to support expanding coverage of the CTC 
procedure as an appropriate CRC screening test. As noted in the 
proposed rule, we have consulted with appropriate organizations that 
have supported this expansion. While we acknowledge that the available 
data on CTC predominantly includes individuals under 65 years old, the 
studies on the general population evaluating CTC have shown that the 
CRC detection rates have been high. In addition, current guidelines, 
including those of the USPSTF and the American Cancer Society, largely 
rest on the consistent findings of high sensitivity and specificity of 
CTC for clinically significant mucosal lesions in the general 
population. After considering all of the public comments, we are 
finalizing our proposal to expand coverage to include CTC as a 
colorectal cancer screening test in the regulation at Sec.  410.37.
    Comment: The majority of commenters supported our proposal to 
codify in regulatory text that Medicare Part B pays for a screening CTC 
if it is ordered in writing by the beneficiary's attending physician, 
physician assistant, nurse practitioner, or clinical nurse specialist. 
One commenter suggested that Medicare beneficiaries should be able to 
refer themselves directly for a CTC without the requirement for an 
order from a clinician. The commenter noted that CTC should follow 
screening mammography for breast cancer detection and not require an 
order for the examination.
    Response: We appreciate the comment about patient-directed 
screenings. Unlike mammography, there are multiple options for CRC 
screening. We expect that the patient and their clinician will make the 
appropriate choice in CRC screening for the individual, which includes 
considerations of the risks, burdens and tradeoffs for each covered 
test or procedure. Therefore, we are finalizing our proposal that a 
screening CTC must be ordered in writing by the beneficiary's attending 
physician, physician assistant, nurse practitioner, or clinical nurse 
specialists, as proposed.
    Comment: The majority of commenters supported our proposed 
frequency limitations of coverage for CTC. One commenter, while 
supporting expanding screening to include CTC, requested CMS reconsider 
the limitations on time between screenings. The other commenter did not 
believe the coverage of a CTC 47 months after a screening colonoscopy 
was performed was necessary. They suggested the coverage of CTC for 
individuals with average risk should be 10 years following the last 
screening colonoscopy.
    Response: The frequency limitations of coverage for CTC average 
risk and high risk individuals described in our provision are in 
alignment with clinical evidence-based recommendations by the USPSTF; 
American Cancer Society; and the United States Multi-Society Task Force 
(MSTF) of Colorectal Cancer, which represents the American College of 
Gastroenterology, the American Gastroenterological Association, and the 
American Society for Gastrointestinal Endoscopy. Therefore, we are 
finalizing the frequency limitations to coverage, as proposed, with one 
minor editorial modification for grammatical clarity in paragraph Sec.  
410.37(i)(1) adding the words ``was performed'' after the word 
colonography in the phrase ``59 months have passed following the month 
in which the last screening computed tomography colonography . . .''.
    Comment: Most commenters supported our proposal to add CTC to the 
definition of CRC screening methods, acknowledging that in accordance 
with sections 1833(a)(1)(Y) and 1833(b)(1) of the Act, and Sec.  
410.152(l)(5)) of the CFR, because CTC has been given Grade A by the 
USPSTF, Part B coinsurance and deductibles will be eliminated for the 
preventive screening procedure. The commenters stated that by reducing 
or eliminating financial barriers, it enhances patient access to these 
cancer screening tools without the burden of out-of-pocket costs.
    Response: We thank commenters for supporting our proposal to add 
CTC to the regulatory definition of colorectal cancer screening tests. 
As we noted in the proposal, CTC will continue to require Part B 
coinsurance and deductible when furnished as a diagnostic or other non-
preventive/screening procedure.
    Comment: One commenter stated that Medicare should cover CTC 
provided by outpatient imaging centers, hospitals, and independent 
diagnostic testing facilities (IDTFs).
    Response: We appreciate the comment and support access to CRC 
screening. This regulation is not placing limitations on appropriate 
places of service beyond the existing Medicare rules.
    Comment: Many commenters supported our proposal to exercise our 
authority in section 1861(pp)(1)(D) of the Act to expand our approach 
to a ``complete CRC screening'' at Sec.  410.37(k) to add a Medicare 
covered blood-based biomarker CRC screening test (described and 
authorized in NCD 210.3) alongside the Medicare covered non-invasive 
stool-based CRC screening test within the definition of a ``complete 
CRC screening.'' Commenters appreciated CMS' recognition that CRC 
screening would not be complete with a positive blood-based biomarker 
test alone and noted that a positive test requires a follow-up 
colonoscopy to confirm the presence of polyps and/or cancer. Commenters 
stated it is critical that patients complete the full continuum of 
screening without cost being a barrier.
    Response: We thank the commenters for supporting this change.
    Comment: All commenters supported our proposal to revise the 
regulatory text at Sec.  410.37(k) to state the instance of the follow-
on colonoscopy in the context of a complete colorectal cancer screening 
shall not apply to the frequency limitations for colorectal cancer 
screenings. Commenters supported that this statement in regulatory text 
is clearer and recognizes, outside the context of a complete colorectal 
cancer screening, the instance of a screening colonoscopy is factored 
into the calculation of frequency limitations of other covered CRC 
screening tests and procedures in addition to a subsequent screening 
colonoscopy.
    Response: We thank commenters for their support. We are finalizing 
Sec.  410.37(k) with editorial modification of the regulatory text at 
Sec.  410.37(k) for additional clarity, removing the sentence, ``The 
instance of the follow-on screening colonoscopy in the context of a 
complete colorectal cancer screening must not apply to the frequency 
limitations for colorectal cancer screening.'' We are replacing that 
sentence with, ``A follow-on screening colonoscopy in the context of a 
complete colorectal cancer screening is not subject to the frequency 
limitations for colorectal cancer screening in Sec.  410.37(g)(2) or 
(3)''.
    Comment: Several commenters requested that CMS exercise our 
authority in section 1861(pp)(1)(D) of the Act to expand our approach 
to a ``complete CRC screening'' to also add CTC along with the Medicare 
covered blood-based biomarker CRC screening test and the Medicare 
covered non-invasive stool-based CRC screening test

[[Page 98320]]

within the definition of a ``complete CRC screening''.
    Response: We disagree with commenters that requested a further 
expansion of a complete colorectal cancer screening to include CTC. CTC 
is a visualization procedure along with colonoscopy and flexible 
sigmoidoscopy whereas stool-based and blood-based CRC screening tests 
are non-visualization tests. CTC provides visualization of the contours 
of the whole colon and demonstrates mucosal surface abnormalities 
consistent with polyps and tumors. These tests are unlike noninvasive 
modalities such as stool-based and blood-based CRC screening, which 
present a binary positive/negative result with variable specificity and 
may result (in the case of a positive test) in the need for a 
visualization study to confirm the derived suspicion of adenoma or 
cancer. The follow-on colonoscopy represents an extension of screening 
in a patient who has converted from average risk to increased risk as a 
result of the positive test. In the case of CTC, visualization of the 
colonic mucosal contour, as well as the remainder of the colonic wall 
and surrounding structures, has already been achieved and the 
determination of a suspicious finding has been made. Polyps over the 
size threshold prompt a referral for diagnostic/therapeutic colonoscopy 
for the purpose of polypectomy. Therefore, the follow-up screening 
colonoscopy after a positive non-visualization test is necessary to 
confirm the presence of polyps and/or cancer. A follow-up colonoscopy 
after an abnormal finding from a CTC would be considered a diagnostic 
colonoscopy to biopsy or remove visualized polyps and/or cancer.
    Comment: A few commenters requested CMS, when necessary, take the 
same approach with future screening tests for ``a complete CRC 
screening.''
    Response: We appreciate the feedback and will consider future tests 
as necessary.
    Comment: Two commenters requested that CMS exercise the same 
authority in section 1861(pp)(1)(D) of the Act to add coverage for the 
newly FDA-approved CRC screening test using multi-target mRNA stool for 
in regulations at Sec.  410.37.
    Response: The first multi-target mRNA stool CRC screening test 
received FDA approval in May 2024. Medicare currently covers multi-
target stool DNA CRC screening tests in regulations at Sec.  410.37, 
but not multi-target mRNA tests as a CRC screening test. CMS has 
accepted a formal NCD reconsideration request and added it to the 
public facing NCD Dashboard available on our website at https://www.cms.gov/files/document/ncd-dashboard.pdf. We look forward to 
opening the NCD tracking sheet in the future and we will also consult 
with appropriate organizations as required by section 1861(pp)(1)(D) of 
the SSA. We note that we did not propose to add mRNA stool CRC 
screening tests in this proposed rule, as there should be an 
opportunity for the public to review and provide comment about this 
relatively new test. The NCD process will provide an opportunity for 
public participation and for CMS to consider additional relevant 
scientific and medical information. However, if an mRNA stool test is 
covered through a reconsideration of the NCD, such a test would qualify 
as an additional non-invasive stool-based colorectal cancer screening 
test.
    Comment: Another commenter noted that two new colorectal cancer 
screening tests have recently been FDA-approved; one being a multi-
target mRNA stool test and the other being a blood-based biomarker 
test. The commenter requested that CMS review these tests to determine 
Medicare coverage.
    Response: We appreciate the comment about the newly FDA-approved 
CRC screening tests. As described above, the multi-target mRNA stool 
test received FDA approval in May 2024 and CMS accepted a formal NCD 
reconsideration request in June 2024. The blood-based biomarker test 
just received FDA approval in July 2024 and met the coverage criteria 
set forth in NCD 210.3 and therefore, became coverable on the same day 
of FDA approval.
    Comment: One commenter encouraged CMS to consider opportunities to 
enhance patient outreach and education on these CRC screening services.
    Response: We thank the commenters for the feedback and agree on the 
importance of outreach and educating beneficiaries and stakeholders. We 
plan to provide implementation instructions for our contractors that 
will include coding and payment instructions, through the CMS 
Transmittals online platform. In addition, CMS may provide additional 
educational articles through the Medicare Learning Network online 
platform or through the Medicare.gov preventive services website at 
https://www.cms.gov/medicare/prevention/prevntiongeninfo/medicare-preventive-services/mps-quickreferencechart-1.html.
    After consideration of public comments, we are finalizing the 
proposals made in the CY 2025 PFS proposed rule to update and expand 
colorectal cancer screening and reduce barriers to access to CRC cancer 
prevention, early detections and improved health outcomes. We are 
removing coverage for the barium enema procedure from CRC screening in 
regulations at Sec.  410.37 and adding coverage for the CTC procedure 
to the definition of CRC screening in the regulations at Sec.  410.37. 
We are finalizing the associated regulatory language as proposed, with 
one minor modification for grammatical clarity regarding frequency 
limitations in paragraph Sec.  410.37(i)(1) adding the words ``was 
performed'' after the word colonography in the phrase ``59 months have 
passed following the month in which the last screening computed 
tomography colonography . . .''.
    We are exercising our authority in section 1861(pp)(1)(D) of the 
Act to finalize expansion of our approach to a ``complete CRC 
screening'' at Sec.  410.37(k), by adding a Medicare covered blood-
based biomarker CRC screening test (described and authorized in NCD 
210.3) alongside the Medicare covered non-invasive stool-based CRC 
screening test within our definition of a ``complete CRC screening''. 
Additionally, we are finalizing revisions of the regulatory text at 
Sec.  410.37(k), with modification, to state that the normal frequency 
time limits established by regulation are not applicable with respect 
to a follow-on colonoscopy in the context of a complete colorectal 
cancer screening.

L. Requirements for Electronic Prescribing for Controlled Substances 
for a Covered Part D Drug Under a Prescription Drug Plan or an MA-PD 
Plan

1. Previous Regulatory Action
    Section 2003 of the Substance Use-Disorder Prevention that Promotes 
Opioid Recovery and Treatment for Patients and Communities (SUPPORT) 
Act (Pub. L. 115-271, October 24, 2018) generally mandates that the 
prescribing of a Schedule II, III, IV, or V controlled substance under 
Medicare Part D be done electronically in accordance with an electronic 
prescription drug program beginning January 1, 2021, subject to any 
exceptions, which HHS may specify. In the CY 2021, CY 2022, CY 2023, 
and CY 2024 PFS final rules, we finalized policies for the CMS 
Electronic Prescribing for Controlled Substances (EPCS) Program 
requirements specified in section 2003 of the SUPPORT Act. We refer 
readers to 85 FR 84802 through 84807, 86 FR 65361 through 65370, 87 FR 
70008 through 70014, and 88 FR

[[Page 98321]]

79285 through 79292 for the details of those finalized policies. 
Specifically, in the CY 2021 PFS final rule, we established a 
requirement that all prescribers conduct electronic prescribing of 
Schedule II, III, IV, and V controlled substances covered under the 
Medicare prescription drug program, subject to any exceptions, which 
HHS may specify, using the NCPDP SCRIPT standard version 2017071 with 
an effective date of January 1, 2021, and a compliance date of January 
1, 2022 (85 FR 84807). In the CY 2022 PFS final rule, we finalized a 
policy to require prescribers to electronically prescribe at least 70 
percent of their Schedule II, III, IV, and V controlled substances that 
are Part D drugs, except in cases where an exception or waiver applies 
(86 FR 65366); and finalized multiple proposals related to the classes 
of exceptions specified by section 2003 of the SUPPORT Act (86 FR 65366 
through 65369). We also extended the earliest date of compliance 
actions to no earlier than January 1, 2023 (86 FR 65364). For 
prescribers who do not meet the compliance threshold based on 
prescriptions written for a beneficiary in a long-term care (LTC) 
facility, we extended the earliest date of compliance actions to no 
earlier than January 1, 2025 (86 FR 65364 and 65365). We also finalized 
our proposal to limit compliance actions, with respect to compliance 
through December 31, 2023, to a non-compliance notice (86 FR 65370).
    In the CY 2023 PFS final rule (87 FR 70012 through 70013), we 
extended the non-compliance action of sending notices to non-compliant 
prescribers, which we had finalized for the CY 2023 CMS EPCS Program 
implementation year (January 1, 2023, through December 31, 2023), to 
the CY 2024 Program implementation year (January 1, 2024, through 
December 31, 2024). We also finalized a change to the data sources used 
to identify the geographic location of prescribers for purposes of the 
recognized emergency exception at Sec.  [thinsp]423.160(a)(5)(iii) (87 
FR 70011 through 70012) and finalized our proposal to use the 
Prescription Drug Event (PDE) data from the current evaluated year 
instead of the preceding year when CMS determines whether a prescriber 
qualifies for an exception based on issuing 100 or fewer Part D 
controlled substance prescriptions per calendar year (87 FR 70009 
through 70011).
    In the CY 2024 PFS final rule (88 FR 79285 through 79287), we 
identified certain terms for use in the CMS EPCS Program and clarified 
that, by virtue of the cross reference in Sec.  [thinsp]423.160(a)(5) 
to ``the applicable standards in paragraph (b) of this section,'' which 
refers to the standards in Sec.  [thinsp]423.160(b), the CMS EPCS 
Program will automatically adopt the electronic prescribing standards 
at Sec.  423.160(b) as they are updated. Additionally, we finalized our 
proposals to remove the same entity exception from the CMS EPCS Program 
and to add ``subject to the exemption in paragraph (a)(3)(iii) of this 
section'' to Sec.  423.160(a)(5) (88 FR 79287 through 79288). As a 
result, prescriptions that are prescribed and dispensed within the same 
legal entity are included in CMS EPCS Program compliance calculations 
as part of the 70 percent compliance threshold at Sec.  
[thinsp]423.160(a)(5), and prescribers are not exempt from the 
requirement to prescribe electronically at least 70 percent of their 
Schedule II through V controlled substances that are Part D drugs--but 
such prescriptions have to meet the applicable standards in Sec.  
423.160(b) subject to the exemption in Sec.  423.160(a)(3)(iii). We 
also finalized a policy to count only the unique prescriptions in the 
measurement year for the purposes of CMS EPCS Program compliance 
threshold calculations (88 FR 79288). Furthermore, for the exceptions 
that we moved to Sec.  [thinsp]423.160(a)(5)(ii) and (iii), we modified 
the exceptions to permit prescribers to apply for waivers in times of 
an emergency and disaster and to limit the emergencies or disasters 
that will trigger the recognized emergency exception. We also modified 
the duration of both exceptions and established timing requirements for 
submitting a waiver application (88 FR 79288 through 79291). Lastly, we 
stated that we will send notices of non-compliance for each measurement 
year a prescriber is non-compliant and will provide educational 
opportunities to support prescribers in becoming compliant (88 FR 79291 
through 79292).
2. Timeline for Including Prescriptions Written for Beneficiaries in 
Long-Term Care (LTC) Facilities in CMS EPCS Program Compliance 
Calculation
a. Background
    In the CY 2021 PFS final rule (85 FR 84807), we adopted the 
requirement for all Schedule II, III, IV, and V controlled substances 
for covered Part D drugs prescribed electronically to be prescribed 
using the applicable standards in Sec.  423.160(b), including the NCPDP 
SCRIPT standard version 2017071. In the CY 2022 PFS final rule (86 FR 
65364), we finalized a policy to extend the date on or after which we 
will pursue compliance actions against prescribers based on Part D 
controlled substance prescriptions those prescribers write for 
beneficiaries in long-term care (LTC) facilities to January 1, 2025. We 
acknowledged that prescribers who work in LTC facilities or who provide 
care to residents in LTC facilities faced technological barriers that 
other prescribers did not face. One such barrier was that the NCPDP 
SCRIPT standard version 2017071 lacked appropriate guidance for EPCS in 
LTC facilities. We also noted that NCPDP was in the process of creating 
a new version of the SCRIPT standard that would be better suited for 
use by prescribers serving LTC facilities, which would allow willing 
partners to enable three-way communication between the prescriber, LTC 
facility, and pharmacy to bridge any outstanding gaps that impede use 
of the NCPDP SCRIPT standard version 2017071 for EPCS in the LTC 
setting (86 FR 65364).
    We received public comments on the CY 2022 PFS proposed rule 
requesting that we exempt prescribers writing Part D controlled 
substance prescriptions for beneficiaries in LTC facilities from having 
to conduct EPCS until after NCPDP SCRIPT standard version 2022011 was 
adopted. In response to those comments, in the CY 2022 PFS final rule, 
we noted that our intent when extending the date on or after which we 
will pursue compliance actions against prescribers based on Part D 
controlled substance prescriptions those prescribers write for 
beneficiaries in LTC facilities was to strike a balance between being 
responsive to stakeholder concerns surrounding the increased 
implementation barriers faced by LTC facilities, while at the same time 
helping to ensure that these facilities eventually implement, and 
receive the benefits of EPCS (86 FR 65364). Furthermore, we noted that 
we were not persuaded to further delay commencing compliance actions to 
await publication of the NCPDP SCRIPT standard version 2022011. We 
acknowledged that three-way communication is not as seamless in the 
NCPDP SCRIPT standard version 2017071 as it may be in upcoming 
versions. We also stated that three-way communication is still possible 
with some modifications to EPCS, and therefore, we did not believe it 
would be appropriate to adopt a further delay on this basis alone (86 
FR 65364).
    In the 2024 PFS final rule (88 FR 79286 through 79287), we 
clarified that based on the existing regulatory text at Sec.  
[thinsp]423.160(a)(5), the CMS EPCS Program will automatically adopt 
the electronic prescribing standards at Sec.  [thinsp]423.160(b) as 
they are updated. We noted that in the ``Medicare Program; Contract 
Year 2024 Policy and Technical Changes to the

[[Page 98322]]

Medicare Advantage Program, Medicare Prescription Drug Benefit Program, 
Medicare Cost Plan Program, Medicare Parts A, B, C, and D Overpayment 
Provisions of the Affordable Care Act and Programs of All-Inclusive 
Care for the Elderly; Health Information Technology Standards and 
Implementation Specifications'' proposed rule (CY 2024 Medicare 
Advantage and Part D Policy and Technical Changes proposed rule) (87 FR 
79550), we proposed to update provisions related to e-prescribing 
standards at Sec.  [thinsp]423.160(b), including, after a transition 
period, requiring the NCPDP SCRIPT standard version 2022011 proposed 
for adoption at 45 CFR 170.205(b) and retiring NCPDP SCRIPT standard 
version 2017071 by January 1, 2025.
    Although we did not propose any policy changes regarding the NCPDP 
SCRIPT standard version in the CY 2024 PFS proposed rule (88 FR 52532), 
we received public comments requesting clarification on when the new 
NCPDP SCRIPT standard version would be adopted and the implications for 
measuring EPCS compliance in LTC. In response to those comments, in the 
CY 2024 PFS final rule (88 FR 79286), we acknowledged that we had not 
finalized our proposal regarding the NCPDP SCRIPT standard version 
2022011 that was proposed in the CY 2024 Medicare Advantage and Part D 
Policy and Technical Changes proposed rule. We also acknowledged that 
some prescribers prescribing for beneficiaries in LTC facilities have 
adopted EPCS, but that others have waited for the standard to be 
updated (88 FR 79286 through 79287). We noted that if the requirement 
to use an updated version of the NCPDP SCRIPT standard is finalized for 
a date after January 1, 2025, we may explore whether a waiver is 
appropriate for prescribers who are not compliant solely as a result of 
prescriptions they have written for beneficiaries in LTC facilities or 
we may revisit the compliance start date, if needed, through future 
rulemaking (88 FR 79287).
    In the ``Medicare Program; Medicare Prescription Drug Benefit 
Program; Health Information Technology Standards and Implementation 
Specifications'' final rule (89 FR 51242 through 51247), which appeared 
in the June 17, 2024 Federal Register (hereinafter referred to as the 
June 2024 Part D and Health IT Standards final rule), we finalized at 
Sec.  423.160(b)(1) the requirement that Part D sponsors, prescribers 
and dispensers, when electronically transmitting prescriptions and 
prescription-related information for covered Part D drugs for Part D 
eligible individuals, must comply with a standard in 45 CFR 170.205(b). 
Taken in conjunction with the standards and expiration date adopted by 
the Office of the National Coordinator for Health Information 
Technology (hereinafter ONC) \735\, as described in the June 2024 Part 
D and Health IT Standards final rule (89 FR 51258 through 51259), Sec.  
[thinsp]423.160(b)(1) will require use of NCPDP SCRIPT standard version 
2023011, which ONC adopted at 45 CFR 170.205(b)(2), beginning January 
1, 2028, and retire use of NCPDP SCRIPT standard version 2017071, which 
ONC previously adopted at 45 CFR 170.205(b)(1) and to which it is 
applying an expiration date of January 1, 2028. ONC finalized January 
1, 2028, as the expiration date for NCPDP SCRIPT standard version 
2017071 instead of January 1, 2027, in consideration of public comments 
requesting that the date be delayed. As a result of these policies 
being finalized, the NCPDP SCRIPT standard version 2023011 will be 
required for the CMS EPCS Program by January 1, 2028. As both NCPDP 
SCRIPT standard version 2017071 and NCPDP SCRIPT standard version 
2023011 will be adopted at 45 CFR 170.205(b) and unexpired as of the 
effective date of the June 2024 Part D and Health IT Standards final 
rule, entities subject to the requirement at Sec.  423.160(b)(1) may 
use either version of the NCPDP SCRIPT standard during the transition 
period beginning July 17, 2024, the effective date of the June 2024 
Part D and Health IT Standards final rule, and ending December 31, 
2027, which is the last day before NCPDP SCRIPT standard version 
2017071 will expire for the purposes of HHS use.
---------------------------------------------------------------------------

    \735\ On July 29, 2024, notice was posted in the Federal 
Register that ONC would be dually titled to the Assistant Secretary 
for Technology Policy and Office of the National Coordinator for 
Health Information Technology (89 FR 60903).
---------------------------------------------------------------------------

b. Barriers to Electronic Prescribing of Controlled Substances for 
Beneficiaries in LTC and the Role of Three-Way Communication in the 
NCPDP SCRIPT Standard
    We understand the challenges of conducting EPCS in the LTC setting 
to be multifactorial. The specific challenges include prescribers being 
responsible for covering multiple LTC facilities, each with different 
electronic health record (EHR) systems; reliance on LTC nursing staff 
to communicate prescriptions to the pharmacy on behalf of the 
prescriber; and with respect to NCPDP SCRIPT standard version 2017071, 
lack of three-way (or multi-party) communication between the 
prescriber, the LTC facility, and the pharmacy.
    When conducting EPCS using the NCPDP SCRIPT standard version 
2017071, prescribers can submit prescriptions electronically to the 
pharmacy, but the prescriber must subsequently contact the LTC facility 
separately to give an order for the medication so the LTC facility can 
administer the medication to the patient as prescribed. In cases where 
EPCS is being conducted and the prescriber has not communicated a 
separate order to the LTC facility, the pharmacy may deliver a 
prescription to the LTC facility and if the facility staff has no 
record of the order, then the LTC facility staff must contact the 
prescriber for an order to be able to administer the drug to the 
patient.
    To conduct EPCS without having to separately communicate an order 
to the LTC facility, prescribers can use a web portal to enter an order 
in the LTC facility's EHR and then, if the EHR supports the necessary 
EPCS capability,\736\ the prescription can be transferred to the 
pharmacy. However, not all LTC facilities have EHRs with this 
functionality. Additionally, each LTC facility may have its own web 
portal, making the number of portals and credentials overly burdensome 
for prescribers who treat patients who reside in multiple different LTC 
facilities. After providing an order to the LTC facility, prescribers 
often rely on LTC facility nursing staff to relay verbal prescription 
orders to pharmacies as permitted under 21 CFR 1306.03(b) and 
1306.21(a).
---------------------------------------------------------------------------

    \736\ According to the Drug Enforcement Administration (DEA), 
for an electronic prescribing system to be used to transmit 
controlled substance prescriptions, a third party must audit the 
electronic prescribing application for compliance with the 
requirements of 21 CFR part 1311, or a certifying organization whose 
certification process has been approved by DEA must verify and 
certify that the application meets the requirements of 21 CFR part 
1311. See https://www.deadiversion.usdoj.gov/ecomm/thirdparty.html.
---------------------------------------------------------------------------

    NCPDP SCRIPT standard version 2023011 permits three-way 
communication that would better facilitate LTC workflows in a way that 
NCPDP SCRIPT standard version 2017071 does not. In comments NCPDP 
submitted in response to the CY 2025 Medicare Advantage and Part D 
Policy and Technical Changes proposed rule, NCPDP confirmed that it 
attempted to create guidance on three-way communication using the NCPDP 
SCRIPT standard version 2017071, but it was not realistic in that 
version of the

[[Page 98323]]

standard.\737\ In NCPDP SCRIPT standard version 2023011, through use of 
a MessageIndicatorFlag, an RxFill transaction may be sent as a copy to 
inform or synchronize systems.\738\ Through use of this functionality, 
a prescriber can electronically send a controlled substance 
prescription (including for a covered Part D drug) to a pharmacy, and 
the pharmacy can use the MessageIndicatorFlag in an RxFill transaction 
when dispensing the prescription to inform the LTC facility of the 
medication order. This functionality streamlines prescribers' workflows 
and ensures that the LTC facility responsible for providing the 
controlled substance to the patient is aware of the order.
---------------------------------------------------------------------------

    \737\ https://standards.ncpdp.org/Standards/media/pdf/Correspondence/2024/NCPDP-Letter-to-CMS-regarding-CMS-4205-P.pdf.
    \738\ National Council for Prescription Drug Programs (NCPDP) 
SCRIPT Standard, Implementation Guide, Version 2023011. Approval 
Date for American National Standards Institute (ANSI): January 17, 
2023., April 2023. NCPDP SCRIPT standard implementation guides are 
available to NCPDP members for free and to non-members for a fee at 
https://standards.ncpdp.org/Access-to-Standards.aspx.
---------------------------------------------------------------------------

c. Timeframe for Including Prescriptions Written for Beneficiaries in 
LTC in the CMS EPCS Program Compliance Calculation
    We received multiple public comments in response to the proposal in 
section III.B.4. of the CY 2025 Medicare Advantage and Part D Policy 
and Technical Changes proposed rule (88 FR 78489) to require NCPDP 
SCRIPT standard version 2023011 and retire NCPDP SCRIPT standard 
version 2017071, requesting that we reconsider the current January 1, 
2025 compliance date for when we will include prescriptions written for 
covered Part D drugs for Part D eligible individuals in a LTC facility 
in the CMS EPCS Program compliance calculation. Commenters requested 
that we align the CMS EPCS Program compliance date for prescriptions 
written for beneficiaries in LTC with the date that NCPDP SCRIPT 
standard 2023011 will be required. In the June 2024 Part D and Health 
IT Standards final rule, we indicated that we would consider a change 
to the CMS EPCS Program compliance date for LTC through the annual 
Medicare PFS rulemaking process (89 FR 51247).
    In the CY 2025 PFS proposed (89 FR 61999) rule, we proposed to 
revise Sec.  423.160(a)(5) to state that prescriptions written for a 
beneficiary in a LTC facility would not be included in determining 
compliance until January 1, 2028, and that compliance actions against 
prescribers who do not meet the compliance threshold based on 
prescriptions written for a beneficiary in a LTC facility would 
commence on or after January 1, 2028. We did not otherwise propose to 
revise Sec.  423.160(a)(5).
    As of the effective date of the June 2024 Part D and Health IT 
Standards final rule, which was July 17, 2024, Part D sponsors, 
prescribers, and dispensers, when electronically transmitting 
prescriptions and prescription-related information for covered Part D 
drugs for Part D eligible individuals, may use NCPDP SCRIPT standard 
version 2023011. However, there will be a transition period where both 
NCPDP SCRIPT standard version 2023011 and NCPDP SCRIPT standard version 
2017071 can be used. ONC finalized an expiration date for NCPDP SCRIPT 
standard version 2017071 of January 1, 2028 (rather than January 1, 
2027, as proposed), in part due to commenters' concern about 
implementing the new standard in LTC facilities (89 FR 51247).
    In the CY 2025 PFS proposed (89 FR 61999) rule, we recognized the 
administrative burden prescribers could potentially face when 
implementing EPCS for prescriptions written for covered Part D drugs 
for Part D eligible individuals in LTC facilities using NCPDP SCRIPT 
standard version 2017071, particularly with the lack of guidance. We 
also stated that we believe even though prescribers can use NCPDP 
SCRIPT standard version 2023011 as of July 17, 2024, it may not be 
feasible to have electronic prescribing systems configured to NCPDP 
SCRIPT standard version 2023011 by January 1, 2025, the current date by 
which prescriptions written for covered Part D drugs for Part D 
eligible individuals in LTC facilities would be included in the CMS 
EPCS Program compliance threshold calculation. By delaying the 
inclusion of prescriptions written for covered Part D drugs for Part D 
eligible individuals in LTC facilities in the CMS EPCS Program 
compliance threshold calculation to January 1, 2028, we would be 
aligning CMS EPCS Program compliance calculations to the date by which 
the NCPDP SCRIPT standard version 2017071 is retired and the new NCPDP 
SCRIPT standard version 2023011 is required for prescribers when 
electronically transmitting prescriptions and prescription-related 
information for covered Part D drugs for Part D eligible individuals. 
We stated that we believe doing so would provide sufficient time for 
prescribers and pharmacies to adopt the new standard. Moreover, we 
acknowledged that LTC facilities will need to configure their EHR 
systems to be able to receive the MessageIndicatorFlag from the 
pharmacy, indicating that the prescription has been filled, and 
establish the necessary policies or operations to convert such a 
message into an order for the patient in the LTC facility.
    We discussed that we considered an alternative where we would 
permit prescribers to apply for a waiver for circumstances beyond their 
control rather than modify the date to include prescriptions for 
beneficiaries in LTC in the compliance threshold calculation. In 2022, 
approximately 4.7 percent (4.5 million) of Part D Schedule II, III, IV, 
and V controlled substance prescriptions were written for beneficiaries 
in LTC facilities, with roughly 52 percent (2.4 million) of them not 
meeting the CMS EPCS Program standards for e-prescribing. If we kept 
the existing start date of January 1, 2025, as in the current 
regulatory text at Sec.  423.160(a)(5) for the CMS EPCS Program, we 
estimate at least 6,800 additional prescribers would become non-
compliant. These estimates are prior to considering emergency and 
disaster exceptions and waivers, which could reduce these numbers. If 
we do not extend the current date by which prescriptions written for 
covered Part D drugs for Part D eligible individuals in LTC facilities 
would be included in the CMS EPCS Program compliance threshold 
calculation, then starting with the CY 2025 measurement year, thousands 
of prescribers may become non-compliant, and those prescribers would 
potentially apply for a waiver. We explained (89 FR 62000) that we 
would expect that by the CY 2028 measurement year, many of these 
prescribers would be compliant and would not need to apply for a waiver 
because beginning January 1, 2028, NCPDP SCRIPT standard version 
2023011 will be the required standard for prescribing and dispensing 
Part D drugs to Part D eligible individuals and commenters have 
indicated that this version of the standard will facilitate EPCS in 
LTC. We reminded prescribers that the CMS EPCS Program compliance rate 
is calculated using the Prescription Origin Code data element in the 
PDE record (88 FR 79287), and the PDE is a record of the prescription 
dispensing event.\739\ We noted that we believe that the three-way 
communication in the NCPDP SCRIPT standard version 2023011 improves 
communication of

[[Page 98324]]

the controlled substance prescription as a medication order to the LTC 
facility's EHR when the pharmacy fills the prescription, but we 
solicited comment on how the NCPDP SCRIPT standard version 2023011 will 
improve prescribers' ability to conduct EPCS to the pharmacy dispensing 
the prescription for individuals in LTC facilities.
---------------------------------------------------------------------------

    \739\ CMS Memorandum. ``Updated Instructions: Requirements for 
Submitting Prescription Drug Event Data (PDE).'' April 27, 2006. 
Available from: https://www.csscoperations.com/internet/
csscw3_files.nsf/F/CSSCPDEGuidance.pdf/$FILE/PDEGuidance.pdf.
---------------------------------------------------------------------------

    We noted in the CY 2025 PFS proposed rule (89 FR 62000) that should 
we finalize our proposal, we would encourage prescribers who write 
Schedule II, III, IV, or V controlled substance prescriptions for 
covered Part D drugs for Part D eligible individuals in LTC facilities 
to use the additional time to prepare for when such prescriptions for 
beneficiaries in LTC facilities would be included in the CMS EPCS 
Program compliance threshold calculation by working to adopt the new 
standard or investing in technology necessary to conduct EPCS.
    We solicited public comment on our proposals to extend the date 
after which prescriptions for covered Part D drugs for Part D eligible 
individuals in LTC facilities would be included in our CMS EPCS Program 
compliance threshold calculation from January 1, 2025, to January 1, 
2028, and that related non-compliance actions would commence on or 
after January 1, 2028. We additionally solicited public comment on how 
NCPDP SCRIPT standard version 2023011 is expected to improve 
prescribers' ability to conduct EPCS to pharmacies dispensing covered 
Part D drugs to Part D eligible individuals in LTC facilities (89 FR 
62000).
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters supported the proposals to extend the date 
after which prescriptions for covered Part D drugs for Part D eligible 
individuals in LTC facilities would be included in the CMS EPCS Program 
compliance threshold calculation from January 1, 2025, to January 1, 
2028, and for related non-compliance actions to commence on or after 
January 1, 2028. The commenters supported the alignment between the CMS 
EPCS Program timeline and the NCPDP SCRIPT standard version 2023011 
requirement, noting their belief that this will simplify compliance 
timelines. A few commenters expressed their belief that the extra time 
will allow prescribers and LTC facilities to address technical and 
administrative issues and minimize burden related to adopting multiple 
standards and configuring EHRs. One commenter agreed that it may not be 
feasible to have electronic prescribing systems configured to NCPDP 
SCRIPT standard version 2023011 by January 1, 2025. One commenter noted 
that while most LTC-based prescribers already prescribe electronically 
and most LTC pharmacies already process electronic prescriptions from 
outside prescribers, this proposal will provide sufficient time for 
others to come into full compliance. One commenter noted that this 
proposal would prevent a large number of waiver applications.
    Response: We thank the commenters for their support and agree with 
their feedback. The proposal to extend the compliance date for the CMS 
EPCS Program for covered Part D drugs prescribed for Part D eligible 
individuals in LTC facilities will simplify timelines for adopting 
NCPDP SCRIPT standard version 2023011 and will provide additional time 
for prescribers working in LTCs to adopt the electronic prescribing 
technology. We also agree this policy will prevent many prescribers who 
prescribe covered Part D drugs for Part D eligible individuals in LTC 
facilities from potentially having to apply for a waiver. We remind 
prescribers that delaying inclusion of Schedule II, III, IV, and V 
controlled substance prescriptions written for covered Part D drugs for 
beneficiaries in LTC facilities in the CMS EPCS Program compliance 
calculation does not exempt prescribers from CMS EPCS Program 
compliance for Schedule II, III, IV, and V controlled substance 
prescriptions written for covered Part D drugs for beneficiaries who do 
not reside in LTC facilities. That is, prescribers who work in both LTC 
and non-LTC settings may still be subject to compliance actions on the 
basis of Schedule II, III, IV, and V controlled substance prescriptions 
written for covered Part D drugs for beneficiaries in non-LTC settings 
if such prescribers do not otherwise qualify for an exception or 
waiver.
    Comment: A few commenters expressed their concerns about conducting 
EPCS in LTC facilities. Commenters noted the difficulty prescribers 
experience working with multiple EHRs in different LTCs and the 
necessary workarounds when the technology has not been adopted 
uniformly. Some commenters stated their belief that not all LTCs have 
EHRs because LTC facilities were excluded from funding in the Health 
Information Technology for Economic and Clinical Health Act (HITECH 
Act), enacted as part of the American Recovery and Reinvestment Act of 
2009 (Pub. L. 111-5, Feb. 17, 2009). To close this gap, a few 
commenters requested cost-effective approaches or incentives for LTC 
facilities, like skilled nursing facility providers, to accept e-
prescriptions by January 1, 2028. One commenter stated that unless 
there is more focus on providing incentives for LTC facilities to 
upgrade their systems, independent adoption of the NCPDP SCRIPT 
standard version 2023011 may not be sufficient to overcome these unique 
e-prescribing challenges among LTC settings.
    Response: We appreciate commenters' concerns about difficulties 
they face working with multiple EHRs in different facilities. We note 
that the CMS EPCS Program measures prescriber compliance with 
requirements for electronic prescribing of the applicable controlled 
substances using information from the PDE data and does not measure 
electronic communication within LTC facilities. In cases where a 
prescriber is prescribing from their own health IT systems, the 
prescriber does not need the LTC facility to have EPCS functionality to 
be compliant with the CMS EPCS Program, because compliance is measured 
based on the prescriber sending the applicable prescriptions to the 
pharmacy electronically using the appropriate standards. We did not 
propose to establish an incentives program as part of the CMS EPCS 
Program to incentivize LTC facilities to adopt this technology, and we 
are not finalizing such a program in this rule. We do believe, however, 
that LTC facilities having EPCS capabilities with NCPDP SCRIPT standard 
version 2023011 could simplify the communication between prescribers 
and LTC facilities, and we encourage LTC facilities to adopt this 
technology as soon as possible. Finally, if a prescriber is unable to 
conduct electronic prescribing of controlled substances due to 
circumstances beyond the prescriber's control, the prescriber may apply 
for a waiver as permitted under Sec.  423.160(a)(5)(iii).
    Comment: A few commenters noted that technical challenges of 
electronic prescribing of controlled substances in LTC facilities would 
exist even after the NCPDP SCRIPT standard version 2023011 was adopted. 
Some prescribers may lack access to EPCS technology or find it 
disruptive to their workflow to use multiple facility EHR systems. 
Commenters elaborated and advised that prescribers would continue to 
use their own systems to issue prescriptions to the pharmacy and 
communicate to the facility via phone, fax, or non-NCPDP electronic 
interoperability methods. One commenter noted that in addition to not 
having compatible health IT across different settings, the

[[Page 98325]]

current resolution by means of accessing a portal adds significant 
burden to prescribers and pharmacies that serve multiple LTC 
facilities. The commenter stated that this situation creates a risk for 
delays in LTC short- and long-stay residents receiving necessary 
medications in a timely manner, resulting in unnecessary pain and other 
negative clinical outcomes. One commenter noted that NCPDP SCRIPT 
standard version 2017071 enables pharmacy-to-facility notification, but 
it occurs too late in the workflow, causing delays and compliance 
challenges for facilities and that NCPDP SCRIPT standard version 
2023011 will not address this challenge. The commenter recommended that 
prescribers explore methods for directly transmitting copies of 
prescriptions: prescriber-to-the-facility, in addition to prescriber-
to-the-pharmacy as required by the Drug Enforcement Agency (DEA). One 
commenter noted the potential compliance and operational challenges 
where prescribers send prescriptions directly to pharmacies, which are 
then responsible for notifying the facility of the order. The commenter 
noted LTC facilities must have signed prescriber orders on file to 
comply with medication management regulations, and the pharmacy's copy 
typically does not include the prescriber's signature, creating a 
potential gap in compliance with LTC facility requirements. LTC 
facilities have direct communication of all orders from prescribers to 
facility staff. The staff then transcribes and relays these orders, 
along with any necessary supplementary information, to pharmacies, 
laboratories, and other relevant parties. The commenter noted that 
NCPDP SCRIPT standard version 2023011 has limited potential as EPCS 
adoption increases, since the communication of orders from the pharmacy 
to the facility is already feasible today.
    Response: We appreciate that prescribers who prescribe covered Part 
D drugs for beneficiaries in LTC facilities may still have challenges 
even after NCPDP SCRIPT standard version 2023011 is required. While we 
recognize the functionality the 3-way communication in NCPDP SCRIPT 
standard version 202311 offers, it is outside the scope of our proposal 
to address whether such communication meets other, separate 
requirements for medication orders in LTC facilities. The CMS EPCS 
Program does not impose requirements for internal communication of 
medication orders for controlled substances within LTC facilities and 
does not include such orders in CMS EPCS Program compliance 
calculations. Rather, CMS EPCS Program requirements at Sec.  
423.160(a)(5) specify that prescribers must electronically prescribe at 
least 70 percent of their Schedule II, III, IV, and V controlled 
substances that are Part D drugs using applicable standards.
    As described in the CY 2022 PFS proposed rule (86 FR 65364), we 
must balance being responsive to stakeholder concerns surrounding the 
increased implementation barriers faced by prescribers who prescribe 
applicable prescriptions for beneficiaries in LTC facilities with 
encouraging the adoption of EPCS due to the benefits of electronic 
prescribing. We believe that delaying the date for when applicable 
prescriptions for beneficiaries in LTC facilities are included in the 
CMS EPCS Program compliance threshold to align with the January 1, 2028 
date on which use of NCPDP SCRIPT standard version 2023011 will be 
required will provide additional time for prescribers, pharmacies, and 
LTC facilities to adopt EPCS. We do not believe that we should 
indefinitely exclude Schedule II, III, IV, and V controlled substance 
prescriptions written for covered Part D drugs for beneficiaries in LTC 
facilities from the CMS EPCS Program compliance threshold. As discussed 
in the CY 2021 and CY 2022 PFS final rules (85 FR 84805 and 86 FR 
65363), we believe there are many benefits to EPCS, including fraud 
deterrence, improved patient safety and workflow efficiencies, 
adherence management, and reduced burdens. Given these benefits, we 
continue to encourage prescribers to adopt the technology necessary for 
EPCS, irrespective of whether LTC facilities have adopted other or 
related technology, because the CMS EPCS Program measures compliance 
based on prescriptions sent by the prescriber to the pharmacy. We 
expect that with the delay, both prescribers and LTC facilities have an 
opportunity to focus their resources to adopt the NCPDP SCRIPT standard 
version 2023011, as use of that standard should reduce potential 
inconsistencies and duplication of communicating the prescription to 
the pharmacy and the medical order to the LTC facility.
    Comment: A few commenters noted the benefits of NCPDP SCRIPT 
standard version 2023011. A few commenters explained that under NCPDP 
SCRIPT version 2017071, prescribers can transmit electronic 
prescriptions for controlled substances to the pharmacy but 
additionally need to contact the LTC facility to give a separate order 
for the facility staff to administer the medication to the patient. 
NCPDP SCRIPT standard version 2023011 is expected to resolve these 
issues. One commenter acknowledged that CMS recognized the 
administrative burden prescribers could potentially face when 
implementing EPCS for prescriptions using NCPDP SCRIPT standard version 
2017071, particularly with the lack of guidance. The commenter further 
elaborated that LTC facilities will need to configure their EHR systems 
to receive the MessageIndicatorFlag from the pharmacy, indicating that 
the prescription has been filled, and establish the necessary policies 
or operations to convert the message into an order for the patient in 
the LTC facility.
    Response: We thank the commenters for their comments regarding 
limitations of the NCPDP SCRIPT standard version 2017017 and their 
recognition of the improved 3-way communication benefits of NCPDP 
SCRIPT standard version 2023011. We acknowledge that LTC facilities may 
need to configure their EHR systems to support NCPDP SCRIPT standard 
version 2023011 and are mindful that these updates may result in 
changes in workflow and may require training for staff. We reiterate 
that the CMS EPCS Program measures compliance based on the prescriber's 
use of electronic prescribing for the applicable prescriptions the 
prescriber transmits to the pharmacy. By delaying the date for which we 
include prescriptions for beneficiaries in LTC facilities, we are 
allowing additional time for prescribers to adapt to changes associated 
with the implementation of the new version of the NCPDP SCRIPT 
standard.
    Comment: One commenter recommended facilitating EPCS adoption 
earlier than January 1, 2028, for prescriptions for covered Part D 
drugs for Part D eligible individuals in LTC facilities. The commenter 
stated that EHR technology companies and senior care providers made 
significant investments to stay compliant with the CMS EPCS Program 
timeline of January 1, 2025, and EPCS adoption will provide practical 
insight on any remaining challenges. The commenter also expressed their 
belief that the delay will continue to pose operational challenges for 
both LTC facilities and pharmacies associated with non-electronic 
communication, such as risk of diversion, paper prescription 
management, and storage of paper for audits.
    Response: We appreciate that LTC facilities have made investments 
in EPCS and are mindful that NCPDP SCRIPT standard version 2023011 may 
not resolve all the workflow issues

[[Page 98326]]

related to EPCS in LTC facilities. However, we believe that delaying 
the date for including the applicable prescriptions for beneficiaries 
in LTC facilities in the CMS EPCS Program compliance calculation is 
warranted to minimize confusion as prescribers, pharmacies, and LTC 
facilities move to NCPDP SCRIPT standard version 2023011. We remind 
commenters that prescribers of Schedule II, III, IV, and V controlled 
substance prescriptions for covered Part D drugs for beneficiaries in 
LTC facilities may currently use EPCS and may continue to do so prior 
to and after January 1, 2028. We encourage prescribers, pharmacies, and 
LTC facilities to adopt this technology as soon as feasible regardless 
of whether such prescriptions are included in CMS EPCS Program 
compliance calculations.
    Comment: A few commenters provided additional considerations 
related to the CMS EPCS Program timeline for LTC. One commenter urged 
CMS to work with the LTC pharmacy community to evaluate if additional 
barriers to implementation exist and to consider additional delays in 
enforcing compliance as needed. Another commenter requested CMS 
consider a waiver for rural locations utilizing small or homegrown 
software systems needing additional time to implement electronic 
prescribing technology. One commenter noted that many LTC facilities 
have pharmacies that already accept commercial prescriptions and asked 
CMS to ensure that the extension does not inadvertently place 
additional burden on providers who may need to employ a different 
method of prescribing when treating patients in LTC facilities.
    Response: We acknowledge the potential challenges of EPCS within 
LTC settings. By delaying the date by which we will include Schedule 
II, III, IV, and V controlled substance prescriptions for covered Part 
D drugs for beneficiaries in LTC facilities in the CMS EPCS Program 
compliance calculation, we are acknowledging that LTC facilities and 
their pharmacies may need additional time to implement EPCS technology, 
which may ultimately impact prescribers' ability to send prescriptions 
electronically to such LTC pharmacies. We believe that the proposed 
extension, to January 1, 2028, provides adequate additional time. We 
did not propose to extend the compliance deadline beyond January 1, 
2028, when NCPDP SCRIPT standard version 2023011 will be the required 
standard for transmitting prescriptions and prescription-related 
information for Part D drugs for Part D eligible individuals, because 
public comments discussed in the June 2024 Part D and Health IT 
Standards final rule generally indicated that this version of the 
standard would facilitate prescriber use of EPCS for beneficiaries in 
LTC facilities (89 FR 51246 through 51247). However, we remind 
prescribers that they may apply for a waiver under Sec.  
423.160(a)(5)(iii) if they are unable to conduct electronic prescribing 
due to circumstances beyond their control. Additionally, the CMS EPCS 
compliance threshold at Sec.  423.160(a)(5) is 70 percent of applicable 
prescriptions, which allows the prescriber to be compliant as long as 
no more than 30 percent of applicable prescriptions are not prescribed 
electronically. We do not believe our proposal will impact prescribers 
who already submit their prescriptions electronically to LTC 
pharmacies, and we encourage all pharmacies and prescribers to adopt 
EPCS as soon as possible.
    After consideration of public comments, we are finalizing our 
proposals to revise Sec.  423.160(a)(5) to state that prescriptions 
written for a beneficiary in a LTC facility would not be included in 
determining compliance until January 1, 2028, and that compliance 
actions against prescribers who do not meet the compliance threshold 
based on prescriptions written for a beneficiary in a LTC facility 
would commence on or after January 1, 2028.

M. Expand Hepatitis B Vaccine Coverage

    Hepatitis B vaccines are currently covered as a Medicare Part B 
benefit under section 1861(s)(10)(B) of the Act. Medicare beneficiaries 
who are at high or intermediate risk of contracting hepatitis B can 
receive hepatitis B vaccines, with no cost to the beneficiary. The 
statute expressly authorizes the Secretary to determine who is at high 
or intermediate risk of contracting hepatitis B by issuing regulations. 
The Secretary, through past rulemaking, defined high and intermediate 
risk groups for hepatitis B vaccine at 42 CFR 410.63. This definition 
was last updated in the CY 2013 PFS final rule (77 FR 69363, November 
16, 2012). Beneficiaries with coverage under Medicare Part D whose 
level of risk falls outside high or intermediate may have their vaccine 
covered under the Part D benefit.\740\
---------------------------------------------------------------------------

    \740\ Sayed, BA, Finegold, K, Ashok, K, Schutz, S, De Lew, N, 
Sheingold, S, Sommers, BD. Inflation Reduction Act Research Series: 
Medicare Part D Enrollee Savings from Elimination of Vaccine Cost-
Sharing. (Issue Brief No. HP-2023-05). Office of the Assistant 
Secretary for Planning and Evaluation, U.S. Department of Health and 
Human Services. September 2023. Retrieved from https://aspe.hhs.gov/sites/default/files/documents/407d41b6534e7af6702eb280b3945d00/aspe-ira-vaccine-part-d.pdf.
---------------------------------------------------------------------------

    Medicare coverage of hepatitis B vaccination is outdated in light 
of more recent information about the risks of contracting hepatitis B. 
As explained in more detail in this section, we proposed to improve 
access and utilization of hepatitis B vaccines by expanding the list of 
individuals who are at high or intermediate risk of contracting 
hepatitis B in Sec.  410.63(a).
1. Background
    Hepatitis B is a vaccine-preventable liver disease caused by the 
hepatitis B virus.\741\ The vaccine consists of a series of typically 
2-3 doses depending on the formulation delivered at various 
intervals.\742\ Hepatitis B virus is transmitted when body fluid 
(blood, semen, or other) from a person infected with the virus enters 
the body of someone who is uninfected.\743\ This can happen through 
sexual contact; sharing needles, syringes, or other drug-injection 
equipment; transmission from the gestational parent to baby during 
pregnancy or at birth; direct contact with blood or open sores; or 
sharing contaminated items such as toothbrushes, razors, or medical 
equipment (such as a glucose monitor) of a person who has hepatitis 
B.\744\ Hepatitis B can be an acute, short-term illness and it can 
develop into a long-term, chronic infection. Chronic hepatitis B can 
lead to serious health problems, including cirrhosis, liver cancer, and 
death. Treatments for hepatitis B are available but no cure exists. 
There are currently an estimated 2.4 million individuals in the U.S. 
living with hepatitis B virus and an estimated 20,000 new infections 
every year.\745\ Acute hepatitis B infections among adults leads to 
chronic hepatitis B disease in an estimated 2-6 percent of

[[Page 98327]]

cases.\746\ Rates of reported cases of acute hepatitis B have steadily 
increased among persons aged 40-49, 50-59 years, and 60 years and older 
from 2015-2019.\747\ In 2020, rates declined in all adult age groups. 
In 2021, rates among all age groups remain stable or declined compared 
to 2020. The highest rates were among persons 40-49 years (1.6 cases 
per 100,000 population) and 50-59 years (1.0 case per 100,000 
population). The rates for people aged 60 years and older were 0.5 
cases per 100,000 population.
---------------------------------------------------------------------------

    \741\ CDC, 2023. Hepatitis B surveillance 2021. Retrieved from 
https://www.cdc.gov/hepatitis/statistics/2021surveillance/hepatitis-b.htm.
    \742\ CDC. Hepatitis B: Hepatitis B vaccine administration. 
Atlanta, GA: U.S. HHS, CDC; 2024. Retrieved from https://www.cdc.gov/hepatitis-b/hcp/vaccine-administration/index.html.
    \743\ CDC, 2023. Hepatitis B surveillance 2021. Retrieved from 
https://www.cdc.gov/hepatitis/statistics/2021surveillance/hepatitis-b.htm.
    \744\ CDC. Hepatitis B: Hepatitis B vaccine administration. 
Atlanta, GA: U.S. HHS, CDC; 2024. Retrieved from https://www.cdc.gov/hepatitis-b/hcp/vaccine-administration/index.html.
    \745\ Conners EE, Panagiotakopoulos L, Hofmeister MG, et al. 
Screening and testing for hepatitis B virus infection: CDC 
recommendations--United States, 2023. MMWR Recomm Rep. 2023;72(1):1-
25. Retrieved from https://www.cdc.gov/mmwr/volumes/72/rr/rr7201a1.htm.
    \746\ Weng, M., Doshani, M., Khan, M., Frey, S., et al. 
Universal hepatitis B vaccination in adults aged 19--59 years: 
Updated recommendations of the Advisory Committee on Immunization 
Practices--United States, 2022. MMWR, April 1, 2022, Vol 71(13);477-
483.
    \747\ CDC. Viral hepatitis. 2021 viral hepatitis surveillance 
report. Atlanta, GA: U.S. HHS, CDC; 2023. Retrieved from https://www.cdc.gov/hepatitis/statistics/2021surveillance/hepatitis-b/figure-2.4.htm.
---------------------------------------------------------------------------

    Hepatitis B vaccines are safe and effective in preventing hepatitis 
B virus.\748\ The number of reported hepatitis B cases has declined 
substantially since the vaccine was introduced in 1982, which was 
achieved through incremental expansion of groups for whom the vaccine 
was recommended. However, vaccination coverage among adults has been 
deficient and further reduction in hepatitis B infections in the U.S. 
has stalled. Approximately 34 percent of adults aged >=19 years have 
been vaccinated against hepatitis B.\749\ Furthermore, an estimated 20 
percent of adults aged >=60 years have been vaccinated against 
hepatitis B.
---------------------------------------------------------------------------

    \748\ Weng, M., et al. 2022. Universal hepatitis B vaccination.
    \749\ CDC. 2023. Vaccination Coverage among Adults in the United 
States, National Health Interview Survey, 2021. Retrieved from 
https://www.cdc.gov/adultvaxview/publications-resources/vaccination-coverage-adults-2021.html.
---------------------------------------------------------------------------

    Since 2011, rates of reported cases of acute hepatitis B decreased 
among children and adolescents aged 0-19 years and persons aged 20-29 
years.\750\ The Centers for Disease Control and Prevention (CDC) states 
that this is due, in part, because of the childhood hepatitis B vaccine 
recommendations that were first implemented in 1991. The Advisory Group 
for Immunization Practices (ACIP) is a group of medical and public 
health experts that develops recommendations on how to use vaccines to 
control diseases in the U.S. and the CDC updates the U.S. adult and 
childhood immunization schedules consistent with ACIP 
recommendations.\751\ As the cohort of persons vaccinated as children 
have grown older, rates of acute hepatitis B among persons aged 30-39 
years began to consistently decrease beginning in 2015.\752\ 
Conversely, rates of reported cases of acute hepatitis B have steadily 
increased among persons aged 40-49, 50-59 years, and 60 years and older 
from 2015-2019 (see Table 65). Overall, the rate of acute hepatitis B 
cases increased 11 percent from 2014 (0.9 per 100,000) to 2018 (1.0 per 
100,000).\753\ Injection drug use and sexual transmission are known 
risk factors associated with rising acute hepatitis B cases. For 
example, acute hepatitis B infections increased 114 percent from 2006 
to 2013 in three states particularly affected by the opioid epidemic 
(Kentucky, Tennessee, and West Virginia).\754\
---------------------------------------------------------------------------

    \750\ CDC. Viral hepatitis. 2021 viral hepatitis surveillance 
report. Atlanta, GA: U.S. HHS, CDC; 2023. Retrieved from https://www.cdc.gov/hepatitis/statistics/2021surveillance/hepatitis-b/figure-2.4.htm.
    \751\ CDC. ACIP. Retrieved from https://www.cdc.gov/acip/?CDC_AAref_Val=https://www.cdc.gov/vaccines/acip/index.html.
    \752\ CDC. Viral hepatitis. 2021 viral hepatitis surveillance 
report. Atlanta, GA: U.S. HHS, CDC; 2023. Retrieved from https://www.cdc.gov/hepatitis/statistics/2021surveillance/hepatitis-b/figure-2.4.htm.
    \753\ CDC 2020. Viral hepatitis surveillance report 2018--
Hepatitis B. Retrieved from https://archive.cdc.gov/#/details?url=https://www.cdc.gov/hepatitis/statistics/2018surveillance/HepB.htm.
    \754\ HHS. 2016. Viral Hepatitis in the United States: Data and 
Trends. Retrieved from https://www.hhs.gov/hepatitis/learn-about-viral-hepatitis/data-and-trends/index.html.
[GRAPHIC] [TIFF OMITTED] TR09DE24.111

2. Statutory Authority
    Section 1861(s)(10)(B) of the Act provides a benefit category under 
Part B for hepatitis B vaccine and its administration, furnished to an 
individual who is at high or intermediate risk of contracting 
hepatitis. The statute expressly authorizes the Secretary to determine 
who is at high or intermediate risk of contracting hepatitis B for 
coverage of the hepatitis B vaccine.
3. Regulation
    Medicare Part B pays for the hepatitis B vaccine as defined in 
Sec.  410.63(a), which describes individuals who are at high or 
intermediate risk of contracting hepatitis and eligible for coverage of

[[Page 98328]]

hepatitis B vaccinations under Part B. In the CY 2013 PFS final rule 
(77 FR 69363), we expanded the definition of individuals at risk of 
contracting hepatitis B, citing updated ACIP recommendations about 
increased risk for diabetes patients to support the change. The ACIP 
stated that the hepatitis B outbreaks were associated with adults with 
diabetes receiving assisted blood glucose monitoring.\755\ Today, the 
regulations are outdated as these risk categories have been shown to be 
ineffective and are no longer the focus of how the medical community 
discusses hepatitis B infection and prevention. In 2019, risk behavior 
and exposure data were missing for 37 percent of case reports (1,183 of 
3,192) of acute hepatitis B infections received by CDC.\756\ ACIP also 
cited a large national survey of family medicine and internal medicine 
physicians assessing barriers to adult hepatitis B vaccination and 
found that 68% cited patients' non-disclosure of risk factors.\757\
---------------------------------------------------------------------------

    \755\ CDC. 2011. Use of Hepatitis B Vaccination for Adults with 
Diabetes Mellitus: Recommendations of the Advisory Committee on 
Immunization Practices (ACIP). MMWR. 60(50);1709-1711. Retrieved 
from https://www.cdc.gov/mmwr/preview/mmwrhtml/
mm6050a4.htm#:~:text=Based%20on%20the%20Work%20Group,made%20(recommen
dation%20category%20A).
    \756\ Weng, M., et al. 2022. Universal hepatitis B vaccination.
    \757\ Daley MF, Hennessey KA, Weinbaum CM, et al. Physician 
practices regarding adult hepatitis B vaccination: a national 
survey. Am J Prev Med 2009;36:491-6. PMID:19362798 https://doi.org/10.1016/j.amepre.2009.01.037.
---------------------------------------------------------------------------

4. Proposed Regulatory Revisions
    Since 1991, hepatitis B vaccination has been recommended by ACIP 
and the CDC for infants at birth, completing the vaccination series by 
16 months of age.\758\ This is important because in the U.S., the age 
cohorts who have received the completed series have low to no risk of 
contracting the hepatitis B virus, as evidenced by the rate of zero 
acute hepatitis B virus infections for the 0-19 age group.\759\ The 
infant and childhood recommendations were not in place for most of 
today's adults which is evidenced by no other age group reaching a rate 
of zero acute hepatitis B virus infections. Given this information, we 
consider the population of people who have completed the vaccination 
series to be at low risk of contracting the hepatitis B virus. 
Individuals who remain unvaccinated against hepatitis B are at 
intermediate risk, at minimum, of contracting hepatitis B virus.
---------------------------------------------------------------------------

    \758\ CDC, 2024. Vaccine safety: Hepatitis B vaccines. Retrieved 
from https://www.cdc.gov/vaccine-safety/vaccines/hepatitis-b.html?CDC_AAref_Val=https://www.cdc.gov/vaccinesafety/vaccines/hepatitis-b-vaccine.html.
    \759\ CDC. Viral hepatitis. 2021 viral hepatitis surveillance 
report. Atlanta, GA: U.S. HHS, CDC; 2023. Retrieved from https://www.cdc.gov/hepatitis/statistics/2021surveillance/hepatitis-b/figure-2.4.htm.
---------------------------------------------------------------------------

    We conclude that anyone who is not fully vaccinated to be at 
intermediate risk of contracting the hepatitis B virus as their risk 
would be above zero. Additionally, rates of reported cases of acute 
hepatitis B steadily increased among age groups 40 and over between 
2015 and 2019, with stabilizing or declining rates between 2020 and 
2021, which may be due to the COVID-19 pandemic.\760\ While it is 
encouraging to see declining rates, these populations remain at 
intermediate risk given their reported cases remained above zero. 
Therefore, we proposed to revise Sec.  410.63(a)(2), Intermediate Risk 
Groups, by adding a new paragraph (a)(2)(iv) to include individuals who 
have not previously received a completed hepatitis B vaccination series 
or whose vaccination history is unknown. We included the latter group 
in this proposal because the CDC has stated that it is not harmful to 
receive either extra doses or a repeat vaccination series.\761\ This 
will allow these individuals to receive a covered vaccination series 
when medical history may not be available. Also, the CDC states that 
screening for hepatitis B virus is not a requirement for vaccination, 
and in settings where screening is not feasible, vaccination of persons 
recommended to receive the vaccine should continue.
---------------------------------------------------------------------------

    \760\ CDC, 2023. Hepatitis B surveillance 2021. Retrieved from 
https://www.cdc.gov/hepatitis/statistics/2021surveillance/hepatitis-b.htm.
    \761\ CDC. Hepatitis B: Hepatitis B vaccine administration. 
Atlanta, GA: U.S. HHS, CDC; 2024. Retrieved from https://www.cdc.gov/hepatitis-b/hcp/vaccine-administration/index.html.
---------------------------------------------------------------------------

    We noted that Sec.  410.63(a)(3) provides an exception to 
individuals considered intermediate or high risk of contracting 
hepatitis B for individuals who have undergone a prevaccination 
screening and have been found to be currently positive for antibodies 
to hepatitis B. We noted that, as proposed, Sec.  410.63(a)(2)(iv) 
would remain subject to this exception because individuals with 
previous infection would not benefit from the vaccine. However, we note 
that the CDC states it is not harmful to vaccinate people who are 
immune to hepatitis B virus because of current or previous infection or 
vaccination, nor does it increase the risk for adverse events.\762\
---------------------------------------------------------------------------

    \762\ CDC. Hepatitis B: Hepatitis B vaccine administration. 
Atlanta, GA: U.S. HHS, CDC; 2024. Retrieved from https://www.cdc.gov/hepatitis-b/hcp/vaccine-administration/index.html.
---------------------------------------------------------------------------

5. Proposal Summary
    As noted previously, we proposed to revise Sec.  410.63(a)(2), 
Intermediate Risk Groups, by adding paragraph (a)(2)(iv) to include 
individuals who have not previously received a completed hepatitis B 
vaccination series or whose vaccination history is unknown. We stated 
that the proposal is in the best interest of the Medicare program and 
its beneficiaries because it would help protect Medicare beneficiaries 
from acquiring hepatitis B infection and contribute to eliminating 
viral hepatitis as a public health threat in the United States. We 
solicited comments on the proposal.
6. Comments/Responses and Summary of the Final Policy
    We received public comments on the proposed revisions to the 
hepatitis B vaccine coverage. The following is a summary of the 
comments we received and our responses.
    Comment: All the commenters supported the proposals to expand 
access to the hepatitis B vaccine in order to increase utilization. The 
commenters stated that our proposals address concerns about disparities 
in access to the vaccine for people with Medicare. Some commenters 
suggested that the proposals would provide greater consistency with 
other preventive Medicare Part B covered vaccines, including the 
influenza, pneumococcal, and COVID vaccines.
    Response: We appreciate the commenters' support of CMS's efforts to 
improve access and utilization of the hepatitis B vaccine.
    Comment: One commenter asked CMS to exercise enforcement discretion 
as providers and pharmacies navigate the migration of this vaccine from 
Part D to Part B coverage and asked that CMS clarify documentation 
requirements needed and whether an incomplete vaccination record would 
be sufficient to administer the vaccine.
    Response: We are not adopting the commenter's suggestion to 
exercise enforcement discretion. Hepatitis B vaccines are currently 
covered as a Medicare Part B benefit under section 1861(s)(10)(B) of 
the Act. The finalized proposals, which expand coverage under Part B 
for beneficiaries, will be effective for services furnished on or after 
January 1, 2025. We believe only a small number of beneficiaries may be 
receiving the vaccine under Part D. In response to the public comment, 
we are clarifying that when the rule is effective, an individual whose 
vaccination history is unknown may receive the hepatitis B vaccine, 
meaning that a vaccination

[[Page 98329]]

record is not needed. The roster bill claim form contains minimal data 
and does not require a vaccination record. Such a roster bill claim 
would be similar to other roster billed vaccines, which include the 
influenza, pneumococcal, and COVID vaccines.
    Comment: Some commenters stated that they look forward to working 
with CMS to expand the mass immunizer program to include all future 
preventive Part B vaccines. Some commenters noted that only four 
preventive vaccines are covered under Medicare Part B which creates 
barriers to offering in-office administration of newer vaccines, such 
as shingles and respiratory syncytial virus (RSV) vaccines, to Medicare 
beneficiaries during an office visit. They also recognized that CMS 
does not have the authority to add new ACIP-recommended vaccines to 
Part B coverage, but urged CMS to work with Congress to close this 
known gap that creates access barriers for patients to much needed 
vaccines.
    Response: We appreciate the suggestions for expanding Medicare 
coverage under part B for additional vaccines in the future. As some 
commenters have noted, however, additional legislation would be 
necessary to expand the scope of coverage under Part B for these 
additional vaccines. Because those suggestions are outside the scope of 
our proposed rule, no further response is required.
    After considering the public comments, we are finalizing our 
proposed revisions to Sec.  410.63(a)(2). Specifically, we are adding 
individuals who have not previously received a completed hepatitis B 
vaccination series or whose vaccination history is unknown to the list 
of intermediate risk groups. Expanding the definition of intermediate 
risk groups will help protect Medicare beneficiaries from acquiring 
hepatitis B infection, contribute to eliminating viral hepatitis as a 
public health threat in the United States and is in the best interest 
of the Medicare program and its beneficiaries.

N. Low Titer O+ Whole Blood Transfusion Therapy During Ground Ambulance 
Transport

1. Ambulance Fee Schedule Background
    Section 1861(s)(7) of the Act establishes an ambulance service as a 
Medicare Part B service where the use of other methods of 
transportation is contraindicated by the individual's condition, but 
only to the extent provided in regulations. Our regulations relating to 
coverage for ambulance services are set forth at 42 CFR part 410, 
subpart B. Since April 1, 2002, payment for ambulance services has been 
made under the ambulance fee schedule (AFS), which the Secretary 
established, as required by section 1834(l) of the Act, in 42 CFR part 
414, subpart H. Payment for an ambulance service is made at the lesser 
of the actual billed amount or the AFS amount, which consists of a base 
rate for the level of service, a separate payment for mileage to the 
nearest appropriate facility, a geographic adjustment factor (GAF), and 
other applicable adjustment factors as set forth at section 1834(l) of 
the Act and Sec.  414.610 of the regulations. In accordance with 
section 1834(l)(3) of the Act and Sec.  414.610(f), the AFS rates are 
adjusted annually based on an inflation factor. The AFS also 
incorporates two permanent add-on payments in Sec.  414.610(c)(5)(i) 
and three temporary add-on payments in Sec.  414.610(c)(1)(ii) and 
(c)(5)(ii) to the base rate and/or mileage rate.
2. Low Titer O+ Whole Blood Transfusion Therapy During Ground Ambulance 
Transport
    Under the AFS, Medicare Part B covers seven levels of service for 
ground (including water) ambulance transports and two levels of service 
for air ambulance transports. The levels of service for ground 
ambulance transports include basic life support (emergency); basic life 
support (non-emergency); advanced life support, level 1 (ALS1) 
(emergency); ALS1 (non-emergency); advanced life support, level 2 
(ALS2); paramedic intercept; and specialty care transport (Sec.  
410.40(c)). Definitions for the levels of service can be found at Sec.  
414.605 and in the Medicare Benefit Policy Manual, Chapter 10, 
Ambulance Services, section 30.1.1, Definition of Ground Ambulance 
Services.
    At Sec.  414.605, ALS2 is defined as either transportation by 
ground ambulance vehicle, medically necessary supplies and services, 
and the administration of at least three medications by intravenous 
push/bolus or by continuous infusion, excluding crystalloid, hypotonic, 
isotonic, and hypertonic solutions (Dextrose, Normal Saline, Ringer's 
Lactate); or transportation, medically necessary supplies and services, 
and the provision of at least one of the following ALS procedures: (1) 
Manual defibrillation/cardioversion; (2) Endotracheal intubation; (3) 
Central venous line; (4) Cardiac pacing; (5) Chest decompression; (6) 
Surgical airway; (7) Intraosseous line. These procedures must be 
performed by ALS personnel trained to the level of the emergency 
medical technician-intermediate (EMT-Intermediate) or paramedic (Sec.  
414.605).
    According to the 2020 National Association of State Emergency 
Medical Services Organizations Assessment (NASEMSO), there are 
approximately 11,450 ground EMS agencies that provide 9-1-1 response 
with transport to an acute care hospital.\763\ The administration of 
low titer O+ whole blood transfusions, otherwise referred to as whole 
blood transfusion therapy (WBT), began in 2017 when two Emergency 
Medical Services (EMS) systems in Texas began providing WBT to patients 
in hemorrhagic shock during ambulance transports. Prior to this, use of 
blood products in the treatment of hemorrhagic shock in the form of 
blood component therapy was available only in the hospital setting and 
by one EMS system. Low titer O+ whole blood contains low levels of 
antibodies that patients of any blood type can receive, and is provided 
in EMS settings to significantly increase these patients' chances of 
survival.
---------------------------------------------------------------------------

    \763\ National Association of State EMS Officials. 2020 National 
Emergency Medical Services Assessment 2020. Table 3, p 27. Available 
from: www./https://nasemso.org/. Accessed May 1, 2024.
---------------------------------------------------------------------------

    By September 2023, more than 121 EMS systems in the United States 
were using blood products in the form of either WBT, packed red blood 
cells (PRBCs), plasma, or a combination of PRBCs and plasma.\764\ 
Seventy percent of these systems were using WBT.\765\ As of March 2024, 
147 EMS systems (1.2 percent of the EMS systems in the United States) 
carry whole blood products, with 200 or more systems anticipated to 
provide some form of blood product transfusion by the end of 2024.\766\ 
Today, nearly 60 percent of those 147 EMS systems carry low titer O+ 
whole blood, with the remainder utilizing other blood products.\767\
---------------------------------------------------------------------------

    \764\ Krohmer J. Chairman, steering committee of the Prehospital 
Blood Transfusion Initiative Coalition. Virtual Meeting April 23, 
2024.
    \765\ Levy MJ, Garfinkel EM, May R, et al. Implementation of a 
prehospital whole blood program: Lessons. J Am Coll Emerg Physicians 
Open. 2024;5: e13142. https://doi.org/10.1002/emp2.13142.
    \766\ Levy MJ, Garfinkel EM, May ER, et al. Implementation of a 
prehospital whole blood program: Lessons. learned. J Am Coll Emerg 
Physicians Open. 2024;5: Apr; 5(2): e13142. https://doi.org/10.1002/emp2.13142. Krohmer J. Chairman, steering committee of the 
Prehospital Blood Transfusion Initiative Coalition. Virtual Meeting 
April 23, 2024.
    \767\ Ibid.
---------------------------------------------------------------------------

    EMS systems that administer WBT and other blood products (PRBCs and 
plasma) generally utilize it for patients suffering hemorrhagic shock 
stemming from traumatic injury, though it may also be indicated in 
certain non-

[[Page 98330]]

traumatic medical conditions such as hemorrhagic shock from a 
gastrointestinal bleed.\768\ Traditional EMS resuscitation protocol for 
massive hemorrhage from trauma and other medical conditions such as 
gastrointestinal bleeding consists of crystalloid fluids and blood 
component transfusions, which consist of a balanced portion of PBRCs, 
platelets, and fresh frozen plasma.\769\
---------------------------------------------------------------------------

    \768\ Ibid.
    \769\ Young PP, Cotton BA, Goodnough LT. Massive Transfusion 
Protocols for Patients with Substantial Hemorrhage. Transfusion 
Medicine Reviews. 2011, Vol 25(4). 293-303.
    Washington State Department of Health Office of Community Health 
Systems Emergency Medical Services and Trauma Section. Trauma 
Clinical Guideline: Massive Transfusion for Trauma.
---------------------------------------------------------------------------

    During the conflicts in Iraq and Afghanistan, use of this 
traditional protocol was difficult due to the austere combat 
environment and limited availability of blood components, which often 
necessitated the use of fresh whole blood (FWB) in traumatic 
resuscitation.\770\ Data collected related to these conflicts 
demonstrated improvements in survival rate and reductions in 
transfusion requirements for military casualties in hemorrhagic shock 
who received FWB versus those receiving traditional blood component 
transfusion, and spurred research and interest in the use of WBT in 
civilian trauma.\771\ Additional data demonstrating an improvement in 
24-hour and 30-day survival rate among medically evacuated combat 
casualties in Afghanistan who received prehospital transfusion 
encouraged research and interest in these techniques for possible 
deployment by EMS services.\772\
---------------------------------------------------------------------------

    \770\ Nessen SC, Eastridge BJ, Cronk D, et al. Fresh whole blood 
use by forward surgical teams in Afghanistan is associated with 
improved survival compared to component therapy without platelets. 
Transfusion. 2013;53: 107S-13S.
    \771\ Spinella PC, Perkins GJ, Grathwohl KW, Beekley AC, Holcomb 
J. Warm Fresh Whole Blood is Independently Associated with Improved 
Survival for Patients with Combat-Related Traumatic Injuries. J 
Trauma. 2009 April; 66(4 Suppl): S69-S76. doi:10.1097/
TA.0b013e31819d85fb. Nessen SC, Eastridge BJ, Cronk D, et al. Fresh 
whole blood use by forward surgical teams in Afghanistan is 
associated with improved survival compared to component therapy 
without platelets. Transfusion. 2013;53: 107S-13S.
    Gurney J, Staudt A, Cap A, Shackleford A, et al. Improved 
Survival in Critically Injured Combat Casualties Treated with Fresh 
Whole Blood by Forward Surgical Teams in Afghanistan. Transfusion. 
2020;60; S180-S188.
    \772\ Shackelford SA, del Junco DJ, Powell-Dunford N, 
Mazuchowski EL, et al. Association of Prehospital Blood Product 
Transfusion During Medical Evacuation of Combat Casualties in 
Afghanistan with Acute and 30-Day Survival. JAMA. 2017; 
318(16):1581-1591.
---------------------------------------------------------------------------

    In the treatment of civilian patients with hemorrhagic shock from 
trauma, studies have demonstrated that WBT provides a substantial 
survival benefit versus traditional component therapy,\773\ especially 
when provided early in the prehospital and hospital settings.\774\ One 
study found WBT increased the survival of such patients by as much 60 
percent and reduced the need for additional blood products in the 24-
hour period following the initial transfusion by 7 percent.\775\ 
Another study noted that there was a significant increase in the 24-
hour and 30-day survival rate in patients suffering from severe 
hemorrhage requiring a large transfusion volume.\776\
---------------------------------------------------------------------------

    \773\ Hazelton JP, Ssentongo AE, Oh JS, et al. Use of Cold-
Stored Whole Blood is Associated with Improved Mortality in 
Hemostatic Resuscitation of Major Bleeding. A Multicenter Study. 
2022. Annals of Surgery. Vol 276(4). 579-88.
    \774\ b. Torres CM, Kent A, Scantling D, et al. Association of 
Whole Blood With Survival Among Patients Presenting With Severe 
Hemorrhage in US and Canadian Adult Civilian Trauma Centers. JAMA 
Surg. 2023;158(5):532-540. doi: 10.1001/jamasurg.2022.6978.
    Brill JB, Tang B, Hatton G, Mueck KM, et al. Impact of 
incorporating whole blood into hemorrhagic shock resuscitation: 
Analysis of 1,377 consecutive trauma patients receiving emergency-
release uncrossmatched blood products. J Am Coll Surg. 
2022;234(4):408-418.
    Guyette FX, Sperry JL, Peitzman AB, et al. Prehospital blood 
product and crystalloid resuscitation in the severely injured 
patient: a secondary analysis of the prehospital air medical plasma 
trial. Ann Surg. 2021;273:358-364.
    \775\ Ibid.
    \776\ Ibid.
---------------------------------------------------------------------------

    Patients suffering from hemorrhagic shock require stabilization in 
the field and rapid transport to an acute care hospital to treat the 
source of hemorrhage.\777\ Individuals who are experiencing hemorrhagic 
shock primarily due to blood loss may require WBT as their only 
resuscitative treatment. Each unit of whole blood takes 5-8 minutes to 
transfuse.\778\ Depending on the time needed to transport and clinical 
need, patients generally receive 1-2 units of WBT during ground 
transport.\779\
---------------------------------------------------------------------------

    \777\ Centers for Disease Control and Prevention. Guidelines for 
field triage of injured patients. MMWR. 2009;58 (RR-1):1-34.
    \778\ Vitberg D. Assistant Medical Director. District of 
Columbia Fire and EMS Department. Zoom meeting. February 20, 2024. 
Bank EA. Assistant Chief of EMS. Co-Chair of the South East Regional 
Advisory Council Trauma Committee. Phone conversation, May 10, 2024.
    \779\ Krohmer J. Chairman, steering committee of the Prehospital 
Blood Transfusion Initiative Coalition. Virtual Meeting April 23, 
2024.
---------------------------------------------------------------------------

    While there may be variance between jurisdictions, the protocols 
for many EMS systems currently providing WBT are designed for patients 
who require complex management at the advanced life support level, 
demonstrating suspicion of blood loss along with evidence of 
physiologic shock as indicated by parameters such as low blood 
pressure, an elevated pulse rate, or slow capillary refill.\780\ Other 
relevant factors may include an elevated lactate level, an End-tidal 
carbon dioxide (EtCO2) waveform capnography reading <25 as surrogate 
for elevated lactate, a shock index (heart rate/systolic blood 
pressure) >1, and, where appropriate and consistent with protocol, 
authorization by online or other medical authority.\781\
---------------------------------------------------------------------------

    \780\ Mark H. Yazer, Philip C. Spinella, Eric A. Bank, Jeremy W. 
Cannon, Nancy M. Dunbar, John B. Holcomb, Bryon P. Jackson, Donald 
Jenkins, Michael Levy, Paul E. Pepe, Jason L. Sperry, James R. 
Stubbs & Christopher J. Winckler (2022) THOR-AABB Working Party 
Recommendations for a Prehospital Blood Product Transfusion Program, 
Prehospital Emergency Care, 26:6, 863-875.
    Ibid., https://miemss.org/home/Clinicians/Whole-Blood.
    \781\ Ibid.
---------------------------------------------------------------------------

    We believe that many ground ambulance transports providing WBT 
already qualify for ALS2 payment, since patients requiring such 
transfusions are generally critically injured or ill and often 
suffering from cardio-respiratory failure and/or shock, and therefore 
are likely to receive one or more procedures currently listed as ALS 
procedures in the definition of ALS2, with endotracheal intubation, 
chest decompression, and/or placement of a central venous line or an 
intraosseous line the most probable to be seen in these circumstances. 
Patients requiring WBT are typically suffering from hemorrhagic shock, 
for which the usual course of treatment includes airway stabilization, 
control of the hemorrhagic source, and stabilization of blood pressure 
using crystalloid infusion and the provision of WBT or other blood 
product treatments when available, but not necessarily the 
administration of advanced cardiac life support medications.\782\ 
Consequently, we do not believe it is likely that most patients who may 
require WBT would trigger the other pathway to qualify as ALS2, that 
is, the administration of at least three medications by intravenous 
push/bolus or by continuous infusion, excluding crystalloid, hypotonic, 
isotonic, and hypertonic solutions (Dextrose, Normal Saline, Ringer's 
Lactate).
---------------------------------------------------------------------------

    \782\ Prehospital Hemorrhage Control and Treatment by 
Clinicians: A Joint Position Statement. Ann Emerg Med. 2023;82:e1-
e8.
---------------------------------------------------------------------------

    However, not all ground ambulance transports providing WBT may 
currently qualify for ALS2 payment. An ambulance transport would not 
qualify for ALS2 payment where a patient received only WBT during a 
ground ambulance transport, and not one or more other services that, 
either by themselves or in combination, presently

[[Page 98331]]

qualify as ALS2. We believe WBT should independently qualify as an ALS2 
procedure because the administration of WBT and handling of low titer 
O+ whole blood requires a complex level of care beyond ALS1 for which 
EMS providers and suppliers at the EMT-Intermediate or paramedic level 
require additional training. In addition, WBT requires specialized 
equipment such as a blood warmer and rapid infuser.\783\ While there is 
no established national training protocol, many systems follow the 
guidelines of the Association for the Advancement of Blood and 
Biotherapies (AABB), which require additional training that is 4 hours 
in length for paramedics and 6 hours in length for EMS supervisory 
staff.\784\ Medicare's requirements for ambulance staffing at Sec.  
410.41(b) include compliance with state and local laws; those laws 
would establish appropriate training requirements with respect to WBT 
administration.
---------------------------------------------------------------------------

    \783\ Pokorny DM, Braverman MA, Edmundson PM, et al. The use of 
prehospital blood products in the resuscitation of trauma patients; 
a review of prehospital transfusion practices and a description of 
our regional whole blood program in San Antionio, TX. ISBT science 
series, 2018-08, Vol, 14(3), p 332-42.
    Floccare D. Air Medical Director, State of Maryland. Email 
communication. May 14,2024
    Krohmer J. Chairman, steering committee of the Prehospital Blood 
Transfusion Initiative Coalition. Virtual Meeting April 23, 2024.
    \784\ Bank EA. Assistant Chief of EMS. Co-Chair of the South 
East Regional Advisory Council Trauma Committee. Email 
correspondence and phone conversation, May 10, 2024.
---------------------------------------------------------------------------

    Therefore, we believe it is appropriate to modify the definition of 
ALS2 to account for the instances where patients are administered WBT 
but do not otherwise qualify for ALS2 payment. Of note, we do not have 
the authority to provide an additional payment, such as an add-on 
payment for the administration of WBT under the AFS.
    We proposed in the CY 2025 PFS proposed rule (89 FR 62002 through 
62004) to modify the definition of ALS2 at Sec.  414.605 by adding the 
administration of low titer O+ whole blood transfusion to the current 
list of seven ALS2 procedures as a new number 8. We would also reflect 
this change in the Medicare Benefit Policy Manual, Chapter 10, 
Ambulance Services, section 30.1.1, Definition of Ground Ambulance 
Services. Under this proposal, a ground ambulance transport that 
provides WBT would itself constitute an ALS2-level transport.
    We are aware that some established EMS systems may already provide 
WBT to treat patients in hemorrhagic shock, while other jurisdictions, 
particularly including those in rural areas, often will rely on 
alternative blood product treatments such as PRBCs and plasma. The 
availability of WBT in rural areas is a complex and multifactorial 
issue. Fluctuating stock of the ``raw product'' (blood donations) along 
with local healthcare demands for blood products (PRBCs, platelets, 
plasma, etc.) affect the availability of WBT. Other issues in rural 
areas include the logistical challenges and the costs involved in 
acquiring fresh units of WBT and returning any unused units to a 
supplier.\785\
---------------------------------------------------------------------------

    \785\ Apelseth TO, Strandenes G. Kristofferson K, Hagen KG. How 
do I implement a whole blood-based blood preparedness program in a 
small rural hospital? Transfusion. 2020. Vol 60(12) 2793-2800.
    Schaefer RM, Bank E, Krohmer JR., Haskell A, et al. Removing the 
Barriers to Prehospital Blood: A Roadmap to Success. Journal of 
Trauma and Acute Care Surgery. 2024. 97(2S): S138-S144. doi: 
10.1097/TA.0000000000004378.
---------------------------------------------------------------------------

    The training, administration, and monitoring is the same for these 
alternative blood product treatments as it is for WBT. While we did not 
include alternative blood product treatments in our proposal, we 
solicited comment on whether we should add them to the list of ALS2 
procedures. We invited comments on this proposal to add the 
administration of low titer O+ whole blood transfusion as an ALS2 
procedure and on whether we should add alternative blood product 
treatments such as the administration of PRBCs or plasma.
    We received public comments on our proposal and solicitation of 
comments. The following is a summary of the comments we received and 
our responses.
    Comment: A commenter stated that whole blood is not the current 
standard of care in pre-hospital transfusions, is very expensive, and 
is more difficult to source than individual blood components.
    Response: As previously discussed, many ground ambulance transports 
providing WBT already qualify for ALS2 payment. WBT is a therapy that 
is currently being used and is considered to be medically appropriate 
in certain circumstances by the medical community. Our proposal aimed 
to ensure that payments for ground ambulance transports better reflect 
the complexity of the services provided. We are aware that WBT can be 
difficult to source, and access can be based on factors such as: donor 
availability, local manufacturing capabilities, demand and usage. We 
are also aware that geographic locale may be a factor as well.
    Comment: Some commenters supported our proposal to add low titer O+ 
whole blood transfusion to the list of ALS2 procedures. Some commenters 
stated that the administration of low titer O- whole blood transfusion 
should also be added to the list of ALS2 procedures.
    Response: We appreciate the commenters' support for our proposal 
and for bringing to our attention that the administration of O- whole 
blood transfusions, like the administration of O+ whole blood 
transfusions, should independently qualify as an ALS2 procedure. Low-
titer O- blood has the same hemostatic composition and resuscitative 
benefits as low titer O+ blood but can only be obtained from 3 percent 
of blood donations because of the rarity of this blood type. Because of 
its rarity, hospitals and blood banks tend to hold this product in 
reserve for use in certain patient populations (pediatric, women of 
childbearing age, sickle cell patients) or clinical conditions such as 
obstetric hemorrhage.\786\
---------------------------------------------------------------------------

    \786\ Transfusion. 2021 Jun;61(6):1966-1971. doi: 10.1111/
trf.16380. Epub 2021 Mar 29. PMID: 33780020; PMCID: PMC8251973.
---------------------------------------------------------------------------

    For that reason--its rarity and general unavailability to ground 
ambulance providers and suppliers--we had refrained from adding low 
titer O- whole blood transfusion to our original proposal. After 
further discussion with EMS officials, we were made aware that some 
agencies may occasionally receive and use a unit of low titer O- whole 
blood as part of their transfusion program. Transfusion of low titer O- 
whole blood requires the same handling and level of training as low 
titer O+ whole blood. We are therefore adding low titer O- whole blood 
transfusion to the list of ALS2 procedures at Sec.  414.605.
    Comment: Several commenters provided feedback on whether we should 
add alternative blood product treatments in addition to low titer O+ 
WBT to the list of ALS2 procedures. Several commenters stated that, 
given the complexity involved in administering alternative blood 
products and their expense, the administration of all FDA-approved 
blood and blood components products (whole blood, plasma, PRBCs, 
platelets, and clotting fractions such as cryoprecipitate) should be 
included in the list of ALS2 procedures.
    A commenter stated that HHS' Agency for Healthcare Research and 
Quality (AHRQ) is currently conducting a systematic review on the 
feasibility, effectiveness, and safety of blood and blood product 
transfusions in the prehospital setting and will be comparing the 
benefits and harms of

[[Page 98332]]

low-titer O+ and O- whole blood transfusion, component blood therapy 
transfusion, and fluid resuscitation. The commenter stated that AHRQ 
indicates that the results of the systematic review will inform future 
prehospital care evidence-based guidelines, protocols, and state and 
local EMS agency decision-making.
    In addition to the ongoing studies and systematic review, the 
commenter stated that more research and comprehensive data are needed 
to evaluate these critical interventions, including the risks and 
benefits of the therapy options to different patient populations and to 
the continued availability of the blood supply. The commenter stated 
that a comprehensive gap analysis is also needed to: (1) identify 
research questions; (2) assess EMS capabilities and operational 
limitations; (3) define the scope of training needed for EMS personnel 
to safely administer blood in pre-hospital settings; (4) understand 
blood collectors' operational limitations that may impact the 
availability of different interventions; (5) evaluate the potential 
impact of pre-hospital transfusion programs on the hospitals' 
inventories, which are essential to patient care; and (6) study blood 
wastage and methods to limit it.
    Response: We appreciate the commenter bringing to our attention the 
ongoing studies and systematic reviews. CMS looks forward to the 
results of the study, but we note that current research, guidelines, 
and EMS protocols indicate that the administration of these services is 
sufficiently complex that, upon our review, they each should 
independently qualify as an ALS2 procedure. Many ground ambulance 
transports already provide blood and blood product transfusions. Based 
on our review and feedback received from interested parties, we are not 
aware of any evidence indicating issues with safety or efficacy that 
may lead CMS to consider not paying for these services furnished as 
part of a ground ambulance transport.
    Upon further review and feedback from interested parties, we have 
determined that all prehospital blood transfusions (PHBTs), which refer 
to the administration of low titer O+ and O- WBT, packed red blood 
cells (PRBCs), plasma, or a combination of PRBCs and plasma, should 
independently qualify as an ALS2 procedures; the administration of low 
titer O+ whole blood transfusion should not be the only PHBT that 
independently qualifies as an ALS2 procedure, as we had proposed in the 
CY 2025 PFS proposed rule (89 FR 62004). The administration, handling, 
training, specialized equipment, and medical criteria of low titer O- 
whole blood, PRBCs, and plasma are the same as previously described 
with respect to low titer O+ whole blood; they require a complex level 
of care beyond ALS1 for which EMS providers and suppliers at the EMT-
Intermediate or paramedic level require additional training.
    Use of PHBT is currently considered to be the best practice 
recommendation by the Trauma, Hemostasis and Oxygenation Research 
Network and the American Association of Blood Banks Working Party.\787\ 
An early study found that using PRBCs during transport improved the 
prehospital mortality rate for patients in hemorrhagic shock.\788\ A 
recent study of penetrating injuries in an urban setting found an in-
hospital mortality benefit of 22 percent if a PHBT was performed within 
15 minutes of the initial patient-EMS encounter.\789\ The study also 
found that the mortality rate increased by 11% for every minute a blood 
transfusion was delayed after that initial 15 minute period.\790\ 
Another recent study in which the use of two units of PRBCs were 
central to its initial resuscitation of massively hemorrhaging patients 
found that this PHBT reduced both prehospital and overall 
mortality.\791\
---------------------------------------------------------------------------

    \787\ Weykamp MB, Stern KE Brakenridge SC, Robinson BRH, et al. 
Pre-Hospital Crystalloid Resuscitation: Practice Variation & 
Associations with Clinical Outcomes. Shock. 2023. January; 59(1): 
28-33.
    Ibid.
    \788\ Rehn M, Weaver A, Brohl K, Eshelb S. Effect of Prehospital 
Red Blood Cell Transfusion on Mortality and Time of Death in 
Civilian Trauma Patients. Shock. 2019; Vol. 51, No. 3: 284-288.
    \789\ Duschesne J, McLafferty BJ, Broome JM, Caputao S, et al. 
Every minute matters: Improving outcomes for penetrating trauma 
through prehospital advanced resuscitative care. J Trauma Acute Care 
Surg. 2024 May 1 doi: 10.1097/TA.0000000000004363. Online ahead of 
print.
    \790\ Ibid.
    \791\ Ritondale J, Piehl M, Caputo S, Broome J, et al. Impact of 
Prehospital Airway-Breathing-Circulation Resusitation Sequence on 
Patients with Severe Hemorrhage. J Am Coll Surg. 2024, Vol. 238(4). 
367-72.
---------------------------------------------------------------------------

    The American College of Surgeons Committee on Trauma, the American 
College of Emergency Physicians, the National Association of EMS 
Physicians and the U.S. Military's Tactical Combat Casualty Care (TCCC) 
guidelines recommend WBT as the first line of resuscitative therapy for 
trauma patients in hemorrhagic shock, followed by PRBCs, and plasma in 
lieu of crystalloids. To clarify our earlier TCCC statement, 
traditional resuscitation protocols for massive hemorrhage from trauma 
and other medical conditions such as gastrointestinal bleeding 
consisted of crystalloids alone in the field and followed in the 
hospital with blood component transfusions, which consists of a 
balanced portion of PRBCs, platelets and fresh frozen plasma. Studies 
cited previously and noted below have demonstrated a mortality benefit 
in the use of these products for patients in hemorrhagic over 
traditional crystalloid therapy especially when provided earlier in the 
resuscitative process. One early study evaluated patients receiving 
four different prehospital resuscitation methods: crystalloid only; 
PRBCs; plasma; and PRBCs and plasma.\792\ Data showed that any blood 
product resuscitation was associated with a lower mortality than 
crystalloid alone. PRBCs and plasma have similar reductions in 
mortality; however, PRBCs and plasma had a much greater reduction in 
mortality than either PRBCs or plasma alone. When used alone, 
crystalloid fluids in this study demonstrated the greatest 
mortality.\793\
---------------------------------------------------------------------------

    \792\ Guyette FX, Sperry JL, Peitzman AB, Billiar TR, et al. 
Prehospital Blood Product and Crystalloid Resuscitation in the 
Severely Injured Patient. A Secondary Analysis of the Prehospital 
Air Medical Plasma Trial. Ann Surg. 2021;273:358-364.
    \793\ Ibid.
---------------------------------------------------------------------------

    Other blood products such as platelets and cryoprecipitate are used 
as part of the resuscitative process after the patient arrives in the 
hospital. At this time there is little data of their use in the field 
by EMS providers for patients in hemorrhagic shock. Furthermore, at 
this time, the use of these products in the field is limited by factors 
such as their expiration dates and storage requirements. Platelets have 
a 5 day expiration date and require continuous agitation while in 
storage at room temperature. Cryoprecipitate requires storage at 
negative 18 degrees Celsius and thawing before delivery.
    Comment: Several commenters stated that the WBT proposal will not 
have any positive effect on actual reimbursement of the cost associated 
with keeping and administering blood products because patients sick 
enough for blood administration already meet the ALS2 criteria. Several 
commenters stated that the current rate for ALS2 is far too low to 
accommodate the cost of providing pre-hospital blood transfusions. One 
commenter stated that they do not support including whole blood or 
blood products within the AFS unless there are appropriate increases in 
payment.
    Some of these commenters recommended that CMS create a new level of 
service, ALS3. One commenter recommended a new ALS3 level for critical 
care that would include, but would not be limited to, the following 
procedures: blood transfusions, ventilator administration, rapid 
sequence intubation, chest tube

[[Page 98333]]

placement, surgical airway placement, heparinization of patients 
suffering from an acute myocardial infarction, and placement of 
umbilical vein catheters in newborns. Other commenters suggested a new 
level of service for prehospital blood programs.
    Several commenters recommended additional funding to fully support 
adding the administration of low titer O+ WBT as an ALS2 procedure. One 
commenter recommended a CMMI payment and service delivery model that 
would incorporate pre-hospital blood transfusions into EMS, where the 
model should include a pre-hospital blood product add-on payment that 
incorporates the costs associated with procuring, storing, and 
administering blood transfusions. The commenter offered that model 
activities may include, but should not be limited to, procuring blood 
products from entities such as blood collection establishments and 
hospitals, storing blood products in accordance with safety standards, 
and transfusing the blood safely and effectively.
    Response: We noted in the CY 2025 PFS proposed rule (89 FR 62004) 
that we do not have the authority to provide an additional payment, 
such as an add-on payment for the administration of WBT under the AFS. 
We may consider the other commenter suggestions for future rulemaking.
    Comment: One commenter was concerned about budget neutrality with 
this proposal, expressing concern that it ought not potentially reduce 
reimbursement for other appropriate ambulance services.
    Response: AFS payment for the other levels of ground ambulance 
services will not be reduced by virtue of the policies we finalize 
here.
    Comment: Several commenters recommended that payment for WBT and 
alternative blood product treatments should also be included in air 
ambulance transport payment.
    Response: We appreciate the commenters' input, but comments 
relating to air ambulance transport are out of scope for this rule.
    Comment: One commenter requested clarification that the 
administration of WBT also meets the requirements for specialty care 
transport (SCT) if all other requirements are met. The commenter noted 
that the phrase ``critically injured or ill'' appears in the definition 
of SCT and in the rationale for including the administration of low 
titer O+ WBT as an ALS2 procedure.
    Response: At Sec.  414.605, SCT means interfacility transportation 
of a critically injured or ill beneficiary by a ground ambulance 
vehicle, including medically necessary supplies and services, at a 
level of service beyond the scope of the EMT-Paramedic. SCT is 
necessary when a beneficiary's condition requires ongoing care that 
must be furnished by one or more health professionals in an appropriate 
specialty area, for example, nursing, emergency medicine, respiratory 
care, cardiovascular care, or a paramedic with additional training. We 
define interfacility transport in the Medicare Benefit Policy Manual, 
Chapter 10, Ambulance Services, Chapter 30.1.1, Definition of Ground 
Ambulance Services, as: for purposes of SCT payment, an interfacility 
transportation is one in which the origin and destination are one of 
the following: a hospital or skilled nursing facility that participates 
in the Medicare program or a hospital-based facility that meets 
Medicare's requirements for provider-based status.
    An interfacility transport of a critically injured or ill 
beneficiary by a ground ambulance vehicle does not meet the definition 
of SCT if the only service provided to the patient during the transport 
is the administration of low titer O+ whole blood transfusion. The 
administration of low titer O+ whole blood transfusion requires an 
individual trained to the level of the emergency medical technician-
intermediate (EMT-Intermediate) or paramedic. It does not require a 
level of service beyond the scope of the EMT-Paramedic, as required 
under Sec.  414.605 although CMS notes that requirements may vary by 
state. We also note that it may be possible, during a transport that 
otherwise meets the definition of SCT, that the administration of low 
titer O+ whole blood transfusion may be provided as a medically 
necessary service, and that the service would therefore be payable as 
part of a SCT.
    Comment: A commenter requested clarification as to whether the 
medical monitoring of WBT qualifies for ALS2 as it does for 
endotracheal intubation. The commenter stated that in certain 
situations, primarily interfacility transports, another healthcare 
provider may initiate WBT, which an ALS provider or supplier will 
monitor and maintain during transport. The commenter believes that the 
transport should qualify as an ALS2 based on the monitoring and 
maintenance of WBT.
    Response: In the Medicare Benefit Policy Manual, Chapter 10, 
Section 30.1.1, under Application for ALS 2, we state: Endotracheal 
(ET) intubation (which includes intubating and/or monitoring/
maintaining an ET tube inserted prior to transport) is a service that 
qualifies for the ALS2 level of payment. Medical monitoring of WBT by 
an EMT-Intermediate or paramedic with additional training to administer 
WBT during a ground ambulance transport would qualify for ALS2 payment.
    After consideration of public comments and upon further review, we 
are modifying our proposed policy to add the administration of low 
titer O+ whole blood to the list of procedures that independently 
qualify as an ALS2 procedure and finalizing a policy to change the 
definition of ALS2 at Sec.  414.605 by including all PHBTs in the list 
of procedures that independently qualify as an ALS2 procedure. 
Specifically, we are modifying the definition of ALS2 at Sec.  414.605 
so that the list of ALS2 procedures now includes, as a new number 8, 
prehospital blood transfusion, which includes the administration of low 
titer O+ and O- whole blood; the administration of packed red blood 
cells; the administration of plasma; or the administration of a 
combination of packed red blood cells and plasma.
O. Medicare Parts A and B Overpayment Provisions of the Affordable Care 
Act (Sec.  401.305(a)(2), 401.305(b)(1), (2), and (3))
1. Executive Summary
    In the proposed rule titled ``Medicare Program; Contract Year 2024 
Policy and Technical Changes to the Medicare Advantage Program, 
Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, 
Medicare Parts A, B, C, and D Overpayment Provisions of the Affordable 
Care Act and Programs of All-Inclusive Care for the Elderly; Health 
Information Technology Standards and Implementation Specifications,'' 
which appeared in the December 27, 2022 Federal Register, we proposed 
to amend our regulations regarding the standard for an ``identified 
overpayment'' under Medicare Parts A, B, C, and D to align the 
regulations with the statutory language in section 1128J(d)(4)(A) of 
the Act, which provides that the terms ``knowing'' and ``knowingly'' 
have the meaning given those terms in the Federal False Claims Act (the 
False Claims Act) at 31 U.S.C. 3729(b)(1)(A) (87 FR 79452). We refer to 
that rule as the ``December 2022 Overpayment Proposed Rule.'' In the 
December 2022 Overpayment Proposed Rule, we proposed to remove the 
existing ``reasonable diligence'' standard and adopt by reference the 
False Claims Act definition of ``knowing'' and ``knowingly'' as set 
forth at 31 U.S.C. 3729(b)(1)(A).

[[Page 98334]]

    After considering the public comments we received in connection 
with the December 2022 Overpayments Proposed Rule, we issued a 
statement in the proposed rule, titled ``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'' (CY 2025 PFS), stating that 
we would retain the Parts A and B proposals published in the December 
2022 Overpayment Proposed Rule. In the CY 2025 PFS, we also made 
additional proposals to revise existing regulations at Sec.  401.305(b) 
regarding the deadline for reporting and returning overpayments. We are 
finalizing both the December 2022 Overpayment Proposed Rule proposals 
and the CY 2025 PFS proposals in this final rule.
2. Provisions of the Regulation (Preamble)
    Section 6402(a) of the Patient Protection and Affordable Care Act 
(Pub. L. 111-148), as amended by the Health Care and Education 
Reconciliation Act of 2010 (Pub. L. 111-152) (collectively known as the 
Affordable Care Act), established section 1128J(d) of the Act. Section 
1128J(d)(1) of the Act requires a person who has received an 
overpayment to report and return the overpayment to the Secretary, the 
State, an intermediary, a carrier, or a contractor, as appropriate, and 
to notify the Secretary, State, intermediary, carrier or contractor to 
which the overpayment was returned in writing of the reason for the 
overpayment. Section 1128J(d)(4)(B) of the Act defines the term 
``overpayment'' as any funds that a person receives or retains under 
title XVIII or XIX to which the person, after applicable 
reconciliation, is not entitled under such title. For purposes of 
Medicare Parts A and B, section 1128J(d)(4)(C) of the Act defines the 
term ``person'' to include providers and suppliers as those terms are 
defined in the Act.
    Section 1128J(d)(2) of the Act requires that an overpayment be 
reported and returned by the later of: (1) the date which is 60 days 
after the date on which the overpayment was identified; or (2) the date 
any corresponding cost report is due, if applicable. Section 
1128J(d)(3) of the Act specifies that any overpayment retained by a 
person after the deadline for reporting and returning an overpayment is 
an obligation (as defined in 31 U.S.C. 3729(b)(3)) for purposes of the 
False Claims Act, 31 U.S.C. 3729.
    Section 1128J(d)(4)(A) of the Act provides that the terms 
``knowing'' and ``knowingly'' have the meaning given those terms in the 
False Claims Act at 31 U.S.C. 3729(b)(1)(A). The False Claims Act (31 
U.S.C. 3729(b)(1)(A)) defines the terms ``knowing'' and ``knowingly'' 
to include information about which a person ``has actual knowledge,'' 
``acts in deliberate ignorance of the truth or falsity of the 
information,'' or ``acts in reckless disregard of the truth or falsity 
of the information.''
a. Regulations Issued Under Section 1128J(d) of the Act
    On May 23, 2014, we published a final rule titled ``Medicare 
Program; Contract Year 2015 Policy and Technical Changes to the 
Medicare Advantage and the Medicare Prescription Drug Benefit 
Programs'' (79 FR 29844) (hereinafter referred to as the ``Parts C and 
D Overpayment Final Rule''), which provided, among other things, that 
an MAO or PDP sponsor has identified an overpayment when the MAO or PDP 
sponsor has determined, or should have determined through the exercise 
of reasonable diligence, that the MAO or PDP sponsor has received an 
overpayment.
    On February 12, 2016, we published a final rule titled ``Medicare 
Program; Reporting and Returning of Overpayments'' (81 FR 7654) 
(hereinafter referred to as the ``Parts A and B Overpayment Final 
Rule''), which provided, among other things, that a provider or 
supplier has identified an overpayment when the provider or supplier 
has determined, or should have determined through the exercise of 
reasonable diligence, that the provider or supplier has received an 
overpayment and quantified the amount of the overpayment.
    In the December 2022 Overpayment Proposed Rule, we proposed to 
amend the existing regulations for Medicare Parts A and B, as well as 
Parts C and D, regarding the standard for an ``identified overpayment'' 
to align the regulations with the statutory language in section 
1128J(d)(4)(A) of the Act. These proposed regulations would assign the 
meaning of the terms ``knowing'' and ``knowingly'' in the False Claims 
Act at 31 U.S.C. 3729(b)(1)(A) to our regulations for purposes of 
Medicare overpayments. Specifically, in the December 2022 Overpayment 
Proposed Rule, we proposed to remove the existing ``reasonable 
diligence'' standard and adopt by reference the False Claims Act 
definition of ``knowing'' and ``knowingly'' as set forth at 31 U.S.C. 
3729(b)(1)(A). We reviewed the comments on the December 2022 
Overpayment Proposed Rule and will respond to them in this final rule. 
We elected not to finalize those provisions in the earlier-published 
corresponding final rule because we believed that regulatory revisions 
to address certain issues commenters raised regarding Parts A and B 
necessitated additional notice-and-comment rulemaking. The additional 
proposals were published in the CY 2025 PFS proposed rule.
    Specifically, in the CY 2025 PFS, we proposed new regulations that 
specify circumstances under which the deadline for reporting and 
returning overpayments in Parts A and B would be suspended to allow 
time for providers and suppliers to investigate and calculate 
overpayments.
b. Relevant Litigation
    In UnitedHealthcare Insurance Co. v. Azar, a group of MAOs 
challenged the 2014 Parts C and D Overpayment Final Rule, and the 
District Court held, in relevant part, that by requiring MAOs to use 
``reasonable diligence'' in searching for and identifying overpayments, 
the final rule impermissibly established False Claims Act liability for 
mere negligence. UnitedHealthcare Ins. Co. v. Azar, 330 F. Supp. 3d 
173, 191 (D.D.C. 2018), rev'd in part on other grounds sub nom. 
UnitedHealthcare Ins. Co. v. Becerra, 16 F.4th 867 (D.C. Cir. 2021), 
cert. denied, 142 S. Ct. 2851 (2022). The District Court noted that 
``(t)he False Claims Act--which the ACA refers to for enforcement, see 
42 U.S.C. 1320a-7k(d)(3)--imposes liability for erroneous (`false') 
claims for payment submitted to the government that are submitted 
`knowingly' . . . a term of art defined in the FCA to include false 
information about which a person `has actual knowledge,' `acts in 
deliberate ignorance of the truth or falsity of the information,' or 
`acts in reckless disregard of the truth or falsity of the 
information.' '' Id. at 190.
    Although the court's ruling applied only to Medicare Part C, to 
provide for consistency in Medicare regulations related to reporting 
and returning overpayments, in the December 2022 Overpayment Proposed 
Rule, we proposed to amend the regulations at current Sec.  
401.305(a)(2) to remove the reference to ``reasonable diligence'' and 
replace it with language incorporating the terminology of section 
1128J(d)(4)(A) of the Act by ascribing the terms ``knowing'' and 
``knowingly'' the same meaning given those terms in the False Claims 
Act at 31 U.S.C.

[[Page 98335]]

3729(b)(1)(A). See UnitedHealthcare, 330 F. Supp. 3d at 191 (finding 
that CMS adopting the False Claims Act standard would be consistent 
with a 2000 agency rule, the False Claims Act, and the Affordable Care 
Act's reference to the False Claims Act).
c. Provisions of Regulations
(1) Medicare Part A and Part B--Amending the Standard for When an 
Overpayment Is Identified (Sec.  401.305(a)(2))
    Proposals from the December 2022 proposed rule sought to amend 
Sec.  401.305(a)(2) by changing the standard for an ``identified 
overpayment.'' We are finalizing the knowledge standard derived from 
the False Claims Act standard, as proposed. This finalized provision 
states that a provider or supplier has identified an overpayment if it 
has actual knowledge of the existence of the overpayment or acts in 
reckless disregard or deliberate ignorance of the overpayment.
    We solicited comments on these proposals and received public 
comments on these proposals. The following is a summary of the comments 
we received and our responses.
    Comment: One commenter requested clarification on the regulatory 
text, pointing to language contained in the February 16, 2012 proposed 
rule (77 FR 9179) that preceded the Parts A and B Overpayment Final 
Rule, that a person identified an overpayment if the person has actual 
knowledge of the existence of the overpayment or acts in reckless 
disregard or deliberate ignorance of the existence of the overpayment. 
The commenter stated that it is not clear if CMS means something 
different by using the terms ``received or retained'' rather than 
``existence'' as used in the 2012 proposed rule.
    Response: The referenced language from the 2012 proposed rule was 
not finalized in the 2016 overpayment rule, and comments on its 
proposals are outside the scope of this regulation. However, we note 
that the section 1128J(d)(4)(B) of the Act defines an overpayment as 
funds that a person ``receives or retains,'' and the finalized 
regulatory language mirrors the statutory construction. We recognize 
the language in the 2012 proposed rule and the language in this final 
rule differ; however, we believe the language in this final rule is 
more consistent with the statutory text, which uses the phrase 
``receives or retains.''
    Comment: One commenter opposed the proposed changes stating that it 
increases the risk on well-meaning hospice providers of unwarranted 
False Claims Act liability based on allegations that they knowingly 
failed to identify, report and refund an overpayment within some 
unclear timeframe based on a ``reckless disregard or deliberate 
indifference'' standard that is prone to a high degree of subjectivity. 
The commenter submits that deleting the practical standards of 
``reasonable diligence'' and quantification to align with an unclear, 
constantly evolving False Claims Act definition and interpretation of 
``knowingly'' is unwise.
    Response: We thank the commenter for the perspective but disagree 
with the conclusions drawn by the commenter. We note that ``deliberate 
indifference'' is not a term included in the definition of ``knowing'' 
or ``knowingly,'' as defined in section 3729(b)(1)(A) of the Act. The 
language in this final rule is consistent with the statutory language. 
We have provided clarification on timeframes in our responses to other 
comments and hope this addresses the commenter's concerns.
    Comment: Some commenters stated that the proposal to define when a 
person has identified an overpayment is ambiguous and will result in 
confusion and inconsistent interpretations, and the proposal is silent 
about what it actually means to be in ``reckless disregard or 
deliberate ignorance'' of an overpayment. The commenters stated that if 
CMS adopts the ``knowing'' standard, it must also adopt clear and 
practical guidance and examples concerning what it means to act in 
reckless disregard or deliberate ignorance regarding a potential 
overpayment and when such a state of mind is attributed to a provider. 
Another commenter requested that CMS clarify the threshold for 
``reckless disregard or deliberate ignorance'' that the provider or 
supplier received or retained an overpayment.
    Response: We appreciate the commenters' concerns. We note that the 
False Claims Act (FCA), from which the language of the ``knowledge'' 
standard adopted by CMS with this rule originates, is supported by an 
existing body of False Claims Act caselaw and examples. Importantly, we 
further note that FCA case law may be broadly illustrative and remind 
stakeholders that inquiries into whether a person has the requisite 
knowledge to have identified an overpayment for purposes of Sec.  
401.305(a)(2) is a fact-specific inquiry.
    Comment: We received numerous comments from providers and suppliers 
objecting to the change in knowledge standard from ``reasonable 
diligence'' to ``knowing'' out of concern that the 6-month 
investigatory timeframe mentioned in a response to comments in the 
Parts A and B Overpayment Final Rule would be removed. One commenter 
stated that CMS should reinstate and extend the guidance that (at 
least) an 8-month diligence period is reasonable and expected, absent 
particularly complicated or challenging overpayment assessments, which 
standard was established in the preamble to the Parts A and B 
Overpayment Final Rule, and that CMS should consider acknowledging that 
a longer period of time may be necessary in some cases. Other 
commenters sought clarification on the timeframes for investigation. 
One commenter stated that CMS does not address the inherent ambiguities 
and practical problems presented by the proposed definition. For 
example, the proposed rule does not explain how a provider or supplier 
would return an overpayment within 60 days if the existence of the 
overpayment is known but the amount of the overpayment remains unknown.
    Response: We understand that providers and suppliers need time to 
investigate, calculate, and report and return certain overpayments. To 
address this concern, we are finalizing Sec.  401.305(b)(3), a 
suspension of the applicable requirements for 180 days, to conduct a 
timely, good faith investigation to determine the existence of related 
overpayments that may arise from the same or similar cause or reason as 
the initially identified overpayment.
    Comment: Some commenters questioned if the knowledge standard 
derived from the False Claims Act requires proactive compliance 
activities and also requested a more definitive and useful guideline to 
the knowledge standard. Other commenters inquired if CMS still expects 
suppliers and providers to undertake reasonable and professional 
efforts to identify an overpayment before disclosing refunds.
    Response: Using the False Claims Act knowledge standard provides an 
illustrative body of case law with examples that can be used for case-
specific queries and analogous fact-patterns about compliance efforts 
and the required efforts to identify an overpayment. We note also that 
providers and suppliers may also have proactive compliance obligations 
under other laws and regulations.
    Comment: Many commenters were supportive of the rule.
    Response: We appreciate the commenters' support.
    Comment: One commenter recommended that CMS expressly include 
certain concepts in the final rule, such as clarifying that a provider

[[Page 98336]]

or supplier that incurs a duty and diligently conducts an 
investigation, and either (1) reasonably concludes that an overpayment 
does not exist (even if that conclusion is in error) or (2) reports and 
returns any resulting overpayments within 60-days after concluding an 
investigation, will have satisfied its obligation under the proposed 
rule. The commenter suggested that if the provider then fails to make 
any reasonable inquiry into the credible information, the provider may 
be found to have acted in reckless disregard or deliberate ignorance of 
an overpayment.
    Response: We believe the rule is sufficiently clear as written and 
additional examples or instructions are not necessary. Identified 
overpayments must be reported and returned in accordance with the 
statutory and regulatory requirements. We appreciate the commenter's 
suggestion; however, the scenarios for investigations are varied and 
fact-specific. While we are not able to address each and every scenario 
in which a provider conducts an investigation, we refer the commenter 
to the body of False Claims Act case law and examples that can be used 
for case-specific queries and analogous fact-patterns.
    Comment: One commenter suggested that CMS should explicitly state 
that the 60-day period to report and return cannot be triggered unless 
and until a provider or supplier has engaged in reasonable and 
professional efforts to determine whether an overpayment occurred and 
has quantified any such overpayment and to which payors it is owed. The 
commenter also believes that CMS should expressly clarify that 
providers and suppliers who identify an overpayment should not report 
in a piecemeal fashion. Rather, they should refrain from reporting, 
including through an HHS-OIG self-disclosure protocol, until the entire 
overpayment is identified.
    Response: We understand that providers and suppliers need time to 
investigate, calculate, and report and return certain overpayments. To 
address this concern, we are finalizing Sec.  401.305(b)(3), which 
allows a person who has identified an overpayment up to 180 days to 
conduct a timely, good faith investigation to determine the existence 
of related overpayments that may arise from the same or similar cause 
or reason as the initially identified overpayment.
    Comment: One commenter stated that ``receive'' and ``retain'' 
should be defined in a manner that contemplates a provider or supplier 
must quantify an overpayment to determine whether an overpayment, in 
fact, exists.
    Response: Providers and suppliers should follow the plain meaning 
of the terms ``receive'' and ``retain.'' The need to quantify 
overpayments is discussed in the Sec.  401.305(b) discussion later in 
response to comments.
    Comment: One commenter suggested that CMS adopt a definition of 
``identified'' that does not impose impractical deadlines on hospitals 
and health systems before exposing them to False Claims Act liability.
    Response: The suspension of the deadline for reporting and 
returning of overpayments in newly-established Sec.  401.305(a)(3), in 
addition to the 60 days required by section 1128J of the Act, provides 
sufficient time providers and suppliers to comply with these 
requirements before being exposed to False Claims Act liability. 
However, providers and suppliers that fail to timely report and return 
overpayments expose themselves to False Claims Act liability.
    Comment: One commenter suggested that CMS create safe-harbor 
provisions such as adding regulatory language to allow for a 6-month 
investigatory period and a provision that providers should not be 
considered to have received or retained an overpayment if it is 
identical or similar to an overpayment that is subject to an 
administrative appeal.
    Response: We appreciate the commenter's suggestion and believe that 
new Sec.  401.305(b)(3) addresses some of the commenter's concerns with 
regard to providing additional time to investigate and calculate 
overpayments. With regard to the suggestion for overpayments subject to 
an administrative appeal, we refer the commenter to the now-finalized 
standards for knowingly receiving or retaining an overpayment: when a 
person has actual knowledge of the information; acts in deliberate 
ignorance of the truth or falsity of the information; or acts in 
reckless disregard of the truth or falsity of the information. We 
encourage the commenter to evaluate their obligation to report and 
return based upon this standard and the body of False Claims Act case 
law.
    Comment: One commenter stated that the proposed rule language would 
inadvertently create confusion as to when the 60-day period to report 
and return an overpayment begins. Another commenter explained that the 
proposed language could put providers and suppliers in a position of 
being accused of having reverse False Claims Act liability for 
retaining overpayments that cannot be quantified within 60 days. 
According to the commenter, providers and suppliers may also risk being 
accused of having constructive knowledge that an overpayment was 
received or retained without any guidance as to what that means. The 
commenter recommends that CMS either expressly add quantification to 
the regulatory text or at least clarify that quantification remains 
part of the definition of ``identified'' in that a person would not be 
considered to have actual or constructive knowledge of an overpayment 
prior to quantifying the amount of the overpayment.
    Other commenters were also concerned about our expectations with 
regard to quantifying overpayments and the amount of time needed to 
calculate overpayments. One commenter urged CMS to finalize amended 
regulatory text that includes the ``knowledge'' standard, just as CMS 
has proposed, but that also adds clarification that identification must 
include the amount of excess funds received. Another commenter 
suggested that CMS consider revising proposed Sec.  401.305(a)(2) to 
read as follows: ``A person has identified an overpayment when the 
person knowingly receives or retains a quantified overpayment. The term 
`knowingly' has the meaning set forth in 31 U.S.C. 3729(b)(1)(A).'' 
Alternatively, the commenter adds, this sentence could be revised to 
specify that a person ``has identified an overpayment when the person 
knowingly receives or retains an overpayment and quantifies the amount 
of the overpayment.
    Response: In response to comments, we are clarifying that, for 
purposes of section 1128J of the Act, a person has identified an 
overpayment, as the term is defined at section 1128J(d)(4)(B) of the 
Act, when the person: (1) has actual knowledge of an overpayment; (2) 
acts in deliberate ignorance of the truth or falsity of information 
regarding the overpayment; or (3) acts in reckless disregard of the 
truth or falsity of information regarding the overpayment. In cases 
where a provider or supplier is actively investigating a potential 
overpayment, the 60-day period for reporting and returning the 
overpayment begins when the provider or supplier has actual knowledge 
of the overpayment. (As explained in greater detail below, the 60-day 
deadline may be suspended for up to 180 days under Sec.  
401.305(b)(3)). On the other hand, in cases where a provider or 
supplier acts in deliberate ignorance or reckless disregard of the 
existence of the overpayment, the 60-day period begins on the date that 
the provider or supplier acted in deliberate ignorance or reckless 
disregard of the truth or falsity of information regarding the 
overpayment.

[[Page 98337]]

    With respect to quantification of the overpayment, once a person 
has identified an overpayment, as the term is defined at Sec.  
401.305(a)(2), the person has 60 days to report and return the 
overpayment under Sec.  401.305(b)(1)(i), even if the person has not 
yet calculated the precise amount of the overpayment at the time of 
identification. Because a person cannot return an indefinite sum, as a 
practical matter the overpayment amount must be calculated within 60 
days of identification to meet the 60-day deadline. However, if the 
person believes that there may be other related overpayments, the 60-
day deadline for reporting and returning the initially identified 
overpayment may be suspended under Sec.  401.305(b)(3) for up to 180 
days, to allow a person to conduct a timely, good faith investigation 
to determine the existence of related overpayments, if any, that may 
arise from the same or similar cause or reason as the initially 
identified overpayment. As noted at Sec.  401.305(b)(3)(ii)(A), the 
investigatory timeframe under Sec.  401.305(b)(3) includes time to 
calculate the aggregate amount of both the initially identified 
overpayment and related overpayments, if any, uncovered by the 
investigation.
    Comment: One commenter inquired about a situation where a provider 
or supplier has found a single overpaid claim, but suspects that the 
underlying issue may impact additional claims. The commenter questioned 
whether it would be appropriate to inquire further before reporting and 
returning the single claim previously determined to be overpaid. The 
commenter interprets the 60-day period to report and return that 
overpayment to start on the date that total overpayment was first 
quantified.
    Response: We agree with the commenter that where a single 
overpayment is found and other related overpayments are suspected, the 
provider or supplier should investigate and calculate the aggregate 
overpayment prior to its return. We are finalizing Sec.  401.305(b)(3), 
which suspends the 60-day report and return obligation for up to 180 
days, to allow persons time to complete a good-faith investigation to 
determine the existence of related overpayments that may arise from the 
same or similar cause or reason as the initially identified 
overpayment. As explained in greater detail below, the 60-day clock 
begins when the initial overpayment is identified, but may be suspended 
under Sec.  401.305(b)(3) for up to 180 days to conduct a timely, good 
faith investigation into the existence of other related overpayments.
    After consideration of the comments received, we are finalizing the 
provisions, as proposed.
(2) Medicare Parts A and B Overpayment Provisions of the Affordable 
Care Act (Sec. Sec.  401.305(b)(1), (b)(2), (b)(3))
    As noted above, after considering the public comments we received 
in connection with the December 2022 Overpayments Proposed Rule, we 
published additional proposals in the CY 2025 PFS. We proposed to 
revise existing regulations at Sec.  401.305(b) regarding the deadline 
for reporting and returning overpayments.
    Existing Sec.  401.305(b)(1) specifies when a person who has 
received an overpayment must report and return an overpayment. We 
proposed to amend this paragraph to reference revised Sec.  
401.305(b)(2), as well as to reference newly-proposed Sec.  
401.305(b)(3).
    Existing Sec.  401.305(b)(2) specifies the circumstances under 
which the deadline for returning overpayments will be suspended. 
Overpayments must be reported no later than the date which is 60 days 
after the date on which the overpayment was identified or the date any 
corresponding cost report is due, if applicable. However, the deadline 
for returning a reported overpayment will be suspended under specified 
circumstances, including the acknowledgement of receipt of a submission 
to the OIG Self-Disclosure Protocol or the CMS Voluntary Self-Referral 
Disclosure Protocol, or under specified conditions if a person requests 
an extended repayment schedule as defined in Sec.  401.603. We proposed 
a technical modification to the introductory language in Sec.  
401.305(b)(2) to acknowledge that this section may be applicable after 
the suspension described in new Sec.  401.305(b)(3) is complete.
    Proposed Sec.  401.305(b)(3) specifies the circumstances under 
which the deadline for reporting and returning overpayments may be 
suspended to allow time for providers and suppliers to investigate and 
calculate overpayments. Proposed Sec.  401.305(b)(3)(i) provides that 
the deadline to report and return an overpayment is suspended if: (1) a 
person has identified an overpayment but has not yet completed a good-
faith investigation to determine the existence of related overpayments 
that may arise from the same or similar cause or reason as the 
initially identified overpayment; and (2) the person conducts a timely, 
good-faith investigation to determine whether related overpayments 
exist. Proposed Sec.  401.305(b)(3)(ii) provides that, if the 
conditions for proposed Sec.  401.305(b)(3)(i) are met, the deadline 
for reporting and returning the initially identified overpayment and 
related overpayments that arise from the same or similar cause or 
reason as the initially identified overpayment will remain suspended 
until the earlier of the date that the investigation of related 
overpayments has concluded and the aggregate amount of the initially 
identified overpayments and related overpayments is calculated, or the 
date that is 180 days after the date on which the initial identified 
overpayment was identified.
    In the proposed rule, we provided an example elucidating a 
hypothetical circumstance. We are repeating the example here, with 
certain modifications to further clarify when the 60-day report and 
return obligation begins. Assume that, on day 1, a person identifies an 
overpayment (as the term is defined at Sec.  401.305(a)(2)) arising 
from a physician's failure to properly document the medical record to 
support the coding of a specific claim, and the person has reason to 
believe that this may be a common practice of the physician, so there 
could be more affected claims. Once the overpayment has been identified 
on day 1, the report and return obligation at Sec.  401.305(b)(1) 
applies, and the person has 60 days to report and return the 
overpayment. However, the 60-day deadline may be suspended for up to 
180 days to conduct and conclude a good faith investigation to 
determine whether related overpayments that arise from the same or 
similar cause or reason as the initially identified overpayment exist. 
If the person does NOT conduct an investigation, or the investigation 
is not timely or not conducted in good faith, the identified 
overpayment must be reported and returned by day 60. If the person does 
conduct a timely, good faith investigation, suspension of the report 
and return obligation under Sec.  401.305(b)(3) begins when the person 
begins the investigation. The suspension of the 60-day deadline ends 
when the investigation is concluded and the initially identified 
overpayment and related overpayments, if any, are calculated, or by day 
180, whichever is earlier. Once the suspension of the 60-day deadline 
ends, the person has the remainder of the 60-day period to report and 
return the overpayment. For example, assuming the investigation to 
determine the existence of related overpayments was begun on day 10 
(that is, the tenth day after the initial overpayment was identified), 
the overpayment must be reported and

[[Page 98338]]

returned within 50 days after either (1) completion of the 
investigation or (2) day 180, whichever is earlier. However, the 
suspension described in Sec.  401.305(b)(2) may also be applicable. For 
example, if the person is reporting the overpayment to the OIG Self-
Disclosure Protocol, as provided for in Sec.  401.305(b)(2) the 
overpayment return requirement may be further suspended in accordance 
with that provision.
    We received many comments on the December 2022 Overpayment Proposed 
Rule expressing concern that we proposed to remove the term 
``quantified'' from the original regulatory text. We believe Sec.  
401.305(b)(3)(ii)(A) addresses these concerns. Other commenters 
expressed concern that the December 2022 Overpayment Proposed Rule 
proposals removed a perceived 6-month time period to investigate all 
overpayments that was referenced in an example in the preamble to the 
original 2016 Parts A and B Overpayment Rule. The December 2022 
Overpayment Proposed Rule was silent on this point. We understand the 
importance of allowing time to investigate and calculate overpayments. 
We believe Sec.  401.305(b)(3)(ii) addresses these concerns.
    We solicited and received public comments on these proposals. The 
following is a summary of the comments we received and our responses.
    Comment: Commenters requested that CMS provide additional guidance 
to assist interested parties in complying with these requirements. Some 
stated there may be confusion on timeframes. Other commenters stated 
that these requirements lack clear definitions for terms such as 
``timely'' or ``good faith.'' Without more precise definitions, 
commenters stated these terms remain open to interpretation, which 
could lead to inconsistencies in enforcement and confusion among 
providers and suppliers. Some commenters stated that education 
materials would be helpful to assist providers in understanding how 
they may need to adapt their overpayment policies to remain in 
compliance.
    Response: We appreciate the commenters' concerns; however, we 
maintain the commenters can rely upon the plain meaning of the terms 
``timely'' and ``good faith.'' Further, we also refer the commenters to 
the body of False Claims Act case law for information about the term 
knowingly.
    Comment: A commenter requested confirmation that the beginning of 
the 60-day deadline does not commence until after a provider has 
conducted their investigation. Another commenter stated that since 180-
day period is described as an investigation period, it may lead a 
provider to inaccurately believe that the 60-day period report and 
repay only begins after the 180-day period has concluded.
    Response: The 60-day deadline at Sec.  401.305(b)(1) for reporting 
and returning an overpayment begins once an overpayment is identified, 
as the term is defined at Sec.  401.305(a)(2), even if the person has 
not yet calculated the precise amount of the overpayment at the time of 
identification. Under Sec.  401.305(b)(3), the 60-day deadline at Sec.  
401.305(b)(1) may be suspended for up to 180 days to allow a person 
time to conduct a timely, good faith investigation to determine whether 
related overpayments exist. If a person does not conduct such an 
investigation, or the investigation is not timely or not conducted in 
good faith, the 60-day deadline is not suspended, and the initially 
identified overpayment must be reported and returned within 60 days of 
its identification. If the person does conduct a timely, good faith 
investigation, the 60-day deadline is suspended until the investigation 
is concluded and the initially identified overpayment and related 
overpayments, if any, are calculated, or by day 180, whichever is 
earlier. Once the suspension of the 60-day deadline ends, the person 
has the remainder of the 60-day period to report and return the 
overpayment. For example, if a person began a timely, good faith 
investigation of related overpayments 20 days after identifying the 
initial overpayment, the suspension of the deadline would apply on day 
20, and there would be 40 days remaining in the 60-day period to report 
and return the overpayment after the suspension at Sec.  
401.305(b)(3)(ii) ends.
    Comment: Some commenters requested specificity for terms such as 
``good-faith investigations'' and for us to provide additional 
information on CMS' expectations for a reasonable timeline for 
conducting such an investigation.
    Response: We appreciate the commenters' concerns; however, we 
maintain the commenters can rely upon the plain meaning of those terms.
    Comment: Some commenters opposed what they called a strict, bright-
line, or arbitrary timeframe for investigating and reporting 
overpayments, stating that the current standard allows an indefinite 
period of time for providers to identify, investigate, and, if an 
overpayment exists, report to Medicare for corrective action. These 
commenters recommended that CMS consider one modification to the 
policy--to create a process to request an extension beyond 180 days for 
complex investigations. Some commenters stated that 8 months is a more 
appropriate period of time for providers to investigate, report, and 
return overpayments under normal circumstances.
    Response: We heard from many interested parties that advocated for 
us to codify a specific period of time to investigate, calculate, 
report and return overpayments, which is the policy we are finalizing 
in this rule. Most commenters were supportive of our proposal; however, 
we appreciate that investigations are often complex and require the 
devotion of resources. We believe we have appropriately balanced the 
needs of providers and suppliers with the required statutory mandates.
    Comment: One commenter requested that the time required for 
advisors or for governmental agencies to clarify applicable rules would 
not count for the 180 days because the overpayment identification is 
not possible without the conclusions from these deliberations. Another 
commenter requested that we delay requirements to allow for time for 
compliance office, legal services, clinical providers, and other 
governmental authorities to provide input.
    Response: We heard from many commenters on the issue of time needed 
for investigations and calculations of overpayments. We believe that 
the newly-established 180-day suspension for providers and suppliers 
that have situations that qualify, in addition to the 60 days to report 
and return overpayments, provides enough time. We, therefore, decline 
to delay implementation or provide additional time to comply with these 
requirements.
    Comment: One commenter, submitting a comment more than 60 days 
after the December 2022 Overpayments Proposed Rule was displayed, 
emphasized that this proposal, which would remove the ``reasonable 
diligence'' standard and replace it with a ``knowing/knowingly'' 
standard is ill-advised, in that, it would accelerate the 60- day clock 
and place unnecessary stress on those conducting important compliance 
activities.
    Response: While we appreciate the commenters' concerns and we 
disagree with this conclusion, comments on the December 2022 
Overpayments Proposed Rule proposal were due within the 60 days comment 
period after that proposal was displayed. It is, therefore, outside of 
the scope of this proposal.
    Comment: One commenter requested that CMS revise proposed Sec.  
401.305(b)(3)(ii) to provide that the deadline is suspended for the 
entirety of a timely, good-faith investigation to

[[Page 98339]]

minimize the piecemeal report and return of overpayments.
    Response: We understand the commenter's concern; however, we heard 
from many interested parties that advocated for us to codify a specific 
period of time to investigate, calculate, report and return 
overpayments, which is the policy we are finalizing in this rule. We 
believe we have appropriately balanced providers' and suppliers' needs 
with the required statutory mandates. These requirements provide 
additional time so that providers and suppliers do not need to 
piecemeal report and return overpayments.
    Comment: Many commenters supported our proposals and thanked CMS 
for providing defined timeframes for providers making a good-faith 
effort in complex situations. Some commenters requested that CMS 
formalize this policy as soon as possible.
    Response: We appreciate the commenters' support.
    Comment: One commenter encouraged CMS to describe the criteria it 
would apply to determine whether an investigation has been undertaken 
in ``good faith'' and therefore the deadline may be suspended.
    Response: We encourage the commenter to use the plain meaning of 
the term ``good faith''.
    Comment: A commenter disagreed with CMS' reliance on 
UnitedHealthcare Insurance Co. v. Azar to remove the ``reasonable 
diligence'' standard because the commenter does not believe the case 
requires CMS to alter its policy for Medicare Parts A and B. Another 
commenter stated similarly that UnitedHealthcare Insurance Co. v. Azar 
does not dictate a wholesale redefinition of the legal standard for 
identifying overpayments in Parts A and B.
    Response: While we agree that Medicare Parts A and B were not 
directly at issue in UnitedHealthcare Insurance Co. v. Azar, the 
underlying statutory provision (section 1128J(d) of the Act) is 
applicable to Medicare Parts A, B, C, and D. The agency, therefore, 
proposed to align its knowledge standard for the policies that are 
subject to that shared statutory provision.
    Comment: One commenter urged CMS to clarify that physician 
practices will have adequate time to organize funds and make payment 
once an aggregate repayment amount is determined.
    Response: The governing statutory provisions, in section 
1128J(d)(4)(A) of the Act, provide clear requirements and allows 60 
days for providers to report and return overpayments.
    Comment: One commenter expressed concern that CMS is proposing 
changes on top of other proposed changes that are not final, leaving 
providers in a difficult position of having to interpret different 
requirements that may not align.
    Response: In the CY 2025 PFS proposal we stated that we were 
retaining the Parts A and B proposals published in the December 2022 
Overpayment Proposed Rule and we did not alter them in that proposed 
rule. We did supplement that language in response to the comments we 
received on the December 2022 Overpayment Proposed Rule. We are not 
aware of any misalignment in the two proposals and thus do not agree 
that there is any need to clarify them in this final rule.
    Comment: A commenter requested that CMS confirm that the proposed 
amendments to Sec.  401.305 would not impose any 6-month or other 
regulatory clock on the first investigation that results in the 
identification of an initial overpayment.
    Response: With respect to the initial identification of an 
overpayment, the general 60-day rule at Sec.  401.305(b)(1), coupled 
with the definition of ``identified'' at Sec.  401.305(a)(2), 
determines the deadline for reporting and returning the overpayment. In 
cases where a provider or supplier is actively investigating a 
potential overpayment, the 60-day period for reporting and returning 
the overpayment begins when the provider or supplier has actual 
knowledge of the overpayment. The suspension under Sec.  401.305(b)(3) 
is available after a person has identified an overpayment, as the term 
is defined at Sec.  401.305(a)(2). As explained in final Sec.  
401.305(b)(3)(i)(A), the suspension for reporting and returning 
overpayments under Sec.  401.305(b)(3) applies when a person has 
identified an overpayment but has not yet completed a good-faith 
investigation to determine the existence of related overpayments that 
may arise from the same or similar cause or reason as the initially 
identified overpayment. If, after identifying the overpayment, the 
person conducts a timely, good faith investigation to determine the 
existence of related overpayments in accordance with Sec.  
401.305(b)(3), the 60-day deadline for reporting and returning the 
initially identified overpayment will be suspended for up to 180 days, 
as provided for under Sec.  401.305(b)(3)(ii). On the other hand, in 
cases where a provider or supplier acts in deliberate ignorance or 
reckless disregard, the 60-day period begins on the date that the 
provider or supplier acts in deliberate ignorance or reckless disregard 
of the truth or falsity of information regarding the overpayment.
    Comment: Commenters had several comments and questions regarding 
related overpayments. One commenter stated that the proposed text would 
appear to consider a related overpayment to be unlawfully retained--
therefore exposing the organization to False Claims Act liability--even 
before the organization actually identifies the related overpayment. 
Some were concerned that this introduces ambiguity and believe that the 
timeframe does not take into the account the true complexity of these 
overpayment investigations. Another commenter stated the 6 month 
benchmark did not encompass such a duty to investigate ``related'' 
overpayments and the proposed change effectively shortens the timeline 
for providers and suppliers to carry out their investigations. Another 
commenter stated that the proposal also appears to create obligations 
that are contrary to the governing statute and CMS lacks authority to 
effectively require investigation of ``related'' overpayments. One 
commenter stated that CMS should revise its proposal to make clear that 
there is no requirement to report and return related overpayments. 
Finally, another commenter requested that CMS adopt language to allow 
providers up to 180 days to identify and quantify an overpayment, 
regardless of whether an investigation into related overpayments is 
required.
    Response: We disagree with the suggestion that we are requiring 
providers and suppliers to report and return overpayments that have not 
been identified or that we are creating new requirements not authorized 
by the statute. Our proposal in the CY 2025 PFS only addressed 
circumstances when the 60-day deadline to report and return identified 
overpayments will be suspended for up to 180 days.
    Final Sec.  401.305(b)(3) does not impose an independent obligation 
to investigate related overpayments when a person has actual knowledge 
of an overpayment. However, other laws, such as the federal False 
Claims Act, may impact whether a person must investigate overpayments. 
If a person believes related overpayments may exist, Sec.  
401.305(b)(3) permits the person up to 180 days to conduct an 
investigation into the existence of related overpayments, provided that 
the person conducts a timely, good-faith investigation. Without this 
provision, persons conducting such investigations might face a rolling 
series of relatively short-term deadlines as the investigation advances 
and uncovers additional

[[Page 98340]]

overpayments, each with its own 60-day deadline. On the other hand, if 
a person has actual knowledge of an overpayment and has no reason to 
believe that there are other related overpayments (that is, the person 
is not acting in deliberate ignorance or reckless disregard to the 
truth or falsity of information about other related overpayments), then 
there is no obligation to investigate, calculate, and report and return 
such other overpayments. In such cases, the person would have 60 days 
after identifying the isolated overpayment to report and return it, as 
specified at Sec.  401.305(b)(1).
    Comment: One commenter stated that we should not deviate from the 
current practice and impose an a two-tiered timeframe and unnecessary 
disclosure requirements on hospitals and health systems to identify, 
investigate, disclose to agencies, and return overpayments.
    Response: We appreciate the commenter's opinion; however, we 
believe this change better aligns with the statutory language.
    Comment: Some commenters opined that we should not deviate from 
this current practice by imposing the False Claims Act definition of 
``identified'' overpayments rather than the current ``reasonable 
diligence'' standard.
    Response: We appreciate the commenters' opinion; however, we 
believe this change better aligns with the statutory language.
    Comment: One commenter stated that Medicare hospice claims have 
been improperly denied or quality providers without outlier data have 
been repeatedly subjected to pervasive and costly audits. To this end, 
they urged CMS to perform an evaluation of hospice denials overturned 
on appeal and conduct training with audit contractors to ensure the 
appropriate review of medical claims.
    Response: This comment is outside the scope of this proposal.
    Comment: One commenter requested that CMS consider requiring 
Medicare Advantage companies to issue overpayment notices in a 
specified timeframe. This would allow providers to address potential 
overpayments in a timely manner.
    Response: This proposal was specific to Medicare Parts A and B; 
therefore, this comment is outside of the scope of this rule.
    After consideration of the public comments received, we are 
finalizing the provisions at Sec.  401.305(a)(2) and (b)(1), (2), and 
(3) as proposed.

P. Medicare Parts C and D Overpayment Provisions of the Affordable Care 
Act (Sec. Sec.  422.326(c), 423.360(c))

    Section 6402(a) of the Patient Protection and Affordable Care Act 
(Pub. L. 111-148) as amended by the Health Care and Education 
Reconciliation Act of 2010 (Pub. L. 111-152) (collectively known as the 
Affordable Care Act) established section 1128J(d) of the Act. Section 
1128J(d)(1) of the Act requires a person who has received an 
overpayment to report and return the overpayment to the Secretary, the 
State, an intermediary, a carrier, or a contractor, as appropriate, and 
to notify the Secretary, State, intermediary, carrier or contractor to 
whom the overpayment was returned in writing of the reason for the 
overpayment. Section 1128J(d)(4)(B) of the Act defines the term 
``overpayment'' as any funds that a person receives or retains under 
title XVIII or XIX to which the person, after applicable 
reconciliation, is not entitled under such title. Section 
1128J(d)(4)(C) of the Act defines the term ``person'' for purposes of 
Medicare Part C and Part D to include a Medicare Advantage organization 
(``MAO'') (as defined in section 1859(a)(1) of the Act) and a Part D 
sponsor (as defined in section 1860D-41(a)(13) of the Act).
    Section 1128J(d)(2) of the Act requires that an overpayment be 
reported and returned by the later of: (1) the date which is 60 days 
after the date on which the overpayment was identified; or (2) the date 
any corresponding cost report is due, if applicable. Section 
1128J(d)(3) of the Act specifies that any overpayment retained by a 
person after the deadline for reporting and returning an overpayment is 
an obligation (as defined in 31 U.S.C. 3729(b)(3)) for purposes of the 
False Claims Act, 31 U.S.C. 3729.
    Section 1128J(d)(4)(A) of the Act provides that the terms 
``knowing'' and ``knowingly'' have the meaning given those terms in the 
False Claims Act at 31 U.S.C. 3729(b)(1)(A). The False Claims Act (31 
U.S.C. 3729(b)(1)(A)) defines the terms ``knowing'' and ``knowingly'' 
to include information about which a person ``has actual knowledge,'' 
``acts in deliberate ignorance of the truth or falsity of the 
information,'' or ``acts in reckless disregard of the truth or falsity 
of the information.''
1. Parts C & D Regulation Promulgated Under Section 1128J(d) of the Act
    On May 23, 2014, CMS published a final rule titled ``Medicare 
Program; Contract Year 2015 Policy and Technical Changes to the 
Medicare Advantage and the Medicare Prescription Drug Benefit 
Programs'' (79 FR 29844) (hereinafter referred to as the ``Parts C & D 
Final Overpayment Rule''), which provided, among other things, that an 
MAO or Part D sponsor has identified an overpayment when the MAO or 
Part D sponsor has determined, or should have determined through the 
exercise of reasonable diligence, that the MAO or Part D sponsor has 
received an overpayment.
2. Relevant Litigation
    In UnitedHealthcare Insurance Co. v. Azar, a group of MAOs 
challenged the final Parts C & D Overpayment Rule, and the District 
Court held, in relevant part, that by requiring MAOs to use 
``reasonable diligence'' in searching for and identifying overpayments, 
the final rule impermissibly created False Claims Act liability for 
mere negligence.\794\ The District Court noted that ``(t)he False 
Claims Act--which the ACA refers to for enforcement, see 42 U.S.C. 
1320a-7k(d)(3)--imposes liability for erroneous (`false') claims for 
payment submitted to the government that are submitted `knowingly' . . 
. a term of art defined in the FCA to include false information about 
which a person `has actual knowledge,' `acts in deliberate ignorance of 
the truth or falsity of the information,' or `acts in reckless 
disregard of the truth or falsity of the information.' ''.\795\ On 
December 27, 2022, CMS published in the Federal Register the proposed 
rule titled ``Medicare Program; Contract Year 2024 Policy and Technical 
Changes to the Medicare Advantage Program, Medicare Prescription Drug 
Benefit Program, Medicare Cost Plan Program, Medicare Parts A, B, C, 
and D Overpayment Provisions of the Affordable Care Act and Programs of 
All-Inclusive Care for the Elderly; Health Information Technology 
Standards and Implementation Specifications'' (the December 2022 
proposed rule).\796\ CMS proposed to amend the final Parts C & D 
Overpayment Rule at Sec. Sec.  422.326(c) and 423.360(c) to remove the 
reference to ``reasonable diligence'' and replace it with language at 
section 1128J(d)(4)(A) that gives the terms ``knowing'' and 
``knowingly'' the same meaning given those terms in the False Claims 
Act at 31 U.S.C. 3729(b)(1)(A).\797\
---------------------------------------------------------------------------

    \794\ UnitedHealthcare Ins. Co. v. Azar, 330 F. Supp. 3d 173, 
191 (D.D.C. 2018), rev'd in part on other grounds sub nom. 
UnitedHealthcare Ins. Co. v. Becerra, 16 F.4th 867 (D.C. Cir. 2021), 
cert. denied, 142 S. Ct. 2851 (2022).
    \795\ UnitedHealthcare, 330 F. Supp. 3d at 190.
    \796\ (87 FR 79452).
    \797\ See UnitedHealthcare, 330 F. Supp. 3d at 191 (finding that 
CMS adopting the False Claims Act standard would be consistent with 
a 2000 agency rule, the FCA, and the Affordable Care Act's reference 
to the False Claims Act).

---------------------------------------------------------------------------

[[Page 98341]]

3. Provisions of Final Regulations: Medicare Advantage Program and Part 
D--Amending the Standard for When an Overpayment Is Identified 
(Sec. Sec.  422.326(c) and 423.360(c))
    In the December 2022 proposed rule, CMS proposed to remove the 
existing standard for when an overpayment is identified in the Medicare 
Advantage and Part D programs and adopt, by reference, the False Claims 
Act definition of ``knowing'' and ``knowingly.'' This section of the 
final rule amends Sec. Sec.  422.326(c) and 423.360(c) to change the 
standard for an ``identified overpayment'' in the Medicare Advantage 
and Part D programs to align with the statutory obligation provided by 
Congress in section 1128J(d)(4)(A) of the Act, which provides that the 
terms ``knowing'' and ``knowingly'' have the meaning given those terms 
in the False Claims Act at 31 U.S.C. 3729(b)(1)(A). Under the proposed 
rule, an MAO or Part D sponsor has identified an overpayment if it has 
actual knowledge of the existence of the overpayment or acts in 
reckless disregard or deliberate ignorance of the overpayment.
    The following is a summary of the comments we received and our 
responses.
    Comment: One commenter supported our proposal to amend the standard 
for identification of an overpayment.
    Response: We appreciate the support.
    Comment: A commenter recommended that CMS follow the plain language 
of the statute and adopt an actual knowledge standard. The commenter 
suggested the following language: ``an MA plan or Part D sponsor has 
`identified' an overpayment once it has determined that the overpayment 
exists.'' They stated that reckless disregard and deliberate ignorance 
go beyond the plain language reading intended by Congress and cited to 
opinions from the U.S. Court of Appeals for the District of Columbia 
and the U.S. District Court for the District of Columbia, as well as to 
legislative history.
    Response: We respectfully disagree with the commenter. Our proposal 
to adopt, by reference, the False Claims Act definition of ``knowing'' 
and ``knowingly,'' that an MAO or Part D sponsor has identified an 
overpayment if it has actual knowledge of the existence of the 
overpayment or acts in reckless disregard or deliberate ignorance of 
the overpayment, comes directly from the statute. Section 
1128J(d)(4)(A) of the Act provides that the terms ``knowing'' and 
``knowingly'' have the meaning given to those terms in the False Claims 
Act. We acknowledge that commenters have stated that the defined terms 
are not used in the statute, but we see nothing in the statute 
indicating that this provision is mere surplusage or that Congress 
intended to create a lower knowledge standard for Medicare overpayments 
than otherwise exists under the False Claims Act. Such an 
interpretation would effectively allow MAOs and Part D sponsors to 
``bury their heads in the sand'' and deliberately ignore or recklessly 
disregard overpayments. As the District Court in UnitedHealthcare 
noted, ``(t)he False Claims Act--which the ACA refers to for 
enforcement, see 42 U.S.C. 1320a-7k(d)(3)--imposes liability for 
erroneous (`false') claims for payment submitted to the government that 
are submitted `knowingly' . . . a term of art defined in the FCA to 
include false information about which a person `has actual knowledge,' 
`acts in deliberate ignorance of the truth or falsity of the 
information,' or `acts in reckless disregard of the truth or falsity of 
the information.' '' \798\
---------------------------------------------------------------------------

    \798\ UnitedHealthcare, 330 F. Supp. 3d at 190; see also id. at 
191 (finding that CMS adopting the False Claims Act standard would 
be consistent with a 2000 agency rule, the FCA, and the Affordable 
Care Act's reference to the False Claims Act).
---------------------------------------------------------------------------

    Comment: Some commenters noted concerns that the new knowledge 
standard for the identification of an overpayment would eliminate the 
6-month investigatory period discussed in the 2016 Parts A & B 
Overpayment Final Rule (81 FR 7654) and that, by failing to comply with 
what they see as a reduced timeframe, they could violate the False 
Claims Act. Some commenters noted that they provide services under 
Medicare Parts A, B, C, and D, and that maintaining a broad array of 
payment rules is complex and requires more than 60-days to ensure 
payment accuracy across various payors. A commenter asked if there is 
an acceptable period of investigation, such as six months, allowed for 
MAOs to quantify the overpayment before they have actually identified 
it.
    Response: We note that unlike the 2016 Parts A and B Overpayment 
Final Rule, the 2014 Parts C & D Overpayment Final Rule did not mention 
an allowance of 180 days for investigation.
    The Parts C & D Final Overpayment Rule applies to MAOs and Part D 
sponsors and provides that the 60-day period is the time period for 
MAOs and Part D sponsors to report and return an identified 
overpayment, after the organization has conducted the activities needed 
to identify that it has received an overpayment. The 60-day requirement 
to report and return overpayments is statutorily required in section 
1128J(d)(2) of the Act.
    Additionally, risk adjusted payment for Medicare Parts C and D 
differs from Fee-For-Service payment in traditional Medicare. Risk 
adjustment payment is based on diagnoses data that MAOs submit to CMS. 
Diagnoses eligible for risk adjustment are those that have been 
documented in the beneficiaries' medical record as the result of a 
face-to-face visit from an acceptable provider type and source, and 
coded using ICD coding guidelines. MAOs submit and delete diagnoses 
from CMS systems (Risk Adjustment Processing System (RAPS) and/or 
Encounter Data Processing System (EDPS)) on an ongoing basis based on 
individual encounters (see Sec.  422.310(d)). Pursuant to Sec.  
422.310(g), under this longstanding process MAOss have from the 
beginning of the data collection period through the final risk 
adjustment data submission deadline, which is a minimum of 13 months, 
to investigate any issues with their data submissions and submit 
corrections.
    CMS recalculates risk scores and adjusts payments through the final 
reconciliation payment process in accordance with Sec.  422.310(g)(2). 
CMS also periodically reruns risk score calculations and adjusts 
payments after it makes final reconciliation payments to MAOs to 
account for instances in which MAOs delete diagnosis data or otherwise 
report overpayments as prescribed by CMS from a period for which the 
deadline for final reconciliation payments has closed (for example, 
when they make ``closed-period deletes'' in RAPS and EDPS).
    Likewise, Part D sponsors report and return Part D overpayments 
related to prescription drug event (PDE) and direct and indirect 
remuneration (DIR) data through the submission of corrected data.\799\ 
PDE/DIR-related overpayments for a given contract year can occur after 
data is due for the annual Part D payment reconciliation for that year. 
Section 423.360(a), Data for the annual Part D payment reconciliation, 
is due within 6 months of the end of the contract year.\800\ CMS 
recoups PDE/DIR-

[[Page 98342]]

related overpayments through the global reopening process described at 
Sec.  423.346(a)(2), which is consistent with the 6-year overpayment 
look-back period described at Sec.  423.360(f).\801\ As a result of 
this process, it is not necessary for a Part D sponsor to calculate the 
amount of the overpayment, as entities are required to do under the 
Medicare Parts A and B overpayment regulation at Sec.  401.305. The 
PDE/DIR-related overpayment reporting and returning process is 
operationally less complex, and therefore, an extensive investigation 
period prior to submitting corrected data is not necessary.
---------------------------------------------------------------------------

    \799\ See HPMS memorandum, Reopening Process and Updates to the 
PDE/DIR-related Overpayment Reporting, April 6, 2028 (available at 
https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/hpms%2520memo_reopen%2520and%2520overpay_04-06-2018_90.pdf).
    \800\ See Sec. Sec.  423.336(c)(1), 423.434(c)(1) and (d)(1).
    \801\ For additional information on reopenings and the 
recoupment of PDE/DIR-related overpayments see Medicare Program; 
Changes to the Medicare Advantage and the Medicare Prescription Drug 
Benefit Program for Contract Year 2024-Remaining Provisions and 
Contract Year 2025 Policy and Technical Changes to the Medicare 
Advantage Program, Medicare Prescription Drug Benefit Program, 
Medicare Cost Plan Program, and Programs of All-Inclusive Care for 
the Elderly (PACE), 89 FR 30448 (April 23, 2024).
---------------------------------------------------------------------------

    Comment: A commenter asked if an MAO receives a recoupment payment 
from a provider, does that equate to ``knowing'' under the new 
standard, and would the MAO then need to report and return this to CMS 
since they ``know'' of an overpayment.
    Response: We appreciate the concern for the appropriate repayment 
of overpayments. The payment system for MAOs is distinct from that for 
Part A and Part B. Rather than payments being based on services 
provided, payments to MAOs are based on a capitated rate that is risk-
adjusted to reflect each enrolled beneficiary's demographic and health 
characteristics. Due to the nature of how MAOs are paid, recouped 
payments an MAO receives from a provider do not necessarily equate to 
that MAO having been overpaid by CMS. However, as a condition of 
payment, MAOs are obligated to submit risk adjustment data that is 
accurate, complete, and truthful based on their best knowledge, 
information, and belief as part of the annual risk adjustment data 
certification (Sec.  422.504(l)). MAOs are thereby required to delete 
any risk adjustment data submitted to CMS that they know to be 
incorrect.
    We received a number of comments to the proposal made in the Parts 
C & D Overpayment provision in the December 2022 proposed rule that 
were out of scope. While these comments are out of scope for this final 
rule because they are not about the specific proposal that the standard 
for identification of an overpayment be amended, we appreciate the 
feedback.
    After consideration of the public comments received, we are 
finalizing the provisions at Sec. Sec.  422.326(c), 423.360(c), as 
proposed. We do not expect the proposed change to result in additional 
costs or savings and are not scoring this provision in the Regulatory 
Impact Analysis section of this rule. Further, as we are not imposing 
any new reporting requirements, we do not believe that our proposal 
will result in additional paperwork burden and have not incorporated a 
burden increase in the Collection of Information section.

IV. Updates to the Quality Payment Program

A. CY 2025 Modifications to the Quality Payment Program

1. Executive Summary
a. Overview
    This section of this final rule outlines changes to the Quality 
Payment Program starting January 1, 2025, except as otherwise noted for 
specific provisions. We continue to move the Quality Payment Program 
forward, including focusing more on alignment and new options for 
clinicians to participate in a more meaningful way, to achieve 
continuous improvement in the quality of health care services provided 
to Medicare beneficiaries and other patients through the Quality 
Payment Program's Merit-based Incentive Payment System (MIPS) and 
Advanced Alternative Payment Models (APMs) for the CY 2025 performance 
period/2027 MIPS payment year.
    Authorized by the Medicare Access and CHIP Reauthorization Act of 
2015 (MACRA) (Pub. L. 114-10, April 16, 2015), the Quality Payment 
Program is a value-based payment program, by which the Medicare program 
rewards clinicians who provide high-value, high-quality care to their 
patients in a cost-efficient manner. There are two ways for clinicians 
who provide services under the Medicare program to participate in the 
Quality Payment Program: MIPS and Advanced APMs. The statutory 
requirements for the Quality Payment Program are set forth in section 
1848(q) and (r) of the Act for MIPS and section 1833(z) of the Act for 
Advanced APMs.
    For the MIPS participation track, MIPS eligible clinicians (defined 
at Sec.  414.1305) \802\ are subject to a MIPS payment adjustment 
(positive, negative, or neutral) based on their performance in four 
performance categories: cost, quality, improvement activities, and 
Promoting Interoperability. We assess each MIPS eligible clinician's 
total performance according to established performance standards with 
respect to the applicable measures and activities specified in each of 
these four performance categories during a performance period to 
compute a final composite performance score (a ``final score'' as 
defined at Sec.  414.1305). In calculating the final score, we must 
apply different weights for the four performance categories, subject to 
certain exceptions, as set forth in section 1848(q)(5) of the Act and 
at Sec.  414.1380. Unless we assign a different scoring weight under 
these exceptions, for CY 2025 performance period/2027 MIPS payment 
year, the scoring weights are as follows: 30 percent for the quality 
performance category; 30 percent for the cost performance category; 15 
percent for the improvement activities performance category; and 25 
percent for the Promoting Interoperability performance category.
---------------------------------------------------------------------------

    \802\ We note that the term MIPS eligible clinician is defined 
at Sec.  414.1305 as including a group of at least one MIPS eligible 
clinician billing under a single tax identification number. We refer 
readers to our policies governing group reporting and scoring under 
MIPS as set forth at Sec.  414.1310(e).
---------------------------------------------------------------------------

    Once calculated, each MIPS eligible clinician's final score is 
compared to the performance threshold established in prior rulemaking 
for that performance period to calculate the MIPS payment adjustment 
factor as specified in section 1848(q)(6) of the Act, such that the 
MIPS eligible clinician will receive in the applicable MIPS payment 
year: (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 a MIPS eligible clinician, CMS accounts 
for scaling factor and budget neutrality requirements, as further 
specified in section 1848(q)(6) of the Act. CMS then applies the MIPS 
payment adjustment factor to amounts otherwise paid under Part B with 
respect to covered professional services for the MIPS eligible 
clinician for the applicable MIPS payment year such that their payments 
for such covered professional services are increased, decreased, or not 
adjusted based on the MIPS eligible clinician's final score relative to 
the performance threshold.
    Section 1848(q) of the Act sets forth other requirements applicable 
to MIPS, including opportunities for feedback and targeted review and 
public reporting of MIPS eligible clinicians' performance. Section 
1848(r) of the Act sets forth more specific requirements for 
development of measures for the cost performance category under MIPS.

[[Page 98343]]

    For the Advanced APM track, if an eligible clinician participates 
in an Advanced APM and achieves Qualifying APM Participant (QP) or 
Partial QP status, they are excluded from the MIPS reporting 
requirements and payment adjustment (though eligible clinicians who are 
Partial QPs may elect to be subject to the MIPS reporting requirements 
and payment adjustment). Eligible clinicians who are QPs for the CY 
2024 performance year receive a 1.88 percent APM Incentive Payment in 
the 2026 payment year. Beginning with the CY 2024 performance year 
(payment year 2026), QPs will also receive a higher PFS payment rate 
(calculated using the differentially higher ``qualifying APM conversion 
factor'') than non-QPs. QPs will continue to be excluded from MIPS 
reporting and payment adjustments for the applicable year.
    Participation in the Quality Payment Program's MIPS track (defined 
as MIPS eligible clinicians with a final score greater than 0, 
including both those who submitted data and those who did not submit 
data) increased slightly to 98.98 percent in the seventh year (CY 2023 
performance period/2025 MIPS payment year) with 679,634 MIPS eligible 
clinicians receiving a final score other than zero out of 686,645 MIPS 
total eligible clinicians. In the CY 2022 performance period/2024 MIPS 
payment year, 97.59 percent of the 624,209 MIPS eligible clinicians 
received a final score other than zero. Therefore, participation rates 
in MIPS increased slightly between the CY 2022 and CY 2023 performance 
periods.
    In addition, 76.81 percent of MIPS eligible clinicians received a 
positive payment adjustment for the 2025 MIPS payment year based on 
their performance in the CY 2023 performance period. Please note that 
results for the CY 2023 performance period/2025 MIPS payment year 
described herein are subject to change as a result of the targeted 
review process, which began on August 12, 2024, and concluded on 
October 11, 2024. For more information on the targeted review process 
for the CY 2023 performance period/2025 MIPS payment year, please see 
our targeted review guide at https://qpp-cm-prod-content.s3.amazonaws.com/uploads/2961/2023-Targeted-Review-Guide.pdf.
    Regarding performance in Advanced APMs, for the CY 2023 QP 
Performance Period, 508,876 eligible clinicians (TIN-NPIs) earned 
Qualifying APM Participant (QP) status while another 1,521 eligible 
clinicians earned partial QP status.
    We plan to continue developing policies for the Quality Payment 
Program that more effectively reward high-quality of care for patients 
and increase opportunities for Advanced APM participation. We are 
moving forward with implementing MIPS Value Pathways (MVPs) to allow 
for a more cohesive participation experience by connecting activities 
and measures from the four MIPS performance categories that are 
relevant to a specialty, medical condition, or a particular population.
    We plan to continue developing policies for the Quality Payment 
Program that more effectively reward high-quality of care for patients 
and increase opportunities for Advanced APM participation. We are 
continuing to develop new MIPS Value Pathways (MVPs) to allow for a 
more cohesive participation experience by connecting activities and 
measures from the four MIPS performance categories that are relevant to 
a specialty, medical condition, or a particular population.
    As we move into the eighth year of the Quality Payment Program, we 
will be implementing the updates set forth in this section of this 
final rule, encouraging continued improvement in clinicians' 
performance with each performance year and driving improved quality of 
health care through payment policy.
b. Summary of Major Proposals
(1) Transforming the Quality Payment Program
    Our National Quality Strategy (https://www.cms.gov/medicare/quality/meaningful-measures-initiative/cms-quality-strategy) addresses 
the urgent need to advance towards a more equitable, safe, and 
outcomes-based health care system for all individuals. We have a 
corresponding cohesive value-based care strategy for Medicare along 
three main pillars: Alignment, Growth, and Equity.\803\ We continue to 
focus on transforming health care delivery \804\ and our 2030 goal to 
have all traditional Medicare beneficiaries in an accountable care 
relationship with their health care provider. In pursuit of this 
vision, we are driving higher value care, supporting Advanced APM 
participation, increasing alignment to reduce burden, and promoting 
health equity. We are exploring new care delivery and payment models; 
for example, we are considering an ambulatory care model that would 
connect payment to performance for specialists in the ambulatory 
setting to increase the number of specialists who deliver longitudinal 
care in an accountable manner and to support greater integration 
between specialty and primary care. This potential model would utilize 
MVPs as a foundation for assessing specialist performance (refer to 
section III.J of this final rule). We are finalizing as proposed in 
section II.G.2 of this final rule to make payment for advanced primary 
care management (APCM) services furnished by a physician or other 
qualified health care professional who is responsible for all primary 
care (for example, physicians and non-physician practitioners, 
including nurse practitioners, physician assistants, certified nurse-
midwives and clinical nurse specialists), and serve as the continuing 
focal point for all needed health care services during a calendar 
month. This proposed payment would incorporate several specific, 
existing care management and communication technology-based services 
into a bundle and include a performance measurements requirement that 
could be met by reporting the Value in Primary Care MVP by clinicians 
billing for APCM services. We are finalizing as proposed that billing 
practitioners who are not MIPS eligible clinicians (as defined at Sec.  
414.1305) will not have to report the MVP in order to furnish and bill 
for APCM services.
---------------------------------------------------------------------------

    \803\ Update On The Medicare Value-Based Care Strategy: 
Alignment, Growth, Equity, Health Affairs Forefront, March 14, 2024. 
https://www.healthaffairs.org/content/forefront/update-medicare-value-based-care-strategy-alignment-growth-equity.
    \804\ Quality in Motion, Acting on the CMS National Quality 
Strategy, April 2024. https://www.cms.gov/files/document/quality-motion-cms-national-quality-strategy.pdf.
---------------------------------------------------------------------------

    Separately, we continue to implement MVPs and subgroup reporting 
option to allow clinicians to report on a cohesive set of measures and 
activities that more directly reflect their clinical practice. MVPs 
allow for more clinically relevant performance measurement, engage more 
specialists in performance measurement, and help reduce barriers to APM 
participation. While traditional MIPS continues to be a reporting 
option, we intend to move to full MVP adoption and to sunset 
traditional MIPS in the future. That future date has not been 
determined and will be established through the official notice and 
comment rulemaking process.
(a) MIPS Value Pathways Development and Maintenance
    In an effort to promote high-quality, safe, and equitable care and 
to implement the vision outlined in the CMS National Quality Strategy, 
we are finalizing as proposed six new MVPs around the following topics: 
Complete Ophthalmologic Care, Dermatological Care, Gastroenterology 
Care, Optimal

[[Page 98344]]

Care for Patients with Urologic Conditions, Pulmonology Care and 
Surgical Care. Complete Ophthalmologic Care, Dermatological Care, 
Gastroenterology Care, Optimal Care for Patients with Urologic 
Conditions, Pulmonology Care, and Surgical Care.
    We are also finalizing our proposal to modify the MVP maintenance 
webinar process as proposed, to provide more flexibility on how we 
communicate submitted maintenance recommendations prior to proposing 
them formally in rulemaking (refer to section IV.A.4.a of this final 
rule).
    Lastly, we are finalizing as proposed MVP maintenance updates to 
our MVP inventory that are in alignment with the MVP development 
criteria, and in consideration of the feedback from interested parties 
we have received through the maintenance process.
(b) MVP Requirements and Scoring
    We are finalizing our proposal to update the scoring of population 
health measures in MVPs by using the highest score of all available 
population health measures, and we are finalizing our proposal to 
remove the requirement for MVP Participants to select a population 
health measure at the time of MVP registration. We are also finalizing 
our proposal to modify the MVP scoring policies at Sec.  
414.1365(d)(3)(ii) with respect to the cost performance category to 
refer to, and therefore align with, our methodology for scoring cost 
measures at Sec.  414.1380(b)(2) under our traditional MIPS policies. 
Additionally, we are finalizing our proposal to align MVP scoring with 
traditional MIPS policies by removing references to high- and medium-
weighted improvement activities in MVPs. We are finalizing our proposal 
to update MVP scoring to assign 40 points for each improvement activity 
to provide full credit for the improvement activities performance 
category for MVP Participants who report one improvement activity. For 
the MVP Promoting Interoperability performance category, we are 
finalizing our proposal to modify our policy at Sec.  
414.1365(c)(4)(i)(A), requiring a subgroup to submit the affiliated 
group's data for this performance category, by removing references to 
specific performance periods/MIPS payment years, thereby permitting 
subgroups to report data for this category in this manner for the CY 
2025 performance period/2027 MIPS payment year and beyond.
(c) APM Performance Pathway
    We are finalizing our proposal to create within the APM Performance 
Pathway (APP) the APP Plus quality measure set beginning with the CY 
2025 performance period/2027 MIPS payment year to align with the 
Universal Foundation measures under the CMS National Quality Strategy. 
We are not modifying the existing APP quality measure set, which 
already includes five of the ten Universal Foundation measures. 
Instead, we are establishing the APP Plus quality measure set as a 
second measure set distinct from the existing APP quality measure set. 
The APP Plus quality measure set will be an optional measure set that 
will incrementally add the six measures from the existing APP quality 
measure set and the remaining five Universal Foundation measures not 
already included in the APP quality measure set beginning with the CY 
2025 performance period/2027 MIPS payment year. Under this proposal, a 
MIPS eligible clinician, group, or APM Entity that reports the APP may 
choose to report either the APP quality measure set or the APP Plus 
quality measure set.
(d) Data Submission for the Performance Categories
    We are finalizing our proposal to adopt minimum criteria for a 
qualifying data submission for a MIPS performance period for the 
quality, improvement activities, and Promoting Interoperability 
performance categories, which we proposed to codify at Sec.  
414.1325(a)(1)(i) through (iii). Specifically, we are finalizing our 
proposals that a qualifying data submission must include numerator and 
denominator data for at least one MIPS quality measure from the final 
list of MIPS quality measures for the quality performance category and 
include a response of ``yes'' for at least one activity in the MIPS 
improvement activities Inventory for the improvement activities 
performance category. For the Promoting Interoperability performance 
category, we are finalizing our proposal that a qualifying data 
submission must include: (1) performance data, including any claim of 
an applicable exclusion, for the measures in each objective, as 
specified by CMS; (2) required attestation statements, as specified by 
CMS; (3) CMS EHR Certification ID (CEHRT ID) from the Certified Health 
IT Product List (CHPL); and (4) the start date and end date for the 
applicable performance period as set forth at Sec.  414.1320.
    We are also finalizing our proposal to codify our existing policies 
governing our treatment of multiple data submissions received for the 
quality and improvement activities performance categories at Sec.  
414.1325(f)(1). We are also finalizing our proposal to modify our 
policy governing our treatment of multiple data submissions received 
for the Promoting Interoperability performance category, which we 
proposed to codify at Sec.  414.1325(f)(2). Specifically, for the 
quality and improvement activities performance categories, we are 
finalizing our proposal that for multiple data submissions received 
from submitters in multiple organizations, we will calculate a score 
for each submission received and assign the highest of the scores. For 
multiple data submissions received from a submitter in the same 
organization, we will score the most recent submission. For the 
Promoting Interoperability performance category, we are finalizing our 
proposal to modify our policy so that, for multiple data submissions 
received, we will calculate a score for each data submission received 
and assign the highest of the scores.
(e) MIPS Performance Category Measures and Activities
(i) Quality Performance Category
    We are finalizing, the proposal to establish the data submission 
criteria for the Alternative Payment Model (APM) Performance Pathway 
(APP) quality measure set; finalizing, as proposed, our proposal to 
maintain the data completeness criteria threshold to at least 75 
percent for the CY 2027 and CY 2028 performance periods/2029 and 2030 
MIPS payment years; finalizing, with modification, our proposal to 
establish a measure set inventory of 195 (instead of 196 as proposed) 
MIPS quality measures, of which 192 (instead of 193 as proposed) are 
available in traditional MIPS and 3 are available only for utilization 
in MVPs; and codifying previously established criteria pertaining to 
the removal of MIPS quality measures.
(ii) Cost Performance Category
    We are finalizing our proposal to add 6 new episode-based measures 
to the cost performance category beginning with the CY 2025 performance 
period/2027 MIPS payment year, as proposed: Chronic Kidney Disease, 
End-Stage Renal Disease, Kidney Transplant Management, Prostate Cancer, 
Rheumatoid Arthritis, and Respiratory Infection Hospitalization. We are 
also finalizing as proposed modifications to 2 existing episode-based 
cost measures so that their specifications reflect re-evaluated 
versions: Cataract Removal with Intraocular Lens (IOL) Implantation 
(currently titled Routine Cataract Removal with IOL

[[Page 98345]]

Implantation) and Inpatient (IP) Percutaneous Coronary Intervention 
(PCI) (currently titled ST-Elevation Myocardial Infarction (STEMI) 
PCI). We are finalizing our proposal to adopt a 20-episode case minimum 
for each of the six new episode-based cost measures, as proposed. We 
are also finalizing our proposal to maintain the case minima for the 2 
existing measures as proposed, which are a 20-episode case minimum for 
the IP PCI measure and a 10-episode case minimum for the Cataract 
Removal with IOL Implantation measure. Additionally, we are finalizing 
our proposal to update the operational list of care episode and patient 
condition groups and codes to reflect these new and modified measures 
that we proposed. Lastly, we are finalizing our proposal to adopt 
criteria to specify objective bases for the removal of any cost 
measures from the MIPS cost performance category, which we are also 
codifying at Sec.  414.1350(e), as proposed.
(iii) Improvement Activities Performance Category
    As part of our regular maintenance of the improvement activities 
Inventory, we are finalizing our proposals to add two new, modify two 
existing, and remove four existing improvement activities for the CY 
2025 performance period/2027 MIPS payment year. We are finalizing a 
delayed implementation of the modification of one existing improvement 
activity and the removal of four existing improvement activities until 
the CY 2026 performance period/2028 MIPS payment year. The new 
activities help fill gaps we have identified in the Inventory while the 
modified and removed activities will ensure that it includes only the 
most meaningful activities that have a clear path to clinical practice 
improvement. In addition, we are finalizing our proposals for two 
changes to the traditional MIPS improvement activities reporting and 
scoring policies for the CY 2025 performance period/2027 MIPS payment 
year: to eliminate the weighting of activities and to reduce the number 
of activities to which clinicians are required to attest to achieve a 
score in the improvement activities performance category. Lastly, we 
are finalizing our proposal to codify seven improvement activity 
removal factors to establish criteria used to identify activities for 
potential removal or modification.
(iv) Promoting Interoperability Performance Category
    We do not have any proposals for the Promoting Interoperability 
performance category.
(f) MIPS Final Scoring Methodology
(i) Scoring the Quality Performance Category
    We are finalizing with modifications our proposal to implement 
defined topped out benchmarks for topped out measures in specialty sets 
affected by limited measure choice and the list of measures that would 
use the defined topped out measure benchmark for CY 2025 performance 
period/2027 MIPS payment year. We are updating the defined topped out 
measure benchmark to include all deciles from 1 to 10 measure 
achievement points. We are finalizing our proposal to apply a Complex 
Organization Adjustment for virtual groups and APM Entities (including 
SSP ACOs) reporting eCQMs. We are finalizing our proposal to score 
Medicare CQMs using flat benchmarks for their first 2 years in the 
program consistent with the Shared Saving Program's policies.
(ii) Scoring the Cost Performance Category
    We are finalizing our proposal to modify our methodology for 
scoring measures for the cost performance category beginning with the 
CY 2024 performance period/2026 MIPS payment year. Additionally, we are 
finalizing our proposal to adopt a new cost measure exclusion policy 
beginning with the CY 2024 performance period/2026 MIPS payment year.
(g) MIPS Payment Adjustments
    We are finalizing our proposal to establish the mean as the 
methodology for determining the performance threshold for the CY 2025 
performance period/2027 MIPS payment year through the CY 2027 
performance period/2029 MIPS payment year. To determine the performance 
threshold for the CY 2025 performance period/2027 MIPS payment year, we 
are finalizing our proposal that we will use the mean of the final 
scores from the CY 2017 performance period/2019 MIPS payment year. 
Based on the mean final score from that prior period, we are finalizing 
our proposal to establish a performance threshold of 75 points for the 
CY 2025 performance period/2027 MIPS payment year.
(h) Calculating the Final Score
    We are finalizing our proposal to adopt a new reweighting policy at 
Sec.  414.1380(c)(2)(i)(A)(10) and (c)(2)(i)(C)(12), as proposed. 
Specifically, we are finalizing that, beginning with the CY 2024 
performance period/2026 MIPS payment year, we may reweight one or more 
of the performance categories (specifically, quality, improvement 
activities, or Promoting Interoperability) where we determine, based on 
information submitted to us on or before November 1st of the year 
preceding the relevant MIPS payment year, that data for a MIPS eligible 
clinician are inaccessible or unable to be submitted due to 
circumstances outside of the control of the clinician because the MIPS 
eligible clinician delegated submission of the data to their third 
party intermediary, evidenced by a written agreement between the MIPS 
eligible clinician and third party intermediary, and the third party 
intermediary did not submit the data for the performance category(ies) 
on behalf of the MIPS eligible clinician in accordance with applicable 
deadlines. We note that, to determine whether to apply reweighting to 
the affected performance category(ies), we will consider: whether the 
MIPS eligible clinician knew or had reason to know of the issue with 
its third party intermediary's submission of the clinician's data for 
the performance category(ies); whether the MIPS eligible clinician took 
reasonable efforts to correct the issue; and whether the issue between 
the MIPS eligible clinician and their third party intermediary caused 
no data to be submitted for the performance category(ies) in accordance 
with applicable deadlines.
(i) Third Party Intermediaries
    We are finalizing our proposal to add a requirement that CMS-
approved survey vendors must provide information on the cost of their 
services beginning with the CY 2026 performance period/2028 MIPS 
payment year. This requirement will only be applicable to the cost of 
services for the CAHPS for MIPS Survey measure. The CAHPS for MIPS 
Survey Vendor Participation Form and the CAHPS for MIPS Survey Minimum 
Business Requirements in the QPP Resource Library will be updated to 
detail the required survey vendor cost information.
(2) Advanced APM Proposals
(a) Overview of the APM Incentive
    An eligible clinician who meet or exceed threshold levels of 
participation in one or more Advanced APMs to become a Qualifying APM 
Participant

[[Page 98346]]

(QP) (or partial QP) is excluded from MIPS reporting requirements and 
payment adjustments. We assess an eligible clinician's level of 
participation in Advanced APMs based on whether either the payment 
amount or patient count Threshold Score as provided at Sec.  414.1425 
meets or exceeds the threshold percentages specified at Sec.  414.1430. 
Threshold scores are calculated using the ratio of attributed 
beneficiaries to attribution-eligible beneficiaries. A beneficiary is 
considered attribution-eligible and included in the calculation of 
threshold scores if they meet the six criteria specified in the 
definition of ``attribution-eligible beneficiary'' at Sec.  414.1305. 
We proposed to modify the sixth criterion under the definition of 
``attribution-eligible beneficiary.'' Specifically, we proposed to 
include as attribution-eligible any beneficiary who has a minimum of 
one claim for covered professional service furnished by an eligible 
clinician for purposes of making QP determinations. We also proposed to 
amend Sec.  414.1430 to reflect the statutory QP and Partial QP 
threshold percentages for both the payment amount and patient count 
methods under the Medicare Option and the All-Payer Option with respect 
to payment year 2026 (performance year 2024) in accordance with 
amendments made by the CAA, 2024. Relatedly, we also proposed to amend 
Sec.  414.1450 to reflect the statutory APM Incentive Payment amount 
for the 2026 payment year (performance year 2024) of 1.88 percent of 
the eligible clinician's estimated aggregate payments for covered 
professional services in accordance with amendments made by the CAA, 
2024.
2. Definitions
    At Sec.  414.1305, we are not finalizing our proposal to revise the 
definition of the following term:
     Attribution-eligible beneficiary
    This term and definition are discussed in detail in section 
IV.A.4.k. of this final rule.
    We solicited comments on this proposal. Our response to comments 
can be found in detail in the section IV.A.4.k.(2) of this final rule.
    We are finalizing the proposed changes to the APM Incentive Payment 
as proposed.
3. Transforming the Quality Payment Program
    Medicare plays a lead role in transitioning the health care system 
away from fee-for-service payment, which incentivizes the quantity of 
care, toward value-based payment, which incentivizes higher-quality 
care and smarter spending. We continue to focus on transforming health 
care delivery and our 2030 goal to have all traditional Medicare 
beneficiaries in an accountable care relationship with their health 
care provider. We also continue to pursue driving higher value care, 
supporting Advanced APM participation, increasing alignment to reduce 
burden, and promoting health equity.
    We intend to continue our efforts to align the Quality Payment 
Program with the value-based strategy Alignment, Growth and Equity 
pillars,\805\ the National Quality Strategy,806 807 808 and 
broader CMS initiatives. We also intend to transform MIPS and obtain 
more meaningful comparable performance data, drive higher value care 
through MVPs and to provide as much transparency as possible about the 
timing for sunsetting traditional MIPS (86 FR 39356). As stated 
previously (86 FR 65394 through 65396), we envision a full transition 
to MVP reporting to support movement towards value-based payment.
---------------------------------------------------------------------------

    \805\ Update On The Medicare Value-Based Care Strategy: 
Alignment, Growth, Equity, Health Affairs Forefront, March 14, 2024. 
https://www.healthaffairs.org/content/forefront/update-medicare-value-based-care-strategy-alignment-growth-equity.
    \806\ CMS National Quality Strategy. (Centers for Medicare & 
Medicaid Services, April 2022). https://www.cms.gov/files/document/cms-national-quality-strategy-fact-sheet-april-2022.pdf.
    \807\ The CMS National Quality Strategy: A Person-Centered 
Approach to Improving Quality. Centers for Medicare & Medicaid 
Services, June 2022). The CMS National Quality Strategy: A Person-
Centered Approach to Improving Quality [verbar] CMS (https://www.cms.gov/blog/cms-national-quality-strategy-person-centered-approach-improving-quality#_ftn4).
    \808\ Quality in Motion, Acting on the CMS National Quality 
Strategy, April 2024. https://www.cms.gov/files/document/quality-motion-cms-national-quality-strategy.pdf.
---------------------------------------------------------------------------

    In the CY 2025 PFS proposed rule (89 FR 62010 through 62016), we 
addressed how we can achieve full MVP adoption and subgroup 
participation as we move toward the sunsetting of traditional MIPS and 
advancing the three pillars and the National Quality Strategy. 
Specifically, in a request for information (RFI), we solicited feedback 
on MIPS eligible clinicians' readiness to report MVPs, how we should 
ensure there are applicable MVPs for all MIPS eligible clinicians, and 
what guidance/parameters are needed for multispecialty groups to place 
MIPS eligible clinicians into subgroups for reporting an MVP relevant 
to the scope of care provided (89 FR 62016). Please note, this was an 
RFI only.
    We received many comments on this RFI and we thank commenters for 
their responses. Although we will not be addressing in this final rule 
the comments received in response to this RFI, we value the input 
received and will take the comments into consideration to help us 
consider potential future policies for MVPs for MIPS. We will consider 
the feedback received for future rulemaking.
4. QPP Reporting and Data Submission
a. CY 2025 MVP Development and Maintenance
(1) Development of New MVPs
    In the CY 2023 PFS final rule (87 FR 70035 through 70037), we 
finalized modifications to the MVP development process to broaden 
opportunities for the general public to provide feedback on new 
candidate MVPs prior to the notice and comment rulemaking process. We 
refer readers to the Quality Payment Program website to review the 
public feedback we received for each 2025 MVP candidate (https://qpp.cms.gov/mips/candidate-feedback).
    Through our development processes for new MVPs (85 FR 84849 through 
84856, 87 FR 70035 through 70037), we aim to gradually develop new MVPs 
that are relevant and meaningful for MIPS eligible clinicians. We 
proposed the inclusion of six new MVPs (89 FR 62582 through 62606):
     Complete Ophthalmologic Care;
     Dermatological Care;
     Gastroenterology Care;
     Optimal Care for Patients with Urologic Conditions;
     Pulmonology Care; and
     Surgical Care.
    With the proposed addition of the 6 new MVPs, we estimated 
approximately 80 percent of MIPS eligible clinicians will have 
applicable MVPs available for reporting. We are finalizing all six new 
MVPs, three as proposed and three with modifications. We refer readers 
to Appendix 3: MVP Inventory, of this final rule for discussion of the 
proposed new MVPs, the public comments received, and our responses.
    Although our intended goal has been to offer MVPs for all 
specialties and subspecialties during the transition from traditional 
MIPS to full MVP implementation (84 FR 40732 through 40740), we 
acknowledge our existing portfolio of quality and cost measures may not 
be applicable to all specialties and subspecialties. For quality 
measures, while most specialties and subspecialties can report on 
broadly applicable quality measures to meet the reporting requirements 
for the quality performance category within an MVP, some specialties 
and subspecialties do not have sufficient robust quality measures that 
are specific to their scope

[[Page 98347]]

of care. Thus, we continue to explore options for overcoming challenges 
to develop MVPs for those specialties and subspecialties with limited 
quality measures.
    For cost measures, while most specialties have at least one 
applicable episode-based cost measure or population-based cost measure, 
these measures may not encompass the full array of care that could be 
covered by a given specialty and, in some instances, some specialties 
and subspecialties may not have an applicable cost measure. For 
example, the following specialties have limited cost measures available 
and applicable based on the current MIPS cost measure inventory:
     Diagnostic Radiology;
     Interventional Radiology;
     Optometry;
     Pathology;
     Radiation Oncology; and
     Speech Language Pathology.
    Additionally, some specialties have one or more applicable cost 
measures, but subspecialists may not be captured under these measures. 
In the case of the Melanoma Resection measure, it applies to individual 
MIPS eligible clinicians, groups, and subgroups that perform a 
sufficient number of melanoma excision procedures to meet the measure's 
case minimum. Although this measure is applicable to many 
dermatologists, whether a dermatologist is scored on this measure 
depends on multiple factors, including whether they submit claims on, 
and are attributed a sufficient number of qualifying melanoma excision 
procedures (minimum of 10 cases as specified under Sec.  
414.1350(c)(4)) to receive a score on this cost measure as set forth in 
Sec.  414.1380(b)(2). While there are existing policies to reweight the 
cost performance category for individual, groups, and subgroups of MIPS 
eligible clinicians that cannot be scored on cost measures in 
accordance with Sec.  414.1380(b)(2), an MVP cannot be developed for a 
specialty or subspecialty if there is not at least one applicable cost 
measure, as finalized in the CY 2021 PFS final rule (85 FR 84472). The 
intent of MVPs is to assess MIPS eligible clinicians, groups, and 
subgroups across all performance categories, and additional cost 
measures would support this intent.
    We use prioritization criteria that we established in the CY 2022 
PFS final rule (86 FR 65456) to determine which cost measures to 
develop:
     Clinical coherence of measure concept (to ensure valid 
comparisons across clinicians).
     Impact and importance to MIPS (including cost coverage, 
clinician coverage, and patient coverage).
     Opportunity for performance improvement.
     Alignment with quality measures and improvement activities 
to ensure meaningful assessments of value.
    In the CY 2022 PFS final rule (86 FR 65457), we also established 
the following standards for cost measure construction:
     Measures must assign services that accurately capture the 
role of attributed clinicians.
     Measures must have clear, ex ante attribution to 
clinicians.
     Measures must be based on episode definitions that have 
clinical face validity and are consistent with practice standards.
     Measures' construction methodology must be readily 
understandable to clinicians.
     Measures must hold clinicians accountable for only the 
costs they can reasonably influence.
     Measures must convey clear information on how clinicians 
can alter their practice to improve measured performance.
     Measures must demonstrate variation to help distinguish 
quality of care across individual clinicians.
     Measure specifications must allow for consistent 
calculation and reproducibility using Medicare claims data.
    As of the CY 2024 performance period/2026 MIPS payment year, we 
have developed and implemented 29 MIPS cost measures, which reflect the 
prioritization criteria and input from interested parties about 
potential clinical topics, measure scope, clinically related services, 
and potential challenges or barriers to measurement. This is a 
substantial achievement in building out the cost measure portfolio 
since MIPS began with only two population-based cost measures, the 
Total Per Capita Cost (TPCC) measure and the Medicare Spending Per 
Beneficiary (MSPB) measure.
    However, there are still MIPS eligible clinicians who do not have 
cost measures that apply to the major aspects of their care practice. 
For example, there are specialties or clinical topics where clinically 
coherent measure concepts have not yet been identified, plus there are 
impacts of cost, clinician, or patient coverage being lower than other 
measure concepts that were prioritized for development. Therefore, we 
continue to encourage interested parties to utilize our established 
pre-rulemaking processes, such as the Call for Measures (https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/overview), to develop and submit candidate quality and cost measures 
relevant to their specialty. Furthermore, we continue to develop MVPs 
based on needs and priorities, as described in the MVP Needs and 
Priorities document (https://qpp-cm-prod-content.s3.amazonaws.com/uploads/1803/MIPS%20Value%20Pathways%20(MVPs)%20Development%20Resources.zip).
    We refer readers to section IV.A.3. of this final rule for a 
discussion of our request for information on Transforming the Quality 
Payment Program, challenges to adopting MVPs, and a potential path 
forward for developing MVPs for MIPS eligible clinicians with limited 
measures.
(2) MVP Maintenance Process
    In the CY 2023 PFS final rule (87 FR 70037), we finalized a 
modification to the annual maintenance process for MVPs previously 
finalized in the CY 2022 PFS final rule (86 FR 65410). We communicated 
that if we identified any potentially feasible and appropriate 
submitted maintenance recommendations, we would host a public facing 
webinar open to interested parties and the general public through which 
they could offer their feedback on the potential maintenance updates we 
have identified.
    Because we have had a low volume of submitted maintenance 
recommendations in past years, we proposed to modify the MVP 
maintenance webinar process to provide us more flexibility in how we 
communicate submitted maintenance recommendations prior to proposing 
them formally in rulemaking. Allowing flexibility in communicating 
recommendations through alternative webinar formats or other public 
communication channels would offer similar opportunities for public 
review and feedback as a live public webinar. For example, in lieu of a 
live webinar, we could choose to communicate submitted maintenance 
recommendations via a pre-recorded webinar, which will encourage 
interested parties to submit their feedback on the submitted 
recommendations in writing by email before maintenance updates are 
formally proposed in rulemaking. It is important to reiterate this 
public webinar process supports our commitment to consider interested 
parties' feedback when determining which maintenance updates are 
appropriate for inclusion in formal notice and comment rulemaking.

[[Page 98348]]

    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: A few commenters supported the proposal to replace the 
live webinar with alternative approaches for the MVP maintenance 
process. The commenters shared their belief that alternative approaches 
could provide additional opportunities for interested parties to offer 
feedback on potential MVPs. One commenter recommended that we retain 
the current length of the public comment period to provide feedback on 
MVP candidates.
    Response: We thank the commenters for their support. We intend to 
retain the 45-day public comment period to provide feedback on MVP 
candidates.
    Comment: One commenter did not support the proposed modification to 
the MVP maintenance webinar process and recommended we continue 
offering the live webinar as it allows interested parties to engage 
directly with us.
    Response: Interested parties will continue to have the opportunity 
to directly engage with us on MVP development. For example, they may 
submit suggestions to our mailbox at [email protected]. These 
suggestions are accepted on a rolling basis throughout the year. 
Recommendations we identify as potentially feasible and appropriate are 
communicated to interested parties and the general public as an 
additional opportunity to provide feedback on potential MVP maintenance 
updates prior to formal notice and comment rulemaking. We will also 
consider providing a live webinar if the feedback warrants discussion 
or dialogue with interested parties.
    After consideration of public comments, we are finalizing our 
proposal as proposed to publicize any potentially feasible and 
appropriate submitted maintenance recommendations through various 
platforms, including but not limited to a live webinar, alternative 
webinar formats, and other public communication channels as we deem 
appropriate. Interested parties may offer their feedback on the 
potential maintenance updates we have identified directly, when the 
selected communication channel permits and otherwise through the 
mailbox noted.
(3) MVP Maintenance Updates to Previously Finalized MVPs
    Between the CY 2022 PFS final rule (86 FR 65998 through 66031) and 
the CY 2023 PFS final rule (87 FR 70037), we finalized 12 MVPs 
available for reporting beginning with the CY 2023 performance period/
2025 MIPS payment year:
     Adopting Best Practices and Promoting Patient Safety 
within Emergency Medicine;
     Advancing Cancer Care;
     Advancing Care for Heart Disease;
     Advancing Rheumatology Patient Care;
     Coordinating Stroke Care to Promote Prevention and 
Cultivate Positive Outcomes;
     Improving Care for Lower Extremity Joint Repair;
     Optimizing Chronic Disease Management;
     Optimal Care for Kidney Health;
     Optimal Care for Neurological Conditions;
     Patient Safety and Support of Positive Experiences with 
Anesthesia;
     Promoting Wellness; and
     Supportive Care for Cognitive-Based Neurological 
Conditions.
    In the CY 2024 PFS final rule (88 FR 79978 through 80047), we 
consolidated Promoting Wellness and Optimizing Chronic Disease 
Management MVPs into a single primary care MVP titled ``Value in 
Primary Care MVP'' as well as finalized five additional MVPs available 
for reporting beginning with the CY 2024 performance period/2026 MIPS 
payment year:
     Focusing on Women's Health;
     Prevention and Treatment of Infectious Disorders Including 
Hepatitis C and Human Immunodeficiency Virus (HIV);
     Quality Care for the Treatment of Ear, Nose, and Throat 
Disorders;
     Quality Care in Mental Health and Substance Use Disorder; 
and
     Rehabilitative Support for Musculoskeletal Care.
    In the CY 2025 PFS proposed rule (89 FR 62607 through 62648), we 
proposed modifications to all 16 MVPs with the addition and removal of 
measures and improvement activities based on the MVP development 
criteria (85 FR 84849 through 84854). Through these modifications, we 
can expand upon the clinical concepts, advance health equity, address 
maintenance requests from the public, and remove measures and 
activities that would either be finalized for removal from their 
respective MIPS Inventory or replaced by more robust measures. In 
addition, through the MVP maintenance process, we proposed to 
consolidate the previously finalized Optimal Care for Patients with 
Episodic Neurological Conditions MVP and the Supportive Care for 
Neurodegenerative Conditions MVP into a single consolidated 
neurological MVP titled Quality Care for Patients with Neurological 
Conditions MVP.
    Comment: One commenter expressed opposition to organizing MVPs at 
the broad specialty level and urged us to propose MVPs that are more 
clinically relevant by focusing on a discrete condition or clinical 
episode, even if they are only provided by a subset of the specialty's 
members or by a particular subspecialty. Alternatively, the commenter 
requested we consider updates to the proposed framework, which would 
continue to allow for broad specialty MVPs, but broken out by sub-
clinical conditions.
    Response: We will address refinements to the general MVP framework 
in future rulemaking, and we will take these suggestions into 
consideration.
    In addition, we received public comments on the proposed 
maintenance updates to previously finalized MVPs. We refer readers to 
Appendix 3: MVP Inventory of this final rule for the proposed 
modifications to the previously finalized MVPs, the public comments 
received, and our responses.
b. MVP Requirements and Scoring
    In the CY 2022 PFS final rule (86 FR 65411 through 65415), we 
finalized policies for MVP reporting requirements, including subgroup 
requirements, which took effect beginning in the CY 2023 performance 
period/2025 MIPS payment year, at Sec.  414.1365(c)(1) through (4). We 
noted that MVP reporting requirements are based on the reporting 
requirements of traditional MIPS but have some differences, such as 
reporting fewer measures, to reduce MVP reporting burden and allow for 
measurement that is more meaningful by requiring clinicians to report 
on measures and activities that comprehensively reflect an episode of 
care or clinical condition (86 FR 65411).
    In the CY 2022 PFS final rule, we finalized policies for MVP 
scoring that took effect beginning in the CY 2023 performance period/
2025 MIPS payment year. We refer readers to 86 FR 65419 through 65427 
for the details of those finalized policies. We previously finalized at 
Sec.  414.1365(d)(2) that, unless otherwise indicated in Sec.  
414.1365(d), the performance standards described at Sec.  
414.1380(a)(1)(i) through (iv) apply to the measures and activities 
included in the MVP (86 FR 65419 through 65421). We noted that in 
general, we have adopted the scoring policies from traditional MIPS for 
MVP Participants unless there is a compelling reason to adopt a 
different policy to further the goals of the MVP framework (86 FR 
65419). In the CY 2025 PFS proposed rule (89 FR 62018 through 62021), 
we

[[Page 98349]]

proposed to update the registration process and scoring policies for 
population health measures in the quality performance category, clarify 
the alignment between scoring cost measures in MVPs and traditional 
MIPS, update requirements and scoring policies for improvement 
activities in the improvement activities performance category, and 
update the requirements for subgroup reporting in the Promoting 
Interoperability performance category.
    We refer readers to section IV.A.4.d. of this final rule for 
policies on data submission requirements; section IV.A.4.e.(1)(c)(i) of 
this final rule for policies on the data completeness threshold; 
section IV.A.4.f.(1)(b) of this final rule for policies on scoring of 
topped out measures, and scoring virtual groups and APM Entities 
(including SSP ACOs) in the quality performance category; section 
IV.A.4.f.(1)(d)(ii)(B) of this final rule for benchmarking policies for 
scoring the cost performance category; section IV.A.4.e.(3)(b)(iv) of 
this final rule for policies for requirements and scoring that remove 
medium- and high-weighting from improvement activities in the 
improvement activities performance category; and section IV.A.4.e.(4) 
of this final rule for current requirements and the Request for 
Information (RFI) for the Promoting Interoperability performance 
category.
(1) Quality Performance Category in MVPs
(a) Background on Population Health Administrative Claims-Based 
Measures
    In the CY 2021 PFS final rule, we discussed the inclusion of 
population health measures as a part of the foundational layer of MVPs, 
to improve patient outcomes, reduce reporting burden and costs, and 
better align with clinician quality improvement efforts (85 FR 84856 
and 84857). In the CY 2022 PFS final rule we defined a population 
health measure as a quality measure that indicates the quality of a 
population or cohort's overall health and well-being, such as, access 
to care, clinical outcomes, coordination of care and community 
services, health behaviors, preventive care and screening, health 
equity, or utilization of health services (86 FR 65408 and 65409). We 
also discussed in the CY 2022 PFS final rule the importance of 
currently adopted population health measures, noting that they capture 
outcomes important to patients and thus provide meaningful information 
to clinicians so they can improve their practice, and discussed the use 
of population health measures as the foundational layer in MVPs to 
ensure that important areas of measurement are reflected within all 
MVPs (86 FR 65408).
    We finalized in the CY 2022 PFS final rule (86 FR 65414) at Sec.  
414.1365(c)(4)(ii) that an MVP Participant is scored on one population 
health measure in accordance with Sec.  414.1365(d)(1). Since the MVP 
population health measures are administrative claims-based, they do not 
require data submission from clinicians and do not contribute to 
reporting burden. To track which population health measure an MVP 
Participant intends to report, we finalized in the CY 2022 PFS final 
rule (86 FR 65417) at Sec.  414.1365(b)(2)(i) that MVP Participants are 
required to select one population health measure at the time of MVP 
registration.
(b) Proposal To Use the Highest Score of All Available Population 
Health Measures
    In the CY 2022 PFS final rule (86 FR 65421 and 65422) we finalized 
scoring rules for population health measures in MVPs. We finalized at 
Sec.  414.1365(d)(3)(i)(A) that, except as provided in paragraph 
(d)(3)(i)(A)(1), each selected population health measure that does not 
have a benchmark or meet the case minimum requirement is excluded from 
the MVP Participant's total measure achievement points and total 
available measure achievement points. In cases where an MVP Participant 
selects a population health measure that cannot be scored because it 
does not have a benchmark or meet the case minimum requirement, we do 
not score any other population health measures that may be applicable 
and available.
    Population health measures are included in the MVP foundational 
layer because they capture outcomes important to patients and thus 
provide meaningful information to clinicians so they can improve their 
practice (86 FR 65408). Under the current policy, we cannot score an 
MVP Participant on a population health measure if the MVP Participant 
selects a measure at registration that lacks a benchmark or if their 
case volume does not meet the case minimum requirement for the selected 
measure, even if another measure is applicable and available. In the CY 
2022 PFS final rule (86 FR 65414) we discussed calculating each 
population health measure and applying the higher score to the quality 
score; however, we ultimately proposed and finalized the current policy 
to score only one selected population health measure to mitigate 
concerns from interested parties that not all population health 
measures are applicable to all specialties (86 FR 65414). We now 
realize that at the time of registration, an MVP Participant will not 
be able to determine if they will have enough cases to meet the case 
minimum required for scoring the selected population health measure and 
may not be able to reliably predict how the measure will score compared 
to a benchmark, given that benchmarks for administrative claims 
measures are set using data from the same performance year. Requiring 
an MVP participant to select the population health measure to be scored 
at the time of registration may unfairly penalize an MVP Participant.
    To increase the likelihood that a population health measure can be 
scored, we had considered several options, including calculating the 
population health measure score by using an average score of all 
population health measures that have a benchmark and meet the case 
minimum requirement and using the score of the population health 
measure with the highest number of cases in order to score the 
population health measure that represents the most care provided by an 
MVP Participant. However, we determined these approaches could result 
in a lower score for an MVP Participant that did not correlate to the 
MVP Participant's performance. We also considered whether an MVP 
Participant could select a population health measure at the time of 
data submission when all other measures are reported. However, 
population health measures are calculated by CMS using administrative 
claims-based data and therefore do not require data submission from 
clinicians, and administrative claims-based data is not available for 
CMS calculation until at least 60 days after the end of the reporting 
period. Therefore, the MVP Participant would not know whether they 
would meet the case minimum requirement for the selected population 
health measure at the time of data submission.
    Because population health measures in the MVP capture outcomes 
important to patients (that is, for example, hospitalizations for acute 
illness) and thus, provide meaningful information to clinicians so they 
can improve their practice, we want to avoid scenarios where MVP 
Participants may inadvertently select a measure that cannot be scored. 
As described for traditional MIPS at Sec.  414.1380(b)(1)(i), we 
calculate all administrative claims-based quality measures and score 
the clinician on each measure for which there is a benchmark and the 
clinician meets the case minimum requirement. Calculating all 
population health

[[Page 98350]]

measures in MVPs would more closely align with the policy to calculate 
all administrative claims-based quality measures. Additionally, we have 
developed MVPs with a smaller, more cohesive set of measures and 
streamlined reporting requirements. A policy to take the highest 
population health score would increase the likelihood that an MVP 
Participant is scored on a population health measure and would ensure 
that MVP Participants receive the highest possible population health 
score that correlates to their performance.
    We proposed in the CY 2025 PFS proposed rule (89 FR 62018 through 
62020) to revise Sec.  414.1365(d)(3)(i)(A) to state that for the CY 
2023 through 2024 performance periods/2025 through 2026 MIPS payment 
years, MVP Participants would be scored on the selected population 
health measure and beginning in the CY 2025 performance period/2027 
MIPS payment year, we would use the highest score of all available 
population health measures. If no population health measure has a 
benchmark or meets the case minimum requirement, then the population 
health measure is excluded from the MVP Participant's total measure 
achievement points and total available measure achievement points. To 
apply this policy to subgroups reporting an MVP, we also proposed in 
the CY 2025 PFS proposed rule (89 FR 62019) to update Sec.  
414.1365(d)(3)(i)(A)(1) to provide that for the CY 2023 through 2024 
performance periods/2025 through 2026 MIPS payment years, subgroups 
will be scored on the selected population health measure based on its 
affiliated group score, if available, and beginning in the CY 2025 
performance period/2027 MIPS payment year, a subgroup is scored on the 
highest scoring of all available population health measures based on 
its affiliated group score, if available. If the subgroup's affiliated 
group score is not available, each such measure is excluded from the 
subgroup's total measure achievement points and total available measure 
achievement points.
    We also proposed in the CY 2025 PFS proposed rule (89 FR 62019 and 
62020) to remove the requirement for an MVP Participant to select a 
population health measure at the time of MVP registration. By 
implementing our proposal to calculate each population health measure 
for an MVP Participant and use the participant's highest score for 
population health measures in MVPs, there would be no need for the MVP 
Participant to select a measure during registration. We proposed in the 
CY 2025 PFS proposed rule (89 FR 62019 and 62020) to revise Sec.  
414.1365(b)(2)(i) to provide that for the CY 2023 through 2024 
performance periods/2025 through 2026 MIPS payment years, each MVP 
Participant must select an MVP, one population health measure included 
in the MVP, and any outcomes-based administrative claims-based measure 
on which the MVP Participant intends to be scored. Beginning in the CY 
2025 performance period/2027 MIPS payment year, each MVP Participant 
must select an MVP and any outcomes-based administrative claims-based 
measure on which the MVP Participant intends to be scored. We sought 
comment on these proposals.
    We received public comments on these proposals. The following is a 
summary of the comments we received on the proposed revisions to (1) 
score MVP Participants on their highest scoring of all population 
health measures; (2) score subgroups on the highest scoring of all 
available population health measures based on its affiliated group 
score, if available; and (3) remove the requirement for an MVP 
Participant to select a population health measure at the time of MVP 
registration and our responses.
    Comment: Many commenters supported the proposal to use the highest 
score of all available population health measures. A few commenters 
expressed their belief that this proposal will reduce clinician burden, 
reduce the likelihood that a clinician selects a measure that cannot be 
scored, and will more accurately reflect the quality of care provided 
in the population health measure score.
    Response: We thank the commenters for their support.
    Comment: A few commenters supported the proposal to use the highest 
score of all available population health measures and recommended that 
we apply the proposal retroactively for the CY 2024 performance period/
2026 MIPS payment year.
    Response: We clarify that the proposal, with respect to years prior 
to the CY 2025 performance period/2027 MIPS payment year was not a 
proposal to retroactively modify current policy. Instead, it 
principally specified that the CY 2024 performance period would be the 
last performance period to operate under existing policy and the newly 
proposed policy would begin with the CY 2025 performance period. While 
the agency may adopt rules retroactively under certain circumstances, 
it declines to do so here.
    Comment: A few commenters, who appear to be MIPS eligible 
clinicians, requested that we provide data on their performance for all 
population health measures, including those not scored.
    Response: We agree that it would be beneficial to provide feedback 
on all population health measures in an MVP. We will explore whether it 
is technically feasible to provide each MIPS eligible clinician with 
patient-level reports to MVP Participants for any population health 
measure that meets case minimum, and not just the one that contributes 
to the final score.
    After consideration of public comments, we are finalizing, as 
proposed, to revise Sec.  414.1365(d)(3)(i)(A) to state that, except as 
provided in paragraph (d)(3)(i)(A)(1) of this section, for the CY 2023 
through 2024 performance periods/2025 through 2026 MIPS payment years, 
each selected population health measure that does not have a benchmark 
or meet the case minimum requirement is excluded from the MVP 
Participant's total measure achievement points and total available 
measure achievement points. Beginning in the CY 2025 performance 
period/2027 MIPS payment year, except as provided in paragraph 
(d)(3)(i)(A)(1), the highest score of all applicable and available 
population health measures will be used. If no population health 
measure has a benchmark or meets the case minimum requirement, each 
such measure is excluded from the MVP Participant's total measure 
achievement points and total available measure achievement points. We 
are also finalizing as proposed to revise Sec.  414.1365(d)(3)(i)(A)(1) 
to state for the CY 2023 through 2024 performance periods/2025 through 
2026 MIPS payment years, a subgroup is scored on the selected 
population health measure based on its affiliated group score, if 
available, and beginning in the CY 2025 performance period/2027 MIPS 
payment year, a subgroup is scored on the highest scoring of all 
available population health measures based on its affiliated group 
score, if available. If the subgroup's affiliated group score is not 
available, each such measure is excluded from the subgroup's total 
measure achievement points and total available measure achievement 
points. We are also finalizing as proposed to revise Sec.  
414.1365(b)(2)(i) to provide that for the CY 2023 through 2024 
performance periods/2025 through 2026 MIPS payment years, each MVP 
Participant must select an MVP, one population health measure included 
in the MVP, and any outcomes-based administrative claims-based measure 
on which the MVP Participant intends to be scored. Beginning in the CY 
2025 performance period/2027 MIPS payment year, each MVP Participant

[[Page 98351]]

must select an MVP and any outcomes-based administrative claims-based 
measure on which the MVP Participant intends to be scored.
(2) Cost Performance Category in MVPs
    In the CY 2022 PFS final rule, we finalized at Sec.  
414.1365(d)(3)(ii) to use the methodology established at Sec.  
414.1380(b)(2)(i) through (v) to score the cost performance category 
for MVPs using the cost measures included in the MVP that MVP 
Participants select and report. The finalized policies at Sec.  
414.1380(b)(2) score cost measures based on achievement and improvement 
when the case minimum specified under Sec.  414.1350(c) is met or 
exceeded and CMS has determined a benchmark (86 FR 65422 and 65423). We 
discussed in the CY 2022 PFS final rule that aligning MVP scoring 
policies with existing traditional MIPS scoring policies balances the 
statutory requirements and goals of the program with ease of use, 
stability, and meaningfulness to MIPS eligible clinicians (86 FR 
65419). We refer readers to section IV.A.4.f.(1)(d)(ii)(B) of this 
final rule for discussion of our proposals to modify the cost 
performance category's scoring methodology at Sec.  414.1380(b)(2), 
which we are finalizing.
    To ensure alignment between MVP and traditional MIPS scoring 
policies, it is important that MVP cost performance category scoring 
policies refer to the traditional MIPS policy on how cost measures are 
scored. We remind readers that cost measures are scored based on the 
MIPS eligible clinician's performance on the measure during the 
performance period compared to the measure's benchmark, as set forth in 
Sec.  414.1380(b)(2). Currently, Sec.  414.1365(d)(3)(ii) provides that 
the cost performance category score is calculated for an MVP 
Participant using the methodology at Sec.  414.1380(b)(2)(i) through 
(v) and the cost measures included in the MVP that they select and 
report. To ensure continued alignment, we proposed in the CY 2025 PFS 
proposed rule (89 FR 62020) to modify Sec.  414.1365(d)(3)(ii) to 
replace the reference to Sec.  414.1380(b)(2)(i) through (v) with a 
broader reference to the cost performance category scoring policies at 
Sec.  414.1380(b)(2).
    We also proposed in the CY 2025 PFS proposed rule (89 FR 62020) to 
similarly revise Sec.  414.1365(d)(3)(ii)(A). This regulation currently 
provides that a subgroup is scored on each cost measure included in the 
MVP that it selects and reports based on its affiliated group score for 
each such measure, if available. In addition, Sec.  
414.1365(d)(3)(ii)(A) provides that, if the subgroup's affiliated group 
score is not available for a measure, the measure is excluded from the 
subgroup's total measure achievement points and total available measure 
achievement points, as described under Sec.  414.1380(b)(2)(i) through 
(v). We proposed in the CY 2025 PFS proposed rule (89 FR 62020) to 
modify Sec.  414.1365(d)(3)(ii)(A) to replace the reference to Sec.  
414.1380(b)(2)(i) through (v) with a broader reference to the cost 
performance category scoring policies at Sec.  414.1380(b)(2).
    We received public comments on these proposals. The following is a 
summary of the comments we received on the proposed revision to the MVP 
cost performance category scoring policy regulation text to reference 
the traditional MIPS policy on how cost measures are scored and our 
responses.
    Comment: A few commenters supported the proposal to modify the 
regulation text governing MVP cost performance category scoring to more 
broadly reference the traditional MIPS cost performance category 
scoring methodology. One commenter requested clarification as to 
whether the proposed modification to the cost performance category's 
scoring methodology in section IV.A.4.f.(1)(d)(ii)(B) of the CY 2025 
PFS proposed rule (89 FR 62083 through 62087) will apply to cost 
measures in MVPs.
    Response: We thank commenters for their support. We clarify that 
the proposed modifications to the cost performance category's scoring 
methodology, as described in the CY 2025 PFS proposed rule (89 FR 62083 
through 62087) and finalized in section IV.A.4.f.(1)(d)(ii)(B) of this 
final rule, will apply to our scoring of cost measures in MVPs.
    After consideration of public comments, we are finalizing as 
proposed modifications to the MVP cost performance category scoring 
policies at Sec.  414.1365(d)(3)(ii) and Sec.  414.1365(d)(3)(ii)(A). 
Specifically, we are finalizing replacing references to Sec.  
414.1380(b)(2)(i) through (v) in each provision with a broader 
reference to the cost performance category's scoring policies at Sec.  
414.1380(b)(2). We are finalizing our proposed modification at Sec.  
414.1365(d)(3)(ii) to state the cost performance category is calculated 
for an MVP Participant using the methodology at Sec.  414.1380(b)(2). 
We also are finalizing our proposed modification to Sec.  
414.1365(d)(3)(ii)(A) to state that, if the subgroup's affiliated group 
score is not available for a measure, the measure is excluded from the 
subgroup's total measure achievement points and total available measure 
achievement points, as described under Sec.  414.1380(b)(2).
(3) Improvement Activities Performance Category in MVPs
    The improvement activities performance category should provide 
clinicians with an opportunity to select from a subset of improvement 
activities within an MVP that are relevant to the clinical topic. In 
the CY 2022 PFS final rule (86 FR 65412 and 64513) we finalized at 
Sec.  414.1365(c)(3), that an MVP Participant who reports an MVP must 
report one of the following: two medium-weighted improvement 
activities; one high-weighted improvement activity; or participation in 
a certified or recognized patient-centered medical home (PCMH) or 
comparable specialty practice as described at Sec.  414.1380(b)(3)(ii). 
We established in the CY 2022 PFS final rule (86 FR 65412 and 64514) 
that MVP Participants submitting MVPs would report fewer improvement 
activities than eligible clinicians reporting traditional MIPS to 
support MVP adoption.
    Additionally, in the CY 2022 final PFS rule (86 FR 65423 and 65424) 
we finalized at Sec.  414.1365(d)(3)(iii) that the improvement 
activities performance category score for MVP Participants is 
calculated based on the submission of high- and medium-weighted 
improvement activities. We finalized that MVP Participants will receive 
20 points for each medium-weighted improvement activity and 40 points 
for each high-weighted improvement activity required under Sec.  
414.1360 on which data is submitted in accordance with Sec.  414.1325 
or for participation in a certified or recognized PCMH or comparable 
specialty practice, as described at Sec.  414.1380(b)(3)(ii). 
Therefore, MVP Participants who do not participate in a certified or 
recognized PCMH or comparable specialty practice must submit one high-
weighted improvement activity or two medium-weighted improvement 
activities included in the MVP to receive a full credit score of 40 
points. We stated that these requirements will provide an incentive for 
reporting MVPs, since fewer improvement activities are required to 
receive a full score for the improvement activities category in an MVP 
compared to traditional MIPS (86 FR 65423).
    We refer readers to section IV.A.4.e.(3)(b)(iv) of this final rule 
for finalized policies that remove the medium- and high-weighting for 
improvement activities in traditional MIPS starting in the CY 2025

[[Page 98352]]

performance period/2027 MIPS payment year. In the CY 2025 PFS proposed 
rule (89 FR 62020 and 62021), we proposed to align MVP policies with 
the traditional MIPS proposal regarding the weighting of improvement 
activities and to reduce the number of improvement activities an MVP 
Participant must submit for an MVP. In the CY 2022 PFS final rule, we 
discuss that maintaining a lower reporting burden will encourage MVP 
participation (86 FR 65412). We discussed in the CY 2022 PFS final rule 
that incentives for reporting MVPs, including reduced reporting 
requirements, allow MVP Participants to report on a smaller, more 
cohesive subset of measures and activities that are relevant to a given 
clinical topic, condition, or episode of care (86 FR 65419 and 65420). 
Therefore, we proposed in the CY 2025 PFS proposed rule (89 FR 62020 
and 62021) that starting in the CY 2025 performance period/2027 MIPS 
payment year, MVP Participants would be required to submit one 
improvement activity to achieve 40 points, or full credit, whereas in 
traditional MIPS clinicians will be required to submit two improvement 
activities to achieve full credit for the improvement activities 
performance category. We also proposed in the CY 2025 PFS proposed rule 
(89 FR 62020 and 62021) to update reporting requirements and scoring 
rules related to the improvement activities performance category for 
MVPs accordingly.
    We proposed in the CY 2025 PFS proposed rule (89 FR 62020 and 
62021) to revise Sec.  414.1365(c)(3) to reflect reporting requirements 
for the CY 2023 and 2024 performance periods/2025 and 2026 MIPS payment 
years and the reporting requirements beginning in the CY 2025 
performance period/2027 MIPS payment year. The revisions proposed in 
the CY 2025 PFS proposed rule (89 FR 62020 through 62021) at Sec.  
414.1365(c)(3)(i) introductory text and additions proposed at 
paragraphs (c)(3)(i)(A) through (C) would require that an MVP 
Participant who reports an MVP, in the CY 2023 through 2024 performance 
periods/2025 through 2026 MIPS payment years, report one of the 
following: two medium-weighted improvement activities; one high-
weighted improvement activity; or participation in a certified or 
recognized PCMH or comparable specialty practice as described at Sec.  
414.1380(b)(3)(ii). Additionally, we proposed in the CY 2025 PFS 
proposed rule (89 FR 62020 and 62021) at Sec.  414.1365(c)(3)(ii) 
introductory text and (c)(3)(ii)(A) and (B), beginning in the CY 2025 
performance period/2027 MIPS payment year an MVP Participant who 
reports an MVP must report either one improvement activity or 
participation in a certified or recognized PCMH, or comparable 
specialty practice as described at Sec.  414.1380(b)(3)(ii). We sought 
comment on the proposals.
    We received public comments on these proposals. The following is a 
summary of the comments we received on the proposed revisions to MVP 
reporting requirements for the improvement activities performance 
category and our responses.
    Comment: Many commenters supported the proposal to reduce the MVP 
reporting requirement for improvement activities.
    Response: We thank commenters for their support.
    Comment: One commenter expressed a concern that the policy will 
reduce requirements of the improvement activities performance category 
and may inadvertently lower the bar for improving quality. The 
commenter recommended increasing the number of improvement activities 
required for MVPs.
    Response: We aim for MVPs to promote high value care by connecting 
the MIPS performance categories, standardizing performance measurement 
of a specialty, medical condition, or episode of care, and providing 
patients and clinicians with robust and meaningful healthcare data (86 
FR 65391).
    We are finalizing our policy that an MVP Participant who reports an 
MVP must report either one improvement activity or participation in a 
certified or recognized PCMH or comparable specialty practice in order 
to better focus on the highest impact improvement activities and to 
encourage quality improvement. MVP scoring policies are intended to 
reduce reporting requirements in MVPs to incentivize MVP participation 
and allow MVP Participants to report on a smaller, more cohesive subset 
of measures and activities that are relevant to a given clinical topic, 
condition, or episode of care, while still driving quality (86 FR 65419 
and 65420). The new policy supports our goal of encouraging improvement 
while lowering the reporting burden.
    After consideration of public comments, we are finalizing as 
proposed to update Sec.  414.1365(c)(3)(i) introductory text and 
additions at paragraphs (c)(3)(i)(A) through (C) to require that an MVP 
Participant who reports an MVP in the CY 2023 through 2024 performance 
periods/2025 through 2026 MIPS payment years report one of the 
following: two medium-weighted improvement activities; one high-
weighted improvement activity; or participation in a certified or 
recognized PCMH or comparable specialty practice as described at Sec.  
414.1380(b)(3)(ii). We are also finalizing as proposed to update Sec.  
414.1365(c)(3)(ii) introductory text and (c)(3)(ii)(A) and (B), that 
beginning in the CY 2025 performance period/2027 MIPS payment year an 
MVP Participant who reports an MVP must report either one improvement 
activity or participation in a certified or recognized PCMH, or 
comparable specialty practice as described at Sec.  414.1380(b)(3)(ii).
    We also proposed in the CY 2025 PFS proposed rule (89 FR 62020 and 
62021) to align MVP scoring with proposed modifications to traditional 
MIPS scoring that will remove the reference to high- and medium-
weighted improvement activities for scoring and assign 40 points for 
each improvement activity submitted by MVP Participants. We proposed in 
the CY 2025 PFS proposed rule (89 FR 62020 and 62021) at Sec.  
414.1365(d)(3)(iii) that in the CY 2023 through 2024 performance 
periods/2025 through 2026 MIPS payment years, the improvement 
activities performance category score is calculated based on the 
submission of high- and medium-weighted improvement activities. MVP 
Participants submitting MVPs in the CY 2023 through 2024 performance 
periods/2025 through 2026 MIPS payment years would receive 20 points 
for each medium-weighted improvement activity and 40 points for each 
high-weighted improvement activity required under Sec.  414.1360 on 
which data is submitted in accordance with Sec.  414.1325 or for 
participation in a certified or recognized PCMH or comparable specialty 
practice, as described at Sec.  414.1380(b)(3)(ii). Beginning in the CY 
2025 performance period/2027 MIPS payment year, MVP Participants would 
receive 40 points for each improvement activity that is submitted or 
participation in a certified or recognized PCMH or comparable specialty 
practice. We sought comment on this proposal.
    We received public comments on these proposals. The following is a 
summary of the comments we received on the proposal to update MVP 
scoring policies for the improvement activities performance category 
and our responses.
    Comment: Many commenters supported the improvement activities 
scoring policy in MVPs, stating that this scoring policy will simplify 
scoring,

[[Page 98353]]

reduce complications, and support efficient participation in MVPs.
    Response: We thank commenters for their support.
    After consideration of public comments, we are finalizing as 
proposed to update at Sec.  414.1365(d)(3)(iii) that in the CY 2023 
through 2024 performance periods/2025 through 2026 MIPS payment years, 
the improvement activities performance category score is calculated 
based on the submission of high- and medium-weighted improvement 
activities. MVP Participants submitting MVPs in the CY 2023 through 
2024 performance periods/2025 through 2026 MIPS payment years will 
receive 20 points for each medium-weighted improvement activity and 40 
points for each high-weighted improvement activity required under Sec.  
414.1360 on which data is submitted in accordance with Sec.  414.1325 
or for participation in a certified or recognized PCMH or comparable 
specialty practice, as described at Sec.  414.1380(b)(3)(ii). Beginning 
in the CY 2025 performance period/2027 MIPS payment year, MVP 
Participants will receive 40 points for each improvement activity that 
is submitted or participation in a certified or recognized PCMH or 
comparable specialty practice, as described at Sec.  
414.1380(b)(3)(ii).
(4) Promoting Interoperability Performance Category in MVPs
    In the CY 2022 PFS final rule, we finalized at Sec.  
414.1365(c)(4)(i) that an MVP Participant is required to meet the 
Promoting Interoperability performance category's reporting 
requirements. We also finalized at Sec.  414.1365(c)(4)(i)(A) the 
Promoting Interoperability performance category's requirements for a 
subgroup participating in MVP reporting (86 FR 65413 and 65414). 
Specifically, at Sec.  414.1365(c)(4)(i)(A), we stated that, for the CY 
2023 and 2024 MIPS performance periods/2025 and 2026 MIPS payment 
years, an MVP Participant that is a subgroup is required to submit its 
affiliated group's data for the Promoting Interoperability performance 
category. Under this policy, the submission of the affiliated group's 
data will be on the subgroup's behalf. If the affiliated group chooses 
to report as a group for the Promoting Interoperability performance 
category, the group will still be required to submit its own data 
separately and in accordance with the reporting rules for groups. We 
refer readers to the CY 2022 PFS final rule for additional details (86 
FR 65413 and 65414).
    We acknowledge the existing language under Sec.  
414.1365(c)(4)(i)(A) establishes the requirement for a subgroup to 
submit its affiliated group's data for the Promoting Interoperability 
performance category in the foundational layer of an MVP for only the 
CY 2023 performance period/2025 MIPS payment year and CY 2024 
performance period/2026 MIPS payment year.\809\ In the CY 2022 PFS 
final rule, we stated our intent to assess the performance of 
clinicians participating in subgroups in the Promoting Interoperability 
performance category using subgroup level data to the extent that it is 
operationally feasible (86 FR 39371 and 39372). However, as discussed 
in the CY 2022 PFS final rule (86 FR 39371), we heard from interested 
parties through the MVP Town Hall (85 FR 84846), that some clinicians 
will need additional time to resolve operational challenges, including 
challenges related to configuration of EHR systems for reporting 
Promoting Interoperability data at the subgroup level. We recognize 
that clinicians and interested parties may need additional time to 
resolve the technical challenges related to configuration of EHR 
systems for capturing and submitting data at the subgroup level.
---------------------------------------------------------------------------

    \809\ In the CY 2025 PFS proposed rule (89 FR 62021), we 
inadvertently stated in error that the existing language under Sec.  
414.1365(c)(4)(i)(A) applied the requirement to the 2027 MIPS 
payment year. We have corrected this typographical error here in 
this final rule.
---------------------------------------------------------------------------

    We proposed in the CY 2025 PFS proposed rule (89 FR 62021) that 
this subgroup reporting policy to use the affiliate group's data for 
the Promoting Interoperability performance category in the MVP they 
select apply beyond the CY 2023 performance period/2025 MIPS payment 
year and CY 2024 performance period/2026 MIPS payment year currently 
specified at Sec.  414.1365(c)(4)(i)(A). Specifically, we proposed in 
the CY 2025 PFS proposed rule (89 FR 62021) to modify Sec.  
414.1365(c)(4)(i)(A) by removing the references to the specific 
performance periods/MIPS payment years and provide instead that an MVP 
Participant that is a subgroup is required to submit its affiliated 
group's data for the Promoting Interoperability performance category. 
This change would allow a subgroup to continue to submit the affiliated 
group's data for the MVP Promoting Interoperability performance 
category for the CY 2025 performance period/2027 MIPS payment year and 
subsequent years. We note that we will continue to monitor the 
operational challenges with the EHR systems and reassess whether 
subgroups should be required to submit performance data at the subgroup 
level for the Promoting Interoperability performance category.
    We received public comments on this proposal. The following is a 
summary of the comments we received on the proposal to allow subgroups 
to continue to submit affiliated group's data for the Promoting 
Interoperability performance category and our responses.
    Comment: A few commenters supported the proposal for subgroups to 
continue to use the affiliate group's data for the Promoting 
Interoperability performance category for the CY 2025 performance 
period/2027 MIPS payment year and subsequent years.
    Response: We thank commenters for their support for continuing the 
policy beyond the CY 2025 performance period/2027 MIPS payment year.
    Comment: One commenter supported the proposal and recommended that 
we evaluate if subgroups are disincentivized to submit MVPs because of 
the policy.
    Response: We thank the commenter for their support and believe the 
policy enables MVP participation for subgroups without the 
infrastructure to report data for the Promoting Interoperability 
performance category measures at the subgroup level. We will monitor 
subgroup participation in future years.
    After consideration of public comments, we are finalizing as 
proposed modification to Sec.  414.1365(c)(4)(i)(A) to allow subgroups 
to continue to submit affiliated group's data for the Promoting 
Interoperability performance category. As finalized, Sec.  
414.1365(c)(4)(i)(A) will state that an MVP Participant that is a 
subgroup is required to submit its affiliated group's data for the 
Promoting Interoperability performance category.
c. APM Performance Pathway
(1) Overview
    In the CY 2021 PFS final rule (85 FR 84859 through 84866), we 
finalized the APM Performance Pathway (APP) at Sec.  414.1367 beginning 
in CY 2021 performance period/2023 MIPS payment year. The APP was 
designed as a reporting and scoring pathway available only to MIPS APM 
participants in order to provide a predictable and consistent MIPS 
reporting option to reduce reporting burden for, and encourage 
continued APM participation by, these clinicians. We also established 
in the APM Performance Pathway for Shared Savings Program ACOs section 
of that same rule that, beginning with the Shared Savings Program 
performance year 2021 (CY 2021 performance period/

[[Page 98354]]

2023 MIPS payment year), ACOs were required to report quality data for 
purposes of the Shared Savings Program via the APP (42 CFR 
425.512(a)(3); 85 FR 84722).
    In that same rule, we finalized a quality measure set (85 FR 84860 
and 84861) for purposes of quality performance category scoring for the 
APP. For those MIPS eligible clinicians, groups, or APM Entities for 
whom a given measure is unavailable due to the size of the available 
patient population or who are otherwise unable to meet the minimum case 
threshold for a measure, we established that such measure would be 
removed from the quality performance category score for such MIPS 
eligible clinician, group, or APM Entity (85 FR 84861). The complete 
existing APP quality measure set is shown in Table 66. As indicated in 
Table 66, the current APP quality measure set includes six quality 
measures, of which five also are Universal Foundation measures. 
Further, for MIPS eligible clinicians, groups, and APM Entities 
reporting through the APP, we established that we would not apply the 
quality measure scoring cap at Sec.  414.1380(b)(1)(iv) in the event 
that a measure in the APP quality measure set is determined to be 
topped out. Because the APP quality measure set is fixed, we noted that 
it would not be appropriate to limit the maximum quality performance 
category score available to APP reporters. Should an APP quality 
measure be determined to be topped out, we would at that time consider 
amending the APP quality measure set through future rulemaking, if 
appropriate.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR09DE24.112


[[Page 98355]]


BILLING CODE 4120-01-C
    We stated when finalizing the APP that the goal of the APP quality 
measure set is not necessarily to reflect the specific quality goals of 
clinicians within their respective APMs, but rather to reduce the 
burden of reporting on quality measures twice: once to MIPS and once to 
their APMs. We believed that by using this broadly applicable 
population-health-based measure set, we would enable MIPS APM 
participants to focus more of their energy and attention on the quality 
measures being reported through their APMs, while relying on a 
consistent measure set within the APP from one year to the next (85 FR 
84862).
    We also finalized the Web Interface measure set for the CY 2021 
MIPS performance period within the APP for Shared Savings Program ACOs 
only (85 FR 84720 through 84723), and in the CY 2022 PFS final rule, 
extended this collection type through CY 2024 (86 FR 65429). In the CY 
2024 PFS final rule, we established the Medicare Clinical Quality 
Measure for Accountable Care Organizations Participating in the 
Medicare Shared Savings Program (Medicare CQM) collection type in the 
APP quality measure set and finalized that the Medicare CQM collection 
type would be available to only ACOs participating in the Shared 
Savings Program. Beginning with the 2024 performance year, ACOs in the 
Shared Savings Program have the option to report the Medicare CQM under 
the APP on only ``beneficiaries eligible for Medicare CQMs as defined 
at Sec.  [thinsp]425.20, instead of their all payer/all patient 
population'' (88 FR 79329).
(2) Establishment of the APP Plus Quality Measure Set To Align With the 
Universal Foundation
    We explained in the CY 2025 PFS proposed rule that under the goals 
of the CMS National Quality Strategy to improve the quality and safety 
of healthcare for everyone,\810\ CMS is implementing a building-block 
approach to streamline quality measures across CMS quality programs for 
measuring primary care clinician performance in the adult and pediatric 
populations by leveraging the Universal Foundation of quality measures 
(89 FR 61854). The Universal Foundation of quality measures focuses 
clinicians' attention on measures that are meaningful for the health of 
broad segments of the population; reduces provider burden by 
streamlining and aligning measures; advances equity with the use of 
measures that will help CMS recognize and track disparities in care 
among and within populations; aids the transition from manual reporting 
of quality measures to seamless, automatic digital reporting; and 
permits comparisons among various quality and value-based care programs 
to help the Agency better understand what drives quality improvement 
and what does not.\811\ The Universal Foundation, which identifies a 
set of key quality measures for use where relevant throughout CMS 
programs, is already reflected in the Medicaid Core Sets and the 
Marketplace Quality Rating System.\812\ In addition, in the CY 2024 PFS 
final rule (88 FR 79321 and 80043), CMS consolidated the previously 
finalized Promoting Wellness and Optimizing Chronic Disease Management 
MIPS Value Pathways (MVPs) into a single consolidated primary care MVP 
(Value in Primary Care MVP) that aligns with the adult Universal 
Foundation quality measures. In the Announcement of CY 2024 Medicare 
Advantage (MA) Capitation Rates and Part C and D Payment Policies, we 
also solicited comment on adding the Universal Foundation measures to 
Medicare Advantage and the Part D Star Ratings Program. We noted that 
we would take these comments into consideration in the future, and that 
any additional measures added to the Star Ratings Program would need to 
be added through rulemaking.\813\ Alignment of quality measures across 
CMS programs allows practitioners to better focus their quality 
efforts, reduces administrative burden, and drives digital 
transformation and stratification of a focused quality measure set to 
assess impact on disparities.\814\
---------------------------------------------------------------------------

    \810\ https://www.cms.gov/medicare/quality/meaningful-measures-initiative/cms-quality-strategy.
    \811\ Jacobs D, Schreiber M, Seshamani M, Tsai D, Fowler E, 
Fleisher L. Aligning Quality Measures across CMS--The Universal 
Foundation. New England Journal of Medicine, March 2, 2023, 
available at https://www.nejm.org/doi/full/10.1056/NEJMp2215539.
    \812\ ``Update On The Medicare Value-Based Care Strategy: 
Alignment, Growth, Equity'', Health Affairs Forefront, March 14, 
2024. DOI: 10.1377/forefront.20240311.141546.
    \813\ Centers for Medicare and Medicaid Services (2023). 
Announcement of Calendar Year (CY) 2024 Medicare Advantage (MA) 
Capitation Rates and Part C and Part D Payment Policies. Retrieved 
March 22, 2024 from Announcement of Calendar Year (CY) 2024 Medicare 
Advantage (MA) Capitation Rates and Part C and Part D Payment 
Policies (https://www.cms.gov/files/document/2024-announcement-pdf.pdf).
    \814\ ``Update On The Medicare Value-Based Care Strategy: 
Alignment, Growth, Equity'', Health Affairs Forefront, March 14, 
2024. DOI: 10.1377/forefront.20240311.141546.
---------------------------------------------------------------------------

    To further advance Medicare's overall value-based care strategy, 
which emphasizes preventive care and primary care and to promote 
greater alignment within and across CMS' quality programs, we proposed 
in the CY 2025 PFS proposed rule (89 FR 62023) to create the APP Plus 
quality measure set within the APP specifically to incorporate all of 
the Adult Universal Foundation measures. Five of the ten adult 
Universal Foundation measures already are represented in the existing 
APP quality measure set for the CY 2025 performance period/2027 MIPS 
payment year under policies finalized in the CY 2024 PFS final rule (88 
FR 79113). The Universal Foundation measures included in the APP 
quality measure set are listed in Table 66. The inclusion of half of 
the measures in the Universal Foundation in the existing APP quality 
measure set and the recognition that a significant number of current 
and potential users of the APP--those clinicians participating in MIPS 
APMs--practice in primary and preventive care areas that are relevant 
to the Universal Foundation make the APP a meaningful addition to CMS' 
efforts at quality alignment by bringing in MIPS reporting by MIPS APM 
participants and in turn by providing feedback in the form of their 
MIPS quality score to those participants as they also continue to work 
towards advancing the care they provide within the context of their 
respective MIPS APMs.
    We noted that we did not propose to modify the existing APP quality 
measure set or the overall framework for the APP as a reporting and 
scoring pathway (89 FR 62023). For example, under this proposal, the 
APP would continue to be available to MIPS eligible clinicians, groups, 
and APM Entities participating in MIPS APMs, meaning that only these 
clinician types would be able to report and be scored on the APP Plus 
quality measure set. We proposed that, within the APP, the APP Plus 
quality measure set will be a second measure set distinct from the 
existing APP quality measure set that MIPS eligible clinicians 
identified on the Participation List or Affiliated Practitioner List of 
an APM Entity participating in a MIPS APM may optionally choose to 
report. Under the proposal, when an applicable MIPS eligible clinician, 
group, or APM Entity chooses to report the APP beginning in the CY 2025 
performance period/2027 MIPS payment year, they will also choose 
whether to report the APP quality measure set or the APP Plus quality 
measure set. We proposed for the CY 2025 performance period/2027 MIPS 
payment year, the APP Plus quality measure set would include the 
current APP quality measures and two

[[Page 98356]]

additional quality measures from the Adult Universal Foundation measure 
set. The measure set would incrementally add the remaining three Adult 
Universal Foundation measures by the CY 2028 performance period/2030 
MIPS payment year. Specifically, we proposed to adopt one new quality 
measure beginning with the CY 2026 performance period/2028 MIPS payment 
year, and two new quality measures beginning with the CY 2028 
performance period/2030 MIPS payment year.
    We requested public comment on this proposal.
    The following is a summary of the public comments we received on 
this proposal and our responses. Because the Shared Savings Program 
proposed to require reporting of the APP Plus quality measure set to 
meet its quality performance standard (89 FR 61853 through 61858), many 
of the comments we received on the establishment of the APP Plus 
quality measure set were submitted by Shared Savings Program ACOs. 
While we have included those comments in this section, we refer readers 
to section III.G.4.b.(2)(a) of this final rule for comments related to 
the APP Plus quality measure set that are specific to the Shared 
Savings Program's proposal to require that ACOs report and be scored on 
the APP Plus quality measure set for purposes of meeting the Shared 
Savings Program's quality performance standard.
    Comment: Several commenters expressed support for the incorporation 
of specific measures into the APP Plus quality measure set, including 
the Breast Cancer Screening (Quality ID #112) measure, Colorectal 
Cancer Screening measure (Quality ID #113), Substance Use Disorder 
Treatment measure (Quality ID #305), Screening for Social Drivers of 
Health (Quality ID #487) measure, and the Adult Immunization Status 
(Quality ID #493) measure.
    Response: We thank commenters for their support.
    Comment: Many commenters requested a delay in incorporation of the 
new quality measures into the APP Plus quality measure set. Some 
commenters suggested that CMS delay incorporation of the APP Plus 
quality measure set from one to three years. Other commenters suggested 
a one or two-year delay to the measure phase-in schedule as it relates 
to each measure due to the complexity and administrative burden 
associated with reporting these new measures.
    A few commenters stated that the proposed timeline for 
incorporating measures with eCQM collection types into the APP Plus 
quality measure set is appropriate provided that the measure 
specification for each measure is available at least 12 to 24 months 
prior to the respective measure incorporation date. These commenters 
stated this lead time is necessary for vendors and clinicians to 
prepare to report new measures. Other commenters encouraged CMS to 
consider an alternative timeline for incorporating measures with eCQM 
collection type into the APP plus quality measure set.
    Response: We have heard from APM Entities, including Shared Savings 
Program ACOs, and other interested parties about the need for 
additional time to report the APP Plus quality measure set due to 
administrative burdens and/or technical complexities associated with 
reporting quality measures using the eCQM collection type. We 
appreciate that it takes time to integrate new quality measures into 
workflows and eCQMs into EHR systems. This is especially so for APM 
Entities whose constituent groups and eligible clinicians are spread 
across different practice locations and may use different EHR systems 
from each other, necessitating the additional steps of data 
aggregation, deduplication, and validation.
    After consideration of public comment, we are finalizing our 
proposal to establish the APP Plus quality measure set with 
modification. We are revising the timeline for incorporating various 
measures into this measure set. Because CMS identified no other 
programs or MIPS APMs outside of the Shared Savings Program that will 
explicitly require participants to report the APP Plus quality measure 
set in the 2025 PFS proposed rule, our plan to modify the timeline for 
incorporating various measures into APP Plus quality measure set is 
predominantly to allow Shared Savings Program ACOs additional time to 
become familiar with new quality measures and their specifications, and 
to implement workflows necessary to support the reporting of new 
measures, as discussed in the comments above. For more information 
about Shared Savings Program proposals and finalized policies to 
require ACOs to report and be scored on the APP Plus quality measure 
set for purposes of meeting the Shared Savings Program's quality 
performance standard and the measure collection types available to 
Shared Savings Program ACOs, please see the discussion at sections 
III.G.4.b.(2)(a) and III.G.4.b.(2)(b) of this final rule, respectively.
    As modified, the APP Plus quality measure set will now add one new 
measure per year from the Adult Universal Foundation measure set for 
the first three years and will delay the incorporation of the Clinician 
and Clinician Group Risk-standardized Hospital Admission Rates for 
Patients with Multiple Chronic Conditions (Quality ID #484) measure by 
one year.
    Specifically, for the CY 2025 performance period/2027 MIPS payment 
year, the APP Plus quality measure set will now include the measures in 
the existing APP quality measure set that are also Universal Foundation 
measures as described in Table 68 and the following quality measure 
from the Universal Foundation of measures: The Breast Cancer Screening 
(Quality ID #112) measure. It will no longer include the Clinician and 
Clinician Group Risk-standardized Hospital Admission Rates for Patients 
with Multiple Chronic Conditions (Quality ID #484) measure nor the 
Colorectal Cancer Screening (Quality ID #113) measure as originally 
proposed in the CY 2025 PFS proposed rule. As a result of these 
modifications, there will be a total of six measures in the APP Plus 
quality measure set for the CY 2025 performance period/2027 MIPS 
payment year.
    Beginning with the CY 2026 performance period/2028 MIPS payment 
year, and as described in Table 69 the APP Plus quality measure set 
will incorporate the Colorectal Cancer Screening (Quality ID #113) 
measure and add back the Clinician and Clinician Group Risk-
standardized Hospital Admission Rates for Patients with Multiple 
Chronic Conditions (Quality ID #484) measure for a total of eight 
measures. The Clinician and Clinician Group Risk-standardized Hospital 
Admission Rates for Patients with Multiple Chronic Conditions (Quality 
ID #484) measure will be added to the APP Plus quality measure set in 
the CY 2026 performance period/2028 MIPS payment year instead of the CY 
2025 performance period/2027 MIPS payment year to, as further discussed 
below, allow CMS time to assess whether and how the measure can be 
respecified to allow more ACOs to be scored on the measure.
    Beginning with the CY 2027 performance period/2029 MIPS payment 
year, and as described in Table 70, the APP Plus quality measure set 
will incorporate the Initiation and Engagement of Substance Use 
Disorder Treatment (Quality ID #305) measure for a total of nine 
measures. As further discussed below, this measure will be added to the 
APP Plus quality measure set in the CY 2027 performance period/2029 
MIPS payment year instead of the

[[Page 98357]]

CY 2026 performance period/2028 MIPS payment year to allow APM Entities 
time to create new workflows and processes to help track referrals and 
follow-ups related to SUD treatment.
    The APP Plus quality measure set will add the final two measures 
from the Adult Universal Foundation measure set, the Screening for 
Social Drivers of Health (Quality ID #487) and Adult Immunization 
Status (Quality ID #493) measures, for a total of 11 measures, 
beginning with the CY 2028 performance period/2030 MIPS payment year, 
or the performance period that is one year after the eCQM specification 
becomes available for each respective measure, whichever is later, as 
described in Table 71. As discussed below, each of these two measures 
may be added after the CY 2028 performance period/2030 MIPS payment 
year as originally proposed to ensure that the eCQM specification for a 
measure is made available in advance of its incorporation into the APP 
Plus quality measure set so that APM Entities, including ACOs, can 
establish the necessary cross-practice workflows to implement the 
measures.
    Expanding the APP Plus quality measure set on this modified 
schedule will allow APM Entities, groups, and clinicians the necessary 
time to become familiar with new measure specifications and incorporate 
each new measure into electronic health records so that they can 
successfully report the APP Plus quality measure set.
    We also proposed in the CY 2025 PFS proposed rule to revise Sec.  
414.1367(c)(1) such that each MIPS eligible clinician, group, or APM 
Entity APM that elects to report the APP would choose to report either 
the APP quality measure set or the APP Plus quality measure set. We 
proposed that a MIPS eligible clinician, group, or APM Entity that 
chooses to report the APP Plus quality measure set for a performance 
period would be required to report all available measures in the APP 
Plus quality measure set for that performance period and will be scored 
on all such measures. For example, with respect to the CY 2027 
performance period/2029 MIPS payment year, a MIPS eligible clinician, 
group, or APM Entity that chooses to report the APP Plus quality 
measure set would be required to report nine MIPS quality measures (to 
the extent applicable and available): the nine measures are the six 
measures incorporated from the existing APP quality measure set and the 
three additional Universal Foundation measures we proposed to 
incrementally adopt in the APP Plus quality measure set in the CY 2025, 
2026, and 2027 performance periods/2027, 2028, and 2029 MIPS payment 
years. The clinician would also be scored on all nine of these 
measures.
    The proposal would incrementally incorporate into the APP Plus 
quality measure set the Universal Foundation measures that are not 
already included in the existing APP quality measure set beginning in 
the CY 2025 performance period/2027 MIPS payment year. The Universal 
Foundation measure set aligns quality measures used across CMS programs 
and initiatives and is relevant to a significant subset of the 
clinicians who are eligible to report the APP. The APP Plus quality 
measure set will allow MIPS eligible clinicians, groups, and APM 
Entities eligible to report the APP to report Universal Foundation 
quality measures, which are used across CMS programs and initiatives.
    We described the APP Plus quality measure set as separate from the 
APP quality measure set and optional for a MIPS eligible clinician, 
group, or APM Entity to report (89 FR 62024).\815\ Although we want to 
promote greater familiarity with the Universal Foundation measures and 
to encourage clinicians to use the Universal Foundation measures 
through their MIPS participation, it is important to continue to allow 
the APP to serve its original purpose of offering a streamlined, stable 
reporting and scoring pathway for MIPS APM participants, who are 
already performing practice transformation and are reporting and being 
scored on quality measures within their APMs. Further, we recognize 
that while the Adult Universal Foundation quality measures are relevant 
to a significant portion of clinicians who are eligible to report the 
APP, they are not relevant for all such clinicians. For example, there 
are specialists for whom few, if any, of these measures may be 
relevant, and we do not wish to effectively exclude these clinicians 
from accessing the benefits of the APP when they otherwise are 
eligible. Moreover, we recognize that as CMS continues to evolve APM 
offerings for specialists, there may be more clinicians in the future 
who are participating in MIPS APMs and will therefore be eligible for 
the APP, which could shift the proportion of clinicians for whom the 
Universal Foundation measures are relevant as compared to today. For 
these reasons, we believe it is important to maintain the existing APP 
quality measure set and to continue to offer it as an option alongside 
the APP Plus quality measure set. We also are continuing to explore 
ways in which we may be able to offer specialists participating in MIPS 
APMs opportunities to report more relevant measures within the APP.
---------------------------------------------------------------------------

    \815\ That said, we note that the Shared Savings Program 
proposed to require that ACOs report the APP Plus quality measure 
set starting with PY 2025 (89 FR 61853).
---------------------------------------------------------------------------

    For the reasons specified previously, we proposed to amend Sec.  
414.1367(c)(1) to establish the APP Plus quality measure set and 
provide MIPS eligible clinicians, groups, and APM Entities the option 
to report the APP quality measure set or the APP Plus quality measure 
set beginning with the CY 2025 performance period/2027 MIPS payment 
year. We requested comment on this proposal.
    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters supported our proposal to create the APP 
Plus quality measure set as an optional measure set within the APP at 
Sec.  414.1367(c)(1). These commenters noted that the proposal offers 
several potential benefits. Numerous commenters appreciated that the 
APP Plus quality measure set will incrementally incorporate all of the 
existing Adult Universal Foundation measures, thereby promoting 
alignment and streamlining quality measure reporting across CMS quality 
programs and, as one commenter stated, with the private sector. Many 
commenters stated that our proposal to incrementally incorporate the 
Adult Universal Foundation measures and eCQM collection type into the 
APP Plus quality measure set is appropriate. Several commenters 
suggested that alignment of quality measures may drive improvements in 
care quality and outcomes. A few commenters noted the APP Plus quality 
measure set can help to encourage APM participation.
    Response: We thank the commenters for their support.
    Comment: One commenter questioned the necessity of creating the APP 
Plus quality measure set, instead of expanding the existing APP quality 
measure set. Several commenters expressed concern that reporting the 
APP Plus quality measure set will increase complexity and reporting 
burden for APM Entities that report the APP, particularly for Shared 
Savings Program Accountable Care Organizations (ACOs).
    Response: We established the APP Plus quality measure set as a 
second measure set distinct from the existing APP quality measure set 
because we recognize that reporting the APP Plus

[[Page 98358]]

quality measure set with its additional quality measures may require 
additional investments in infrastructure, skill development, and 
knowledge. However, because the APP Plus quality measure set is 
optional, a MIPS eligible clinician, group, or APM Entity that chooses 
to report the APP can assess the feasibility and benefits of reporting 
the APP Plus quality measure set as compared to the existing APP 
quality measure set and decide which measure set to report. We refer 
readers to section III.G.4.b.(2)(a) of this final rule for discussion 
regarding the separate but related proposal to require Shared Savings 
Program ACOs to report and be scored on the APP Plus quality measure 
set for purposes of meeting the Shared Savings Program's quality 
performance standard.
    Comment: Many commenters provided feedback on specific measures 
proposed for inclusion in the APP Plus quality measure set. 
Specifically, we received comment on Quality ID #112 Breast Cancer 
Screening; Quality ID #113 Colorectal Cancer Screening; Quality ID #305 
Initiation and Engagement of Substance Use Disorder Treatment; Quality 
ID #479 Hospital-Wide, 30-day All-Cause Unplanned Readmission (HWR) 
Rate for MIPS Clinician Groups; Quality ID #484 Clinician and Clinician 
Group Risk-standardized Hospital Admission Rates for Patients with 
Multiple Chronic Conditions; Quality ID #487 Screening for Social 
Drivers of Health; and Quality ID #493 Adult Immunization Status. 
Commenters expressed support for some measures and concern for other 
measures. Many commenters also commented on our proposed schedule for 
incorporating various measures into the APP Plus quality measure set. 
While some commenters suggested our incorporation schedule is 
appropriate, numerous other commenters had concerns with the timeline 
for incorporating the five additional Universal Foundation measures 
with the eCQM collection type into the APP Plus quality measure set and 
requested that we delay incorporation of each measure by one year or 
more to allow more time to prepare to report these measures.
    Response: We appreciate the commenters' careful consideration of 
our proposal to establish the APP Plus quality measure set, inclusive 
of the individual measures that will comprise it and our proposed 
schedule for incorporation of quality measures into the APP Plus 
quality measure set. The incremental incorporation of the five 
Universal Foundation measures not already included in the APP quality 
measure set into the APP Plus quality measure set will give eligible 
clinicians, groups and APM Entities that report the APP Plus quality 
measure set time to become familiar with new measure specifications and 
implement workflows necessary to support reporting of each additional 
measure. This phase-in approach will permit vendors to adequately 
prepare for eCQM implementation. However, we recognize that there may 
be increased burden with increased reporting requirements, and while 
the APP Plus quality measure set is optional for MIPS APM participants, 
we acknowledge that the reporting of all measures within the set is a 
requirement that follows on to the choice to use it, and further we 
recognize that the use of the APP Plus quality measure set will be 
required for Shared Savings Program ACOs. Therefore, to allow APM 
Entities, including Shared Savings Program ACOs, more time to build 
capacity to report the complete set of measures, we are finalizing our 
proposal with modification to incorporate the Universal Foundation 
measures more gradually than the schedule that we proposed for 
incorporation into the APP Plus quality measure set.
    For a few measures, we received comments on neither the 
incorporation of the measure into the APP Plus quality measure set nor 
on the proposed timeline for doing so, and therefore are finalizing the 
incorporation and phase-in schedule as proposed. Specifically, we are 
finalizing as proposed the incorporation of the following quality 
measures into the APP Plus quality measure set in the CY 2025 
performance period/2027 MIPS payment year: Quality ID #001 Diabetes: 
Hemoglobin A1c (HbA1c) Poor Control; Quality ID #134 Preventive Care 
and Screening: Screening for Depression and Follow-up Plan; Quality ID 
#236 Controlling High Blood Pressure; and Quality ID #321 CAHPS for 
MIPS.
    We address comments we received on specific quality measures in the 
responses below.
    Comment: Several commenters expressed support for incorporating 
Quality ID #112 Breast Cancer Screening and Quality ID #113 Colorectal 
Cancer Screening into the APP Plus quality measure set for the CY 2025 
performance period/2027 MIPS payment year.
    Response: We thank the commenters for their support.
    Comment: One commenter stated that Quality ID #112 Breast Cancer 
Screening and Quality ID #113 Colorectal Cancer Screening were retired 
from MIPS in 2024, while another commenter stated they believed vendors 
are no longer supporting these measures; these commenters suggested 
that incorporation of the measures into the APP Plus quality measure 
set should be delayed. Another commenter stated that adding these 
measures to the APP Plus quality measure set would increase 
administrative burden specifically for Shared Savings Program ACOs 
beginning in 2025 since they would be required to report all measures 
in the APP Plus quality measure set.
    Response: We want to correct an apparent misunderstanding regarding 
the Status of Quality ID #112 Breast Cancer Screening and Quality ID 
#113 Colorectal Cancer Screening in MIPS. Beginning with the CY 2024 
performance period/2026 payment year, these measures (in addition to 
one other) were removed from the traditional MIPS reporting option but 
otherwise retained for MVP development (88 FR 79897 through 79900). The 
clinical concepts represented by these quality measures support some 
specialties in a more targeted approach rather than the broader 
clinical concept of preventive screenings represented within the 
Quality #497: Preventive Care and Wellness (composite) measure. We also 
note that the measures are also being maintained for the CMS Web 
Interface collection type for Shared Savings Program ACOs reporting 
under the APP through the 2024 performance period, after which time the 
Web Interface will sunset. Nevertheless, we understand that reporting 
new quality measures may require an APM Entity, group, and/or clinician 
to update their workflows and processes. At the same time, we believe 
that it may take more effort to prepare to report quality measures with 
greater complexity and that there is a marked difference in complexity 
between the two cancer screening measures. Specifically, we believe the 
Colorectal Cancer Screening measure to be a more complex measure 
because five different screening tests can be used to build the 
numerator with look-back periods ranging from the current performance 
period to nine years prior as compared to the Breast Cancer Screening 
measure that has only one way to build the numerator (mammography) and 
a shorter look-back period of 27-months. In recognition of the 
difference in complexity between these two measures, we are finalizing 
without modification our proposal to incorporate Quality ID #112 Breast 
Cancer Screening into the APP Plus quality measure set for the CY 2025 
performance period/2027 MIPS payment year but are finalizing with 
modification our proposal to

[[Page 98359]]

incorporate Quality ID #113 Colorectal Cancer Screening into the APP 
Plus quality measure set with a one-year delay from the CY 2025 
performance period/2027 MIPS payment year to the CY 2026 performance 
period/2028 MIPS payment year. The incorporation dates of these 
measures are reflected in Table 67. We refer readers to section 
III.G.4.b.(2)(a) of this final rule for discussion regarding the 
separate but related proposal to require Shared Savings Program ACOs to 
report and be scored on the APP Plus quality measure set beginning in 
the CY 2025 performance period.
    Comment: With respect to Quality ID #305 Initiation and Engagement 
of Substance Use Disorder Treatment, several commenters expressed 
support for the inclusion of a behavioral health measure in the APP 
Plus quality measure set. These commenters believe the measure promotes 
whole person care. One commenter stated: ``given that overdose rates 
continue to be unacceptably high, it is critical to get upstream and 
employ preventive measures that help initiate and engage with substance 
use treatment.''
    Response: We thank the commenters for their support.
    Comment: A few commenters expressed concern with incorporating 
Quality ID #305 Initiation and Engagement of Substance Use Disorder 
Treatment into the APP Plus quality measure set. Two commenters stated 
that the measure is not endorsed at the clinician level. One commenter 
stated ``clinicians cannot force a patient to accept treatment for 
SUD'' and that the measure is ``difficult, if not impossible, for 
clinicians to track in the current health care landscape with a lack of 
interoperability across care settings and providers.'' A few commenters 
noted that some communities lack the resources necessary to assist 
patients with SUD. For the above reasons, commenters stated that 
reporting the measure would be complex and requested that the measure 
either not be incorporated into the APP Plus quality measure set or its 
incorporation be delayed.
    Response: We acknowledge that clinicians cannot force patients to 
initiate SUD treatment. However, we note that alcohol use disorder and 
SUD are prevalent, undertreated, and sources of significant morbidity 
and mortality with the majority of patients affected not receiving 
evidence-based care. For these reasons, we believe that initiation of 
treatment is important to measure. While our proposal to incorporate 
Quality ID #305 Initiation and Engagement of Substance Use Disorder 
Treatment into the APP Plus quality measure set did not provide 
distinct factors for commenters to address with respect to timing of 
incorporation into the APP Plus quality measure set, we are receptive 
to commenters' concerns about the behavioral health landscape and the 
challenges that lack of interoperability in health care present to 
accurately capturing and reporting the measure's numerator. We 
understand that reporting the Initiation and Engagement of Substance 
Use Disorder Treatment measure may be complex for APM Entities, groups, 
and clinicians, especially because not all APM Entities, groups and 
clinicians have the capability to furnish SUD treatment and must 
therefore refer patients out for such treatment. We recognize that 
outside referrals might be difficult for some clinicians to track for a 
variety of reasons, such as when a patient cannot be reached or 
otherwise declines to schedule an appointment. Therefore, to allow APM 
Entities time to create new workflows and processes that potentially 
rely on more than one source of data for documenting and tracking 
referrals and follow-up, we are finalizing with modification our 
proposal to incorporate Quality ID #305 Initiation and Engagement of 
Substance Use Disorder Treatment with a one-year delay from the CY 2026 
performance period/2028 MIPS payment year to the CY 2027 performance 
period/2029 MIPS payment year. The incorporation date of this measure 
is reflected in Table 67.
    Comment: With respect to Quality ID #479 Hospital-Wide, 30-Day, All 
Cause Unplanned Readmission (HWR) Rate, one commenter questioned 
whether hospital readmissions rates accurately reflect the quality of 
care for all patient populations and asked whether incentivizing lower 
readmissions could exacerbate disparities in care. This commenter 
opposed incorporation of the HWR measure into the APP Plus quality 
measure set.
    Response: We acknowledge the commenter's concerns. However, Quality 
ID #479 HWR Rate is not a new measure and we expect that APP reporters 
are familiar with it. The HWR Rate measure is a Universal Foundation 
measure and already included in the existing APP quality measure set. 
As we indicated throughout the proposed rule, our principal aim in the 
establishment of the APP Plus quality measure set is aligning with the 
Universal Foundation, which would not be fully accomplished if we 
permanently left out one of its included measures. Further, like all 
measures in the existing APP quality measure set, we believe inclusion 
of this measure in the APP Plus quality measure set meaningfully 
contributes to our stated goal to align quality measures across CMS 
programs. We also note that the measure uses administrative claims data 
to evaluate readmission rates and requires no additional data 
submission from APM Entities, groups, or eligible clinicians, which 
means there is no reporting burden associated with this measure. 
Therefore, we are finalizing as proposed our proposal to incorporate 
Quality ID #479 HWR Rate into the APP Plus quality measure set for the 
CY 2025 performance period/2027 MIPS payment year.
    Comment: A few commenters noted that the measure specification for 
Quality ID #484 Clinician and Clinician Group Risk-standardized 
Hospital Admission Rates for Patients with Multiple Chronic Conditions 
(MIPS MCC) as used in the APP quality measure set excludes patients 
assigned to a clinician who achieves qualifying APM participant (QP) 
status from the denominator. These commenters pointed out that in the 
2023 performance period, the denominator exclusion caused Shared 
Savings Program ACOs whose eligible clinicians were determined to be 
QPs to not be scored on the measure, resulting in greater weight being 
placed on the remaining measures within the APP quality measure set for 
such ACOs. These commenters are opposed to incorporating the MIPS MCC 
measure into the new APP Plus quality measure set out of concern that 
weight redistribution will continue to occur with potentially negative 
effects on ACOs' performance category scores.
    Response: We thank the commenters for bringing this to our 
attention. CMS understands that the exclusion of patients of QPs from 
the denominator of the MIPS MCC measure disparately impacts certain 
Shared Savings Program ACOs. This is so because of our QP determination 
rule for participation in an Advanced APM as specified at 42 CFR 
414.1425(b)(1) provides that eligible clinicians are assessed at the 
APM Entity level when a Participation List is used to identify eligible 
clinicians that participate with the APM Entity, as is the case with 
the Shared Savings Program and because the Shared Savings Program 
requires all participating ACOs to report and be scored on the quality 
measures in the APP quality measure set at the APM Entity level to 
evaluate quality performance, regardless of whether an ACO's eligible 
clinicians otherwise achieve QP status for a year through a track that 
qualifies as an Advanced APM.

[[Page 98360]]

    When a Shared Savings Program ACO's eligible clinicians achieve QP 
status together at the APM Entity level and the ACO reports the MCC 
measure, the denominator will be reduced to zero because the measure 
specification excludes patients of QPs. As the commenters noted, for 
the 2023 performance year, this resulted in some Shared Savings Program 
ACOs effectively not being scored on the MCC measure and having greater 
weight placed on the remaining measures in the APP quality measure set 
because when the denominator for a quality measure is reduced to zero, 
the measure is removed from the performance category score. Non-Shared 
Savings Program APM Entities that participated in an Advanced APM in 
2023, and whose clinicians achieved QP status for the year, did not 
experience the same weight redistribution with the APP quality measure 
set since QPs are ordinarily excluded from MIPS reporting and scoring. 
However, we note that these effects are seen when the measure is being 
used for purposes of the quality program of the Shared Savings Program, 
which requires its participant ACOs to report the APP. The APP is 
designed as a reporting and scoring pathway within MIPS for 
participants of MIPS APMs, and regulations governing the APP sit with 
other MIPS regulations. We recognize that at times, the 
interrelationship between the APP as a MIPS pathway and the Shared 
Savings Program may lead to intended consequences in one program and 
unintended consequences in the other. In this case, the exclusion of 
QPs from the measure is appropriate in the context of MIPS, from which 
QPs are statutorily excluded from participating, whereas for purposes 
of the Shared Savings Program, the exclusion of QPs leads to the 
aforementioned scoring quirk.
    It is concerning to us that the MIPS MCC measure specification may 
result in disparate impacts on the quality performance category scores 
between Shared Savings Program ACOs that participate in an advanced 
track of the program and APM Entities that participate in other APMs. 
However, as we stated in the CY 2025 proposed rule, we continue to 
believe that hospital admission rates are an effective marker of 
ambulatory care quality (89 FR 62026). We also believe that a MCC 
measure can help incentivize clinicians to develop and implement 
efficient and coordinated chronic disease management strategies to 
limit unplanned hospital admissions. This is consistent with the 
rationale we provided when we first proposed an MCC measure for 
inclusion in MIPS, at which time we stated that such measure ``promotes 
improved MCC management and coordinated care by assessing the unplanned 
hospital admissions for this high-risk population.'' (84 FR 40939). 
Therefore, we are finalizing with modification our proposal to 
incorporate Quality ID #484 Clinician and Clinician Group Risk-
standardized Hospital Admission Rates for Patients with Multiple 
Chronic Conditions into the APP Plus quality measure set. We are 
delaying the incorporation of the measure by one year from the CY 2025 
performance period/2027 MIPS payment year to the CY 2026 performance 
period/2028 MIPS payment year to allow CMS time to assess whether and 
how the measure can be respecified to allow more ACOs to be scored on 
the measure. The new incorporation date of this measure is reflected in 
Table 67. We will examine the use of this measure within MIPS for MIPS 
APM participants via the APP and by the Shared Savings Program as 
specified to exclude QPs from the calculation of the measure.
    Notwithstanding the incorporation delay of the MIPS MCC measure 
into the APP Plus quality measure set, the MIPS MCC measure will remain 
a part of the original APP quality measure set for the CY 2025 
performance period/2027 MIPS payment year such that MIPS APM 
participants who choose to report the APP quality measure set will be 
scored on the measure as it is currently specified.
    Comment: Several commenters expressed support for incorporating 
Quality ID #487 Screening for Social Drivers of Health (SDOH) into the 
APP Plus quality measure set. These commenters believe that assessing 
social needs can improve mental and physical health outcomes and 
advance health equity.
    Response: We thank the commenters for their support.
    Comment: Several commenters opposed to the incorporation of Quality 
ID #487 Screening for Social Drivers of Health (SDOH) measure into the 
APP Plus quality measure set. A few commenters noted that CMS requires 
collection of Health-Related Social Need (HRSN) data across multiple 
setting-specific programs and stated that repeated screenings could 
result in duplicative efforts and be counter-productive to building 
trust with patients. A few commenters highlighted research that 
suggests screening and referral for SDOH does not improve health 
outcomes. One commenter stated that reporting the measure would 
increase burden for clinicians because it requires evaluation of 
patient needs across many domains. Another commenter stated EHR may not 
reliably capture required data elements in available data fields. A few 
commenters noted that the eCQM specification is not currently available 
for the Screening for SDOH measure. Several commenters requested that 
CMS make available the eCQM specification for this measure in advance 
of its incorporation into the APP Plus quality measure set while one 
commenter specifically suggested that the Screening for SDOH measure be 
incorporated into the APP Plus quality measure set prior to the CY 2028 
performance period.
    Response: CMS has recognized the importance of screening for SDOH 
in prior rulemaking. Most recently, in the CY 2024 PFS final rule, we 
provided an illustrative example of how clinicians that identify unmet 
HRSNs through screening for SDOH can better understand and help address 
problem(s) addressed in a medical visit and associated risk factor. In 
this example, a clinician discovers a patient's living situation does 
not permit reliable access to electricity by screening the patient for 
HRSNs and, as a result, considers whether to prescribe an inhaler 
rather than a power-operated nebulizer to treat asthma (88 FR 78921). 
Absent SDOH screening, the clinician in this example might 
inadvertently prescribe a treatment (power-operated nebulizer) that the 
patient could not consistently self-administer as prescribed, leading 
to poor symptom control or frequent exacerbation of symptoms. This 
scenario makes clear that information regarding housing instability and 
utility difficulties gathered from screening for SDOH has the potential 
to improve health outcomes. We believe that information collected about 
HRSNs from other domains when screening for SDOH can be just as 
valuable when incorporated into clinical decision making. In addition, 
because HRSNs may change rapidly and identification of unmet needs may 
be used to improve patient care plans, it is appropriate to require 
collection of HRSN data across multiple setting-specific programs.
    CMS acknowledges that the Screening for SDOH measure requires 
assessment across multiple domains--specifically, food insecurity, 
housing instability, transportation needs, utility difficulties, and 
interpersonal safety. However, we note that measure burden is minimized 
because screening is accomplished through the use of a single, 
standardized tool and multiple assessments are not required within the 
same performance period. Further, clinicians have the

[[Page 98361]]

flexibility to choose which standardized tool to use to build the 
measure's numerator. The measure specification does not prescribe a 
tool that must be used but rather provides examples of standardized 
screening tools that may be used. These tools include: Accountable 
Health Communities Health-Related Social Needs Screening Tool (2017); 
\816\ Accountable Health Communities Health-Related Social Needs 
Screening Tool (2021); \817\ The Protocol for Responding to and 
Assessing Patients' Risks and Experiences (PRAPARE) Tool (2016); \818\ 
WellRx Questionnaire (2014); \819\ and American Academy of Family 
Physicians (AAFP) Screening Tool (2018).\820\ This flexibility allows 
APM Entities, groups, and eligible clinicians to choose the tool that 
can best be integrated into clinical workflows and practice-specific 
EHR. MIPS eligible clinicians, groups, and APM Entities are encouraged 
to work with their EHR vendors to ensure that screening for HRSNs 
across domains can be captured in practice-specific EHR.
---------------------------------------------------------------------------

    \816\ Centers for Medicare and Medicaid Services (2017). The 
Accountable Health Communities Health-Related Social Needs Screening 
Tool https://www.cms.gov/priorities/innovation/files/worksheets/ahcm-screeningtool.pdf.
    \817\ Centers for Medicare and Medicaid Services (2021). The 
Accountable Health Communities Health-Related Social Needs Screening 
Tool https://www.cms.gov/priorities/innovation/media/document/ahcm-screeningtool-companion#page=55&zoom=100,0,0.
    \818\ PREPARE Collaboration (2016). Protocol for Responding to 
and Assessing Patients' Assets, Risks, and Experiences https://prapare.org/the-prapare-screening-tool/.
    \819\ The Journal of the American Board of Family Medicine May 
2016, 29 (3) 414-418; DOI: 10.3122/jabfm.2016.03.150272. WellRx 
Questionnaire.
    \820\ American Academy of Family Physicians (2018). Social Needs 
Screening Tool https://www.aafp.org/dam/AAFP/documents/patient_care/everyone_project/hops19-physician-form-sdoh.pdf.
---------------------------------------------------------------------------

    In response to comments received that noted an eCQM is not 
presently available for the Screening for SDOH measure, we are 
finalizing with modification our proposal to incorporate Quality ID 
#487 Screening for Social Drivers of Health (SDOH) into the APP Plus 
quality measure set with a delay until the CY 2028 performance period, 
or the performance period that is one year after the eCQM specification 
becomes available for this measure, whichever is later. The 
incorporation date of this measure is reflected in Table 67. This delay 
is necessary due to variables related to the development and testing of 
new measures. In addition, we understand that it can take a substantial 
amount of time for a new measure specification to be supported by 
vendors and incorporated into electronic health records. We also 
believe a delay will allow APM Entities time to create new workflows 
and processes to screen for HRSNs. For these reasons, we are declining 
to incorporate the Screening for SDOH measure into the APP Plus quality 
measure set prior to the CY 2028 performance period.
    As stated above, we recognize that there are factors in the process 
of developing quality measure specifications beyond CMS' control, which 
may in turn delay the publication of the Screening for SDOH eCQM 
specification on the eCQI resource center and, ultimately, availability 
of the collection type for MIPS quality measures. We want to clarify 
that for the Adult Immunization Status measure to be incorporated into 
the APP Plus quality measure set in the CY 2028 performance period, the 
eCQM specification must be published on the eCQI resource center by May 
2027. If, however, the eCQM specification is published later, for 
example in May 2028, then the Screening for SDOH measure will be 
incorporated into the APP Plus quality measure set in the CY 2029 
performance period. Similarly, if the eCQM specification is published 
in May 2029, then the Screening for SDOH measure will be incorporated 
into the APP Plus quality measure set in the CY 2030 performance 
period, and so on.
    Comment: Several commenters expressed support for incorporating 
Quality ID #493 Adult Immunization Status into the APP Plus quality 
measure set. A few commenters stated that vaccinations can improve 
health equity given the disparate impact of infectious diseases on 
marginalized populations. One commenter stated that ``measure is 
perhaps one of the strongest tools to increase rates of adult 
immunizations.''
    Response: We thank the commenters for their support.
    Comment: Several commenters expressed concern about incorporation 
of Quality ID #493 Adult Immunization Status into the APP Plus quality 
measure set. These commenters stated that the measure would be 
technically complex to report and noted that the measure requires 
reporting on four different vaccines. One commenter stated that the 
vaccines with which the measure is concerned are not routinely 
administered in office-based settings because they are covered by 
Medicare Part D. Another commenter pointed out that patients may 
receive vaccines outside of office-based settings such as at retail 
pharmacies, local health departments, and in the workplace, creating 
difficulties tracking patient vaccinations. This commenter also stated 
that immunization registry challenges create administrative burden for 
clinicians that report vaccine measures. As with the SDOH measure, a 
few commenters noted that an eCQM specification is not currently 
available for the Adult Immunization Status measure and requested that 
CMS make available the eCQM specification for this measure in advance 
of its incorporation into the APP Plus quality measure set.
    Response: We acknowledge that clinicians may face challenges 
administering vaccines in office-based settings, including the four 
vaccines with which the Adult Immunization Status measure is concerned: 
influenza, Td/Tdap, herpes zoster, and pneumococcal conjugate. However, 
Medicare Part B covers a limited set of vaccines including both the 
influenza vaccine and pneumococcal conjugate, two of the four vaccines 
assessed by the Adult Immunization Status measure. Medicare Part D 
covers all commercially available vaccines, except those covered by 
Medicare Part B. With respect to the vaccines measured by the Adult 
Immunization Status measure, Medicare Part D covers the vaccines not 
covered by Medicare Part B; namely, Td/Tdap and herpes zoster. 
Clinicians can bill Medicare Part D for vaccines administered in office 
if enrolled in Medicare. We also note that under the current MIPS CQM 
specification, patient reported vaccination, when recorded in the 
medical record, is acceptable for meeting the numerator of the 
measure.\821\
---------------------------------------------------------------------------

    \821\ Quality ID #493 (CBE 3620): Adult Immunization Status 
(2024), available at https://qpp.cms.gov/docs/QPP_quality_measure_specifications/CQMMeasures/2024_Measure_493_MIPSCQM.pdf.
---------------------------------------------------------------------------

    Nevertheless, in response to comments received that noted an eCQM 
specification is not presently available for the Adult Immunization 
Status measure, we are finalizing with modification our proposal to 
incorporate Quality ID #493 Adult Immunization Status into the APP Plus 
quality measure set until the CY 2028 performance period, or the 
performance period that is one year after the eCQM specification 
becomes available for this measure, whichever is later. The 
incorporation date of this measure is reflected in Table 67. This delay 
is necessary due to variables related to the development and testing of 
new measures. In addition, we understand that it can take a substantial 
amount of time for a new measure specification to be supported by 
vendors and incorporated into electronic health records. We also 
believe a delay will allow APM Entities time to create new

[[Page 98362]]

workflows and processes to collect data related to vaccinations, 
particularly those administered outside the APM Entity.
    As stated above, we recognize that there are factors in the process 
of developing quality measure specifications beyond CMS' control, which 
may in turn delay the publication of the Adult Immunization Status eCQM 
specification on the eCQI resource center and, ultimately, availability 
of the collection type for MIPS quality measures. We want to clarify 
that for the Adult Immunization Status measure to be incorporated into 
the APP Plus quality measure set in the CY 2028 performance period, the 
eCQM specification must be published on the eCQI resource center by May 
2027. If, however, the eCQM specification is published later, for 
example in May 2028, then the Adult Immunization measure will be 
incorporated into the APP Plus quality measure set in the CY 2029 
performance period. Similarly, if the eCQM specification is published 
in May 2029, then the Adult Immunization Status measure will be 
incorporated into the APP Plus quality measure set in the CY 2030 
performance period, and so on.
    Comment: A few commenters suggested that we incorporate into the 
APP Plus quality measure set the measures from Universal Foundation of 
measures but with modifications. Several commenters suggested 
substitute or alternate measures for incorporation into the APP Plus 
quality measure set. Yet a few other commenters suggested that we 
incorporate additional measures into the APP Plus quality measure set 
including a cardiac care measure, a kidney health evaluation measure, 
an HIV screening measure, and any new setting- and population-specific 
``add-on'' measures later added to the Universal Foundation of 
measures.
    Response: When we proposed to leverage the Universal Foundation of 
measures to create the APP Plus quality measure set, we did so with the 
goal of aligning quality programs across CMS. It was never our intent 
to create a new or iterative quality measure set as doing so would not 
streamline quality measure reporting across CMS. While each of the 
measures suggested may have specific merits, as we stated in the CY 25 
PFS proposed rule, ``alignment of quality measures across CMS programs 
allows practitioners to better focus their quality efforts, reduces 
administrative burden, and drives digital transformation and 
stratification of a focused quality measure set to assess impact on 
disparities'' (89 FR 62023). We believe that incorporating the 
Universal Foundation of measures into the APP Plus quality measure set 
as is best supports our goal of alignment.
    Comment: Several commenters observed that the APP Plus quality 
measure set is primary-care focused and stated that it should include 
more specialty measures.
    Response: When we proposed to establish the APP Plus quality 
measure set in the CY 2025 PFS proposed rule and shared our plans to 
incorporate the Universal Foundation of measures into the APP Plus 
quality measure set, we acknowledged that the Universal Foundation 
emphasizes primary and preventive care. We also recognized that ``while 
the Adult Universal Foundation quality measures are relevant to a 
significant portion of clinicians who are eligible to report the APP, 
they are not relevant for all such clinicians'' and that ``there are 
specialists for whom few, if any, of these measures may be relevant'' 
(89 FR 62024). We want to reiterate that the APP's primary goal is to 
offer an opportunity for MIPS APM participants to align with quality 
programs across CMS. As CMS continues to develop new and innovative APM 
offerings for specialists, and the proportion of specialists in APMs 
increases, we are considering how the MIPS quality performance category 
as it is reported and scored within the APP might better reflect the 
practice and needs of specialists. As such, we continue to explore ways 
in which we may be able to offer specialists participating in MIPS APMs 
opportunities to report more relevant measures within the APP, 
including considering methods for collecting input from interested 
parties on this point.
    Comment: One commenter questioned why eligible clinicians, groups, 
and APM Entities that report the APP Plus quality measure set for a 
performance period would be required to report all measures in the APP 
Plus quality measure set instead of selecting six measures, as required 
for other MIPS reporting pathways.
    Response: The APP Plus quality measure set was designed to align 
with other quality programs across CMS and leverages the Universal 
Foundation of measures to do that. If APP reporters could each choose 
from the APP Plus quality measure set a subset of six measures to 
report for a performance period, many unique combinations of measures 
could result. Such variability would not allow for meaningful quality 
comparisons between or among APP reporters, which is essential for many 
of the APMs, including the Shared Savings Program, that use the APP. 
True alignment across CMS quality programs cannot be achieved if those 
reporting the APP Plus quality measure set do not report substantially 
the same measures as participants of other quality programs. 
Additionally, because our regulations already establish with respect to 
the APP that all measures in the original APP quality measure set are 
required to be reported and scored, if applicable, CMS' operational 
process for scoring the APP would need to be changed to reflect a top-
six approach for the APP Plus quality measure set, increasing 
operational cost and complexity year after year with the incremental 
adoption of each measure into the APP Plus quality measure set. Without 
a strong programmatic benefit for doing so, it would not be prudent to 
take on the added burden and commensurate cost to the public. Finally, 
while it may seem counterintuitive that reporting more measures has a 
burden reduction component, there is administrative simplicity in 
knowing exactly what to report and which measures will be scored 
without having to examine and choose individual measures each year, 
when reporters have incentives to switch measures to maximize scoring. 
When we proposed to establish the APP for the CY 2021 performance 
period, we proposed to require that MIPS eligible clinicians who 
reported the APP would be scored on all measures in the APP quality 
measure set (85 FR 50285).\822\ We finalized this proposal in the CY 
2021 final rule (85 FR 84472-85377) so that MIPS APM participants that 
reported under the APP would know exactly what measures to report and 
would not have to expend effort poring over measure options and making 
individual measure choices. Therefore, we are now similarly finalizing 
the requirement that MIPS eligible clinicians scored under the APP Plus 
APP Plus quality measure set to report all measures in the measure set.
---------------------------------------------------------------------------

    \822\ But note, ``[f]or those MIPS eligible clinicians, groups, 
or APM Entities for whom a measure is unavailable due to the size of 
the available patient population or who are otherwise unable to meet 
the minimum case threshold for a measure, we [ ] propos[ed] to 
remove such measure from the quality performance category score for 
such MIPS eligible clinician, group or APM Entity.'' 85 FR 50286.
---------------------------------------------------------------------------

    Comment: One commenter believed our proposal would ``open up the 
APP (and APP Plus) measure sets'' to MIPS eligible clinicians and 
groups not in a MIPS APM.
    Response: In the CY 2021 PFS final rule (85 FR 84859 through 
84866), we finalized the APP at Sec.  414.1367 beginning in CY 2021 
performance period/2023 MIPS payment year as an optional streamlined 
reporting and

[[Page 98363]]

scoring pathway for MIPS eligible clinicians identified on the 
Participation List or Affiliated Practitioner List of an APM Entity. 
When we proposed to create the APP Plus quality measure set, we noted 
that we were not proposing to modify the existing APP framework for the 
APP as a reporting and scoring pathway and stated ``the APP will 
continue to be available to MIPS eligible clinicians, groups, and APM 
Entities participating in MIPS APMs, meaning that only these clinician 
types will be able to report and be scored on the APP Plus quality 
measure set'' (89 FR 62023). We regret that this statement may have 
caused confusion. However, because the APP is only available to MIPS 
eligible clinicians identified on the Participation List or Affiliated 
Practitioner List of an APM Entity, and the APP is the only reporting 
pathway that offers the APP Plus quality measure set, it is our intent 
that only MIPS eligible clinicians, groups, and APM Entities that 
participate in a MIPS APM and are otherwise eligible to report the APP, 
and do report the APP, may choose to report the APP Plus quality 
measure set.
    After consideration of public comments, we are finalizing our 
proposal to amend Sec.  414.1367(c)(1) to establish the APP Plus 
quality measure set and provide MIPS eligible clinicians, groups, and 
APM Entities the option to report the APP quality measure set or the 
APP Plus quality measure set beginning with the CY 2025 performance 
period/2027 MIPS payment year. However, we are finalizing with 
modification the phase-in schedule for incorporating measures into the 
APP Plus quality measure set.
(3) Measures for Use in the APP Quality Measure Set and APP Plus 
Quality Measure Set
    In the CY 2021 PFS final rule, we adopted the current APP quality 
measure set (85 FR 84860 and 84861). Table 66 contains the current APP 
quality measure set. We did not propose any changes to the existing APP 
quality measure set for the CY 2025 performance period/2027 MIPS 
payment year or successive years.
    In the CY 2025 PFS propose rule, we proposed a phased approach to 
establish the APP Plus quality measure set over four years (89 FR 
62024). As early as the CY 2028 performance period/2030 MIPS payment 
year, the APP Plus quality measure set will consist of the measures 
currently contained in the APP quality measure set and five additional 
quality measures from the Universal Foundation measure set. We proposed 
to phase in the new measures over time to allow for both the eCQM and, 
for Shared Savings ACOs, Medicare CQM collection types to be developed 
and become available. Specifically, we proposed that the APP Plus 
quality measure set will consist of the six measures currently 
contained in the APP quality measure set and the following five new 
measures described below, which will be added incrementally. However, 
as described in the comment responses, we are finalizing a modified 
timeline for incorporating quality measures into the APP Plus quality 
measure set.
     Beginning with the CY 2025 performance period/2027 MIPS 
payment year and subsequent performance periods: The Breast Cancer 
Screening (Quality ID #112) measure. This measure is currently 
available with the eCQM, MIPS CQM, and Medicare Part B Claims measure 
collection types. We will make the Medicare CQM collection type 
available for this measure prior to the start of performance year 2025 
only for Shared Savings Program ACOs.
     Beginning with the CY 2026 performance period/2028 MIPS 
payment year and subsequent performance periods: The Colorectal Cancer 
Screening (Quality ID #113) measure. This measure is currently 
available with the eCQM, MIPS CQM, and Medicare Part B Claims measure 
collection types. We will make the Medicare CQM collection type 
available for this measure prior to the start of performance year 2026 
only for Shared Savings Program ACOs. Beginning with the CY 2026 
performance period/2028 MIPS payment year, we will also incorporate the 
Clinician and Clinician Group Risk-standardized Hospital Admission 
Rates for Patients with Multiple Chronic Conditions (Quality ID #484) 
measure. The MCC measure is an administrative claims-based measure.
     Beginning with the CY 2027 performance period/MIPS payment 
year 2029 and subsequent performance periods: The Initiation and 
Engagement of Substance Use Disorder Treatment (Quality ID #305) 
measure. This measure is currently available with the eCQM collection 
type. We will make the Medicare CQM collection type available for this 
measure prior to the start of performance year 2027 and only for Shared 
Savings Program ACOs.
     Beginning no earlier than the CY 2028 performance period/
2030 MIPS payment year and continuing for subsequent performance 
periods: The Screening for Social Drivers of Health (Quality ID #487) 
and Adult Immunization Status (Quality ID #493) measures. These 
measures are currently available with the MIPS CQM collection type but 
are not currently available with the eCQM or Medicare CQM collection 
types. Because developing an eCQM specification typically takes three 
years, we will add these measures to the APP Plus quality measure set 
in the CY 2028 performance period/2030 MIPS payment year, or the 
performance period that is one year after the eCQM specification 
becomes available for each respective measure, whichever is later. We 
will make these measure specifications available prior to the first 
year that each measure is incorporated into the APP Plus quality 
measure set.
    As discussed earlier, we intend to incorporate the Adult Universal 
Foundation measures in the APP Plus quality measure set. We note that 
the additional Universal Foundation measures that we proposed to 
include in the APP Plus quality measure set align with national 
condition-specific initiatives and CMS priorities. In this section, we 
briefly discuss each new Universal Foundation measure that will be 
added to the APP Plus quality measure set and that is not already 
included in the APP quality measure set: Breast Cancer Screening and 
Colorectal Cancer Screening Measures.
(a) Breast Cancer Screening Measure and Colorectal Cancer Screening 
Measure
    Our addition of the Breast Cancer Screening (Quality ID #112) and 
Colorectal Cancer Screening (Quality ID #113) measures to the APP Plus 
quality measure set starting with the CY 2025 performance period and 
the CY 2026 performance period, respectively, aligns with the President 
and First Lady's Cancer Moonshot initiative, of which a key objective 
is to ``make sure everyone has access to cancer screenings--so more 
Americans can catch cancer early, when outcomes are best.'' \823\ 
Breast cancer and colorectal cancer are two of the most common types of 
cancers, accounting for an estimated 23 percent of all new cancer 
diagnoses in the United States in 2023.\824\ Because the risk of 
developing these types of cancers increases with age, the Breast Cancer 
Screening measure focuses on mammogram screening for breast cancer 
every 24 months starting at age 50 and the Colorectal Cancer Screening 
measure focuses on appropriate screening for colorectal cancer once per

[[Page 98364]]

performance period, also starting at age 50. Additionally, the February 
2024 preliminary measure specifications for the eCQM version of 
Colorectal Cancer Screening lower the starting age for screenings to 
45, an update that aligns with United States Preventive Services Task 
Force recommendation that colorectal cancer screening begin at age 45 
to reduce risk of death.\825\
---------------------------------------------------------------------------

    \823\ The White House (n.d.). The President and First Lady's 
Cancer Moonshot. Accessed March 28, 2024. https://www.whitehouse.gov/cancermoonshot/.
    \824\ Siegel, R.L., Miller, K.D., Wagle, N.S., & Jemal, A. 
(2023). Cancer statistics, 2023. CA: a cancer journal for 
clinicians, 73(1), 17-48. https://doi.org/10.3322/caac.21763.
    \825\ eCQI Resource Center (2023). Colorectal Cancer Screening. 
Accessed March 29, 2024. https://ecqi.healthit.gov/ecqm/ec/2024/cms0130v12?compare=2024to2023. United States Preventative Task Force 
(2021). Final Recommendation on Screening for Colorectal Cancer. 
https://www.uspreventiveservicestaskforce.org/uspstf/sites/default/files/file/supporting_documents/colorectal-cancer-screening-final-rec-bulletin.pdf.
---------------------------------------------------------------------------

(b) Initiation and Engagement of Substance Use Disorder Treatment 
Measure
    We described in the CY 2025 PFS proposed rule that an estimated 
48.7 million Americans aged 12 or older (17.3 percent of the 
population) were classified as having had a substance use disorder 
(SUD) in the past year in 2022 (89 FR 62025).\826\ These individuals 
are at an increased risk for having major medical conditions, injury, 
overdose, and death.\827\ Outcomes for individuals with SUDs are 
improved through early and regular treatment.\828\ Initiation and 
Engagement of Substance Use Disorder Treatment (Quality ID #305) 
measure ensures patients 13 years of age and older with a new SUD 
episode have the initiation of intervention or medication within 14 
days of the new SUD episode or engage in ongoing treatment, including 
two additional interventions or short-term medications, or one long-
term medication within 34 days of the initiation of treatment. This 
measure also supports CMS efforts to reduce deaths related to opioid 
overdoses, which have significantly increased in recent years,\829\ and 
the CMS Behavioral Health Strategy.\830\
---------------------------------------------------------------------------

    \826\ Substance Abuse and Mental Health Services Administration. 
(2023). Key substance use and mental health indicators in the United 
States: Results from the 2022 National Survey on Drug Use and Health 
(HHS Publication No. PEP23-07-01-006, NSDUH Series H-58). Center for 
Behavioral Health Statistics and Quality, Substance Abuse and Mental 
Health Services Administration. https://www.samhsa.gov/data/report/2022-nsduh-annual-national-report. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5291754/.
    \827\ Bahorik, A.L., D.D. Satre, A.H. Kline-Simon, C.M. Weisner, 
C.L. Campbell. 2017. ``Alcohol, Cannabis, and Opioid Use Disorders, 
and Disease Burden in an Integrated Health Care System.'' J 
Addiction Medicine 11(1),3-9. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5291754/.
    \828\ Kampman, K., K. Freedman. 2020. ``American Society of 
Addiction Medicine (ASAM) National Practice Guideline for the 
Treatment of Opioid Use Disorder: 2020 Focused Update.'' Journal of 
Addiction Medicine 14, no. 2S: 1-91, https://doi.org/10.1097/ADM.0000000000000633.
    \829\ National Institute on Drug Abuse (2023). Drug Overdose 
Deaths. Accessed March 28, 2024. https://nida.nih.gov/research-topics/trends-statistics/overdose-death-rates.
    \830\ Centers for Medicare and Medicaid Services (2024). CMS 
Behavioral Health Strategy. Accessed April 19, 2024. https://www.cms.gov/cms-behavioral-health-strategy.
---------------------------------------------------------------------------

(c) Screening for Social Drivers of Health Measure
    We described in the CY 2025 PFS proposed rule (89 FR 62025) that in 
the CY 2023 PFS proposed rule (87 FR 46154 through 46155) we had sought 
comment on the potential future inclusion of the Screening for Social 
Drivers of Health (Quality ID #487) measure in the APP quality measure 
set. While the majority of commenters were generally supportive of 
adding the Screening for Social Drivers of Health measure, several 
raised concerns related to the undue burden on collection, cost and 
resources of implementation, and holding providers accountable for the 
collection of data which could be beyond their scope or ability. Some 
supportive commenters appreciated that the Screening for Social Drivers 
of Health measure could drive the standardization of measures that 
examine social drivers of health in Federal health care quality and 
payment systems, and that this would ultimately drive the health of our 
patients and our Nation, maximize the use of limited Government 
resources to support vulnerable patients, and achieve quality 
improvement and equity in health outcomes. Commenters further stated 
that the Screening for Social Drivers of Health measure is crucial in 
recognizing the impact of health-related social needs issues on 
patients and providers, in laying the foundation to invest in those 
communities, and in avoiding fragmentation and provider/patient burden 
by supporting alignment across public and private quality and payment 
programs. Some commenters opposed the addition of the measure and 
cautioned CMS to test it before it would be required. Other opposed 
commenters voiced their concern about the undue burden on data 
collection among patients and providers and the costs and resources 
associated with implementing new Social Drivers of Health measures, and 
that gathering health related social needs data would lead to holding 
providers accountable for addressing social needs of patients that is 
beyond a provider's scope or ability.
    The benefits of adding the Screening for Social Drivers of Health 
measure to the APP Plus quality measure set outweigh these concerns. 
For example, while the challenges and concerns noted previously in this 
section associated with implementing screening for Social Drivers of 
Health are voiced by family medicine clinicians, social workers, and 
clinical staff, including the potential negative impact screening could 
have on the patient-clinician relationship, screening for social 
drivers of health uncovers patient needs, allows clinicians to provide 
their patients with resources or referrals, results in appropriately 
adapting patient care, and prioritizes patient safety.\831\ The 
addition of the Screening for Social Drivers of Health measure also is 
consistent with our priorities to advance health equity and move toward 
whole-person care throughout our various programs, including the MIPS 
and the Hospital Inpatient Quality Reporting (HICR) programs. This 
measure addresses five social and economic determinants--namely, food 
insecurity, housing instability, transportation needs, utility 
difficulties, and interpersonal safety \832\--that are central to the 
Health Equity strategic plan pillar (https://www.cms.gov/pillar/health-equity) and have been identified as both a measurement priority and a 
performance gap among CMS programs.
---------------------------------------------------------------------------

    \831\ Porterfield, L., Jan, Q.H., Jones, F., Cao, T., Davis, L., 
Guillot-Wright, S., & Walcher, C.M. (2024). Family Medicine Team 
Perspectives on Screening for Health-Related Social Needs. Journal 
of the American Board of Family Medicine: JABFM, 
jabfm.2023.230167R3. Advance online publication. https://doi.org/10.3122/jabfm.2023.230167R3.
    \832\ https://qpp.cms.gov/docs/QPP_quality_measure_specifications/CQM-Measures/2023_Measure_487_MIPSCQM.pdf.
---------------------------------------------------------------------------

    The movement to address socioeconomic, environmental, and 
behavioral health factors (referred to as drivers of health) has gained 
traction after a study estimated that only 20 percent of a person's 
health outcomes are linked to their medical care with the remaining 80 
percent attributable to drivers of health.\833\ Because of the strong 
relationship between Social Drivers of Health and physical health 
outcome, screening for Social Drivers of Health will support the goals 
of improving health outcomes by providing clinicians with a more 
comprehensive understanding of each patient's circumstances to inform 
clinical decision making and ensure high-quality care.
---------------------------------------------------------------------------

    \833\ Hood, C.M., K.P. Gennuso, G.R. Swain, and B.B. Catlin. 
2016. County health rankings: Relationships between determinant 
factors and health outcomes. American Journal of Preventive Medicine 
50(2):129-135. https://doi.org/10.1016/j.amepre.2015.08.024.
---------------------------------------------------------------------------

    In addition, many of these drivers of health are not only linked to 
poorer health, but disproportionately impact

[[Page 98365]]

communities of color and underserved populations. Through screening, 
once per performance period, of patients 18 years and older for food 
insecurity, housing instability, transportation needs, utility 
difficulties, and interpersonal safety, screening for Social Drivers of 
Health and appropriate referrals can potentially improve health 
outcomes and reduce health disparities. As we indicated when we 
proposed to adopt Screening for Social Drivers of Health in MIPS in the 
CY 2023 PFS proposed rule, we believe that consistently addressing 
drivers of health will have two significant benefits. First, because 
drivers of health disproportionately impact individuals and communities 
that are disadvantaged and/or underserved by the healthcare system, the 
promotion of screening for these factors will support clinician 
practices and health systems in actualizing an expressed commitment to 
address disparities in care, implementing associated equity measures to 
track progress, and improving overall health equity.\834\ Second, 
patient-level driver of health data through screening is essential in 
the long-term to encourage meaningful collaboration among clinicians 
and community-based organizations, and implement and evaluate related 
innovations in healthcare and social service delivery. (87 FR 46280)
---------------------------------------------------------------------------

    \834\ American Hospital Association. (December, 2020). Health 
Equity, Diversity & Inclusion Measures for Hospitals and Health 
System Dashboards. Available at https://ifdhe.aha.org/system/files/media/file/2020/12/ifdhe_inclusion_dashboard.pdf.
---------------------------------------------------------------------------

(d) Adult Immunization Status Measure
    We described in the CY 2025 PFS proposed rule that the Adult 
Immunization Status measure (Quality ID #493) ensures that adults are 
up to date with the recommended routine vaccines: influenza; tetanus 
and diphtheria (Td) or tetanus, diphtheria and acellular pertussis 
(Tdap); zoster; and pneumococcal (89 FR 62026). We also stated that 
this robust measure supports the comprehensive evaluation of compliance 
with recommended adult immunizations that improve quality care and 
prevent disease (89 FR 62026).
(e) Maintaining the Use of the Clinician and Clinician Group Risk-
standardized Hospital Admission Rates for Patients With Multiple 
Chronic Conditions Measure in the APP Quality Measure Set and Including 
It in the APP Plus Quality Measure Set
    We noted in the CY 2025 PFS proposed rule (87 FR 46154 through 
46155) that Clinician and Clinician Group Risk-standardized Hospital 
Admission Rates for Patients with Multiple Chronic Conditions (Quality 
ID #484) is an administrative claims-based measure that is in the APP 
quality measure set for the MIPS CY performance period 2025/2027 
payment year under policies finalized in the CY 2024 PFS final rule (88 
FR 79113 and 79114) but is not one of the ten Adult Universal 
Foundation measures. Our proposal would continue to maintain this 
measure in the APP quality measure set, but the Clinician and Clinician 
Group Risk-standardized Hospital Admission Rates for Patients with 
Multiple Chronic Conditions (Quality ID #484) would be withheld from 
the APP Plus quality measure set for the CY 2025 performance period/
2027 MIPS payment year before being incorporated in the CY 2026 
performance period/2028 MIPS payment year and subsequent performance 
periods. We continue to believe that hospital admission rates are an 
effective marker of ambulatory care quality. As noted in our rationale 
for adopting the measure in the measure specifications, ``Hospital 
admissions from the outpatient setting reflect a deterioration in 
patients' clinical status and as such reflect an outcome that is 
meaningful to both patients and providers.\835\ Patients receiving 
optimal, coordinated high-quality care should use fewer inpatient 
services than patients receiving fragmented, low-quality care. Thus, 
high population rates of hospitalization may signal poor quality of 
care or inefficiency in health system performance. Furthermore, these 
effects may be exacerbated in disadvantaged areas.\836\ Patients with 
multiple chronic conditions are at high risk for hospital admission, 
often for potentially preventable causes, such as exacerbation of 
pulmonary disease.'' \837\ Maintaining this measure in the APP quality 
measure set and, as a consequence, including it in the APP Plus quality 
measure set also is consistent with our previously stated goals in the 
CY 2021 PFS final rule to align the APP with the Meaningful Measures 
framework, an initiative to remove lower value quality measures across 
CMS programs while keeping measures that have less burden and are the 
most meaningful with the greatest impact on patient outcomes. This 
measure supports the framework's goals as it is identified among the 
highest priorities for quality measurement and improvement while also 
reducing burden, promoting alignment, moving payment toward value, and 
identifying key quality performance metrics for consumers (85 FR 
84726).
---------------------------------------------------------------------------

    \835\ Centers for Medicare and Medicaid Services--Quality 
Payment Program (2023). Measure information for the Multiple Chronic 
Care Conditions (MCC) Risk-standardized Hospital Submission Rate for 
Patients for the Merit-based Incentive Payment System (MIPS) Groups, 
Performance Year (PY)2023 MCC Measure Code Specifications, Retrieved 
March 22, 2024 from 2023 Clinician and Clinician Group Risk-
standardized Hospital Admission Rates for Patients with Multiple 
Chronic Conditions--QPP. https://qpp-cm-prod-content.s3.amazonaws.com/uploads/2202/2023%20MIPS%20Multiple%20Chronic%20Conditions%20Measure%20Specifications.zip.
    \836\ Jencks, S.F., et al. (2019). ``Safety-Net Hospitals, 
Neighborhood Disadvantage, and Readmissions Under Maryland's All-
Payer Program: An Observational Study.'' Ann Intern Med. doi: 
10.7326/M16-2671.
    \837\ Abernathy, K., Zhang, J., Mauldin, P., Moran, W., 
Abernathy, M., Brownfield, E., & Davis, K. (2016). Acute Care 
Utilization in Patients With Concurrent Mental Health and Complex 
Chronic Medical Conditions. Journal of Primary Care & Community 
Health, 7(4), 226-233. https://doi.org/10.1177/2150131916656155.
---------------------------------------------------------------------------

(f) The APP and APP Plus Quality Measure Sets Beginning With the CY 
2025 Performance Period/2027 MIPS Payment Year
    Table 67 identifies the measures in the Adult Universal Foundation 
measure set, crosswalks them to corresponding MIPS measures, and lists 
the timeline for their incorporation into the APP Plus quality measure 
set between the CY 2025 and 2028 performance periods/2027 and 2030 MIPS 
payment years as they become available for both the eCQM and Medicare 
CQM collection types. We note that Clinician and Clinician Group Risk-
standardized Hospital Admission Rates for Patients with Multiple 
Chronic Conditions (Quality ID #484) is not one of the ten Adult 
Universal Foundation measures and is not listed in Table 23; however, 
we are maintaining reporting of this measure in the APP quality measure 
set, and, as such, also proposed to include it in the APP Plus quality 
measure set. We note we are finalizing incorporation Quality ID #484 
into the APP Plus quality measure set with a one-year delay to the CY 
2026 performance period/2028 MIPS payment year and subsequent 
performance periods, as discussed above.
BILLING CODE 4120-01-P

[[Page 98366]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.113

    We refer readers to Table 66 for the APP quality measure set for 
the CY 2025 performance period/2027 MIPS payment year and subsequent 
years. The APP Plus quality measures for the CY 2025, 2026, 2027, and 
2028 performance period and subsequent performance periods are 
displayed in Tables 68, 69, 70, and 71 respectively. We are finalizing 
that there will be six measures in the APP Plus quality measure set in 
the CY 2025 performance period (Table 68), eight measures in the CY 
2026 performance period (Table 69), nine measures in the CY 2027 
performance period (Table 70), and eleven measures no sooner than the 
CY 2028 performance period (Table 71). We refer readers to Appendix 1 
of this final rule for additional measure specification information.

[[Page 98367]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.114


[[Page 98368]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.115


[[Page 98369]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.116


[[Page 98370]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.117

BILLING CODE 4120-01-C

[[Page 98371]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.118

    Scoring for the APP quality performance category scoring 
methodology at Sec.  414.1367(c)(1) will continue to be performed in 
accordance with Sec.  414.1380(b)(1). For the APP quality measure set, 
this means that the scoring methodology will not change. For the APP 
Plus quality measure set, we proposed to calculate the MIPS quality 
performance category score for a MIPS eligible clinician, group, or APM 
Entity that chooses to report the APP Plus quality measure set via the 
APP by summing the scores for all of the measures, as applicable, 
included in the APP Plus quality measure set for a given year. Scoring 
clinicians on all measures, as applicable, in the APP Plus quality 
measure set will promote the best, safest, and most equitable care and 
provide a comprehensive assessment of the performance of those who 
choose to report the measure set.
    Because we proposed that a MIPS eligible clinician, group, or APM 
Entity that chooses to report the APP Plus quality measure set will be 
scored on all of the measures in that set, we also proposed a 
conforming change to MIPS data submission requirements in Sec.  
414.1335(b) to require that a MIPS eligible clinician, group, or APM 
Entity that reports the APP Plus quality measure set via the APP will 
be required to report on all measures included in the APP Plus quality 
measure set, except for administrative claims-based measures, which are 
calculated using data from claims submissions. We solicited comment on 
this proposal. For further discussion on the data submission proposal 
for the APP Plus quality measure set, see section IV.A.4.e.(1)(b) of 
this final rule.
d. Data Submission for the Performance Categories
(1) Overview
    For previously established policies relevant to data submission for 
the MIPS performance categories, we refer readers to Sec.  414.1325 and 
the CY 2017 Quality Payment Program final rule (81 FR 77087 through 
77097), CY 2018 Quality Payment Program final rule (82 FR 53619 through 
53626), CY 2023 PFS final rule (86 FR 65438 through 65441) and CY 2024 
PFS final rule (88 FR 79330 through 79332). Specifically, we finalized 
at Sec.  414.1325(a)(1) that individual MIPS eligible clinicians, 
groups, virtual groups, subgroups, and Alternative Payment Model (APM) 
Entities must submit data on measures and activities for the quality, 
improvement activities, and Promoting Interoperability performance 
categories in accordance with Sec.  414.1325. We note, that under the 
current policies described at Sec.  414.1325(a)(2), there are no data 
submission requirements for the cost performance category or 
administrative claims-based quality measures.
    In the CY 2025 PFS proposed rule (89 FR 62031 through 62036), we 
proposed to adopt minimum criteria for a qualifying data submission for 
a MIPS performance period for the quality, improvement activities, and 
Promoting Interoperability performance categories at Sec.  
414.1325(a)(1)(i) through (iii). We also proposed to codify our 
existing policies governing our treatment of multiple data submissions 
received for the quality and improvement activities performance 
categories at Sec.  414.1325(f)(1). We also proposed to modify our 
existing policy governing our treatment of multiple data submissions 
received for the Promoting Interoperability performance category at 
Sec.  414.1325(f)(2).
    Policies in this section of this final rule are intended to 
eliminate certain issues with the scoring of an unintended data 
submission affecting payment adjustments for individual MIPS eligible 
clinicians, groups, virtual groups, subgroups, and APM Entities. We 
proposed these changes to be effective beginning with the CY 2024 
performance period/2026 MIPS payment year for the data submission 
period in CY 2025.

[[Page 98372]]

(2) Minimum Criteria for a Qualifying Data Submission for the MIPS 
Quality, Improvement Activities, and Promoting Interoperability 
Performance Categories
(a) Background
    CMS uses the data submitted by (or on behalf of) individual MIPS 
eligible clinicians, groups, virtual groups, subgroups, or APM Entities 
in the quality, improvement activities, and Promoting Interoperability 
performance categories to assess their performance on the measures and 
activities in these three categories and to determine their MIPS 
payment adjustments. Under the previously established data submission 
policies at Sec.  414.1325, individual MIPS eligible clinicians, 
groups, virtual groups, subgroups, and APM Entities generally submit 
data on measures and activities for the quality, improvement 
activities, and Promoting Interoperability performance categories in 
accordance with the data submission deadlines at Sec.  414.1325(e)(1). 
Under our current policies, we consider any submission of data received 
for a MIPS performance category during the designated data submission 
period for a MIPS performance period in accordance with Sec.  
414.1325(e)(1) to be a data submission for the corresponding MIPS 
performance period and assign a score for the submission.
    For the quality and improvement activities performance categories, 
under the current reweighting policies at Sec.  414.1380(c)(2)(i)(A)(6) 
through (8) for an extreme and uncontrollable circumstance (EUC) or 
other type of exception based on certain circumstances, we score any 
data submitted by (or on behalf of) a MIPS eligible clinician with an 
approved reweighting application. This includes MIPS eligible 
clinicians with an approved application-based EUC reweighting or an 
approved reweighting for a clinician identified in a CMS-designated 
region affected by an automatic EUC event. Under this current policy, 
in the event that a MIPS eligible clinician submits any data for the 
quality or improvement activities performance category, such submission 
overrides the approved reweighting for the applicable performance 
category and we score the performance categories for which data was 
submitted, and include the performance category scores in the MIPS 
eligible clinician's final score as otherwise provided in Sec.  
414.1380(c).
    Similarly, for the Promoting Interoperability performance category, 
under the current reweighting policies at Sec.  414.1380(c)(2)(i)(C) 
for a significant hardship or other type of exception based on certain 
circumstances, we score any data submitted by (or on behalf of) a MIPS 
eligible clinician with an approved reweighting application, except as 
provided in Sec.  414.1380(c)(2)(i)(C)(10) and (11). Under this current 
policy, in the event that a MIPS eligible clinician submits any data 
for the Promoting Interoperability performance category, such 
submission overrides the approved reweighting for the performance 
category and we will score the Promoting Interoperability performance 
category and include the category score in the MIPS eligible 
clinician's final score as otherwise provided in Sec.  414.1380(c).
    We have received inquiries from MIPS eligible clinicians that 
highlight unintended consequences associated with our current data 
submission requirements. Several MIPS eligible clinicians have notified 
us that there have been instances where they unintentionally submitted 
non-scorable data for a MIPS performance category, which overrode an 
approved reweighting or a previously scorable data submission for the 
MIPS quality, improvement activities, or Promoting Interoperability 
performance categories. Data submissions without any scorable data 
(non-scorable data submissions) generally only include limited data 
that cannot be scored, such as a practice ID, date, activity ID, 
measure ID, or CMS Electronic Health Record (EHR) Certification ID 
(CEHRT ID). MIPS eligible clinicians have also notified us that, in 
some instances, the data submission overriding the prior approved 
reweighting or prior scorable submission was performed by a third-party 
intermediary or a practice representative.
    The MIPS eligible clinician, group, virtual group, subgroup, APM 
Entity, or third party intermediary acting on behalf of a MIPS eligible 
clinician, group, virtual group, subgroup, APM Entity, as applicable, 
that submits data on measures and activities under MIPS is defined at 
Sec.  414.1305 as the submitter type.
    The mechanism by which a submitter type submits data to CMS 
(including, as applicable: Direct, log in and upload, log in and 
attest, Medicare Part B claims, and the CMS Web Interface) is defined 
at Sec.  414.1305 as the submission type. The direct submission type 
allows users to transmit data through a computer-to-computer 
interaction, such as an API. The log in and upload submission type 
allows users to upload and submit data in the form and manner specified 
by CMS with a set of authenticated credentials. The log in and attest 
submission type allows users to manually attest that certain measures 
and activities were performed in the form and manner specified by CMS 
with a set of authenticated credentials. We refer readers to Sec.  
414.1325(b) and (c) for available data submission types that individual 
MIPS eligible clinicians, groups, virtual groups, subgroups, and APM 
Entities may utilize to submit data for the quality, improvement 
activities, and Promoting Interoperability performance categories.
    To submit data, a submitter must gain access to the Quality Payment 
Program website (https://qpp.cms.gov/login) for submitting or viewing 
data for the associated individual MIPS eligible clinician, group, 
subgroup, virtual group, or APM Entity. We refer readers to the Quality 
Payment Program Resource Library (https://qpp.cms.gov/resources/resource-library) for additional information on the MIPS data 
submission process and obtaining access to submit data during the 
designated submission period under Sec.  414.1325(e)(1).
    After gaining access to the Quality Payment Program website for the 
associated individual MIPS eligible clinician, group, subgroup, virtual 
group, or APM entity, a submitter can navigate to the ``Eligibility and 
Reporting'' tab and view whether there is any reweighting applied for 
one or more of the MIPS performance categories for the associated 
individual MIPS eligible clinician, group, virtual group, subgroup, or 
APM Entity. In addition, at the time of submission, the system 
generates warnings to the submitter (for all the available submission 
types) if there is an existing approved reweighting for the performance 
category in which the data is being submitted or an existing data 
submission for an individual MIPS eligible clinician, group, virtual 
group, subgroup, or APM Entity. For example, if a group has an approved 
reweighting for the Promoting Interoperability performance category, 
the system alerts the submitter prior to completing the data submission 
with a message stating: ``This Action Will Impact Your Category 
Weights. Currently, Promoting Interoperability does not count towards 
your final score. By choosing to report Promoting Interoperability 
data, your score for this category will be included in your final 
score. This action cannot be undone.'' The submitter must check the 
``Yes, I agree'' box prior to confirming the data submission in the 
performance category. We refer readers to the Quality Payment Program 
Resource Library (https://qpp.cms.gov/resources/resource-library) for 
additional details on the process to

[[Page 98373]]

submit MIPS data for MIPS eligible clinicians, groups, virtual groups, 
subgroups, and APM Entities.
    Under the current policy and process, we assign a score for any 
submission received from an individual MIPS eligible clinician, group, 
virtual group, subgroup or APM Entity for a performance period during 
the designated MIPS submission period regardless of whether the 
submission included data on the MIPS measures and activities. We 
implemented the policy and process to recognize any data submitted as 
an extension of the policy that submission of any data overrides 
reweighting of the MIPS performance categories as described at Sec.  
414.1380(c)(2). We assign a score for submissions with data on MIPS 
measures and activities, and also for submissions that only include 
non-scorable data, such that they do not include any data that allows 
us to measure a clinician's performance on the applicable measures and 
activities. For example, if we receive a submission for a MIPS 
performance category without any measure or activity data (for example, 
without numerator and denominator data for any quality measures, 
without a response of ``yes'' for any improvement activities, without a 
``yes'' or ``no'' response for an attestation, or responses for the 
required objectives and associated measures and attestation statements 
for the Promoting Interoperability performance category), and the data 
submission includes only non-scorable data (such as the practice ID, 
measure ID and TIN/NPI information), we assign a zero score for the 
applicable MIPS performance category in the event we do not receive a 
subsequent submission with measure or activity data.
    Despite implementing these system warnings to alert the submitter 
of a potential impact of their entry on the reweighting status or 
existing data submission, we continue to receive non-scorable data 
submissions, which override an approved reweighting or a previously 
scored data submission, for the MIPS quality, improvement activities, 
or Promoting Interoperability performance categories. To help address 
the unintentional overriding of an existing scorable data submission or 
an approved reweighting for the MIPS performance categories, we 
proposed a narrower set of minimum criteria of what would qualify as a 
data submission under our existing policies. We note that we did not 
propose to change our existing policies to assign a score for a data 
submission (meeting the proposed narrower minimum criteria) for the 
applicable MIPS performance categories, including our policy governing 
data submissions from a third-party intermediary, even if the 
submission overrides an approved reweighting or a prior scorable 
submission for the MIPS eligible clinician, group, virtual group, 
subgroup, or APM Entity.
    We have identified that we could potentially avoid submissions 
without any scorable data on MIPS measures or activities from 
overriding previously approved reweighting or a prior submission for 
the MIPS performance categories if we require a submission to include 
certain data on measures or activities in the MIPS quality, improvement 
activities, or Promoting Interoperability performance categories to 
assign a score. Therefore, we proposed to adopt minimum criteria for 
what we would consider to be a qualifying data submission for which CMS 
can assign a score.
    Specifically, we proposed to consider a submission valid and 
scorable (including, potentially, a score of zero) for the applicable 
MIPS performance category only if the data submission includes: 
numerator and denominator data for at least one MIPS quality measure in 
the quality performance category; a response of ``yes'' for at least 
one improvement activity in the improvement activities performance 
category; and all required elements to report objectives and associated 
measures and attestation statements for the Promoting Interoperability 
performance category.\838\ We describe the details of these data 
submission criteria for each performance category in sections 
IV.A.4.d.(2)(b), IV.A.4.d.(2)(c), and IV.A.4.d.(2)(d) of this final 
rule. As further described in these sections, we are finalizing these 
data submission criteria for each performance category as proposed.
---------------------------------------------------------------------------

    \838\ Attestation is one possible way to for MIPS eligible 
clinicians participating in APMs to earn credit in the improvement 
activities performance category but is not required to earn credit. 
Consistent with our regulation at Sec.  414.1380(b)(3)(i), we 
automatically award 50 percent credit for the improvement activities 
performance category to MIPS eligible clinicians participating in 
APMs when they attest to having completed an improvement activity or 
submit data for the quality or Promoting Interoperability 
performance categories. We did not propose to change this.
---------------------------------------------------------------------------

    As discussed in the CY 2025 PFS proposed rule (89 FR 62033), we 
note that we did not propose any changes to the existing scoring or 
reweighting policies described under Sec.  414.1380 for the MIPS 
performance categories. If the MIPS eligible clinician, group, virtual 
group, subgroup, or APM Entity does not have an approved reweighting 
for one or more of the MIPS performance categories and we do not 
receive a data submission for a performance category that has not been 
reweighted, we will assign a score of zero for the applicable 
performance category.
(b) Quality Performance Category
    We refer readers to Sec. Sec.  414.1325 and 414.1330 through 
414.1340 and the CY 2017 Quality Payment program final rule (81 FR 
77097 through 77162) and CY 2018 Quality Payment Program final rule (82 
FR 53626 through 53641), the CY 2019 PFS final rule (83 FR 59754 
through 59765), CY 2020 PFS final rule (84 FR 63949 through 62959), CY 
2021 PFS final rule (85 FR 84866 through 84877), CY 2022 PFS final rule 
(86 FR 65431 through 65445), CY 2023 PFS final rule (87 FR 70047 
through 70057), and CY 2024 PFS final rule (88 FR 79329 through 79338) 
for a description of previously established policies related to the 
quality performance category. The data submitted from the final list of 
MIPS quality measures are used to assess the performance of an 
individual MIPS eligible clinician, group, virtual group, subgroup, or 
APM Entity for the quality performance category, to contribute to their 
overall score, and to help determine the payment adjustment for MIPS 
eligible clinicians.
    In the CY 2025 PFS proposed rule (89 FR 62033), we proposed that a 
data submission in the quality performance category must include 
numerator and denominator data for at least one quality measure from 
the list of MIPS quality measures to be assigned a score in the quality 
performance category. We previously finalized data submission types for 
MIPS eligible clinicians, groups, virtual groups, subgroups, and APM 
Entities as described at Sec.  414.1325. In the CY 2018 Quality Payment 
Program final rule (82 FR 53780), we stated that we will determine a 
quality performance category percent score whenever a MIPS eligible 
clinician has submitted at least one quality measure. As described in 
the CY 2025 PFS proposed rule (89 FR 62033), we currently assign a 
score for any data submitted for the MIPS performance categories and 
have implemented operational measures to limit unintentional overriding 
of an approved reweighting or existing scorable data submitted for a 
MIPS performance category. However, we continue to receive 
unintentional submissions without data that can be scored resulting in 
the overriding of an approved reweighting application or a prior data 
submission that can be scored for the quality performance category. We 
noted that we did not propose any

[[Page 98374]]

changes to the current scoring policies described under Sec.  
414.1380(b)(1) for the quality performance category. Therefore, we will 
still assign a score of zero for the quality performance category if an 
individual MIPS eligible clinician, group, virtual group, subgroup, or 
APM Entity does not submit at least one available quality measure 
unless the performance category has been reweighted as defined at Sec.  
414.1380(c)(2).
    We proposed to specify what we consider to be a data submission at 
Sec.  414.1325(a)(1)(i) to state that, for the quality performance 
category, a data submission must include numerator and denominator data 
for at least one MIPS quality measure from the final list of MIPS 
quality measures (89 FR 62033). We anticipate the change will 
potentially avoid unintentional overriding of an approved reweighting 
or a prior data submission for the quality performance category due to 
submissions without any quality measure data. We did not propose any 
changes to the data submission requirements, data submission criteria, 
data completeness criteria, and scoring for the quality performance 
category described under Sec. Sec.  414.1325, 414.1335, 414.1440, and 
414.1380(b)(1) respectively. We requested public comments on this 
proposal.
    We received public comments on this proposal.
    Comment: Many commenters supported the proposal to adopt minimum 
criteria for data submissions in the quality performance category that 
would require numerator and denominator data for at least one MIPS 
quality measure from the final list of MIPS quality measures. A few 
commenters expressed appreciation that this proposal will mitigate 
negative scoring impacts on clinicians when data submission is 
unintended. A few other commenters appreciated CMS' efforts to align 
data submission requirements across all performance categories because 
it can help standardize reporting. Other commenters also expressed 
belief that the proposal will help solve problems with the current data 
submission process by ensuring accuracy and completeness in performance 
reporting, reducing ambiguity, and preventing incomplete submissions 
from being scored.
    Response: We thank the commenters for their support.
    Comment: A few commenters expressed concern or did not support the 
proposal to adopt minimum criteria for data submissions in the quality 
performance category. One commenter shared their belief that constant 
tweaks and changes to the program can be detrimental to and complicated 
for practices, especially for those with limited resources. Another 
commenter expressed concern that the requirement to provide detailed 
performance data and attestation statements for the MIPS performance 
categories could increase administrative burden, particularly for 
smaller practices with limited resources.
    Response: While we acknowledge the commenters' concerns, the 
proposed minimum criteria for a qualifying data submission will prevent 
submissions without any scorable data from unintentionally overriding 
an existing scorable data submission or an approved reweighting for the 
MIPS performance categories without increasing reporting burden for 
providers. We note the proposed minimum criteria for a qualifying data 
submission do not require practices to change how they submit data and 
will benefit practices by preventing unintended consequences due to 
submissions without any scorable data.
    Comment: One commenter requested clarification regarding whether 
submission of a single quality data code (QDC) for a single Medicare 
Part B Claims measure would satisfy the proposed minimum criteria of 
numerator and denominator data for a data submission in the quality 
performance category and noted that in the past, practices have 
reported unintentional overriding of an approved extreme and 
uncontrollable circumstance (EUC) due to accidental submission of QDCs.
    Response: Under the proposed minimum criteria for a quality data 
submission, a data submission must include numerator and denominator 
data for at least one MIPS quality measure from the final list of MIPS 
quality measures. Therefore, a submission of a single QDC for a single 
Medicare Part B Claims measure would be considered a qualifying data 
submission and under the current reweighting policies at Sec.  
414.1380(c)(2)(i)(A)(6) through (8) for an EUC or other type of 
exception based on certain circumstances, this submission will override 
an approved reweighting of the quality performance category.
    Comment: One commenter recommended that in addition to the proposed 
minimum criteria for a data submission in the quality performance 
category, CMS should allow a practice to submit a targeted review 
request to indicate accidental data submitted on behalf of the practice 
and to allow for the scoring to be corrected.
    Response: At the time of submission, the system on the Quality 
Payment Program website generates warnings for the submitter (for all 
the available submission types) if there is an existing approved 
reweighting for the performance category in which the data is being 
submitted or an existing data submission for an individual MIPS 
eligible clinician, group, virtual group, subgroup, or APM Entity. The 
existing system warnings, combined with the proposed minimum criteria 
for a data submission, should be sufficient to warn practices against 
and prevent the accidental submission of data that overrides a previous 
data submission or an approved reweighting. We encourage group 
practices and clinicians to continue collaborating with their data 
submission representatives (third party intermediaries or practice 
administrators) to avoid unintended submissions.
    The targeted review policy established under section 1848(q)(13)(A) 
of the Act is limited to informal review of our calculation of the MIPS 
adjustment factor applicable to the MIPS eligible clinician. This 
includes requests for targeted review of errors in our application of 
policies governing calculation of scores for measures and activities, 
performance category scores, and MIPS final scores (81 FR 77353). We 
proposed minimum criteria for qualifying data submission for the 
quality, improvement activities, and Promoting Interoperability 
performance categories to identify where non-scoreable data submissions 
may have been inadvertent or in error. Adopting these standards will 
establish clear, objective criteria to assess whether we received a 
qualifying data submission that we will score for the performance 
category. If a MIPS eligible clinician submits a targeted review 
request alleging an accidental data submission, we will apply this 
qualifying data submission policy, as finalized, to determine whether 
we calculated the performance category score appropriately, or in 
error.
    After consideration of public comments, we are finalizing the 
policy as proposed to codify at Sec.  414.1325(a)(1)(i) that for the 
quality performance category, a data submission must include numerator 
and denominator data for at least one MIPS quality measure from the 
final list of MIPS quality measures.
(c) Improvement Activities Performance Category
    We refer readers to Sec. Sec.  414.1355 and 414.1360 and the CY 
2017 Quality Payment Program final rule (81 FR

[[Page 98375]]

77177 and 77178), CY 2018 Quality Payment Program final rule (82 FR 
53648 through 53661), CY 2019 PFS final rule (83 FR 59776 and 59777), 
CY 2020 PFS final rule (84 FR 62980 through 62990), CY 2022 PFS final 
rule (86 FR 65462) and the CY 2024 PFS final rule (88 FR 79328) for a 
description of previously established policies related to the 
improvement activities performance category.
    We previously finalized at Sec.  414.1360(a)(2) that MIPS eligible 
clinicians, groups, virtual groups, or subgroups must submit a ``yes'' 
response for each improvement activity that is performed for at least a 
continuous 90-day period during the applicable performance period to 
receive points in the improvement activities performance category 
described under Sec.  414.1360(b)(3). We currently assign a score for 
any submission or attestation received in the improvement activities 
performance category via the submission types described under Sec.  
414.1325(a)(1) regardless of whether the submission or attestation 
included a ``yes'' response or not. In the event of a submission 
without ``yes'' responses, we currently assign a score of zero.
    Data submitted in the improvement activities performance category 
is used to assess the performance of an individual MIPS eligible 
clinician, group, virtual group, subgroup, or APM Entity on the 
attestation or data submission for the improvement activities and to 
determine the payment adjustment for MIPS eligible clinicians. In the 
CY 2025 PFS proposed rule (89 FR 62033 through 62034), we proposed to 
specify for clinicians what we consider to be a data submission and 
that we will score a data submission only if the submission includes a 
response of ``yes'' for at least one improvement activity included in 
the improvement activities inventory for the MIPS performance period. 
We anticipate the change will potentially avoid unintentional 
overriding of an approved reweighting or a prior data submission for 
the improvement activities performance category due to submissions or 
attestations without a response of ``yes'' for any of the improvement 
activities.
    Specifically, we proposed that for the improvement activities 
performance category, a data submission must include a response of 
``yes'' for at least one activity in the MIPS improvement activities 
inventory (89 FR 62033 and 62034). We note that we did not propose any 
changes to the data submission criteria and scoring for the improvement 
activities performance category described under Sec. Sec.  414.1360 and 
414.1380(b)(3) respectively.
    We received public comments on this proposal.
    Comment: Many commenters supported the proposal to adopt minimum 
criteria for data submissions in the improvement activities performance 
category which would require a response of ``yes'' for at least one 
activity in the MIPS improvement activities Inventory. A few commenters 
expressed appreciation that this proposal will mitigate negative 
scoring impacts on clinicians when data submission was unintended. A 
few other commenters appreciated CMS' efforts to align data submission 
requirements across all performance categories because it can help 
standardize reporting. Other commenters also expressed the belief that 
this proposal will help solve problems with the current data submission 
process by ensuring accuracy and completeness in performance reporting, 
reducing ambiguity, and preventing incomplete submissions from being 
scored.
    Response: We thank the commenters for their support.
    Comment: A few commenters provided recommendations about the 
proposal to adopt minimum criteria for data submissions in the 
improvement activities performance category. One commenter recommended 
that CMS adopt an alternative policy to score and reweight the 
improvement activities category and uses the higher of those two scores 
because the commenter believes this to be the simplest solution that 
would also avoid unintended consequences for clinicians that qualify 
for automatic credit within the improvement activities category, such 
as not receiving credit for participating in an eligible MIPS APM or 
patient-centered medical home. Another commenter recommended that CMS 
should ensure that any policy finalized does not override an approved 
reweighting request for the improvement activities performance 
category. Another commenter recommended that in addition to the 
proposed minimum criteria for a data submission in the improvement 
activities performance category, CMS should allow the practice to 
submit a targeted review request to indicate accidental data submitted 
on behalf of the practice and to allow for the scoring to be corrected.
    Response: We did not propose this policy to maximize a MIPS 
eligible clinician's score. The reweighting policy is for clinicians 
that have been affected by ``extreme and uncontrollable circumstances'' 
that prevented the clinician from performing functions essential to 
reporting completion of the activity or in other circumstances such 
that there are not sufficient measures and activities applicable and 
available as described in Sec.  414.1380(c)(2)(i)(A)(3) and (6) through 
(9). If a clinician receives reweighting or otherwise qualifies for the 
reweighting policy, subsequent affirmative reporting that the clinician 
completed the improvement activity is clear evidence that the clinician 
was in fact able to complete the functions necessary to complete 
reporting of the activity. The proposed policy is therefore most 
appropriate as it accounts for blank, inadvertent non-scorable 
submissions, while still permitting clinicians who were approved for 
reweighting and were able to complete at least one activity to override 
the reweighting and be scored.
    This proposed policy will not interfere with awarding due credit 
for clinicians that qualify for automatic credit within the improvement 
activities category, such as those that participate in an eligible MIPS 
APM or patient-centered medical home as these clinicians automatically 
receive credit for the category as described under Sec.  
414.1380(b)(3)(i) and (ii). We refer readers to section 
IV.A.4.e.(3)(b)(iv) of this final rule for additional details on the 
changes to the scoring and reporting requirements for the improvement 
activities performance category.
    While we understand the commenter's recommendation to use the 
targeted review policy for indicating accidental submissions and allow 
scoring corrections, we note that at the time of submission, the system 
on the Quality Payment Program website generates warnings to the 
submitter (for all the available submission types) if there is an 
existing approved reweighting for the performance category in which the 
data is being submitted or an existing data submission for an 
individual MIPS eligible clinician, group, virtual group, subgroup, or 
APM Entity. The existing system warnings, combined with the proposed 
minimum criteria for a data submission, will prevent occurrences of 
accidental data submission resulting in overriding a previous intended 
data submission or an approved reweighting. We encourage group 
practices and clinicians to continue collaborating with their data 
submission representatives (third party intermediaries or practice 
administrators) to avoid unintended consequences.
    Comment: One commenter expressed concern that the requirement to 
provide detailed performance data and

[[Page 98376]]

attestation statements for the MIPS performance categories could 
increase administrative burden, particularly for smaller practices with 
limited resources.
    Response: We acknowledge the commenter's concerns; however, the 
proposed minimum criteria for a qualifying data submission will prevent 
submissions without any scorable data from unintentionally overriding 
an existing scorable data submission or an approved reweighting for the 
MIPS performance categories without increasing reporting burden. We 
note the proposed minimum criteria for a qualifying data submission do 
not require practices to change the way they already submit data and 
will benefit practices by preventing unintended consequences due to 
submissions without any scorable data.
    After consideration of public comments, we are finalizing the 
policy as proposed and codify at Sec.  414.1325(a)(1)(ii) that for the 
improvement activities performance category, a data submission must 
include a response of ``yes'' for at least one activity in the MIPS 
improvement activities inventory.
(d) Promoting Interoperability Performance Category
    We refer readers to Sec.  414.1375 for our previously established 
policies regarding reporting for the Promoting Interoperability 
performance category. We also refer readers to Sec.  414.1305 for the 
definition of attestation, Sec.  414.1325 for data submission 
requirements, and Sec.  414.1380(b)(4) for Promoting Interoperability 
performance category scoring. We refer readers to Sec.  
414.1380(c)(2)(i)(C) for our previously finalized policies regarding 
scoring of data submission in the Promoting Interoperability 
performance category after an approved reweighting for the performance 
category. We also refer readers to the CY 2017 Quality Payment Program 
final rule (81 FR 77199 through 77245), CY 2018 Quality Payment Program 
final rule (82 FR 53663 through 53688), CY 2019, CY 2021, CY 2022, CY 
2023, and CY 2024 PFS final rules (83 FR 59785 through 59820, 84 FR 
62991 through 63006, 85 FR 84886 through 84895, 86 FR 65466 through 
65490, 87 FR 70060 through 70087, and 88 FR 79351 through 79365, 
respectively) for a description of previously established policies 
related to the Promoting Interoperability performance category.
    Under our current policy, we consider any information received for 
the Promoting Interoperability performance category in the Quality 
Payment Program Submission environment a data submission and assign a 
performance category score based on the submission. We assign a score 
of zero for incomplete submissions in the Promoting Interoperability 
performance category, for example, submissions that include only a date 
and CMS EHR Certification ID (CEHRT ID) without any data that can be 
scored with respect to the required objectives, measures, or 
attestations, as specified by CMS. Under Sec.  414.1375, if we receive 
a complete data submission for the Promoting Interoperability 
performance category with responses included for all the required 
Promoting Interoperability objectives, associated measures, and 
attestation statements as specified by CMS and utilizing the CEHRT 
(meeting the definition at Sec.  414.1305) as required, we score the 
data submission under our established scoring policies for the 
performance category.
    We previously finalized at Sec.  414.1380(c)(2)(i)(C) that, if a 
MIPS eligible clinician with an approved reweighting for the Promoting 
Interoperability performance category submits data, they will be scored 
in this performance category and the reweighting will not be applied, 
except as provided in Sec.  414.1380(c)(2)(i)(C)(10) and (11). We also 
included in the educational materials available on the Quality Payment 
Program resource library (https://qpp-cm-prod-content.s3.amazonaws.com/uploads/2602/2023MIPSSubmissionGuide.pdf) that a MIPS eligible 
clinician will be scored in this performance category if they attest to 
any data, such as selecting performance period dates or responding to 
attestation statements during the submission period. As set forth under 
Sec.  414.1380(c)(2)(i)(C), submission of any data for the Promoting 
Interoperability performance category overrides reweighting, including 
reweighting due an approved significant hardship exception and 
automatic reweighting for clinicians that are Ambulatory Surgical 
Center (ASC)-based, hospital-based, non-patient facing, and small 
practices. Similarly, under Sec.  414.1380(c)(2)(i)(A)(4)(iii), 
submission of any data also overrides our automatic reweighting of the 
Promoting Interoperability performance category for clinical social 
workers.\839\
---------------------------------------------------------------------------

    \839\ We note that this automatic reweighting policy for 
clinical social workers only applies through the CY 2024 performance 
period/2026 MIPS payment year.
---------------------------------------------------------------------------

    Furthermore, to earn a performance category score for the Promoting 
Interoperability performance category, we established at Sec.  414.1375 
that, for the performance period established at Sec.  414.1320, 
individual MIPS eligible clinicians, groups, virtual groups, subgroups, 
or APM Entities must use CEHRT as defined at Sec.  414.1305, report on 
objectives and associated measures as specified by CMS, and submit 
attestations as specified by CMS. Under Sec.  414.1325(b) and (c), 
individual MIPS eligible clinicians, groups, virtual groups, subgroups 
and APM entities (or authorized representatives submitting on their 
behalf) can submit data for the Promoting Interoperability performance 
category using the direct, login and attest, or login and upload 
submission types. Specifically, to submit data for the Promoting 
Interoperability performance category, individual MIPS eligible 
clinicians, groups, virtual groups, subgroups and APM entities (or 
authorized representatives submitting on their behalf) must use CEHRT 
as required (meeting the definition at Sec.  414.1305) for the 
continuous 180-day performance period (Sec.  414.1320(i)) to report the 
applicable objectives, measures, and attestations. We refer readers to 
section IV.A.4.e.(4) of this final rule for additional details on CEHRT 
requirements (including applicable ONC health IT certification criteria 
set forth under 45 CFR 170.315) and objectives, measures, and 
attestations required for the Promoting Interoperability performance 
category.
    Under our current policy, we receive submissions in the Promoting 
Interoperability performance category without completed responses for 
all the required objectives, measures, and attestations. For example, 
if a submission for the Promoting Interoperability performance category 
includes only a date, practice ID, and/or a CEHRT ID, or the submission 
does not include all of the required objectives, measures, and 
attestations, then we consider these to be incomplete data submissions. 
Currently, an incomplete data submission would void an approved 
reweighting of the Promoting Interoperability performance category in 
accordance with Sec.  414.1380(c)(2)(i)(C), except as provided in Sec.  
414.1380(c)(2)(i)(C)(10) and (11). As described in the proposed rule 
and this section of this final rule, we believe that we should not 
consider data submissions for the Promoting Interoperability 
performance category if the submission is incomplete, and does not 
include all necessary required data. We proposed that the minimum 
criteria for a qualifying data submission for the Promoting 
Interoperability performance category must include all required 
reporting elements for the performance category, as specified in this 
section.
    We considered whether CMS should accept incomplete submissions for 
the

[[Page 98377]]

Promoting Interoperability performance category. If CEHRT is utilized 
as required to collect and report measure data and submit attestation 
statements and other requirements, it would generally result in only 
complete submissions for the Promoting Interoperability performance 
category. We recognize that some of the measures in the Promoting 
Interoperability performance category (such as the SAFER Guides measure 
and security risk analysis) do not directly require the use of CEHRT, 
whereas some measures (such as e-prescribing) directly require the use 
of CEHRT. However, all the requirements for the Promoting 
Interoperability performance category are directly related to a MIPS 
eligible clinician demonstrating whether they are a meaningful user of 
CEHRT in accordance with sections 1848(q)(2)(A)(iv), (B)(iv) and 
1848(o)(2)(A) of the Act. Further, section 1848(o)(2)(A) requires that 
all requirements set forth therein (meaningful use of CEHRT, electronic 
exchange of health information, and reporting on clinical quality and 
other measures using CEHRT) be met for a MIPS eligible clinician to be 
treated as a meaningful EHR user for the applicable performance period. 
Therefore, accepting an incomplete data submission for the Promoting 
Interoperability performance category would be counterintuitive to a 
MIPS eligible clinician demonstrating whether they are a meaningful 
user of CEHRT in accordance with sections 1848(q)(2)(A)(iv), (B)(iv) 
and 1848(o)(2)(A) of the Act.
    In the CY 2025 PFS proposed rule (89 FR 62034 through 62035), we 
proposed to adopt minimum criteria for a qualifying data submission for 
the Promoting Interoperability performance category submission to 
include all of the required reporting elements for the category, 
including data on all required measures (including any claim of an 
applicable exclusion), required attestation statements, the CEHRT ID, 
and the start and end date for the applicable performance period. This 
proposal will clarify what counts as a data submission for MIPS 
eligible clinicians and it will potentially avoid partial data 
submissions from overriding an approved reweighting or a previously 
scored submission for the Promoting Interoperability performance 
category.
    Specifically, we proposed to specify minimum criteria as a 
qualifying data submission for the Promoting Interoperability 
performance category at Sec.  414.1325(a)(1)(iii) to provide that a 
data submission must include all of the following elements:
     Performance data, including any claim of an applicable 
exclusion, for the measures in each objective, as specified by CMS;
     Required attestation statements, as specified by CMS;
     CMS EHR Certification ID (CEHRT ID) from the Certified 
Health IT Product List (CHPL); and
     The start date and end date for the applicable performance 
period as set forth in Sec.  414.1320.
    As discussed previously, we did not propose any changes to the 
existing scoring or reweighting policies described under Sec.  414.1380 
for the MIPS performance categories in this section of this final rule. 
If the MIPS eligible clinician, group, virtual group, subgroup, or APM 
Entity does not have an approved reweighting for one or more of the 
MIPS performance categories and we do not receive a data submission 
meeting the proposed minimum criteria for a performance category that 
has not been reweighted, we will assign a score of zero for the 
applicable performance category. If we receive a qualifying data 
submission meeting the minimum criteria for reporting, then we will 
review the data submission and score the Promoting Interoperability 
performance category in accordance with our applicable scoring 
policies.
    We refer readers to section IV.A.4.e.(4) of this final rule for 
additional details on the reporting requirements and scoring of the 
objectives, measures, and attestations the Promoting Interoperability 
performance category.
    We received public comments on this proposal.
    Comment: Many commenters supported the proposal to adopt minimum 
criteria for data submissions in the Promoting Interoperability 
performance category. A few commenters expressed appreciation that this 
proposal will mitigate negative scoring impacts on clinicians when data 
submission was unintended. A few other commenters appreciated CMS' 
efforts to align data submission requirements across all performance 
categories because it can help standardize reporting. Other commenters 
also expressed their belief that this proposal will help solve problems 
with the current data submission process by ensuring accuracy and 
completeness in performance reporting, reducing ambiguity, and 
preventing incomplete submissions from being scored.
    Response: We thank the commenters for their support. We intend to 
standardize data submission requirements for MIPS to the extent 
feasible. To this end, while we proposed to establish minimum criteria 
for a qualifying data submission for all three performance categories 
for which we require data submission under Sec.  414.1325(a), we note 
that the specific minimum criteria we proposed for each performance 
category varies. This variation is by necessity as these criteria 
reflect the differences in the requirements of, and the individual 
measures and activities specified for, each performance category.
    Comment: A few commenters expressed concern or did not support the 
proposal to adopt minimum criteria for data submissions in the 
Promoting Interoperability performance category. One commenter 
expressed concern about increasing complexity in the Promoting 
Interoperability performance category. Another commenter expressed 
concern that the requirement to provide detailed performance data and 
attestation statements for the MIPS performance categories could 
increase administrative burden, particularly for smaller practices with 
limited resources. A few commenters expressed concern about using an 
``all-or-nothing'' approach for minimum criteria for data submission 
for the Promoting Interoperability performance category because they 
believe the policy is overly punitive and penalizes clinicians for 
administrative errors. One commenter recommended that CMS instead 
require performance data on one reporting option within the Health 
Information Exchange (HIE) objective and not each measure within the 
objective. Another commenter recommended that CMS instead score all 
Promoting Interoperability measures that include a numerator and 
denominator.
    Response: We believe that the proposed minimum criteria for what 
would qualify as a data submission will prevent submissions without any 
scorable data from unintentionally overriding an existing scorable data 
submission or an approved reweighting for the Promoting 
Interoperability performance category. The proposed minimum criteria 
for a qualifying data submission do not require practices to change the 
way they already submit data and will benefit practices by preventing 
unintended consequences due to submissions without any scorable data. 
We did not propose any changes to existing scoring or reweighting 
policies described under Sec.  414.1380 with respect to these proposed 
data submission policies (89 FR 62033). The data submission policies 
discussed in this section IV.A.4.d.(2) of the final rule will establish 
clear

[[Page 98378]]

minimum criteria so we may identify when we have received a qualifying 
data submission for a performance category, and thus apply our existing 
scoring policies or override an approved reweighting in accordance with 
Sec.  414.1380(c)(2)(i).
    For example, as described in Sec.  414.1380(c)(2)(i)(C)(9), we 
automatically reweight the Promoting Interoperability performance 
category to zero percent for MIPS eligible clinician(s) in a small 
practice as defined at Sec.  414.1305. Therefore, MIPS eligible 
clinician(s) in a small practice are not required to submit data for 
the Promoting Interoperability performance category. However, if MIPS 
eligible clinician(s) in the small practice submit data meeting the 
minimum criteria of a qualifying data submission for the Promoting 
Interoperability performance category as finalized in this rule, then 
we will override the automatic reweighting and score the Promoting 
Interoperability performance category, as specified in Sec.  
414.1380(c)(2)(i)(C).
    In response to the commenter's concerns about using an ``all-or-
nothing'' approach for the minimum criteria for a qualifying data 
submission for the Promoting Interoperability performance category, if 
CEHRT is utilized as required to collect and report measure data and 
submit attestation statements and other requirements, it will generally 
result in only complete submissions for the Promoting Interoperability 
performance category. Additionally, we believe that accepting an 
incomplete data submission for the Promoting Interoperability 
performance category would be counterintuitive to a MIPS eligible 
clinician demonstrating whether they are a meaningful user of CEHRT in 
accordance with sections 1848(q)(2)(A)(iv), (B)(iv) and 1848(o)(2)(A) 
of the Act. The proposed minimum criteria for a qualifying data 
submission for the Promoting Interoperability performance category are 
intended to prevent penalties and errors that may occur due to 
unintentional submissions without data on measures overriding prior 
data submissions or reweighting. Only scoring data submissions with all 
elements required for reporting in the Promoting Interoperability 
performance category should minimize the chance of MIPS eligible 
clinicians receiving a score of zero due to unintentional submissions.
    Regarding the commenters' recommendations to use one reporting 
option under the HIE objective or score all measures within the 
category that require a numerator and denominator, we note that we did 
not propose any changes to the existing reporting and scoring 
requirements in the Promoting Interoperability performance category in 
relation to this qualifying data submission policy. This qualifying 
data submission policy does not alter our reporting requirements for 
the Promoting Interoperability performance category, including what 
measure(s) fulfill the HIE objective. We refer readers to Sec.  
414.1375(b) and section IV.A.4.e.(4)(f) of this final rule for details 
on the requirements for the Promoting Interoperability performance 
category. As previously noted, once we receive a qualifying data 
submission for the Promoting Interoperability performance category, we 
will score it in accordance with our existing policies.
    After consideration of public comments, we are finalizing the 
policy as proposed and codify at Sec.  414.1325(a)(1)(iii) that a data 
submission in the Promoting Interoperability performance category must 
include all of the following elements:
     Performance data, including any claim of an applicable 
exclusion, for the measures in each objective, as specified by CMS;
     Required attestation statements, as specified by CMS;
     CMS EHR Certification ID (CEHRT ID) from the Certified 
Health IT Product List (CHPL); and
     The start date and end date for the applicable performance 
period as set forth in Sec.  414.1320.
(3) Treatment of Multiple Data Submissions
(a) Background
    Under the current policies described at Sec.  414.1325(d), 
individual MIPS eligible clinicians, groups, virtual groups, subgroups, 
and APM Entities may submit their MIPS data using multiple data 
submission types for any performance category in accordance with Sec.  
414.1325(a)(1), as applicable; provided, however, that the individual 
MIPS eligible clinician, group, virtual group, subgroup, or APM Entity 
uses the same identifier for all performance categories and all data 
submissions. We established the policy to offer flexibility for 
individual MIPS eligible clinicians, groups, virtual groups, subgroups, 
and APM Entities with reporting, as it provides more options for 
submission of data for the applicable performance categories. We refer 
readers to the CY 2017 and 2018 Quality Payment Program final rules (81 
FR 77094 and 77095 and 82 FR 53619 through 53626, respectively) for 
additional details on the use of multiple data submission mechanisms 
for any MIPS performance category.
    As described in this section of this final rule, at Sec.  414.1305, 
we define a submitter type as a MIPS eligible clinician, group, virtual 
group, subgroup, APM Entity, or third-party intermediary acting on 
behalf of a MIPS eligible clinician, group, virtual group, subgroup, 
APM Entity, as applicable, that submits data on measures and activities 
under MIPS. During a submission period, a submitter associated with an 
organization (for example, registry, practice administrator, or EHR 
vendor) could submit data for a MIPS eligible clinician, group, 
subgroup, virtual group, or APM Entity. If needed, the submitter could 
also review and correct the data submission resulting in multiple data 
submissions for the MIPS performance categories. Additionally, there 
could be instances when a submitter unintentionally submits data 
multiple times. There could also be instances when we receive data for 
a MIPS eligible clinician, group, subgroup, virtual group, or an APM 
Entity from multiple organizations. For example, both a qualified 
registry and a qualified clinical data registry (QCDR) could submit 
MIPS data on behalf of a group practice for a performance period. 
Individual MIPS eligible clinicians, groups, practice representatives, 
and third-party intermediaries benefit from the flexibility to submit 
data multiple times as it provides opportunities to correct errors in a 
prior submission and allows clinicians to submit data from multiple 
sources (for example, qualified registry and group submission) to 
increase their chances to provide the most clinically relevant data.
    For the quality, improvement activities, and Promoting 
Interoperability performance categories, there is an established policy 
governing our treatment of multiple data submissions received for a 
performance period. However, we have not codified this policy in prior 
rules. We provided additional guidance on how we process and score 
multiple submissions received in the MIPS performance categories via 
educational and outreach materials is available on the Quality Payment 
Program Resource Library (https://qpp.cms.gov/resources/resource-library.)
    We proposed to codify at Sec.  414.1325(f)(1) our existing policies 
governing our treatment of multiple data submissions received for the 
quality and improvement activities performance categories. We also 
proposed to modify our policy governing our treatment of multiple data 
submissions received for

[[Page 98379]]

the Promoting Interoperability performance category, which we also 
proposed to codify at Sec.  414.1325(f)(2). As further described in 
these sections, we are finalizing these multiple data submission 
policies for each performance category as proposed.
(b) Quality and Improvement Activities Performance Categories
    In the CY 2018 Quality Payment Program final rule (82 FR 53619 
through 53626), we discussed scoring policies for multiple submissions 
received in the MIPS performance categories. Specifically, we stated 
that if an individual MIPS eligible clinician or group submits the same 
measure through two different mechanisms, each submission would be 
calculated and scored separately and that we do not have the ability to 
aggregate data on the same measure across submission mechanisms. We 
would only count the submission that gives the clinician the higher 
score, thereby avoiding double counting (82 FR 53620). We refer readers 
to CY 2019 PFS final rule (83 FR59747 through 59749) for our discussion 
of previously finalized policies related to the use of the term 
``submission mechanism.''
    Under the existing policy for the quality and improvement 
performance categories, if we receive multiple submissions for an 
individual clinician, group, subgroup, or virtual group from submitters 
from separate organizations (for example, registry, practice 
administrator, or EHR vendor), we score each submission and assign the 
highest of the scores for the performance category. If we receive 
multiple submissions for an individual clinician, group, subgroup, or 
virtual group from a submitter or submitters from the same 
organization, we will use the most recent submission. For example, if a 
qualified registry submits improvement activities for a group on 
Tuesday and a practice administrator submits improvement activities 
data for the same group on Wednesday, we will score all the data 
submissions and assign the highest of the scores. If the practice 
administrator from a group practice submits improvement activities data 
for the group on Tuesday and either the practice administrator or 
another submitter employed by the group practice submits improvement 
activities data for the group again on Wednesday, we will score only 
the data submission received on Wednesday because a new data submission 
received from the same organization on Wednesday will override the 
prior data submission on Tuesday.
    In the CY 2025 PFS proposed rule (89 FR 62035 through 62036), we 
proposed to codify the existing process for multiple data submissions 
for the quality and improvement activities performance categories, we 
proposed to add at Sec.  414.1325(f)(1) that for multiple data 
submissions received in the quality and improvement activities 
performance categories in accordance with paragraphs (a)(1)(i) and (ii) 
for an individual MIPS eligible clinician, group, subgroup, or virtual 
group from submitters in multiple organizations (for example, qualified 
registry, practice administrator, or EHR vendor), CMS will calculate 
and score each submission received and assign the highest of the 
scores. We also proposed to codify our policy governing our treatment 
of multiple data submissions for the quality and improvement activities 
performance category received for an individual MIPS eligible 
clinician, group, subgroup, or virtual group from one or multiple 
submitters in the same organization to score the most recent submission 
(89 FR 62036).\840\ We requested public comments on this proposal.
---------------------------------------------------------------------------

    \840\ In the CY 2025 proposed rule (89 FR 62036), we 
inadvertently stated that we were proposing to modify the policy 
governing our treatment of multiple submissions received for the 
quality and improvement activities performance categories from the 
same organization. We intended to state that we are proposing to 
codify the existing policy.
---------------------------------------------------------------------------

    We received public comments on these proposals.
    Comment: Several commenters supported the proposal to codify the 
current process for the treatment of multiple data submissions for a 
clinician from separate organizations in the quality and improvement 
activities performance categories, which uses the highest score when 
multiple data submissions are received from separate organizations. The 
commenters shared their belief that this approach allows clinicians to 
submit data from multiple sources and be assessed based on their best 
performance without being penalized.
    Response: We thank the commenters for their support.
    Comment: Many commenters did not support the proposal to codify the 
current policy for the treatment of multiple data submissions from the 
same organization in the quality and improvement activities performance 
categories, which uses the most recent submission when multiple data 
submissions are received from submitters in the same organization. The 
commenters shared their belief that this approach is inconsistent with 
the current policy for CMS assigning the highest score for multiple 
submissions received from separate organizations. The commenters 
recommended that CMS maintain the same policy for all multiple 
submissions, regardless of whether the submissions are from the same or 
multiple organizations, as they believe this would avoid confusion and 
would be consistent with other multiple submissions policies in the 
quality, improvement activities, and Promoting Interoperability 
performance categories. The commenters also shared their concerns that 
using only the most recent submission would result in unintended 
consequences for clinicians as the Quality Payment Program submission 
system does not allow making corrections to a completed data 
submission. A few commenters expressed concern that the proposed 
approach would prevent a practice's ability to submit data multiple 
times if the clinicians in the practice submitted MIPS and MVP data via 
different participation options (for example, as a group, individual 
and APM Entity). Another commenter recommended that CMS provide an 
option for submitters to indicate whether a previous submission should 
be overridden.
    Response: Separate approaches for multiple submissions based on 
whether the submitter is from the same organization or multiple 
organizations are appropriate as these are not equivalent 
circumstances. Individual MIPS eligible clinicians, groups, practice 
representatives, and third-party intermediaries use multiple sources 
(for example, a QCDR and qualified registry) to submit data, resulting 
in multiple submissions. This offers flexibility for clinicians to 
submit data from multiple sources (for example, qualified registry and 
group submission) and increases their ability to provide the most 
clinically relevant data. For example, a small practice may report 
three measures via claims and upload a QRDA III file with three eCQMs 
to meet the requirement of submitting 6 measures.
    On the other hand, we expect a submitter from a single organization 
would generally submit data multiple times to update a previous 
submission with additional information or to fix data errors in a 
previous submission. When a single submitter or multiple submitters 
from the same organization submit data multiple times, the new 
submission overrides a previous submission only if the new quality or 
improvement activity data submission is for the same participation type 
(individual eligible clinician, group, subgroup, or virtual group) 
under the same reporting option (traditional MIPS

[[Page 98380]]

or MVP) for the MIPS performance period. For example, if a group 
practice submitted traditional MIPS data for an individual eligible 
clinician in January 2024 and the practice administrator from the same 
group submitted MVP data at the group level in March 2024, we will 
accept and score both the individual MIPS submission and the group's 
MVP submission and assign the highest score for the MIPS eligible 
clinicians in the group. However, if the practice administrator from a 
group practice submits quality data for the group on Tuesday and either 
the practice administrator or another submitter employed by the group 
practice submits quality data for the group again on Wednesday, we will 
score only the data submission received on Wednesday because a new data 
submission received from the same organization on Wednesday will 
override the prior data submission on Tuesday. We acknowledge the 
Quality Payment Program submission system does not allow making changes 
to an existing submission, however, the flexibility to submit data 
multiple times provides the opportunity for submitters to override a 
previous submission to fix data errors. We note that we are not 
changing the current policy for multiple data submissions received for 
the quality and improvement activities performance categories. We are 
only codifying the existing policies as described previously.
    While we understand the commenter's recommendation to add an option 
for submitters to indicate whether they would want to keep or delete a 
prior submission, we note that at the time of submission, the system 
generates warnings to the submitter (for all the available submission 
types) if there is an existing data submission for an individual MIPS 
eligible clinician, group, virtual group, subgroup, or APM Entity. We 
refer readers to the Quality Payment Program Resource Library (https://qpp.cms.gov/resources/resource-library) for additional details on the 
process to submit MIPS data for MIPS eligible clinicians, groups, 
virtual groups, subgroups, and APM Entities.
    Comment: Several commenters supported the proposal to codify the 
current process to use only the most recent submission when multiple 
data submissions are received in the quality and improvement activities 
performance categories from the same organization. One commenter shared 
their belief that this approach allows overriding of a previous 
submission from the same organization and would eliminate confusion for 
submitters.
    Response: We thank the commenters for their support.
    Comment: One commenter acknowledged the technical complexity for 
CMS to accept all submissions from a single organization and 
recommended that CMS explore the feasibility of accepting and scoring 
multiple submissions from the same organization.
    Response: We appreciate the commenter's recommendation to explore 
operational feasibility for us to accept and score all submissions from 
the same organization. Technical feasibility is not the only reason for 
using the most recent submission when we receive multiple submissions 
from the same organization. We expect that a submitter associated with 
an organization (for example, registry, practice administrator, or EHR 
vendor) would coordinate with the individual clinician, group, 
subgroup, virtual group, or APM Entity to submit relevant data 
appropriately and avoid multiple submissions for the same reporting 
option. There could be instances when a submitter would need to 
resubmit data. For example, a submitter may resubmit quality data to 
review and correct the data submission or to update the quality data 
submission with additional information, resulting in multiple data 
submissions for the quality performance category. Overriding a previous 
submission in such instances would eliminate confusion and allow the 
clinicians to be scored appropriately on the updated most recent 
submission. We will continue to monitor for any potential issues or 
concerns with using the most recent submission for multiple submissions 
from the same organization and will revisit the policy in the future, 
as needed.
    After consideration of public comments, we are finalizing the 
proposal as proposed to codify at Sec.  414.1325(f)(1) that for 
multiple data submissions received in the quality and improvement 
activities performance categories in accordance with paragraphs 
(a)(1)(i) and (ii) for an individual MIPS eligible clinician, group, 
subgroup, or virtual group from submitters in multiple organizations 
(for example, qualified registry, practice administrator, or EHR 
vendor), CMS will calculate and score each submission received and 
assign the highest of the scores. Additionally, we are finalizing the 
proposal to codify that for multiple data submissions for the quality 
and improvement activities performance categories received for an 
individual MIPS eligible clinician, group, subgroup, or virtual group 
from one or multiple submitters in the same organization, CMS will 
calculate a score for the most recent submission.
(c) Promoting Interoperability Performance Category
    For the Promoting Interoperability performance category, we 
explained in the educational materials published on the Quality Payment 
Program Resource Library (https://qpp-cm-prod-content.s3.amazonaws.com/uploads/2602/2023MIPSSubmissionGuide.pdf.) that any data submitted 
through multiple submission types or multiple submissions submitted 
through the same submission type will result in a score of zero for the 
Promoting Interoperability performance category. Additionally, we 
recommended using a single submission type (file upload, API, or 
attestation by an individual MIPS eligible clinician, group, virtual 
group, subgroup or a third-party intermediary) to submit data for the 
Promoting Interoperability performance category. As described in 
section IV.A.4.d.(2)(d) of this final rule, the utilization of the 
CEHRT should not generate conflicting data for measures and objectives 
in the Promoting Interoperability performance category. However, we 
have received inquiries from MIPS eligible clinicians that were 
impacted by the existing policy to assign a score of zero for multiple 
submissions in the Promoting Interoperability performance category. 
Specifically, we identified scenarios when a complete submission from 
an individual MIPS eligible clinician or group followed by an 
incomplete submission resulted in a score of zero, either overriding a 
previous score greater than zero or voiding an approved reweighting for 
the performance category.
    In the CY 2025 PFS proposed rule (89 FR 62036), we proposed to 
amend our policy for treatment of multiple data submissions for the 
Promoting Interoperability performance category. We proposed that, for 
multiple data submissions received, CMS will calculate a score for each 
data submission received and assign the highest of the scores. We also 
proposed to codify this proposal at Sec.  414.1325(f)(2).
    We believe this proposed change is consistent with our existing 
policy for treatment of multiple data submissions received in the 
quality and improvement activities performance categories, as discussed 
previously. Implementing a similar policy for allowing multiple data 
submissions in the Promoting Interoperability performance category may 
provide flexibility for individual MIPS eligible

[[Page 98381]]

clinicians, groups, virtual groups, subgroups, and APM Entities to fix 
errors in a prior data submission. Additionally, we recognize there may 
be instances when a practice switches EHR vendors during a performance 
period, potentially resulting in separate data submissions for the 
Promoting Interoperability performance category. This policy also 
aligns with our intent to maintain consistency in data submission 
requirements across all MIPS performance categories, to the extent 
possible, as it significantly reduces the complexity for MIPS eligible 
clinicians participating in MIPS.
    We received public comments on this proposal.
    Comment: Many commenters supported CMS' proposal to modify the 
policy for handling multiple data submissions in the Promoting 
Interoperability performance category as this change would not penalize 
clinicians who inadvertently submitted data multiple times and is 
consistent with the scoring policy for other MIPS performance 
categories.
    Response: We thank the commenters for their support.
    Comment: A few commenters recommended that CMS implement the 
revised policy for the CY 2023 performance period/2025 MIPS payment 
year to mitigate negative impacts to MIPS eligible clinicians who 
received a zero score in the Promoting Interoperability performance 
category due to multiple submissions. Specifically, the commenters 
suggested that CMS should allow targeted review requests beyond the 
deadline for the CY 2023 performance period to implement the amended 
policy.
    Response: We acknowledge the commenters' recommendation to 
implement the proposed modified policy for scoring multiple data 
submissions in the Promoting Interoperability performance category 
beginning in the CY 2023 performance period/2025 MIPS payment year to 
mitigate zero scores for multiple submissions in this performance 
category. Section 1848(q)(7) of the Act requires that we finalize and 
notify all MIPS eligible clinicians of their final MIPS payment 
adjustment factors for the 2025 MIPS payment year no later than 30 days 
prior to January 1, 2025, which occurs prior to the effective date of 
this final rule. Applying new, modified scoring policies after we have 
finalized our calculations for the performance period/MIPS payment 
years, even as we identify and seek to apply improvements for future 
MIPS payment years, is not feasible. Further, MIPS eligible clinicians 
generally rely on the finality of our calculation and application of 
MIPS payment adjustment factors to their Medicare Part B claims during 
the MIPS payment year. We proposed that these modified data submission 
policies be effective as soon as feasible: beginning with the CY 2024 
performance period/2026 MIPS payment year for the data submission 
period in CY 2025 (January 1, 2025 through March 31, 2025) (89 FR 
62031).
    Comment: One commenter recommended that CMS implement a process to 
ensure that the submission used for the highest score is accurately 
reflective of the performance and to resolve any potential issues with 
discrepancies in data from multiple sources.
    Response: We understand the commenter's concern regarding potential 
issues with the accuracy of discrepancies in data from multiple data 
submissions in the Promoting Interoperability performance category. We 
have an established policy for validating and auditing MIPS data 
submissions as described under Sec.  414.1390. We will continue 
monitoring multiple submissions in the Promoting Interoperability 
performance category for this issue and consider revisiting the policy 
in the future, as needed.
    We also note that individual MIPS eligible clinicians, groups, 
virtual groups, subgroups and APM entities (or authorized 
representatives submitting on their behalf) have the flexibility to 
submit data using multiple submission types (the direct, login and 
attest, or login and upload) as established under Sec.  414.1325(b) and 
(c). However, the submitters do not have the ability to use multiple 
data sources. Regardless of the submission type, data submission for 
the Promoting Interoperability performance category requires the use of 
CEHRT (meeting the definition at Sec.  414.1305) as the single data 
source to report the applicable objectives, measures, and attestations. 
We expect that the use of CEHRT combined with the proposed minimum 
criteria for a qualifying data submission in the Promoting 
Interoperability performance category will minimize potential issues 
with accuracy of the data being submitted.
    After consideration of public comments, we are finalizing our 
policy as proposed and codify the proposal at Sec.  414.1325(f)(2) 
providing that, for multiple data submissions received for the 
Promoting Interoperability performance category, CMS will calculate a 
score for each data submission received and assign the highest of the 
scores.
f. MIPS Performance Category Measures and Activities
(1) Quality Performance Category
(a) Background
    Section 1848(q)(1)(A)(i) and (ii) of the Act requires the Secretary 
to develop a methodology for assessing the total performance of each 
MIPS eligible clinician according to certain specified performance 
standards and, using such methodology, to provide for a final score for 
each MIPS eligible clinician. Section 1848(q)(2)(A)(i) of the Act 
provides that the Secretary must use the quality performance category 
in determining each MIPS eligible clinician's final score, and section 
1848(q)(2)(B)(i) of the Act describes the measures that must be 
specified under the quality performance category.
    We refer readers to Sec. Sec.  414.1330 through 414.1340 and the CY 
2017 and CY 2018 Quality Payment Program final rules (81 FR 77097 
through 77162 and 82 FR 53626 through 53641, respectively), and the CY 
2019, CY 2020, CY 2021, CY 2022, CY 2023, and CY 2024 PFS final rules 
(83 FR 59754 through 59765, 84 FR 63949 through 62959, 85 FR 84866 
through 84877, 86 FR 65431 through 65445, 87 FR 70047 through 70055, 
and 88 FR 79329 through 79338, respectively) for a description of 
previously established policies and statutory basis for policies 
regarding the quality performance category.
    In the CY 2025 PFS proposed rule (89 FR 62037 through 62042), we 
proposed to:
     Establish the data submission criteria for the Alternative 
Payment Model (APM) Performance Pathway (APP) quality measure set.
     Maintain the data completeness criteria threshold of at 
least 75 percent for the CY 2027 and CY 2028 performance periods/2029 
and 2030 MIPS payment years.
     Codify previously established criteria pertaining to the 
removal of MIPS quality measures.
     Modify the MIPS quality measure set as described in 
Appendix 1 of the CY 2025 PFS proposed rule, including the addition of 
new measures, updates to specialty sets, removal of existing measures, 
and substantive changes to existing measures.
(b) Data Submission Criteria
(i) Data Submission Criteria for the Quality Performance Category
    In the CY 2021 PFS final rule (85 FR 84859 through 84866), we 
established the APP in Sec.  414.1367 as an available reporting option 
starting with the CY

[[Page 98382]]

2021 performance period/2023 MIPS payment year, which was designed to 
provide a predictable and consistent MIPS reporting option to reduce 
reporting burden and encourage continued APM participation. 
Additionally, we finalized a quality measure set (85 FR 84860 through 
84861) for purposes of the quality performance category scoring for the 
APP.
    The APP and the APP quality measure set were designed to reduce the 
reporting burden and create new scoring opportunities for MIPS APMs by 
having a stable, streamlined pathway for reporting and scoring in MIPS 
while recognizing the reporting burden and performance scoring that 
MIPS eligible clinicians, groups, and APM Entities already experience 
in their respective MIPS APMs. We believed that using a broadly 
applicable population health-based measure set would enable MIPS APM 
participants to focus on the quality measures being reported through 
their APMs, while relying on a consistent measure set within the APP 
from year to year. (85 FR 84862).
    In section IV.A.4.c.(2) of the CY 2025 PFS proposed rule (89 FR 
62023 through 62024), we proposed to create a second quality measure 
set as an available option under the APP, specifically the APP Plus 
quality measure set, which is a set of measures that leverages the 
Adult Universal Foundation measure set. Of the ten Adult Universal 
Foundation measures, five of the measures are already included in the 
APP quality measure set for the CY 2025 performance period/2027 MIPS 
payment year (88 FR 79113 through 79114). As originally proposed, the 
APP Plus quality measure set would initially consist of all the 
measures currently within the APP quality measure set (five Adult 
Universal Foundation measures and a separate quality measure) plus two 
additional measures from the Adult Universal Foundation measure set. 
The set would incrementally add the remaining three Adult Universal 
Foundation measures by the CY 2028 performance period/2030 MIPS payment 
year. (We refer readers to section IV.A.4.c.(3) of the CY 2025 PFS 
proposed rule (89 FR 62024 through 62031) for further discussion 
regarding the APP Plus quality measure set proposal.) Leveraging the 
APP Plus quality measure set with the Adult Universal Foundation 
measure set serves to advance Medicare's overall value-based care 
strategy and maintain alignment within and across CMS's quality 
programs. The alignment of quality measures across CMS programs allows 
clinicians to better focus their quality efforts, reduce administrative 
burden, and drive digital transformation and stratification of a 
focused quality measure set to assess the impact on disparities.\841\ 
For further discussion on the quality measures included in the APP Plus 
quality measure set and the timeline for incorporating such quality 
measures, please see section IV.A.4.c.(3) of this final rule.
---------------------------------------------------------------------------

    \841\ Update On The Medicare Value-Based Care Strategy: 
Alignment, Growth, Equity'', Health Affairs Forefront, March 14, 
2024. DOI: 10.1377/forefront.20240311.141546.
---------------------------------------------------------------------------

    For the APP Plus quality measure set, we proposed in Sec.  
414.1335(b) to require MIPS eligible clinicians, groups, and APM 
Entities, including Medicare Shared Saving Program (Shared Savings 
Program) Accountable Care Organizations (ACOs), reporting the APP Plus 
measure set to report on all measures in the APP Plus quality measure 
set (with the exception of the administrative claims-based quality 
measures automatically calculated by CMS) for the applicable 
performance period. As discussed further in section IV.A.4.c.(3) of 
this final rule, the APP Plus quality measure set would be optional for 
MIPS eligible clinicians, groups, and APM Entities (not including 
Shared Savings Program ACOs) meeting the reporting requirements under 
the APP starting with the CY 2025 performance period/2027 MIPS payment 
year. However, Shared Savings Program ACOs would be required to report 
the APP Plus quality measure set to meet the reporting requirements of 
the Medicare Shared Savings Program's quality performance standard as 
outlined in section IV.A.4.c.(2) of this final rule. Under the proposal 
in Sec.  414.1335(b), the requirement to report all measures within the 
APP Plus quality measure set (with the exception of the administrative 
claims-based quality measures automatically calculated by CMS) would be 
the same regardless of whether a MIPS eligible clinician, group or APM 
Entity is reporting the APP Plus quality measure set on a mandatory or 
optional basis. We proposed conforming amendments in Sec.  414.1335(a).
    Lastly, we note that the existing reporting requirements and 
scoring policies established in Sec.  414.1367(c)(1) would continue to 
be applicable to the APP quality measure set. Similarly, the existing 
scoring policies established in Sec.  414.1367(c)(1) would be 
applicable to the APP Plus quality measure set. As described in more 
detail in section IV.A.4.c.(3) of this final rule, all measures in the 
APP Plus quality measure set would be scored, unless a quality measure 
does not have a benchmark or meet the case minimum requirements. If a 
measure within the APP Plus quality measure set does not have a 
benchmark or meet the case minimum requirements, the measure would 
still be required to be reported in order to meet the reporting 
requirements of the APP and for the measure to be excluded from scoring 
(such measure would not contribute to the quality performance category 
score as long as the measure is reported). If such a measure is not 
reported, then the measure would fail to meet the reporting 
requirements of the APP and as a result, it would receive 0 achievement 
points.
    We solicited public comment on the proposal to establish the data 
submission criteria for the APP Plus quality measure set, specifically 
the proposal to require the reporting of all measures within the APP 
Plus quality measure set (with the exception of the administrative 
claims-based quality measures automatically calculated by CMS). The 
following is a summary of the public comments received.
    Comment: Some commenters supported the fundamental establishment of 
the APP Plus quality measure set. However, many commenters did not 
support the mandatory reporting requirements for the Shared Savings 
Program ACOs associated with the APP Plus quality measure set or the 
number of quality measures required to be reported. Also, many 
commenters did not support the limitation of collection types to only 
include Medicare Clinical Quality Measures for Accountable Care 
Organizations Participating in the Medicare Shared Savings Program 
(Medicare CQMs) and electronic clinical quality measures (eCQMs).
    Response: We appreciate the support from commenters regarding the 
fundamental establishment of the APP Plus quality measure set. For all 
comments and responses pertaining to the measure composition of the APP 
Plus quality measure set, specific measures within the APP Plus quality 
measure set, the reporting requirements of the APP Plus quality measure 
set, and the timeline for increasing the number of measures associated 
with the APP Plus quality measure set, we refer readers to section 
IV.A.4.c. of this final rule.
    After consideration of public comments, we are finalizing, as 
proposed, the proposal in Sec.  414.1335(b) to establish the data 
submission criteria for the APP Plus quality measure set, specifically 
the proposal to require the reporting of all measures within the

[[Page 98383]]

APP Plus quality measure set (with the exception of the administrative 
claims-based quality measures automatically calculated by CMS). MIPS 
eligible clinicians, groups, and APM Entities reporting the APP Plus 
quality measure set will be scored based on data submitted for eCQMs, 
MIPS CQMs and/or Medicare CQMs (available only to Shared Savings 
Program ACOs), and data automatically calculated for administrative 
claims-based quality measures, which includes the following number of 
quality measures: 6 quality measures for the CY 2025 performance 
period/2027 MIPS payment year; 8 quality measures for the CY 2026 
performance period/2028 MIPS payment year; 9 quality measures for the 
CY 2027 performance period/2029 MIPS payment year; and 11 quality 
measures for the CY 2028 performance period/2030 MIPS payment year, or 
the performance period that is one year after the eCQM specifications 
become available for each respective measure, whichever is later. For 
the reporting requirements pertaining to the APP Plus quality measure 
set, we refer readers to section IV.A.4.c.(2) of this final rule.
(c) Data Completeness Criteria
(i) Data Completeness Criteria for the Quality Performance Category
    As described in the CY 2017 Quality Payment Program final rule (81 
FR 77125 through 77126), to ensure that data submitted on quality 
measures are complete enough to accurately assess each MIPS eligible 
clinician's quality performance, we established a data completeness 
requirement. Section 1848(q)(5)(H) of the Act provides that analysis of 
the quality performance category may include quality measure data from 
other payers, specifically, data submitted by MIPS eligible clinicians 
with respect to items and services furnished to individuals who are not 
entitled to benefits under Part A or enrolled under Part B of Medicare. 
For the CY 2017 performance period/2019 MIPS payment year (first year 
of the implementation of MIPS), we established the data completeness 
criteria threshold to reflect a threshold of at least 50 percent (81 FR 
77125). The data completeness criteria threshold means the following: 
an individual MIPS eligible clinician, group, virtual group, or APM 
Entity submitting measure data on qualified clinical data registry 
(QCDR) measures, MIPS clinical quality measures (CQMs), or eCQMs must 
submit data on at least a specific percent (that is, 50 percent as 
specified above and 60 percent, 70 percent, and 75 percent as specified 
in the following paragraphs) of their patients that meet the measure's 
denominator criteria, regardless of payer; an individual MIPS eligible 
clinician, group, virtual group, or APM Entity submitting quality 
measure data on Medicare Part B claims measures must submit data on at 
least a specified percent (that is, 50 percent as specified above and 
60 percent, 70 percent, and 75 percent as specified in the following 
paragraphs) of their Medicare Part B patients seen during the 
corresponding performance period; and an APM Entity, specifically a 
Shared Savings ACO that meets the reporting requirements under the APP, 
submitting quality measure data on Medicare CQMs must submit data on at 
least a specified percent (that is, 70 percent and 75 percent as 
specified in the following paragraphs) of the APM Entity's applicable 
beneficiaries eligible for the Medicare CQM, as defined at Sec.  
425.20, who meet the measure's denominator criteria.
    In the CY 2017 and CY 2018 Quality Payment Program final rules and 
the CY 2020 PFS final rule, we noted that we would increase the data 
completeness criteria threshold over time (81 FR 77121, 82 FR 53632, 
and 84 FR 62951). We increased the data completeness criteria threshold 
from at least 50 percent to at least 60 percent for the CY 2018 
performance period/2020 MIPS payment year (81 FR 77125 and 82 FR 53633) 
and maintained a threshold of at least 60 percent for the CY 2019 
performance period/2021 MIPS payment year (82 FR 53633 and 53634). For 
the CY 2020 performance period/2022 MIPS payment year, we increased the 
data completeness criteria threshold from at least 60 percent to at 
least 70 percent (84 FR 62952). We maintained data completeness 
criteria threshold of at least 70 percent for the CY 2021, CY 2022, and 
CY 2023 performance periods/2023, 2024, and 2025 MIPS payment years (86 
FR 65435 through 65438). For the CY 2024 and CY 2025 performance 
periods/2026 and 2027 MIPS payment years, we increased the data 
completeness criteria threshold from at least 70 percent to at least 75 
percent (87 FR 70049 through 70052). Lastly, we maintained the data 
completeness criteria threshold of at least 75 percent for the CY 2026 
performance period/2028 MIPS payment year (88 FR 79334 through 79337).
    We continue to believe that it is important to incrementally 
increase the data completeness criteria threshold as MIPS eligible 
clinicians, groups, virtual groups, subgroups, and Alternative Payment 
Model (APM) Entities gain experience with MIPS. The incorporation of 
higher data completeness criteria thresholds in future years ensures a 
more accurate assessment of a MIPS eligible clinician's performance on 
quality measures and prevents selection bias to the extent possible (81 
FR 77120, 82 FR 53632, 83 FR 59758, 86 FR 65436, 87 FR 70049, and 88 FR 
79334). To improve compliance with the data completeness threshold, we 
have encouraged all MIPS eligible clinicians to perform the quality 
actions associated with the quality measures on their patients (82 FR 
53632, 86 FR 65436, 87 FR 70049, and 88 FR 79334) such that all 
applicable cases may be used when calculating a measure. The data 
submitted for each measure is expected to be representative of the 
individual MIPS eligible clinician, group, or virtual group's overall 
performance for that measure.
    Increasing the data completeness criteria threshold provides for a 
more accurate assessment of performance. We want to ensure that an 
appropriate, yet achievable, data completeness criteria threshold is 
applied to all eligible clinicians participating in MIPS. Based on our 
analysis of data completeness rates from data submission for the CY 
2017 performance period,\842\ it is generally feasible for eligible 
clinicians and groups to achieve a higher data completeness criteria 
threshold without jeopardizing their ability to successfully 
participate and perform well in MIPS. Our approach for increasing the 
data completeness criteria threshold slowly and incrementally over time 
enhances the ability for individual MIPS eligible clinicians, groups, 
virtual groups, subgroups, and APM Entities to meet the data 
completeness criteria threshold as it increases and consequently, 
enables successful participation under MIPS. Thus, a data completeness 
criteria threshold of less than 100 percent may reduce clinician burden 
and accommodate operational issues that may arise during data 
collection during the initial years of the program (82 FR 53632, 86 FR 
65436, 87 FR 70049, and 88 FR 79334).
---------------------------------------------------------------------------

    \842\ As described in the CY 2020 PFS final rule (84 FR 62951), 
the average data completeness rates were as follows: for individual 
eligible clinicians, it was 76.14; for groups, it was 85.27; and for 
small practices, it was 74.76.
---------------------------------------------------------------------------

    As MIPS eligible clinicians, groups, virtual groups, and APM 
Entities have gained experience participating in MIPS, particularly 
meeting the data completeness criteria threshold over the last 8 years 
(from the CY 2017 performance period to the CY 2024 performance 
period), such experience has prepared MIPS eligible clinicians, groups, 
virtual groups, subgroups

[[Page 98384]]

(participation option available starting with the CY 2024 performance 
period), and APM Entities to meet incremental increases in the data 
completeness criteria threshold. We have maintained a data completeness 
criteria threshold of at least 70 percent for 4 years from the CY 2020 
performance period through the CY 2023 performance period and as a 
result, individual MIPS eligible clinicians, groups, virtual groups, 
and APM Entities had 4 years of a maintained data completeness criteria 
threshold of at least 70 percent before transitioning to an increased 
data completeness criteria threshold of at least 75 percent starting 
with the CY 2024 performance period. We believed that maintaining the 
data completeness criteria threshold of at least 70 percent for 4 years 
provided adequate time for individual MIPS eligible clinicians, groups, 
virtual groups, and APM Entities to adjust to the increase that went 
into effect at the onset of the COVID-19 public health emergency and 
account for the implications the COVID-19 pandemic had on the 
healthcare system.
    As we assessed the timeframe for a potential future increase to the 
data completeness criteria threshold, we determined that maintaining 
the data completeness criteria threshold of at least 75 percent for a 
total of 5 years would provide sufficient time for MIPS eligible 
clinicians, groups, virtual groups, subgroups, and APM Entities to 
adjust to the data completeness criteria threshold of at least 75 
percent. In response to the proposal in the CY 2023 PFS proposed rule 
to increase the data completeness criteria threshold to at least 80 
percent starting with the CY 2026 performance period/2028 MIPS payment 
year, interested parties indicated in the public comments that 
increasing the data completeness threshold from 75 to 80 percent within 
two years of increasing the threshold from 70 to 75 percent would 
present various challenges such as the following, which would make it 
more difficult to meet the data completeness criteria threshold: 
increased burden (in particular, disproportionately increase burden for 
smaller and rural practices due to limited resources and staff, and 
some practices that are continuing to recover from the COVID-19 Public 
Health Emergency); and exacerbated technical and interoperability 
challenges pertaining to data aggregation across multiple EHRs, systems 
(utilizing different registries, and EHR developers and vendors), and 
sites (including multiple TINs participating in the Shared Savings 
Program as an ACO) (88 FR 79337). We accept these concerns, and we thus 
believe that MIPS eligible clinicians, groups, virtual groups, 
subgroups, and APM Entities require more time to adjust and prepare for 
an increase. We previously established that for the CY 2024 performance 
period through the CY 2026 performance period/2026 MIPS payment year 
through the 2028 MIPS payment year, we will establish and maintain the 
data completeness threshold of at least 75 percent (87 FR 70049 through 
70052, 88 FR 79334 through 79337). To maintain such threshold for a 
total of 5 years, we proposed in the CY 2025 PFS proposed rule, to 
maintain the data completeness criteria threshold of at least 75 
percent for the CY 2027 and CY 2028 performance periods/2029 and 2030 
MIPS payment years. It is advantageous to delineate the expectations 
for MIPS eligible clinicians, groups, virtual groups, subgroups, and 
APM Entities in advance of an applicable performance period as it 
provides sufficient notice of the expectation and subsequently allows 
such MIPS eligible clinicians, groups, virtual groups, subgroups, and 
APM Entities to prepare for a potential increase in future years.
    In the CY 2025 PFS proposed rule, we proposed to maintain the data 
completeness criteria threshold of at least 75 percent for 2 additional 
years. Specifically, in Sec.  414.1340(a), we proposed the following 
data completeness criteria thresholds pertaining to QCDR measures, MIPS 
CQMs, and eCQMs:
     At paragraph (a)(4), for the CY 2027 and CY 2028 
performance periods/2029 and 2030 MIPS payment years, a MIPS eligible 
clinician, group, virtual group, subgroup, and APM Entity submitting 
quality measures data on QCDR measures, MIPS CQMs, or eCQMs must submit 
data on at least 75 percent of the MIPS eligible clinician, group, 
virtual group, subgroup, or APM Entity's patients that meet the 
measure's denominator criteria, regardless of payer.
    Similarly, in Sec.  414.1340(b), respectively, we proposed the 
following data completeness criteria thresholds pertaining to Medicare 
Part B claims measures:
     At paragraph (b)(4), for the CY 2027 and CY 2028 
performance periods/2029 and 2030 MIPS payment years, a MIPS eligible 
clinician, group, virtual group, subgroup, and APM Entity submitting 
quality measures data on Medicare Part B claims measures must submit 
data on at least 75 percent of the MIPS eligible clinician, group, 
virtual group, subgroup, or APM Entity's patients seen during the 
corresponding performance period to which the measure applies.
    Additionally, in Sec.  414.1340(d), respectively, we proposed the 
following data completeness criteria thresholds pertaining to Medicare 
CQMs:
     At paragraph (d)(1), for the CY 2027 and CY 2028 
performance periods/2029 and 2030 MIPS payment years, an APM Entity, 
specifically a Shared Savings Program ACO that meets the reporting 
requirements under the APP, submitting quality measure data on Medicare 
CQMs must submit data on at least 75 percent of the APM Entity's 
applicable beneficiaries eligible for the Medicare CQM, as defined at 
Sec.  425.20, who meet the measure's denominator criteria.
    Lastly, for the data completeness criteria pertaining to the 
quality performance category, we proposed a conforming amendment to 
recognize that an APM Entity, specifically a Shared Savings Program ACO 
that meets the reporting requirements under the APP, must meet the data 
completeness criteria requirements established at Sec.  414.1340(d)(1).
    We solicited public comment on these proposals. The following is a 
summary of the public comments received.
    Comment: Many commenters supported the data completeness criteria 
threshold to be maintained at 75 percent and appreciated that CMS took 
into consideration the challenges and burden associated with raising 
the threshold. Many commenters expressed that the threshold is 
achievable and provides an accurate picture of quality without placing 
undue burden on clinicians. A few commenters noted that maintaining the 
threshold will provide stability to clinicians, especially small 
practices and solo practitioners who have fewer resources and staff to 
handle increased reporting requirements. One commenter noted that such 
consistency would allow clinicians to focus on delivering high-quality 
care without the added pressure of changing reporting requirements on 
top of other capacity issues such as staffing shortages.
    Response: We appreciate the support from commenters.
    Comment: Many commenters requested for CMS to maintain the data 
completeness criteria threshold of at least 75 percent permanently or 
indefinitely. Many commenters expressed concerns regarding any future 
increases to the data completeness criteria threshold and requested for 
CMS to consider barriers or burden associated with meeting the data 
completeness criteria threshold. Commenters indicated that future 
increases to the data completeness criteria threshold would exacerbate 
the

[[Page 98385]]

technical challenges associated with data aggregation, data 
integration, and interoperability across multiple EHR systems, 
particularly for clinicians providing care across multiple sites under 
the same Taxpayer Identification Number (TIN) and Shared Savings 
Program ACOs with multiple TINs that utilize several different EHR 
systems and vendors. A few commenters indicated that technical 
limitations, data privacy concerns, patient misidentification and 
varying interpretations of data completeness requirements may lead to 
inaccurate reporting and difficulty in meeting the threshold. A few 
commenters noted that higher data completeness criteria thresholds have 
a disparate impact on practices that manually extract and report 
quality data. Some commenters requested for CMS to consider the impact 
of increasing the data completeness criteria threshold would have on 
small and rural practices. A few of such commenters indicated that an 
increased data completeness criteria threshold would result in a 
disproportionate burden for many small or rural practices without 
improving data accuracy. One commenter asserted that current health IT 
standards are insufficient for seamless data aggregation from EHRs or 
registries, particularly for clinicians and Shared Savings Program ACOs 
operating across multiple sites and EHR systems. The commenter 
requested for CMS to collaborate with clinicians, Shared Savings 
Program ACOs, and EHR vendors to address such issues before increasing 
the data completeness criteria threshold.
    Response: We recognize that there are technical challenges 
associated with data aggregation across multiple sites and EHR systems. 
We previously noted concerns raised by interested parties regarding the 
unintended consequences of accelerating the data completeness 
thresholds too quickly, which may jeopardize a MIPS eligible 
clinician's ability to participate and perform well under MIPS (81 FR 
77121, 82 FR 53632, 84 FR 62951, and 87 FR 70049). However, the 
adoption of higher data completeness criteria thresholds in future 
years ensures a more accurate assessment of a MIPS eligible clinician's 
performance on quality measures and prevents selection bias to the 
extent possible (81 FR 77120, 82 FR 53632, 83 FR 59758, 86 FR 65436, 
and 87 FR 70049). It is therefore important to incrementally increase 
the data completeness criteria threshold as MIPS eligible clinicians, 
groups, virtual groups, subgroups, and APM Entities gain experience 
with MIPS. Thus, we want to ensure that an appropriate, yet achievable, 
data completeness criteria threshold is applied to all eligible 
clinicians participating in MIPS. Prior to determining whether or not 
to increase the data completeness criteria threshold in the future, we 
will analyze data completeness rates from data submission and assess if 
it is feasible for MIPS eligible clinicians, groups, virtual groups, 
subgroups, and APM Entities to achieve a higher data completeness 
criteria threshold without jeopardizing their ability to successfully 
participate and perform in MIPS.
    Comment: A few commenters requested for CMS to provide the 
following if the data completeness criteria threshold is increased in 
future years: offer CMS-facilitated quality data aggregation, allow the 
direct reporting of quality data from multiple EHR systems, and shorten 
the performance period for the quality performance category for cases 
involving the switching of EHR systems during a performance period.
    Response: We recognize there are some concerns with the potential 
increase in the data completeness threshold in future years and 
appreciate the commenters' suggestions on how we could mitigate these 
concerns. We will take this feedback into account when considering 
future increases in the data completeness threshold.
    Comment: Some commenters did not support the proposal to maintain 
the data completeness criteria threshold of at least 75 percent. A few 
commenters requested for CMS to lower the data completeness criteria 
threshold to at least 70 percent while one commenter requested for CMS 
to lower the data completeness criteria threshold to at least 60 
percent. A few commenters expressed their belief that the threshold 
should be lowered to 60 percent while one commenter recommended 70 
percent due to administrative burden and technical challenges 
associated with data aggregation, data integration, and 
interoperability across multiple EHR systems as experienced by Shared 
Savings Program ACOs.
    Response: We disagree with commenters regarding their request to 
lower the data completeness criteria threshold from its current 
threshold of at least 75 percent. Based on our analysis of data 
completeness rates from data submission for the CY 2017 performance 
period,\843\ it is feasible for eligible clinicians and groups to 
achieve a higher data completeness criteria threshold above 60 percent 
and 70 percent without jeopardizing their ability to successfully 
participate and perform in MIPS. The adoption of higher data 
completeness criteria thresholds in future years ensures a more 
accurate assessment of a MIPS eligible clinician's performance on 
quality measures and prevents selection bias to the extent possible (81 
FR 77120, 82 FR 53632, 83 FR 59758, 86 FR 65436, and 87 FR 70049). It 
is therefore important to incrementally increase the data completeness 
criteria threshold as MIPS eligible clinicians, groups, virtual groups, 
subgroups, and APM Entities gain experience with MIPS. Thus, we want to 
ensure that an appropriate, yet achievable, data completeness criteria 
threshold is applied to all eligible clinicians participating in MIPS.
---------------------------------------------------------------------------

    \843\ As described in the CY 2020 PFS final rule (84 FR 62951), 
the average data completeness rates were as follows: for individual 
eligible clinicians, it was 76.14; for groups, it was 85.27; and for 
small practices, it was 74.76.
---------------------------------------------------------------------------

    Also, due to the complex technical challenges that Shared Savings 
Program ACOs encounter as they prepare for the reporting of eCQMs and/
or MIPS CQMs, we established the Medicare CQMs collection type to serve 
as a transition collection type under the APP quality measure set 
starting with the CY 2024 performance period (88 FR 79329 through 79330 
and 79332) and under the APP Plus quality measure set starting with the 
CY 2025 performance period (as discussed in section IV.A.4.c.(3) of 
this final rule). The reporting of eCQMs and/or MIPS CQMs is new for 
some Shared Savings Program ACOs under the APP quality measure set and 
the APP Plus quality measure set due to the CMS Web Interface 
sunsetting and no longer being available starting with the CY 2025 
performance period. In order to facilitate the transition to the 
reporting of eCQMs and/or MIPS CQMs, the availability of the Medicare 
CQMs as a collection type assists with the transition of reporting 
eCQMs and/or MIPS CQMs as the complex technical challenges specific to 
Shared Savings Program ACOs are mitigated and addressed. For the 
Medicare CQMs collection type, Shared Savings Program ACOs report 
quality data on a subset of Medicare beneficiaries (beneficiaries 
eligible for Medicare CQMs as defined at Sec.  425.20) instead of the 
reporting of quality data on all-payers as required for eCQMs and MIPS 
CQMs. We note that the Medicare CQMs collection type, serving as a 
transition collection type for Shared Savings Program ACOs, is not an 
available collection type for MIPS eligible clinicians, groups, virtual 
groups, subgroups, and other APM Entities participating in MIPS.
    Comment: A few commenters requested for CMS to include exceptions

[[Page 98386]]

for meeting the data completeness criteria threshold due to unforeseen 
circumstances such as patient self-discharges, interruptions to an 
episode of care, and practices switching EHR technology or systems.
    Response: We disagree with commenters regarding the establishment 
of exclusions for MIPS eligible clinicians, groups, virtual groups, 
subgroups, and APM Entities not able to meet the data completeness 
criteria threshold for circumstances pertaining to patient self-
discharges, interruptions to an episode of care, and practices 
switching EHR technology or systems. Cases pertaining to patient self-
discharges and interruptions to an episode of care are items that would 
be more appropriately addressed in a measure specification. We 
encourage interested parties to contact measure stewards to discuss 
revisions for possible implementation in future years. Also, switching 
of EHR technology or systems does not warrant an exception to meeting 
the reporting requirements for the quality performance category as it 
relates to meeting the data completeness criteria threshold. We 
recognize that there are certain circumstances outside the control of 
clinicians, but we believe that the reporting requirements can be met 
even when EHR technology or systems are switched during a performance 
period. However, we recognize the importance of not penalizing 
clinicians for certain circumstances outside their control. For 
example, many of our policies, including the extreme and uncontrollable 
circumstances exception and the reweighting policy discussed in section 
IV.A.4.i.(2) of this final rule relating to the reweighting of the 
quality, improvement activities, and Promoting Interoperability 
performance categories when contractually-obligated third party 
intermediaries do not submit MIPS data, are aimed at ensuring that a 
MIPS eligible clinician, group, virtual group, subgroup, or APM Entity 
is not unfairly penalized due to unforeseen circumstances outside their 
control.
    Comment: A few commenters requested for CMS to consider 
establishing different data completeness thresholds for each measure 
type and collection type. The commenters indicated that while a 75 
percent data completeness criteria threshold may be reasonable for 
process measures, it is significantly more challenging to meet such 
threshold for patient-reported outcome measures; therefore, the 
commenters requested for CMS to apply a lower threshold for patient-
reported outcome measures to encourage broader adoption of these 
measures. One commenter recommended that CMS offer an alternative data 
completeness criteria threshold for Shared Savings Program ACOs 
reporting eCQMs due to the technical challenges with such measures such 
as data aggregation across multiple EHR systems and de-duplicating 
patient data.
    Response: To provide consistency regarding the data completeness 
criteria threshold across measure types (that is, process and outcome 
quality measures) and collection types, and prevent confusion regarding 
the expectations concerning the data completeness criteria threshold, 
it is imperative to establish the same data completeness criteria 
threshold requirements for QCDR measures, eCQMs, MIPS CQMs, Medicare 
Part B claims measures, and Medicare CQMs. In regard to patient-
reported outcome measures, we note that the CAHPS for MIPS Survey 
measure, which is a patient-reported outcome measure, has different 
data completeness criteria requirements from QCDR measures, eCQMs, MIPS 
CQMs, Medicare Part B claims measures, and Medicare CQMs. For the CAHPS 
for MIPS survey measure, groups, virtual groups, subgroups, and APM 
Entities report data on a sample of Medicare Part B patients provided 
by CMS.
    We recognize that there are technical challenges for Shared Savings 
Program ACOs as they prepare to report eCQMs under the APP Plus quality 
measure set. As a result of the aforementioned technical challenges, we 
are finalizing, with modification, the proposed policy pertaining to 
collection types available for the newly established APP Plus quality 
measure set, which excluded MIPS CQMs as an available collection type 
from the newly established APP Plus quality measure set. Particularly, 
we are finalizing, with modification, the proposed policy by including 
the availability of MIPS CQMs as a collection type within the APP Plus 
quality measure set for a two-year period from CY 2025 performance 
period/2027 MIPS payment year through CY 2026 performance period/2028 
MIPS payment year in order to provide another option for meeting the 
reporting requirements under the APP Plus quality measure set. We refer 
readers to section IV.A.4.c.(3) of this final rule for further 
discussion regarding the extension of the availability of MIPS CQMs as 
a collection type under the newly established APP Plus quality measure 
set. Lastly, we note that we will continue to engage in conversations 
with interested parties as we mitigate the complex technical 
challenges.
    Comment: Some commenters requested for CMS to consider other 
methodologies and approaches for data completeness. One commenter 
expressed concerns that the data completeness percentage received by 
CMS does not accurately capture the eligible population for each TIN 
due to vendors or practices only capturing the cases within a single 
EHR site and do not include the eligible encounters from other sites of 
service. A few commenters requested for CMS to consider the data 
completeness criteria threshold based on sample size. One commenter 
noted that smaller sample sizes are considered sufficient for Medicare 
Part C and D Star Ratings, as well as clinical data for hospitals to 
report on care measures. Another commenter indicated that a higher data 
completeness criteria threshold amounts to a census of available 
patient data, as opposed to a sample, which can be prone to error and 
as a result, higher data completeness thresholds do not always yield 
more accurate depictions of quality performance. As another option for 
CMS to explore, one commenter suggested that CMS consider a data 
completeness criteria threshold that meets a minimum reliability score 
of 0.80, which would increase the reliability and confidence of quality 
measure performance scores.
    Response: We established the data completeness criteria with the 
intention of ensuring that more quality data is reported (compared to 
the previous reporting program, Physician Quality Reporting System 
(PQRS)) and the data submitted for quality measures are complete enough 
to accurately assess each MIPS eligible clinician's quality 
performance. With regard to some commenters' suggestion to consider the 
data completeness criteria threshold based on sample size, we are 
concerned that having MIPS eligible clinicians report on a fixed number 
of patients may not necessarily be a representative sample of the MIPS 
eligible clinician's patient population and, therefore, may not allow 
for accurate assessment of each MIPS eligible clinician's quality 
performance. The establishment of the data completeness criteria 
threshold and the adoption of higher data completeness criteria 
thresholds ensures a more accurate assessment of a MIPS eligible 
clinician's performance on quality measures (81 FR 77120, 82 FR 53632, 
83 FR 59758, 86 FR 65436, and 87 FR 70049).
    After consideration of public comments, we are finalizing, as 
proposed, to maintain the data completeness criteria threshold of at 
least 75 percent for the CY 2027 and CY 2028 performance periods/2029 
and

[[Page 98387]]

2030 MIPS payment years. Specifically, we are finalizing, as proposed, 
the proposals in Sec.  414.1340(a), (b), and (d):
     At paragraph (a)(4), for the CY 2027 and CY 2028 
performance periods/2029 and 2030 MIPS payment years, a MIPS eligible 
clinician, group, virtual group, subgroup, and APM Entity submitting 
quality measures data on QCDR measures, MIPS CQMs, or eCQMs must submit 
data on at least 75 percent of the MIPS eligible clinician, group, 
virtual group, subgroup, or APM Entity's patients that meet the 
measure's denominator criteria, regardless of payer.
     At paragraph (b)(4), for the CY 2027 and CY 2028 
performance periods/2029 and 2030 MIPS payment years, a MIPS eligible 
clinician, group, virtual group, subgroup, and APM Entity submitting 
quality measures data on Medicare Part B claims measures must submit 
data on at least 75 percent of the MIPS eligible clinician, group, 
virtual group, subgroup, or APM Entity's patients seen during the 
corresponding performance period to which the measure applies.
     At paragraph (d)(1), for the CY 2027 and CY 2028 
performance periods/2029 and 2030 MIPS payment years, an APM Entity, 
specifically a Shared Savings Program ACO that meets the reporting 
requirements under the APP, submitting quality measure data on Medicare 
CQMs must submit data on at least 75 percent of the APM Entity's 
applicable beneficiaries eligible for the Medicare CQM, as defined at 
Sec.  425.20, who meet the measure's denominator criteria.
(d) Selection of Quality Measures
(i) Addition of New Quality Measures
(A) Pre-Rulemaking Process
    Prior to introducing a new MIPS quality measure in a proposed rule, 
CMS receives public input on measures through the pre-rulemaking 
process (referred to as the Pre-Rulemaking Measure Review (PRMR)) 
established in accordance with section 1890A of the Act. Although 
section 1848(q)(2)(D)(viii) of the Act provides that the pre-rulemaking 
process under section 1890A of the Act is not required to apply to the 
selection of MIPS quality measures, we have found that the pre-
rulemaking process provides a comprehensive review of measures from 
multi-stakeholder workgroups and have accordingly elected for such 
measures to be reviewed utilizing the PRMR process (87 FR 70048). 
Pursuant to the established PRMR process (additional information 
regarding the PRMR process is available at https://p4qm.org/PRMR), CMS 
has contracted with a Consensus-Based Entity (CBE), which is 
responsible for convening a multi-stakeholder panel comprised of 
clinicians, patients, measure experts, and health information 
technology specialists to provide input on measures CMS is considering 
for use in Medicare.
    The pre-rulemaking process begins with CMS's publication of 
measures under consideration for use in Medicare (the MUC List). Each 
measure on the MUC List is reviewed by one of several committees 
convened by the PQM for the purpose of providing multi-stakeholder 
input to the Secretary. The PRMR process includes opportunities for 
public comment through a 21-day public comment period, as well as 
public listening sessions. The PQM posts the compiled comments and 
listening session inputs received during the public comment period and 
the listening sessions within 5 days of the close of the public comment 
period. More details regarding the PRMR process may be found in the PQM 
Guidebook of Policies and Procedures for Pre-Rulemaking Measure Review 
and Measure Set Review.
    The final vote of a multistakeholder committee convened by the CBE 
may result in the following disposition of a measure: recommended, 
recommended with conditions, do not recommend, or no consensus. A ``no 
consensus'' recommendation signals continued disagreement among the 
committee despite being presented with perspectives from public 
comment, committee member feedback and discussion, and highlights the 
multi-faceted assessments of quality measures. Quality measures that 
are considered for potential implementation in MIPS starting with the 
CY 2025 performance period were included on the 2023 Measures Under 
Consideration (MUC) List (available at https://mmshub.cms.gov/sites/default/files/2023-MUC-List.xlsx). The new MIPS quality measures 
finalized, as proposed, are described in Table Group A of Appendix 1 of 
this final rule. There may be cases in which the CBE does not recommend 
for a measure to move forward to the rulemaking process and eventual 
implementation due to a measure not being endorsed by the CBE or other 
CBE, but we go forth with proposing a measure. We note that section 
1848(q)(2)(D)(iii)(v)(III) of the Act does not preclude the Secretary 
from proposing and implementing measures that are not endorsed by a CBE 
as long as the measure is evidence-based.
(ii) Removal of Quality Measures
    In the CY 2025 PFS proposed rule, we proposed to codify previously 
established criteria for the removal of MIPS quality measures from the 
MIPS quality measure inventory. In the CY 2017 Quality Payment Program 
final rule (81 FR 77136 through 77137), we established the following 
criteria for measure removal to include: If the Secretary determines 
that the MIPS quality measure is no longer meaningful, such as MIPS 
quality measures that are topped out; and, if a measure steward is no 
longer able to maintain the quality measure. In the CY 2019 PFS final 
rule (83 FR 59763), we expanded the criteria for measure removal to 
include MIPS quality measures that reached an extremely topped out 
status (for example, a measure with an average mean performance within 
the 98th to 100th percentile range); the MIPS quality measure may be 
proposed for removal in the next rulemaking cycle, regardless of 
whether or not it is in the midst of the topped-out measure lifecycle, 
due to the extremely high and unvarying performance where meaningful 
distinctions and improvement in performance can no longer be made, 
after taking into account any other relevant factors.
    Also, in the CY 2019 PFS final rule (83 FR 59764), we established 
other criteria for measure removal, specifically MIPS quality measures 
that are: duplicative; not maintained or updated to reflect current 
clinical guidelines, which are not reflective of a clinician's scope of 
practice; and low-bar, standard of care process measures. As described 
in the CY 2019 PFS final rule (83 FR 59765), we established an approach 
to incrementally remove process measures where prior to removal, 
consideration will be given to, but will not be limited to the 
following:
     Whether the removal of the process measure impacts the 
number of measures available for a specific specialty.
     Whether the MIPS quality measure addresses a priority area 
highlighted in the Measure Development Plan: https://www.cms.gov/Medicare/Quality-Payment-Program/Measure-Development/Measuredevelopment.html.
     Whether the MIPS quality measure promotes positive 
outcomes in patients.
     Considerations and evaluation of the measure's performance 
data.
     Whether the MIPS quality measure is designated as high 
priority or not.
     Whether the MIPS quality measure has reached extremely 
topped out status within the 98th to 100th percentile range, due to the 
extremely high and unvarying performance where meaningful distinctions 
and

[[Page 98388]]

improvement in performance can no longer be made.
    Lastly, in the CY 2020 PFS final rule (84 FR 62958 through 62959), 
we expanded the criteria for measure removal to include MIPS quality 
measures that do not meet case minimum and reporting volumes required 
for benchmarking after being in the program for 2 consecutive CY 
performance periods and not available for MIPS quality reporting by or 
on behalf of all MIPS eligible clinicians. For MIPS quality measures 
that do not meet case minimum and reporting volumes required for 
benchmarking after being in the program for 2 consecutive CY 
performance periods, we noted that we will factor in other 
considerations (such as, but not limited to: The robustness of the 
measure; whether it addresses a measurement gap; if the measure is a 
patient-reported outcome; and consideration of the MIPS quality measure 
in developing MVPs) prior to determining whether to remove the MIPS 
quality measure.
    We are finalizing, as proposed, the codification of the 
aforementioned criteria established for the removal of MIPS quality 
measures from the MIPS quality measure inventory in Sec.  414.1330(c), 
respectively.
(iii) Inventory of Quality Measures
    Section 1848(q)(2)(D)(i) of the Act requires the Secretary, through 
notice and comment rulemaking, to establish an annual final list of 
quality measures from which MIPS eligible clinicians may choose for the 
purpose of assessment under MIPS. Section 1848(q)(2)(D)(i)(II) of the 
Act requires that the Secretary annually update the list by removing 
measures from the list, as appropriate; adding new measures to the 
list, as appropriate; and determining whether measures that have 
undergone substantive changes should be included on the updated list.
    Previously finalized MIPS quality measures can be found in the CY 
2024 PFS final rule (88 FR 79556 through 79964), CY 2023 PFS final rule 
(87 FR 70250 through 70633), CY 2022 PFS final rule (86 FR 65687 
through 65968), CY 2021 PFS final rule (85 FR 85045 through 85377), CY 
2020 PFS final rule (84 FR 63205 through 63513), CY 2019 PFS final rule 
(83 FR 60097 through 60285), CY 2018 Quality Payment Program final rule 
(82 FR 53966 through 54174), and CY 2017 Quality Payment Program final 
rule (81 FR 77558 through 77816). We proposed changes to the MIPS 
quality measure inventory, as set forth in Appendix 1 of the CY 2025 
PFS proposed rule, including the following: the addition of new 
measures; updates to specialty sets (that is, creation of new specialty 
sets; addition and/or removal of measures; and substantive changes to 
existing measures within specialty sets); removal of existing measures; 
and substantive changes to existing measures. For the CY 2025 
performance period, we proposed an inventory of 196 MIPS quality 
measures.
    The new MIPS quality measures that we proposed to include in MIPS 
for the CY 2025 performance period and future years can be found in 
Table Group A of Appendix 1 of the CY 2025 PFS proposed rule. For the 
CY 2025 performance period, we proposed 9 new MIPS quality measures, 
which includes 5 high priority measures, of which 2 are also patient-
reported outcome measures.
    On January 3, 2024, we announced that we will be accepting 
recommendations for potential new specialty measure sets or revisions 
to existing specialty measure sets for year 9 (CY 2017 performance 
period/2019 MIPS payment year through CY 2025 performance period/2027 
MIPS payment year) of MIPS under the Quality Payment Program.\844\ The 
recommendations we received were based on the MIPS quality measures 
finalized in the CY 2024 PFS final rule and the 2023 MUC List; the 
recommendations include the addition or removal of current MIPS quality 
measures from existing specialty sets, and/or the creation of new 
specialty sets. All specialty set recommendations submitted for 
consideration were assessed and vetted, and as a result, the 
recommendations that we agree with are proposed in this proposed rule. 
We proposed the addition of a new specialty set and additionally 
proposed modifications to existing specialty sets as described in Table 
Group B of Appendix 1 of the CY 2025 PFS proposed rule. Modifications 
to specialty sets include the addition of new measures and/or existing 
measures within the MIPS quality measure inventory, removal of 
measures, and/or substantive changes to previously finalized measures 
(we referred readers to Table Group D of Appendix 1 in the CY 2025 PFS 
proposed rule). Specialty and subspecialty sets are not inclusive of 
every specialty or subspecialty. We develop and maintain specialty 
measure sets to assist MIPS eligible clinicians with selecting quality 
measures that are most relevant to their scope of practice.
---------------------------------------------------------------------------

    \844\ Message to the Quality Payment Program listserv on January 
3, 2024, entitled ``The Centers for Medicare & Medicaid Services 
(CMS) is Soliciting Stakeholder Recommendations for Potential 
Consideration of New Specialty Measure Sets and/or Revisions to the 
Existing Specialty Measure Sets for the 2025 Performance Year of the 
Merit-based Incentive Payment System (MIPS).''
---------------------------------------------------------------------------

    In addition to establishing new individual MIPS quality measures, 
modifying existing specialty sets, and creating new specialty sets as 
described in Tables Group A and Group B of Appendix 1 of the CY 2025 
PFS proposed rule, we referred readers to Table Group C of Appendix 1 
of the CY 2025 PFS proposed rule for a list of MIPS quality measures 
proposed for removal and applicable rationale for each measure. We have 
previously specified certain criteria that will be used when we are 
considering the removal of a measure (81 FR 77136 and 77137; 83 FR 
59763 through 59765; 84 FR 62957 through 62959); and such criteria is 
outlined in the proposed Sec.  414.1330(c) (as further discussed in 
section IV.A.4.e.(1)(d)(ii) of the CY 2025 PFS proposed rule (89 FR 
62040)). For the CY 2025 performance period, we proposed to remove 11 
MIPS quality measures based on the previously established criteria. Of 
the 11 MIPS quality measures proposed for removal, 2 MIPS quality 
measures are duplicative to a proposed new MIPS quality measure; 3 MIPS 
quality measures are duplicative of current measures; 1 MIPS quality 
measure has reached the topped out lifecycle; 2 MIPS quality measures 
are extremely topped out; 1 MIPS quality measure is no longer owned/
maintained; and 2 MIPS quality measures have limited adoption and 
consequently, have not been able to establish benchmarks to provide a 
meaningful impact to quality improvement. We have continuously 
communicated to interested parties our desire to reduce the number of 
process measures within the MIPS quality measure set (see, for example, 
83 FR 59763 through 59765). Seven of the MIPS quality measures proposed 
for removal are process measures that would not provide granular 
information related to disparities. The proposal to remove the MIPS 
quality measures described in Table Group C of Appendix 1 of the CY 
2025 PFS proposed rule would lead to a more parsimonious inventory of 
meaningful, robust measures in the program, and that our approach to 
removing measures should occur through an iterative process that 
includes an annual review of the MIPS quality measures to determine 
whether they meet our removal criteria.
    Also, we proposed substantive changes to several MIPS quality 
measures, which can be found in Table Group D of Appendix 1 of the CY 
2025 PFS proposed rule. We have previously established criteria that 
would apply when we are considering making

[[Page 98389]]

substantive changes to a quality measure (81 FR 77137, and 86 FR 65441 
through 65442). We proposed substantive changes to 66 MIPS quality 
measures, which includes 2 MIPS quality measures previously retained 
for utilization only in MVPs (we referred readers to Table Group DD of 
Appendix 1 of the CY 2025 PFS proposed rule for such measures). On an 
annual basis, we review the established MIPS quality measure inventory 
to consider updates to the measures. Possible updates to measures may 
be minor or substantive. The aforementioned proposed inventory of 196 
MIPS quality measures includes 193 MIPS quality measure available for 
utilization in traditional MIPS and MVPs, and 3 MIPS quality measures 
available only for utilization in MVPs (as finalized in the CY 2024 PFS 
final rule (88 FR 79897 through 77902)). In the CY 2024 PFS final rule, 
we removed the following 3 MIPS quality measures from traditional MIPS, 
but retained for utilization in MVPs: Quality #112: Breast Cancer 
Screening; Quality #113: Colorectal Cancer Screening; and Quality #128: 
Preventive Care and Screening: Body Mass Index (BMI) Screening and 
Follow-Up Plan (88 FR 79338 and 79897 through 79902). As noted in the 
CY 2025 PFS proposed rule, some MIPS quality measures available in 
traditional MIPS and/or MVPs are measures adopted by the Shared Savings 
Program for utilization under the APP, specifically the APP quality 
measure set and the newly established APP Plus quality measure set, as 
discussed in section IV.A.4.c.(3) of the CY 2025 PFS proposed rule. For 
the MIPS quality measures available in the APP quality measure set and 
APP Plus quality measure set for the CY 2025 performance period, we 
refer readers to section IV.A.4.c.(1) and section IV.A.4.c.(3) of this 
final rule.
    Lastly, as described in the CY 2025 PFS proposed rule, we proposed 
a substantive change to the following administrative claims measure, 
Quality #492: Risk-Standardized Acute Cardiovascular-Related Hospital 
Admission Rates for Patients with Heart Failure under the Merit-based 
Incentive Payment System (we refer readers to Table Group D of Appendix 
1 of this final rule), that would be applied retroactively starting 
with the CY 2023 performance period/2025 MIPS payment year (89 FR 
62042). In the CY 2023 PFS final rule, we inadvertently specified the 
measure was available at the individual clinician level. The inclusion 
of the availability of the measure at the individual clinician level is 
a misrepresentation and erroneously conveys to MIPS eligible clinicians 
reporting at the individual clinician level that the measure is 
available to meet the minimum required number of measures to report 
under traditional MIPS or an MVP. The measure was tested and developed 
for implementation at the group, virtual group, subgroup via an MVP, 
and APM Entity levels. Thus, the measure is limited to groups, virtual 
groups, subgroups via an MVP, and APM Entities participating in MIPS. 
We believe that a failure to apply this substantive change 
retroactively would be contrary to the public interest.
    Prior to the finalization of this measure as a new measure 
available within the MIPS quality measure inventory in the CY 2023 PFS 
final rule, the measure was initially proposed as a new measure in the 
CY 2022 PFS proposed rule. Based on the public comments received in 
response to the initial proposal of this measure in the CY 2022 PFS 
proposed rule, there were concerns regarding the attribution of certain 
patients to clinicians, particularly the risk adjustment for clinicians 
with higher caseloads of patients with more complicated or severe heart 
failure. As a result, the measure was not finalized as part of the CY 
2022 PFS final rule; however, we noted that we would continue to 
consider how to implement condition-specific measures such as this 
measure under MIPS (86 FR 65692 through 65694).
    In the CY 2023 PFS proposed rule, we re-proposed this measure, 
which mitigated the concerns regarding the attribution of such patients 
to clinicians by excluding patients at advanced stages of heart failure 
and requiring that a group, virtual group, subgroup via an MVP, and APM 
Entity to include at least 1 cardiologist (and a 21-patient case 
minimum); and subsequently, the measure was finalized in the CY 2023 
PFS final rule (87 FR 70266 through 70271). The intent of the measure 
is for assessment of performance to be conducted at the group, virtual 
group, subgroup via an MVP, and APM Entity levels. The measure was not 
tested, developed, or implemented at the individual clinician level. 
For this measure to be available at the individual clinician level, the 
measure would need to be tested at the individual clinician level to 
establish validity, reliability, and risk adjustments at the individual 
clinician level (89 FR 62042). It is not appropriate for the measure to 
be available at the individual clinician level without further testing. 
Consequently, any assessment of data for this measure at the individual 
clinician level would produce invalid and unreliable results. By 
retroactively applying the substantive change to this measure 
(modifying the measure to remove the individual clinician level as an 
option) effective starting with the CY 2023 performance period/2025 
MIPS payment year, the level of reporting available for the measure 
will align with the intent, implementation, and operationalization of 
the measure, and clarify that the measure is not available at the 
individual clinician level.
    We solicited public comment on the proposals to modify the quality 
performance category measure inventory, a set of 196 MIPS quality 
measures for the CY 2025 performance period, which includes the 
following:
     Implementation of 9 new MIPS quality measures: 5 high 
priority measures, of which 2 are also patient-reported outcome 
measures;
     Removal of 11 MIPS quality measures: 2 MIPS quality 
measure are duplicative to a proposed new quality measure; 3 MIPS 
quality measures are duplicative to current quality measures; 1 MIPS 
quality measure has reached the topped-out lifecycle; 2 MIPS quality 
measures are extremely topped out; 1 MIPS quality measure is no longer 
owned/maintained; and 2 MIPS quality measures have limited adoption and 
consequently, have not been able to establish benchmarks to provide a 
meaningful impact to quality improvement; and
     Substantive changes to 66 MIPS quality measures.
    We refer readers to Table Groups A through DD of Appendix 1 of this 
final rule for a summary of the public comments received regarding the 
proposed modifications to the MIPS quality measure inventory for the CY 
2025 performance period and the discussion regarding final decisions.
    After consideration of public comments, and for the reasons stated 
in the aforementioned Table Groups A through DD of Appendix 1 of this 
final rule and the CY 2025 PFS proposed rule (89 FR 62251 through 
62570), we are finalizing, with modification, a measure set of 195 MIPS 
quality measures (192 MIPS quality measures are available in 
traditional MIPS and 3 MIPS quality measures are available only in 
MVPs) in the inventory for the CY 2025 performance period, which 
includes the following:
     Implementation of seven new MIPS quality measures of which 
three are high priority measures;
     Removal of 10 MIPS quality measures: 2 MIPS quality 
measure are duplicative to a proposed new quality measure; 2 MIPS 
quality measures are

[[Page 98390]]

duplicative to current quality measures; 1 MIPS quality measure has 
reached the topped-out lifecycle; 2 MIPS quality measures are extremely 
topped out; 1 MIPS quality measure is no longer owned/maintained; and 2 
MIPS quality measures have limited adoption and consequently, have not 
been able to establish benchmarks to provide a meaningful impact to 
quality improvement; and
     Substantive changes to 66 MIPS quality measures.
(e) Quality Performance Category Requests for Information
    In the CY 2025 PFS proposed rule, we included the following 
Requests for Information (RFIs) (89 FR 62042 through 62044).
(i) Survey Modes for the Administration of the Consumer Assessment of 
Healthcare Providers and Systems (CAHPS) for MIPS Survey Request for 
Information
    We solicited public comment on the potential expansion of the 
survey modes of the CAHPS for MIPS Survey from a mail-phone protocol to 
a web-mail-phone protocol. During the 2023 CAHPS for MIPS Web Mode 
Field Test, we found that adding the web-based survey mode to the 
current mail-phone protocol of CAHPS for MIPS survey administration 
resulted in an increased response rate. We specifically requested 
comment on (1) whether the increase in response rate would outweigh a 
possible increase in the cost of survey administration associated with 
the addition of a web-based survey mode to the current mail-phone 
survey protocol, and (2) if providing email addresses to vendors would 
be feasible for groups, virtual groups, subgroups, and APM Entities 
(including Shared Savings Program ACOs).
    We thank commenters for their feedback on this RFI, which may be 
considered in future rulemaking.
(ii) Guiding Principles for Patient-Reported Outcome Measures in 
Federal Models, and Quality Reporting and Payment Programs Request for 
Information
    We are committed to elevating the patient voice in healthcare. One 
critical approach to elevating the patient voice that is aligned with 
the CMS National Quality Strategy and strategy of the CMS Innovation 
Center is to include more Patient-Reported Outcome Measures (PROMs) and 
Patient-Reported Outcome Performance Measures (PRO-PMs) in CMS quality 
reporting and payment programs and CMS Innovation Center Models. As we 
move forward with including more PROMs and PRO-PMs in CMS quality 
reporting and payment programs and CMS Innovation Center Models, it is 
important to develop a set of guiding principles and considerations for 
the selection and implementation of PROMs or PRO-PMs. Through this RFI, 
we sought comment regarding the overarching principles and 
considerations related to data infrastructure, selection, feasible 
implementation, and patient engagement of PROMs and PRO-PMs.
    We thank commenters for their feedback on this RFI, which may be 
considered in future rulemaking.
(2) Cost Performance Category
    Section 1848(q)(2)(A) of the Act includes resource use as a 
performance category under MIPS. We refer to this performance category 
as the cost performance category. As required by sections 1848(q)(2) 
and (5) of the Act, the four performance categories of MIPS are used in 
determining the MIPS final score for each MIPS eligible clinician. In 
general, MIPS eligible clinicians are evaluated under all four of the 
MIPS performance categories, including the cost performance category.
    We proposed to add six new episode-based measures to the cost 
performance category beginning with the CY 2025 performance period/2027 
MIPS payment year. These six measures include:
     Chronic Kidney Disease (CKD), which assesses MIPS eligible 
clinicians on the risk-adjusted and specialty-adjusted cost to Medicare 
for patients who receive care to manage and treat CKD stages 4 and 5;
     End-Stage Renal Disease (ESRD), which assesses MIPS 
eligible clinicians on the risk-adjusted and specialty-adjusted cost to 
Medicare for patients who receive medical care to manage ESRD;
     Kidney Transplant Management, which assesses MIPS eligible 
clinicians on the risk-adjusted and specialty-adjusted cost to Medicare 
for ongoing kidney transplant-related care and management starting at 
least 90 days after transplant surgery;
     Prostate Cancer, which assesses MIPS eligible clinicians 
on the risk-adjusted and specialty-adjusted cost to Medicare for the 
management and treatment of prostate cancer;
     Rheumatoid Arthritis, which assesses MIPS eligible 
clinicians on the risk-adjusted and specialty-adjusted cost to Medicare 
for the management and treatment of rheumatoid arthritis; and
     Respiratory Infection Hospitalization, which assesses MIPS 
eligible clinicians on the risk-adjusted cost to Medicare for the 
inpatient treatment of respiratory infection.
    We proposed modifications to two existing episode-based measures so 
that their specifications reflect modified versions beginning with the 
CY 2025 performance period/2027 MIPS payment year. These two measures 
are:
     Cataract Removal with Intraocular Lens (IOL) 
Implantation,\845\ which assesses MIPS eligible clinicians on the risk-
adjusted cost to Medicare for cataract removal procedures; and
---------------------------------------------------------------------------

    \845\ The current title of this measure is the Routine Cataract 
Removal with Intraocular Lens (IOL) Implantation measure, which we 
proposed this retitled, modified measure would replace.
---------------------------------------------------------------------------

     Inpatient (IP) Percutaneous Coronary Intervention 
(PCI),\846\ which assesses MIPS eligible clinicians on the risk-
adjusted cost to Medicare for the inpatient PCI treatment of patients 
who present with a cardiac event.
---------------------------------------------------------------------------

    \846\ The current title of this measure is the ST-Elevation 
Myocardial Infarction (STEMI) Percutaneous Coronary Intervention 
(PCI) measure, which we proposed this retitled, modified measure 
would replace.
---------------------------------------------------------------------------

    We proposed that MIPS eligible clinicians must be attributed a 
minimum of 20 cases for each of the proposed six new measures. In 
addition, we proposed to maintain the existing case minimums for the 
two measures we proposed to modify in this rulemaking, which are a 20-
episode case minimum for the IP PCI measure and a 10-episode case 
minimum for the Cataract Removal with IOL Implantation measure. We also 
proposed to update the operational list of care episode and patient 
condition groups and codes to reflect these new and modified measures.
    Finally, we proposed to adopt criteria to specify objective bases 
for the removal of any cost measures from the MIPS cost performance 
category, which we also proposed to codify at Sec.  414.1350(e).
    For a description of the statutory authority for and existing 
policies pertaining to the cost performance category, we refer readers 
to Sec.  414.1350 and the CY 2017 Quality Payment Program final rule 
(81 FR 77162 through 77177), CY 2018 Quality Payment Program final rule 
(82 FR 53641 through 53648), CY 2019 PFS final rule (83 FR 59765 
through 59776), CY 2020 PFS final rule (84 FR 62959 through 62979), CY 
2021 PFS final rule (85 FR 84877 through 84881), CY 2022 PFS final rule 
(86 FR 65445 through 65461), CY 2023 PFS final rule (87 FR 70055 
through 70057), and CY 2024 PFS final rule (88 FR 79339 through 79349).
    For more details on the proposals in this section on which we 
invited comments, we refer readers to the CY

[[Page 98391]]

2025 PFS proposed rule (89 FR 62044 through 62055).
(a) Updates to MIPS Cost Measure Inventory
(i) Background on Episode-Based Cost Measure Development, Reevaluation, 
and Pre-Rulemaking Review
    Under Sec.  [thinsp]414.1350(a), we specify cost measures for a 
performance period to assess the performance of MIPS eligible 
clinicians on the cost performance category. There are currently 29 
cost measures in the cost performance category for the CY 2024 
performance period/2026 MIPS payment year, comprising of 27 episode-
based measures covering a range of conditions and procedures and 2 
population-based measures.
    We worked with the measure development contractor to identify the 
proposed six new episode-based measures through empirical analyses and 
public comment. These measures cover clinical topics and MIPS eligible 
clinicians practicing in certain specialties for whom there are 
currently limited or no applicable cost measures. As such, these 
measures will help fill gaps in the cost performance category's measure 
set and support the transition from traditional MIPS to MVPs by 
allowing new MVPs to be created and enhancing existing MVPs. They also 
address interested parties' feedback about the need for more clinically 
refined episode-based measures in the cost performance category. 
Finally, they increase the cost coverage of care episode and patient 
condition groups, moving closer towards the statutory goal of covering 
50 percent of expenditures under Medicare Parts A and B, as specified 
under section 1848(r)(2)(i)(I) of the Act.
    The measure development contractor also conducts comprehensive 
reevaluation every 3 years after a measure is implemented in MIPS to 
ensure that measures continue to meet criteria for importance, 
scientific acceptability, and usability in line with the CMS Measures 
Management System Blueprint (https://mmshub.cms.gov/blueprint-measure-lifecycle-overview). As a result of this process, we proposed to modify 
two episode-based measures currently in use (the Routine Cataract 
Removal with Intraocular Lens (IOL) Implantation and ST-Elevation 
Myocardial Infarction (STEMI) Percutaneous Coronary Intervention (PCI) 
measures), and proposed the modified Respiratory Infection 
Hospitalization as a new measure, replacing the Simple Pneumonia with 
Hospitalization measure previously removed from the cost performance 
category.
    We refer readers to the CY 2025 PFS proposed rule (89 FR 62045 
through 62046; 89 FR 62048 through 62050) for more detailed information 
on the development and reevaluation of episode-based measures, 
particularly the episode-based measures we proposed to adopt and modify 
in the proposed rule.
    Following development and reevaluation processes, the episode-based 
measures were submitted to the Measures Under Consideration (MUC) List 
and evaluated for potential use in MIPS by the Pre-Rulemaking Measure 
Review (PRMR) process. This process involved reviews by the PRMR 
Clinician Committee Advisory and Recommendation Groups, as well as 2 
public comment periods. The PRMR Clinician Committee Advisory and 
Recommendation Groups review the measure information, a preliminary 
analysis of the measures and their testing information developed by the 
consensus-based entity (CBE) (contracted in accordance with section 
1890 of the Act), and public comments. The PRMR Clinician Committee 
Recommendation Group met in January 2024 to discuss in more detail the 
measures we proposed to adopt and modify and voted on their 
recommendations for the appropriateness of these measures' use in MIPS. 
We refer readers to the CY 2025 PFS proposed rule (89 FR 62051 through 
62053) for more detailed information regarding the PRMR process and the 
PRMR groups' discussions, voting results, and recommendations for the 
measures we proposed to adopt and modify.
    Although we may pursue endorsement by the CBE, contracted in 
accordance with section 1890 of the Act, for the proposed measures at a 
later time, we are not required to use only CBE endorsed measures in 
MIPS. We emphasize that cost measures undergo extensive review and 
testing before they are implemented in MIPS. We continue to believe in 
the strength of the episode-based measures proposed for adoption and 
modification in this rulemaking, based on valid and reliable testing 
results and extensive review from interested parties as part of the 
measure development and PRMR process. We refer readers to our 
discussion in the CY 2025 PFS proposed rule (89 FR 62051) for more 
information regarding this testing and review process.
    In section IV.A.4.e.(2)(a)(ii) of this final rule, we describe our 
proposal to adopt six new measures in the cost performance category 
beginning with the CY 2025 performance period/2027 MIPS payment year. 
In section IV.A.4.e.(2)(a)(iii) of this final rule, we describe our 
proposal to modify two existing measures in the cost performance 
category beginning with the CY 2025 performance period/2027 MIPS 
payment year. In section IV.A.4.e.(2)(b)of this final rule, we describe 
our proposal that MIPS eligible clinicians must be attributed a minimum 
number of cases for each of these measures to be assessed and scored on 
such measure.
(ii) Proposals to Adopt Six New Episode-Based Measures Beginning with 
the CY 2025 Performance Period/2027 MIPS Payment Year
    In this section of this final rule, we describe generally the six 
new episode-based measures, which we proposed to add to the cost 
performance category beginning with the CY 2025 performance period/2027 
MIPS payment year. While we generally describe these six episode-based 
measures in this section of this final rule, we refer readers to our 
description of these measures in the CY 2025 PFS proposed rule (89 FR 
62046 through 62048) for more detailed information.
    In conjunction with our measure development contractor, we 
developed these measures with consideration of the common standards 
that are described in the CY 2022 PFS final rule (86 FR 65455 through 
65459) to ensure consistency across episode-based measures being 
developed. The six new episode-based measures we proposed met all the 
requirements described in the CY 2022 PFS final rule, including the 
following: (1) episode definition based on trigger codes that determine 
the patient cohort; (2) attribution; (3) service assignment; (4) 
exclusions; and (5) risk adjustment. Generally, for all episode-based 
measures, we exclude episodes where costs cannot be fairly compared to 
the costs for the whole cohort in the episode-based measure. These 
exclusions, like other features of each episode-based measure, are 
developed with extensive clinician and interested parties' engagement. 
We have specified exclusions for all six proposed episode-based 
measures. We also apply a risk adjustment model to each episode-based 
measure in the cost performance category. All six proposed episode-
based measures have been risk-adjusted in accordance with the measure's 
risk adjustment model. We refer readers to our description of the risk 
adjustment model applied to each of the proposed measures in the CY 
2025 PFS proposed rule (89 FR 62047).

[[Page 98392]]

    More information on the episode-based measure development 
requirements, which were outlined so that external interested parties 
could develop measures in the future, are available in the Blueprint 
for the CMS Measures Management System (https://mmshub.cms.gov/blueprint-measure-lifecycle-overview) and the Meaningful Measures 
Initiative (https://www.cms.gov/medicare/quality/meaningful-measures-initiative).
    The episode-based measures that we proposed for adoption beginning 
with the CY 2025 performance period/2027 MIPS payment year are set 
forth in Table 72.
[GRAPHIC] [TIFF OMITTED] TR09DE24.140

    The five chronic condition episode-based measures assess outpatient 
treatment and ongoing management of the following chronic conditions: 
CKD, ESRD, kidney transplant management, prostate cancer, and 
rheumatoid arthritis. These measures assess the costs of services 
related to these conditions, such as physician services, imaging or 
diagnostic services, emergency room care or hospitalizations, 
medications, or other services related to ongoing management or post-
acute care. The measure construction for these proposed measures 
follows the approach described in the CY 2022 PFS final rule (86 FR 
65445 through 65461), which also includes detailed discussion of the 
attribution methodology and examples of how episodes are attributed.
    We refer readers to our description of our overall attribution 
methodology for cost measures in the CY 2025 proposed rule (89 FR 62047 
and 62048). More information about the chronic condition episode-based 
measures attribution methodology, including a one-page summary and a 
Frequently Asked Questions (FAQ) document, is available at https://www.cms.gov/files/zip/mips-chrcondition-episode-based-cost-measures-attribution-methodology-2023-zip.zip. More general information about 
the overall chronic condition cost measure framework is available at 
https://www.cms.gov/files/document/chronic-condition-cost-measure-framework-poster.pdf.
    The Respiratory Infection Hospitalization measure is an acute 
inpatient medical condition episode-based measure, which focuses on the 
inpatient treatment of respiratory infection and is attributed to 
clinicians and clinician groups treating a patient during the 
hospitalization. It includes the cost of services related to the 
inpatient treatment of a respiratory infection, such as initial 
inpatient services, subsequent outpatient physician visits, and 
emergency room care or hospitalizations for related complications. As 
described further in the CY 2025 PFS proposed rule (89 FR 62049), the 
Respiratory Infection Hospitalization measure is the reevaluated 
version of the Simple Pneumonia with Hospitalization measure, adopted 
for MIPS in the CY 2019 PFS final rule (83 FR 59767 through 59773) and 
removed from MIPS in the CY 2024 PFS final rule (88 FR 79348 and 
79349). This new, modified measure addresses the concerns with the 
previous version of the measure by expanding the patient cohort to 
include beneficiaries hospitalized for pneumonia and related 
respiratory infections, reflecting the coding changes as described in 
the CY 2024 PFS final rule (88 FR 79348 and 79349). The modified 
measure also incorporates feedback we received from interested parties 
about appropriate risk adjustment and exclusions during the 
reevaluation process of the prior Simple Pneumonia with Hospitalization 
measure.
    The specifications for all six episode-based measures we proposed 
for adoption in this rulemaking are available at https://www.cms.gov/medicare/quality/value-based-programs/cost-measures. The specifications 
documents for each measure consist of a methods document that describes 
the steps for constructing the measure and a measure codes list file 
that contains the medical codes used in that methodology. First, the 
methods document provides detailed methodology describing each step to 
construct the measure, including: identifying patients receiving care; 
defining an episode-based measure; attributing episodes to MIPS 
eligible clinicians and clinician groups; assigning costs; defining 
exclusions; risk adjusting; and calculating measure score. Second, the 
measure codes list file contains the codes used in the measure 
specifications, including the episode triggers, attribution, 
stratification, assigned items and services, exclusions, and risk 
adjustors.
    More information about the episode-based measures is available in 
the Measure Justification Forms, which were posted to support PRMR 
discussions. These documents provide a comprehensive characterization 
of the measures, their justification, and testing results of the 
measures' specifications at this time. These documents are available 
through the QPP Cost Measure Information page at https://www.cms.gov/medicare/quality/value-based-programs/cost-measures.
    We invited comments on the proposals in this section.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Several commenters shared their support of our proposal to 
adopt and implement the six new episode-based measures and also shared 
support generally for our development of additional episode-based 
measures. One commenter stated that they appreciate that cost 
measurement can reduce healthcare costs. Another commenter supported 
CMS's efforts to expand the set of available episode-based measures so 
that all specialists and sub-specialists have adequate measures 
available for

[[Page 98393]]

scoring in the MIPS cost performance category.
    Response: We appreciate the commenters' support of our proposal to 
adopt the six new episode-based measures in the MIPS cost performance 
category and our efforts to develop additional episode-based measures 
in the future.
    Comment: One commenter supported the adoption and implementation of 
the proposed Chronic Kidney Disease and End-Stage Renal Disease 
episode-based measures. The commenter noted the adoption of these 
measures would further support the idea that early identification is 
essential and beneficial for both patients and providers, and 
emphasized the importance of kidney health evaluation screening in 
chronic kidney disease and high-risk populations.
    Response: We thank the commenter for their support for the adoption 
and implementation of the Chronic Kidney Disease and End-Stage Renal 
Disease episode-based measures in MIPS, and we agree with the 
importance of measuring performance related to the management and 
treatment of kidney health.
    Comment: One commenter did not support the inclusion of the Kidney 
Transplant Management episode-based measure. The commenter raised 
concerns that the measure may create unintended consequences for the 
care outcomes of kidney transplant patients and potentially impact 
incentives for clinicians to use hard-to-place organs in kidney 
transplants, which may result in higher costs of care for kidney 
transplant management. The commenter stated that there is not enough 
information available on optimal post-renal transplant patient care and 
that an episode-based measure could lead to the possibility of patient 
harm and decreased survival of transplant organs. Another commenter 
urged CMS to monitor for impacts of implementation of this measure on 
access to appropriate transplantation care and to ensure the measure 
does not disincentivize referrals of medically appropriate patients for 
transplant evaluation or the use of breakthrough pharmaceuticals.
    Response: We disagree that the Kidney Transplant Management 
episode-based measure would create unintended consequences for the care 
outcomes of patients or that it would disincentivize the use of hard-
to-place organs, which are organs that are accepted and transplanted 
later in the donor organ matching process.\847\ This is the process 
where a donor kidney is matched with a transplant recipient, ranked in 
order of need and likelihood of survival. In our testing, we understood 
hard-to-place organs as typically organs from a deceased donor kidney 
with a high Kidney Donor Profile Index (KDPI). A higher value indicates 
that the donor kidneys will be less likely to function.\848\ The 
measure uses risk adjustment to neutralize the impact of kidney 
transplant organ characteristics and other factors on clinician 
performance. The risk adjustment model includes variables related to 
the transplanted organ, such as whether the donor is living or 
deceased, and whether the kidney was from a blood type incompatible 
donor. Deceased donors or donors with incompatible blood types are 
examples of how a kidney organ may be accepted later in the ranked list 
of transplant recipients requiring a kidney, and therefore, harder to 
place. The measure also risk adjusts for patient-level factors, 
including comorbidities, demographics, disability status, recent use of 
long-term care, and dual enrollment in Medicare and Medicaid. These 
risk adjustment variables help ensure that the measure is accounting 
for higher complexity and higher cost patients, and reduces the 
likelihood of unintended consequences, such as clinicians choosing not 
to provide care to higher complexity patients. We will monitor the 
impact of the Kidney Transplant Management episode-based measure for 
any unintended consequences that may be identified through public 
comment or empiric testing during the measure maintenance process.
---------------------------------------------------------------------------

    \847\ Ashiku L, Dagli C. Identify Hard-to-Place Kidneys for 
Early Engagement in Accelerated Placement With a Deep Learning 
Optimization Approach. Transplant Proc. 2023 Jan-Feb;55(1):38-48. 
doi: 10.1016/j.transproceed.2022.12.005. Epub 2023 Jan 12. PMID: 
36641350.
    \848\ Organ Procurement & Transplantation Network, Accelerated 
placement of hard-to-place kidneys. https://optn.transplant.hrsa.gov/professionals/improvement/improving-organ-usage-and-placement-efficiency/protocols-for-expedited-placement-variance/accelerated-placement-of-hard-to-place-kidneys/.
---------------------------------------------------------------------------

    Comment: A few commenters expressed support for the proposal to 
adopt and implement the Respiratory Infection Hospitalization episode-
based measure. One commenter noted that this measure covers more 
conditions that can cause a respiratory hospitalization than the 
original Simple Pneumonia with Hospitalization episode-based measure.
    Response: We thank the commenters for their support. We agree that 
the Respiratory Infection Hospitalization episode-based measure 
includes a larger patient cohort than the Simple Pneumonia with 
Hospitalization episode-based measure did, which will allow for more 
comprehensive assessment of the costs of care related to inpatient 
hospitalizations for respiratory infections. By expanding the patient 
cohort, the measure will capture additional MIPS eligible clinicians 
and patients, resulting in the measure having greater potential impact 
on the value of care.
    Comment: One commenter did not support implementation of the 
Respiratory Infection Hospitalization episode-based measure in MIPS due 
to overarching concerns they had with the attribution methodology and 
actionability of episode-based measures. They stated that the measure 
may be more appropriate at a systems-level, and that they could support 
the measure's adoption and use in other Medicare programs instead of 
MIPS. More specifically, they raised concerns that the measure included 
services that occur within 30 days of the trigger event and questioned 
whether hospitalists, who may be attributed the measure, have control 
over these costs. They also stated that hospital costs are typically 
fixed by the MS-DRG associated with the hospital stay, so the measure 
may have limited actionability for MIPS eligible clinicians.
    Response: We disagree with the commenters' concerns about the 
attribution methodology of the Respiratory Infection Hospitalization 
episode-based measure. As we described in the CY 2025 PFS proposed rule 
(89 FR 62047 and 62048), the attribution methodology for this measure 
was developed with input from a TEP, a Clinician Expert Workgroup, and 
patients, families, and caregivers. The measure only includes the costs 
of services clinically related to respiratory infection 
hospitalizations; MIPS eligible clinicians are not assessed on 
clinically unrelated costs that may occur during the 30-day episode 
window. We determined that a 30-day episode window is appropriate based 
on empirical data presented by the measure developer and based on input 
from the Clinician Expert Workgroup on reasonable timelines for 
clinicians to influence clinically related costs, such as respiratory 
infection-specific complications, antibiotic-related complications, and 
post-acute care. Additionally, while the assigned costs of inpatient 
hospitalizations that trigger episodes are standardized by MS-DRG, the 
measure can assess variation in costs based on the additional 
clinically related services provided during the 30-day episode window, 
such as the cost of post-discharge care and potential complications or 
rehospitalization. This

[[Page 98394]]

measure is attributed to individual MIPS eligible clinicians and groups 
that provide inpatient E/M services for patients hospitalized for 
respiratory infections. However, the care that MIPS eligible clinicians 
provide during and following an inpatient hospitalization can influence 
the occurrence, frequency, and intensity of services that patients 
receive during the episode and impact costs of care. For example, 
appropriate reduction in antibiotic use can reduce costly readmissions 
for respiratory infections.\849\ For more discussion on the potential 
for reduction in readmissions and appropriate use of antibiotics, we 
refer readers to the measure rationale available in the Measure 
Justification Form available for download at https://www.cms.gov/medicare/quality/value-based-programs/cost-measures/prior.
---------------------------------------------------------------------------

    \849\ Mauro, James, Saman Kannangara, Joanne Peterson, David 
Livert, and Roman A. Tuma. ``Rigorous Antibiotic Stewardship in the 
Hospitalized Elderly Population: Saving Lives and Decreasing Cost of 
Inpatient Care.'' JACAntimicrobial Resistance 3, no. 3 (09, 2021): 
1. https://doi.org/10.1093/jacamr/dlab118.
---------------------------------------------------------------------------

    Comment: Commenters expressed concerns with implementing the 
Rheumatoid Arthritis episode-based measure, noting that the PRMR 
Recommendation Group voted ``do not recommend'' when considering its 
implementation in MIPS. Commenters were concerned that this may set a 
precedent or undermine the PRMR evaluation process.
    Response: Each measure that we propose for use in MIPS is 
considered on a case-by-case basis. We weigh the PRMR recommendations 
in any decision to propose measures for adoption in MIPS; however, PRMR 
support is not required for a cost measure to be adopted and 
implemented into MIPS. As noted previously, cost measures undergo 
extensive review and testing before we propose to adopt them in MIPS. 
We proposed the adoption and modification of these cost measures in the 
CY 2025 PFS proposed rule based on testing results and extensive review 
from interested parties as part of the measure development and PRMR 
process. We refer readers to our discussion in the CY 2025 PFS proposed 
rule (89 FR 62051) for more information regarding this testing and 
review process.
    For the Rheumatoid Arthritis measure, we do not agree with the PRMR 
Recommendation Group's recommendation as we described in detail in the 
CY 2025 PFS proposed rule (89 FR 62051 through 62053). Testing 
conducted during and after measure development demonstrates that the 
Rheumatoid Arthritis measure is reliable and valid. Additionally, the 
Rheumatoid Arthritis measure represents a high priority and high-cost 
area of care with potential for individual MIPS eligible clinicians and 
groups to improve their performance on the measure.
    Finally, we do not agree that a decision to adopt and implement the 
Rheumatoid Arthritis measure would set a precedent or undermine the 
PRMR process. The role of the PRMR process is to review potential 
measures for their use in a CMS program and provide a recommendation to 
CMS for consideration. We have reviewed the PRMR discussions and 
recommendations on the Rheumatoid Arthritis measure and considered this 
feedback in our decision to propose the measure. As previously stated, 
we consider each measure on a case-by-case basis when determining 
whether to adopt and implement a measure in MIPS.
    Comment: Commenters also reiterated concerns raised during the PRMR 
public comment period on the Rheumatoid Arthritis measure that current 
Medicare coverage guidelines, such as fail-first medication 
requirements and Self-Administered Drug exclusions, limit the types of 
care that clinicians can provide to rheumatoid arthritis patients, 
which could also impact cost measurement. One commenter requested that 
these limiting coverage guidelines be addressed before the episode-
based measure can be a successful measurement of rheumatoid arthritis 
related care. Another commenter more generally requested that CMS 
review and address specialty society comments made during the PRMR 
public comment period before adopting the Rheumatoid Arthritis measure.
    Response: While we appreciate the commenters' recommendations on 
broader Medicare coverage guidelines, the measure includes patients who 
are continually enrolled in Medicare and is stratified by episodes with 
and without Part D enrollment, so all MIPS eligible clinicians are 
being assessed on a population with similar Medicare coverage 
guidelines. These concerns were also raised during the PRMR public 
comment period, and we do not have concerns about these Medicare 
coverage guidelines negatively impacting MIPS eligible clinicians' 
performance on the measure. These guidelines may influence MIPS 
eligible clinician's practice patterns; however, the measure assesses 
each MIPS eligible clinician compared to the national average of all 
other MIPS eligible clinicians attributed the same measure for the same 
performance period. As such, all MIPS eligible clinicians are being 
assessed based on similar factors influencing clinicians' practice 
decisions. As a result, we do not believe that these Medicare coverage 
guidelines prevent the Rheumatoid Arthritis episode-based measure from 
successfully measuring cost performance related to the treatment and 
management of rheumatoid arthritis. We refer readers to section 
IV.A.4.f.(1)(d) of this final rule for more detailed discussion 
regarding our scoring methodology for cost measures.
    The public comments we received during the PRMR process raised 
concerns that the measure holds rheumatologists accountable for costs 
outside of their control, in particular for costly medications that are 
used in good standards of care. The measure developer and Clinician 
Expert Workgroup considered what services to include in the measure 
that would be within the reasonable influence of attributed clinicians. 
Based on clinical input and empiric analysis, we include Part D drugs 
in the measure as they are important aspects of care provided for 
rheumatoid arthritis. The Clinician Expert Workgroup believed that any 
additional complexity by including Part D was outweighed by the need to 
capture these costs to appropriately assess clinician performance. The 
Clinician Expert Workgroup's discussions are available for review in 
meeting summaries posted on the Cost Measures Information page at 
https://www.cms.gov/medicare/quality/value-based-programs/cost-measures/prior. Part D costs are standardized to remove price variation 
from non-clinical factors, such as drug manufacturers and plans. 
Additionally, the measure sub-groups for episodes for patients with and 
without Part D enrollment to account for expected differences in cost, 
such that episodes for patients with Part D enrollment are only 
directly compared with other episodes for patients with Part D 
enrollment.
    We disagree with the public comments received during the PRMR 
process stating that the measure will not produce actionable results 
for MIPS eligible clinicians. Individual MIPS eligible clinicians and 
groups receive MIPS Performance Feedback for measures on which they are 
assessed, which they can review to identify potential opportunities to 
improve future cost performance. For example, MIPS eligible clinicians 
can review supplemental data reports to help identify differences 
between the characteristics of the national average episode for the 
measure and their

[[Page 98395]]

attributed episodes, such as whether their episodes have higher than 
average costs associated with hospitalizations. Additionally, for the 
Rheumatoid Arthritis measure, there are a number of actions that 
clinicians can take to provide more efficient care. For instance, the 
Rheumatoid Arthritis measure includes the cost of hospitalizations and 
other complications of care, so by reducing the occurrence of 
potentially avoidable adverse events, clinicians can improve 
performance on the measure. In addition, peer-reviewed literature notes 
opportunities to improve the value of care provided to rheumatoid 
arthritis patients by carefully considering the use of disease-
modifying anti-rheumatic drugs (DMARDs).850 851 Peer-
reviewed literature also indicates that while patients are often 
prescribed corticosteroids for 6 months or more, guidelines indicate 
that corticosteroid use should be limited.\852\ Chronic glucocorticoid 
use among rheumatoid arthritis patients is associated with a higher 
health care costs due to increased occurrence of adverse events (for 
example, developing diabetes or osteoporosis, cardiovascular events 
such as thrombotic stroke, myocardial infarction, or 
death).853 854 855
---------------------------------------------------------------------------

    \850\ Choosing Wisely, ``Don't prescribe biologics for 
rheumatoid arthritis before a trial of methotrexate (or other 
conventional non-biologic DMARDs),'' 2013, https://www.choosingwisely.org/clinician-lists/american-college-rheumatology-biologics-for-rheumatoid-arthritis/.
    \851\ Drosos, A. et al., ``Therapeutic Options and Cost-
Effectiveness for Rheumatoid Arthritis Treatment,'' Current 
Rheumatology Reports, 22, no. 8 (June 2020): 1-6, https://doi.org/10.1007/s11926-020-00921-8.
    \852\ George, M.D. et al., ``Variability in glucocorticoid 
prescribing for rheumatoid arthritis and the influence of provider 
preference on long-term use,'' Arthritis Care & Research 73, no. 11 
(July 2020): 1597-1605, https://doi.org/10.1002/acr.24382.
    \853\ Black, R.J. et al., ``A Survey of Glucocorticoid Adverse 
Effects and Benefits in Rheumatic Diseases: The Patient 
Perspective,'' Journal of Clinical Rheumatology 23, no. 8 (December 
2017): 416-420, https://doi.org/10.1097/rhu.0000000000000585.
    \854\ Wilson, J.C. et al., ``Incidence and Risk of 
Glucocorticoid-Associated Adverse Effects in Patients With 
Rheumatoid Arthritis,'' Arthritis Care & Research, 71, no. 4, (April 
2019): 498-511, https://doi.org/10.1002/acr.23611.
    \855\ Best, J.H. et al., ``Association Between Glucocorticoid 
Exposure and Healthcare Expenditures for Potential Glucocorticoid-
related Adverse Events in Patients with Rheumatoid Arthritis,'' 
Journal of Rheumatology 45, no. 3 (March 2018): 320-328, https://doi.org/10.3899/jrheum.170418.
---------------------------------------------------------------------------

    Comment: One commenter raised concerns that biosimilar medications 
are not included in the Rheumatoid Arthritis episode-based measure and 
the potential implications this would have on the measure's validity.
    Response: We thank the commenter for raising these concerns. We 
agree that biosimilar medications are clinically relevant to rheumatoid 
arthritis management and believe the costs of biologic and biosimilar 
disease-modifying anti-rheumatic medications should be included in the 
Rheumatoid Arthritis episode-based measure. We modified the final 
specifications for the Rheumatoid Arthritis episode-based measure to 
include biosimilar medications in addition to biologic medications. For 
the full list of medications included in the measure, we refer readers 
to the measure codes list that is available for download at https://www.cms.gov/medicare/quality/value-based-programs/cost-measures/about.
    Comment: A few commenters recommended that CMS use a specialty 
attribution exclusion to exclude both ophthalmologists and optometrists 
from the Rheumatoid Arthritis measure to avoid attributing ophthalmic 
practices. One commenter stated concerns that the inclusion of 
ophthalmic medications within the Rheumatoid Arthritis measure could 
results in clinicians being attributed Rheumatoid Arthritis episodes 
based on the treatment of ophthalmic complications, rather than 
treatment of Rheumatoid Arthritis. One commenter further recommended 
excluding dermatologists.
    Response: We thank the commenters for their suggestions; however, 
we do not believe it is appropriate to apply a specialty attribution 
exclusion to the Rheumatoid Arthritis episode-based measure for all 
ophthalmologists, optometrists, and dermatologists. Episode-based 
measures use care patterns identified in claims data to attribute MIPS 
eligible clinicians rather than relying on clinician specialties. Input 
from a TEP and Clinician Expert Workgroup informed the attribution 
methodology that we proposed for the Rheumatoid Arthritis measure. The 
Clinician Expert Workgroup advised ophthalmic medications may be used 
to treat symptoms related to rheumatoid arthritis, and therefore, 
recommended including these medications as clinically related service 
costs. However, we agree with the commenter's concerns that the 
inclusion of ophthalmic medications could result in Rheumatoid 
Arthritis episodes being attributed to MIPS eligible clinicians 
prescribing ophthalmic medications for other purposes, but who are not 
providing broader treatment and management for rheumatoid arthritis. 
Based on the public comments we received, we have removed ophthalmic 
medications from the measure specifications prior to implementation of 
this measure for the CY 2025 performance period/2027 MIPS payment year. 
We refer readers to the revised measure specifications, which are 
available here; https://www.cms.gov/medicare/quality/value-based-programs/cost-measures.
    Comment: One commenter raised concerns about the Rheumatoid 
Arthritis episode-based measure, stating that the measure does not 
offer actionable insights for improving costs of care and that it does 
not differentiate the appropriateness of costs in relation to quality 
and patient outcomes. They requested CMS reconvene the Clinician Expert 
Workgroup to reevaluate the validity of the measure, given concerns 
with cost scoring methodology.
    Response: We disagree that the Rheumatoid Arthritis episode-based 
measure does not offer actionable insights for MIPS eligible 
clinicians. We have identified many clinical actions that can improve 
performance on this cost measure based on peer-reviewed literature and 
discussions with persons and families with lived experiences. These 
include early diagnosis of rheumatoid arthritis, improving treatment 
through appropriate use of monitoring tests, appropriate use of 
medications and reducing medication non-adherence, and improved care 
coordination to reduce treatment complications. We provide annual MIPS 
Performance Feedback and patient-level reports, which include 
information on the services that a MIPS eligible clinician provides and 
the costs of those services to help inform their care decisions. In 
response to requests for more information, beginning for the CY 2023 
performance period/2025 MIPS payment year, we have also introduced a 
new supplemental cost report that provides more information for MIPS 
eligible clinicians to review about their cost measure scores. These 
reports are a new set of reports that compare a MIPS eligible 
clinician's costs to the national observed costs for certain types of 
services. The cost measure assesses costs directly related to treatment 
choices and the costs of other services, such as clinically related 
adverse outcomes or complications. With these supplemental cost 
reports, MIPS eligible clinicians can review differences between the 
characteristics of the national average episode for a measure and their 
attributed episodes to determine if there are any billing or care 
patterns that warrant additional investigation. For example, if MIPS 
eligible clinicians have higher than average costs associated with 
hospitalizations, MIPS eligible

[[Page 98396]]

clinicians could consider practice improvements to reduce the rates of 
potentially avoidable hospitalizations.
    Additionally, MIPS is designed to assess MIPS eligible clinicians' 
performance on their quality and cost of care (each performance 
category score generally constituting 30 percent of a MIPS eligible 
clinician's final score), as well as improvement activities and 
meaningful use of CEHRT (see section 1848(q)(2)(A), (B) and (q)(5)(E) 
of the Act). MIPS thereby holistically assesses MIPS eligible 
clinicians' performance across various aspects of their practice, 
including both the quality and cost of their care in generally equal 
measure.
    Before proposing the measure for use in MIPS, we tested the measure 
validity. Testing indicated that the Rheumatoid Arthritis measure 
reflects the cost directly related to treatment choices and the cost of 
related adverse outcomes such as downstream emergency department 
visits, hospitalizations, or post-acute care. For more information on 
validity testing, we refer readers to the Measure Justification Form 
available for download here: https://www.cms.gov/medicare/quality/value-based-programs/cost-measures/prior. These testing results were 
made publicly available during the PRMR process in 2023.
    Finally, we do not expect that the modifications we proposed for 
our cost scoring methodology will have any impact on the integrity of 
the Rheumatoid Arthritis episode-based measure. The cost performance 
category scoring changes we proposed in the CY 2025 PFS proposed rule 
(89 FR 62085 through 62088) do not impact the calculation of the 
Rheumatoid Arthritis episode-based measure or clinicians' average risk-
adjusted costs per episode for this measure. Instead, the proposed 
modifications to the cost performance category's scoring methodology 
would affect how clinicians' average risk-adjusted costs per episode 
for all cost measures are benchmarked for MIPS scoring, and assignment 
of achievement points for each benchmark. We refer readers to section 
IV.A.4.f.(1)(d) of this final rule for further discussion regarding our 
proposals to modify scoring of measures in the cost performance 
category.
    Comment: Some commenters expressed concerns about the Prostate 
Cancer episode-based measure, stating that the highly heterogenous 
nature of prostate cancer makes it inappropriate for cost measurement. 
Two commenters stated that the measure does not sufficiently account 
for the range of severity in prostate cancer patients and significant 
variation in treatment costs. One of the commenters stated that claims 
data is insufficient to address disease severity.
    Response: We disagree with commenters that the Prostate Cancer 
measure does not account for prostate cancer severity. The Prostate 
Cancer measure accounts for severity using several claims-based risk 
adjustment variables (that is, Androgen Deprivation Therapy (ADT) 
drugs, chemotherapy, immunotherapy, prostatectomy, Prostate-Specific 
Antigen (PSA) tests, and radiation). Furthermore, the measure also 
stratifies (that is, sub-groups) episodes based on whether the patient 
had a metastatic cancer diagnosis or metastatic cancer drug usage in 
the year prior to the episode start. This is detailed in the measure 
specifications available on the Cost Measures Information page at 
https://www.cms.gov/medicare/quality/value-based-programs/cost-measures/. Testing showed that indicators of high-resource use (for 
example, chemotherapy and immunotherapy) were strong predictors of 
episode cost and the sub-groups, in conjunction with the risk 
adjustment model, adequately account for cost variation. These results 
are available in the Measure Justification Form available on the Cost 
Measure Information page at https://www.cms.gov/medicare/quality/value-based-programs/cost-measures/.
    While the treatment for prostate cancer can vary substantially, we 
disagree that this was not accounted for during the development of the 
measure. The Clinician Expert Workgroup identified that prostate cancer 
severity can influence the type of treatment and its associated episode 
costs. As stated previously, the measure risk adjusts and stratifies by 
metastatic cancer to account for the impact of prostate cancer severity 
on variation in treatment costs. Furthermore, the current services 
assigned to the measure are those the Clinician Expert Workgroup 
determined to be clinically related to the treatment and management of 
prostate cancer and associated with the attributed clinician's role in 
managing the patient's care.
    The measure's specifications reflect the Clinician Expert 
Workgroup's consensus on the best approach for accounting for cancer 
severity given information available in claims. The Clinician Expert 
Workgroup considered the use of prostate cancer staging information 
from other sources, such as electronic health records (EHRs) or 
registries, but these sources lacked current and complete staging 
information. Ultimately, these methods would not capture the full 
population of patients included in the measure, making a claims-based 
approach more feasible and meaningful. If more granular cancer staging 
information becomes available via claims, we may consider changes to 
the measure's construction in the future. The Clinician Expert 
Workgroup's discussions are available for review in meeting summaries 
posted on the Cost Measures Information page at https://www.cms.gov/medicare/quality/value-based-programs/cost-measures/prior.
    Comment: One commenter raised concerns that the majority of the 
PRMR panel did not support the Prostate Cancer measure. Another 
commenter raised concerns that the measure was not adequately tested 
following post-field-testing adjustments and requested CMS refrain from 
implementing the cost measure until the Clinician Expert Workgroup has 
been reconvened and testing has been completed on the refined measure 
that involves the broader oncology community.
    Response: We disagree with commenters that the Prostate Cancer 
measure performance was not adequately tested following post-field-
testing adjustments. The Prostate Cancer measure was tested extensively 
on its importance, scientific acceptability, feasibility, usability, 
and harmonization following the completion of its development and this 
testing information was included in the 2023 MUC List \856\ and PRMR 
materials and publicly posted in the Measure Justification Form during 
PRMR discussions. These results were also noted for readers of the CY 
2025 PFS proposed rule (89 FR 62045 through 62049) to reference.
---------------------------------------------------------------------------

    \856\ Overview of the List of Measures Under Consideration for 
December 1, 2023, https://mmshub.cms.gov/sites/default/files/2023-MUC-List-Overview.pdf.
---------------------------------------------------------------------------

    The commenter's statement to involve the broader oncology community 
was unclear. However, we understand the commenter's reference to a 
broader oncology community to mean other interested parties involved in 
oncology care who were not members of the Prostate Cancer Clinician 
Expert Workgroup. We solicited broad input on the development and 
refinement of the measure from interested parties though a public 
comment period, Clinician Expert Workgroups, a TEP, and patients, 
families, and caregivers as discussed in the CY 2025 proposed rule (89 
FR 62044 through 62055). While the PRMR committee did not reach 
consensus to support the Prostate Cancer measure, the measure testing 
results support the use of the measure. For example, testing found 
opportunities for MIPS eligible clinicians to improve cost performance,

[[Page 98397]]

such as substantial variation in performance scores. We calculated the 
distribution of the measure score for MIPS eligible clinicians that 
meet the case minimum to determine if there are large gaps in measure 
scores, and therefore, performance. The 90th percentile score was more 
than double the 10th percentile score at the TIN level and more than 
triple at the TIN-NPI level. Clinicians who were in the 90th percentile 
had much higher average episode costs compared to clinicians who were 
in the 10th percentile. This suggests there is an opportunity for 
improving clinician cost performance by closing the gap between the 
most and least efficient providers.
    Testing also showed that the measure far exceeded the 0.4 threshold 
for mean reliability, which we reaffirmed as the threshold for 
reliability in the CY 2022 PFS final rule (86 FR 64996). As noted in 
the CY 2025 PFS proposed rule (89 FR 62052 through 62053), the Prostate 
Cancer measure had a mean reliability of 0.68 at the TIN level and 0.62 
at the TIN-NPI level. This is considered moderate to high reliability. 
Furthermore, the measure captures a high-cost clinical area, fills a 
gap in cancer care measurement in MIPS, and enhances the Advancing 
Cancer Care MVP.
    Comment: One commenter expressed concerns regarding potential 
adverse consequences related to five of the newly proposed episode-
based measures affecting clinicians who treat patients from specific 
backgrounds, particularly Black patients. The commenter stated that the 
ESRD, CKD, and Kidney Transplant Management measures do not adequately 
account for differences in disease presentation due to the previous 
inclusion of race in kidney function calculations, stating that Black 
patients may have previously received late diagnoses of kidney disease 
and therefore have higher treatment costs. The commenter raised similar 
concerns for the Prostate Cancer measure, stating that due to existing 
differences in disease presentation for Black patients, clinicians 
could potentially discriminate against Black patients who have more 
costly, advanced disease with the aim to improve their MIPS score. The 
commenter also raised equity concerns regarding the Rheumatoid 
Arthritis measure, suggesting that differences in disease severity and 
pain level for Black patients compared to other demographics could lead 
to lower MIPS scores for providers who care for these patients, 
particularly with the inclusion of Part D medication costs in the 
measure. Other commenters more generally requested that CMS 
appropriately accounts for social drivers of health (SDOH) in the 
episode-based measures.
    Response: We thank the commenters for their feedback and agree that 
it is important to consider SDOH in cost measurement. The 5 new 
episode-based measures referenced by the commenter include dual 
Medicare and Medicaid enrollment status in the risk adjustment 
methodology.
    When considering risk adjusting for SDOH, we aim to balance the 
tension between fairness in performance measurement for clinicians 
treating vulnerable patients and the risk of perpetuating disparities 
for these patients if clinicians are held to different standards for 
different populations. Throughout cost measure development, we have 
considered several variables to risk adjust for SDOH, including dual 
Medicare and Medicaid enrollment status, Race/Ethnicity, ICD-10 Z 
codes, and American Community Survey indices such as Agency for 
Healthcare Research and Quality (AHRQ) Socioeconomic Status (SES) index 
and deprivation index. We considered whether these variables are 
available for all patients and can be reliably used in risk adjustment, 
which have been barriers in the past to expanding risk adjustment for 
SDOH. We determined that dual Medicare and Medicaid enrollment status 
is still the most appropriate variable to consider for risk adjustment.
    We selected this approach in consideration of current peer-reviewed 
literature on the topic and input from the measure developer, TEP, and 
Clinician Expert Workgroups. This analysis did consider race/ethnicity 
factors, however research shows that information found in claims lacks 
granularity to describe the diversity of the U.S. population, with only 
five categories available.857 858 In addition, the National 
Quality Forum stated race as ``qualitatively different from other 
social risk factors because the race variable often reflects a broad 
range of influences.'' \859\ Research also shows that social risk 
driven by race is often correlated with and partially captured by dual 
enrollment status, and that dual enrollment status is a powerful 
predictor of poor outcomes.860 861 Given this finding, we 
are moving forward with using dual Medicare and Medicaid enrollment 
status as the most appropriate variable to consider for risk 
adjustment.
---------------------------------------------------------------------------

    \857\ Nguyen, Kevin H., Kaitlyn P. Lew, and Amal N. Trivedi. 
``Trends in Collection of Disaggregated Asian American, Native 
Hawaiian, and Pacific Islander Data: Opportunities in Federal Health 
Surveys.'' American Journal of Public Health (2022).
    \858\ Kader, Farah, Lan N. Doan, Matthew Lee, Matthew K. Chin, 
Simona C. Kwon, and Stella S. Yi. ``Disaggregating Race/Ethnicity 
Data Categories: Criticisms, Dangers, And Opposing Viewpoints'', 
Health Affairs Forefront (2022).
    \859\ National Quality Forum, ``Developing and Testing Risk 
Adjustment Models for Social and Functional Status-Related Risk 
Within Healthcare Performance Measurement'' (2022). https://www.qualityforum.org/Publications/2022/12/Risk_Adjustment_Technical_Guidance_Final_Report_-_Phase_2.aspx.
    \860\ Office of the Assistant Secretary for Planning and 
Evaluation. ``Second report to Congress on social risk and 
Medicare's value-based purchasing programs.'' (2020) https://aspe.hhs.gov/pdf-report/second-impact-report-tocongress.
    \861\ Ibid.
---------------------------------------------------------------------------

    However, we recognize the importance of the concerns raised by this 
commenter and will continue to monitor the episode-based measures for 
any unintended consequences for Black patients or other vulnerable 
populations.
    Comment: Commenters expressed concern for and opposed the inclusion 
of Part D prescription drug costs in Medicare cost measures. One 
commenter explained that the addition of prescription drugs in cost 
measures would exacerbate current inequities in the Medicare program by 
unnecessarily penalizing physicians for factors outside of their 
control (including coverage, formularies, out-of-pocket costs, and 
transactions outside of physician negotiation). This commenter also 
stated they were unable to determine the impact of adding Part D drugs 
to the new episode-based measures due to a lack of information from 
CMS.
    Response: We include Part D costs in many cost measures because 
they are important drivers of cost. We have included the Part D costs 
based on input from the TEP and Clinician Expert Workgroup. Per the 
TEP's guidance, we include Part D costs in measures after considering 
the following factors: whether we can assess performance without Part 
D, the amount of cost this represents, and whether there is a 
sufficient sample size to sub-group by Part D enrollment. The Clinician 
Expert Workgroups then provide input on which medications to include in 
the measure that are clinically relevant and within the reasonable 
influence of attributed MIPS eligible clinicians. Finally, the Part D 
costs are adjusted to account for expected cost differences. 
Specifically, Part D costs are standardized so that non-clinical cost 
variation (such as drug manufacturers and plans) is removed. 
Additionally, the measure stratifies episodes into distinct sub-groups 
based on whether a patient

[[Page 98398]]

is enrolled in Part D to account for expected differences in costs, and 
a separate risk adjustment model is run for each sub-group. This 
results in episodes with and without Part D enrollment having similar 
risk-adjusted episode costs and measure scores and neutralizes the 
expected differences in observed episode costs.
    Measure testing information on the sub-grouping of episodes with 
and without Part D enrollment, as well as the impact of medication 
costs on episodes costs are available in the Measure Justification Form 
available for download at https://www.cms.gov/medicare/quality/value-based-programs/cost-measures/prior.
    Comment: Commenters recommended CMS add specialty exclusions to the 
chronic condition episode-based measures to prevent inappropriate 
attribution to clinicians who are providing care to patients with CKD, 
ESRD, or rheumatoid arthritis but are not managing the patient's 
chronic condition. One commenter acknowledged CMS's actions to improve 
attribution of measures but remained concerned that the issues are 
ongoing and continue to penalize physicians for care outside of their 
control. Another commenter recommended that new, proposed cost measures 
should exclude nurse practitioners and physician assistants from 
attribution where most other MIPS eligible clinicians in their TIN are 
excluded from the cost measure.
    Response: Generally, MIPS eligible clinicians are not excluded from 
episode-based measure attribution based on specialty; instead, cost 
measures are attributed to individual MIPS eligible clinicians and 
groups based on care patterns observable in claims data. Episode-based 
measures focus on a specific condition or procedure and are constructed 
so that we only include the costs of services clinically related to 
that care. The attribution methodology intends to capture MIPS eligible 
clinicians that influence the care a patient receives for this specific 
condition or procedure. Clinicians from multiple specialties may 
contribute to this care, and so the current attribution methodology for 
episode-based measures does not include specialty exclusions.
    As described in the CY 2025 PFS proposed rule (89 FR 62048 through 
62050), we continually monitor and reevaluate cost measures adopted 
into MIPS. However, based on the input that we received from the TEP 
and Clinician Expert Workgroups and from empiric analyses presented by 
the measure developer, the measures we proposed in the CY 2025 PFS 
proposed rule are appropriately specified. Clinician Expert Workgroup 
discussions and Measure Justification Forms with measure testing 
results are available for review at https://www.cms.gov/medicare/quality/value-based-programs/cost-measures/prior.
    Comment: Several commenters stated the importance of frequent (for 
example, quarterly) and actionable performance feedback and raised 
concerns that this was not yet available for cost measures. Commenters 
were concerned that MIPS eligible clinicians do not know in real time 
which cost measures are being attributed to them, which patients are 
being assigned to them, and what costs outside of their practice they 
are being held accountable for until after the performance period is 
over. They stated that, without frequent and actionable data, MIPS 
eligible clinicians cannot make changes to their care.
    Response: We currently provide annual MIPS Performance Feedback 
that includes information on MIPS eligible clinicians' performance for 
the previous performance period. This feedback typically becomes 
available during the summer in between the performance period and the 
MIPS payment year. We provide these reports on an annual basis, as we 
calculate cost measures following the end of the performance period. We 
calculate and score the cost measures following the end of the 
performance period because we need to review all claims that fall 
within the scope of a cost measure for a given performance period. 
Specifically, we will score each cost measure attributed to a MIPS 
eligible clinician (meeting or exceeding the minimum case volume) by 
assigning achievement points between one and ten based on the MIPS 
eligible clinician's performance on the cost measure during the 
performance period compared to the measure's benchmark (Sec.  
414.1380(b)(2)). Each cost measure's benchmark is based on the national 
averages of all other MIPS eligible clinicians attributed the same 
measure for the same performance period. These benchmarks are derived 
from cost data from all individual MIPS eligible clinicians, groups, 
and virtual groups that met the measure's case minimum for that 
performance period. MIPS eligible clinicians have episodes of care that 
begin and end at various times throughout the performance period, so to 
calculate an accurate comparison across MIPS eligible clinicians, we 
have historically calculated all scores following the end of the 
performance period. Calculating the MIPS cost measures during the 
performance period may provide an incomplete indication of how a MIPS 
eligible clinician is performing. We refer readers to section 
IV.A.4.f.(1)(d) of this final rule for more detailed discussion 
regarding our scoring methodology for cost measures.
    Additionally, we post detailed measure specifications that describe 
the attribution methodology and a list of included services so that 
MIPS eligible clinicians can anticipate when their Medicare claims for 
treating a Medicare patient may be captured by a MIPS cost measure.
    Finally, we would like to note that MIPS eligible clinicians could 
be rewarded for improving on their performance on a cost measure in 
future years based on the improvement scoring methodology, as described 
in Sec.  414.1380(b)(2)(v).
    We are continuing to work towards providing meaningful and timely 
information on cost measures generally and we recognize the importance 
of providing this information for measures implemented in MIPS.
    Comment: Many commenters recommended that CMS introduce the 
proposed episode-based measures on an information-only or optional 
basis to allow for sufficient feedback about the measures and to assess 
if there are unintended consequences for the measures. Several 
commenters suggested 2 years as an appropriate minimum length of time. 
These commenters stated that, in order to fully assess any unintended 
consequences of the proposed episode-based measures and to evaluate 
CMS's methodological decisions regarding issues such as health equity, 
attribution, and inclusion of Part D medication costs, CMS should 
implement the proposed measures on an informational-only basis.
    Response: For cost measures we develop, the cost measure 
development process (currently 18 months long) provides significant 
time for testing and public feedback on measure specifications, which 
we post publicly. As previously stated in the CY 2025 PFS proposed rule 
(89 FR 62051), cost measures undergo extensive review by clinicians 
participating in Clinician Expert Workgroups in addition to the 
multiple opportunities provided for public comment. The measure 
developer convenes Clinician Expert Workgroups to advise on measure 
specifications, based on iterative empiric analyses on frequency and 
impact of related services, patient conditions, and other risk factors. 
After the measure specifications are drafted, we host a national field 
testing period, where there is a robust public comment opportunity. 
Once the measures are fully developed, they undergo the pre-

[[Page 98399]]

rulemaking and rulemaking processes, which includes additional testing 
on the final measure specifications and opportunities for public 
comment. We strive to balance the development and testing timeline with 
the importance of being able to develop, adopt, and implement measures 
to assess cost of care in a timely manner. As we previously stated in 
the CY 2025 PFS proposed rule (89 FR 62045), we are striving to develop 
more cost measures to move closer towards the statutory goal of 
covering 50 percent of expenditures under Medicare Parts A and B, as 
specified under section 1848(r)(2)(i)(I) of the Act. In addition, as 
discussed in the CY 2025 PFS proposed rule (89 FR 62045), we seek to 
develop more cost measures to support our development of MVPs. We need 
to assess the impact adding a 2-year informational period could have on 
this policy goal and development process. We will consider the 
recommendation for an informational-only period for future rulemaking.
    Comment: A few commenters expressed concerns about post-field 
testing transparency in pre-rulemaking cost measure development. These 
commenters stated there were significant methodological changes made to 
cost measures after the field testing period. These commenters 
requested that CMS clearly communicate these post-field testing measure 
specifications updates to interested parties. The commenters also 
expressed concern about a lack of available testing on final measure 
specifications and suggested that CMS publish additional testing 
results prior to measure proposal. A few commenters also suggested that 
CMS hold an additional field testing period before the rulemaking 
process.
    Response: We disagree that final measure specifications and testing 
information is unavailable or that the pre-rulemaking process is not 
transparent. Following field testing, we reconvene the Clinician Expert 
Workgroups to discuss the public feedback and additional testing as we 
work to refine draft measure specifications. A summary of this 
discussion and the Clinician Expert Workgroups' recommendations are 
posted publicly on the Cost Measures Information page here: https://www.cms.gov/medicare/quality/value-based-programs/cost-measures/prior. 
Based on the field testing, public comments, Clinician Expert Workgroup 
feedback, and extensive empirical testing from the measure developer, 
we finalize any refinements to the measure specifications. We then work 
with the measure developer to conduct thorough testing on the final 
measures' performance, reliability, and validity. This testing supports 
submission of the measure for consideration for inclusion in the MUC 
List. If accepted, the measure and its specifications are shared with 
the PRMR members to discuss their recommendations for including these 
measures in MIPS. The testing results, which reflect post-field testing 
changes to the measure, are posted publicly in the Measure 
Justification Forms for each measure. In addition, if we propose to 
adopt the measure via rulemaking, we publish the final specifications 
for the proposed measures concurrently with the proposed rule. We 
encourage interested parties to review all measure specifications 
documents along with the Measure Justification Form for each proposed 
measure and to provide their feedback via public comment. These 
materials are published on the Cost Measures Information page for the 
public's reference: https://www.cms.gov/medicare/quality/value-based-programs/cost-measures/. Interested parties are welcome to provide 
feedback on any post-field testing measure specifications updates 
through the rulemaking process.
    While we acknowledge that transparency regarding cost measure 
development is important, additional field testing periods, beyond 
those described above, would delay measure implementation beyond the 
current 18-month process, preventing us from implementing cost measures 
on a timely basis. We understand that more frequent testing information 
would be useful, and we will consider this feedback as part of future 
rulemaking.
    Comment: Some commenters requested that CMS ensure close alignment 
between cost and quality measures to avoid disincentivizing appropriate 
care.
    Response: During episode-based measure development, we consider 
ways to align cost and quality goals. For example, we may align a cost 
measure's episode window length or align the overall measure scope with 
existing quality measures. We work with the Clinician Expert Workgroups 
and review empirical data from the measure developers on the most 
appropriate way to do this in the specifications for each cost measure.
    Additionally, MIPS is designed to assess MIPS eligible clinicians' 
performance on their quality and cost of care (each performance 
category score generally constituting 30 percent of a MIPS eligible 
clinician's final score), as well as improvement activities and 
meaningful use of CEHRT (see section 1848(q)(2)(A), (B) and (q)(5)(E) 
of the Act). Cost measures are used in MIPS alongside quality measures 
so that MIPS eligible clinicians can be assessed on the value of their 
care. MIPS thereby holistically assesses MIPS eligible clinicians' 
performance across various aspects of their practice, including both 
the quality and cost efficiency of their care in generally equal 
measure. This goal of assessing value is furthered with the transition 
to MVPs, which connect measures and activities across MIPS categories 
on sets of measures relevant to certain types of care. Measures are 
monitored after implementation for potential unintended consequences, 
such as evidence of care stinting. However, the measures already 
safeguard against potential care stinting by including the costs of 
adverse outcomes.
    Comment: Some commenters urged CMS to pursue CBE endorsement for 
the episode-based measures.
    Response: We thank the commenters for their recommendations. We 
will consider whether to pursue CBE endorsement for the six new 
episode-based measures in future evaluation cycles. As we discussed in 
the CY 2025 PFS proposed rule (89 FR 62051) and section IV.A.4.e.(2)(i) 
of this final rule, we are not required to use only CBE-endorsed 
measures in MIPS. Additionally, the measures undergo a robust 18-month 
development cycle, where feedback from public comments, persons with 
lived experiences, clinician experts, and other interested parties are 
incorporated into the measure's specifications. The measures undergo an 
iterative testing process, including empiric analyses to inform measure 
specification decisions and national field testing where extensive 
information on measure performance is posted publicly for feedback on 
potential revisions. As a result, the measure has undergone a high 
level of scrutiny and received varied input throughout its development, 
despite not having undergone the CBE endorsement process yet.
    After consideration of public comments, we are finalizing the 
implementation of the six new episode-based measures into MIPS 
beginning with the CY 2025 performance period/2027 MIPS payment year. 
The six new episode-based measures are CKD, ESRD, Kidney Transplant 
Management, Prostate Cancer, Rheumatoid Arthritis, and Respiratory 
Infection Hospitalization. For the Rheumatoid Arthritis episode-based 
measure, we are finalizing measures specifications with modifications 
to the assigned Part D

[[Page 98400]]

services: to include biosimilar medications and not include ophthalmic 
medications. We are finalizing the other new episode-based measures 
(CKD, ESRD, Kidney Transplant Management, Prostate Cancer, and 
Respiratory Infection Hospitalization) as proposed.
(iii) Summary of Proposals To Modify Two Episode-Based Measures 
Beginning With the CY 2025 Performance Period/2027 MIPS Payment Year
    In this section, we summarize our proposal to modify two episode-
based measures currently in use in MIPS beginning with the CY 2025 
performance period/2027 MIPS payment year. The episode-based measures 
that we proposed to modify beginning with the CY 2025 performance 
period/2027 MIPS payment year are listed in the Table 73, including 
both the original measure names and the modified measure names we 
proposed.
[GRAPHIC] [TIFF OMITTED] TR09DE24.119

    For the purpose of assessing performance of MIPS eligible 
clinicians in the cost performance category, we finalized, in the CY 
2019 PFS final rule (83 FR 59767 through 59773), the Routine Cataract 
Removal with Intraocular Lens (IOL) Implantation and ST-Elevation 
Myocardial Infarction (STEMI) Percutaneous Coronary Intervention (PCI) 
episode-based measures to be included in MIPS beginning with the CY 
2019 performance period/2021 MIPS payment year. In the CY 2025 PFS 
proposed rule (89 FR 62049 through 60253), we proposed to modify the 
Routine Cataract Removal with IOL Implantation and STEMI PCI measures 
based on input from interested parties from prior public comment 
periods and recommendations from Clinician Expert Workgroups.
    In addition to new measure titles as set forth in Table 73, we 
proposed substantive modifications to these measures. While we 
generally describe the modifications we proposed to these two episode-
based measures in this section of this final rule, we refer readers to 
our discussion in the CY 2025 PFS proposed rule (89 FR 62050 and 62051) 
for more detailed information regarding the modifications we proposed 
for each of these measures, and our rationale for these modifications.
    We proposed modifications for the modified Cataract Removal with 
IOL Implantation measure (replacing the Routine Cataract Removal with 
IOL Implantation Measure) beginning with the CY 2025 performance 
period/2027 MIPS payment year as follows.
    First, we proposed to modify this cost measure by expanding the 
patient cohort based on changes to the exclusion criteria. Testing has 
shown that many episodes excluded due to ocular conditions had similar 
cost profiles, compared to episodes included in the measure, and 
represented a significant portion of triggered episodes. The measure-
specific expert workgroup discussed the appropriateness of the original 
exclusion criteria and recommended potential revisions. The modified 
measure includes patients with certain previously excluded ocular 
conditions, such as glaucoma and macular degeneration, in the measure 
cohort because of their similar cost profiles. In response to expanding 
the measure cohort, we also proposed updates to the risk adjustment 
model to risk adjust for ocular conditions that are no longer excluded 
but may still impact case complexity and episode costs. These changes 
are appropriate as they further account for patient heterogeneity in 
the more clinically diverse patient cohort. However, the modified 
measure continues to exclude episodes for patients with significant 
ocular conditions impacting surgical complication rate or visual 
outcomes because testing did not suggest they had similar enough cost 
profiles for any expected cost differences to be accounted for through 
risk adjustment.
    Second, we proposed to modify this cost measure's service 
assignment specifications in two ways, to include: (1) certain 
clinically related telehealth services, pre-operative testing, 
emergency department (ED) visits for ocular complaints, and 
postoperative durable medical equipment (DME); and (2) certain 
additional clinically related Medicare Part B medication costs that 
were not initially included in the measure. The previous version of the 
measure included a smaller subset of these services. However, testing 
showed that additional clinically related services within these 
categories occur during Cataract Removal episodes and exclusion of 
these services from the measure could result in failure to capture 
important costs. We proposed to include the additional services because 
this change will retain the original intent of the measure while 
capturing a more complete picture of cost performance variation. 
Additionally, we proposed to expand the types of Part B medications 
assigned to the measure because it will be appropriate to use similar 
service assignment rules for all clinically related Part B medications.
    Further details about the modified Cataract Removal with IOL 
Implantation measure are available in the measure specifications 
documents, which are available at https://www.cms.gov/medicare/quality/value-based-programs/cost-measures.
    We proposed modifications for the modified IP PCI measure 
(replacing the STEMI PCI measure) beginning with the CY 2025 
performance period/2027 MIPS payment year as follows.
    First, we proposed to modify this cost measure by expanding the 
patient cohort based on changes to the triggering logic. The previous 
version of

[[Page 98401]]

the measure narrowly defined a subset of STEMI PCI patients to promote 
homogeneity of the patient cohort. However, testing demonstrated that 
PCI episodes with and without STEMI appear to have similar cost 
profiles and involve similar clinician types. Therefore, it is 
appropriate to expand the patient cohort in the modified measure to 
include episodes beyond those with STEMI diagnoses, such as PCI for 
non-STEMI diagnoses and PCI without either STEMI or non-STEMI 
diagnoses. As such, we will no longer use ICD-10 diagnosis information 
to restrict assessment of costs under this measure to only inpatient 
PCI procedures with a STEMI diagnosis. This change will increase the 
number of MIPS eligible clinicians and beneficiaries for whom this cost 
measure will be applicable.
    Second, we proposed to modify this cost measure to include 
additional sub-groups to stratify the patient cohort based on diagnosis 
to account for variations in cost and treatment pathways for inpatient 
procedures. While there are overall similarities between the diagnosis 
for inpatient PCI episodes (that is, STEMI, non-STEMI, and other 
inpatient PCI episodes), there are still expected differences in 
observed costs between these cohorts. This modification will allow us 
to assess variation in clinician cost performance rather than expected 
cost differences due to patient diagnoses. We believe this is 
appropriate because testing shows differences in observed episode costs 
among STEMI, non-STEMI, and other inpatient PCI episodes are 
neutralized via sub-grouping and risk adjustment.
    Third, we proposed that the modified measure excludes episodes with 
cardiac arrest and risk adjusts for patients with a history of tobacco 
use to further address heterogeneity in the patient cohort, as these 
cases can result in more complex treatment and higher observed costs 
for reasons outside of the control of the attributed clinician. This 
was supported by testing on the expanded patient cohort.
    Further detail about the modified IP PCI measure is included in the 
measure specifications documents, which are available at https://www.cms.gov/medicare/quality/value-based-programs/cost-measures.
    We invited comments on the proposals in this section.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: One commenter expressed support for the trigger codes used 
in the current Routine Cataract Removal with IOL Implantation measure, 
which we have retained for the modified Cataract Removal with IOL 
Implantation measure, and urged CMS not to make any additional changes 
to the trigger logic for routine cataract procedures, given the name 
change.
    Response: We agree that the measure should maintain its current 
trigger logic methodology, based on extensive discussions with the 
Clinician Expert Workgroup who similarly recommended not expanding the 
measure to include additional procedure trigger codes. As a result, we 
did not propose modifications to the trigger logic for the modified 
Cataract Removal with IOL Implantation measure. The updated measure 
name reflects changes to the patient cohort based on revisions to the 
measure exclusions and risk adjustment methodology.
    Comment: Several commenters did not support the updates to the 
Cataract Removal with IOL Implantation episode-based measure. They 
raised concerns with the expansion of the measure to include more 
patients with significant ocular comorbidities and opposed the removal 
of certain diagnosis codes from the measure's list of exclusions. A 
couple commenters recommended acute angle-closure glaucoma, capsular 
glaucoma, glaucoma secondary to eye inflammation or trauma, and other 
glaucoma codes classified as severe, moderate, or indeterminate 
severity remain exclusions. Another commenter recommended to continue 
to exclude diagnoses for pseudoexfoliation glaucoma and syndrome, other 
age-related cataracts, mature cataracts, and atrophic and exudative 
Age-Related Macular Degeneration (AMD).
    Response: We thank the commenters for their recommendations. We 
determined that it is appropriate to include these patients within the 
measure based on empirical analyses and input from the Clinician Expert 
Workgroup during our reevaluation of the Routine Cataract Removal with 
IOL Implantation measure.
    As part of the initial measure development and the comprehensive 
reevaluation process, we worked with the clinician experts, including 
the Clinical Subcommittee during Wave 1 of measure development and the 
Clinician Expert Workgroup during the comprehensive reevaluation, to 
review relevant services and patient conditions that may influence the 
care for the specific condition or procedure. The measure developer and 
clinician experts considered exclusions for episodes in which there are 
small patient or case cohorts that demonstrate extreme variability due 
to clinical heterogeneity, are not feasible for performance 
improvement, and cannot be mitigated via risk adjustment or service 
assignment. During reevaluation of the Routine Cataract Removal with 
IOL Implantation measure, testing showed that nearly half of the 
episodes meeting the trigger logic were excluded based on the original 
measure's exclusion criteria, despite excluded episodes for complex eye 
conditions having very similar observed and risk-adjusted episode cost 
distributions compared to the episodes include in the measure. Previous 
analyses also showed that the use of Hierarchical Condition Category 
(HCC) codes in the measure's standard risk adjustment model 
successfully accounted for complexity amongst patients with significant 
ocular comorbidities, further minimizing the need for continuing to 
exclude them. These testing results do not indicate that the measure 
will have unintended consequences as a result of no longer excluding 
episodes for certain ocular conditions. Taking these considerations 
into account, we agreed with the input from the Clinician Expert 
Workgroup during the reevaluation of this measure to include episodes 
with certain ocular conditions (for example, macular degeneration, 
glaucoma, and Type 2 Diabetes Mellitus with ophthalmic complications) 
in the measure without adjustment beyond the standard risk adjustment 
model, while also adding a measure-specific risk adjustor for ocular 
conditions that impact case complexity. Finally, episodes with 
significant ocular conditions impacting surgical complication rate and/
or visual outcomes remain excluded in the modified measure 
specifications.
    Comment: For the Cataract Removal with IOL Implantation measure we 
proposed, one commenter recommended excluding episodes for patients 
with a history of herpes and zoster virus, retinal degeneration, 
anterior scleritis, posterior polar cataracts, recurrent corneal 
erosions, punctate keratitis, neurotrophic keratitis, exposure 
keratoconjunctivitis, filamentary keratitis, lagophthalmos, and 
exophthalmic conditions to account for high-cost conditions that could 
be outside a clinician's control.
    Response: We thank the commenter for their recommendations, but we 
do not agree that additional diagnoses should be used to exclude 
episodes from measure calculation at this time. We will monitor the 
impact of these diagnosis codes on the Cataract Removal with IOL 
Implantation measure. Additionally, the measure uses several

[[Page 98402]]

methods to minimize the impact of outlier episode costs on measure 
scores. For more information on how the measure accounts for outlier 
costs, we refer readers to the Measure Information Form published on 
the QPP Cost Measures Information page at https://www.cms.gov/files/zip/2024-06-cy25-pfs-cost-measure-methods.zip.
    Comment: One commenter expressed general support for the inclusion 
of clinically related services in the Cataract Removal with IOL 
Implantation measure. However, they recommended exclusion of the costs 
of lenses and frames, which they consider to be outside of a 
clinician's control.
    Response: We thank the commenters for their support of the assigned 
services proposed for this modified measure and their recommendation 
not to include lenses and frames. We continue to believe it is 
appropriate to include the costs of durable medical equipment (DME) in 
this measure based on input from the Clinician Expert Workgroup. The 
Clinician Expert Workgroup supported the inclusion of postoperative DME 
costs in the Cataract Removal with IOL Implantation measure, as MIPS 
eligible clinicians may prescribe these for patients after the cataract 
removal procedure. The Clinician Expert Workgroup's discussions are 
available for review in meeting summaries posted on the Cost Measures 
Information page at https://www.cms.gov/medicare/quality/value-based-programs/cost-measures/prior.
    Comment: One commenter urged CMS to risk adjust for ICD-10 Z codes 
for SDOH in the Cataract Removal with IOL Implantation measure.
    Response: These codes are not currently available to incorporate 
into cost measures because of concerns that they are not routinely and 
consistently coded on Medicare claims. We will continue to monitor ICD-
10 Z codes for potential future use in cost measures.
    We considered additional risk adjustment for SDOH during the 
reevaluation of the Routine Cataract Removal with IOL Implantation 
measure. While ICD-10 Z codes are not a viable option at this time, we 
tested whether it would be appropriate to risk adjust for dual Medicare 
and Medicaid enrollment status. We examined the associations between a 
patient's dual enrollment status and provider performance. Testing 
demonstrated that most clinicians perform equally well or even 
significantly better on episodes for patients with dual enrollment 
status compared to other episodes, which suggests that it is possible 
for clinicians to mitigate the effect of social risk factors. 
Additionally, risk adjusting for dual enrollment status does not appear 
to substantially change the performance ranking for many clinicians. 
These results support not including a risk adjustment variable for dual 
enrollment status in the Cataract Removal with IOL Implantation measure 
at this time. More information about this testing is included in the 
Measure Justification Form available on the QPP Cost Measures 
Information page at https://www.cms.gov/files/zip/2023-wave-1-reevaluated-measure-justification-forms.zip.
    Comment: One commenter expressed support for risk adjusting for 
certain patient conditions and use of services in the modified Cataract 
Removal with IOL Implantation measure that were excluded in the 
original measure. They stated this modification could broaden patient 
eligibility and help mitigate the impact of outlier cases that skew 
performance scores.
    Response: We agree that the risk adjustment variables added to the 
Cataract Removal with IOL Implantation measure result in broader 
eligibility while still accounting for potential differences in cost 
due to patient-level factors.
    Comment: Commenters had mixed feedback on the inclusion of Part B 
drugs with separate payment status, including non-opioid pain 
management drugs and drugs with pass-through payment statuses, in the 
Cataract Removal with IOL Implantation measure. One commenter supported 
the inclusion of Part B medications with separate payment statuses, 
when clinically relevant. However, many commenters raised concerns 
about their inclusion and recommended that Omidria, Dextenza, and 
IHEEZO not be included in the measure. These commenters stated that 
their inclusion could disincentivize use of drugs, discourage 
medication innovation, and bias drug data collected during the pass-
through period. Some commenters opposed the inclusion of Part B 
medications altogether from the measure as to not inadvertently 
incentivize the use of opioids in routine procedures.
    Response: We disagree with the comment that including costs of 
clinically related Part B medications would necessarily disincentivize 
their use. Part B medications are included in the original Routine 
Cataract Removal with IOL Implantation measure, which was reviewed and 
endorsed by a CBE in Spring 2019.\862\ The Clinician Expert Workgroup 
for the modified Cataract Removal with IOL Implantation measure closely 
reviewed service assignment rules to determine whether assignment of 
service categories contributes to the measure's ability to 
differentiate between clinician performance and is within a clinician's 
reasonable influence. Once a clinically related service is assigned to 
an episode, its ability to reduce complications or improve quality of 
care can be captured in the measure through a reduction in downstream 
costs of care. In the same way, the inclusion of clinically related 
Part B costs does not incentivize the use of inappropriately 
administered medications, as the practice would be reflected in the 
measure as higher downstream costs of care.
---------------------------------------------------------------------------

    \862\ National Quality Forum, Cost and Efficiency, Spring 2019 
Cycle: CDP Report https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=92292.
---------------------------------------------------------------------------

    During reevaluation, the Clinician Expert Workgroup for the 
Cataract Removal with IOL Implantation measure carefully evaluated Part 
B medication costs and agreed that it is important to have similar 
service assignment rules for all clinically related drugs with separate 
payment statuses, including those under pass-through status, as 
selective inclusion could have unintended consequences. This sentiment 
was also echoed by public comments received prior to and during the 
reevaluation process. While clinically related Part B medications can 
be indicated for use in cataract procedures and result in better 
quality care and outcomes, clinician experts noted that they could also 
represent low value care if not used appropriately. The Clinician 
Expert Workgroup's discussions are available for review in meeting 
summaries posted on the Cost Measures Information page at https://www.cms.gov/medicare/quality/value-based-programs/cost-measures/prior. 
Not including these medications would result in important costs not 
being captured when looking at overall costs of a cataract removal 
episode.
    Comment: One commenter supported the proposed modifications to the 
STEMI PCI measure under the newly titled IP PCI measure because the 
modifications intend to provide a more comprehensive, fair, and 
accurate assessment of costs associated with PCI procedures. The 
commenter did caution that the expanded patient cohort could introduce 
added complexity in the measure calculation and that ongoing feedback 
should be available to monitor the impact of the changes.
    Response: We thank the commenter for their support of the IP PCI 
episode-based measure, reflecting modifications

[[Page 98403]]

to the STEMI PCI measure. As we explained in the CY 2025 PFS proposed 
rule (89 FR 62051), we decided to expand the patient cohort for the IP 
PCI measure beyond STEMI diagnoses based on the empirical data 
presented by the measure developer and input from the Clinician Expert 
Workgroup members. To account for the expanded patient cohort and the 
expected differences in observed costs, the measure is stratified into 
three sub-groups based on diagnosis and each sub-group uses a separate 
risk adjustment model. The Clinician Expert Workgroup agreed with using 
this approach to account for variations in treatment pathways and costs 
for STEMI and non-STEMI diagnoses.
    We also thank the commenter for their recommendation for ongoing 
feedback to monitor the impact of measure changes. In addition to 
publicly posting measure specifications that describe each cost 
measure's scope and stratification, we also release annual QPP Feedback 
Reports that will include feedback on the modified episode-based 
measure and publish Public Use Files (PUF) with additional data 
available for clinicians to review. Additionally, interested parties 
can contact the Quality Payment Program Service Center to request 
additional clarifications on the measure specifications. We will 
continue to monitor the impact of these changes on MIPS eligible 
clinicians and consider making available additional data about the 
measure.
    Comment: One commenter did not support the proposal to include non-
STEMI PCI patients in the modified IP PCI episode-based measure because 
of the differences between PCI procedures performed for STEMI versus 
other diagnoses. The commenter recommended developing separate measures 
for the 2 conditions.
    Response: We disagree that it is inappropriate to include diagnoses 
for both STEMI and non-STEMI conditions in the IP PCI measure. The IP 
PCI's measure specifications account for expected cost differences 
between PCI procedures performed for a wider set of diagnoses by 
creating sub-groups for episodes where there is a diagnosis for STEMI, 
non-STEMI, or neither STEMI nor non-STEMI. During the reevaluation 
process, the measure developer and Clinician Expert Workgroup reviewed 
testing results that showed risk adjustment effectively mitigated cost 
differences between the three subgroup populations, which is expected 
based on the design of the risk adjustment model. This approach 
stratifies episodes into distinct sub-groups, and a separate risk 
adjustment model is run for each sub-group, resulting in an average 
observed cost to expected cost ratio that is centered around 1.0 for 
each subgroup. The observed cost to expected cost ratio is used to 
calculate the dollar value score for each episode, so the average 
dollar value score for episodes across each subgroup will be similar. 
This results in PCI episodes for each diagnosis type having similar 
risk-adjusted episode costs and measure scores, and neutralizes the 
expected differences in observed episode costs.
    After consideration of public comments, we are finalizing the 
modifications to two existing episode-based measures in MIPS beginning 
with the CY 2025 performance period/2027 MIPS payment year, as 
proposed.
(b) Reliability and Case Minimum
    In this section of this final rule, we describe the case minima we 
proposed for the episode-based measures we proposed to adopt and modify 
in the CY 2025 PFS proposed rule and are finalizing in section 
IV.A.4.e.(2) of this final rule, as discussed previously.
    Reliability is a metric that evaluates the extent that variation in 
a measure comes from clinician performance (``signal'') rather than 
random variation (``noise''). Higher reliability suggests that a 
measure is effectively capturing meaningful differences between 
clinicians' performance. However, we continued to caution against using 
reliability as the sole metric to evaluate a measure because of the 
tradeoffs between accuracy and reliability, and the role of service 
assignment in reducing noise. These and other considerations are 
detailed in the CY 2022 PFS final rule (86 FR 65453 through 65455). We 
also noted that increasing case minima necessarily reduces the number 
of clinicians who meet the case minimum for a given measure. Because 
these are clinically refined measures, we aim to have as many MIPS 
eligible clinicians as possible to be able to have their costs 
evaluated by them. Therefore, we considered that a mean reliability of 
0.4 represents moderate reliability because it accounts for these 
considerations and is a sufficient threshold to ensure that the measure 
is performing as intended when assessed in conjunction with other 
testing.
    We previously established at Sec.  414.1350(c)(5) a case minimum of 
20 episodes for acute inpatient medical condition episode-based 
measures and at Sec.  414.1350(c)(4) a case minimum of 10 episodes for 
procedural episode-based measures in the CY 2019 PFS final rule (83 FR 
59773 through 59774). We also established at Sec.  414.1350(c)(6) a 
case minimum of 20 episodes for chronic condition episode-based 
measures in the CY 2022 final rule (86 FR 65453 through 65455).
    As we described in the CY 2025 PFS proposed rule, we examined the 
reliability of the eight episode-based measures (six new and two 
modified) we proposed in this rulemaking, and Table 74 presents the 
percentage of tax identification numbers (TINs) and TIN/National 
Provider Identifiers (NPIs) that meet the 0.4 reliability threshold and 
the mean reliability for TINs and TIN/NPIs at our case minimum of 20 
for each of the chronic condition and acute inpatient medical condition 
episode-based measures. At a 20-episode case minimum, the mean 
reliability for the measures exceeds 0.4 for both groups and individual 
clinicians, and the majority of groups and individual clinicians meet 
the 0.4 reliability threshold. For the procedural measure, Cataract 
Removal with Intraocular Lens (IOL) Implantation, we applied the case 
minimum of 10 episodes. At a 10-episode case minimum, the mean 
reliability for the measure exceeds 0.4 for both groups and individual 
clinicians, and all groups and individual clinicians meet the 0.4 
reliability threshold.

[[Page 98404]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.120

    Calculating these episode-based measures with these case minimums 
will accurately and reliably assess the performance of clinicians and 
clinician group practices. Therefore, we proposed to adopt a case 
minimum of 20 episodes for the chronic condition (CKD, ESRD, Kidney 
Transplant Management, Prostate Cancer, Rheumatoid Arthritis) and acute 
inpatient medical condition (Respiratory Infection Hospitalization and 
IP PCI) measures and a case minimum of 10 episodes for the procedural 
measure (Cataract Removal with IOL Implantation) listed in Table 74. 
For the IP PCI and Cataract Removal with IOL Implantation, these case 
minimums remain consistent with the case minimums for the original 
measures (that is, STEMI PCI and Routine Cataract Removal with IOL 
Implantation) that are currently in use. These proposals are also 
consistent with our regulation at Sec.  414.1350(c)(4) through (6). We 
did not propose to modify these regulations establishing the case 
minima for these types of cost measures.
    We invited comments on the proposals in this section.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: A few commenters expressed support for the 20-episode case 
minimum for the new episode-based measures while encouraging CMS to 
monitor administrative burdens.
    Response: We appreciate the commenters' support and agree that this 
is an appropriate case minimum. We will continue to monitor the impact 
the episode-based measure case minima may have on MIPS eligible 
clinicians.
    After consideration of public comments, we are finalizing our 
proposals to adopt a case minimum of 20 episodes for the chronic 
condition (CKD, ESRD, Kidney Transplant Management, Prostate Cancer, 
Rheumatoid Arthritis) and acute inpatient medical condition 
(Respiratory Infection Hospitalization and IP PCI) measures and a case 
minimum of 10 episodes for the procedural measure (Cataract Removal 
with IOL Implantation), as proposed.
(c) Revisions to the Operational List of Care Episode and Patient 
Condition Groups and Codes
    In accordance with section 1848(r)(2)(H) of the Act, we proposed to 
revise the operational list beginning with the CY 2025 performance 
period/2027 MIPS payment year to include 6 new care episode and patient 
condition groups, based on input from clinician specialty societies and 
other interested parties, to reflect the new episode-based measures we 
are finalizing as described in section IV.A.4.e.(2)(ii) of this final 
rule. We proposed including Respiratory Infection Hospitalization as a 
care episode group and CKD, ESRD, Kidney Transplant Management, 
Prostate Cancer, and Rheumatoid Arthritis as patient condition groups. 
These care episode and patient condition groups serve as the basis for 
the six new episode-based measures that we are finalizing as described 
in section IV.A.4.e.(2)(ii) of this final rule for the cost performance 
category. The codes that define these six care episode and patient 
condition groups align with the trigger codes of the episode-based 
measures in section IV.A.4.e.(2)(ii)of this final rule. These 
specifications are developed with extensive input from interested 
parties.
    Additionally, we proposed to revise the care episode group codes 
listed to align with the modifications proposed for Cataract Removal 
with Intraocular Lens (IOL) Implantation and Inpatient (IP) 
Percutaneous Coronary Intervention (PCI) measures in section 
IV.A.4.e.(2)(iii) of this final rule.
    For context on the statutory requirements for care episode and 
patient condition groups and changes to the operational list, we refer 
readers to the CY 2025 PFS proposed rule (89 FR 62054 through 62055).
    Our revisions to the operational list are available on our QPP Cost 
Measure Information page at https://www.cms.gov/medicare/quality/value-based-programs/cost-measures/about.
    We invited public comment on our proposals in this section.
    We did not receive public comments on these proposals. We are 
finalizing the revisions to the operational list to include care 
episode group codes that align with the new and modified episode-based 
measures, as proposed, beginning with the CY 2025 performance period/
2027 MIPS payment year.

[[Page 98405]]

(d) Removal Criteria for MIPS Cost Measures
    Once adopted, cost measures are retained in the cost performance 
category measure inventory, except when we specifically proposed to 
remove a measure. We have identified a need to establish and codify 
objective criteria that can be used to inform the removal of a cost 
measure from the MIPS cost performance category. Specifically, when 
removing the Simple Pneumonia with Hospitalization episode-based 
measure from the CY 2024 PFS final rule (88 FR 79348 through 79349), we 
confirmed that, unlike the MIPS quality performance category, the MIPS 
cost performance category did not have clear guidelines for removing a 
measure established through the notice-and-comment rulemaking process. 
Establishing such criteria will allow for more consistency in our 
evaluation of the cost measures and our decision on whether to propose 
that a cost measure be removed from the MIPS cost performance category.
    Therefore, we proposed to adopt the following factors that can be 
used to guide the removal of a cost measure:
     Factor 1: It is not feasible to implement the measure 
specifications.
     Factor 2: A measure steward is no longer able to maintain 
the cost measure.
     Factor 3: The implementation costs or negative unintended 
consequences associated with a cost measure outweigh the benefit of its 
continued use in the MIPS cost performance category.
     Factor 4: The measure specifications do not reflect 
current clinical practice or guidelines.
     Factor 5: The availability of a more applicable measure, 
including a measure that applies across settings, applies across 
populations, or is more proximal in time to desired patient outcomes 
for the particular topic.
    We selected these factors for our proposal because they address 
instances that we anticipate, based on previous experience, where a 
cost measure may not be appropriate to maintain in a program, but not 
limited to these instances. We also worked to align these criteria with 
the MIPS quality removal considerations and criteria set forth in the 
CY 2019 PFS final rule (83 FR 59763 through 59765) and CY 2020 PFS 
final rule (84 FR 62957 through 62959), where possible, and, in part, 
the Hospital Value-Based Purchasing (HVBP) Program's removal factors 
that are codified in our regulations at 42 CFR 412.164(c)(3). We 
proposed these specific criteria to encourage a degree of alignment 
between existing measure removal policies within MIPS and across 
Medicare programs, where appropriate, for cost measures. For more 
information on our considerations when determining these removal 
criteria, we refer readers to the CY 2025 PFS proposed rule (89 FR 
62055).
    We note that these factors are criteria that will be used as 
guidance when considering whether to propose to remove a measure, 
rather than firm requirements. Specifically, there could be instances 
when a measure meets one or multiple measure removal factors, but will 
be retained in the cost performance category regardless, if we 
determine that the benefit of keeping the measure in the cost 
performance category will outweigh the benefit of removing it. Prior to 
proposing a measure for removal in accordance with this policy, we will 
carefully review the specifications of the cost measures by conducting 
necessary literature reviews, empirical testing, or other information 
gathering.
    Additionally, we proposed to codify this measure removal policy by 
amending Sec.  [thinsp]414.1350 by adding the cost removal criteria in 
paragraph (e). Specifically, we proposed at Sec.  [thinsp]414.1350(e) 
that we may remove a cost measure from MIPS based on one or more of the 
following factors, provided however that we may retain a cost measure 
that meets one or more of the following factors if we determine the 
benefit of retaining the measure outweighs the benefit of removing it.
     It is not feasible to implement the measure 
specifications.
     A measure steward is no longer able to maintain the cost 
measure.
     The implementation costs or negative unintended 
consequences associated with a cost measure outweigh the benefit of its 
continued use in the MIPS cost performance category.
     The measure specifications do not reflect current clinical 
practice or guidelines.
     The availability of a more applicable measure, including a 
measure that applies across settings, applies across populations, or is 
more proximal in time to desired patient outcomes for the particular 
topic.
    We invited comments on this proposal.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters supported the proposal and agreed with the 
proposed criteria for removing a cost measure from the program. One 
commenter stated that these criteria were straightforward and 
reasonable. One commenter expressed the belief that feasibility should 
be a pre-requisite to the cost measure removal process.
    Response: We thank the commenters for their support and agree that 
these are reasonable guidelines for removing a cost measure from use.
    Comment: Several commenters requested that CMS remove the TPCC 
measure based on these criteria.
    Response: We thank the commenters for their feedback. We will 
consider the cost measure removal criteria in future years to determine 
whether the TPCC measure, or any other cost measures, should be 
proposed for removal.
    After consideration of public comments, we are finalizing the cost 
measure removal criteria as proposed and are finalizing our proposal to 
codify this cost measure removal policy at Sec.  [thinsp]414.1350(e) as 
proposed.
(e) Summary of Measures Specified for the Cost Performance Category 
Beginning With the CY 2025 Performance Period/2027 MIPS Payment Year
    The previously established measures for the cost performance 
category, and those measures being finalized in this rule, specified 
for the CY 2025 performance period/2027 MIPS payment year and future 
periods are summarized in Table 75.
BILLING CODE 4120-01-P

[[Page 98406]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.121


[[Page 98407]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.122

BILLING CODE 4120-01-C

[[Page 98408]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.123

(3) Improvement Activities Performance Category
(a) Background
    For previous discussions on the general background of the 
improvement activities performance category, we refer readers to the CY 
2017 Quality Payment Program final rule (81 FR 77177 and 77178), the CY 
2018 Quality Payment Program final rule (82 FR 53648 through 53661), 
the CY 2019 Physician Fee Schedule (PFS) final rule (83 FR 59776 and 
59777), the CY 2020 PFS final rule (84 FR 62980 through 62990), CY 2021 
PFS final rule (85 FR 84881 through 84886), the CY 2022 PFS final rule 
(86 FR 65462 through 65466), the CY 2023 PFS final rule (87 FR 70057 
through 70061), and the CY 2024 PFS final rule (88 FR 79350 and 88 FR 
79351). We also refer readers to Sec.  414.1305 for the definitions of 
improvement activities and attestation, Sec.  414.1320 for standards 
establishing the performance period, Sec.  414.1325 for the data 
submission requirements, Sec.  414.1355 for standards related to the 
improvement activity performance category generally, Sec.  414.1360 for 
data submission criteria for the improvement activity performance 
category, and Sec.  414.1380(b)(3) for improvement activities 
performance category scoring.
    In the CY 2025 PFS proposed rule (89 FR 62055 through 62059) we 
proposed two changes to the traditional Merit-based Incentive Payment 
System (MIPS) and the MIPS Value Pathways (MVPs) improvement activities 
policies for the CY 2025 performance period/2027 MIPS payment year. 
First, we proposed to eliminate the weighting of improvement 
activities. Second, we proposed to reduce the number of activities to 
which clinicians are required to attest to achieve a full score in the 
improvement activities performance category. We also proposed to codify 
at Sec.  414.1355 the seven improvement activity removal factors, which 
were adopted in the CY 2020 PFS final rule (FR 84 62988 through 62990) 
to establish the criteria used to identify improvement activities for 
potential modification or removal from the improvement activities 
Inventory. In addition, we proposed changes to the improvement 
activities Inventory for the CY 2025 performance period/2027 MIPS 
payment year and future years as follows: adding two new improvement 
activities; modifying two existing improvement activities; and removing 
eight previously adopted improvement activities.
(b) Improvement Activities Inventory
(i) Annual Call for Activities Background
    We refer readers to the CY 2025 PFS proposed rule (89 FR 62056) for 
details about the annual Call for Improvement Activities.
(ii) Codification of Improvement Activity Removal Factors
    In the CY 2018 Quality Payment Program proposed rule (82 FR 30056), 
we solicited comments on the criteria that may be used to identify 
improvement activities for potential removal from the improvement 
activities Inventory, citing that, over time, certain improvement 
activities should be considered for removal to ensure the Inventory is 
robust and relevant (84 FR 40764). In the CY 2020 PFS final rule (84 FR 
62988 through 62990), we established seven removal factors to identify 
improvement activities for potential modification or removal from the 
improvement activities Inventory. In the CY 2025 Quality Payment 
Program proposed rule (89 FR 62056),We proposed to codify at Sec.  
414.1355 the following existing seven improvement activity removal 
factors:
     Factor 1: Activity is duplicative of another activity.
     Factor 2: There is an alternative activity with a stronger 
relationship to quality care or improvements in clinical practice.
     Factor 3: Activity does not align with current clinical 
guidelines or practice.
     Factor 4: Activity does not align with at least one 
meaningful measure area.
     Factor 5: Activity does not align with the quality, cost, 
or Promoting Interoperability performance categories.
     Factor 6: There have been no attestations of the activity 
for 3 consecutive years.
     Factor 7: Activity is obsolete.
    We note that these factors are criteria that are used as guidance 
in determining removal of an activity, but their use is at our 
discretion. For example, there may be instances when an activity meets 
one or multiple activity removal factors but may be retained in the 
improvement activities performance category Inventory, because the 
benefit of retaining the improvement activity outweighs the benefit of 
removing it. We believe that codifying these removal factors will 
provide transparency and consistency with removals of improvement 
activities from the Inventory by requiring that elements of each 
activity are objectively reviewed and justification for removal is 
clearly identified.
    We received comments on this proposal. The following is a summary 
of the comments we received and our responses.
    Comment: Many commenters expressed support for our proposal to 
codify these seven improvement activity removal factors, citing that 
this would provide clarity when providing justification for changes to 
the Inventory. A few commenters requested that CMS provide a detailed 
rationale for why certain improvement activities are removed.
    Response: We appreciate commenters' support. For detailed 
information about the rationale for activity removals, we refer 
commenters to Table C of Appendix 2 of this final rule.
    Comment: Multiple commenters requested that CMS follow a policy of 
retaining activities when the benefits of retaining the activity 
outweigh the benefits of removing them. They recommended that we err on 
the side of

[[Page 98409]]

retaining activities if they continue to offer clinical relevance and 
benefit to their patient populations. One commenter asked CMS to 
consider clinical professional society guidelines and practices as well 
as quality measurement standards when creating removal factors so that 
all types of practitioners have improvement activities available to 
them.
    Response: We appreciate these suggestions. In our efforts to 
streamline and refine the improvement activities Inventory, we have and 
will continue to fully examine each activity for clinical relevance and 
applicability prior to proposing to remove the improvement activity. 
The removal or modification of an improvement activity from the 
Inventory will occur through notice-and-comment rulemaking. Commenters 
will have an opportunity to provide their input during the notice-and-
comment rulemaking process.
    Comment: A few commenters had concerns regarding Activity Removal 
Factor 7 (activity is obsolete) and its consideration of activities 
that are commonly reported and are thus ``overutilized'' and 
``achieved.'' One commenter argued that an activity that is frequently 
reported by clinicians demonstrates the activity's importance to 
improving patient care. Another commenter requested that we clearly 
define ``obsolete'' and clarify how the value of the activity across 
varying specialties is evaluated.
    Response: For Activity Removal Factor 7, we consider an activity 
``obsolete'' when it is no longer available or can no longer be 
completed by eligible clinicians as an improvement activity. In vetting 
and establishing this Removal Factor, we employed a commonly used 
definition of ``obsolete'' as in `out of date.' In the context of the 
Quality Payment Program, this means an activity that no longer reflects 
current clinical best practices, that is no longer available for 
implementation (e.g., when a program or initiative upon which an 
activity depends has been ended or closed), and/or that, because of the 
nature of the activity, cannot be attested to year after year with a 
reasonable expectation of clinical quality improvement year after year. 
For example, in Appendix 2 of the CY 2024 PFS final rule, we finalized 
the removal of ``Consulting Appropriate Use Criteria (AUC) Using 
Clinical Decision Support (CDS) when Ordering Advanced Diagnostic 
Imaging'' (IA_PSPA_29) under removal factor 7 because the AUC CDS 
program ended and it was no longer possible to attest to this activity. 
This criterion also applies to activities for which the required 
actions are completed once or a finite number of times and that, 
because of the nature of the activity, cannot be repeated year after 
year to improve clinical care. Once the requirements of an activity are 
met, continuing to attest to the activity that has already been 
completed is not considered meeting the intent of improving clinical 
care. For example, in Appendix 2 of this final rule, we are finalizing 
the removal of ``Provide 24/7 Access to MIPS Eligible Clinicians or 
Groups Who Have Real-Time Access to Patient's Medical Record'' 
(IA_EPA_1) under Removal Factor 7. A clinician or group practice meets 
the requirements of this activity if they complete the establishment of 
expanded hours of access to the patient medical record, alternative 
methods for accessing patient information, and/or a process for 
providing rapid access to patient information during urgent care or 
transition management. However, continuing to maintain this access year 
after year does not significantly improve care year after year. This 
improvement activity is obsolete because EHR systems that provide 24/7 
access and health exchange of patient data by clinicians and groups 
have largely been adopted and, therefore, the goal of this improvement 
activity has largely been achieved.
    Comment: One commenter expressed concern over Activity Removal 
Factor 1 (activity is duplicative of another activity), indicating that 
they disagree with a removal criterion that indicates that activities 
are duplicative of quality measures.
    Response: We agree with the commenter that alignment between the 
various MIPS performance categories is often a benefit, not a weakness, 
as it promotes harmonization around key care improvement goals while 
reducing burden. Activity Removal Factor 1 identifies when multiple 
improvement activities in the Inventory overlap in their requirements, 
goals and/or clinical scope and can justifiably be removed or modified. 
This removal factor is beneficial in streamlining the Inventory so that 
all activities are unique and clinically relevant without being 
redundant.
    Comment: One commenter requested additional clarification regarding 
how activities will be identified for removal under Activity Removal 
Factor 2 (there is an alternative activity with a stronger relationship 
to quality care or improvements in clinical practice). Specifically, 
the commenter expressed concern that ``stronger relationship to quality 
care'' is not clearly defined and therefore could have unintended 
consequences of removing activities that are critical to certain 
specialties. The commenter also asked how this removal factor differs 
from Activity Removal Factor 1 (activity is duplicative of another 
activity). If the activity considered for removal is not duplicative of 
an existing activity, it may have an important role.
    Response: For Activity Removal Factor 1, we evaluate and identify 
two or more improvement activities that require the same or similar 
actions to be completed in order to achieve clinical practice 
improvement in the same clinical area. For Activity Removal Factor 2, 
we evaluate activities within each subcategory and activities that 
pertain to similar clinical areas to identify whether one activity may 
yield a stronger relationship to clinical practice improvement. Even 
when activities are not duplicative, some activities may promote a 
higher level of clinical practice improvement in a clinical area than 
others. Over the last several performance years, we have observed that 
some activities have not remained aligned with the latest clinical 
practice standards, have not incorporated the latest national 
priorities, and/or have activity requirements that are no longer 
substantive enough to promote a sufficient level of clinical practice 
improvement in today's health care environment. As we review activities 
and refine the Inventory, this removal factor will enable us to retain 
the most robust and clinically meaningful improvement activities.
    After consideration of comments, we are finalizing the codification 
of seven improvement activity removal factors atSec.  414.1355, as 
proposed.
(iii) Changes to the Improvement Activities Inventory
    We refer readers to the CY 2025 PFS proposed rule (89 FR 62056 
through 62057) for details about proposed changes to the improvement 
activities Inventory.
    We also refer readers to the Quality Payment Program website under 
Explore Measures and Activities at https://qpp.cms.gov/mips/explore-measures?tab=improvementActivities&py=2023#measures for a complete list 
of the current improvement activities.
    We proposed to add two new improvement activities, modify two 
existing improvement activities, and remove eight previously adopted 
improvement activities for the CY 2025 performance period/2027 MIPS 
payment year and future years. We refer readers to Appendix 2 of the CY 
2025

[[Page 98410]]

PFS proposed rule (89 FR 62571) for more details.
    In response to stakeholder feedback, we are making efforts to 
streamline the Inventory over the coming rulemaking cycles to include 
only the most robust and clinically meaningful improvement activities. 
The removal and modification of 10 total activities is an initial step 
toward our goal of reducing the size of the Inventory and helping to 
ensure that it includes only the most meaningful activities that have a 
clear path to clinical practice improvement, while the two proposed new 
activities would help fill gaps we have identified in the Inventory.
    We proposed two new improvement activities in the Population 
Management subcategory (89 FR 62057). One new activity, IA_PM_24, 
titled ``Implementation of Protocols and Provision of Resources to 
Increase Lung Cancer Screening Uptake'' will allow MIPS eligible 
clinicians to receive credit for establishing a process or procedure to 
increase rates of lung cancer screening. While lung cancer is a leading 
cause of cancer-related deaths in the U.S., lung cancer screening is 
under-utilized.863 864 865 866 This activity aims to 
increase this screening and improve associated outcomes. Another 
activity, IA_PM_25, titled ``Save a Million Hearts: Standardization of 
Approach to Screening and Treatment for Cardiovascular Disease Risk'' 
will allow MIPS eligible clinicians to receive credit for implementing 
a standardized, evidence-based cardiovascular disease risk assessment 
and care management plan in their practices. This activity is informed 
by the results of the CMS Innovation Center Million Hearts Model, which 
included initial atherosclerotic cardiovascular disease (ASCVD) 
assessment as well as cardiovascular care management. ASCVD assessment 
and care management were shown to contribute to improved identification 
and treatment of patients at risk for ASCVD; \867\ this activity 
expands on the work of the Million Hearts Model by (1) increasing 
flexibility in requirements, allowing more clinician specialties to 
participate; increased flexibility in risk assessment will fit the 
needs of attesting clinicians and their patient populations; and (2) 
requiring the use of structured documentation of risk factors and 
associated treatment plans with the aim of addressing all risk factors 
directly.
---------------------------------------------------------------------------

    \863\ American Cancer Society. (2021) Can Lung Cancer Be Found 
Early?, https://www.cancer.org/cancer/lung-cancer/detection-diagnosis-staging/detection.html.
    \864\ NIH National Cancer Institute. Cancer Stat Facts: Lung and 
Bronchus Cancer. (2022). https://seer.cancer.gov/statfacts/html/lungb.html.
    \865\ Fedewa, S.A., Bandi, P., Smith, R.A., Silvestri, G.A., & 
Jemal, A. (2022). Lung Cancer Screening Rates During the COVID-19 
Pandemic. Chest, 161(2), 586-589. https://doi.org/10.1016/j.chest.2021.07.030.
    \866\ National Cancer Institute (2023). Lung Cancer Screening. 
https://progressreport.cancer.gov/detection/lung_cancer; accessed 
May 2023, last updated March 2024.
    \867\ American College of Cardiology (n.d.). Million Hearts 
Cardiovascular Disease Reduction Model (Million Hearts Model). 
https://www.cms.gov/priorities/innovation/data-and-reports/2023/mhcvdrrm-finalannevalrpt-fg.
---------------------------------------------------------------------------

    We proposed two modifications to improvement activities focused on 
strengthening the activities to better promote more meaningful clinical 
practice improvement (89 FR 62057). We proposed to modify IA_PM_26 
(formerly IA-ERP_6), titled ``Vaccine Achievement for Practice Staff--
COVID-19, Influenza, and Hepatitis B,'' and its validation criteria to 
revise its target goals, and to expand its focus and promote the 
vaccination of staff for COVID-19 as well as Influenza and Hepatitis B. 
Adjusting the target goals for this activity aligns with the latest 
Centers for Disease Control and Prevention (CDC) recommendations,\868\ 
and feedback received over the last 2 years indicates that this could 
increase its utilization. Additionally, we proposed to expand the focus 
of this activity to include influenza and hepatitis B to highlight the 
importance of staff vaccination for vaccine-preventable diseases 
prevalent today. We also proposed to change the activity's subcategory, 
from Emergency Response & Preparedness to Population Management, to 
emphasize that staff vaccination is a long-term strategy in reducing 
morbidity and mortality rates for these diseases.
---------------------------------------------------------------------------

    \868\ Centers for Disease Control and Prevention (2024). 
Vaccines & Immunizations. Last Updated April 2024. https://www.cdc.gov/vaccines/index.html.
---------------------------------------------------------------------------

    We proposed to modify IA_BE_4, currently titled ``Engagement of 
patients through implementation of improvements in patient portal,'' 
and its validation criteria to limit the activity to new 
implementations of a patient/caregiver portal and encourage the 
measure's adoption by clinicians who do not currently utilize this 
health information exchange technology. We proposed to modify this 
activity's name, description, and its validation criteria to better 
align with current practices. This activity was originally created 
during a time of transition to EHRs to encourage electronic information 
exchange. It has become standard practice to use patient portals; 
therefore, the activity is no longer driving improvement among 
clinicians who have already implemented patient portals.
    We separately proposed to remove eight existing activities, 
presented in Table 76:

[[Page 98411]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.124

    We refer readers to Appendix 2 to this final rule for details on 
the proposed revisions to the improvement activities Inventory, the 
comments we received on these activities, our responses to those 
comments, and the final disposition of each proposal.
    In addition to the comments on individual activities we received, 
which are addressed in Appendix 2 to this final rule, we received 
comments on our reporting and scoring proposals as well as policies 
around the maintenance of the improvement activities Inventory. The 
following is a summary of these comments and our responses.
    Comment: One commenter recommended that CMS consider the relative 
effort of activities when evaluating the IA inventory as a whole. 
Another commenter asked that we continue to add new activities when 
appropriate to ensure that a diversity of activities with a manageable 
effort level are available for all clinicians.
    Response: We appreciate commenters' suggestions on ways to maintain 
an Inventory of activities that are diverse, robust, and meaningful. We 
agree with this approach to review and assess each activity on a 
regular basis for relevance and effectiveness in promoting clinical 
practice improvement while adding new activities that incorporate 
varying aspects of clinical care that may not already be addressed. As 
we work to streamline the Inventory, the overall number of improvement 
activities from which MIPS eligible clinicians can choose is reduced; 
however, each retained activity highlights a unique and vital aspect of 
clinical practice improvement, and therefore every activity remaining 
in the Inventory would be considered a high priority activity.
    Comment: Several commenters requested that CMS give a one-year 
notice before removing an activity so that practices have enough time 
to plan for changes. For example, activities proposed for removal in 
the CY 2025 PFS proposed rule should not be removed from the program 
until the 2026 performance year. Since the final rule does not come out 
until roughly a month before the start of the applicable performance 
year, and practices need ample time to plan for any changes, 
particularly when reporting a different activity would require a 
financial investment or increased resource allocation.
    Response: We appreciate this comment. A blanket delay of the 
removal of all eight activities as proposed would not be necessary. At 
least four of the eight proposed activity removals still offer a 
significant opportunity to streamline the Inventory by eliminating 
activities that have been determined to be less substantive. We also 
believe that the reduction in the number of activities to report 
offsets any burden on clinicians to select alternate activities to 
report for CY 2025.
    After consideration of comments, we are finalizing as proposed the 
addition of two new activities, the modification of one activity, and 
the removal of four activities in the improvement activities Inventory 
for the CY 2025 performance year/2027 MIPS payment year and subsequent 
years. We are also finalizing the delay removal of four activities and 
modification of one activity until the CY 2026 performance year/2028 
MIPS payment year to allow clinicians time to plan and budget for 
selecting alternate activities to report. We refer readers to Appendix 
2 of this final rule for details on the finalized revisions to the 
improvement activities Inventory.
(iv) Improvement Activity Scoring and Reporting Policies
    In the CY 2025 Quality Payment Program proposed rule (89 FR 62059), 
We proposed two scoring and reporting policy changes for the 
improvement activities performance category effective for the CY 2025 
performance period/

[[Page 98412]]

2027 MIPS payment year and subsequent years. First, we proposed to 
eliminate the weighting of improvement activities in order to simplify 
scoring of the category, as well as complement our ongoing efforts to 
refine and improve the Inventory. In the CY 2017 Quality Payment 
Program final rule (81 FR 77177 and 77178), we codified at Sec.  
414.1380(b)(3) the scoring policies for the improvement activities 
performance category. We established there that clinicians (except for 
non-patient facing MIPS eligible clinicians, small practices, and 
practices located in rural areas and geographic health professional 
shortage areas (HPSAs)) receive 10 points for each medium-weighted 
improvement activity and 20 points for each high-weighted improvement 
activity. Non-patient facing MIPS eligible clinicians, small practices, 
and practices located in rural areas and geographic HPSAs receive 20 
points for each medium-weighted improvement activity and 40 points for 
each high-weighted improvement activity. We established a 
differentially weighted model for the improvement activities 
performance category with two categories, medium and high, to provide 
flexible scoring and because there are no nationally recognized 
standards or definitions for these activities (81 FR 28210). Weights 
were assigned based on the level of effort and resources needed to 
complete each activity, as well as alignment with current national 
public health priorities and programs such as the Quality Innovation 
Network-Quality Improvement Organization (QIN/QIO).
    We have subsequently determined that the benefit to categorizing 
activities as high or medium weighted has greatly diminished. Over the 
last several years of the Quality Payment Program, we have made 
refinements and enhancements to the improvement activities Inventory by 
adding new activities to incorporate newly identified opportunities for 
clinical improvement and by modifying existing activities to support 
changes in practice standards, while also eliminating activities that 
are duplicative or that no longer promote a sufficient level of 
clinical improvement. In this and subsequent rulemaking cycles, we are 
focusing our efforts on streamlining the Inventory to retain the 
highest priority activities that offer the strongest promotion of 
clinical practice improvement. As the Inventory is streamlined, each 
retained activity highlights a unique and vital aspect of clinical 
practice improvement, and therefore every activity remaining in the 
Inventory would be considered a high priority activity.
    Second, we proposed to further simplify improvement activity 
reporting requirements by reducing the number of activities to which 
clinicians are required to attest to achieve a full score in the 
improvement activities performance category. We proposed that MIPS 
eligible clinicians who participate in traditional MIPS would be 
required to report two activities. In addition, we proposed that MIPS 
eligible clinicians who are categorized as small practice, rural, in a 
provider-shortage area, or non-patient facing would now be required to 
report one activity. We proposed that these policies would be effective 
for the CY 2025 performance period/2027 MIPS payment year and 
subsequent years.
    We also proposed that MVP participants would be required to report 
one activity. In the CY 2022 PFS final rule (86 FR 65412 through 
65413), we established that MVP Participants submitting MVPs report 
fewer improvement activities than eligible clinicians reporting 
traditional MIPS to incentivize and support MVP adoption. As we stated 
in the CY 2022 PFS final rule (86 FR 65412), we continue to believe 
that reduced reporting requirements are necessary to support the 
adoption of and reduce the burden for implementation of MVPs.
    We proposed to lower the number of activities that MIPS eligible 
clinicians are required to complete in order to obtain a full score to 
adjust for the ongoing reduction of activities in the Inventory as well 
as to support eligible clinicians with simplified reporting as they 
engage in fewer but more demanding activities. While our efforts to 
streamline the Inventory may result in a lower overall number of 
improvement activities MIPS eligible clinicians can choose from, the 
retained activities in the Inventory would be the highest priority 
activities that offer the strongest promotion of clinical practice 
improvement. This proposal is also responsive to commenters who, in the 
past, have requested that the number of required activities be reduced 
and that more activities be highly weighted (81 FR 77182). The activity 
removals and modifications being proposed would result in an Inventory 
of activities that are meaningful, timely, and rigorous. While 
decreasing the number of required activities would simplify reporting, 
MIPS eligible clinicians would still be required to participate in 
meaningful activities that yield significant practice improvement.
    We requested comments on our proposals to remove weighting and 
reduce the number of activities that clinicians are required to attest 
to achieve a full score in the improvement activities performance 
category.
    Specifically, we requested comments on our proposal to revise Sec.  
414.1380(b)(3) to read that, beginning with the CY 2025 performance 
period/2027 MIPS payment year, MIPS eligible clinicians (except for 
non-patient facing MIPS eligible clinicians, small practices, and 
practices located in rural areas and geographic HPSAs) receive 20 
points for each improvement activity, while non-patient facing MIPS 
eligible clinicians, small practices, and practices located in rural 
areas and geographic HPSAs receive 40 points for each improvement 
activity. Therefore, to receive a score of 40 points, or full credit, 
MIPS eligible clinicians (except for non-patient facing MIPS eligible 
clinicians, small practices, and practices located in rural areas and 
geographic HPSAs) must report two improvement activities, while non-
patient facing MIPS eligible clinicians, small practices, and practices 
located in rural areas and geographic HPSAs must report one improvement 
activity.
    We also requested comments on our proposal to revise Sec.  
414.1365(c)(3) to state that, beginning with the CY 2025 performance 
period/2027 MIPS payment year, MVP participants receive 40 points for 
each improvement activity. Therefore, to receive a score of 40 points, 
or full credit, MVP participants would be required to report one 
improvement activity.
    We received comments on these proposals. The following is a summary 
of the comments we received and our responses.
    Comment: Many commenters expressed support for our proposal to 
eliminate improvement activity weights. Many believed that this change 
would simplify reporting and greatly reduce administrative burden and 
complexity of scoring. Other commenters found activity weights were not 
beneficial, indicating that in some cases, the activity weight does not 
necessarily correlate with the activity's value to clinicians or to 
patient care. A few commenters praised this change of weighting all 
improvement activities equally because it promotes fairness across 
different practice settings and aligns with our efforts to make the 
Quality Payment Program more accessible. One commenter encouraged CMS 
to identify additional simplifications to make the process of reporting 
even less burdensome.
    Response: We appreciate commenters' support.
    Comment: A few commenters recommended that CMS balance the

[[Page 98413]]

need for reduced reporting burden with the continued goal of driving 
meaningful quality improvements and not overlooking critical aspects of 
care. One commenter highlighted that improvement activities which are 
weighted as high typically reflect more significant or innovative 
improvements than activities that are weighted as medium, and, if 
weighting is eliminated, it may be more challenging to distinguish 
between practices making substantial improvements and those meeting 
only minimal requirements. Another commenter believed that 
incentivizing clinicians for choosing to report high value activities 
may drive clinical improvements more effectively. One commenter stated 
that removing the distinction between medium and high-weighted 
activities may reduce the motivation for clinicians to engage in 
activities with the highest impact as well as reduce the robustness of 
the improvement activities performance category.
    Response: We appreciate these comments and will continue to assess 
and take such concerns into consideration as we refine the Inventory. 
As we streamline the Inventory, each retained activity highlights a 
unique and vital aspect of care and will offer a meaningful level of 
clinical practice improvement. We believe that, with the elimination of 
activity weighting, clinicians will invariably be participating in 
activities that offer the highest level of clinical improvement, as 
every retained activity in the Inventory will ultimately be considered 
a high-priority activity. As we move forward, we will continue to 
explore ways to incentivize clinicians to engage in actions that yield 
the highest level of practice improvement.
    Comment: Many commenters expressed support for the reduction in the 
number of activities to which clinicians must report. A few commenters 
also commended CMS for continuing to alleviate the reporting burden for 
small practice, rural, in a provider-shortage area, or non-patient 
facing clinicians by reducing the number of required activities.
    Response: We appreciate commenters' support of our changes to 
simplify reporting as well as our commitment to reducing reporting 
burden for eligible clinicians who are categorized as small practice, 
rural, in a provider-shortage area, or non-patient facing.
    Comment: One commenter requested that CMS award bonus points to 
clinicians that report additional improvement activities in a 
performance year to encourage pursuit of more than the minimum. Another 
commenter requested that CMS consider ways to provide cross-category 
credit for investments in quality that are captured through both 
quality measures and improvement activities.
    Response: We appreciate these comments. Our current policy focus is 
to consider reporting changes that align with both MIPS and MVP. We 
noted in the CY 2019 PFS final rule (83 FR 59851) that bonus points 
were created as transition policies, which were not meant to continue 
through the life of the program. As we move to MVPs, we are simplifying 
our scoring by ending transition policies that were established in the 
initial years of the program. As we are in the eighth year of the 
Quality Payment Program and we are reducing (not increasing) the 
reporting requirements for the improvement activities performance 
category, we are not able to provide bonus points for improvement 
activities at this time. As we consider policies that support MVP 
adoption by current MIPS participants, we will continue to assess and 
explore ways to incorporate incentives via future rulemaking. We will 
continue to identify cross-category efficiencies as we refine the 
Inventory for both MIPS and MVP.
    Comment: One commenter recommended that the requirements for 
improvement activity reporting be aligned across MIPS and MVPs to 
reduce complexity, enhance consistency across the program, and ensure 
fairness for participants.
    Response: We appreciate this comment and will continue to consider 
reporting changes that align with both MIPS and MVPs. At this time, we 
continue to believe that reduced reporting requirements are necessary 
to support the adoption of and reduce the burden for implementation of 
MVPs. Finalizing the policy that MVP participants may report fewer 
improvement activities than eligible clinicians reporting traditional 
MIPS will incentivize and support MVP adoption. We will also continue 
to seek ways to further simplify reporting across both MIPS and MVPs.
    Comment: A few commenters requested that CMS require clinicians to 
report only one improvement activity instead of two. Those commenters 
argued that even practices that don't qualify as small practices, 
especially those in multispecialty settings, struggle to find two 
appropriate improvement activities that apply to the majority of the 
group, and, as the improvement activity Inventory continues to be 
streamlined, large multi-specialty groups may be forced to implement 
improvement activities that are not meaningful. One commenter expressed 
the belief that there should be parity in reporting requirements 
regardless of whether or not a clinician is patient-facing in order to 
remove complexity. Another commenter argued that participants may still 
face challenges in meeting these new reduced requirements, especially 
compared to MVP participants who will only need to report one 
improvement activity.
    Response: As we consider policies that support MVP adoption by 
current MIPS participants, we will assess and explore ways to 
incorporate incentives via future rulemaking. At this time, we continue 
to believe that reduced reporting requirements for MVP participants are 
necessary to support the adoption of and reduce the burden for 
implementation of MVPs. We do not believe that the current and future 
Inventory is not sufficient and MIPS participants should be able to 
identify two activities to implement that will be both meaningful and 
not overly burdensome. We also note that flexibilities for special 
statuses such as Non-patient facing are a feature of the Quality 
Payment Program overall. Section 1848(q)(2)(C)(iv) of the Act requires 
the Secretary, in specifying improvement activities, to give 
consideration to the circumstances of professional types who typically 
furnish services that do not involve face-to-face interaction with a 
patient. In the CY 2017 Quality Payment Program final rule (81 FR 77041 
through 77049), we discuss the definition of a non-patient facing MIPS 
eligible clinician as well as the establishment of exceptions due to 
many non-patient facing MIPS eligible clinicians not having sufficient 
improvement activities applicable and available to report under MIPS. 
We will continue to identify opportunities to reduce reporting burden 
for both MIPS and MVPs, particularly for multispecialty practices and 
clinicians in other settings who do not classify as a small practice, 
rural practice, or Non-patient facing.
    After consideration of comments, we are finalizing these scoring 
and reporting policy changes as proposed.
(4) Promoting Interoperability Performance Category
(a) Background
    Section 1848(q)(2)(A) of the Act includes the meaningful use of 
certified electronic health record (EHR) technology (CEHRT) as a 
performance category under MIPS. We refer to this performance category 
as the Promoting Interoperability performance category (and in past 
rulemaking, we referred to

[[Page 98414]]

it as the advancing care information performance category).
    For our previously established policies regarding the Promoting 
Interoperability performance category, we refer readers to the 
regulation at 42 CFR 414.1375 and the CY 2017 Quality Payment Program 
final rule (81 FR 77199 through 77245), CY 2018 Quality Payment Program 
final rule (82 FR 53663 through 53688), CY 2019 PFS final rule (83 FR 
59785 through 59820), CY 2020 PFS final rule (84 FR 62991 through 
63006), CY 2021 PFS final rule (85 FR 84886 through 84895), CY 2022 PFS 
final rule (86 FR 65466 through 65490), CY 2023 PFS final rule (87 FR 
70060 through 70087), and CY 2024 PFS final rule (88 FR 79308 through 
79312 and 88 FR 79351 through 79365).
(b) Current Definition of CEHRT for the Quality Payment Program
    In the CY 2024 PFS final rule (88 FR 79307 through 79312), we 
finalized revisions to the definition of CEHRT for the Quality Payment 
Program at 42 CFR 414.1305. In the CY 2024 PFS final rule (88 FR 79309 
and 79310), we amended the definition of CEHRT to be more flexible in 
response to changes proposed by the Office of the National Coordinator 
for Health Information Technology (ONC) \869\ in the ``Health Data, 
Technology, and Interoperability: Certification Program Updates, 
Algorithm Transparency, and Information Sharing'' (HTI-1) proposed rule 
(88 FR 23746 through 23917). Specifically, we amended our definition of 
CEHRT at Sec.  414.1305 to ensure references to ONC's definition of 
Base EHR at 45 CFR 170.102 and its health IT certification criteria at 
45 CFR 170.315 were responsive to any changes ONC makes to its 
definition and criteria at any time. Instead of requiring that CEHRT 
meet only the ``2015 Edition Base EHR definition,'' we added that it 
also may meet the ``subsequent Base EHR definition'' as defined at 45 
CFR 170.102. We also amended our definition of CEHRT to provide that 
the CEHRT must also be certified to the ONC health IT certification 
criteria ``as adopted and updated'' in 45 CFR 170.315. This approach is 
consistent with the policies subsequently finalized in the HTI-1 final 
rule (89 FR 1205 through 1210). For additional background and 
information on this update, we refer readers to the discussion in the 
CY 2024 PFS final rule on this topic (88 FR 79307 through 79312).
---------------------------------------------------------------------------

    \869\ On July 29, 2024, notice was posted in the Federal 
Register that the Office of the National Coordinator for Health IT 
would be dually titled to the Assistant Secretary for Technology 
Policy and Office of the National Coordinator for Health Information 
Technology (89 FR 60903).
---------------------------------------------------------------------------

    In consideration of the updates finalized in the CY 2024 PFS final 
rule and the HTI-1 final rule, we refer to ``ONC health IT 
certification criteria'' throughout this final rule where we previously 
would have referred to ``2015 Edition health IT certification 
criteria.'' These revisions to the definition of CEHRT in Sec.  
414.1305 ensure that updates to the definition of Base EHR in 45 CFR 
170.102, and updates to applicable ONC health IT certification criteria 
in 45 CFR 170.315, are incorporated into the CEHRT definition without 
additional regulatory action by CMS. For ease of reference, Table 80 
sets forth the ONC health IT certification criteria required to meet 
the Promoting Interoperability performance category objectives and 
measures.
    In the CY 2024 PFS final rule (88 FR 79408 through 79414), we also 
finalized changes to the CEHRT definition at Sec.  414.1305 for 
Advanced APMs requiring use of EHR technology certified under the ONC 
Health IT Certification Program that meets the ONC Base EHR definition 
at 45 CFR 170.102 and any such ONC health IT certification criteria 
adopted or updated in 45 CFR 170.315 that are determined applicable for 
the APM, for the year, considering factors such as clinical practice 
area, promotion of interoperability, relevance to reporting on 
applicable quality measures, clinical care delivery objectives of the 
APM, or any other factor relevant to documenting and communicating 
clinical care to patients or their health care providers in the APM. 
This CEHRT definition affords Advanced APMs the ability to tailor 
additional CEHRT use requirements to those features or capabilities 
that are clinically relevant to the APM and its participants, rather 
than referring to the same criteria associated with measures in the 
Promoting Interoperability performance category of MIPS (88 FR 79413).
    We highlight certain updates to ONC health IT certification 
criteria finalized in the ONC HTI-1 final rule that impact 
certification criteria referenced under the CEHRT definition. ONC 
adopted the certification criterion ``Decision support interventions'' 
(DSI) in 45 CFR 170.315(b)(11) to ultimately replace the ``Clinical 
decision support (CDS)'' certification criterion in 45 CFR 
170.315(a)(9) included in the Base EHR definition (89 FR 1236). The 
finalized DSI criterion ensures that Health IT Modules certified to 45 
CFR 170.315(b)(11) must, among other functions, enable a limited set of 
identified users to select (that is, activate) certain evidence-based 
decision support interventions and Predictive DSI (as the latter term 
is defined in 45 CFR 170.102) (89 FR 1241) and support user access to 
specified ``source attributes''--categories of technical performance 
and quality information--for both evidence-based and Predictive DSI (89 
FR 1236). ONC further finalized that a Health IT Module may meet the 
Base EHR definition by either being certified to the existing CDS 
certification criterion in 45 CFR 170.315(a)(9) or being certified to 
the revised DSI criterion in 45 CFR 170.315(b)(11), for the period up 
to, and including, December 31, 2024. On and after January 1, 2025, ONC 
finalized that a Health IT Module must be certified to the DSI 
certification criterion in 45 CFR 170.315(b)(11) in order to meet the 
Base EHR definition, and the adoption of the CDS certification 
criterion in 45 CFR 170.315(a)(9) will expire on January 1, 2025 (89 FR 
1281).
    In the HTI-1 final rule, ONC also finalized other updates related 
to ONC health IT certification criteria referenced in the CEHRT 
definition. ONC finalized January 1, 2026, as the date when updates 
discussed below would take effect; accordingly, health IT developers 
must update and provide certified Health IT Modules to their customers 
consistent with the Maintenance of Certification requirements in 45 CFR 
170.402(b)(3) by this date, including the following updates:
     ONC updated the ``Transmission to public health agencies--
electronic case reporting'' criterion in 45 CFR 170.315(f)(5) to 
specify the use of consensus-based, industry-developed electronic 
standards and implementation guides (IGs) to replace functional, 
descriptive requirements in the existing criterion on and after January 
1, 2026 (89 FR 1228).
     ONC adopted the United States Core Data for 
Interoperability (USCDI) version 3 in 45 CFR 170.213(b) and finalized 
that USCDI version 1 in 45 CFR 170.213(a) will expire on January 1, 
2026 (89 FR 1211 and 1224). This change impacts ONC health IT 
certification criteria that reference the USCDI, including the 
``Transitions of care'' certification criteria (45 CFR 
170.315(b)(1)(iii)(A)(1) and (2)), ``Clinical information 
reconciliation and incorporation--Reconciliation'' (45 CFR 
170.315(b)(2)(iii)(D)(1) through (3)); and ``View, download, and 
transmit to 3rd party'' (45 CFR[thinsp]170.315(e)(1)(i)(A)(1)) (89 FR 
1214).
     ONC updated the ``Demographics'' certification criterion 
(45 CFR 170.315(a)(5)), including renaming the

[[Page 98415]]

criterion to ``Patient demographics and observations'' (89 FR 1295 and 
1296).
     ONC updated the ``Standardized API for patient and 
population services'' certification criterion in 45 CFR 170.315(g)(10) 
including finalizing references to newer versions of standards 
referenced in the criterion, such as the US Core IG 6.1.0 (89 FR 1285) 
and the SMART App Launch Implementation Guide Release 2.0.0 (89 FR 
1292).
    For complete information about the updates to ONC health IT 
certification criteria finalized in the HTI-1 final rule, we refer 
readers to the text of the final rule (89 FR 1192) as well as resources 
available on ONC's website.\870\
---------------------------------------------------------------------------

    \870\ For more information, see https://www.healthit.gov/topic/laws-regulation-and-policy/health-data-technology-and-interoperability-certification-program.
---------------------------------------------------------------------------

(c) Potential Future Update of the SAFER Guides Measure
(i) Background
    ONC developed the Safety Assurance Factors for EHR Resilience 
Guides (SAFER Guides) in 2014, and later updated them in 2016. ONC 
provided the SAFER Guides, including the High Priority Practices SAFER 
Guide, as a tool to help organizations at all levels conduct self-
assessments to optimize the safety and use of EHRs.\871\ In the CY 2022 
PFS final rule (86 FR 65475 through 65477), we adopted the SAFER Guides 
measure under the Protect Patient Health Information objective 
beginning with the CY 2022 performance period/2024 MIPS payment year. 
For the CY 2022 performance period/2024 MIPS payment year and the CY 
2023 performance period/2025 MIPS payment year, MIPS eligible 
clinicians were required to attest to whether they have conducted an 
annual self-assessment using the High Priority Practices SAFER Guide 
\872\ at any point during the calendar year in which the performance 
period occurs, with one ``yes/no'' attestation statement. MIPS eligible 
clinicians were not scored based on their answer to the attestation, or 
their level of implementation of each of the practices. However, 
failure to attest to this measure would result in earning a score of 
zero for the Promoting Interoperability performance category for 
failing to meet the minimum reporting requirements.
---------------------------------------------------------------------------

    \871\ https://www.healthit.gov/topic/safety/safer-guides.
    \872\ https://www.healthit.gov/sites/default/files/safer/guides/safer_high_priority_practices.pdf.
---------------------------------------------------------------------------

    In the CY 2024 PFS final rule (88 FR 79354 through 79356), we 
modified the SAFER Guides measure. Beginning with the CY 2024 
performance period/2026 MIPS payment year, this modified measure 
requires MIPS eligible clinicians to conduct, and attest ``yes'' to 
having completed, an annual self-assessment of their CEHRT, using the 
High Priority Practices SAFER Guide. We remind readers that the SAFER 
Guides measure only requires completion of a self-assessment and does 
not require MIPS eligible clinicians to implement fully each of the 
practices identified in their self-assessment.
(ii) Status of Updates to SAFER Guides
    As summarized in the CY 2024 PFS final rule (88 FR 79354 through 
79356), we received comments in response to our proposal to modify the 
SAFER Guides measure, including many comments recommending that we 
collaborate with ONC to update the SAFER Guides, noting that the SAFER 
Guides were last updated in 2016 (88 FR 59264). In response to these 
comments, we noted that, while the current SAFER Guides reflect 
relevant and valuable guidelines for safe practices with respect to 
current EHR systems, we would consider exploring updates in 
collaboration with ONC. We reminded readers to visit the CMS resource 
library website at https://www.cms.gov/regulations-guidance/promoting-interoperability/resource-library and the ONC website at https://www.healthit.gov/topic/safety/safer-guides for resources on the content 
and appropriate use of the SAFER Guides (88 FR 59262). We also noted 
that future updates to the SAFER Guides would be provided with 
accompanying educational and promotional materials to notify 
participants, in collaboration with ONC, when available (88 FR 59265).
    In the proposed rule and this final rule, we seek to make readers 
aware that efforts to update the SAFER Guides are currently underway. 
We anticipate that updated versions of the SAFER Guides may become 
available as early as CY 2025. We would consider proposing a change to 
the SAFER Guides measure, as soon as feasible, potentially beginning in 
the CY 2026 performance period/2028 MIPS payment year to permit use of 
updated versions of the SAFER Guides at that time. We encourage MIPS 
eligible clinicians to become familiar with the updated versions of the 
SAFER Guides when they become available and consider them as they 
implement appropriate EHR safety practices.
(d) Modification of the Definition of Meaningful EHR User for 
Healthcare Providers That Have Committed Information Blocking
    The Department of Health and Human Services (HHS) final rule ``21st 
Century Cures Act: Establishment of Disincentives for Health Care 
Providers That Have Committed Information Blocking'' (hereafter 
referred to as the Disincentives final rule), was displayed for public 
inspection by the Office of the Federal Register on June 26, 2024, and 
appeared in the Federal Register on July 1, 2024 (89 FR 54662 through 
54718). The final rule implements the provision of the 21st Century 
Cures Act specifying that a healthcare provider, determined by the HHS 
Office of the Inspector General (OIG) to have committed information 
blocking, shall be referred to the appropriate agency to be subject to 
appropriate disincentives set forth through notice and comment 
rulemaking. In the Disincentives final rule, we finalized that a MIPS 
eligible clinician (other than a qualified audiologist) will not be 
considered a meaningful EHR user in a performance period if the OIG 
refers, during the calendar year of the performance period, a 
determination that the MIPS eligible clinician committed information 
blocking as defined at 45 CFR 171.103. Information blocking, in the 
case of a health care provider, as defined in 45 CFR 171.102, is a 
practice that is likely to interfere with the access, exchange, or use 
of electronic health information, except as required by law or 
specified in an information blocking exception in 45 CFR part 171, 
subpart B, C, or D, and that the health care provider knows is 
unreasonable and is likely to interfere with access, exchange, or use 
of electronic health information. Furthermore, we finalized amendments 
to the definition of ``meaningful EHR User for MIPS'' at Sec.  414.1305 
to state that a MIPS eligible clinician (other than a qualified 
audiologist) is not a meaningful EHR user for a performance period if 
the OIG refers a determination that the MIPS eligible clinician 
committed information blocking, as defined at Sec.  171.103, during the 
calendar year of the performance period (89 FR 54699). We also 
finalized amending the requirements at Sec.  414.1375(b) to specify 
that a MIPS eligible clinician must be a meaningful EHR user for MIPS 
(as defined at Sec.  414.1305) to earn a score for MIPS Promoting 
Interoperability performance category (89 FR 54695 through 54699). 
Under the final policies, a MIPS eligible clinician that OIG determines 
has committed information blocking would

[[Page 98416]]

not be a meaningful EHR user, and therefore would be unable to earn a 
score (instead earning a score of zero) for the Promoting 
Interoperability performance category.
    Additional regulatory provisions were finalized at 45 CFR part 171, 
subpart J, related to the application of disincentives (89 FR 54675).
    We note that, as finalized, the revised definition of ``meaningful 
EHR user for MIPS'' at Sec.  414.1305 and the revisions to Sec.  
414.1375(b) became effective when the final rule took effect on July 
31, 2024. For additional background and information, we refer readers 
to the discussion in the ``21st Century Cures Act: Establishment of 
Disincentives for Health Care Providers That Have Committed Information 
Blocking'' proposed rule (88 FR 74957 through 74962), as well as the 
Disincentives final rule.
(e) Future Goals of the Promoting Interoperability Performance Category
(i) Future Goals with Respect to Fast Healthcare Interoperability 
Resources[supreg] (FHIR) APIs for Patient Access
    In partnership with ONC, we envision a future where patients have 
timely, secure, and easy access to their health information through the 
health application of their choice. We are working with ONC to enable 
this type of access to health information by requiring the use of APIs 
that utilize the Health Level Seven International[supreg] (HL7) FHIR 
standard. We are working with ONC and other Federal partners to improve 
timely and accurate data exchange, partner with industry to enhance 
digital capabilities, advance adoption of FHIR, support enterprise 
transformation efforts that increase our technological capabilities, 
and promote interoperability.
    In the CY 2021 PFS proposed rule (85 FR 50303), we described our 
future vision for the Promoting Interoperability performance category 
and stated that we will continue to consider changes that support a 
variety of HHS goals, including supporting alignment with the 21st 
Century Cures Act, advancing interoperability and the exchange of 
health information, and promoting innovative uses of health IT. We also 
described plans to continue to align the Promoting Interoperability 
performance category with policies finalized in the ``21st Century 
Cures Act: Interoperability, Information Blocking, and the ONC Health 
IT Certification Program'' final rule (85 FR 25642), including 
finalization of a new certification criterion for a standards-based API 
using FHIR, among other health IT topics.
    ONC finalized the HTI-1 final rule (89 FR 1192), effective March 
11, 2024, to further implement the 21st Century Cures Act, among other 
policy goals. ONC finalized revisions to the ``Standardized API for 
patient and population services'' certification criterion at 45 CFR 
170.315(g)(10). It also adopted the HL7 FHIR US Core Implementation 
Guide (IG) Standard for Trial Use version 6.1.0 at 45 CFR 
170.215(b)(1)(ii), which provides the latest consensus-based 
capabilities aligned with the USCDI Version 3 \873\ data elements for 
FHIR APIs. The HTI-1 final rule also created the Insights Condition and 
Maintenance of Certification requirements (Insights Condition) within 
the ONC Health IT Certification Program to provide transparent 
reporting on certified health IT (89 FR 1199). This Insights Condition 
will require developers of certified health IT subject to the 
requirements to report on measures that provide information about the 
use of specific certified health IT functionalities by end users. One 
such measure calculates the number of unique individuals who access 
their electronic health information overall and by different methods 
such as through a standardized API for patient and population services 
(89 FR 1313 and 1314).
---------------------------------------------------------------------------

    \873\ https://www.healthit.gov/isa/united-states-core-data-interoperability-uscdi#uscdi-v3.
---------------------------------------------------------------------------

    By adopting these new and updated standards, implementation 
specifications, certification criteria, and conditions of 
certification, provisions in the HTI-1 final rule advance 
interoperability, improve transparency, and support the access, 
exchange, and use of electronic health information. We aim to further 
advance the use of FHIR APIs through policies in the Promoting 
Interoperability performance category to advance interoperability, 
encourage the exchange of health information, and promote innovative 
uses of health IT. We also hope to gain insights into the adoption and 
use of FHIR APIs by MIPS eligible clinicians due to the ONC Health IT 
Certification Program's Insights Condition. We believe maintaining our 
focus on promoting interoperability, alignment, and simplification 
would reduce healthcare provider burden while allowing flexibility to 
pursue innovative applications that improve care delivery. For 
additional background and information, we refer readers to the 
discussion in the HTI-1 final rule on this topic (89 FR 1192).
(ii) Improving Cybersecurity Practices
    The Promoting Interoperability performance category encourages the 
advancement of EHR safety by promoting appropriate cybersecurity 
practices through the Security Risk Analysis and SAFER Guides measures. 
On February 14, 2023, the National Institute of Standards and 
Technology (NIST) published updated guidance for health care entities 
implementing requirements of the Health Insurance Portability and 
Accountability of 1996 (HIPAA) Security Rule (45 CFR part 160 and 
subparts A and C of 45 CFR part 164). The guidance, NIST SP 800-66r2, 
provides information and resources to HIPAA-covered entities to improve 
their cybersecurity risk practices.\874\ We also wish to alert readers 
of additional HHS resources and activities regarding cybersecurity best 
practices as recently summarized in an HHS strategy document that 
provides an overview of HHS recommendations to help the health care 
sector address cyber threats.\875\ HHS has also recently published a 
website detailing recommended cybersecurity performance goals.\876\ We 
intend to consider how the Promoting Interoperability performance can 
promote cybersecurity best practices for MIPS eligible clinicians in 
the future.
---------------------------------------------------------------------------

    \874\ https://csrc.nist.gov/pubs/sp/800/66/r2/final.
    \875\ https://aspr.hhs.gov/cyber/Documents/Health-Care-Sector-Cybersecurity-Dec2023-508.pdf.
    \876\ https://hphcyber.hhs.gov/performance-goals.html.
---------------------------------------------------------------------------

(iii) Improving Prior Authorization Processes
    We recently released the CMS Interoperability and Prior 
Authorization final rule, which appeared in the Federal Register on 
February 8, 2024 (89 FR 8758). The final rule aims to enhance health 
information exchange and access to health records for patients, 
healthcare providers, and payers, and improve prior authorization 
processes. In the final rule, we finalized the addition of a new 
measure, the ``Electronic Prior Authorization'' measure, under the HIE 
objective for the MIPS Promoting Interoperability performance category 
beginning with the CY 2027 performance period/2029 MIPS payment year 
(89 FR 8909 through 8927).
    (f) Requirements for the Promoting Interoperability Performance 
Category for the CY 2025 Performance Period/2027 MIPS Payment Year

[[Page 98417]]

(i) Objectives and Measures for the CY 2025 Performance Period/2027 
MIPS Payment Year
    For ease of reference, Table 77 lists the objectives and measures 
for the Promoting Interoperability performance category required for 
the CY 2025 performance period/2027 MIPS payment year. We note that we 
did not propose any changes to previously established objectives, 
measures, and other requirements for the Promoting Interoperability 
performance category in the proposed rule.
BILLING CODE 4120-01-P

[[Page 98418]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.125


[[Page 98419]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.126


[[Page 98420]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.127


[[Page 98421]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.128


[[Page 98422]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.129


[[Page 98423]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.130

BILLING CODE 4120-01-C
(ii) Scoring Methodology for the CY 2025 Performance Period/2027 MIPS 
Payment Year
    Table 78 reflects the scoring methodology for the Promoting 
Interoperability performance category for the CY 2025 performance 
period/2027 MIPS payment year.

[[Page 98424]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.131

(iii) Exclusion Redistribution
    Many required measures have exclusions associated with them as 
shown in Table 77. If a MIPS eligible clinician believes that an 
exclusion for a particular measure applies to them, they may claim it 
when they submit their data. The maximum points available in Table 78 
do not include the points that will be redistributed if a MIPS eligible 
clinician claims an exclusion for a specific measure. For ease of 
reference, Table 79 shows how points will be redistributed among the 
objectives and measures specified for the Promoting Interoperability 
performance category for the CY 2025 performance period/2027 MIPS 
payment year in the event a MIPS eligible clinician claims an exclusion 
for a given measure.

[[Page 98425]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.132

(iv) ONC Health IT Certification Criteria
    For ease of reference, Table 80 lists the objectives and measures 
for the Promoting Interoperability performance category for the CY 2025 
performance period/2027 MIPS payment year and the associated ONC health 
IT certification criteria set forth at 45 CFR 170.315, as is currently 
applicable. We refer readers to the CY 2024 PFS final rule (88 FR 79307 
through 79312) for our discussion of and amendments to the definition 
of CEHRT at Sec.  414.1305.
BILLING CODE 4120-01-P

[[Page 98426]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.133


[[Page 98427]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.134

BILLING CODE 4120-01-C
(g) Request for Information (RFI) Regarding Public Health Reporting and 
Data Exchange
    In the CY 2025 PFS proposed rule (89 FR 62072 through 62075), we 
sought comment on a series of goals and principles for the Promoting 
Interoperability performance category's Public Health and Clinical Data 
Exchange objective, particularly to support timely sharing of 
information with public health agencies that also reduces 
administrative burden for MIPS eligible clinicians.
    We received many comments on this RFI regarding public health 
reporting and data exchange, and we thank the commenters for responding 
to our request for information. Although we will not be addressing in 
this final rule the comments received in response to this RFI, we value 
the input received and will take the comments into consideration to 
help us consider potential future policies to enhance public health 
reporting and data exchange. We will continue to collaborate with the 
CDC and ONC to explore how the Promoting Interoperability performance 
category could advance public health infrastructure through more 
advanced use of health IT and data exchange standards and consider the 
feedback received for future rulemaking.
f. MIPS Final Score Methodology
(1) Performance Category Scores
(a) Background
    Sections 1848(q)(1)(A)(i) and (ii) and (5)(A) of the Act provide, 
in relevant part, that the Secretary shall develop a methodology for 
assessing the total performance of each MIPS eligible clinician 
according to certain specified performance standards and, using such 
methodology, provide for a final score for each MIPS eligible 
clinician. Section 1848(q)(6)(A) of the Act specifies that, to then 
determine a MIPS payment adjustment factor for each MIPS eligible 
clinician for an applicable MIPS payment year, we must compare the MIPS 
eligible clinician's final score for the given year to the performance 
threshold we established for that same year in accordance with section 
1848(q)(6)(D) of the Act. We refer readers to section IV.A.4.g.(2) of 
this final rule for further discussion of the performance threshold, 
and our calculation of MIPS payment adjustment factors, and our 
proposals with respect thereto.
    Section 1848(q)(2)(A) of the Act provides that the Secretary must 
assess each MIPS eligible clinician with respect to four performance 
categories in determining each MIPS eligible clinician's final score: 
quality, resource use (referred to as ``cost''), clinical practice 
improvement activities (referred to as ``improvement activities''), and 
meaningful use of certified EHR technology (referred to as ``Promoting 
Interoperability''). Section 1848(q)(2)(B) of the Act describes the 
measures and activities that must be specified under each performance 
category, including the quality performance category and cost 
performance category. Section 1848(q)(3) of the Act provides that we 
must establish performance standards with respect to the measures and 
activities specified under the four performance categories for a 
performance period, considering historical performance standards, 
improvement, and the opportunity for continued improvement. To 
calculate a final score for each MIPS eligible clinician for the 
performance period of an applicable MIPS payment year, section 
1848(q)(5)(A) of the Act provides that we must develop a methodology 
for assessing the total performance of each MIPS eligible clinician 
according to the performance standards we have established with respect 
to applicable measures and activities specified for each performance 
category, using a scoring scale of 0 to 100.
    In calculating the final score, we must apply different weights for 
the four performance categories, subject to certain exceptions, as set 
forth in section 1848(q)(5) of the Act and at Sec.  414.1380. Unless we 
assign a different scoring weight pursuant to these exceptions, for the 
CY 2025 performance period/2027 MIPS payment year, the scoring weights 
for each performance category are as follows: 30 percent for the 
quality performance category; 30 percent for the cost performance 
category; 15 percent for the improvement activities performance 
category; and 25 percent for the Promoting Interoperability performance 
category.
    For the CY 2025 performance period/2027 MIPS payment year, we 
proposed in the CY 2025 PFS proposed rule to update our scoring 
methodologies to respond to statutory requirements and impacts observed 
in performance data. Specifically, we proposed to--
     Establish defined topped out benchmarks for certain topped 
out measures for clinicians impacted by limited measure choice;
     Establish Complex Organization Adjustment for eCQMs 
reported by Virtual Groups and APM Entities.
     Score Medicare CQMs using flat benchmarks for their first 
two performance periods in the program.
     Modify the benchmarking methodology for scoring measures 
in the cost performance category;
     Adopt a new cost measure exclusion policy;
     Eliminate the weighting of activities in the improvement 
activities performance category; and
     Reduce the number of activities to which clinicians are 
required to attest.
    We did not propose any changes to scoring policies for the 
Promoting Interoperability performance category.
    We refer readers to section IV.A.4.e.(3)(b)(iv) of this final rule 
for discussion of scoring proposals in the Improvement Activities 
performance category.
    We refer readers to section IV.A.4.f.(1)(d) of this final rule for 
discussion of proposals for scoring the cost performance category.
(b) Scoring the Quality Performance Category for the Following 
Collection Types: Medicare Part B Claims Measures, eCQMs, MIPS CQMs, 
QCDR Measures, the CAHPS for MIPS Survey Measure and Administrative 
Claims Measures
    We refer readers to the CY 2017, CY 2018, and CY 2019 Quality 
Payment Program final rules, the CY 2020, CY

[[Page 98428]]

2021, CY 2022, and CY 2023 PFS final rules, and Sec.  414.1380(b)(1) 
for our current policies regarding, among other things, quality measure 
benchmarks, calculating total measure achievement points, calculating 
the quality performance category score, including achievement and 
improvement points, and the small practice bonus (81 FR 77276 through 
77308, 82 FR 53716 through 53748, 83 FR 59841 through 59855, 84 FR 
63011 through 63018, 85 FR 84898 through 84913, 86 FR65490 through 
65509, and 87 FR 70088 through 70091). In the CY 2024 PFS final rule, 
we finalized updates to our scoring flexibilities policy at Sec.  
414.1380(b)(1)(vii)(A) (88 FR 79368 through 79369).
(i) Scoring for Topped Out Measures in Specialty Measure Sets With 
Limited Measure Choice
    We refer readers to the CY 2017, CY 2018, and CY 2019 Quality 
Payment Program final rules, the CY 2023 PFS final rule (81 FR 77282 
through 77287, 82 FR 53721 through 53727, 83 FR 59761 through 59765, 
and 88 FR 70090 through 70091), and Sec.  414.1380(b)(1)(iv) for our 
established topped out measure scoring policies.
    Topped out measures are measures for which measure performance is 
considered so high and unvarying that meaningful distinctions and 
improvements in performance can no longer be made (81 FR 77136). We 
define topped out measures in Sec.  414.1305 differently for process 
measures and non-process measures. A topped out process measure means a 
measure with a median performance rate of 95 percent or higher. A 
topped out non-process measure means a measure where the Truncated 
Coefficient of Variation is less than 0.01 and the 75th and 90th 
percentile are with 2 standard errors. For MIPS eligible clinicians 
electing to report on measures where they expect to perform well, we 
anticipated many measures would have performance distributions 
clustered near the top. (81 FR 77282). Section 1848(q)(3)(B) of the Act 
requires that in establishing performance standards with respect to 
measures and activities, we consider, among other things, the 
opportunity for continued improvement. Topped out measures do not 
provide an opportunity for continued improvement nor, more broadly, do 
payment adjustments based on topped out measures incentivize clinicians 
to improve their care. As a result, we finalized policies to identify 
and cap the scoring potential of such measures. Additionally, we 
established practices for the removal of such measures, such as 
establishing the topped out measure lifecycle, to continue to drive 
quality improvement in areas where such improvement is possible and 
necessary.
    The topped out measure lifecycle is described in the CY 2018 PFS 
final rule (82 FR 53721 and 53727). We established at Sec.  
414.1380(b)(1)(iv)(B) that we would cap scoring for topped out measures 
at 7 points in the second consecutive year that it is identified as 
topped out. If a measure has been identified as topped out for 3 
consecutive years after being originally identified through the 
benchmarks, such measure may then be proposed for removal through 
notice-and-comment rulemaking (83 FR 59761). This timeline, however, is 
not fixed. We noted our concern where removal of topped out measures 
would leave clinicians with fewer than 6 applicable measures to report 
and that such removal in those instances would impact some specialties 
more than others (82 FR 53721). We stated that consideration for 
ensuring available applicable measures would be made when considering 
measure removals (83 FR 59763).
    The topped out scoring cap and the topped out measure lifecycle 
were established with the intention to drive continued quality 
improvement by providing clinicians with the ability to plan for 
optimal quality measurement and reporting and by providing measure 
developers time to develop and submit alternative measures for use in 
the program (82 FR 53727). However, the pace of measure development has 
not matched the rate at which topped out measures would ideally be 
removed under the established topped out lifecycle policy. Since the CY 
2017 performance period/2019 MIPS payment year, the MIPS final list of 
quality measures has decreased from 271 to 198 including the removal of 
34 topped out measures that had reached the end of the topped out 
measure lifecycle.
    We have received feedback from interested parties and independently 
verified that clinicians reporting specialty sets in which there is 
high presence of topped out measures receiving the 7-point cap are 
often facing both limited measure choice and limited scoring 
opportunities. Analysis of data from the CY 2022 performance period/
2024 MIPS payment year showed that only 7 percent of quality measure 
submissions were for topped out measures. However, of those 
submissions, clinicians representing five specialties accounted for 54 
percent of the submissions of topped out measures that contributed to 
the final score. When we analyzed the data from the CY2022 performance 
period/2024 MIPS payment year, we found that clinicians in these 
specialties were facing limited measure choice, with an 
overrepresentation of topped out measures among their measure 
selection. Some such topped out measures have been retained in the 
program to ensure specialists will have applicable measures in the 
absence of more robust measure development.
    We acknowledge that certain clinician specialists have limited 
measure choice and that their opportunities to maximize their MIPS 
performance score may be particularly affected by the current topped 
out measure scoring policy. We appreciate that, as the performance 
threshold increases, it may become more difficult for these clinician 
specialists to maximize their MIPS performance score and secure 
positive payment adjustments for reasons entirely outside of their 
control, primarily the topped-out measure scoring cap. To determine a 
MIPS payment adjustment factor for each MIPS eligible clinician for a 
year, we must compare the MIPS eligible clinician's final score for the 
given year to the performance threshold we 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 we 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. In the CY 
2024 PFS final rule, we finalized the performance threshold at a score 
of 75 points for the CY 2024 performance period/2026 MIPS payment year 
at Sec.  414.1405(b)(9)(iii) (88 FR 79319). We have finalized in 
section IV.A.4.g.(2)(c) of this final rule to maintain the performance 
threshold at 75 points for the CY 2025 performance year/2027 MIPS 
payment year. As the number of topped out measures a clinician reports 
increases, a clinician who must report topped out measures will see 
their maximum potential quality performance category score decrease, 
and the clinician must score as close to perfect as possible on the 
topped out measures to mitigate the effect of the 7-point cap on the 
clinician's final score. Affected clinicians face additional difficulty 
should they be subject to additional scoring policies, including 
reweighting of performance categories and reporting quality measures 
that lack benchmarks. Reweighting of the Promoting

[[Page 98429]]

Interoperability, cost, or both performance categories increases the 
weighting of the quality performance category in the final score from 
30 percent to 55 or 85 percent.
    We want to address scoring scenarios in which limited measure 
choice compels clinicians to report topped out measures with scoring 
caps consistent with our desire to facilitate fairer scoring of all 
specialties. For this reason, we proposed in the CY 2025 PFS proposed 
rule that beginning with the CY 2025 performance period/2027 MIPS 
payment year CMS could remove the 7-point cap for certain topped out 
measures that we would select based on the methodology discussed below. 
This will allow clinicians who practice in specialties impacted by 
limited measure choice to be scored according to defined topped out 
measure benchmarks that do not cap scores at 7 measure achievement 
points. Table 81 is an illustrative example of the proposed defined 
topped out measure benchmark.
[GRAPHIC] [TIFF OMITTED] TR09DE24.135

    As discussed above, given that clinicians reporting specialty 
measure sets with limited measure choice are disproportionately 
hindered by the 7-point topped out measure scoring cap, we would, in 
accordance with the methodology proposed in the CY 2025 PFS proposed 
rule (89 FR 62079) focus on identifying the topped out measures within 
specialty measure sets which clinicians with limited measure choice 
report. We proposed to identify the measures for which we would apply 
the defined topped out measure benchmark on a yearly basis. Measures 
receiving the defined topped out measure benchmarks would be proposed 
and adopted through notice-and-comment rulemaking concurrent with our 
adoption of the MIPS final list of quality measures.
    This proposed performance standard would aim, for clinicians with 
limited measure availability, to continue to require high performance, 
but would not cap scoring potential for exceptional performers and 
would offer better scoring opportunities for those performing below the 
median in the distribution than under our current policy. Under the 
proposed topped out measure benchmarking methodology, those achieving 
high performance rates would be rewarded for high performance. Scores 
between 9-9.9 were intentionally left out. We considered inclusion of 
scores in the 9th decile, but ultimately excluded them to necessitate 
exceptional clinical quality performance to achieve maximum scores. As 
originally proposed, we believed this approach would ameliorate the 
challenge of reporting on measures with a scoring cap while maintaining 
a high performance standard for topped out measures.
    In addition to addressing the scoring limit of the cap, we also 
proposed to address the scoring limits caused by the heavily skewed 
distribution of topped out measures. Previously, because median 
clinician performance was heavily skewed towards the top of 
distribution for many topped out measures the second highest achievable 
decile after the 7th decile may be the 3rd or 4th decile. We therefore 
proposed to specify a topped out measure benchmark that would set an 
even performance standard. Such a benchmark policy would facilitate 
clinician efforts to improve clinical quality among clinicians for whom 
improvement is still possible. The proposed distribution would allow 
those performing at or above the 97th percent to achieve a score of 7.5 
measure achievement points or greater to reward high performance and 
encourage clinical quality improvement for those who perform below the 
median.
    We proposed a methodology that would be used to conduct an analysis 
annually to determine which specialty measure sets are impacted by 
limited measure choice and which measures should be subject to the 
scoring cap exemption. Our analysis would evaluate all specialty 
measure sets by collection type to assess the impact of limited measure 
choice considering the influence of several scoring considerations 
including the number of capped topped out measures, the number of 
measures in the specialty set without historical benchmarks, and the 
scoring potential to meet or exceed the performance threshold. We would 
then consider each capped topped out measure in the corresponding 
specialty measure sets on a case-by-case basis for application of the 
defined topped out measure benchmark. Additionally, annual 
consideration of which measures would have the defined topped out 
measure benchmark applied would consider any changes to the 
availability of applicable measures and changes in the topped out 
status of measures that previously had the defined topped out measure 
applied. A measure would not have a defined topped out measure 
benchmark applied until it was identified as topped out for 2 
consecutive performance periods, the point at which point the 7-point 
cap would be applied. If suppression of a measure or removal of a 
benchmark impacts a measure scored according to the defined topped out 
measure benchmark, it would not be proposed again for the application 
of the defined topped out measure benchmark and the performance 
standard would return to the standard scoring policy at Sec.  
414.1380(b)(1)(i).
    Measures that are identified as topped out for 3 consecutive 
performance periods may still be proposed for

[[Page 98430]]

removal through notice-and-comment rulemaking and extremely topped out 
measures, those with an average mean performance within the 98th to 
100th percentile range, could also still be proposed for removal in the 
next rulemaking cycle, regardless of whether or not they are in the 
midst of the topped out measure lifecycle (83 FR 59763). If a measure 
that is scored according to a defined topped out measure benchmark 
later shows extremely topped out status, it would be subject to this 
policy. Any such measure removal would continue to occur through 
notice-and-comment rulemaking. While we aim to be responsive to those 
facing limited measure choice, we do not believe that measures with 
topped out performance have the same value in the program as measures 
that are not topped out, and they should be scored accordingly in 
instances where doing so does not unfairly limit a clinician's scoring 
opportunity. We believe these parameters identify those most impacted 
by limited measure choice while continuing to encourage high clinical 
quality measure performance.
    This proposal is consistent with our current topped out measure 
lifecycle, program goals, and historical approaches to scoring 
scenarios with limited measure choice. In the CY 2017 Quality Payment 
Program final rule, we exempted measures reported via the CMS Web 
Interface from the 7-point measure cap. The CMS Web Interface requires 
that MIPS eligible clinicians submitting via the CMS Web Interface must 
submit all measures included in the CMS Web Interface (81 FR 77116). 
Their lack of ability to select alternative measures made the 
application of the 7-point measure cap inappropriate. Instead, we 
finalized a proposal at Sec.  414.1380(b)(1)(ii)(A) to use benchmarks 
from the corresponding year of the Shared Saving Program as the Shared 
Savings Program incorporates a methodology for measures with high 
performance into the benchmark (82 FR 53721). The defined topped out 
measure benchmark similarly aims to score clinicians facing limited 
measure choice on topped out measures using a methodology that adjusts 
for high performance.
    We considered several policy options to address topped out measure 
scoring for clinicians facing limited measure choice. These included 
removing all topped out measures at the end of the topped out measure 
lifecycle, exempting all topped out measures in specialty measure sets 
from application of the 7-point cap, applying a denominator reduction 
for those scoring 7 out of 10 measure achievement points on topped out 
measures in specialty measure sets, and adopting a new reweighting 
policy for the quality performance category for clinicians impacted by 
limited measure choice that score below the performance threshold. 
These approaches would not appropriately address the barriers to fair 
scoring posed by limited measure choice, nor would they incentivize and 
reward improvement in clinical quality measure performance. 
Additionally, these alternatives would introduce additional scoring 
complexity and in one case, require clinicians' additional submission 
of a reweighting application to access potential benefits. The proposed 
approach of applying defined topped out measure benchmarks for certain 
topped out measures selected in accordance with the methodology set 
forth above avoids the additional complexity of the other approaches by 
building on historical and current quality measure scoring policies to 
topped out measures that does not require additional steps to access 
and is applicable as we transition to MVPs.
    For the reasons stated above, we proposed in the CY 2025 PFS 
proposed rule to add Sec.  414.1380(b)(1)(iv)(C) to state that 
beginning with the CY 2025 performance period/2027 MIPS payment year, 
measures impacted by limited measure choice as specified in paragraph 
(b)(1)(ii)(E) are not subject to the 7 measure achievement point cap 
specified in paragraph (b)(1)(iv)(B). We proposed a conforming change 
to Sec.  414.1380(b)(1)(iv)(B).
    We also proposed to add Sec.  414.1380(b)(1)(ii)(E) to state that, 
beginning with the CY 2025 performance period/2027 MIPS payment year, 
CMS will publish a list in the Federal Register of topped out measures 
determined to be impacted by limited measure choice. Measures included 
in the list would be scored from 1 to 10 measure achievement points 
according to defined topped out measure benchmarks calculated from 
performance data in the baseline period in which a performance rate of 
97 percent corresponds to 7.5 measure achievement points. Accordingly, 
we also proposed to update Sec.  414.1380(b)(1)(ii) to state that 
except as provided in paragraphs (b)(1)(ii)(B) through (F), benchmarks 
will be based on performance by collection type, from all available 
sources, including MIPS eligible clinicians and APMs, to the extent 
feasible, during the applicable baseline or performance period. We also 
proposed to make conforming changes to this section to include a 
previous inadvertent omission of paragraph (b)(1)(ii)(D) in addition to 
the proposed new exceptions in paragraphs (b)(1)(ii)(E) and (F) 
corresponding to policies discussed in sections IV.A.4.f.(1)(b)(i) and 
IV.A.4.f.(1)(c)(i) respectively.
    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters supported the proposal to remove the 7-
point cap for topped out measures that have been impacted by limited 
measure choice. These commenters believed that this proposal would 
expand clinicians' and specialists' ability to participate in the 
program and not penalize them for factors outside of their control. 
Several commenters also stated this proposal will help level the 
playing field for specialists and help them achieve a quality score 
that is more representative of the care they provide. Further, several 
commenters noted that the proposal would provide fairer and more 
accurate performance assessments, support consistent high-quality care, 
encourage continuous quality improvement, and address challenges posed 
by high-performing measures. Further, several commenters stated that 
this proposal would be advantageous for certain specialties, such as 
anesthesiology, oncology, pathology, and radiology. A few commenters 
also appreciated CMS' willingness to recognize the challenges faced by 
specialties, especially given the fact that the pace of measure 
development has been slower than anticipated.
    Response: We thank commenters for their support.
    Comment: Several commenters offered suggestions on how to clarify 
or improve on the proposed Topped Out Measure Benchmark and 
methodology. A few commenters requested that CMS clarify why it chose 
to tie a performance rate in the 97th percentile to 7.5 measure 
achievement points. These commenters further questioned if 7.5 points 
represent 10 percent of the current year's performance threshold, 
similar to CMS' cost measure scoring proposal. They also noted that CMS 
should align this proposal with the cost category proposal and assign a 
point value that increases over time in alignment with any increases to 
the MIPS performance threshold. Additionally, a few commenters offered 
recommendations on the proposed Topped Out Measure Benchmark. A few 
commenters recommended that CMS allow for 9-9.9 measure achievement 
points for a performance rate of 99-99.9 percent. One commenter 
recommended that CMS omit the first decile rather than the ninth and 
did not believe CMS

[[Page 98431]]

adequately justified why it removed the ninth percentile. Another 
believed that the benchmarking methodology should be modified to a 
lower limit of 25 percent, instead of 84 percent.
    Response: At Sec.  414.1305 we define topped out measures. A topped 
out process measure is a measure with a median performance rate of 95 
percent or higher. A topped out non-process is a measure where the 
Truncated Coefficient of Variation is less than 0.01 and the 75th and 
90th percentile are with 2 standard errors. Extremely topped out 
measures are defined as measures where the mean performance rate is 
between 98 and 100 percent. We tied a performance rate of 97 percent to 
7.5 points to assure that clinicians reporting measures for which the 
defined topped out measure benchmark is applied could meet the 
performance threshold which is similar to the cost measure benchmarking 
methodology discussed in section IV.A.4.f.(1)(d)(ii)(B) of this final 
rule. We will continue to align the defined topped out measure 
benchmark with the performance threshold as updates are made.
    We agree that CMS should include the 9th decile. Originally, we 
thought exclusion would emphasize the importance of high performance to 
achieve high scores. After further consideration, we have determined 
that the omission of the 9th decile would unnecessarily penalize 
clinicians facing limited measures choice. Assigning clinicians with a 
performance rate of 84 percent to the lowest decile holds clinicians to 
the higher performance standards necessary to perform well on a topped 
out measure. Omitting the 9th decile would doubly penalize clinicians, 
which is unnecessary due to the aforementioned abbreviated higher 
performance standard. Therefore, we are finalizing the define topped 
out measure benchmark to include the 9th decile corresponding to a 
performance rate from 99 to 99.9 percent. The defined topped out 
measure benchmarks seek to alleviate concerns that clinicians with 
limited measure choice forced to report on a high proportion of topped 
out measures cannot meet the performance threshold, while still 
requiring high performance to score well on measures with topped out 
performance. Therefore, it is not appropriate to lower the first decile 
to a performance rate of 25 percent.
    Comment: A few commenters requested clarification from CMS on the 
proposal. One commenter sought guidance on whether the proposal would 
apply to quality measures in an MVP. Another commenter sought 
clarification on how broadly the proposal would be applied, especially 
for specialties that have greater weight placed on their quality score 
and may be exempt from the Promoting Interoperability and Cost 
categories. One commenter inquired about how CMS would define ``limited 
measure sets'' and if it is solely based on CQM/eCQM availability or if 
it also is inclusive of QCDR measures.
    Response: To identify measures subject to this proposal, we would 
review each specialty measure set by collection type and identify if 
the prevalence of topped out measures within such a set hinders a 
clinician's ability to successfully participate in the MIPS quality 
performance category. For discussion on our approach for determining 
topped out measures impacted by limited measure choice and subject to 
the defined topped out measure benchmark, please see section 
IV.A.4.f.(1)(b)(ii) of this final rule. As discussed in section 
IV.A.4.f.(1)(b)(ii), those reporting specialty measure sets are those 
most likely to be impacted by limited measure choice. If a measure is 
identified for application of the defined topped out measure benchmark, 
that benchmark would be used across MIPS. If it is in use in an MVP, 
the defined topped out measure benchmark would be applied there as 
well. Additionally, reporters reporting the measure outside of the 
entire specialty measure set as part of their six required quality 
measures would be scored according to the defined topped out measure 
benchmark. The policy is designed to help those most impacted by 
limited measure choice, but application of the benchmark applies to all 
who report it. QCDR measures were not included in this scope as they 
are governed by another policy at Sec.  414.1400(b)(4)(iii)(C) stating 
that CMS may revoke a measure's second year approval if identified as 
topped out.
    Comment: Several commenters expressed concern with the proposal to 
remove the 7-point cap for topped out measures that have been impacted 
by limited measure choice and recommended CMS remove the cap on all 
topped out measures. A few commenters believed that the proposal falls 
short of addressing the overall challenges with the way benchmarks for 
all measures are currently established. A few commenters also stated 
that universal application of this policy would ensure that no 
clinicians are negatively impacted by the current scoring cap while 
also avoiding challenges related to accurately identifying which 
measures should be subject to this policy. For example, one commenter 
specifically mentioned that specialties like podiatry would be 
disadvantaged as they have more than 10 measures in their specialty 
set, the majority of which are cross-cutting measures. One commenter 
encouraged CMS to think more broadly about ``limited measure choice,'' 
recognizing that many specialists and subspecialists also experience 
limited choice and there is an inadequate selection of measures for 
multispecialty TINs. One commenter believed that limiting the proposal 
to a select set of measures is confusing and arbitrary. One commenter 
raised concerns that the proposal restricts the number of achievable 
measures for physicians, which could lead to fewer scoring 
opportunities and a higher likelihood of penalties. Another commenter 
noted that the proposal may place unrealistic expectations and pressure 
on providers, because they may find it challenging to consistently meet 
such high performance thresholds. Further, one commenter suggested that 
when selecting measures under this proposal, CMS should view 
performance rates for traditional MIPS independently from MVPs while 
another commenter requested that CMS remove the 7-point cap for a 
specified timeframe to ensure stability for clinicians. One commenter 
encouraged CMS to identify ways to evaluate topped out measures more 
granularly, highlighting that they may represent an opportunity for 
improvement among clinicians who do not currently report them. Another 
commenter suggested that CMS should monitor the impact of the proposal 
to address any complexity or unintended consequences.
    Response: We thank commenters for their feedback. As the program 
evolves, we will continue to evaluate our scoring methodology to 
support fair and equitable scoring that promotes clinical quality 
improvement. Our current topped out measure policy at Sec.  
414.1380(b)(1)(iv) was established to incentivize clinicians to strive 
to for continued improvement taking into consideration areas where 
continued improvement is still needed. The topped out measure scoring 
cap has been a useful tool in communicating that there is limited 
opportunity for continued improvement. Measures with topped out 
performance, indicate that there is already reasonable expectation of 
high clinical quality performance. Clinicians not facing limited 
measure availability can choose to report on measures for which there 
is opportunity to score above seven points. Clinicians facing the most 
limited measure choice, do not have this option. For the CY 2025 
performance period/2027 MIPS

[[Page 98432]]

payment year, the defined topped out measure policy provides relief for 
the clinicians most impacted by limited measure choice. Our methodology 
seeks to identify those most impacted by limited measure choice that 
current topped out measure policies would leave unable to avoid 
negative adjustments and includes instances where reweighting of other 
performance categories would result in a higher weight of the quality 
performance category. This policy looks at specialty measure sets to 
identify measures because reporters often have fewer than 6 measures 
from which to choose. Specialties, such as podiatry, have specialty 
measure sets that include topped out measures, but have an opportunity 
to reach the performance threshold based on the available measures in 
the specialty measure set and avoid harsh negative payment adjustments. 
We will monitor the impact of this proposal. Additionally, we will 
evaluate our larger benchmarking policy and consider scoring 
alternatives that do not include scoring caps.
    This proposal does not restrict the number of achievable measures 
for clinicians but rather provides those with a limited availability of 
quality measures relevant to their practice the ability to avoid 
significant negative payment adjustments solely based on the limited 
availability. It is important to maintain high performance standards 
for the topped out measures identified under this policy as historical 
data shows that there is a reasonable expectation of high performance. 
The defined topped out measure benchmark will score those already 
performing well accordingly and provides those below the median 
performance rates the opportunities to receive scores not impacted by 
the large performance skews in the distribution that typically omits 
deciles in the middle ranges. Our benchmarking methodology does not 
distinguish the performance rates between traditional MIPS and MVPs. 
Therefore we would not distinguish between traditional MIPS and MVPs 
for application of the defined topped out measure benchmarks. We will 
not remove the cap for a specified timeframe. Measure performance can 
change year over year and a measure that shows topped out performance 
in one year can change in the next. Therefore, application of the 
topped out measure policies including the defined topped out measure 
benchmark will be done on a yearly basis. We will continue to find ways 
to evaluate topped out measures to ensure we provide clinicians with 
fair scoring opportunities on measures meaningful to their practices. 
We will continue to monitor the impact of this policy and the status of 
topped out measures and amend them through notice and comment 
rulemaking in the future, if necessary.
    Comment: Several commenters offered general recommendations to CMS 
concerning topped out measures. One commenter stressed the importance 
of developing new measures to drive improvements in care while another 
recommended that CMS work with interested parties to identify ways to 
maintain topped out measures in the program so that CMS can continue to 
track performance. Another commenter noted that topped out measures 
should not be removed in specialty measure sets, because it penalizes 
specialties with limited reporting options and discourages them from 
investing in the development of new measures. Further, one commenter 
recommended that CMS consider a process for revisiting topped out 
measures that have been removed from the quality inventory, as it could 
encourage renewed focus on patient outcomes that have been 
deprioritized in prior years.
    Response: We agree that development of new measures is essential to 
resolving the problem of limited measure choice. We encourage 
clinicians to engage in the measure development process. For more 
information on how to get involved in the measure development process, 
we direct stakeholders to visit https://mmshub.cms.gov/. Where 
necessary, we maintain topped out measures in MIPS beyond the four-year 
timeline for removal described in the CY 2018 PFS final rule (83 FR 
59761), often to ensure that specialty clinicians have appropriate 
measures to report. We encourage clinicians to participate in our 
notice-and-comment rulemaking measure inventory process to ensure we 
maintain measures that are meaningful to their practices. For measures 
that are topped out, we encourage measure stewards to revise the 
measures to add more stringent or next-step criteria to make the 
measure more robust, thereby building on the original quality measure 
assessment to drive further quality care and likely changing the 
measure's topped out status. Additionally, whether a clinician or a 
group is being assessed for the quality action or not, it should still 
be completed as a matter of high-quality care. Once quality actions 
have become a standard of care, the focus of quality assessment shifts 
to areas where a gap exists. We do not believe it would be appropriate 
to reintroduce quality measures that have been removed from the 
program.
    After consideration of public comments, we are finalizing our 
proposal with modification. We are modifying the language at Sec.  
414.1380(b)(1)(ii)(E) to state, beginning with the CY 2025 performance 
period/2027 MIPS payment year, CMS will publish a list in the Federal 
Register of topped out measures determined to be impacted by limited 
measure choice on a yearly basis. Measures included in the list are 
scored from 1 to 10 measure achievement points according to defined 
topped out measure benchmarks calculated from performance data in the 
baseline period in which a performance rate of 97 percent corresponds 
to 10 percent of the performance threshold for the corresponding 
performance year. Unlike our proposal, this revised language will 
include the 9th decile in the scoring range to corresponding scores 
with a performance rate of 99 percent.
(ii) Approach for Determining Topped Out Measures Impacted by Limited 
Measure Choice and Subject to the Defined Topped Out Measure Benchmark 
and the List of Measures That Will Be Subject to the Defined Topped Out 
Measure Benchmark for the CY 2025 Performance Period/2027 MIPS Payment 
Year
    In the CY 2025 PFS proposed rule, we proposed that we would 
annually determine and publish a list of topped out measures that will 
have the 7-point cap removed and be subject to the proposed defined 
topped out measure benchmark. To identify which topped out measures 
would be added to the list, we proposed that we would review each 
specialty measure set by collection type and identify if the prevalence 
of topped out measures within such a set hinders a clinician's ability 
to successfully participate in the MIPS quality performance category. 
To make such a determination, we would analyze the ability of 
clinicians reporting the specialty measure sets under review to 
reasonably achieve 75 percent of available quality achievement points 
based upon the measures available to them and program requirements. As 
stated, the analysis would be conducted for each specialty measure set 
and will be further broken down by collection type. At the collection 
type level, each measure will be assigned points based upon the current 
benchmarking data: new measures receive 7 or 5 points based on year in 
the program, measures with benchmarks are given points based upon the 
highest decile achievable with a less than perfect score (less than 100

[[Page 98433]]

percent or greater than 0 percent for inverse measures), and measures 
with no available historic benchmark are given 0 points. All measure 
set points would be added together to get an output of scoring 
potential; the Medicare Part B claims collection type measure sets have 
an additional 6 points added to the output to account for the small 
practice bonus. The sum of quality achievement points for each measure 
set would be compared to the analysis threshold, which is currently 75 
percent of available quality achievement points, based upon number of 
available measures. Any measure sets that are not able to meet or 
exceed the threshold will be flagged as `at-risk.' Additional factors 
that we will take into consideration would include whether:
     A measure within the specialty measure set is considered a 
cross cutting measure;
     A measure within the specialty measure set is a broadly 
applicable measure, which we would consider to be a measure included in 
three or more specialty sets; and
     There are more than ten measures, by collection type, 
available in the specialty set.
    Table 82 contains the list of measures that meet the criteria 
specified above and for which we proposed to apply the defined topped 
out measure benchmark for the CY 2025 performance period/2027 MIPS 
payment year. Specialty measure sets impacted by limited measure choice 
include those for Pathology, Anesthesiology, Diagnostic Radiology, and 
Radiation Oncology.

[[Page 98434]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.136

    We solicited comment on the proposed approach that we would use 
each year to identify the list of measures subject to the defined 
topped out measure benchmark, as well as the proposed list of topped 
out measures impacted by limited measure choice and subject to defined 
topped out measure benchmark for CY 2025 performance period/2027 MIPS 
payment year.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters supported the proposed approach for 
determining topped out measures that would not be subject to the 7-
point cap. Commenters noted that the proposed approach would address 
concerns that providers are being unfairly penalized for MIPS scoring 
due to a dearth of measures to report.
    Response: We thank commenters for their support.
    Comment: Several commenters expressed concern or did not support 
the proposed approach for determining topped out measures, citing 
limited quality or specialty-specific measure choice as a result of 
measures being topped out and putting specialists, particularly 
subspecialists, at a disadvantage due to limited measure availability. 
One commenter did not

[[Page 98435]]

support the topped out measure methodology, because they believed that 
the proposed quantitative level does not consider clinical relevance of 
the measure or volume of Medicare services it impacts.
    Response: For the CY 2025 performance period/2027 MIPS payment 
year, we set 75 percent as the quantitative level according to the 
performance threshold of 75 points discussed in section IV.A.4.g.(2)(c) 
of this final rule. We will continue to set the quantitative level for 
identifying topped out measures subject to the defined topped out 
measure benchmark in relation to the performance threshold to ensure 
clinicians with limited choice will not be penalized as it rises. This 
is an effective first step in addressing the scoring constraints of 
limited measure choice. Additionally, we consider clinical relevance in 
the maintenance of the quality measure inventory and regularly maintain 
topped out measure in MIPS based on their relevance to participants. We 
encourage interested parties to engage in the development of measures 
that are meaningful to their practice. For more information, see visit 
https://mmshub.cms.gov/. Additionally, we will continue to revisit our 
scoring policies and propose policies that alleviate concerns about 
scoring and measure selection constraints.
    Comment: Many commenters offered recommendations to CMS on 
additional topped out measures that CMS should include in the proposed 
list of topped out measures that would be subject to the topped out 
measure benchmark. Several commenters recommended that CMS include all 
the measures in the MIPS Hospitalist Specialty Set in the list of 
proposed topped out measures for the CY 2025 performance period. These 
commenters believed that the hospitalist specialty measure set should 
be included, because out of four measures in the set, three of them are 
capped at 7 points. A few commenters recommend that CMS remove the 7-
point cap for QCDR measures that are topped out, citing that the 7-
point cap for QCDR measures will disproportionately impact specialists 
and subspecialists. One commenter specifically recommended the topped 
out measure policy should extend to QCDR measures, such as 
anesthesiologist measure sets that are approaching or have approached 
topped out measure status. A few commenters recommended developing new 
measures for radiology given the lack of other measures and current 
gaps. Further, a few commenters requested that CMS reevaluate the 
occupational therapy (OT) and physical therapy (PT) specialty set 
measures, citing that these measures are increasingly being topped out.
    Response: Topped out measures in the Hospitalist and occupational 
therapy (OT) and physical therapy (PT) specialty sets were not proposed 
for application of the defined topped out measure benchmark because 
they are cross-cutting or broadly applicable. QCDR measures were not 
included in the scope of this policy because they are governed by 
policy at Sec.  414.1400(b)(4)(iii)(C) stating that CMS may revoke a 
measure's second year approval if identified as topped out. We 
encourage interested parties to engage in the development of measures 
that are meaningful to their practice. For more information, see visit 
https://mmshub.cms.gov/.
(iii) Complex Organization Adjustment for Virtual Groups and APM 
Entities
    Section 1848(q)(5)(B)(ii)(I) of the Act requires the Secretary to 
encourage MIPS eligible clinicians to report on applicable quality 
measures through the use of Certified Electronic Health Record 
Technology (CEHRT) and qualified clinical data registries. Section 
1848(q)(5)(B)(ii)(II) of the Act provides that the Secretary shall 
treat such clinicians as satisfying the clinical quality measures 
reporting requirement described in section 1848(o)(2)(A)(iii) of the 
Act if they report such measures through the use of such EHR technology 
for a given performance period.\877\ In the CY 2017 Quality Payment 
Program final rule (81 FR 77297), we established the measure bonus 
point and bonus cap for using CEHRT for end-to-end electronic 
reporting. We refer readers to Sec.  414.1380(b)(1)(v)(B) for our 
previously finalized policies regarding measure bonus points for end-
to-end electronic reporting.
---------------------------------------------------------------------------

    \877\ Section 1848(o)(2)(A)(iii) of the Act requires a 
meaningful EHR user to demonstrate to the satisfaction of the 
Secretary that the eligible professional, among other things, has 
not knowingly and willfully taken action to limit or restrict the 
compatibility or interoperability of the certified EHR technology.
---------------------------------------------------------------------------

    In the CY 2022 PFS final rule, we finalized our proposal to end 
measure bonus points for end-to-end electronic reporting. We noted that 
as we move to MVPs we are simplifying scoring by removing many of the 
transition policies that we established in the early years of the 
program in order to develop a stronger MVP program and promote 
alignment between MIPS and MVPs. As stated in previous rulemaking, we 
are working to develop ways to encourage the use of CEHRT for 
electronic reporting without offering measure bonus points. We stated 
that we believed that we could fulfill the statutory requirement at 
section 1848(q)(5)(B)(ii)(I) of the Act to encourage the usage of 
CEHRT, through other means. Accordingly, over the past few years, we 
have reduced the availability and limited who can submit data for the 
Medicare Part B claims collection type to only small practices noting 
that the Medicare Part B claims collection type is not an electronic 
means of submission.
    Satisfying quality reporting requirements is not equally attainable 
for each MIPS eligible clinician or entity in the Quality Payment 
Program. As the Quality Payment Program and its components (MIPS and 
Advanced APMs) has matured, reliance on and subsequent requirements 
necessitating the use of CEHRT have increased (88 FR 79331). Virtual 
groups and APM Entities may experience administrative and technological 
barriers to electronic reporting, including challenges aggregating 
patient data from multiple TINs, data deduplication, and 
interoperability between different health IT/EHR systems. In the CY 
2018 Quality Payment Program final rule, commenters indicated that data 
aggregation across multiple TINs for virtual groups would be burdensome 
for rural and small practices and that this burden could be prohibitive 
for virtual groups' successful participation in MIPS (82 FR 53610). 
Commenters stated that the requirement for virtual groups to aggregate 
data from individual clinicians could be a potential barrier for 
virtual group participation and would likely be error prone (82 FR 
53610). Commenters noted that the potential penalty for failure to 
overcome technical challenges in data aggregation was, at that time, a 
5 percent decrease to the payment adjustment for TINs that are already 
operating on small margins (82 FR 53610). Commenters noted that the 
aggregation of data across various TINs using health IT systems may be 
logistically difficult and complex, as groups and health IT systems 
have different ways of collecting and storing data and stated that data 
aggregation across various systems for measures and activities under 
each performance category may not be possible if qualified registries 
do not have the option to assist virtual groups (82 FR 53610). 
Additionally, commenters stated that practices already have an issue of 
not being able to deduplicate patient data across different health IT 
systems/multiple EHRs and indicated that virtual groups need clear 
guidelines regarding how to achieve accurate reporting (82 FR 53613).

[[Page 98436]]

    Furthermore, commenters expressed concerns that registries 
supporting virtual group reporting would be opening themselves to 
potential penalties as a result of technical challenges in data 
aggregation across multiple EHR systems (82 FR 53610). The commenters 
indicated that registries may not be able to support virtual group 
reporting due to legal and operational complexity. Certain registries 
have internal data governance standards, including patient safety 
organization requirements, that they must follow when contracting with 
single TIN participants that may complicate their ability to support 
virtual group reporting due to necessary legal agreements between solo 
practitioners and small groups within a virtual group (82 FR 53611). 
Commenters requested that CMS provide guidance to registries regarding 
how to handle data sharing among virtual groups with respect to patient 
safety organization requirements and provide guidance regarding the 
expectations for registries supporting virtual group reporting (82 FR 
53611).
    APM Entities are organizations that participate in CMS's various 
APMs, including the Medicare Shared Savings Program and CMS Innovation 
Center models. APM Entities face similar organizational challenges 
reporting eCQMs because of their complex structures, new and innovative 
partnerships under their respective APMs, and utilization of multiple 
EHR technologies across participants (88 FR 79097). For ACOs in the 
Shared Savings Program, and ACOs and other large organizations in CMS 
Innovation Center models, these issues are further exacerbated by scale 
and patient volume, as discussed in more detail further in this 
section. In the CY 2023 PFS proposed rule, commenters noted for ACOs 
participating in the Shared Savings Program reporting all payer/all 
patient eCQMs/MIPS CQMs there are issues related to meeting all-payer 
data requirements, data completeness requirements, and data aggregation 
(87 FR 69837). ACOs also noted the financial burden of aggregating, 
deduplicating, and exporting eCQM data across multiple TINs and EHRs 
(88 FR 79097). In addition, as summarized in the CY 2024 PFS final 
rule, commenters noted that the current state of data standards and 
interoperability do not yet fully enable Shared Saving Programs ACOs to 
meet the eCQM reporting requirements successfully and encouraged CMS to 
continue working with providers to facilitate the transition to all-
payer/all-patient measures even as/if the provider or ACO chooses to 
report Medicare CQMs (88 FR 79107). In the CY 2024 PFS final rule (88 
FR 79098), we stated that our long-term goal continues to be to support 
Shared Savings Program ACOs in the adoption of all payer/all patient 
measures and transition to digital quality measurement reporting. These 
challenges also can be faced by other large APM Entities participating 
in CMS Innovation Center models.
    Additionally, APM Entities in CMS Innovation Center models, 
regardless of size, are participating in innovative payment and 
delivery designs through which they may forging new partnerships among 
different providers and provider types to provide care to attributed 
beneficiaries to meet the APM's care delivery requirements. For 
example, the Making Care Primary (MCP) Model includes several payment 
innovations to support participants in delivering advanced primary care 
and aims to strengthen coordination between patients' primary care 
clinicians, specialists, social service providers, and behavioral 
health clinicians, ultimately leading to chronic disease prevention, 
fewer emergency room visits, and better health outcomes. The model will 
operate through three progressive tracks, with the first track being 
designed for organizations with no prior value-based care experience. 
Additionally, the model includes State partnerships and multi-payer 
alignment objectives. Participation in this model will involve forming 
new relationships to provide whole-person care to beneficiaries, which 
is likely to necessitate bridging data across multiple technologies and 
involve new and complex administrative burdens in the provision of this 
advanced primary care.
    Based on our assessment and understanding over the past 2 years, we 
have learned that there are complexities and challenges for virtual 
groups and APM Entities in adopting all-payer/all-patient collection 
types, and as a result, the widespread adoption of the all-payer/all 
patient collection types requires further time and support. We have 
come to understand that further support is needed for complex 
organizations. As an example, Shared Saving Program ACOs provide a high 
volume of services, particularly those related to preventative 
screening measures. An internal analysis of performance year 2022 
submission data indicates that Shared Savings Program ACOs reported on 
33 times more denominator eligible patients for eCQM 001--Diabetes: 
HbA1c Poor Control (>9 percent), 53 times more denominator eligible 
patients for eCQM 134--Preventative Care and Screening: Screening for 
Depression and Follow-Up Plan, and 25 times more denominator eligible 
patients for eCQM 236--Controlling High Blood Pressure than other MIPS 
reporters. In performance year 2022, one ACO reported on over 700,000 
denominator eligible beneficiaries for a single eCQM.
    The requirement to aggregate patient data collected across multiple 
health records into a single data stream before sending to CMS poses 
administrative challenges and the need for additional resources for 
virtual groups and APM Entities, including Shared Savings Program ACOs. 
Additionally, data deduplication is resource intensive and requires the 
development of new workflows to ensure accuracy. Stakeholders have also 
noted that patient files exist in multiple, disparate EHRs since each 
EHR system may collect and store data differently. This is important as 
moving to reporting eCQMs requires building new processes to fill data 
gaps and ensure data accuracy and causes participants often to 
customize workflows for data processing, such as using Quality 
Reporting Document Architecture (QRDA) I (individual patient) and QRDA 
III (measured entity's aggregate) data submission approaches for 
quality reporting. EHR vendors have also expressed concerns regarding 
the need for more time to develop new features that can facilitate eCQM 
reporting processes. Some interested parties have also voiced concerns 
that clinician specialty or patient population could yield lower 
quality scores when reporting eCQMs and create resistance to switching 
to this collection type.
    We noted in the CY 2024 PFS final rule that a few commenters agreed 
that Medicare CQMs would address most of ACOs' concerns regarding all 
payer/all patient reporting in the Shared Saving Program, such as 
difficulties reporting for those ACOs with a higher proportion of 
specialty practices or groups with multiple EHRs, beneficiaries with no 
primary care relationship, and shouldering a greater burden when 
matching and deduplicating patient records (88 FR 79101). Other 
commenters noted Medicare CQMs reduce concerns about specialists 
reporting on primary care focused measures. Commenters shared that 
Medicare CQMs were responsive to several key concerns raised by Shared 
Savings Program ACOs regarding feasibility of implementing eCQMs/MIPS 
CQMs, including equity concerns (88 FR 79101). However, we maintain 
that consistent with section 1848(q)(5)(B)(ii)(I) of the Act we support

[[Page 98437]]

and encourage providers as they perform any necessary bridging of data 
across multiple technologies, which can involve new and complex 
administrative burdens.
    To account for the organizational complexities faced by Virtual 
Groups and APM Entities, including ACOs in the Shared Savings Program, 
we proposed to establish a Complex Organization Adjustment beginning in 
the CY 2025 performance period/2027 MIPS Payment Year. Virtual Group 
and APM Entities would receive 1 measure achievement point for each 
submitted eCQM that meets the data completeness at Sec.  
414.1380(b)(1)(iii) and case minimum requirements at Sec.  414.1340. 
Each reported eCQM may not receive more than 10 measure achievement 
points and the total achievement points (numerator) may not exceed the 
total available measure achievement points (denominator) for the 
quality performance category. The Complex Organization Adjustment for a 
Virtual Group or APM Entity may not exceed 10 percent of the total 
available measure achievement points in the quality performance 
category. The adjustment would be added for each eCQM measure submitted 
at the individual measure level.
    Adding one point for each eCQM would help complex organizations to 
overcome barriers to reporting eCQMs while not masking overall quality 
performance. By limiting the Complex Organization Adjustment to Virtual 
Groups and APM Entities, we can limit scoring inflation and target this 
intervention to those facing challenges to eCQM implementation. 
Moreover, while acknowledging the Complex Organization Adjustment is a 
recognition of current challenges to eCQM reporting we believe that 
adoption of approaches to the exchange and aggregation of quality data 
enabled by Fast Healthcare Interoperability Resources (FHIR) 
Application Programing Interfaces (APIs) will reduce or eliminate the 
barriers posed by organizational complexities to eCQM reporting and 
will revisit and end this Adjustment as uptake of capabilities for 
quality data aggregation and exchange using FHIR APIs increases, 
requirements surrounding the use of FHIR APIs for quality data change 
are established, or other barriers posed by organizational complexity 
are otherwise reduced. This adjustment differs from the previous end-
to-end electronic reporting bonus in that it does not merely award 
measure achievement points for reporting but provides an adjustment for 
clinicians facing complex organizational barriers for adopting the eCQM 
collection type.
    We proposed to add Sec.  414.1380(b)(1)(vii)(C) to provide that, 
beginning in the CY 2025 performance period/2027 payment year, a 
virtual group and an APM Entity receives one measure achievement point 
for each eCQM submitted that meets the case minimum requirement at 
paragraph (b)(1)(iii) and the data completeness requirement at Sec.  
414.1340. Each measure may not to exceed 10 measure achievement points. 
The total adjustment to the Virtual Group or APM Entity's quality 
performance category score under this paragraph may not exceed 10 
percent of the total available measure achievement points. Accordingly, 
we proposed to update Sec.  414.1380(b)(1)(vii) to state a MIPS 
eligible clinician's quality performance category score is the sum of 
all the measure achievement points assigned for the measures required 
for the quality performance category criteria plus the measure bonus 
points in paragraph (b)(1)(v) and Complex Organization Adjustment in 
paragraph (b)(1)(vii)(C). The sum is divided by the sum of total 
available measure achievement points. The improvement percent score in 
paragraph (b)(1)(vi) is added to that result. The quality performance 
category score cannot exceed 100 percentage points.
    We solicited comment on our proposal to implement a Complex 
Organization Adjustment for virtual groups and APM Entities, including 
ACOs in the Shared Savings Program.
    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters supported the proposed complex 
organization adjustment for virtual groups and APM entities. These 
commenters believed that this would promote eCQM adoption and address 
the unique challenges that virtual groups and APM entities experience 
in reporting eCQMs. One commenter also believed that the proposal would 
help ease the transition for ACOs as they familiarize themselves with 
eCQM reporting tools and implement new processes to improve performance 
on eCQMs. Another commenter supported the proposal on the condition 
that CMS maintain the option to report Medicare CQMs.
    Response: We thank commenters for their support.
    Comment: Many commenters recommended that CMS expand the complex 
organization adjustment to all MIPS participants reporting eCQMs and 
any clinician or practice that uses multiple EHRs or practices at 
multiple sites rather than restricting the policy to virtual groups and 
APM entities. These commenters noted that individual clinicians and 
group practices also face challenges in reporting eCQMs and aggregating 
data across disparate EHR platforms. Therefore, these commenters 
believed that these entities should also receive the adjustment. One 
commenter requested clarification on the proposed complex organization 
adjustment, specifically requesting that CMS provide a transparent 
definition of ``complex organization'' and information on how an 
organization is determined to be a complex organization. A few 
commenters specifically discussed the proposal's potential impacts on 
small practices. These commenters recommended that CMS expand the 
adjustment to small practices as they face disproportionate barriers to 
reporting of eCQMs. Another commenter encouraged CMS to ensure that the 
costs of complying with the requirements are not disproportionately 
borne by APM participants in small practices who may struggle to cover 
the costs associated with aggregating patient data across systems. A 
few commenters recommended that the proposed complex organization 
adjustment should be broadened beyond eCQM reporting and also offered 
to entities reporting Medicare CQMs and MIPS CQMs.
    Response: At this time, we are defining complex organizations as 
virtual groups and APM Entities including Shared Saving Program ACOs. 
In order to facilitate their participation in the Quality Payment 
Program, these organizations' compositions require structures that are 
complex or are participating in innovative payment models that require 
flexibility in forming their structures, posing the challenges to data 
aggregation, deduplication and interoperability across multiple EHRs/
health IT vendors. This differs from other types of organizations that 
do not by nature necessitate these complex, innovative compositions. 
This adjustment is to offset the challenges associated with adoption of 
eCQMs because of the organizational complexity required by definition 
of virtual groups and APM Entities and is therefore not appropriate for 
other types of participants or collection types such as MIPS CQMs or 
Medicare CQMs. Small practices in MIPS currently receive a small 
practice bonus of 6 measure achievement points added to the quality 
performance category if they submit at least one

[[Page 98438]]

measure in the performance category. Small practices that are APM 
Entities or virtual groups would receive the small practice bonus in 
addition to the Complex Organization Adjustment. We will continue to 
monitor the interaction of these policies as well their impacts on 
small practices.
    Comment: A few commenters expressed concern about the proposed 
complex organization adjustment. These commenters believed that the 
complex organization adjustment is insufficient to offset the 
significant challenges that APM entities, specifically ACOs, continue 
to face. Additionally, commenters expressed skepticism that the 
proposal would increase eCQM reporting since it does not address 
underlying concerns related to data interoperability and aggregation. A 
few commenters recommended that CMS address the underlying technology 
infrastructure and interoperability concerns that virtual groups, ACOs, 
and other entities experience. Further, a few commenters stated that 
scoring adjustments do not address barriers to aggregating and 
reporting data across multiple EHRs nor do they solve concerns with 
data validity and reliability when reporting eCQMs. These commenters 
also stated that adding bonus points to quality scores makes it 
difficult to track and improve quality over time. Another commenter had 
concerns that the adjustment would not fully address difficulties 
encountered by large physician groups, particularly if the 10-point cap 
per measure is too limiting.
    Response: We thank commenters for their feedback. In response to 
comments that the proposal does not solve the underlying concerns with 
data validity and reliability when reporting eCQMs we acknowledged in 
our proposal that the requirement to aggregate patient data collected 
across multiple health records into a single data stream before sending 
to CMS poses administrative challenges and the need for additional 
resources for virtual groups and APM Entities, including Shared Savings 
Program ACOs. We also acknowledged that data deduplication is resource 
intensive and requires the development of new workflows to ensure 
accuracy. We will continue to work with interested parties to resolve 
this issue. In adding one point for each eCQM would help complex 
organizations to overcome structural barriers to reporting eCQMs. In 
limiting the application to virtual groups and APM Entities and capping 
the adjustment to 10 percent of the total achievable points in the 
quality performance category, the Complex Organization Adjustment will 
serve to help these participants overcome barriers to eCQM reporting 
while reducing scoring inflation. We will monitor the impact of this 
policy and make amendments where necessary. Additionally, MIPS CQMs 
will be available to report in the APP Plus measure set for an 
additional two years as discussed in section III.G.4.b.(2)(b). of this 
final rule. Furthermore, we believe that the adoption of approaches 
leveraging FHIR APIs for quality data aggregation and exchange will 
reduce or eliminate the barriers posed by organizational complexities 
to eCQM reporting and will revisit and end this Adjustment as uptake of 
FHIR APIs for these purposes increases, requirements surrounding the 
use of FHIR APIs are established, or other barriers posed by 
organizational complexities are otherwise reduced.
    After consideration of public comments, we are finalizing our 
proposal to add Sec.  414.1380(b)(1)(vii)(C) to provide that, beginning 
in the CY 2025 performance period/2027 payment year, a virtual group 
and an APM Entity receives one measure achievement point for each eCQM 
submitted that meets the case minimum requirement at paragraph 
(b)(1)(iii) and the data completeness requirement at Sec.  414.1340. 
Each measure may not to exceed 10 measure achievement points. The total 
adjustment to the virtual group or APM Entity's quality performance 
category score under this paragraph may not exceed 10 percent of the 
total available measure achievement points. Additionally, we are 
finalizing our proposal to update Sec.  414.1380(b)(1)(vii) to state a 
MIPS eligible clinician's quality performance category score is the sum 
of all the measure achievement points assigned for the measures 
required for the quality performance category criteria plus the measure 
bonus points in paragraph (b)(1)(v) and Complex Organization Adjustment 
in paragraph (b)(1)(vii)(C). The sum is divided by the sum of total 
available measure achievement points. The improvement percent score in 
paragraph (b)(1)(vi) is added to that result. The quality performance 
category score cannot exceed 100 percentage points
(c) Scoring the Quality Performance Category Through MIPS for ACOs in 
the Shared Saving Program
(i) Score for Shared Savings Program ACOs Reporting Medicare CQMs Using 
Flat Benchmarks
    In section III.G.4.c.(2)(c) of this final rule we proposed to score 
Shared Savings Program ACOs reporting Medicare CQMs in the APP Plus 
quality measure set using flat benchmarks for their first 2 performance 
periods in MIPS. Consistent with this discussion, we proposed to add 
Sec.  414.1380(b)(1)(ii)(F) to state that beginning in the CY 2025 
performance period/2027 MIPS payment year, measures of the Medicare CQM 
collection type will be scored using flat benchmarks for their first 2 
performance periods in MIPS. We solicited comment on our proposal to 
score Medicare CQMs using flat benchmarks for their first two 
performance periods in MIPS.
    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses. We refer readers 
to section III.G.4.c.(2)(c) of this final rule for a summary of 
comments and our responses.
    After consideration of public comments, we are finalizing the 
addition of Sec.  414.1380(b)(1)(ii)(F) to state that beginning in the 
CY 2025 performance period/2027 MIPS payment year, measures of the 
Medicare CQM collection type will be scored using flat benchmarks for 
their first 2 performance periods in MIPS.
(d) Cost Performance Category Score
(i) Scoring the Cost Performance Category Background
    As discussed previously, to calculate a final score for each MIPS 
eligible clinician for the performance period of an applicable MIPS 
payment year, section 1848(q)(5)(A) of the Act requires that we must 
develop a methodology for assessment of the total performance of each 
MIPS eligible clinician, according to the performance standards we have 
established in accordance with section 1848(q)(3) of the Act, with 
respect to applicable measures and activities specified for each 
performance category. For the final score, we must use a scoring scale 
of 0 to 100.
    We refer readers to Sec. [thinsp]414.1380(b)(2) for our policies 
regarding scoring for the cost performance category and to previous 
rules where these policies were finalized, including the CY 2017 
Quality Payment Program final rule (81 FR 77308 through 77311), the CY 
2018 Quality Payment Program final rule (82 FR 53748 through 53752), 
the CY 2019 PFS final rule (83 FR 59856), the CY 2021 PFS final rule 
(85 FR 84877 through 84880), the CY 2022 PFS final rule (86 FR 65507 
through 65509), the CY 2023 PFS final rule (87 FR 70091 through 70093), 
and the CY 2024 PFS final rule (88 FR 79369 through 79373).
    In the CY 2025 PFS proposed rule (89 FR 62083 through 62088), we 
proposed to: (1) modify the benchmark

[[Page 98439]]

methodology for scoring measures specified for the cost performance 
category beginning with the CY 2024 performance period/2026 MIPS 
payment year; and (2) adopt a new cost measure exclusion policy 
beginning with the CY 2025 performance period/2027 MIPS payment year.
(ii) Benchmark Methodology for Scoring the Cost Performance Category
(A) Background on Methodology for Scoring the Cost Performance Category
    Under Sec. [thinsp]414.1350(a), we specify cost measures for a 
performance period to assess the performance of MIPS eligible 
clinicians on the cost performance category. Under Sec.  
414.1380(b)(2), we score each MIPS eligible clinician \878\ on each 
cost measure attributed to them in accordance with Sec.  414.1350(b) so 
long as the MIPS eligible clinician meets the minimum case volume 
specified under Sec.  414.1350(c) to be scored on that cost measure. 
Cost performance category measures are attributed to MIPS eligible 
clinicians through, and scored based on, claims data; we do not require 
MIPS eligible clinicians to submit any additional data on cost measures 
to CMS (Sec.  414.1325(a)). We have codified our cost performance 
category scoring policies at Sec.  414.1380(b)(2).
---------------------------------------------------------------------------

    \878\ The term MIPS eligible clinician is defined in Sec.  
414.1305 as including a group of at least one MIPS eligible 
clinician billing under a single tax identification number. A cost 
measure therefore may be attributed to a group that includes at 
least one MIPS eligible clinician and the group may therefore be 
scored on the cost performance category as a whole. We refer readers 
to our policies governing group reporting and scoring under MIPS as 
set forth at Sec.  414.1310(e).
---------------------------------------------------------------------------

    Specifically, we finalized at Sec.  414.1380(b)(2) that we will 
score each cost measure attributed to a MIPS eligible clinician 
(meeting or exceeding the minimum case volume) by assigning achievement 
points between one and ten based on the MIPS eligible clinician's 
performance on the cost measure during the performance period compared 
to the measure's benchmark. We award the achievement points (including 
partial points) based on which benchmark decile range the MIPS eligible 
clinician's performance on the measure is between. The MIPS eligible 
clinician's cost performance category score (to be added to the final 
score) is the sum (not to exceed 100 percent) of: (1) the total number 
of achievement points earned by the MIPS eligible clinician divided by 
the total number of available achievement points; and (2) the cost 
improvement score, as determined under Sec.  414.1380(b)(2)(iv) (Sec.  
414.1380(b)(2)(iii)). We will not calculate a cost performance category 
score if the MIPS eligible clinician is not attributed any cost 
measures for the performance period because the MIPS eligible clinician 
has not met the minimum case volume as specified at Sec.  414.1350(c) 
for any of the cost measures or a benchmark has not been created for 
any of the cost measures that would otherwise be attributed to the MIPS 
eligible clinician (Sec.  414.1380(b)(2)(v)).
    As set forth at Sec.  414.1380(b)(2)(i), we determine cost measure 
benchmark ranges based on all MIPS eligible clinicians' performance on 
each attributed cost measure during the performance period. We 
determine a benchmark for a cost measure only if at least 20 MIPS 
eligible clinicians are attributed and meet the minimum case volume for 
that measure, as specified at Sec.  414.1350(c). If we cannot determine 
a benchmark for a cost measure because an insufficient number of MIPS 
eligible clinicians had the measure attributed to them (that is, less 
than 20 MIPS eligible clinicians meet the minimum case volume), then we 
will not assign any score for the measure for any MIPS eligible 
clinician (Sec.  414.1380(b)(2)(i) and (v)). We refer readers to our 
prior rulemakings, including the CY 2017 Quality Payment Program final 
rule (81 FR 77308 through 77311), for a detailed discussion of our 
previously finalized policies for determining a benchmark for each cost 
measure and then assignment of achievement points based on comparison 
of a MIPS eligible clinician's performance to that established 
benchmark.
    Specifically, under our current scoring policy at Sec.  
414.1380(b)(2) and benchmark methodology, MIPS eligible clinicians with 
the lowest average cost per episode or beneficiary would be in the top 
decile (Decile 10) and receive the highest number of available 
achievement points (10). On the other end of the spectrum, MIPS 
eligible clinicians with the highest average cost per episode or 
beneficiary would be in the bottom decile (Decile 1) and receive the 
lowest number of achievement points (1). More information about how 
average cost per beneficiary or per episode are calculated and 
translated to MIPS achievement points is available in the 2023 MIPS 
Cost User Guide.\879\
---------------------------------------------------------------------------

    \879\ https://qpp.cms.gov/resources/document/fac61617-20ef-4d31-9f0f-4a0e76620ca3.
---------------------------------------------------------------------------

    Table 83 provides an example of using benchmark deciles along with 
partial achievement points to assign achievement points for a sample 
cost measure under our current methodology. The following formula is 
used to determine the number of partial points awarded to the MIPS 
eligible clinician:
    Benchmark Decile # + [(measure score, expressed as a dollar 
amount--bottom of benchmark decile range)/(top of benchmark decile 
range--bottom of benchmark decile range)] = Cost Measure Achievement 
Points.\880\
---------------------------------------------------------------------------

    \880\ Ibid.

---------------------------------------------------------------------------

[[Page 98440]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.137

    In the CY 2021 PFS final rule (85 FR 84877 through 84880), we 
finalized at Sec.  [thinsp]414.1350(d)(4) the weight of the cost 
performance category to be 20 percent of the MIPS final score for the 
2023 MIPS payment year and at Sec.  [thinsp]414.1350(d)(5) the weight 
of the cost performance category to be 30 percent of the MIPS final 
score for the 2024 MIPS payment year and each subsequent MIPS payment 
year. We noted that such an approach would allow us to reach the 
statutorily required weight of 30 percent by the 2024 MIPS payment year 
(see section 1848(q)(5)(E)(i)(II) of the Act) while reducing the impact 
of experiencing an increase in the weight of the cost performance 
category too much in any single year and providing clinicians with an 
eased gradual and incremental transition starting with the 2023 MIPS 
payment year. Since then, MIPS eligible clinicians have raised concerns 
about cost performance category scoring having a negative impact on 
their final MIPS score. Multiple factors have likely contributed to 
clinician concerns. First, there has been an increase in weight for the 
cost performance category over time. Specifically, due to the COVID-19 
Public Health Emergency (COVID-19 PHE) which ended on May 11, 2023, we 
reweighted the cost performance category's score to zero percent of the 
final score for many MIPS eligible clinicians. We announced on April 6, 
2020 that, due to the COVID-19 PHE, we would apply our extreme and 
uncontrollable circumstances reweighting policies described at Sec.  
414.1380(c)(2)(i) to MIPS eligible clinicians nationwide and extend the 
deadline to submit an application for reweighting the quality, cost, 
improvement activities or Promoting Interoperability reporting 
categories for the CY 2019 performance period/2021 MIPS payment year 
(85 FR 19277 and 19278). Also, for the CY 2020 performance period/2022 
MIPS payment year and the CY 2021 performance period/2023 MIPS payment 
year, we extensively applied our reweighting policies, described under 
Sec.  414.1380(c)(2)(i), to MIPS eligible clinicians nationwide due to 
the COVID-19 PHE.\881\ \882\ As a result, the CY 2022 performance 
period/2024 MIPS payment year was the first MIPS payment year that the 
cost performance category score generally constituted 30 percent of 
MIPS eligible clinicians' final scores (section 1848(q)(5)(E)(i)(II) of 
the Act). Second, the number of cost measures has increased over time, 
and therefore, more MIPS eligible clinicians are being measured on the 
cost performance category and on new measures.
---------------------------------------------------------------------------

    \881\ https://qpp-cm-prod-content.s3.amazonaws.com/uploads/816/2020%20Cost%20Quick%20Start%20Guide.pdf.
    \882\ https://qpp-cm-prod-content.s3.amazonaws.com/uploads/1298/2021%20MIPS%20Cost%20Quick%20Start%20Guide.pdf.
---------------------------------------------------------------------------

    Additionally, based on our calculation of cost performance category 
scores for the CY 2022 performance period/2024 MIPS payment year, we 
observed lower scores for the cost performance category than for the 
quality performance category, even though they each generally 
constitute 30 percent of the final score. Recent analyses of CY 2022 
performance period/2024 MIPS payment year data have identified the 
unweighted mean cost performance category score was 59 out of 100, 
while the unweighted mean score for the quality performance category 
was 74 out of 100. We also note that the unweighted mean scores were 95 
out of 100 for the improvement activities performance category and 94 
out of 100 for the Promoting Interoperability performance category.
    There are several factors that may have contributed to a 
significantly lower score in the cost performance category, compared to 
the other categories. First, measures in the cost performance category 
are scored against a benchmark determined based on average performance 
of all MIPS eligible clinicians during that same performance period 
(Sec.  414.1380(b)(2) introductory text and (b)(2)(i)) rather than a 
benchmark determined based on historical data, which is used, wherever 
possible, for non-administrative claims-based quality measures in the 
quality performance category. Benchmarks determined based on historical 
data for the quality performance category provide MIPS eligible 
clinicians with helpful performance targets in advance of or during the 
performance period. Meanwhile, the performance period benchmarks for 
the cost performance category do not provide MIPS eligible clinicians 
with information about performance targets before or during the 
performance period. However, in the CY 2025 PFS proposed rule, we 
stated that using benchmarks based in the performance period is a 
better approach for the cost performance category than using benchmarks 
based on historical data because different payment policies may apply 
during the historical period than during the performance period, which 
may affect the cost of care for patients treated by MIPS eligible 
clinicians.
    Second, in traditional MIPS (compared to MVP reporting), MIPS 
eligible clinicians are scored on each cost measure for which they are 
attributed and meet the established case minimum and a benchmark can be 
calculated. In the quality performance category, if a MIPS eligible 
clinician

[[Page 98441]]

reports more than the required number of quality measures, we use the 
highest scored outcome measure and then the next highest scored 
measures to reach a total of 6 scored quality measures to calculate the 
clinician's MIPS quality performance category score. The current cost 
benchmark methodology uses a decile range based on linear percentile 
distributions and assigns 5.0 to 6.9 achievement points to clinicians 
with cost measure scores within the 50th to 60th percentiles (Table 
83).
    For the example cost measure presented in Table 83, the cost 
measure median, the 50th percentile, is $969.72. If a MIPS eligible 
clinician's average cost per episode for the measure is $1,104 (about 
$135 above the median), the MIPS eligible clinician's cost falls within 
Benchmark Decile 2, for which the MIPS eligible clinician may receive 
between 2.0 and 2.9 achievement points. We then use the following 
formula to determine the number of partial points awarded to the MIPS 
eligible clinician:
    Benchmark Decile # + [(measure score, expressed as a dollar 
amount--bottom of benchmark decile range)/(top of benchmark decile 
range--bottom of benchmark decile range)] = Cost Measure Achievement 
Points.\883\
---------------------------------------------------------------------------

    \883\ https://qpp.cms.gov/resources/document/fac61617-20ef-4d31-9f0f-4a0e76620ca3.
---------------------------------------------------------------------------

    Based on this partial points calculation formula, the clinician 
would receive 0.3 partial points, resulting in a cost measure score of 
2.3 out of 10 achievement points for the Screening/Surveillance 
Colonoscopy cost measure under this example.
    This score may have the effect of lowering the MIPS eligible 
clinician's final score, as discussed previously. If the MIPS eligible 
clinician is only attributed and scored on this single cost measure and 
does not receive a cost improvement score, then their score for the 
cost performance category would be based on the cost measure's score of 
2.3 out of 10 achievement points. Their score for the cost performance 
category would be 0.23 (2.3/10 = 0.23), equal to the total number of 
achievement points earned by the MIPS eligible clinician divided by the 
total number of available achievement points under Sec.  
414.1380(b)(2)(iii)(A). Based on the final score calculation under 
Sec.  414.1380(c), the contribution of the cost performance category 
score to the final score for this MIPS eligible clinician would be 
equal to the cost performance category score multiplied by the cost 
performance category weight (30 percent if the MIPS eligible clinician 
has not received any reweighting).
    To illustrate how this cost performance category score could lower 
the final score, if this MIPS eligible clinician received perfect 
scores in each of the other three performance categories, based on the 
final score calculation under Sec.  414.1380(c) and the respective 
performance category weights when all four performance categories are 
scored without reweighting, we would use the formula as described 
below. For this example, we have not included the complex patient 
bonus.
    MIPS Final score = [(60/60 x 30 percent for quality) + (2.3/10 x 30 
percent for cost) + (40/40 x 15 percent for improvement activities) + 
(100/100 x 25 percent for Promoting Interoperability)] x 100 = 
76.9.\884\
---------------------------------------------------------------------------

    \884\ In simplified terms, the MIPS Final score = (30 points for 
quality) + (6.9 points for cost) + (15 points for improvement 
activities) + (25 points for Promoting Interoperability) = 76.9 
final score points.
---------------------------------------------------------------------------

    In this example, a MIPS final score of 76.9 for the MIPS eligible 
clinician is just above the 2024 MIPS payment year performance 
threshold of 75. Therefore, under the current cost scoring methodology, 
a MIPS eligible clinician scoring near the median on a cost measure 
would need to score perfectly (or nearly perfectly) within the other 
three performance categories to receive a final score slightly above 
the performance threshold and to avoid a negative payment adjustment. 
The unweighted cost performance category score of 23 out of 100 
noticeably lowers the MIPS eligible clinician's MIPS final score.
(B) Modification to Scoring Methodology for the Cost Performance 
Category Beginning with CY 2024 Performance Period/2026 MIPS Payment 
Year
    In light of the concerns identified with our current cost scoring 
policies, we proposed to modify the methodology for scoring the cost 
performance category beginning with the CY 2024 performance period/2026 
MIPS payment year (89 FR 62085 through 62087). The proposed cost 
scoring methodology would be based on standard deviation, median, and 
an achievement point value that is derived from the performance 
threshold. Specifically, for a MIPS eligible clinician whose average 
costs attributed under a cost measure would be equal to the median cost 
for all MIPS eligible clinicians that had the measure attributed them, 
we would assign an achievement point value equal to 10 percent of the 
performance threshold. For example, for the CY 2024 performance period/
2026 MIPS payment year, the median would have an achievement point 
value of 7.5, based on a performance threshold of 75 as finalized at 
Sec.  414.1405(b)(9)(iii). For each cost measure, the cut-offs for 
benchmark ranges would be calculated based on standard deviations, 
expressed in dollars, from the median.
    The benchmark ranges, the median, and the performance threshold-
derived achievement point values aligned with the median would be 
dynamic and responsive to changes in average costs per episode or 
beneficiary assessed by cost measures and performance thresholds for 
each CY performance period/MIPS payment year. The performance 
threshold-derived point values could change based on the performance 
threshold established for each performance period/MIPS payment year. 
The standard deviations from the median used to determine cutoffs for 
benchmark ranges for each year would be reviewed for any necessary 
updates on an annual basis based on performance across MIPS eligible 
clinicians within the cost performance category and the performance 
threshold established for the performance period/MIPS payment year. We 
would perform analyses when the performance threshold changes to set 
the benchmark ranges. To determine the benchmark ranges, we would 
adhere to the following principles: (1) center the majority of average 
costs per episode or beneficiary around the performance threshold-
derived point value; (2) determine benchmark ranges according to the 
statistical distribution curve of the average cost per episode or 
beneficiary; and (3) distribution of achievement points for cost 
measures should be reflective of overall program performance. We refer 
readers to Table 84 for an example of how the proposed cost scoring 
methodology could be implemented for a specific cost measure when the 
performance threshold is set to 75.

[[Page 98442]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.138

    Continuing with the example of the Screening/Surveillance 
Colonoscopy cost measure, now presented in Table 84 as an example of 
implementation of the proposed cost scoring methodology, the median 
(50th percentile) cost would remain $969.72. Under the proposed cost 
scoring methodology, for the CY 2024 performance period/2026 MIPS 
payment year, a MIPS eligible clinician with a cost per episode equal 
to the median cost of all cases attributed to all MIPS eligible 
clinicians would receive 7.5 achievement points out of 10 possible 
achievement points.
    Using the same example as previously presented in section 
IV.A.4.f.(1)(d)(ii)(A) of this final rule, we would apply the proposed 
cost scoring benchmark methodology as shown in Table 84 to a MIPS 
eligible clinician with an average cost per episode for this measure 
that is $1,104 (about $135 above the median). Based on the analysis of 
data in this example, the standard deviation for the Screening/
Surveillance Colonoscopy cost measure would be $135.35. This value for 
the standard deviation would then be used to calculate the benchmark 
ranges in Table 69 by plugging in this value for the standard deviation 
for each benchmark range. For example, ``Median cost + (1 x $135.35)'' 
would be calculated for ``Median cost + (1 standard deviation)'' for 
the bottom of Benchmark range 6. As shown with the example in Table 84, 
under our proposed cost scoring methodology, the MIPS eligible 
clinician's average cost per episode of $1,104 would fall within 
Benchmark Range 6 for the Screening/Surveillance Colonoscopy cost 
measure, for which the MIPS eligible clinician may receive between 6.0 
and 6.9 achievement points.
    Under our proposal to modify the cost performance category's 
scoring methodology for individual cost measures, we would continue to 
use our established formula to assign partial achievement points:
    Benchmark Range # + [(measure score, expressed as a dollar amount--
bottom of benchmark range)/(top of benchmark range--bottom of benchmark 
range)] = Cost Measure Achievement Points.
    As a result, using the example shown in Table 84, under our 
proposed cost scoring methodology, the MIPS clinician would receive 
6.02 cost measure achievement points (6 + [($1,104--$1,105.07)/
($1,037.40--$1,105.07)] = 6.02). The assignment of 6.02 achievement 
points under the proposed cost scoring methodology would be closer to 
the performance threshold equivalent of 7.5 than the assignment of 2.3 
achievement points under the current cost scoring methodology, as 
discussed in our previous example in section IV.A.4.f.(1)(d)(ii)(A) of 
this final rule.
    In this example, the MIPS eligible clinician's score for the cost 
performance category would be 0.602 (6.02/10 = 0.602), equal to the 
total number of achievement points earned by the MIPS eligible 
clinician divided by the total number of available achievement points 
at Sec.  414.1380(b)(2)(iii)(A). Based on the final score calculation 
at Sec.  414.1380(c), the contribution of the cost performance category 
score to the final score for this MIPS eligible clinician would be 
equal to the cost performance category score multiplied by the cost 
performance category weight (30 percent if the MIPS eligible clinician 
has not received any reweighting).
    If this MIPS eligible clinician received perfect scores in each of 
the other three performance categories, based on the final score 
calculation at Sec.  414.1380(c) and the respective performance 
category weights when all four performance categories are scored 
without reweighting, we would use the formula as described below. For 
this example, we have not included the complex patient bonus.
    MIPS Final score = [(60/60 x 30 percent for quality) + (6.02/10 x 
30 percent for cost) + (40/40 x 15 percent for improvement activities) 
+ (100/100 x 25 percent for Promoting Interoperability)] x 100 = 
88.06.\885\
---------------------------------------------------------------------------

    \885\ In simplified terms, the MIPS Final score = (30 points for 
quality) + (18.06 points for cost) + (15 points for improvement 
activities) + (25 points for Promoting Interoperability) = 88.06 
final score points.
---------------------------------------------------------------------------

    This MIPS final score of 88.06 for the MIPS eligible clinician 
would be well above the 2024 MIPS payment year performance threshold of 
75. The cost performance category score of 60.2 out of 100 would not 
noticeably lower the MIPS eligible clinician's MIPS final score.
    This proposed modification in our scoring methodology for cost 
measures would align the assignment of achievement points for cost 
measures so that clinicians with costs near the measure's 50th 
percentile (median) would not receive a disproportionately low score. 
Based on our analyses utilizing data from the CY 2022 performance 
period/2024 MIPS payment year, this proposed methodology would increase 
the mean cost performance category score (unweighted) for clinicians 
with a cost performance category score from 59 out of 100 to 72 out of 
100 (an increase of

[[Page 98443]]

13 points).\886\ Further, this proposed cost scoring methodology would 
increase the means for each cost measure score by amounts ranging from 
0.04 to 2.52 points. Our analysis showed that, under our proposed 
methodology, with this increase to the mean cost performance category 
score, the mean final score would increase by 3.89 points for MIPS 
eligible clinicians assessed on at least one cost measure and receiving 
a cost performance category score. Under our analysis, our scoring 
methodology would not negatively impact MIPS eligible clinicians whose 
average costs for a specific cost measure are around the median.
---------------------------------------------------------------------------

    \886\ In the CY 2025 PFS proposed rule (89 FR 62086), we stated 
that this proposed methodology would increase the mean cost 
performance category score (unweighted) for clinicians with a cost 
performance category score from 59 out of 100 to 71 out of 100 (an 
increase of 11.9 points). In between the publishing of the CY 2025 
PFS proposed rule (89 FR 62086) and this final rule, updated 
modeling for our regulatory impact analysis (RIA) was performed, and 
we have revised to 72 out of 100 (an increase of 13 points) in this 
final rule to align with the updated RIA modeling.
---------------------------------------------------------------------------

    Specifically, our analysis supports our intended goal for the 
proposed modification to the scoring methodology: MIPS eligible 
clinicians who deliver care at an average cost near the median costs 
for all MIPS eligible clinicians attributed the measure would receive 
scores at, or very close to, the performance threshold-derived score. 
Additionally, this proposed modification would address MIPS eligible 
clinicians' concerns that cost measure scoring negatively impacts their 
final scores more than other performance categories, including 
disparate negative effects for MIPS eligible clinicians who are scored 
on the cost performance category compared to clinicians not scored on 
the cost performance category.
    To codify this policy, we proposed to modify Sec.  414.1380(b)(2) 
to specify that achievement points are awarded based on which benchmark 
range the MIPS eligible clinician's performance on the measure is in 
(89 FR 62087). We also proposed to specify that CMS assigns partial 
points based on where the MIPS eligible clinician's performance falls 
between the top and the bottom of the benchmark ranges. The terms 
``decile'' and ``percentile distribution'' are currently used at Sec.  
414.1380(b)(2) to describe the scoring methodology used to award 
achievement points and assign partial points. However, under the 
proposed methodology, the term ``decile'' no longer accurately 
describes how the benchmark ranges would be constructed. The more 
general term ``benchmark range'' accurately describes both the current 
and the proposed cost scoring methodology, and we therefore proposed to 
modify Sec.  414.1380(b)(2) to use ``benchmark range'' in lieu of 
``decile'' and ``percentile distribution.'' We did not propose any 
modifications to the remainder of the language currently at Sec.  
414.1380(b)(2), which provides that, for each cost measure attributed 
to a MIPS eligible clinician, the clinician receives one to ten 
achievement points based on the clinician's performance on the measure 
during the performance period compared to the measure's benchmark.
    We also did not propose any modifications to the language currently 
at Sec.  414.1380(b)(2)(i), generally governing if and how CMS 
determines a cost measure's benchmark. However, we proposed to codify 
our current cost scoring policy, previously finalized in the CY 2017 
QPP final rule (81 FR 77308 through 77311), with modification by adding 
language at Sec.  414.1380(b)(2)(i)(A). We proposed to specify at Sec.  
414.1380(b)(2)(i)(A) that, for the 2019 through 2025 MIPS payment 
years, CMS determines cost measure benchmark ranges based on linear 
percentile distributions (89 FR 62087).
    We also proposed to codify our proposed benchmarking methodology at 
Sec.  414.1380(b)(2)(i)(B) (89 FR 62087). We proposed to specify at 
Sec.  414.1380(b)(2)(i)(B) that, beginning with the 2026 MIPS payment 
year, for each cost measure, CMS determines 10 benchmark ranges based 
on the median cost of all MIPS eligible clinicians attributed the 
measure, plus or minus standard deviations and that CMS awards 
achievement points based on which benchmark range a MIPS eligible 
clinician's average cost for a cost measure corresponds. We also 
proposed to codify at Sec.  414.1380(b)(2)(i)(B) that, beginning with 
the 2026 MIPS payment year, CMS awards achievement points equivalent to 
10 percent of the performance threshold for a MIPS eligible clinician 
whose average cost attributed under a cost measure is equal to the 
median cost for all MIPS eligible clinicians attributed the measure.
    We received public comments on this proposal. The following is a 
summary of the comments we received on the proposed modification to the 
cost scoring methodology and our responses.
    Comment: Many commenters supported the proposal to modify the cost 
scoring methodology starting with the CY 2024 performance period/2026 
MIPS payment year. These commenters stated their belief that the 
modifications will improve fairness, help address cost performance 
category scoring transparency and predictability, mitigate significant 
variations in cost scores for minimal differences in performance, 
ensure the performance category remains focused on lowering costs, and 
result in a positive impact on cost scores. A few commenters agreed 
that setting the median performance period cost for each measure at 10 
percent of the performance threshold (7.5 points for the CY 2024 
performance period/2026 MIPS payment year) will result in cost measure 
scores more closely aligning with actual and expected MIPS performance 
without negatively impacting final MIPS scores. A few commenters stated 
that the proposed modification would ensure fairer comparison, allowing 
for more accurate and equitable performance assessment across diverse 
health care settings. A few commenters expressed appreciation that the 
proposed modification would better align cost and quality performance 
category scores, prevent the cost performance category from more 
negatively impacting final MIPS scores than the other performance 
categories, and prevent disproportionate negative impacts on those who 
receive cost performance category scores. One commenter stated their 
belief that the proposed scoring changes will help address the 
difficulties associated with parsing out cost data for improvement 
efforts. One commenter stated their belief that the use of standard 
deviations from the median to determine benchmark ranges should better 
align measure scores with statistically significant differences.
    Response: We thank the commenters for their support.
    Comment: While many commenters supported the proposed modifications 
to our cost scoring methodology, many of these commenters requested 
that CMS implement the cost scoring methodology modification starting 
with an earlier performance period than we proposed (before the CY 2024 
performance period/2026 MIPS payment year). The commenters believed the 
current cost scoring methodology to be problematic and therefore 
recommended applying the proposed cost scoring methodology to earlier 
MIPS payment years to prevent low cost performance category scores from 
leading to lower MIPS final scores in those previous MIPS payment 
years. Several commenters stated their belief that problems with the 
cost performance category started with the CY 2022 performance period/
2024 MIPS payment year, when CMS began to score the category once again 
following the COVID-19 pandemic and the cost performance category 
weight increased

[[Page 98444]]

to 30 percent. These commenters recommended that CMS should therefore 
apply this policy retroactively starting with the CY 2022 performance 
period/2024 MIPS payment year or the CY 2023 performance period/2025 
MIPS payment year. The commenters stated their belief that retroactive 
application of this policy is necessary because MIPS eligible 
clinicians scored in the cost performance category for previous years 
are at a disadvantage compared to clinicians not scored on cost 
measures, such as certain specialties or those participating through 
MIPS APMs. One commenter expressed their belief that applying the 
policy retroactively is consistent with section 1871(e)(1)(A)(ii) of 
the Act that provides statutory authority to retroactively apply a 
substantive change in regulation when failure to do so would be 
contrary to the public interest.
    Response: We acknowledge the commenters' recommendation to 
implement the proposed modified policy for scoring cost measures 
earlier than we proposed, beginning with the CY 2022 performance 
period/2024 MIPS payment year or CY 2023 performance period/2025 MIPS 
payment year. Understanding MIPS eligible clinicians' concerns with our 
cost measure scoring policy as previously discussed, we proposed to 
apply modifications to our scoring policy as soon as feasible, 
beginning with the CY 2024 performance period/2026 MIPS payment year 
(89 FR 62085 through 62087).
    In the interest of finality in our MIPS payment adjustment factor 
determinations (especially given the budget neutrality requirement for 
our calculations in aggregate in section 1848(q)(6)(F) of the Act), we 
are unable to reopen determinations for the 2024 MIPS payment year or 
2025 MIPS payment year after this final rule becomes effective. For the 
CY 2022 performance period/2024 MIPS payment year, we have finalized 
our calculation of, and are currently applying to Medicare Part B 
payments, the MIPS payment adjustment factors for each MIPS eligible 
clinician. Changing those payment rates to apply our proposed modified 
cost measure scoring policy would require extensive reprocessing of 
claims, which is not feasible. For the CY 2023 performance period/2025 
MIPS payment year, we already completed our initial calculations of 
MIPS final scores and payment adjustment factors based on our MIPS 
policies in effect for that performance period/MIPS payment year. 
Section 1848(q)(7) of the Act requires that we finalize and notify all 
MIPS eligible clinicians of their final MIPS payment adjustment factors 
for the 2025 MIPS payment year no later than 30 days prior to January 
1, 2025, prior to the effective date of this final rule. Applying new, 
modified scoring policies after we have finalized our calculations for 
the performance period/MIPS payment years, even as we identify and seek 
to apply improvements for future MIPS payment years, is not feasible.
    While some MIPS eligible clinicians may benefit from application of 
this modified cost measure scoring policy to earlier MIPS payment 
years, others may not. Further, MIPS eligible clinicians generally rely 
on the finality of our calculation and application of MIPS payment 
adjustment factors to their Medicare Part B claims during the MIPS 
payment year.
    Comment: Several commenters requested that, if the proposed scoring 
policy cannot be applied retroactively, CMS reweight the cost 
performance category for the CY 2022 performance period/2024 MIPS 
payment year and the CY 2023 performance period/2025 MIPS payment year. 
One commenter stated their belief that CMS has statutory authority 
(section 1848(q)(5)(F) of the Act) and regulatory authority (Sec.  
414.1380(c)(2)(i)(A)(2) and Sec.  414.1380(c)(2)(i)(A)(9)) to reweight 
the cost performance category when there are not sufficient measures or 
flaws in the cost scoring methodology that make it impossible to 
reliably calculate a score for measures to adequately capture and 
reflect performance.
    Response: We decline this request to reweight the cost performance 
category on these bases for the CY 2022 performance period/2024 MIPS 
payment year or the CY 2023 performance period/2025 MIPS payment year. 
In the CY2025 PFS proposed rule (89 FR 62085 through 62087), we 
proposed to modify our methodology for assigning achievement points for 
a MIPS eligible clinician's performance on cost measures relative to 
the measure's benchmark (that is, the average performance of all MIPS 
eligible clinicians attributed the same cost measure during the same 
performance period) to better align the achievement points with our 
performance threshold. We did not note any issues with individual cost 
measures, their respective specifications, or the reliability of the 
cost measure data that would warrant reweighting under these statutory 
and regulatory authorities on the basis of this proposed modification 
to our cost measure scoring policy.
    We did previously conduct an empirical analysis of all cost 
measures for the CY 2022 performance period/2024 MIPS payment year and 
the CY 2023 performance period/2025 MIPS payment year to determine if 
any of the cost measures had been significantly impacted by the COVID-
19 PHE to warrant individual measure exclusion or reweighting of the 
cost performance category. Our empirical analysis identified that only 
the Simple Pneumonia with Hospitalization measure warranted exclusion 
from our calculation of MIPS eligible clinicians' scores under the cost 
performance category. We otherwise did not identify a basis for 
reweighting the cost performance category for all MIPS eligible 
clinicians for the CY 2022 performance period/2024 MIPS payment year 
and the CY 2023 performance period/2025 MIPS payment year. We refer 
readers to our fact sheets for more information about these analyses 
and our findings at: https://qpp.cms.gov/resources/document/b0889301-2116-4844-99f7-3f56f8a3de22 (for the CY 2022 performance period/2024 
MIPS payment year) and https://qpp.cms.gov/resources/document/689a740a-5b23-47e6-8b7d-c448d6d68085 (for the CY 2023 performance period/2025 
MIPS payment year). Based on our analysis, it would not be appropriate 
to reweight the cost performance category.
    Comment: A few commenters encouraged CMS to ensure that there are 
adequate risk adjustments made for high-risk cases and flexibility for 
specialties with inherent cost challenges. Specifically, one commenter 
suggested using states or regions, specialty status, and practice size 
to inform peer groups and consider geographical variability and 
specialty practice differences that are not addressed by using the 
national cost averages.
    Response: We thank the commenters for their recommendation to 
include risk adjustments in cost scoring. We agree that it is important 
for cost measures to include adequate risk adjustment. All MIPS cost 
measures include risk adjustment for patient-level factors and other 
variables. We refer readers to the QPP Explore Measures page (https://qpp.cms.gov/mips/explore-measures?tab=costMeasures) for more 
information about the cost measures currently in use in MIPS, including 
the risk adjustment methodology for each measure. We will continue to 
risk adjust at the specific cost measure level as discussed in the CY 
2025 PFS proposed rule (89 FR 62047) and in section IV.A.4.e.(2)of this 
final rule. At this time, we will not make additional adjustments as 
part of cost performance

[[Page 98445]]

category scoring. The measures used within the cost performance 
category are constructed to identify the differences in clinician 
services provided and specialties as much as possible.
    Comment: A few commenters urged CMS to evaluate and publish the 
results of CMS' future analyses of the impact of the cost scoring 
modification as they are concerned that not every cost measure has a 
normal distribution which could lead to unexpected and undesirable 
results and to ensure equity. One commenter requested that CMS offer 
robust support for physicians adapting to the new cost scoring 
methodology.
    Response: We thank the commenters for their recommendation to 
monitor and publish the impact of the cost scoring methodology 
modification. Our analysis supports our intended goal for the proposed 
modification to the scoring methodology: MIPS eligible clinicians who 
deliver care at an average cost near the median costs for all MIPS 
eligible clinicians attributed the measure would receive scores at, or 
very close to, the performance threshold-derived score. Additionally, 
this proposed modification would address MIPS eligible clinicians' 
concerns that cost measure scoring negatively impacts their final 
scores more than other performance categories, including disparate 
negative effects for MIPS eligible clinicians who are scored on the 
cost performance category compared to clinicians not scored on the cost 
performance category. We release annual QPP Feedback Reports that 
include feedback and publish Public Use Files with additional data 
available for clinicians to review. We would continue to monitor the 
impact of these scoring changes on MIPS eligible clinicians and 
consider making available additional data.
    In response to the request that CMS offer support for adjusting to 
the new cost scoring methodology, we note that clinicians would not 
need to do anything different under this new cost scoring methodology 
since CMS automatically scores cost measures using claims data. 
Additionally, we will make available educational materials to inform 
MIPS eligible clinicians about the new cost scoring methodology 
modifications and their anticipated impact.
    Comment: A few commenters, while supportive of the proposal, 
expressed their belief that it does not resolve core issues of the cost 
performance category, which they believe are: lack of clinical 
relevancy to many clinicians; lack of timely feedback for improving 
performance; the lengthy process for developing new measures; and the 
need for changes to the attribution logic of certain measures. A few 
commenters requested that CMS provide timely and detailed performance 
feedback throughout the performance period (quarterly or at a minimum 
bi-annually) for cost measures to allow clinicians to track and improve 
performance during the performance period.
    Response: We note that the proposed modifications to the cost 
scoring methodology are intended to address cost scoring concerns, as 
previously discussed. While we appreciate the additional feedback, the 
other issues raised are outside of the scope of our proposals for this 
rulemaking. We will consider this feedback as we continue to work to 
improve the cost performance category overall.
    Regarding the commenters' request for timely and detailed feedback 
for MIPS eligible clinicians on their performance in the cost 
performance category, we currently provide annual MIPS Performance 
Feedback that includes information on MIPS eligible clinicians' 
performance for the previous performance period. This feedback 
typically becomes available during the summer in between the 
performance period and the MIPS payment year, which is as soon as 
feasible. We provide these reports on an annual basis, as we calculate 
cost measures following the end of the performance period. This is 
because MIPS cost measure scores are based on national averages and are 
calculated using benchmarks that are derived from cost data from all 
MIPS eligible clinicians, groups, and virtual groups that met the 
measure's case minimum for that performance period. MIPS eligible 
clinicians have episodes of care that begin and end at various times 
throughout the performance period, so to calculate an accurate 
comparison across clinicians, CMS has historically calculated all 
scores following the end of the performance period. Calculating the 
MIPS cost measures during the performance period may provide an 
incomplete indication of how a MIPS eligible clinician is performing. 
We are continuing to work towards providing meaningful and timely 
information on cost measures generally and we recognize the importance 
of providing this information for measures implemented in MIPS.
    Additionally, we post detailed measure specifications that describe 
the attribution methodology and a list of included services so that 
MIPS eligible clinicians can anticipate when they are treating a 
Medicare patient that may be captured by a MIPS cost measure.
    Finally, we note that MIPS eligible clinicians could be rewarded 
for improving on their performance on a cost measure in future years 
based on the improvement scoring methodology, as described in Sec.  
414.1380(b)(2)(iv).
    Comment: One commenter did not support the proposed modification to 
the cost scoring methodology and stated their belief that keeping the 
current cost scoring methodology is a better option to ensure half of 
MIPS eligible clinicians perform well and the other half of clinicians 
perform poorly on the cost performance category. The commenter stated 
that it was their understanding that, in order to create meaningful 
incentives, the goal of MIPS is for roughly half of the industry to 
pass and the other half to fail.
    Response: The proposed cost scoring methodology is intended to 
prevent MIPS eligible clinicians delivering care at an average cost 
near the median cost for all MIPS eligible clinicians attributed a 
measure from being negatively impacted and to address concerns that the 
current cost measure scoring methodology disproportionately lowers 
final scores for clinicians more than other performance categories, 
creating disparate negative impacts for those scored on the cost 
performance category compared to those who are not.
    Since the proposed methodology utilizes the median, around half of 
the clinicians would receive cost measure scores at or above the 
performance threshold equivalent. Both the current and proposed 
methodologies calculate the range of national average costs for all 
MIPS eligible clinicians attributed the cost measure and assign 
achievement points based on how the individual MIPS eligible 
clinician's attributed costs compare to that national range. The 
proposed methodology modifies the assignment of those achievement 
points such that MIPS eligible clinicians performing near the median 
for a cost measure would be more likely to receive a neutral score 
consistent with the performance threshold than a negative score, which 
they would be more likely to receive under the current scoring 
methodology. Some MIPS eligible clinicians will still perform well 
while other MIPS eligible clinicians will still perform poorly on the 
cost performance category. However, under the proposed methodology, the 
MIPS eligible clinicians performing near the median for a cost measure 
will be treated more neutrally, rather than grouped together with those 
performing poorly. This proposal likewise would not impact the budget 
neutrality of the MIPS payment adjustments; it would only address 
issues with the cost

[[Page 98446]]

performance category scoring so that those scored on cost are not 
disadvantaged compared to those not scored on cost.
    After consideration of public comments, we are finalizing our 
proposals to modify our scoring methodology for the cost performance 
category beginning with the CY 2024 performance period/2026 MIPS 
payment year, as proposed. Specifically, we are finalizing that, 
beginning with the 2026 MIPS payment year, for each cost measure, we 
will determine 10 benchmark ranges based on the median cost of all MIPS 
eligible clinicians attributed the measure, plus or minus standard 
deviations, and we will award achievement points based on which 
benchmark range a MIPS eligible clinician's average cost for a cost 
measure corresponds. We also are finalizing as proposed that, beginning 
with the 2026 MIPS payment year, we will award achievement points 
equivalent to 10 percent of the performance threshold for a MIPS 
eligible clinician whose average cost attributed under a cost measure 
is equal to the median cost for all MIPS eligible clinicians attributed 
the measure. We are also finalizing as proposed that achievement points 
are awarded based on which benchmark range the MIPS eligible 
clinician's performance on the measure is in and that we will assign 
partial points based on where the MIPS eligible clinician's performance 
falls between the top and the bottom of the benchmark ranges.
    We are also codifying this modified scoring policy as proposed at 
Sec.  414.1380(b)(2) and 414.1380(b)(2)(i)(B). We are also finalizing 
our proposed amendment to the regulation text at Sec.  414.1380(b)(2) 
to use the term ``benchmark range'' in lieu of ``decile'' and 
``percentile distribution.'' We did not propose any modifications to 
the remainder of the language currently at Sec.  414.1380(b)(2), which 
provides that, for each cost measure attributed to a MIPS eligible 
clinician, the clinician receives one to ten achievement points based 
on the clinician's performance on the measure during the performance 
period compared to the measure's benchmark. We are also finalizing as 
proposed to codify our current cost scoring policy by adding at Sec.  
414.1380(b)(2)(i)(A) that, for the 2019 through 2025 MIPS payment 
years, we determine cost measure benchmark ranges based on linear 
percentile distributions.
(iii) Adoption of Additional Cost Measure Exclusion Policy
(A) Background on Cost Measure Exclusion Policy
    We refer readers to Sec.  414.1380(b)(2)(v)(A) and the CY 2022 PFS 
final rule (86 FR 65507 through 65509) for our previously established 
policy for excluding a single cost measure from a MIPS eligible 
clinician's score for the cost performance category. As described at 
Sec.  414.1380(b)(2)(v)(A), we established that, beginning with the 
2024 MIPS payment year, if data used to calculate a score for a cost 
measure are impacted by significant changes during the performance 
period, such that calculating the cost measure score would lead to 
misleading or inaccurate results, then the affected cost measure is 
excluded from the MIPS eligible clinician's or group's cost performance 
category score. We also established at Sec.  414.1380(b)(2)(v)(A) that 
``significant changes'' are changes external to the care provided, and 
that CMS determines may lead to misleading or inaccurate results. We 
specified at Sec.  414.1380(b)(2)(v)(A) that significant changes 
include, but are not limited to, rapid or unprecedented changes to 
service utilization, and will be empirically assessed by CMS to 
determine the extent to which the changes impact the calculation of a 
cost measure score that reflects clinician performance.
    As described in the CY 2022 PFS final rule (86 FR 65507 through 
65509), we finalized the policy at Sec.  [thinsp]414.1380(b)(2)(v)(A) 
to provide scoring flexibility in instances where changes during a 
performance period impede the effective measurement of cost. We 
identified that there is a need for additional flexibility in 
calculating the scores for cost measures to account for the impact of 
changing conditions that are beyond the control of individual MIPS 
eligible clinicians and groups. We noted that this flexibility would 
allow us to ensure that clinicians are not impacted negatively when 
performance is affected not due to the care provided, but due to 
external factors. We noted that we would determine whether such 
external changes impede the effective measurement of cost by 
considering factors including: The extent and duration of the changes, 
and the conceptual and empirically tested relationship between the 
changes and each measure's ability to accurately capture clinician cost 
performance (86 FR 65508). Empirical testing could include assessing 
whether there are rapid or unprecedented changes to patient case volume 
or case mix, and the extent to which this could lead to misleading or 
inaccurate results (86 FR 65508).
(B) Permit Exclusion of a Cost Measure When Impacted by Errors and When 
Significant Changes Occur Outside of the Performance Period
    In the CY 2022 PFS final rule, for the quality performance 
category, we modified the quality measure exclusion policy at Sec.  
[thinsp]414.1380(b)(1)(vii)(A) to change ``significant changes'' to 
``significant changes or errors'' (86 FR 65492) and to include the 
omission of codes or inclusion of inactive or inaccurate codes to 
provide that for each measure submitted, if applicable, and impacted by 
significant changes or errors prior to the applicable data submission 
deadline at Sec.  [thinsp]414.1325(e), performance is based on data for 
9 consecutive months of the applicable CY performance period. 
Currently, for the cost performance category, we do not include 
``errors'' in addition to ``significant changes'' within our cost 
measure exclusion policy at Sec.  [thinsp]414.1380(b)(2)(v)(A). To 
provide CMS with greater flexibilities to be responsive to any errors 
or significant changes outside of the control of MIPS eligible 
clinicians that negatively impact the ability of specific cost 
measure(s) to assess clinician performance, we proposed in the CY 2025 
PFS proposed rule (89 FR 62087 and 62088) to add a new cost measure 
exclusion policy at Sec.  [thinsp]414.1380(b)(2)(v)(B) similar to the 
quality measure exclusion policy. Additionally, to further align our 
measure exclusion policies among the performance categories, we 
proposed to include ``errors'' for the cost performance category. 
Specifically, we proposed that, beginning with the 2027 MIPS payment 
year, if data used to calculate a score for a cost measure are impacted 
by significant changes or errors affecting the performance period, such 
that calculating the cost measure score would lead to misleading or 
inaccurate results, then the affected cost measure is excluded from the 
individual MIPS eligible clinician's or group's cost performance 
category score.
    For purposes of this cost measure exclusion policy at Sec.  
414.1380(b)(2)(v)(B), we proposed to define ``significant changes or 
errors'' 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 
(89 FR 62088). While we proposed to include ``errors'' within this 
policy for the cost performance category, as the quality performance 
category already

[[Page 98447]]

does, the list of what ``significant changes or errors'' includes would 
differ by performance category to capture differences in how cost 
measures and quality measures are calculated and measured. For 
instance, unlike quality measures for which MIPS eligible clinicians 
generally must submit data to CMS, cost measures are calculated by CMS 
solely based on administrative claims data; and, therefore, should not 
be impacted by reporting errors. However, cost measures could be 
impacted by CMS calculation errors. Further, under our proposed cost 
measure exclusion policy, errors would be external to the care 
provided, and such that CMS determines may lead to misleading or 
inaccurate results that negatively impact the measure's ability to 
reliably assess performance. Under our proposed exclusion policy for 
cost measures, significant changes or errors would include, but 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. Additionally, the 
proposed exclusion policy would not automatically result in cost 
measure exclusion. Instead, we would determine whether there is a 
negative impact from the significant change or error when deciding if a 
cost measure would be excluded.
    Specifically, we proposed that, before applying the proposed cost 
measure exclusion policy, 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. 
It is important to clarify that a change or error would not 
automatically result in measure exclusion, but instead, that we would 
need to determine whether there is a negative impact from the change or 
error that would affect cost measure scoring.
    Because significant changes or errors can have an ongoing impact on 
a measure beyond a single performance period, we proposed that the new 
cost measure exclusion policy at Sec.  414.1380(b)(2)(v)(B) would allow 
us to exclude cost measures when such changes and errors occur outside 
of the performance period, but otherwise affect the performance period. 
For example, if a cost measure is impacted by a coding change or 
guidance that requires substantive changes to a measure, we may not be 
able to modify the measure within one performance period. In such 
circumstances, we may want to exclude the cost measure for the affected 
performance periods due to the ongoing impact on the measure. We would 
ensure that if data used to calculate a score for a cost measure are 
impacted by significant changes or errors affecting one or more 
performance periods delivering misleading or inaccurate results, then 
the affected cost measure could be excluded from the individual MIPS 
eligible clinician's or group's cost performance category score. The 
cost measure should be able to be excluded regardless of when we become 
aware of the issue, when the significant change came into effect, or 
when the error first occurred. Therefore, we proposed that this cost 
measure exclusion policy would address data used to calculate a score 
for a cost measure being impacted by significant changes and errors 
affecting a performance period, even if they do not occur during the 
performance period and also to codify this policy at Sec.  
[thinsp]414.1380(b)(2)(v)(B) (89 FR 62088).
    We proposed that this cost measure exclusion policy would be 
effective beginning with the CY 2025 performance period/2027 MIPS 
payment year so this policy would be in place as soon as feasible.
    This proposal would specify that, beginning with the 2027 MIPS 
payment year, if data used to calculate a score for a cost measure are 
impacted by significant changes or errors affecting the performance 
period, such that calculating the cost measure score would lead to 
misleading or inaccurate results, then the affected cost measure would 
be excluded from the MIPS eligible clinician's or group's cost 
performance category score. We proposed to specify that ``significant 
changes or errors'' are 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 also proposed to specify that significant changes or 
errors would 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 proposed that CMS 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 also proposed to codify this new cost 
measure exclusion policy at Sec.  [thinsp]414.1380(b)(2)(v)(B).
    We received public comments on this proposal. The following is a 
summary of the comments we received on the proposal to adopt a new cost 
measure exclusion policy and our responses.
    Comment: A few commenters supported the proposed cost measure 
exclusion policy as they believe it will prevent unfair cost 
performance category scores. One commenter appreciated that CMS's 
proposed cost measure exclusion policy recognizes the inherent 
difficulties in attribution for cost in the MIPS program, especially 
for lower volume Medicare specialists such as obstetrics.
    Response: We thank the commenters for their support. In the CY 2025 
PFS proposed rule (89 FR 62087 and 62088), we proposed the new cost 
measure exclusion policy to provide greater flexibilities to be 
responsive to any errors or significant changes outside of the control 
of MIPS eligible clinicians that negatively impact the ability of 
specific cost measure(s) to assess clinician performance. This cost 
measure exclusion policy would not address any potential concerns with 
attribution of cost measures in MIPS.
    Comment: A few commenters supported the new cost measure exclusion 
policy but requested that CMS finalize and apply the policy earlier 
than we proposed, beginning with the CY 2023 performance period/2025 
MIPS payment year or the CY 2024 performance period/2026 MIPS payment 
year. A few commenters expressed their belief that there are cost 
measures in use for the CY 2023 performance period/2025 MIPS payment 
year for which this exclusion policy should be applied because they 
have concerns about the data and measure specifications used to 
calculate these measures.
    Response: We acknowledge the commenters' recommendation to 
implement the proposed cost measure exclusion policy earlier than we 
proposed. As previously discussed, we proposed to adopt and apply this 
cost measure exclusion policy as soon as feasible, beginning with the 
CY 2025 performance period/2027 MIPS payment year. We will not apply 
this policy for the CY 2023 performance period/2025 MIPS payment year. 
In the interest of finality in our MIPS payment adjustment factor 
determinations (especially given the budget neutrality requirement for 
our calculations in aggregate in section 1848(q)(6)(F) of the Act), we 
are unable to reopen determinations for the CY 2023 performance period/
2025 MIPS

[[Page 98448]]

payment year after this final rule becomes effective. We have completed 
our initial calculations of MIPS final scores and payment adjustment 
factors based on our MIPS policies in effect for that performance 
period/MIPS payment year. Section 1848(q)(7) of the Act requires that 
we finalize and notify all MIPS eligible clinicians of their final MIPS 
payment adjustment factors for the 2025 MIPS payment year no later than 
30 days prior to January 1, 2025, prior to the effective date of this 
final rule. Applying new, modified policies after we have finalized our 
calculations for the performance period/MIPS payment year, even as we 
identify and seek to apply improvements for future MIPS payment years, 
is not feasible. The CY 2024 performance period/2026 MIPS payment year 
is not impacted by these same barriers as the measures have not yet 
been scored. Therefore, this policy can be implemented beginning in the 
CY 2024 performance period/2026 MIPS payment year. Regarding comments 
about specific cost measures, we note that we would analyze cost 
measures and implement this new cost measure exclusion policy on a 
case-by-case basis beginning with the CY 2024 performance period/2026 
MIPS payment year.
    Comment: One commenter recommended that if a cost measure meets the 
cost measure exclusion policy criteria, CMS replace the cost measure or 
remove it from MIPS for the following performance period. The commenter 
specifically referenced cost measures that the measure steward cannot 
maintain, for which they stated that updates would not be made to the 
specifications to account for changes in billing, coding practices, and 
other influences on the measure.
    Response: We thank the commenter for their recommendation. The 
proposed cost measure exclusion policy only addresses cost measure 
exclusion and is not intended to be used for cost measure removal, for 
which there are separate defined criteria. As discussed further in 
section IV.A.4.e.(2)(d)of this final rule, we are finalizing the cost 
measure removal criteria as proposed and have codified this measure 
removal policy by amending Sec.  [thinsp]414.1350 by adding the cost 
removal criteria in paragraph (e). CMS may remove a cost measure from 
MIPS based on one or more of the factors, which include that a measure 
steward is no longer able to maintain the cost measure. Under the cost 
measure removal policy, if a cost measure is excluded under the 
proposed cost measure exclusion policy and the measure steward can no 
longer maintain the measure, CMS may consider the cost measure for 
removal in future years.
    After consideration of public comments, we are finalizing our 
proposal to adopt a new cost measure exclusion policy, with 
modification. Specifically, we are finalizing that, beginning with the 
2026 MIPS payment year, if data used to calculate a score for a cost 
measure are impacted by significant changes or errors affecting the 
performance period, such that calculating the cost measure score leads 
to misleading or inaccurate results, then the affected cost measure 
will be excluded from the MIPS eligible clinician's or group's cost 
performance category score. We are also finalizing as proposed to 
specify that ``significant changes or errors'' are changes or errors 
external to the care provided. We are also finalizing as proposed to 
specify that CMS will determine whether ``Significant changes and 
errors'' lead to misleading or inaccurate results that negatively 
impact the measure's ability to reliably assess performance. We are 
also finalizing as proposed to specify that significant changes or 
errors will 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 are also finalizing as proposed that CMS will 
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 will lead to 
misleading or inaccurate results that negatively impact the measure's 
ability to reliably assess performance. Lastly, we are finalizing our 
proposal to codify the new cost measure exclusion policy at Sec.  
414.1380(b)(2)(v)(B), with the modification above.
g. MIPS Payment Adjustments
(1) Background
    Section 1848(q)(6)(A) of the Act requires that we specify a MIPS 
payment adjustment factor for each MIPS eligible clinician for a year. 
This MIPS payment adjustment factor is a percentage determined by 
comparing the MIPS eligible clinician's final score for the given year 
to the performance threshold we established for that same year in 
accordance with section 1848(q)(6)(D) of the Act. The MIPS payment 
adjustment factors specified for a year must result in differential 
payments such that MIPS eligible clinicians with final scores above the 
performance threshold receive a positive MIPS payment adjustment 
factor, those with final scores at the performance threshold receive a 
neutral MIPS payment adjustment factor, and those with final scores 
below the performance threshold receive a negative MIPS payment 
adjustment factor.
    For previously established policies regarding our determination and 
application of MIPS payment adjustment factors to each MIPS eligible 
clinician, we refer readers to the CY 2017 Quality Payment Program 
final rule (81 FR 77329 through 77343), CY 2018 Quality Payment Program 
final rule (82 FR 53785 through 53799), CY 2019 PFS final rule (83 FR 
59878 through 59894), CY 2020 PFS final rule (84 FR 63031 through 
63045), CY 2021 PFS final rule (85 FR 84917 through 84926), CY 2022 PFS 
final rule (86 FR 65527 through 65537), CY 2023 PFS final rule (87 FR 
70096 through 70102), and CY 2024 PFS final rule (88 FR 79373 through 
79380).
(2) Establishing the Performance Threshold
(a) Statutory Authority and Background
    As discussed above, to determine a MIPS payment adjustment factor 
for each MIPS eligible clinician for a year, we must compare the MIPS 
eligible clinician's final score for the given year to the performance 
threshold we 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 we 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.
    Sections 1848(q)(6)(D)(ii) through (iv) of the Act provided special 
rules, applicable only for certain initial years of MIPS, for our 
computation and application of the performance threshold for our 
determination of MIPS payment adjustment factors. These special rules 
are no longer applicable for establishing the performance threshold for 
the CY 2025 performance period/2027 MIPS payment year. We refer readers 
to the CY 2024 PFS proposed rule (88 FR 52596) for further information 
on these previously applicable requirements as they explain our prior 
computations of the performance threshold.
    In the CY 2022 PFS final rule (86 FR 65527 through 65532), we 
selected the mean as the methodology for

[[Page 98449]]

determining the performance threshold for the CY 2022 performance 
period/2024 MIPS payment year through CY 2024 performance period/2026 
MIPS payment year. We also established regulation at Sec.  414.1405(g) 
that, for each of the 2024, 2025, and 2026 MIPS payment years, the 
performance threshold would be the mean of the final scores for all 
MIPS eligible clinicians from a prior period. As discussed under 
section IV.A.4.g.(2)(b) of this final rule, we are finalizing our 
proposal to continue using the mean as the methodology for determining 
the performance threshold for the 2027, 2028, and 2029 MIPS payment 
years.
    In the CY 2024 PFS final rule (88 FR 79373 through 79380), we 
established the performance threshold for the CY 2024 performance 
period/2026 MIPS payment year by calculating the mean of the final 
scores for all MIPS eligible clinicians using CY 2017 performance 
period/2019 MIPS payment year data. As further discussed under section 
IV.A.4.g.(2)(c) of this final rule, we are finalizing our proposal to 
continue using the mean of the final scores for all MIPS eligible 
clinicians from the CY 2017 performance period/2019 MIPS payment year 
to establish the performance threshold as 75 points for the CY 2025 
performance period/2027 MIPS payment year.
    For further information on our current performance threshold 
policies, we refer readers to the CY 2017 Quality Payment Program final 
rule (81 FR 77333 through 77338), CY 2018 Quality Payment Program final 
rule (82 FR 53787 through 53792), CY 2019 PFS final rule (83 FR 59879 
through 59883), CY 2020 PFS final rule (84 FR 63031 through 63037), CY 
2021 PFS final rule (85 FR 84919 through 84923), CY 2022 PFS final rule 
(86 FR 65527 through 65532), CY 2023 PFS final rule (87 FR 70096 
through 70100), and CY 2024 PFS final rule (88 FR 79373 through 79380).
    We codified the performance thresholds for each of the first 8 
years of MIPS at Sec.  414.1405(b)(4) through (9). These performance 
thresholds are shown in Table 85.
[GRAPHIC] [TIFF OMITTED] TR09DE24.139

(b) Establishing the Performance Threshold Methodology for the 2027, 
2028, and 2029 MIPS Payment Years
    Section 1848(q)(6)(D)(i) of the Act requires that we 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. That section 
also provides that the Secretary may reassess the selection of the mean 
or median every 3 years. In accordance with section 1848(q)(6)(D)(i) of 
the Act, we proposed in the CY 2025 PFS proposed rule to continue using 
the mean of the final scores for all MIPS eligible clinicians to 
compute the performance threshold for the 2027, 2028, and 2029 MIPS 
payment years (89 FR 62089 through 62091).
    In the CY 2022 PFS final rule (86 FR 65527 through 65532), we 
selected the mean (rather than the median) as the methodology for 
determining the performance threshold for the 2024, 2025, and 2026 MIPS 
payment years. For the CY 2019 performance period/CY 2021 MIPS payment 
year through CY 2021 performance period/2023 MIPS payment year, section 
1848(q)(6)(D)(iv) of the Act required that we methodically increase the 
performance threshold each year to ``ensure a gradual and incremental 
transition'' to the performance threshold we estimated would be 
applicable in the CY 2022 performance period/2024 MIPS payment year. 
Although sections 1848(q)(6)(D)(ii) through (iv) of the Act were no 
longer applicable for establishing the performance threshold for the CY 
2024 performance period/2026 MIPS payment year, these previously 
applicable statutory requirements explained prior computations of the 
performance threshold that impacted our policy considerations for 
establishing the performance threshold for MIPS going forward. Based on 
our review of possible values for the CY 2022 performance period/2024 
MIPS payment year, using the mean as our methodology for setting the 
performance threshold for the CY 2022 performance period/2024 MIPS 
payment year through the CY 2024 performance period/2026 MIPS payment 
year would continue the ``gradual and incremental transition'' that was 
previously required under section 1848(q)(6)(D)(iv) of the Act, as well 
as to provide consistency to our stakeholders. Therefore, we finalized 
the proposal to use the mean as our methodology for setting the 
performance threshold for that 3-year period. We also codified this 
methodology in regulation at Sec.  414.1405(g), providing that, for 
each of the 2024, 2025, and 2026 MIPS payment years, the performance 
threshold will be the mean of the final scores for all MIPS eligible 
clinicians from a prior period as specified.
    At the time of the CY2025 PFS proposed rule, we had data available 
on MIPS eligible clinicians' final scores from the CY 2017 performance 
period/2019 MIPS payment year through CY 2022 performance period/2024 
MIPS payment year, as shown in Table 86. These values represent all 
available computations of mean and median final scores for those 
performance periods/MIPS payment years. As discussed in this section of 
the final rule, we may use

[[Page 98450]]

either the mean or median of the final scores from a prior period for 
computing the performance threshold for the next 3 years, beginning 
with the CY 2025 performance period/2027 MIPS payment year. As 
discussed in the CY 2025 PFS proposed rule, we did not have MIPS 
eligible clinicians' final scores available from performance periods 
after the CY 2022 performance period/2024 MIPS payment year, which may 
inform the performance thresholds for the CY 2026 performance period/
2028 MIPS payment year and CY 2027 performance period/2029 MIPS payment 
year (89 FR 62090). Therefore, we did not include the mean and median 
final scores for the CY 2023 performance period/2025 MIPS payment year 
for consideration as potential performance threshold values for the CY 
2025 performance period/2027 MIPS payment year. As provided in section 
1848(q)(6)(D)(i) of the Act, we must select whether we will use the 
mean or median of MIPS eligible clinicians' final scores from a prior 
period, which we may reassess after 3 years. We assessed these 
selection options based on the data we had available.
[GRAPHIC] [TIFF OMITTED] TR09DE24.141

    As shown in Table 86, using the median final score gives a possible 
range of performance thresholds from 85.17 points to 99.63 points 
(rounded to 85 points and 100 points, respectively). Given our 
performance threshold of 75 points for the CY 2024 performance period/
2026 MIPS payment year, these values would result in an increase of 10 
points to 25 points for the CY 2025 performance period/2027 MIPS 
payment year, and potentially the CY 2026 performance period/2028 MIPS 
payment year and CY 2027 performance period/2029 MIPS payment year. 
Selecting the median of final scores as our methodology would, at a 
minimum, result in a 13 percent increase in the performance threshold 
of 75 points, which we had established for the CY 2022 performance 
period/2024 MIPS payment year through the CY 2024 performance period/
2026 MIPS payment year. Further, as shown in Table 85, 75 points is the 
highest performance threshold we have established for any MIPS payment 
year to date.
    As shown in Table 86, using the mean final score as the methodology 
would yield a possible range of performance thresholds from 74.65 
points to 89.47 points (rounded to 75 points and 89 points, 
respectively). Given our performance threshold of 75 points in the CY 
2024 performance period/2026 MIPS payment year, these values would 
result in an increase of zero to 14 points for the CY 2025 performance 
period/2027 MIPS payment year, and potentially the CY 2026 performance 
period/2028 MIPS payment year and CY 2027 performance period/2029 MIPS 
payment year. Selecting the mean of final scores as our methodology 
would, at a maximum, result in a 19 percent increase in the performance 
threshold of 75 points, which we had established for the CY 2022 
performance period/2024 MIPS payment year through the CY 2024 
performance period/2026 MIPS payment year.
    We aim to incentivize performance improvement while also ensuring 
that it is reflective of true clinician performance. Moreover, where 
possible, it is important to offer stability and consistency for MIPS 
eligible clinicians. After evaluating the possible values for mean and 
median shown in Table 86 and our prior policies for consistently 
selecting a performance threshold value of 75 points for the CY 2022 
performance period/2024 MIPS payment year through the CY 2024 
performance period/2026 MIPS payment year, we have determined that 
using the mean as our methodology for the 2027 through 2029 MIPS 
payment years would offer the most consistent and predictable approach 
for MIPS eligible clinicians. On this basis, we proposed in the CY 2025 
PFS proposed rule to continue using the mean of the final scores for 
all MIPS eligible clinicians from a prior period as specified to 
compute the performance threshold for each of the 2027 through 2029 
MIPS payment years (89 FR 62089 through 62091).
    We also proposed to codify this proposal by amending our regulation 
at Sec.  414.1405. We proposed to amend Sec.  414.1405 by: (1) revising 
paragraph (g) to read only ``Performance Threshold Methodology''; (2) 
redesignating, with minor technical modification, the substantive 
provision at paragraph (g) as a new paragraph (g)(1) to reflect the 
performance threshold methodology we established and used to specify 
the performance threshold for the 2024, 2025 and 2026 MIPS payment 
years under Sec.  414.1405(b)(9); and (3) adding paragraph (g)(2) to 
provide that, for each of the 2027, 2028, and 2029 MIPS payment years, 
the performance threshold is the mean of the final scores for all MIPS 
eligible clinicians from a prior period as specified under Sec.  
[thinsp]414.1405(b)(10).
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Several commenters expressed their support for 
establishing the performance threshold by continuing to use the mean as 
the methodology for calculating the performance threshold for the 2027, 
2028, and 2029 MIPS payment years. A few commenters stated their 
appreciation for continued stability in the requirements determining 
payment adjustments under the MIPS program.
    Response: We thank the commenters for their support.
    Comment: A few commenters recommended that CMS remain flexible on 
whether to use the mean or median to compute the performance threshold 
in future years in case of unforeseen circumstances.
    Response: We note that, in accordance with section 1848(q)(6)(D)(i) 
of the Act, we may reassess whether to use the mean or median to 
compute the performance threshold every three years. In the CY 2028 PFS 
proposed rule, we plan to reassess whether to select using the mean or 
median to

[[Page 98451]]

compute the performance threshold using the data available at that time 
to determine whether to use the mean or median for purposes of 
computing the performance threshold in future years, specifically the 
2030 through 2032 MIPS payment years.
    Comment: One commenter expressed concern with CMS using the mean of 
a prior period to calculate the performance threshold as CMS sunsets 
traditional MIPS and moves toward MVP reporting.
    Response: We note that, in accordance with section 1848(q)(6)(D)(i) 
of the Act, we are required to choose between the mean or median of a 
prior period to calculate the performance threshold by which we compare 
MIPS final scores to determine the MIPS payment adjustment factors for 
each MIPS eligible clinician (see section 1848(q)(6)(A) of the Act). 
These statutory requirements apply regardless of whether a MIPS 
eligible clinician reports MIPS data under traditional MIPS or MVPs. As 
we continue to move toward MVP reporting, we intend to evaluate the 
final score data as it becomes available to determine a performance 
threshold that is most reflective of a MIPS eligible clinician's 
performance in addition to ensuring that we incentivize providing high 
quality and value of care without unfairly penalizing clinicians. 
Moreover, using the mean to calculate the performance threshold may 
provide consistency and stability as more MIPS eligible clinicians 
begin to report MVPs over traditional MIPS.
    After consideration of public comments, we are finalizing our 
proposal to continue using the mean of the final scores for all MIPS 
eligible clinicians from a prior period as specified to compute the 
performance threshold for each of the 2027 through 2029 MIPS payment 
years, as proposed. We are also finalizing our proposal to amend our 
regulation at Sec.  414.1405, as proposed. We amend Sec.  414.1405 by: 
(1) revising paragraph (g) to read only ``Performance Threshold 
Methodology''; (2) redesignating, with minor technical modification, 
the substantive provision at paragraph (g) as a new paragraph (g)(1) to 
reflect the performance threshold methodology we established and used 
to specify the performance threshold for the 2024, 2025 and 2026 MIPS 
payment years under Sec.  414.1405(b)(9); and (3) adding paragraph 
(g)(2) to provide that, for each of the 2027, 2028, and 2029 MIPS 
payment years, the performance threshold is the mean of the final 
scores for all MIPS eligible clinicians from a prior period as 
specified under Sec.  [thinsp]414.1405(b)(10).
(c) Establishing the Performance Threshold for the CY 2025 Performance 
Period/2027 MIPS Payment Year
    Using the mean of 75 points from the CY 2017 performance period/
2019 MIPS payment year continues to be the most appropriate option for 
establishing the performance threshold for the CY 2025 performance 
period/2027 MIPS payment year for various reasons described in this 
section, including: providing consistency for MIPS eligible clinicians 
while allowing additional time for more recent data to become 
available, continuing to provide opportunities for MIPS eligible 
clinicians to gain experience with cost measure scoring (particularly 
the methodology we are finalizing in section IV.A.4.f.(1)(d)(ii)(B) of 
this final rule), and ensuring that we do not inadvertently 
disadvantage certain clinician types, such as small practices and solo 
practitioners, as we increase the performance threshold.
    As shown in Table 86, we calculated the mean values for the CY 2017 
performance period/2019 MIPS payment year through the CY 2022 
performance period/2024 MIPS payment year, and determined that the mean 
of 75 points from the CY 2017 performance period/CY 2019 MIPS payment 
year continues to be the most appropriate option that would provide 
stability for MIPS eligible clinicians while still encouraging high 
quality of care. The final scores for the CY 2023 performance period/
2025 MIPS payment year were not finalized in time for the proposed rule 
and, therefore, the mean final score for the CY 2023 performance 
period/2025 MIPS payment year was not included for consideration as a 
potential performance threshold value for the CY 2025 performance 
period/2027 MIPS payment year.
    Though we did consider the mean of 87 points from the CY 2018 
performance period/2020 MIPS payment year, a substantial increase of 12 
points could unfairly impact clinicians as they continue to recover 
from the COVID-19 public health emergency (COVID-19 PHE), which ended 
on May 11, 2023. We also considered using the means of the final scores 
from the CY 2019 performance period/2021 MIPS payment year through the 
CY 2022 performance period/2024 MIPS payment year for establishing the 
CY 2025 performance period/2027 MIPS payment year performance 
threshold. However, we decided they would not be appropriate for 
measuring future clinician performance given the impact of the COVID-19 
PHE on data for MIPS, as described below.
    Given issues with underlying data in prior periods due to the 
COVID-19 PHE, it would be beneficial to wait for more recent data that 
better reflects clinicians' performance and continue to rely on data 
from the CY 2017 performance period/2019 MIPS payment year, which 
predated the COVID-19 PHE. Due to the timing of the COVID-19 PHE and 
our announcement on March 22, 2020, extending the deadline for MIPS 
data submission,\887\ we are still evaluating the usability of data 
from the CY 2019 performance period/2021 MIPS payment year. While data 
collection occurred during the CY 2019 performance period prior to the 
start of the COVID-19 PHE, data submission for the CY 2019 performance 
period (occurring during the first quarter of CY 2020) was impacted. 
Specifically, in addition to extending the deadline for submitting MIPS 
data, we announced on April 6, 2020, that, due to the COVID-19 PHE, we 
would apply our extreme and uncontrollable circumstances reweighting 
policies described under Sec.  414.1380(c)(2)(i) to MIPS eligible 
clinicians nationwide and extend the deadline to submit an application 
for reweighting the quality, cost, improvement activities or Promoting 
Interoperability performance categories for the CY 2019 performance 
period/2021 MIPS payment year (85 FR 19277 and 19278). These 
flexibilities for the submission of MIPS data occurring in the first 
quarter of CY 2020 were intended to alleviate the reporting burden on 
clinicians that were responding to the onset of the COVID-19 pandemic. 
The geographic differences of COVID-19 incidence rates along with 
different impacts resulting from Federal, State, and local laws and 
policy changes implemented in response to COVID-19 may have affected 
which MIPS eligible clinicians were able to submit data for the CY 2019 
performance period. This may have led to final scores that were not 
wholly representative of performance for all MIPS eligible clinicians. 
Also, for the CY 2020 performance period/2022 MIPS payment year and the 
CY 2021 performance period/2023 MIPS payment year, we extensively 
applied our reweighting policies, described under Sec.  
414.1380(c)(2)(i), to MIPS eligible clinicians nationwide due to the 
COVID-19 PHE. Inherently, these

[[Page 98452]]

actions, particularly reweighting the performance categories, skewed 
the final scores from those years such that they are not an appropriate 
indicator for future performance of MIPS eligible clinicians. 
Specifically, we are concerned that the final scores during the COVID-
19 PHE reflect the performance of only MIPS eligible clinicians that 
may have been less impacted by the pandemic, and do not accurately 
represent MIPS eligible clinician performance overall during this 
period.
---------------------------------------------------------------------------

    \887\ https://www.cms.gov/newsroom/press-releases/cms-announces-relief-clinicians-providers-hospitals-and-facilities-participating-quality-reporting.
---------------------------------------------------------------------------

    As discussed further in the CY 2025 PFS proposed rule (89 FR 62083 
through 62085) and section IV.A.4.f.(1)(d)(ii) of this final rule, MIPS 
eligible clinicians have expressed concern that the cost performance 
category scoring has a negative impact on their MIPS final score. The 
CY 2022 performance period/2024 MIPS payment year was the first MIPS 
payment year that the cost performance category score generally 
constituted 30 percent of MIPS eligible clinicians' final scores 
(section 1848(q)(5)(E)(i)(II) of the Act). We have observed lower 
category scores for the cost performance category as compared to the 
quality performance category. In light of these concerns, which are 
supported by our analysis of cost performance category scores as 
discussed in the CY 2025 PFS proposed rule (89 FR 62083 through 62087) 
and section IV.A.4.f.(1)(d)(ii) of this final rule, we stated that 
maintaining a performance threshold of 75 points for the CY 2025 
performance period/2027 MIPS payment year would provide stability for 
MIPS eligible clinicians as they become acquainted with the cost 
performance category (particularly the scoring methodology we proposed 
and are finalizing in section IV.A.4.f.(1)(d)(ii)(B) of this final 
rule) without unfairly and negatively impacting their final scores and 
MIPS payment adjustments. We also stated that maintaining the 
performance threshold at 75 points for the 2027 MIPS payment year would 
provide us time to incorporate the impacts of this cost performance 
category scoring methodology as we establish future performance 
thresholds (89 FR 62091 and 62092).
    As discussed in the CY 2025 PFS proposed rule (89 FR 62083 through 
62087) and section IV.A.4.f.(1)(d)(ii) of this final rule, we stated 
that multiple factors have likely contributed to MIPS eligible 
clinicians' concerns, including increases in the weight for the cost 
performance category over time (see section 1848(q)(5)(E)(i)(II) of the 
Act), the number of cost measures, and the number of MIPS eligible 
clinicians that are being attributed new cost measures and receiving a 
score for the cost performance category. This increase in weight for 
the cost performance category over time has been particularly notable 
because, as discussed previously, due to the application of our 
reweighting policies described under Sec.  414.1380(c)(2)(i) for the 
COVID-19 PHE, many MIPS eligible clinicians were not scored on the cost 
performance category for the CY 2019 performance period/2021 MIPS 
payment year through the CY 2021 performance period/2023 MIPS payment 
year (85 FR 19277 through 19278).888 889 In the CY 2025 PFS 
proposed rule, we stated our belief that our proposal to maintain a 
performance threshold of 75 points for the CY 2025 performance period/
2027 MIPS payment year may help alleviate some of MIPS eligible 
clinicians' concerns related to the cost performance category and its 
impact on their MIPS final score (89 FR 62091 through 62092).
---------------------------------------------------------------------------

    \888\ https://qpp-cm-prod-content.s3.amazonaws.com/uploads/1198/2020%20MIPS%20Automatic%20EUC%20Fact%20Sheet.pdf.
    \889\ https://qpp-cm-prod-content.s3.amazonaws.com/uploads/1437/2021%20MIPS%20Automatic%20EUC%20Fact%20Sheet.pdf.
---------------------------------------------------------------------------

    In the CY 2025 PFS proposed rule (89 FR 62092), we also stated our 
concern that any increase in the performance threshold may 
inadvertently and unfairly disadvantage certain clinician types, 
specifically small practices and solo practitioners. As we stated in 
the CY 2024 PFS final rule (88 FR 79377), we want to consider the 
impacts of the performance threshold and its related policies on small 
practices. We received feedback that many small practices and solo 
practitioners face challenges in their ability to participate in MIPS, 
including the costs to implement and maintain certified electronic 
health record (EHR) technology (CEHRT), staff and training costs, and 
limited staff capacity to manage the complexity of the program. We also 
heard that increases in the performance threshold add administrative 
and financial burden for small practices that discourage their 
participation in MIPS. Though we have several policies within MIPS that 
continue to support small and solo practices, including scoring and 
reweighting policies, we are interested in understanding how to best 
support small practices and enhance their ability to successfully 
participate in MIPS as MIPS continues to evolve. As such, we performed 
qualitative analysis through engagement with small practices, third 
party intermediaries, and other interested parties to gather 
information about the experience of small practices participating in 
the program. We also reached out to small practices and solo 
practitioners in CY 2024 to gather additional information about 
barriers for actively engaging with MIPS. On this basis, we stated that 
we anticipate establishing a performance threshold of 75 points for the 
CY 2025 performance period/2027 MIPS payment year will allow us time to 
gather additional data on the impacts of new policies on small and 
rural practices, and to develop strategies to reduce barriers for small 
practices and solo practitioners participating in MIPS (89 FR 62092).
    We refer readers to the Regulatory Impact Analysis in the CY 2025 
PFS proposed rule (89 FR 62152) and section VII.E.18.d.(4) of this 
final rule for an estimate of the percent of MIPS eligible clinicians 
that will receive a negative payment adjustment for the CY 2025 
performance period/2027 MIPS payment year with the finalized policies 
in this final rule and the performance threshold we are finalizing at 
75 points.
    As discussed in the CY 2025 PFS proposed rule (89 FR 62092) and 
this section IV.A.4.g.(2)(c) of this final rule, maintaining a 
performance threshold of 75 points allows additional time for more data 
to become available, continues to provide opportunities for clinicians 
to become familiar with the cost measure scoring, and ensures that we 
do not inadvertently disadvantage certain clinician types, such as 
small practices and solo practitioners. Therefore, we proposed to 
establish a performance threshold of 75 points for the CY 2025 
performance period/2027 MIPS payment year based on the mean of MIPS 
eligible clinicians' final scores from the CY 2017 performance period/
2019 MIPS payment year, and to codify this performance threshold by 
adding paragraphs at Sec.  414.1405(b)(10) introductory text and 
(b)(10)(i) (89 FR 62091 and 62092).
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters supported CMS's proposal to use the mean 
of MIPS eligible clinicians' final scores from the CY 2017 performance 
period/2019 MIPS payment year (equal to 75 points) for the purposes of 
establishing the performance threshold for the CY 2025 MIPS performance 
period/2027 MIPS payment year.
    Several commenters supported this proposal because they believed 
that this would continue to provide consistency and stability to MIPS 
while allowing some time to gather data that is unaffected by the 
COVID-19 PHE.

[[Page 98453]]

Commenters also agreed that this proposal provides consistency while 
clinicians continue gaining familiarity with cost measures and the 
changes to the cost measure scoring methodology. One commenter stated 
that changes to the performance threshold may discourage clinicians 
wishing to report MVPs.
    Many commenters requested that we continue to maintain the 
performance threshold at 75 points in future years.
    Response: We thank commenters for their support. We will continue 
to assess the data on MIPS final scores as they become available in 
future years to establish the performance threshold for each 
performance period/MIPS payment year in accordance with section 
1848(q)(6)(D)(i) of the Act, and as we transition to MVPs.
    Comment: A few commenters noted that it has become increasingly 
difficult for their specialty (for example, orthopedic physicians) to 
meet the 75-point performance threshold. More specifically, a few 
commenters expressed concerns that there were not enough quality 
measures within MIPS for certain specialties to successfully achieve 
the performance threshold of 75 points. Another few commenters stated 
their concerns that certain specialties only have topped out measures 
to report.
    Response: We note that section 1848(q)(6)(D)(i) of the Act requires 
that we compute the performance threshold for a year 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. Hence, we have limited flexibility in 
establishing the performance threshold since we are restricted to the 
data we have available from the prior period.
    We also understand that some MIPS eligible clinicians may not have 
six measures to select in the quality performance category that are 
relevant to their practice or may have several measures in the quality 
performance category that are topped out measures. To address this, we 
established an eligible measure applicability policy within the quality 
performance category to reduce the denominator of required measures for 
the collection type used by a clinician if the clinician has fewer than 
six applicable measures to report in that collection type. This allows 
clinicians to be scored on the quality measures that are relevant to 
their scope of practice. For more information on the eligible measure 
applicability policy please see the CY 2017 and CY 2018 Quality Payment 
Program final rules (81 FR 77290 through 77291, 82 FR 53730 through 
53732). We also refer readers to section IV.A.4.f.(1)(b) of this final 
rule in which we are finalizing our proposal regarding scoring topped 
out measures to allow certain clinicians who practice in specialties 
impacted by limited measure choice to be scored according to defined 
topped out measure benchmarks that do not cap scores at 7 measure 
achievement points. The policy is intended to address scoring scenarios 
in which limited measure choice compels clinicians to report topped out 
measures with scoring caps and aims to facilitate fairer scoring of all 
specialties.
    With respect to the commenters' concerns on the specialty measures 
available, we solicit commenter recommendations for new specialty 
measure sets and revisions to existing specialty measure sets on an 
annual basis. We encourage interested parties to provide 
recommendations during the specialty measure set solicitation process 
(for more information please see the QPP resource library at http://www.qpp.cms.gov). We also encourage clinicians that lack sufficient 
quality measures relevant to their scope of practice to work with 
groups or organizations that represent clinicians to provide 
recommendations during the specialty measure set solicitation process 
and to consider reporting a relevant MVP when one becomes available.
    Comment: A few commenters supported CMS's proposal to establish the 
performance threshold at 75 points for the CY 2025 MIPS performance 
period/2027 MIPS payment year but expressed concerns that this policy 
may continue to inadvertently harm small and rural practices, creating 
further challenges for them to successfully participating in MIPS.
    Response: We have several policies within MIPS that continue to 
support small and rural practices, including scoring and reweighting 
policies set forth in Sec.  414.1380. For example, under Sec.  
414.1380(c)(2)(i)(C)(9), we automatically reweight the Promoting 
Interoperability performance category to zero percent of the MIPS final 
score for MIPS eligible clinicians that are in a small practice as 
defined in Sec.  414.1305. Under this reweighting policy, MIPS eligible 
clinicians in small practices are not required to adopt or meaningfully 
use CEHRT to report the Promoting Interoperability performance 
category. As we consider the performance threshold and its related 
policies in future years, we will continue to consider the impact on 
small and rural practices, particularly as we transition to MVPs.
    Comment: A few commenters advocated for legislative changes, 
including transitioning to an alternative performance payment system 
that would allow for a performance threshold of 60 points that would be 
in effect for at least 3 years. A few commenters stated this freeze 
would particularly benefit small practices that continue to face 
challenges in meeting the performance threshold. Additionally, a few 
commenters also said adapting an alternative performance system would 
eliminate the current tournament model.
    Response: As discussed in detail in the CY 2025 PFS proposed rule 
(89 FR 62088 through 62092), our proposed performance threshold policy 
is based on current statutory requirements.
    After consideration of public comments, we are finalizing our 
proposal to establish a performance threshold of 75 points for the CY 
2025 performance period/2027 MIPS payment year based on the mean of 
MIPS eligible clinicians' final scores from the CY 2017 performance 
period/2019 MIPS payment year, and to codify this performance threshold 
by adding paragraphs at Sec.  414.1405(b)(10) introductory text and 
(b)(10)(i).
(3) Example of Adjustment Factors
    Figure 4 provides an illustrative example of how various final 
scores would be converted to a MIPS payment adjustment factor using the 
statutory formula and based on our finalized policies for the CY 2025 
performance period/2027 MIPS payment year. In Figure 4, the performance 
threshold is set at 75 points, as we have finalized in section 
IV.A.4.g.(2)(c) of this final rule.
    For purposes of determining the maximum and minimum range of 
potential MIPS payment adjustment factors, section 1848(q)(6)(B) of the 
Act defines the applicable percentage as 9 percent for the CY 2025 
performance period/2027 MIPS payment year. The MIPS payment adjustment 
factor is determined on a linear sliding scale from zero to 100, with 
zero being the lowest possible score which receives the negative 
applicable percentage and resulting in the lowest payment adjustment, 
and 100 being the highest possible score which receives the highest 
positive applicable percentage and resulting in the highest payment 
adjustment.
    However, there are two modifications to this linear sliding scale. 
First, as specified in section 1848(q)(6)(A)(iv)(II) of the Act, there 
is an exception for a final score between zero and one-fourth of the 
performance threshold (zero and 18.75 points based on the finalized

[[Page 98454]]

performance threshold of 75 points for the CY 2025 performance period/
2027 MIPS payment year). All MIPS eligible clinicians with a final 
score in this range will receive a negative MIPS payment adjustment 
factor equal to 9 percent (the applicable percentage). Second, the 
linear sliding scale for the positive MIPS payment adjustment factor is 
adjusted by the scaling factor, which cannot be higher than 3.0, as 
required by section 1848(q)(6)(F)(i) of the Act.
    If the scaling factor is greater than zero and less than or equal 
to 1.0, then the MIPS payment adjustment factor for a final score of 
100 will be less than or equal to 9 percent (the applicable 
percentage). If the scaling factor is above 1.0 but is less than or 
equal to 3.0, then the MIPS payment adjustment factor for a final score 
of 100 will be greater than 9 percent. Only those MIPS eligible 
clinicians with a final score equal to 75 points (the performance 
threshold proposed for the CY 2025 performance period/2027 MIPS payment 
year) will receive a neutral MIPS payment adjustment.
    Beginning with the CY 2023 performance period/2025 MIPS payment 
year, the additional MIPS payment adjustment for exceptional 
performance described in section 1848(q)(6)(C) of the Act is no longer 
available. For this reason, Figure 4 does not illustrate an additional 
adjustment factor for MIPS eligible clinicians with final scores at or 
above the additional performance threshold described in section 
1848(q)(6)(D)(ii) of the Act.
[GRAPHIC] [TIFF OMITTED] TR09DE24.142

    Table 87 illustrates the changes in payment adjustment based on the 
final policies from the CY 2024 PFS final rule (88 FR 52599 through 
56001) for the CY 2024 performance period/2026 MIPS payment year and 
the finalized policies for the CY 2025 performance period/2027 MIPS 
payment year, as well as the applicable percent required by section 
1848(q)(6)(B) of the Act.
BILLING CODE 4120-01-P

[[Page 98455]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.143

BILLING CODE 4120-01-C
h. Review and Correction of MIPS Final Score--Feedback and Information 
To Improve Performance
    Under section 1848(q)(12)(A)(i) of the Act, we are required to 
provide MIPS eligible clinicians with timely (such as quarterly) 
confidential feedback on their performance under the quality and cost 
performance categories beginning July 1, 2017, and we have discretion 
to provide such feedback regarding the improvement activities and 
Promoting Interoperability performance categories. In the CY 2018 
Quality Payment Program final rule (82 FR 53799 through 53801), we 
finalized that on an annual basis, beginning July 1, 2018, performance 
feedback will be provided to MIPS eligible clinicians and groups for 
the quality and cost performance categories, and if technically 
feasible, for the improvement activities and advancing care information 
(now called Promoting Interoperability) performance categories.
    We made performance feedback available for the CY 2019 performance 
period/2021 MIPS payment year on August 5, 2020; for the CY 2020 
performance period/2022 MIPS payment year on August 2 and September 27, 
2021; for the CY 2021 performance period/2023 MIPS payment year on 
August 22, 2022; CY 2022 performance period/2024 MIPS payment year on 
August 10, 2023; and for the CY 2023 performance period/2025 MIPS 
payment year on August 12, 2024. We direct readers to qpp.cms.gov for 
more information.
i. Calculating the Final Score
    For a description of the statutory basis and our previously 
finalized policies for calculating the final score for each MIPS 
eligible clinician, including performance category weights and 
reweighting the performance categories, we refer readers to Sec.  
414.1380(c) and the discussion in the CY 2017 and CY 2018 Quality 
Payment Program final rules, and the CY 2019, CY 2020, CY 2021, CY 
2022, and CY 2023 PFS final rules (81 FR 77319 through 77329, 82 FR 
53769 through 53785, 83 FR 59868 through 59878, 84 FR 63020 through 
63031, 85 FR 84908 through 84917, 86 FR 65509 through 65527, and 87 FR 
70093 through 70096, respectively).
    As described in more detail in the following sections, in the CY 
2025 PFS proposed rule (89 FR 62094 through 62096), we proposed to 
supplement our current policies for reweighting one or more performance 
categories (that is, quality, improvement activities, and Promoting 
Interoperability) to permit reweighting in circumstances where we 
determine that data for a MIPS eligible clinician are inaccessible or 
unable to be submitted due to circumstances outside of the control of 
the clinician because the MIPS eligible clinician delegated submission 
of the data to their third party intermediary, evidenced by a written 
agreement between the MIPS eligible clinician and third party 
intermediary, and the third party intermediary did not submit the data 
for the performance category(ies) on behalf of the MIPS eligible 
clinician in accordance with applicable deadlines.
    In the CY 2025 PFS proposed rule (89 FR 62095 through 62096), we 
proposed that this reweighting policy only be available for the 
quality, improvement activities, and Promoting Interoperability 
performance categories because a MIPS eligible clinician may delegate 
data submission to a third party

[[Page 98456]]

intermediary for these three performance categories, and not the cost 
performance category. MIPS eligible clinicians do not submit data 
separately for measures for the cost performance category; we score 
cost measures based solely on administrative claims data.
(1) Background
    Section 1848(q)(5)(A) of the Act requires the Secretary to develop 
a methodology for assessing the total performance of each MIPS eligible 
clinician according to the performance standards for the applicable 
measures and activities for each performance category applicable to 
such clinician for a performance period and, using the methodology, 
provide for a final score (using a scoring scale of 0 to 100) for each 
MIPS eligible clinician for the performance period.
    Additionally, section 1848(q)(5)(E) of the Act specifies how we 
must weigh the scores for each performance category in our calculation 
of the MIPS eligible clinician's final score. We have codified these 
weights at Sec.  414.1380(c)(1). Meanwhile, section 1848(q)(5)(F) of 
the Act provides that, if there are not sufficient measures and 
activities applicable and available to each type of MIPS eligible 
clinician involved, the Secretary shall assign different scoring 
weights (including a weight of 0). We previously finalized at Sec.  
414.1380(c) that if a MIPS eligible clinician is scored on fewer than 
two performance categories, they will receive a final score equal to 
the performance threshold (81 FR 77326 through 77328 and 82 FR 53778 
and 53779).
    We also finalized at Sec.  414.1380(c)(2) several policies 
addressing on what basis we may reweight one or more performance 
categories, and how those weights will be redistributed to the 
remaining performance categories. For example, in the CY 2020 PFS final 
rule (84 FR 63023 through 63026), we finalized a reweighting policy at 
Sec.  414.1380(c)(2)(i)(A)(9) and (c)(2)(i)(C)(10) for the four MIPS 
performance categories. Under this policy, we may reweight one or more 
of the performance categories for a MIPS eligible clinician if we 
determine, based on information known to us prior to the beginning of 
the relevant MIPS payment year, that data for a MIPS eligible clinician 
for the applicable performance category(ies) are inaccurate, unusable, 
or otherwise compromised due to circumstances outside of the control of 
the clinician and its agents. Under this policy, we are able to address 
circumstances where submitted data are inaccurate, unusable, or 
otherwise compromised.
    However, we have found this policy, and our other reweighting 
policies at Sec.  414.1380(c)(2), do not address circumstances where 
data are inaccessible or unable to be submitted due to circumstances 
outside of the control of the MIPS eligible clinician, particularly 
where the clinician has delegated submission of the data to a third 
party intermediary and that third party intermediary does not submit 
the data in accordance with applicable deadlines. In accordance with 
our regulations governing third party intermediaries at Sec.  
414.1400(a)(3)(iv) and (e)(1), we may take remedial action in the event 
a third party intermediary fails to meet the criteria necessary for 
their approval as a third party intermediary, fails to comply with 
other requirements applicable to third party intermediaries, has 
submitted a false certification, or discontinues their services and do 
not assist MIPS eligible clinicians in connecting with a different 
third party intermediary. However, our regulations do not address the 
impact of a third party intermediary's action or inaction resulting in 
failure to submit the MIPS eligible clinician's data as required, over 
which the MIPS eligible clinician has little to no control, on a MIPS 
eligible clinician's final score.
    Currently, if we determine that data for a MIPS eligible clinician 
were not submitted during the MIPS data submission period for reasons 
outside the clinician's control, we assign the clinician a score of 
zero for the performance category or categories for which data were not 
submitted.\890\ Because an excusable failure to submit data is not 
currently a basis for reweighting, the lack of data may reduce the MIPS 
eligible clinician's final score and therefore may reduce the 
clinician's MIPS payment adjustment. However, we believe that 
reweighting of the applicable performance categories may be appropriate 
in these rare cases as described in section IV.A.4.i. of this final 
rule.
---------------------------------------------------------------------------

    \890\ As set forth in Sec.  414.1325(a), data is only required 
to be submitted for certain measures and activities as specified for 
certain performance categories. For example, MIPS eligible 
clinicians are not required to submit data for the cost performance 
category to receive a score for that category because cost measures 
are scored based on Medicare claims data. We refer readers to our 
data submission requirements at Sec.  414.1325 and our proposals to 
modify these requirements in the CY 2025 PFS proposed rule (89 FR 
62031 through 62036). As previously discussed in section 
IV.A.4.e.(1)(b)(i) of this final rule, we are finalizing our 
proposals to modify the data submission requirements at Sec.  
414.1325.
---------------------------------------------------------------------------

    Specifically, we believe that a MIPS eligible clinician should not 
be penalized in cases where the MIPS eligible clinician enters into an 
agreement with a third party intermediary to submit data on their 
behalf, and the data are not submitted due to reasons outside of the 
control of the MIPS eligible clinician. While we encourage the impacted 
MIPS eligible clinician to take steps to ensure data submission for 
subsequent years, by, for example, selecting an alternate third party 
intermediary, there may be cases where there is insufficient time for 
the MIPS eligible clinician to submit the data through an alternative 
mechanism in time for the data to be considered for the relevant 
performance period. For instance, the MIPS eligible clinician may 
become aware that their third party intermediary did not submit data on 
their behalf after the data submission period closes. In these cases, 
we believe it is appropriate to provide relief to the MIPS eligible 
clinician so that they are not unfairly penalized for their third party 
intermediary's inaction.
(2) Reweighting Performance Category(ies) Policy When a Third Party 
Intermediary Did Not Submit Data Due to Reasons Outside the MIPS 
Eligible Clinician's Control
    In the CY 2025 PFS proposed rule (89 FR 62094 through 62096), we 
proposed to adopt a new reweighting policy at Sec.  
414.1380(c)(2)(i)(A)(10) and (c)(2)(i)(C)(12) to address this 
circumstance. Specifically, beginning with the CY 2024 performance 
period/2026 MIPS payment year, we proposed that we may reweight one or 
more of the quality, improvement activities, and Promoting 
Interoperability performance categories where we determine, based on 
documentation submitted to us through a reweighting request on or 
before November 1st of the year preceding the relevant MIPS payment 
year, that data for a MIPS eligible clinician are inaccessible or 
unable to be submitted due to circumstances outside of the control of 
the clinician because the MIPS eligible clinician delegated submission 
of their data to a third party intermediary, evidenced by a written 
agreement between the MIPS eligible clinician and the third party 
intermediary, and the third party intermediary did not submit the data 
for the performance category(ies) on behalf of the MIPS eligible 
clinician in accordance with applicable deadlines. We also proposed 
that, to determine whether to apply reweighting to the affected 
performance category(ies), we would consider: whether the MIPS eligible 
clinician knew or had reason to know of the issue with its third party 
intermediary's submission of the clinician's data for the performance 
category(ies); whether the MIPS eligible

[[Page 98457]]

clinician took reasonable efforts to correct the issue; and whether the 
issue between the MIPS eligible clinician and their third party 
intermediary caused no data to be submitted for the performance 
category(ies) in accordance with applicable deadlines. We believe these 
factors are necessary to ensure we are only granting these requests in 
circumstances where MIPS eligible clinicians would otherwise be 
unfairly penalized due to the actions or inactions of a third party 
intermediary. MIPS eligible clinicians could request reweighting under 
this policy in circumstances where no data was submitted on their 
behalf by their third party intermediary through the help desk at 
[email protected].
    Under this policy, MIPS eligible clinicians would be able to 
request reweighting for each performance category for which their third 
party intermediary, to which the MIPS eligible clinician delegated 
submission of their data, did not submit data for reasons outside of 
the control of the MIPS eligible clinician. We note that we only 
proposed that this reweighting policy be available for the quality, 
improvement activities, and Promoting Interoperability performance 
categories because a MIPS eligible clinician may delegate data 
submission to a third party intermediary only with respect to these 
three performance categories, and not the cost performance category. 
MIPS eligible clinicians do not submit data separately for measures for 
the cost performance category; we score cost measures based solely on 
Medicare claims data.
    Under this proposed reweighting policy, the MIPS eligible clinician 
must submit reweighting requests beginning with the close of a relevant 
performance period's data submission period, only after it is confirmed 
that no data has been submitted in accordance with applicable 
deadlines. MIPS eligible clinicians would be able to submit reweighting 
requests on or before November 1st of the year preceding the associated 
MIPS payment year to allow time for CMS to re-calculate their final 
score and MIPS payment adjustment factor.
    We would only approve reweighting requests with evidence of a 
written agreement between the MIPS eligible clinician and a third party 
intermediary. Such written agreement must provide that the MIPS 
eligible clinician delegated submission of their data to the third 
party intermediary, and that the third party intermediary agreed to 
submit data on their behalf in accordance with applicable deadlines, 
for the performance category or performance categories in question.
    In the CY 2025 PFS proposed rule, we proposed that we would review 
requests and make determinations to reweight based on our assessment 
that data were not submitted outside the control of the MIPS eligible 
clinician. We proposed that we would determine whether to apply 
reweighting to the affected performance category(ies) under this policy 
based on our consideration of the following criteria: whether the MIPS 
eligible clinician knew or had reason to know of the issue with its 
third party intermediary's submission of the clinician's data for the 
performance category(ies); whether the MIPS eligible clinician took 
reasonable efforts to correct the issue; and whether the issue between 
the MIPS eligible clinician and their third party intermediary caused 
no data to be submitted for the performance category(ies) in accordance 
with applicable deadlines. These criteria would inform whether we would 
grant reweighting requests under our policy at Sec.  
414.1380(c)(2)(i)(A)(10) and (c)(2)(i)(C)(12). Circumstances resulting 
in a clinician's data being inaccessible or unable to be submitted that 
would merit reweighting could include, but are not limited to, a 
critical systems failure, the third party intermediary going out of 
business, the third party intermediary having collected data on a MIPS 
eligible clinician's behalf and refusing to hand it over for the MIPS 
eligible clinician to submit, or other circumstances CMS determines to 
be outside the control of the MIPS eligible clinician.
    This reweighting policy is solely intended to mitigate the 
potentially adverse financial impact of no data being submitted during 
the MIPS data submission period for one or more performance categories 
on behalf of the MIPS eligible clinician due to the failure of a third 
party intermediary to fulfill its contractual responsibilities. Our 
determination to grant a reweighting request under this policy does not 
indicate, and should not be interpreted to suggest, that the third 
party intermediary could not be held liable for the failure to perform 
the task as delegated, that is, to submit data on the performance 
category(ies) on behalf of the MIPS eligible clinician. In these 
circumstances where we determine that a third party intermediary failed 
to fulfill its agreement with the MIPS eligible clinician to submit 
their data, we believe it is appropriate to give the MIPS eligible 
clinician the opportunity to request reweighting of the affected 
performance category(ies), provided that all elements of our policy are 
met.
    In the CY 2025 PFS proposed rule, we proposed to apply reweighting 
only in cases when we receive documentation of a third party 
intermediary's failure to submit data on behalf of a MIPS eligible 
clinician demonstrating that all elements of our policy are met.
    In the CY 2025 PFS proposed rule, we proposed that this policy 
would be effective beginning with CY 2024 performance period/2026 MIPS 
payment year. This policy change would become effective prospectively, 
prior to the beginning of the data submission period for the CY 2024 
performance period/2026 MIPS payment year, which will occur January 2, 
2025, through March 31, 2025. We proposed this effective date to 
provide relief to MIPS eligible clinicians, whose circumstances meet 
all requirements set forth in this reweighting policy, as soon as 
feasible.
    In the CY 2025 PFS proposed rule, we also proposed to codify this 
new reweighting policy, including all proposed elements, at Sec.  
414.1380(c)(2)(i)(A)(10) for the quality and improvement activities 
performance categories and at Sec.  414.1380(c)(2)(i)(C)(12) for the 
Promoting Interoperability performance category.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters supported the proposed policy stating it 
provided appropriate relief for MIPS eligible clinicians impacted by a 
third party intermediary's failure to submit data on their behalf. One 
commenter further applauded CMS for proposing to make this policy 
effective for the CY 2024 performance period/2026 MIPS payment year so 
that clinicians can receive relief as soon as possible.
    Response: We thank the commenters for their support.
    Comment: A few commenters requested that CMS ensure reweighting is 
available across scenarios where complete data is not submitted due to 
reasons outside of a clinician's control. A few commenters asked that 
CMS consider additional circumstances for this policy, including 
instances when a third party intermediary submitted inaccurate or 
incomplete data (rather than no data), technical limitations by the 
electronic health record vendor to supply necessary data for 
aggregation, cybersecurity events experienced by third party 
intermediaries, failure of a clinician to provide complete data to a 
third party intermediary, and termination of a third party 
intermediary.

[[Page 98458]]

    Response: We acknowledge commenters' recommendation to provide 
reweighting in additional scenarios. We note that we previously 
finalized reweighting policies for several scenarios outside of the 
control of the clinician, as set forth in Sec.  414.1380(c)(2)(i). 
These circumstances include extreme and uncontrollable circumstances, 
insufficient internet access, and cases where submitted data are 
inaccurate, unusable, or otherwise compromised. In CY 2020 PFS final 
rule (84 FR 63025), we acknowledged certain scenarios that, depending 
on the specific circumstances, could be covered under the policy we 
finalized at Sec.  414.1380(c)(2)(i)(A)(9) and (c)(2)(i)(C)(10) for 
reweighting when data that are inaccurate, unusable, or otherwise 
compromised for reasons outside the control both of a clinician and its 
agents. As discussed further in the CY 2020 PFS final rule, such 
scenarios may include the third party intermediary going out of 
business or experiencing a loss of data, including instances where data 
is impacted by a cyberattack (84 FR 63025).
    As we proposed, we similarly would consider certain factors when 
making reweighting determinations under this new reweighting policy, 
including whether the MIPS eligible clinician knew, or had reason to 
know, of any data submission issues prior to the deadline for data 
submission and the MPS eligible clinician took reasonable efforts to 
correct the issue. For example, this policy would not apply to 
instances where a third party intermediary terminates a contract mid-
year as we would anticipate that clinicians would take reasonable 
efforts to replace their party intermediary.
    In proposing this new reweighting policy, we intended solely to 
mitigate the potential adverse financial impact on MIPS eligible 
clinicians' final scores and MIPS payment adjustments because no data 
was submitted due to the failure of a third party intermediary to 
fulfill its contractual responsibilities (89 FR 62096). We also 
proposed that such circumstances must be outside of the control of the 
MIPS eligible clinician to make reasonable efforts to remedy. Scenarios 
in which a MIPS eligible clinician does not provide complete data to a 
third party intermediary would not be covered by this new reweighting 
policy we proposed. We clarify that this new reweighting policy would 
only apply to situations in which data was not submitted on behalf of 
the MIPS eligible clinician due to circumstances outside of the control 
of the clinician. A MIPS eligible clinician's failure to submit 
complete data to the third party intermediary would be at least 
partially within the control of the MIPS eligible clinician.
    We encourage MIPS eligible clinicians and their agents experiencing 
these types of circumstances to communicate with us as early as 
possible to provide details about the circumstances surrounding these 
events. Additionally, we may consider commenters' recommendations for 
additional scenarios for reweighting via future rulemaking.
    Comment: One commenter expressed the belief that we should use 
existing processes, including the extreme and uncontrollable 
application and the targeted review process, for this policy. 
Commenters expressed the belief that creating a new process would be 
confusing to MIPS eligible clinicians.
    Response: The CMS help desk is the proper forum for MIPS eligible 
clinicians to submit reweighting requests under this new policy. As we 
proposed, MIPS eligible clinicians would only be able to begin 
submitting reweighting requests under this new policy beginning with 
the close of a relevant performance period's data submission period, 
only after it is confirmed that no data has been submitted in 
accordance with applicable deadlines (89 FR 62096). Further, we 
proposed they could submit such requests from the expiration of the 
data submission period through November 1st (89 FR 62096). This 
timeframe does not align with the timeframe for MIPS eligible 
clinicians to request reweighting under our other policies, such as our 
extreme and uncontrollable circumstances policy, which typically occur 
prior to the start of data submission period. Further, as we noted in 
the proposed rule, this policy addresses rare cases where a MIPS 
eligible clinician should not be penalized for a third party 
intermediary's failure to submit their data as promised in a written 
agreement (89 FR 62095). We do not expect the volume of these requests 
to be exceptional. Given these distinctions, the CMS help desk presents 
the best mechanism for MIPS eligible clinicians to submit their 
requests under this new reweighting policy as soon as feasible for the 
CY 2024 performance period/2026 MIPS payment year. We may reassess this 
process if the volume exceeds our expectations.
    Similarly, MIPS eligible clinicians currently submit reweighting 
requests through the CMS help desk for our existing reweighting policy 
for when data are inaccurate, unusable, or otherwise compromised (84 FR 
63023). This process for submitting certain reweighting requests is not 
wholly new or unfamiliar to MIPS eligible clinicians.
    Further, the targeted review process established under section 
1848(q)(13)(A) of the Act is limited to informal review of our 
calculation of the MIPS adjustment factor applicable to the MIPS 
eligible clinician. This includes requests for targeted review of 
errors in our application of policies, such as our reweighting 
policies, governing calculation of scores for measures and activities, 
performance category scores, and MIPS final scores (81 FR 77353). A 
MIPS eligible clinician should not be submitting a reweighting request 
for the first time during the targeted review process as such request 
is outside of the scope and purpose of targeted review.
    Comment: One commenter requested that any requests for reweighting 
under this policy be kept confidential and that third party 
intermediaries not automatically be put on probation if a MIPS eligible 
clinician submits an application for reweighting.
    Response: Similar to our existing policy for reweighting when data 
are inaccurate, unusable, or otherwise compromised (84 FR 63023), we 
intend for this policy to provide flexibility for MIPS eligible 
clinicians whose data are not submitted due to circumstances outside of 
their control. We did not develop this policy to hold harmless third 
party intermediaries or other agents for any role they play in data 
inaccuracies. We do not have authority to waive liability as it relates 
to fraud, waste, and abuse laws or to alter the certification 
requirements of health information technology. We also note that third 
party intermediaries that submit data that are inaccurate, unusable or 
otherwise compromised may be subject to remedial action or termination 
in accordance with Sec.  414.1400(f).
    Comment: A few commenters requested that CMS provide additional 
guidance on what constitutes reasonable efforts on the part of the 
clinician to correct the issue for their reweighting request to be 
approved. Similarly, a few comments asked that CMS be mindful of the 
potential for added administrative burden that may come with 
reweighting requests.
    Response: In general, we expect the circumstances for which this 
policy applies to occur infrequently. In such cases, we expect that 
MIPS eligible clinicians, upon realizing that their third party 
intermediary did not submit data on their behalf, will reach out to 
their third party intermediary to try to identify the issue. If 
potential issues with data submission are discovered

[[Page 98459]]

before the close of the data submission period, we will consider 
whether the MIPS eligible made reasonable efforts to obtain data for 
submission or otherwise made efforts to ensure that data submission 
would be completed. If it is discovered that data submission was not 
completed after the close of the data submission period, we will 
consider if a clinician knew, or had reason to know, of any data 
submission issues prior to the deadline and whether the MPS eligible 
clinician took reasonable efforts to correct the issue.
    Under our proposed policy, we would consider evidence of the MIPS 
eligible clinician attempting to select an alternate third party 
intermediary, any communication between the MIPS eligible clinician and 
their third party intermediary, and any documentation signifying that a 
clinician's data was not submitted due to reasons that could include, 
but are not limited to, a critical systems failure, the third party 
intermediary going out of business, the third party intermediary having 
collected data on a MIPS eligible clinician's behalf and refusing to 
transmit it to the MIPS eligible clinician to submit, or other 
circumstances CMS determines to be outside the control of the MIPS 
eligible clinician. As these actions, and any accompanying 
documentation, are ones we anticipate MIPS eligible clinicians would 
reasonably undertake and collect in circumstances where they 
unexpectedly discover that the third party intermediary may not submit 
their data on their behalf in accordance with applicable deadlines, we 
do not expect that our reweighting request requirements will be overly 
burdensome. We will review the documentation and make determinations 
for reweighting requests through the CMS help desk.
    After consideration of public comments, we are finalizing as 
proposed adoption of the new reweighting policy for the quality, 
improvement activities, and Promoting Interoperability performance 
categories in circumstances in which third party intermediaries do not 
submit data on behalf of clinicians who have delegated the submission 
of this data to them beginning with the CY 2024 performance period/2026 
MIPS payment year. We are also finalizing to codify this policy as 
proposed at Sec.  414.1380(c)(2)(i)(A)(10) and (c)(2)(i)(C)(12).
j. Third Party Intermediaries General Requirements
(1) Requirements for CMS-approved Survey Vendors
(a) Background
    As codified at Sec.  414.1305, a CMS-approved survey vendor means a 
survey vendor that is approved by CMS for a particular performance 
period to administer the Consumer Assessment of Healthcare Providers & 
Systems (CAHPS) for MIPS survey and to transmit survey measures data to 
CMS.
    We refer readers to Sec.  414.1400(d), the CY 2017 Quality Payment 
Program final rule (81 FR 77386), the CY 2018 Quality Payment Program 
final rule (82 FR 53818 and 53819), the CY 2019 PFS final rule (83 FR 
59907 and 59908), and the CY 2022 PFS final rule (86 FR 65538 and 
65539) for previously finalized standards and criteria for CMS-approved 
survey vendors.
(b) Requirement To Submit Cost of Services
    In the CY 2017 Quality Payment Program final rule (81 FR 77386 and 
77387), we established that CMS-approved survey vendors may transmit 
data collected from the CAHPS for MIPS survey to CMS for use in MIPS. 
Section 414.1400(d)(2) requires that CMS-approved survey vendors submit 
a survey vendor application to CMS in a form and manner specified by 
CMS for each MIPS performance period for which it wishes to transmit 
such data. We implemented this requirement through the Vendor 
Participation Form, which is available at https://qpp.cms.gov/resources/resource-library.
    The CY 2017 Quality Payment Program final rule contained 
requirements applicable to other types of third party intermediaries, 
which varied based on whether the third party intermediary was a 
Qualified Clinical Data Registry (QCDR) or qualified registry. For 
example, we established requirements for QCDRs and qualified registries 
to ``sign a document verifying the QCDR's name, contact information, 
cost for MIPS eligible clinicians or groups to use the QCDR or 
qualified registry'' (81 FR 77368 and 77369; 81 FR 77385 and 77386). If 
QCDRs and qualified registries do not provide this information, CMS may 
exclude them from MIPS in a subsequent year. This requirement helps 
eligible clinicians determine which vendors to use prior to 
registration and provides transparency on the cost of program 
participation. Currently, CMS-approved survey vendors are not required 
to provide cost information even though other third party 
intermediaries (QCDRs and qualified registries) are required to do so.
    We proposed under the current application submission requirement at 
Sec.  414.1400(d)(2) that beginning with the CY 2026 performance 
period/2028 MIPS payment year, a survey vendor must include on its 
application the range of costs of its third party intermediary 
services. Ranges of cost estimates would vary based on different levels 
of service (that is, number of survey respondents, languages provided, 
etc.). With respect to a third party intermediary that is solely a CMS-
approved survey vendor, the publishable costs would be limited to the 
cost of services related to the CAHPS for MIPS survey (89 FR 62097). 
CMS has received inquiries from MIPS participants regarding survey 
vendor costs but has not been able to provide any specific information 
in response to those requests. The cost information from survey vendors 
is not easily available to the MIPS eligible clinicians who are 
considering contracting for services. Having such information in the 
publicly accessible QPP Resource Library (as part of the list of 
approved vendors) would make it easier for MIPS eligible clinicians to 
contract for services and educate themselves about the cost of using a 
third party intermediary survey vendor. In recent years, some 
participants who registered for the CAHPS for MIPS survey later 
withdrew their participation once they learned the costs of survey 
administration. Providing information on the cost of CMS-approved CAHPS 
for MIPS survey vendor services may support MIPS participants who are 
interested in the CAHPS for MIPS Survey but want to know what the costs 
of administering the survey will be, thus allowing them to make more 
informed decisions about whether to participate in the CAHPS for MIPS 
survey. This would also increase the consistency in requirements across 
different types of third party intermediaries.
    With this proposal, the CAHPS for MIPS Survey Vendor Participation 
Form \891\ and the CAHPS for MIPS Survey Minimum Business Requirements 
\892\ in the QPP Resource Library would be updated to detail the 
required survey vendor cost estimate information. The CAHPS for MIPS 
Survey Vendor Participation Form submitted by vendors seeking CMS

[[Page 98460]]

approval would be updated to include fields to report the cost 
information. The vendor-specific cost information would then be 
published in the list of CAHPS for MIPS Survey Approved Vendors which 
is also posted in the Resource Library.
---------------------------------------------------------------------------

    \891\ 2024 CAHPS for MIPS Survey Vendor Participation Form, 
March 25, 2024. https://qpp.cms.gov/resources/document/6386fe4b-49b9-42c8-9a2b-a1149f7b142a.
    \892\ 2024 CAHPS for MIPS Survey Vendor Minimum Business 
Requirements, March 11, 2024. https://qpp.cms.gov/resources/document/02e6e596-51de-4336-a6a6-ab63fc639dbc.
---------------------------------------------------------------------------

    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: A few commenters supported the requirement that survey 
vendors must include on their application the range of costs of their 
third party intermediary services. One commenter stated that the 
proposal will make requirements consistent across third party 
intermediary types. Another commenter agreed that the proposal will 
increase transparency regarding costs for Consumer Assessment of 
Healthcare Providers and Systems (CAHPS) for MIPS Surveys and overall 
participation in MIPS, which would help participants be more successful 
when choosing a third party vendor.
    Response: We thank the commenters for their support.
    Comment: One commenter expressed their view that pricing models are 
proprietary business information and that they are concerned that the 
public disclosure of pricing information to competitors could have 
unintended negative effects on the market. While the commenter did not 
support the proposal, they recommended the following guidelines for its 
implementation: do not require strict standardization of pricing 
information as survey vendors have unique offerings that make comparing 
options challenging, allow survey vendors to clearly communicate the 
details of their offerings (for example, service tiers, or packages), 
and provide survey vendors flexibility to explain pricing models (for 
example, the factors that influence their pricing).
    Response: The public disclosure of pricing information will be 
beneficial to MIPS participants and to survey vendors as it will 
minimize the risk of late withdrawals by survey registrants given that 
MIPS participants will understand the cost of services in advance. We 
understand that the cost of services can change over time and may 
differ based on a variety of factors including survey mode, language, 
sample size, etc. Cost estimates will be collected annually, to capture 
changes in cost over time, for a common set of factors including survey 
mode, language, and sample size, so the cost ranges (as provided by the 
survey vendor) will be displayed in the list of CAHPS for MIPS Survey 
Approved Vendors. The factors used for collecting cost information 
through the CAHPS for MIPS Survey Vendor Participation Form and how the 
cost information is displayed in the list of CAHPS for MIPS Survey 
Approved Vendors may be updated on a periodic basis due to changing 
survey requirements and survey vendor feedback.
    Comment: One commenter requested clarification on CMS' review and 
approval process for cost information, including if the information 
submitted will be edited and whether vendors will have the opportunity 
to review the presentation of their cost information in the QPP 
Resource Library before it goes live. The commenter also requested 
clarification on whether there will be a process for vendors to correct 
any inaccurate cost information or make updates when pricing structures 
change.
    Response: We will generally not make any edits to the information 
vendors submit, but we may ask the vendor to provide clarifying edits 
if information is lacking from the original submission. Survey vendors 
will have the opportunity to review the presentation of their cost 
information before it is released to the public in the QPP Resource 
Library. We will add a step to the current review process for the final 
list of CMS-approved vendors in which a vendor will be sent their 
``row'' of information. The vendor will be asked to (a) confirm receipt 
and (b) provide any corrections by a specific date prior to the list 
going live. We already encourage survey vendors to provide updates to 
their information included in the final list of CAHPS for MIPS Survey 
Approved Vendors once it is published through the vendor technical 
assistance mailbox. Updates to cost information will be included in 
this existing process, and we will provide instructions for vendors 
regarding communicating updates and corrections to the information 
posted in the final approved vendor list.
    After consideration of public comments, we are finalizing our 
proposal that beginning with the CY 2026 performance period/2028 MIPS 
payment year survey vendors are required to include on their 
application the range of costs of their third party intermediary 
services.
k. Overview of QP Determinations and the APM Incentive
(1) Overview
    The Quality Payment Program provides incentives for eligible 
clinicians to engage in value-based, patient-centered care under 
Medicare Part B via MIPS and Advanced APMs. The structure of the 
Quality Payment Program enables the Department to advance 
accountability and encourage improvements in care. The Secretary also 
has adopted the closely related goal that all people with Original 
Medicare be in an accountable care relationship by 2030, so that their 
needs can be holistically assessed, and their care is coordinated 
within a broader total cost of care system. Our vision for increased 
participation among clinicians in Advanced APMs is driven by the belief 
that integrating individuals' clinical needs across a spectrum of 
clinicians and settings will improve patient care and population 
health.
    As we continue to make improvements to the Quality Payment Program, 
we seek to develop, propose, and implement policies that encourage 
broad and meaningful clinician participation, including by specialists, 
in Advanced APMs.
    In the CY 2017 Quality Payment Program final rule (81 FR 77450 
through 77457), we finalized the payment amount method and patient 
count method for calculation of Threshold Scores used for QP 
determinations under the Medicare option and codified these methods at 
Sec.  414.1435(a) and (b), respectively. The payment amount method is 
based on payments for Medicare Part B covered professional services, 
including certain supplemental service payments, while the patient 
count method is based on numbers of patients. Both methods use the 
ratio of ``Attributed beneficiaries'' to ``Attribution-eligible 
beneficiaries,'' as defined at Sec.  414.1305.
    An attributed beneficiary is a beneficiary attributed to the APM 
Entity under the terms of the Advanced APM as indicated on the most 
recent available list of attributed beneficiaries at the time of a QP 
determination. An attribution-eligible beneficiary is a beneficiary 
who:
     Is not enrolled in Medicare Advantage or a Medicare cost 
plan;
     Does not have Medicare as a secondary payer;
     Is enrolled in both Medicare Parts A and B;
     Is at least 18 years of age;
     Is a United States resident; and
     Has a minimum of:
    ++ One claim for E/M services furnished by an eligible clinician 
who is in the APM Entity for any period during the QP Performance 
Period.
    ++ Or, for an Advanced APM that does not base attribution on E/M 
services and for which attributed beneficiaries are not a subset of the 
attribution-eligible beneficiary population based on the requirement to

[[Page 98461]]

have at least one claim for E/M services furnished by an eligible 
clinician who is in the APM Entity for any period during the QP 
Performance Period, the attribution basis determined by CMS based upon 
the methodology the Advanced APM uses for attribution, which may 
include a combination of E/M and/or other services.
    In this section, we proposed to modify the definition of 
``attribution-eligible beneficiary'' to include any beneficiary who has 
received a covered professional service (section 1833(z)(3)(A) of the 
Act; 42 CFR 414.1305; section 1848(k)(3)(A) of the Act) furnished by 
the eligible clinician (NPI) for whom we are making the QP 
determination. By no longer specifying E/M services as the default 
attribution basis, the QP determination methodology would better be 
able to account for Advanced APMs that do not use E/M services as the 
basis for beneficiary attribution or that use a combination of E/M and 
other services.
(2) Payment Amount and Patient Count Methods
    The payment amount method for calculating Threshold Scores is based 
on payments for Medicare Part B covered professional services, 
including certain supplemental service payments, while the patient 
count method is based on numbers of patients. Both methods use the 
ratio of ``attributed beneficiaries'' to ``attribution-eligible 
beneficiaries,'' as defined at Sec.  414.1305.\893\
---------------------------------------------------------------------------

    \893\ For technical information on the QP calculation 
methodology, see the ``QP Methodology Fact Sheet'' that we publish 
annually, which can be found as part of the ``2024 Learning 
Resources for QP Status and APM Incentive Payment'' materials on the 
Quality Payment Program Resource Library at qpp.cms.com.
---------------------------------------------------------------------------

    Attributed beneficiaries are those who are attributed to the APM 
Entity (or individual eligible clinician) under the terms of the 
Advanced APM as indicated on the most recent available list of 
attributed beneficiaries at the time of a QP determination. 
Attribution-eligible beneficiaries generally are those who, during the 
QP Performance Period, meet six criteria (listed in this section) 
specified in the definition of that term at Sec.  414.1305 and 
described in section IV.A.4.m.(3) of this final rule.
    When making QP determinations, we begin by calculating Threshold 
Scores using the payment amount and patient count methodologies. These 
Threshold Scores are percentages based on the ratio of the payment 
amounts or patient counts for attributed beneficiaries to the payment 
amounts or patient counts for attribution-eligible beneficiaries during 
the QP performance period. If the Threshold Score (using either the 
payment amount or patient count method) calculated at the APM Entity or 
individual eligible clinician level, as applicable, meets or exceeds 
the relevant QP threshold described at Sec.  414.1430(a), the relevant 
eligible clinician or clinicians (either the individual eligible 
clinician or all those on the APM Entity's Participation List) achieve 
QP status for such year.
[GRAPHIC] [TIFF OMITTED] TR09DE24.144

    Our regulation at Sec.  414.1435(b)(3) provides that a beneficiary 
may be counted only once in the numerator and denominator for a single 
APM Entity group, and at Sec.  414.1435(b)(4) provides that a 
beneficiary may be counted multiple times in the numerator and 
denominator for multiple different APM Entity groups. In the CY 2021 
PFS final rule (85 FR 84951 through 84952), we amended Sec.  
414.1435(c)(1)(i) to specify that beneficiaries who have been 
prospectively attributed to an APM Entity for a QP Performance Period 
will be excluded from the attribution-eligible beneficiary count for 
any other APM Entity that is participating in an APM where that 
beneficiary would be ineligible to be added to the APM Entity's 
attributed beneficiary list. This means that beneficiaries who have 
been attributed to one APM Entity and are thus barred under the terms 
of an Advanced APM from attribution to another APM Entity are removed 
from the denominator of both the payment amount method and patient 
count method in QP Threshold Score calculations for the APM Entity to 
which they cannot be attributed. In other words, we do not penalize an 
APM Entity in the QP Threshold Score calculation by including a 
beneficiary in its denominator when the terms of an Advanced APM do not 
permit such beneficiary to be attributed to such APM Entity.
(a) Attributed Beneficiary
    An attributed beneficiary is a beneficiary attributed to the APM 
Entity under the terms of the Advanced APM as indicated on the most 
recent available list of attributed beneficiaries at the time of a QP 
determination. There may be beneficiaries on the most recent available 
list who do not meet the criteria to be attribution-eligible 
beneficiaries because the QP performance period does not align with the 
Advanced APM's performance period or attribution period, or for other 
reasons. There may also be cases where a beneficiary's status changes, 
for example by enrolling in a Medicare Advantage Plan. We exclude these 
beneficiaries from our Threshold Score calculations because they do not 
meet criteria to be attribution-eligible beneficiaries. Although APMs 
may have reconciliation processes in place to address changes in 
beneficiary status at various intervals, those processes do not 
necessarily coincide with the timeframe of QP determinations. 
Therefore, when calculating Threshold Scores for QP determinations, we 
exclude from the list of attributed beneficiaries any beneficiaries who 
do not meet the criteria to be attribution-eligible beneficiaries at 
that point in time.
(b) Attribution-Eligible Beneficiary
    Under our regulation at Sec.  414.1305, we define an attribution-
eligible beneficiary as a beneficiary who:
     Is not enrolled in Medicare Advantage or a Medicare cost 
plan;

[[Page 98462]]

     Does not have Medicare as a secondary payer;
     Is enrolled in both Medicare Parts A and B;
     Is at least 18 years of age;
     Is a United States resident; and
     Has a minimum of one claim for E/M services furnished by 
an eligible clinician who is in the APM Entity for any period during 
the QP Performance Period or, for an Advanced APM that does not base 
beneficiary attribution on E/M services and for which attributed 
beneficiaries are not a subset of the attribution-eligible beneficiary 
population based on the requirement to have at least one claim for E/M 
services furnished by an eligible clinician who is in the APM Entity 
for any period during the QP Performance Period, the attribution basis 
determined by CMS based upon the methodology the Advanced APM uses for 
attribution, which may include a combination of E/M and/or other 
services.
    Our stated intent when we finalized the definition of attribution-
eligible beneficiary (81 FR 77451 through 77452) was to have a 
definition that would, for purposes of QP determinations, allow us to 
be consistent across Advanced APMs in how we consider the population of 
beneficiaries served by an APM Entity. The criteria we used to define 
attribution-eligible beneficiary were aligned with the attribution 
methodologies and rules for our contemporaneous Advanced APMs. The 
first five criteria are conditions that are required for a beneficiary 
to be attributed to any Advanced APM. The sixth criterion identifies 
beneficiaries who have received certain services from an eligible 
clinician who is associated with an APM Entity for any period during 
the QP Performance Period. We chose to refer to E/M services as the 
primary basis for purposes of attribution-eligibility because many of 
the Advanced APMs CMS offered at that time used E/M claims to attribute 
beneficiaries to their APM Entity groups. Over time, we have updated 
the list of services that are considered to be E/M services for 
purposes of identifying attribution-eligible beneficiaries and have 
published this list as part of the ``2024 Learning Resources for QP 
Status and APM Incentive Payment'' materials on the Quality Payment 
Program Resource Library at qpp.cms.gov.
    We also included an exception in this sixth criterion to allow us 
to use an alternative approach for Advanced APMs that do not base 
beneficiary attribution on any E/M services, and thus for which 
attributed beneficiaries are not a subset of the attribution-eligible 
beneficiary population based on the requirement to have at least one 
claim for an E/M service. To date, we have implemented this alternative 
approach for four Advanced APMs:
     Bundled Payments for Care Improvement Advanced Model.
     Comprehensive Care for Joint Replacement Payment Model 
(CEHRT Track).
     Comprehensive ESRD Care Model (LDO arrangement and Non LDO 
Two Sided Risk Arrangement).
     Maryland Total Cost of Care Model (Care Redesign Program).
    We have published links to the methodologies we use to identify 
attribution-eligible beneficiaries for these Advanced APMs in the 
``2024 Learning Resources for QP Status and APM Incentive Payment'' 
materials on the Quality Payment Program Resource Library at 
qpp.cms.gov.
    We adopted the general rule with flexibility to apply alternative 
methods for this criterion to ensure that, for the Advanced APMs for 
which beneficiary attribution is based on services other than E/M 
services, the attributed beneficiary population is truly a subset of 
such Advanced APMs' attribution-eligible beneficiary populations and, 
ultimately, so that our way of identifying beneficiaries for purposes 
of Threshold Score calculations for QP determinations would be 
appropriate for such Advanced APMs. That said, our thinking when we 
developed these approaches was shaped by the form and nature of the 
Advanced APMs that existed at that time. We believed that, by affording 
sufficient flexibility within the program, we could both foster 
innovation in Advanced APMs and simplify our execution of the program. 
However, with our more narrowly defined default approach to beneficiary 
attribution (relying on claims for E/M services), we have increasingly 
needed to exercise the flexibility to identify an alternative approach 
to attribution eligibility for Advanced APMs that fell into the 
exception, which meant that we identified several individually tailored 
ways of performing the beneficiary attribution methodology for specific 
Advanced APMs. We anticipate that Advanced APMs will continue to evolve 
and use novel approaches to value-based care that may emphasize a broad 
range of covered professional services, and in that event the 
application of our current regulations may result in increased 
variability among the ways we define attribution-eligible beneficiary 
when making QP determinations.
    We proposed to modify the sixth criterion of the definition of 
``attribution-eligible beneficiary'' at Sec.  414.1305 to include any 
beneficiary who has received a covered professional service furnished 
by the eligible clinician for whom we are making the QP determination, 
beginning with the 2025 QP Performance Period. By no longer specifying 
a claim for E/M services as the default attribution basis in the sixth 
criterion, and instead making the default attribution based on covered 
professional services, we had aimed to eliminate the need to create 
unique attribution bases that are tied to a specific Advanced APM's 
attribution methodology.
    We proposed to consider all covered professional services for 
purposes of attribution, and not solely the limited range of E/M 
services currently used for attribution. This approach would include as 
attributed beneficiaries those who are receiving any services within 
the entire range of covered professional services through the Advanced 
APM. We believed that this proposal would result in a QP calculation 
that, by including beneficiaries receiving any covered professional 
service, more accurately reflects eligible clinicians' actual 
participation in Advanced APMs and would be consistent across all 
Advanced APMs, thereby improving transparency and predictability of the 
determinations as well as being more operationally efficient than the 
current policy. Further, we believed that the proposal better aligned 
the QP determination methodology with the universe of services to which 
the Quality Payment Program (including MIPS and APMs) applies, noting 
that the statutory provisions governing the Quality Payment Program 
generally pertain to covered professional services (for example, 
financial incentives for both MIPS eligible clinicians and QPs are 
applied to, and based on, payments for covered professional services) 
and that the statutory definition of qualifying APM participant (QP) 
refers to covered professional services.
    In the 2025 Physician Fee Schedule proposed rule, we also 
acknowledged that, while this proposal would represent significant 
progress toward rationalizing attribution for the broader range of 
Advanced APMs, our continued analysis suggested that there may be more 
work to be done in this area. We have found that our proposed approach 
makes the above-described improvements to QP determinations, but we 
also see situations in which QP scores remain low in certain Advanced 
APMs, particularly where an Advanced APM is focused on a limited set of 
services, diseases, or conditions. As we describe further in this 
section, a few of our commenters also modeled this

[[Page 98463]]

effect. We recognize the need to provide, consistent with statutory 
requirements, equitable opportunities to achieve QP status for 
participants in Advanced APMs that have different focus areas, goals, 
scopes, and design features. Further, in the case of CMS Innovation 
Center models, we recognize that there will be ongoing evolution and 
innovation in the model tests that are Advanced APMs, including the 
development of new approaches to attribution that apply within the 
models.
    We solicited comment on this proposal to revise the sixth criterion 
of the definition of ``attribution-eligible beneficiary'' at Sec.  
414.1305 to include a beneficiary who has at least one claim for a 
covered professional service furnished by an eligible clinician who is 
on the Participation List for the APM Entity (or by the individual 
eligible clinician, as applicable) at any determination date during the 
QP Performance Period. We also invited comment more generally on 
potential approaches we could consider to make QP determinations in the 
most equitable, rational, transparent, and meaningful way for eligible 
clinicians across the broad range of Advanced APMs, including Advanced 
APMs that are focused on a limited set of services. Based on the 
results of our ongoing analysis and feedback from commenters, we are 
not finalizing the proposed change to the definition of ``attribution-
eligible beneficiary'' at Sec.  414.1305.
    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: Many commenters supported the proposal. Of these, several 
commenters also requested additional information and analysis on the 
impact of our proposal on QP determinations for eligible clinicians 
that participate in each Advanced APM.
    Response: We thank the commenters for their support. Further, we 
appreciate commenters' desire for more information on our analysis 
regarding the proposal. We agree that information is critical, and one 
of the reasons we made the proposal was that we believed having a more 
consistent QP determination methodology to apply across Advanced APMs 
would offer greater transparency that in turn could foster 
understanding by eligible clinicians as to how we quantify their 
Advanced APM participation.
    Qualitatively, our analysis showed that the proposed policy 
appeared to have a significant positive effect on eligible clinicians 
in the Innovation Center's kidney care models, specifically by allowing 
for more of the non-E/M covered professional services that clinicians 
furnish to contribute to attribution. The effects of the proposed 
policy within other Advanced APMs were more mixed and clustered closer 
to neutral. We note that our projections of future QP performance 
periods, which use available data from prior QP performance period, 
have historically yielded lower QP counts than the actual results for a 
performance period. We have observed that changes to an APM Entity's 
Participation List, services furnished, and attributed beneficiaries 
all have significant impacts on the number of QPs projected for future 
QP performance periods. But updates to an APM Entity's Participation 
List may be due to a variety of factors not limited to changes to the 
composition of a participating provider organization or changes in 
Advanced APM benchmarking methodology otherwise unknown to us. We 
further note that changes such as our proposed policy can lead to 
varied QP Threshold Scores for APM Entities within the same Advanced 
APM. In other words, the net change in the total number of QPs produced 
by the proposed policy may not be reflective of uniform directional 
shifts of the APM Entity scores within the same Advanced APM. For 
example, APM Entities vary not only in composition but also in size, so 
an estimated change in scores that puts just one large APM Entity above 
or below a QP or Partial QP threshold can appear to be a major change 
to the entire Advanced APM. Finally, because QP status is determined 
based on specific QP payment amount and QP patient count thresholds, 
only those changes in scores that result in an eligible clinician 
meeting or exceeding a QP threshold will contribute to the net 
estimated change in QP counts. While these are important endpoints, a 
focus on the outcome may mean we overstate important gains or losses in 
Threshold Scores.
    Comment: One commenter specifically opposed our proposal as it 
relates to the Enhancing Oncology Model (EOM), citing the low number of 
cancer types included in this model as the reason eligible clinicians 
on an EOM Participation List will not achieve QP status. The same 
commenter also suggested that CMS create specialty-specific QP 
thresholds. QP determinations
    Response: We noted in the proposed rule and earlier in this final 
rule that our proposal did not solve all of the problems we had 
identified with the current methodology, in particular when the 
Advanced APM is focused on a limited set of services. EOM is an 
Advanced APM for which this is true. We recognize that the design of 
some Advanced APMs, particularly those with a focus on specific 
services, diseases, or conditions, may limit the extent to which 
eligible clinicians are able to increase their participation in the 
Advanced APM when they have a broader practice outside the APM. We also 
understand that it may be difficult for certain specialists to increase 
participation in the available Advanced APMs. We agree with the 
commenter's concern that the EOM's focus on a subset of cancer types is 
a limiting factor with respect to the attribution of beneficiaries to 
participating eligible clinicians for purposes of QP determinations, 
and while our quantitative results were not identical to those that the 
commenter shared, we did see the same trend in the effects of the 
proposal that the commenter did. We are continuing to pursue an 
approach to QP determinations that can be applied consistently across 
Advanced APMs that would account for the limitation EOM participants 
face. We believe that all eligible clinicians that participate in an 
Advanced APM should have access to a fair QP calculation.
    We also noted in the proposed rule and earlier in this final rule 
that we anticipate that Innovation Center models will continue to 
identify novel approaches to attribution as the Innovation Center 
implements its specialty care strategy.\894\ While we intended for our 
proposal to better capture the universe of services these future 
Advanced APMs will focus on, we are continuing to analyze the effects 
of our current or proposed policy on future models. As we stated 
earlier in this final rule, we developed our current policy several 
years ago based on contemporaneous Advanced APMs, and we made our 
proposal in large part because we believe that that policy no longer 
serves the Advanced APMs that have come since. We continue to believe 
that our proposal is a better approach than the status quo, and we 
believe that it is likely to be part of a comprehensive approach to QP 
determinations that will better reflect the current and future state of 
Advanced APMs. In response to public comments, we believe that, even 
if, as we anticipate, our proposal will be part of the evolution of QP 
determination methodologies, we should come back with one or more 
proposals that reflect a complete

[[Page 98464]]

package of QP determination methodologies.
---------------------------------------------------------------------------

    \894\ https://www.cms.gov/blog/cms-innovation-centers-strategy-support-person-centered-value-based-specialty-care.
---------------------------------------------------------------------------

    After consideration of public comments, we are not finalizing our 
proposal to revise the sixth criterion of the definition of 
``attribution-eligible beneficiary'' at Sec.  414.1305. We anticipate 
that we will propose a comprehensive approach to QP determination in 
future rulemaking, including a strategy to address the needs of 
condition-specific models, which may include this proposal as one 
element.
(3) QP Thresholds and Partial QP Thresholds
    Section 1833(z)(2) of the Act specifies the thresholds for the 
level of participation in Advanced APMs required for an eligible 
clinician to become a QP for a year. The Medicare Option, based on Part 
B payments for covered professional services or counts of patients 
furnished covered professional services under Part B, has been 
applicable since payment year 2019 (performance period 2017). The All-
Payer Combination Option, through which QP status is calculated using 
the Medicare Option in addition to an eligible clinician's 
participation in Other Payer Advanced APMs, has been applicable since 
payment year 2021 (performance period 2019). In the CY 2017 Quality 
Payment Program final rule (81 FR 77433 through 77439), we finalized 
our policy for QP and Partial QP Thresholds for the Medicare Option as 
codified at Sec.  414.1430(a) and for the All-Payer Combination Option 
at Sec.  414.1430(b).
    Section 304(a)(2) of Division G, Title I, Subtitle C, of the 
Consolidated Appropriations Act, 2024 (CAA, 2024) (Pub. L. 118-42, 
March 9, 2024) amended section 1833(z)(2) of the Act by extending for 
payment years 2025 and 2026 (performance periods 2023 and 2024) the 
applicable payment amount and patient count thresholds for an eligible 
clinician to achieve QP status. Specifically, section 304(a)(2) of the 
CAA, 2024, amended section 1833(z)(2) of the Act to continue the QP 
payment amount thresholds that applied in payment year 2025 
(performance period 2023) to payment year 2026 (performance period 
2024). Additionally, section 304(a)(2) of the CAA, 2024, amended 
section 1833(z)(2) of the Act to require that, for payment year 2026, 
the Secretary use the same percentage criteria for the QP patient count 
threshold that applied in payment year 2022. As such, the Medicare 
Option QP thresholds for payment year 2026 will remain at 50 percent 
for the payment amount method and 35 percent for the patient count 
method. Section 304(b) of the CAA, 2024, also amended section 
1848(q)(1)(C)(iii) of the Act to extend through payment year 2026 the 
Partial QP thresholds that were established beginning for payment year 
2021 under the Medicare Option. Therefore, the Partial QP thresholds 
for payment year 2026 (performance period 2024) will remain at 40 
percent for the payment amount method and 25 percent for the patient 
count method.
    Under the All-Payer Combination Option, the QP thresholds for 
payment year 2026 (performance period 2025) will remain at 50 percent 
for the payment amount method and 35 percent for the patient count 
method. The Partial QP thresholds for payment year 2026 (performance 
period 2024) will continue at 40 percent for the payment amount method 
and 25 percent for the patient count method. To become a QP through the 
All-Payer Combination Option, eligible clinicians must first meet 
certain minimum threshold percentages under the Medicare Option. For 
payment year 2026 (performance period 2024), the minimum Medicare 
Option threshold an eligible clinician must meet to be eligible for the 
All-Payer Combination Option is 25 percent for the payment amount 
method or 20 percent for the patient count method. For Partial QP 
status, the minimum Medicare Option threshold an eligible clinician 
must meet to be eligible for the All-Payer Combination Option is 20 
percent for the payment amount method or 10 percent for the patient 
count method.
    To conform our regulation with the amendments made by the CAA, 
2024, we proposed to amend Sec.  414.1430 by revising paragraphs (a) 
and (b) to reflect the statutory QP and Partial QP threshold 
percentages for both the payment amount and patient count under the 
Medicare Option and the All-Payer Option with respect to payment year 
2026 (performance period 2024)
    The revisions to Sec.  414.1430(a) and (b) for the Medicare Option 
and All-Payer Combination Option QP and Partial QP thresholds are as 
follows:
     Paragraph (a)(1)(v) to state that for 2026 the amount is 
50 percent, and a new paragraph (a)(1)(vi) to state that for 2027and 
later, the amount is 75 percent.
     Paragraph (a)(2)(v) to state that for 2026 the amount is 
40 percent, and a new paragraph (a)(2)(vi) to state that for 2027 and 
later, the amount is 50 percent.
     Paragraph (a)(3)(v) to state that for 2026 the amount is 
35 percent, and a new paragraph (a)(3)(vi) to state that for 2027 and 
later, the amount is 50 percent.
     Paragraph (a)(4)(v) to state that for 2026 the amount is 
25 percent, and a new paragraph (a)(4)(vi) to state that for 2027 and 
later, the amount is 35 percent.
     Paragraph (b)(1)(i)(A) to state that for 2021 through 2026 
the amount is 50 percent, and paragraph (b)(1)(i)(B) to state that for 
2027 and later, the amount is 75 percent.
     Paragraph (b)(2)(i)(A) to state that for 2021 through 2026 
the amount is 40 percent and paragraph (b)(2)(i)(B) to state that for 
2027 and later, the amount is 50 percent.
     Paragraph (b)(3)(i)(A) to state that for 2021 through 2026 
the amount is 35 percent, and paragraph (b)(3)(i)(B) to state that for 
2027 and later, the amount is 50 percent.
     Paragraph (b)(4)(i)(A) to state that for 2021 through 2026 
the amount is 25 percent, and paragraph (b)(4)(i)(B) to state that for 
2027 and later, the amount is 35 percent.
    As these changes are specified by statute, as described above, we 
are finalizing the extensions of these thresholds as proposed.
BILLING CODE 4120-01-P

[[Page 98465]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.145

BILLING CODE 4120-01-C
(4) APM Incentive Payment
    Prior to amendments made by section 304(a)(1) of the CAA, 2024, 
section 1833(z)(1) of the Act provided for APM Incentive Payments for 
eligible clinicians who are QPs with respect to a year in each of 
payment years 2019 through 2025. Specifically, for each of the 
specified payment years, in addition to the amount of payment that will 
otherwise be made for covered professional services furnished by an 
eligible clinician who is determined to be a QP for such year, an 
additional lump sum APM Incentive Payment will be made equal to 5 
percent of the eligible clinician's estimated aggregate payment amounts 
for such covered professional services for the preceding year (which we 
defined as the ``base year'') in each of payment years 2019 through 
2024, and 3.5 percent of such amounts in payment year 2025. Covered 
professional services are defined at Sec.  414.1305, with reference to 
the statutory definition at section 1848(k)(3) of the Act, as services 
for which payment is made under, or based on, the PFS and which are 
furnished by an eligible clinician (physician; practitioner as defined 
in section 1842(b)(18)(C) of the Act; PT, OT, or speech-language 
pathologist; or qualified audiologist as defined under section 
1861(ll)(4)(B) of the Act).
    Section 304(a) of the CAA, 2024 amended section 1833(z)(1) of the 
Act to provide that eligible clinicians who are QPs with respect to 
payment year 2026 (performance period 2024) will receive an APM 
Incentive Payment equal to 1.88 percent of their estimated aggregate 
payment amounts for Medicare Part B covered professional services in 
the preceding year. In effect, this statutory change extends the APM 
Incentive Payment for one additional year, at 1.88 percent.
    Accordingly, we proposed to incorporate the change made by the CAA, 
2024, by amending the regulation text at Sec.  414.1450 to add the 
payment year 2026 APM Incentive Payment amount of 1.88 percent of 
covered professional services payments. We proposed to amend paragraph 
(b)(1) to state that the amount of the APM Incentive Payment for 
payment years 2019 through 2024 is equal to 5 percent, for payment year 
2025, 3.5 percent, and for payment year 2026, 1.88 percent of the 
estimated aggregate payments for

[[Page 98466]]

covered professional services furnished during the calendar year 
immediately preceding the payment year.
    Beginning with the 2026 payment year, which relates to the 2024 QP 
Performance Period, section 1848(d)(1)(A) of the Act specifies that 
there shall be two separate PFS conversion factors, one for items and 
services furnished by an eligible clinician who is a QP for the year 
(the qualifying APM conversion factor), and the other for other items 
and services not furnished by a QP (the non-qualifying APM conversion 
factor). Each conversion factor will be equal to the conversion factor 
for the previous year multiplied by the applicable update for the year 
specified in section 1848(d)(20) of the Act. The update specified for 
the qualifying APM conversion factor for CY 2025 is 0.75 percent, while 
the update for the nonqualifying APM conversion factor is 0.25 percent.
    As the establishment of a 1.88 percent APM Incentive Payment for 
payment year 2026 is established by statute, we are finalizing as 
proposed our incorporation of this change into Sec.  414.1450(b)(1).

V. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et 
seq.), we are required to provide 60-day notice in the Federal Register 
and solicit public comment before a ``collection of information'' 
requirement (as defined under 5 CFR 1320.3(c) of the PRA's implementing 
regulations) is submitted to the Office of Management and Budget (OMB) 
for review and approval. To fairly evaluate whether a collection of 
information should be approved by OMB, section 3506(c)(2)(A) of the PRA 
requires that we solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    In the CY 2025 PFS proposed rule (89 FR 61596), we solicited public 
comment on each of the aforementioned issues for the following sections 
of the rule that contained information collection requirements (ICRs). 
We did not receive such comments, and therefore, we are finalizing them 
in this rule as proposed.

A. Wage Estimates

    To derive average costs, we used data from the U.S. Bureau of Labor 
Statistics' (BLS) May 2023 National Occupational Employment and Wage 
Estimates for all salary estimates (https://www.bls.gov/oes/2023/may/oes_nat.htm). In this regard, Tables 89 and 90 presents BLS' mean 
hourly wage, our estimated cost of fringe benefits and other indirect 
costs (calculated at 100 percent of salary), and our adjusted hourly 
wage. There are many sources of variance in the average cost estimates, 
both because fringe benefits and other indirect costs vary 
significantly from employer to employer, and because methods of 
estimating these costs vary widely from study to study. Therefore, we 
believe that doubling the hourly wage to estimate total cost is a 
reasonably accurate estimation method.
    We note that the May 2023 BLS data does not include median hourly 
wage rates for a number of the physician occupation types listed in 
Table 90; in these cases, the BLS identifies that the median wage rate 
is equal to or greater than $115.00/hr or $239,200 per year. BLS data 
for prior years, such as the May 2021 and May 2022 data, provide 
similar notes for median wage rates for occupations that are above a 
given threshold ($100.00/hr or $208.000 per year for the May 2021 BLS 
data (https://www.bls.gov/oes/2021/may/oes_nat.htm), and $115.00/hr or 
$239,200 per year for the May 2022 BLS data (https://www.bls.gov/oes/2022/may/oes_nat.htm). Therefore, for consistency with previous years 
for estimating physician wage rates, we have continued to use mean 
hourly wage rates across our wage estimates.
[GRAPHIC] [TIFF OMITTED] TR09DE24.146

    For our purposes, BLS' May 2023 National Occupational Employment 
and Wage Estimates does not provide an occupation that we could use for 
``Physician'' wage data. To estimate a Physician's costs, we used an 
average conglomerate wage of $291.64/hr as demonstrated below in Table 
90.

[[Page 98467]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.147

B. Information Collection Requirements (ICRs)

1. ICRs Regarding Clinical Laboratory Fee Schedule: Revised Data 
Reporting Period and Phase-In of Payment Reductions (Sec.  414.504)
    On November 17, 2023, section 502 of the Further Continuing 
Appropriations and Other Extensions Act, 2024 (Pub. L. 118-22) (FCAOEA, 
2024) was passed and delayed data reporting requirements for CDLTs that 
are not ADLTs, and it also delayed the phase-in of payment reductions 
under the Clinical Laboratory Fee Schedule (CLFS) from private payor 
rate implementation under section 1834A of the Act. After the 
publication of the proposed rule (CMS-1807-P) and the close of the 
comment period, however, the data reporting period and phase-in of 
payment reductions were further delayed. On September 26, 2024, section 
221 of the Continuing Appropriations and Extensions Act, 2025 (Pub. L. 
118-83) was passed and delayed CLFS data reporting requirements for 
CDLTs that are not ADLTs, as well as the phase-in of payment reductions 
under the CLFS from private payor rate implementation under section 
1834A of the Act. As stated in section 1834A(h)(2) of the Act, chapter 
35 of title 44 U.S.C., which includes such provisions as the PRA, does 
not apply to information collected under section 1834A of the Act. 
Consequently, we are not setting out any burden estimates under this 
section of this final rule. Please refer to section VII.E.8. of this 
final rule for a discussion of the impacts associated with the changes 
described in section III.D. of this final rule.
2. ICRs Regarding the Updates to the Medicare Diabetes Prevention 
Program (Sec. Sec.  410.79, 414.84, and 424.205)
    In section Sec.  410.79(b), we are finalizing our proposal to make 
conforming changes to our regulation Conditions of Coverage to align 
with the 2024 Centers for Disease Control and Prevention (CDC) Diabetes 
Prevention Recognition Program (DPRP) Standards.\895\ We are finalizing 
our proposal to amend Sec.  410.79(b) to add a new term for MDPP, ``in-
person with a distance learning component.'' The ``in-person with a 
distance learning component'' code will reduce administrative burden 
and allow MDPP suppliers to streamline data reporting to CDC because 
they will only have to maintain one code if they are providing in-
person and distance learning delivery. To further align with 2024 CDC 
DPRP Standards, we also added the term ``combination with an online 
component'' and revised the current ``online'' definition. We also 
clarified in Sec.  410.79(d)(1) that MDPP make-up sessions can only be 
furnished using distance learning and in-person delivery modes, in 
alignment with the Extended flexibilities as defined in the CY 2024 PFS 
final rule (88 FR 79528). We also finalized our proposal to amend Sec.  
410.79(e)(3)(iii)(C) in response to comments that beneficiaries are 
unable to take a picture while standing on their home scales due to 
risk of injury and physical health limitations (88 FR 79249). We 
finalized our proposal to revise language to specify that a beneficiary 
can self-report their weight for an MDPP distance learning session by 
sending two (2) date-stamped photos: one with their weight on the 
digital scale and one of the beneficiary visible in their home. 
Additionally, at Sec.  414.84(c), to make it possible for Medicare 
Administrative Contractors (MACs) to process claims for same day make-
up sessions in MDPP, we finalized our proposal d that MDPP suppliers be 
required to append an existing claim modifier (Current Procedural 
Terminology (CPT) Modifier 79) to any claim for G9886 or G9887 to 
indicate a make-up session that was held on the same day as a regularly 
scheduled MDPP session. We finalized our proposal to remove the MDPP 
bridge payment in Sec.  414.84(a), (d), and (e). This payment is no 
longer necessary in

[[Page 98468]]

MDPP's CY 2024 fee for service payment structure and could introduce 
the potential for fraud, waste, or abuse. Finally, we finalized our 
proposal to make minor edits throughout Sec. Sec.  410.79, 424.205, and 
414.84 to update outdated references and align with previous rulemaking 
pertaining to MDPP terminology, payment structure, and requirements. 
Section 1115A(d)(3) of the Act exempts Innovation Center model tests 
and expansions, which include the MDPP expanded model, from the 
provisions of the PRA. Accordingly, this collection of information 
section does not set out any burden for the provisions, including the 
collection of weights, per the CY 2024 PFS final rule.
---------------------------------------------------------------------------

    \895\ Centers for Disease Control and Prevention Diabetes 
Prevention Recognition Program. Standards and Operating Procedures. 
Requirements for CDC Recognition. June 2024. https://nationaldppcsc.cdc.gov/s/article/DPRP-Standards-and-Operating-Procedures.
---------------------------------------------------------------------------

3. ICRs Regarding the Medicare Shared Savings Program
    Section 1899(e) of the Act provides that chapter 35 of title 44 
U.S.C., which includes such provisions as the PRA, shall not apply to 
the Shared Savings Program. Accordingly, we are not setting out Shared 
Savings Program burden estimates under this section of the preamble. 
Please refer to section VI.E.11. of this final rule for a discussion of 
the impacts associated with the changes to the Shared Savings Program 
as described in section III.G. of this final rule.
4. ICRs Regarding Rebate Reduction Requests Submitted Under Sections 
11101 and 11102 of the Inflation Reduction Act (CMS-10858, OMB 0938-
1474) (Sec. Sec.  427.402, 428.302, and 428.303)
    The following changes will be submitted to OMB for approval under 
control number 0938-INSERT (CMS-INSERT).
    In sections III.I. of this final rule, we are finalizing the 
proposed policy that to receive consideration for an inflation rebate 
reduction for a specific rebatable drug when the manufacturer believes 
there is a severe supply chain disruption or likely shortage, a 
manufacturer must submit to CMS a rebate reduction request form along 
with supporting documentation. As stated in the proposed rule (89 FR 
62104), we proposed this because manufacturers hold some of the 
information and documentation that is needed to determine whether the 
rebate amount for a Part B or Part D rebatable drug should be reduced 
due to either a severe supply chain disruption or a likely shortage as 
required by sections 1847A(i)(3)(G)(ii), 1860D-14B(b)(1)(C)(ii), and 
1860D-14B(b)(1)(C)(iii) of the Act.
    At Sec. Sec.  427.402(c)(4) and 428.302(c)(4), we proposed the 
criteria that a Part B or Part D rebatable drug must meet for CMS to 
grant a severe supply chain disruption rebate reduction request. At 
Sec. Sec.  427.402(c)(5) and 428.302(c)(5), we proposed that if a 
manufacturer believes a severe supply chain disruption continues into a 
fifth consecutive calendar quarter for a Part B rebatable biosimilar 
biological product, or a second applicable period for a generic Part D 
rebatable drug or biosimilar after the start of the natural disaster or 
other unique or unexpected event, the manufacturer may request an 
extension of the rebate reduction one time by submitting a rebate 
reduction extension request and supporting documentation. At Sec.  
428.303(c)(4), we proposed criteria that a generic Part D rebatable 
drug must meet for CMS to grant a rebate reduction request because the 
generic Part D rebatable drug is likely to be in shortage, including 
the requirements for a one-time extension of a rebate reduction. At 
Sec.  428.303(c)(5), we proposed that if a manufacturer believes a 
generic Part D rebatable drug that was granted a reduction of the 
rebate amount and continues to be affected by the potential drug 
shortage continuing into 1 additional consecutive applicable period, 
the manufacturer may request an extension of the rebate reduction one 
time by submitting a rebate reduction extension request and supporting 
documentation.
    We did not receive any public comments on the collection of 
information requirements for the rebate reduction requests provisions, 
and we are finalizing as proposed.
    Additional instructions for submitting rebate reduction requests 
are provided in the collection of information that was approved on July 
22, 2024, under OMB control number 0938-1474 and can be found on 
reginfo.gov (https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202407-0938-012). The approved collection of 
information includes the rebate reduction request forms that must be 
submitted to CMS for consideration for a rebate reduction.
    As stated in the proposed rule (89 FR 62104), we believe that few 
manufacturers will submit a rebate reduction request form due to the 
statutory specifications regarding eligible drugs, as well as the 
policy criteria finalized in this rule. Using the wage rates in Table 
89 of this final rule, we anticipate collecting a total of 10 rebate 
reduction request forms per year. We estimate a total annual burden of 
3,100 hours (310 hr per form * 10 forms) at a cost of $37,378 [(160 hr 
x $84.66/hr for a Business Operations Specialist collect information 
and provide brief explanations detailing the specifics of the severe 
supply chain disruption or likely shortage, including determining 
changes in drug production and distribution and when supply is expected 
to meet demand, submit information on how the manufacturer plans to 
resolve or mitigate the severe supply chain disruption or likely 
shortage, compile supporting documentation providing evidence of the 
severe supply chain disruption and likely shortage, and submit such 
information as part of their request to CMS) + (80 hr x $129.62/hr for 
a Pharmacist to evaluate the impact and duration of a severe supply 
chain disruption or determine the likelihood of shortage and 
anticipated duration of the potential shortage T) + (50 hr x $169.68/hr 
for a Lawyer to review the submission and determine which information, 
if any, on the form or in the supporting documentation is considered 
proprietary and protected under Exemption 3 and/or Exemption 4 of the 
Freedom of Information Act) + (20 hr x $248.94/hr for a Chief Executive 
to review the Rebate Reduction Request Form and supporting 
documentation and certify the submission; certification must be done by 
the (1) CEO, (2) CFO, (3) an individual other than a CEO or CFO, who 
has authority equivalent to a CEO or a CFO, or (4) an individual with 
the directly delegated authority to perform the certification on behalf 
of one of the individuals mentioned in (1) through (3))].
    Using the wage rates in Table 89 of this final rule, we also 
anticipate collecting a total of 10 rebate reduction extension request 
forms per year, and a total annual burden estimate of 3,100 hours (310 
hr per form * 10 forms) at a cost of $37,378 [(160 hr x $84.66/hr for a 
Business Operations Specialist to collect information and provide brief 
explanations detailing the specifics of the continued severe supply 
chain disruption or likely shortage, including determining changes in 
drug production and distribution and when supply is expected to meet 
demand, submit information on how the manufacturer plans to resolve or 
mitigate the severe supply chain disruption or likely shortage, compile 
supporting documentation providing evidence of the severe supply chain 
disruption and likely shortage continuation, and submit such 
information as part of their request to CMS) + (80 hr x $129.62/hr for 
a Pharmacist to to evaluate the continued impact and duration of a 
severe supply chain disruption or determine the

[[Page 98469]]

continued likelihood of shortage and anticipated duration of the 
potential shortage) + (50 hr x $169.68/hr for a Lawyer to review the 
submission and determine which information, if any, on the form or in 
the supporting documentation is considered proprietary and protected 
under Exemption 3 and/or Exemption 4 of the Freedom of Information Act) 
+ (20 hr x $248.94/hr for a Chief Executive to review the Rebate 
Reduction Request Form and supporting documentation and certify the 
submission; certification must be done by the (1) CEO, (2) CFO, (3) an 
individual other than a CEO or CFO, who has authority equivalent to a 
CEO or a CFO, or (4) an individual with the directly delegated 
authority to perform the certification on behalf of one of the 
individuals mentioned in (1) through (3)))].
    CMS approximates that the burden estimates for the rebate reduction 
request form and the rebate reduction extension request form will be 
similar due to the questions on the forms requiring about the same 
amount of time for a manufacturer to collect and submit the information 
on the applicable form.
    We did not receive any public comments on the collection of 
information requirements and burden estimates for the rebate reduction 
requests provisions, and we are finalizing as proposed.
5. ICRs Regarding Medicare Parts A and B Overpayment Provisions of the 
Affordable Care Act (Sec.  401.305(a)(2) and (b)(1), (2), and (3))
    Section W of the December 2022 Overpayments Proposed Rule proposed 
amendments to Sec.  401.305(a)(2) to change the standard for an 
``identified overpayment'' for Medicare Parts A and B and include by 
reference, the knowledge standard set forth in the False Claims Act at 
31 U.S.C. 3729(b)(1). The proposed amendments for Medicare Parts A and 
B are associated with OMB control number 0938-1323 (CMS-10405); 
however, we did not make any revisions to the currently approved 
requirements and burden under this control number. We were not able to 
predict if there will be any change in the number of overpayments 
identified or reported under the proposed amendments to the rule; 
however, we solicited comment on this assumption.
    Section III.O. of this final rule discusses existing Sec.  
401.305(b)(1), which specifies when a person who has received an 
overpayment must report and return an overpayment. We proposed to amend 
Sec.  401.305(b)(1) by referencing revised Sec.  401.305(b)(2) and new 
Sec.  401.305(b)(3). We proposed a technical modification to the 
introductory language in Sec.  401.305(b)(2) to acknowledge that this 
paragraph may be applicable after the suspension described in new Sec.  
401.305(b)(3) is complete. New Sec.  401.305(b)(3) identifies 
circumstances under which the deadline for reporting and returning 
overpayments will be suspended to allow time for providers to 
investigate and calculate overpayments. Again, the amendments for 
Medicare Parts A and B are associated with OMB control number 0938-1323 
(CMS-10405); however, we did not make any revisions to the currently 
approved requirements and burden under this control number since we 
could not predict if there will be any change to the number of 
overpayments identified or reported based on this rulemaking's changes. 
We solicited comment on this assumption.
    We did not receive public comments on the provisions and 
assumptions, and therefore, we are finalizing them as proposed.
6. The Quality Payment Program (42 CFR Part 414 and Section IV. of This 
Final Rule)
    The following Quality Payment Program-specific ICRs reflect changes 
to our currently approved burden (that is, burden that is currently 
approved by OMB via an active collection of information request) to 
capture policy changes in this CY 2025 final rule.
    In the CY 2025 PFS proposed rule (89 FR 62104 through 62152), we 
presented detailed burden updates that reflected the impact of proposed 
policy provisions as well as updated data and assumptions that were 
independent of policy proposals. We also solicited public comment on 
our approach to presenting burden such estimates, but we did not 
receive any comment.
    In this final rule, we only present detailed burden estimates for 
Quality Payment Program ICRs that are new or revised and based on 
policies finalized in this rule. We also continue our discussions of 
policy provisions for which we did not propose burden updates. Non-
rulemaking adjustments, due to updated data and assumptions, and the 
changes due to provisions of this rule, will be submitted to OMB for 
approval under the associated control numbers.
    Outside of previous physician fee schedule payment policy rules 
which included adjustment-only burden, this follows our long-standing 
process for setting out PRA-related burden in the vast majority of our 
proposed and final rules. It is intended to focus our PRA score on the 
impact of the rulemaking document.
 a. Background
(1) ICRs Associated With Merit-Based Incentive Payment System (MIPS) 
and Advanced Alternative Payment Models (APMs)
    In section V.B.6. of this final rule, we discuss a series of ICRs 
associated with the Quality Payment Program, including for MIPS and 
Advanced APMs. The following sections describe the changes in the 
estimated burden for the information collections relevant to the policy 
provisions finalized in the CY 2025 PFS final rule for MIPS and 
Advanced APM ICRs. These changes, as well as non-rulemaking 
adjustments, will be submitted to OMB for approval under control number 
0938-1314 (CMS-10621). The updated information collections for the 
Consumer Assessment of Healthcare Providers and Systems (CAHPS) for 
MIPS Survey outlined in section IV.A.4.j.(1)(b) of this final rule will 
be submitted to OMB for review under control number 0938-1222 (CMS-
10450), to be a requirement for CAHPS for MIPS survey vendors beginning 
with the CY 2026 performance period/2028 MIPS payment year. We have 
received approval for the collection of information associated with the 
virtual group election process under OMB control number 0938-1343 (CMS-
10652).
(a) Summary of Annual Quality Payment Program Burden Estimates
    Table 91 summarizes this rule's total burden estimates for the 
Quality Payment Program for the CY 2025 performance period/2027 MIPS 
payment year. For the Quality Payment Program, we provide estimates 
only for ICRs that have policy provisions finalized in this final rule 
that impact our burden estimates.
    In the CY 2024 PFS final rule (87 FR 70169), the total estimated 
burden for the CY 2024 performance period/2026 MIPS payment year was 
724,212 hours at a cost of $81,322,556 (see Table 91, row a). 
Accounting for updated wage rates and the subset of all Quality Payment 
Program ICRs outlined in this section of this final rule compared to 
the CY 2024 PFS final rule, the total estimated annual burden of 
continuing policies and information set forth in the CY 2024 PFS final 
rule into the CY 2025 performance period/2027 MIPS payment year is 
635,303 hours at a cost of $75,919,246 (see Table 91, row b). These 
represent a decrease of 88,909 hours and $5,403,307. To understand the 
burden implications of the policies finalized in this rule, we provide 
an estimate of the total burden associated

[[Page 98470]]

with continuing the policies and ICRs currently approved by OMB and set 
forth in the CY 2024 PFS final rule into the CY 2025 performance 
period/2027 MIPS payment year. The estimated burden of 594,447 hours at 
a cost of $71,079,848 (see Table 91, row c) reflects the availability 
of more accurate data to account for all potential respondents and 
submissions across the ICRs with burden changes detailed in this 
section of the final rule and represents a decrease of 40,856 hours and 
$4,839,401 (see Table 91, row d).
    Our total burden estimate for the CY 2025 performance period/2027 
MIPS payment year, for ICRs that include changes due to provisions 
finalized in this final rule, is 586,877 hours and $70,166,672 (see 
Table 91, row e), which represents a decrease of 48,426 hours and 
$5,752,577 (see Table 91, row f) from the CY 2024 PFS final rule 
estimate with updated wage rates and ICRs. From these estimates, 
updated data and assumptions not related to policies in this final rule 
will reduce burden by 40,856 hours and $4,839,401 (see Table 91, row 
d). We estimate that the policies in this final rule will further 
reduce burden by 7,570 hours (-48,426 hours--40,856 hours) and $913,176 
(-$5,752,577--$4,839,401) (see Table 91, row g) for the CY 2025 
performance period/2027 MIPS payment year; this estimate is unchanged 
from the CY 2025 PFS proposed rule (89 FR 62105 and 62106). In Table 
92, we identify the expected change in total hours and total responses 
for the included ICRs.
[GRAPHIC] [TIFF OMITTED] TR09DE24.149


[[Page 98471]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.148

    Table 93 provides the reasons for changes in the estimated burden 
for the CY 2025 performance period/2027 MIPS payment year for 
information collections in the Quality Payment Program section (IV.A) 
of this final rule. As with Tables 91 and 92, we updated Table 93 from 
the CY 2025 PFS proposed rule (89 FR 62108 through 62440) to only 
include ICRs for which policy provisions finalized in this rulemaking 
impact our burden estimates. We divided the reasons for our change in 
burden into those related to finalized policies in the CY 2025 PFS 
final rule and those related to adjustments in burden continued from 
the CY 2024 PFS final rule policies and as currently approved under 
CMS-10621 (OMB 0938-1314) that reflect updated data and revised 
methods.

[[Page 98472]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.150

(2) Summary of Changes for the Quality Payment Program: MIPS
(a) MIPS ICRs With Changes Due to Policy Provisions
    As identified in Tables 92 and 93, the following five MIPS ICRs 
under control number 0938-1314 (CMS-10621) show changes in burden due 
to the policies finalized in this final rule:
     Quality Performance Category Data Submission by Medicare 
Part B Claims Collection Type.
     Quality Performance Category Data Submission by Qualified 
Clinical Data Registry (QCDR) and MIPS Clinical Quality Measure (CQM) 
Collection Type.
     Quality Performance Category Data Submission by Electronic 
Clinical Quality Measure (eCQM) Collection Type.
     MIPS Value Pathways (MVP) Quality Performance Category 
Submission.
     MVP Registration.
    In aggregate, we estimate policy provisions will result in a net 
decrease in burden of 7,570 hours and $913,176 for the CY 2025 
performance period/2027 MIPS payment year (see Table 91). We detail 
changes to our currently approved estimates for these ICRs under 
control number 0938-1314 (CMS-10621) based on policy provisions as well 
as revised burden assumptions based on the updated data available at 
the time of preparation of this final rule; these discussions begin in 
section V.B.6.b. of this final rule.
    As detailed in section V.B.6.b. of this final rule, updates to the 
information collections for the CAHPS for MIPS Survey will be submitted 
to OMB for review under control number 0938-1222 (CMS-10450). We did 
not propose updates to the burden estimates because of the forthcoming 
changes.
(b) MIPS ICRs With No Changes to Currently Approved Estimates
    We did not propose adjustments to our burden estimates for the 
following ICRs in the CY 2025 PFS proposed rule. We are finalizing not 
to make any changes to these ICRs from our currently approved estimates 
under the control

[[Page 98473]]

numbers listed below. This includes the following ICRs:
     Beneficiary Responses to CAHPS for MIPS Survey Burden 
(0938-1222) (89 FR 62139).
     Group Registration for the CAHPS Survey (0938-1222) (89 FR 
62139).
     Registration for Virtual Groups (0938-1343) (89 FR 62115).
     Nomination of Improvement Activities (0938-1314) (89 FR 
62147).
     Open Authorization (OAuth) Credentialing and Token Request 
Process (0938-1314) (89 FR 62123).
     Opt-out of Performance Data Display on Compare Tools for 
Voluntary Participants (0938-1314) (89 FR 62151).
     Nomination of MVPs (0938-1314) (89 FR 62147).
    Notably, we discuss related policy provisions for the following 
ICRs in this final rule, and why we believe they do not impact our 
current burden estimates, in sections V.B.6.c.(5).(a).(ii) and 
V.B.6.b.:
     Subgroup Registration (0938-1314) (89 FR 62136).
     CAHPS for MIPS Survey Vendor Requirements (0938-1222) (89 
FR 62122).
(c) MIPS ICRs With Changes Due to Available Data
    We proposed updates to the following ICRs for the CY 2025 
performance period/2027 MIPS payment year due to the availability of 
updated data and assumptions that are not associated with policy 
provisions in this final rule. These burden updates, as presented in 
the CY 2025 PFS proposed rule, will be submitted to OMB for approval 
under control number 0938-1314 (CMS-10621). We did not receive public 
comment on our estimates for these ICRs provided in the CY 2025 PFS 
proposed rule.
     Call for Quality Measures (89 FR 62139 and 62140).
     Quality Payment Program Identity Management Application 
Process (89 FR 62127).
    Notably, in sections V.B.6.d. and V.B.6.e. of this final rule, we 
discuss related policy provisions for the following ICRs and why we 
believe they do not impact our current burden estimates.
     Reweighting Applications for Promoting Interoperability 
and Other Performance Categories (89 FR 62140 through 62142).
     Data Submission for the Promoting Interoperability 
Performance Category (89 FR 62142 through 62145).
     Data Submission for the Improvement Activities Performance 
Category (89 FR 62145 through 62147).
    In the CY 2025 PFS proposed rule, we proposed updates to the 
following ICRs for the CY 2025 performance period/2027 MIPS payment 
year due to the availability of updated data and assumptions that are 
not associated with policy provisions. We are further revising these 
estimates due to the availability of updated data and assumptions and 
will submit them to OMB under control number 0938-1314 (CMS-10621).
     QCDR Simplified Self-Nomination and other Requirements (89 
FR 62115 and 62116).
     QCDR Full Self-Nomination and other Requirements (89 FR 
62116 and 62117).
     Qualified Registry Simplified Self-Nomination and other 
Requirements (89 FR 62118 and 62119).
     Qualified Registry Full Self-Nomination and other 
Requirements (89 FR 62119 and 62120).
     Third Party Intermediary Plan Audits (89 FR 62120 through 
62122).
(d) Data Considerations for MIPS Submissions
    As noted in the CY 2025 PFS proposed rule (89 FR 62111), we 
incorporated submission data from CY 2022 performance period/2024 MIPS 
payment year to calculate the total burden for data submission under 
the quality, Promoting Interoperability, and improvement activities 
performance categories. The accuracy of our estimates of the total 
burden for data submission for those performance categories may be 
impacted by several primary factors. First, we are unable to predict 
with certainty who will be a Qualifying APM Participant (QP) for the CY 
2025 performance period/2027 MIPS payment year. Second, it is difficult 
to predict whether Partial QPs, who can elect to report to MIPS, will 
choose to participate in the CY 2025 performance period/2027 MIPS 
payment year compared to the CY 2022 performance period/2024 MIPS 
payment year. Therefore, the actual number of Advanced APM participants 
and how they elect to submit data may differ from our estimates. 
However, we believe our estimates are the most appropriate given the 
available data.
(3) Summary of Quality Payment Program Changes: Advanced APMs
    In the CY2025 PFS proposed rule, we proposed updates to the 
following ICRs for the CY 2025 performance period/2027 MIPS payment 
year due to the availability of updated data and assumptions that are 
not associated with policy provisions. These burden updates, as 
presented in the CY 2025 PFS proposed rule, will be submitted to OMB 
for approval under control number 0938-1314 (CMS-10621). This includes 
the following ICRs:
     Partial QP Elections (89 FR 62148).
     Other Payer Advanced APM Determinations: Payer-Initiated 
Process (89 FR 62149).
     Other Payer Advanced APM Determinations: Eligible 
Clinician-Initiated Process (89 FR 62149 and 62150).
     Submission of Data for QP Determinations under the All-
Payer Combination Option (89 FR 62150 and 62151).
(4) Framework for Understanding the Burden of MIPS Data Submission
    We refer readers to the CY 2024 PFS final rule (88 FR 79422 through 
79424) for a framework on how the organizations permitted or required 
to submit data on behalf of clinicians vary across the types of data, 
and whether the clinician is a MIPS eligible clinician or other 
eligible clinician voluntarily submitting data, MIPS APM participant, 
or an Advanced APM participant. Note that virtual groups are subject to 
the same data submission requirements as groups, and therefore, we will 
refer only to groups for the remainder of this section, unless 
otherwise noted.
    For MIPS eligible clinicians participating in MIPS APMs, the 
organizations submitting data on behalf of MIPS eligible clinicians 
will vary between performance categories and, in some instances, 
between MIPS APMs. We previously finalized in the CY 2021 PFS final 
rule (85 FR 84859 through 84866) that the APM Performance Pathway (APP) 
is available for clinicians who participate in a MIPS APM for both ACO 
participants and non-ACO participants to submit quality data. Due to 
data limitations and our inability to determine who will use the APP 
versus the traditional MIPS submission mechanism for the CY 2025 
performance period/2027 MIPS payment year, we continue to assume Shared 
Savings Program ACO APM Entities will submit quality data through the 
APP as required. Additionally, we assume MIPS eligible clinicians in 
non-Shared Savings Program ACO APM Entities will participate through 
traditional MIPS or MVPs, submitting as an individual or group rather 
than as an APM Entity. Per section 1899(e) of the Act, submissions 
received from eligible clinicians in ACOs are not included in burden 
estimates for this final rule because quality data submissions to 
fulfill requirements of the Shared Savings Program are not subject to 
the PRA. Accordingly, this burden is not included in Quality Payment 
Program burden estimates.

[[Page 98474]]

    In section IV.A.4.c.(2) of this final rule, we are finalizing our 
proposal to create the APP Plus quality measure set that will allow for 
alignment of the APP with the Adult Universal Foundation measures. 
Shared Savings Program ACOs will be required to report the APP Plus 
quality measure set beginning with the CY 2025 performance period/2027 
MIPS payment year. We did not propose to modify the existing APP 
quality measure set; instead, we are finalizing our proposal to create 
the APP Plus quality measure set that will be optional for MIPS 
eligible clinicians, groups, and APM Entities (not including Medicare 
Shared Savings Program ACOs) meeting the reporting requirements under 
the APP starting with the CY 2025 performance period/2027 MIPS payment 
year. However, for Medicare Shared Savings Program ACOs, they will be 
required to report the APP Plus quality measure set to meet the 
reporting requirements of the Medicare Shared Savings Program's quality 
performance standard. As finalized, each MIPS eligible clinician, 
group, or APM Entity that elects to report the APP may choose to report 
either the APP quality measure set or the APP Plus quality measure set. 
MIPS APM participants may also elect to report via traditional MIPS or 
MVPs.
    We are finalizing, with modification, the proposed APP Plus quality 
measure set, which will include the five quality measures from the APP 
quality measure set that are also Adult Universal Foundation measures 
(Quality #001: Diabetes: Hemoglobin A1c (HbA1c) Poor Control; Quality 
#134: Preventive Care and Screening: Screening for Depression and 
Follow-up Plan; Quality #236: Controlling High Blood Pressure; Quality 
#321: CAHPS for MIPS; and Quality #479: Hospital-Wide, 30-day, All-
Cause Unplanned Readmission (HWR) Rate for MIPS Eligible MIPS Clinician 
Groups) as well as Quality #112: Breast Cancer Screening for a total of 
six measures for the CY 2025 performance period/2027 MIPS payment year. 
The number of quality measures within the APP Plus quality measure set 
will incrementally increase each performance period between CY 2026 and 
CY 2028, as described in section IV.A.4.c.(3) two new quality measures 
(including Quality #484: Clinician and Clinician Group Risk-
standardized Hospital Admission Rates for Patients with Multiple 
Chronic Conditions) for the CY 2026 performance period/2028 MIPS 
payment year; one new quality measure for the CY 2027 performance 
period/2029 MIPS payment year; and two new quality measures for the CY 
2028 performance period/2030 MIPS payment year, or the performance 
period that is one year after the eCQM specifications become available 
for each respective measure, whichever is later.
    We refer readers to section IV.A.4.c.(3)(f) of this final rule for 
additional details. As described in section IV.A.4.e.(1)(b)(i) of this 
final rule, we are finalizing our proposal to require the reporting of 
all measures in the APP Plus quality measure set (with the exception of 
the administrative claims-based quality measures automatically 
calculated by CMS) for the applicable performance period.
    The APP quality measure set for performance year 2024 and 
subsequent years was finalized in the CY 2024 PFS final rule (88 FR 
79112 through 79114) and consists of six measures: two administrative 
claims measures, the CAHPS for MIPS survey, and three measures that 
MIPS eligible clinicians, groups, and APM Entities reporting the APP 
must actively report to CMS via the Medicare CQM (available only to 
Shared Savings Program ACOs), eCQM, MIPS CQM, or Medicare Part B claims 
collection types (available only to individual MIPS eligible 
clinicians, groups, and APM Entities (excluding Shared Savings Program 
ACOs) that are considered small practices), as available per measure. 
MIPS eligible clinicians, groups, or APM Entities reporting the APP 
Plus quality measure set will be scored on data submitted via the 
available collection types described in section IV.A.4.c.(3)(f) of this 
final rule: six measures for the CY 2025 performance period/2027 MIPS 
payment year; eight measures for the CY 2026 performance period/2028 
MIPS payment year; and nine measures for the CY 2027 performance 
period/2029 MIPS payment year. Two additional quality measures will be 
added to the APP Plus quality measure set for the CY 2028 performance 
period/2030 MIPS payment year, or the performance period that is one 
year after the eCQM specifications become available for each respective 
measure, whichever is later.
    The quality performance category burden for MIPS eligible 
clinicians who elect to report the APP Plus quality measure set varies 
compared to the APP quality measure set, traditional MIPs, and MVPs. We 
assume MIPS eligible clinicians incur no burden for reporting the two 
administrative claims quality measures (Quality #479 and Quality #484) 
required under the APP quality measure set, as similar to cost 
measures, we automatically calculate scores from administrative claims 
reporting. In the APP Plus quality measure set, Quality #479 will be 
automatically calculated beginning in the CY 2025 performance period/
2027 MIPS payment year, and Quality #484 will be automatically 
calculated beginning in the CY 2026 performance period/2028 MIPS 
payment year. Additionally, burden estimates for the CAHPS for MIPS 
registration and beneficiary reporting are provided in the CAHPS for 
MIPS PRA package under OMB control number 0938-1222 (CMS-10450); we do 
not assume that MIPS eligible clinicians incur additional reporting 
burden for reporting this measure under the APP quality measure set, or 
the APP Plus quality measure set beginning with the CY 2025 MIPS 
performance period/2027 MIPS payment year. Therefore, we assume that 
MIPS eligible clinicians, groups, and APM Entities reporting the APP 
Plus quality measure set will incur burden for actively submitting 
their quality performance category data via the available collection 
types--eCQM and MIPS CQM. MIPS eligible clinicians, groups, and APM 
Entities reporting the APP, traditional MIPS, and MVPs may incur burden 
for actively submitting the quality performance category data via the 
available collection types--eCQM, MIPS CQM, and Medicare Part B Claims. 
We note these assumptions for actively submitting to assess clinician 
reporting burden may differ from MIPS scoring policy.
    This active submission of quality performance data for the APP Plus 
quality measure set will include four of the six quality measures for 
the CY 2025 performance period/2027 MIPS payment year, five of the 
seven quality measures for the CY 2026 performance period/2028 MIPS 
payment year, and six of the nine measures for the CY 2027 performance 
period/2029 MIPS payment year. Once the additional two quality measures 
are added to the APP Plus quality measure set (for the CY 2028 
performance period/2030 MIPS payment year or the performance period 
that is one year after the eCQM specifications become available for 
each respective measure, whichever is later), active submission of 
quality performance data will include eight of the 11 quality measures.
    Continuing this burden comparison for MIPS eligible clinicians 
reporting the APP Plus quality measure set for the CY 2025 performance 
period/2027 MIPS payment year, clinicians will need to actively submit 
quality performance category data for two fewer quality measures than 
clinicians participating in traditional MIPS (six measures), one more 
quality measure than clinicians participating via the APP (three 
measures), and the same number of

[[Page 98475]]

quality measures as clinicians participating via MVPs (four measures). 
For the CY 2026 performance period/2028 MIPS payment year, clinicians 
reporting the APP Plus quality measure set will need to actively submit 
quality performance category data for one less quality measure than 
clinicians participating in traditional MIPS (six measures); they will 
need to report two more quality measures than clinicians participating 
via the APP (three measures), and one more quality measure than 
clinicians participating via MVPs (four measures). For the CY 2027 MIPS 
performance period/2029 MIPS payment per, clinicians reporting the APP 
Plus quality measure set will need to actively submit quality 
performance category data for the same number of quality measures as 
clinicians participating in traditional MIPS (six measures); they will 
need to report three more quality measures than clinicians 
participating via the APP (three measures), and two more quality 
measures than clinicians participating via MVPs (four measures). Once 
the additional two quality measures are added to the APP Plus measure 
set, for the CY 2028 performance period/2030 MIPS payment year, or the 
performance period that is one year after the eCQM specifications 
become available for each respective measure, whichever is later, 
clinicians reporting the APP Plus quality measure set will need to 
actively submit quality performance category data for two more quality 
measures than clinicians reporting via traditional MIPS (six measures), 
five more quality measures than clinicians participating via the APP 
(three measures), and four more measures than clinicians participating 
via MVPs (four measures). For this comparison of MIPS reporting 
requirements, we assume that clinicians reporting via traditional MIPS 
and MVPs will report eCQM, MIPS CQM, and Medicare Part B Claims 
collection types and will not elect to report the CAHPS for MIPS 
survey.
    As finalized in section III.G.4.b.(2)(a) of this final rule, all 
Shared Savings Program ACOs will be required to report the APP Plus 
measure set for the CY 2025 performance period/2027 MIPS payment year. 
Per section 1899(e) of the Act, submissions received from eligible 
clinicians in ACOs are not included in burden estimates for this final 
rule because quality data submissions to fulfill requirements of the 
Shared Savings Program are not subject to the PRA. As the APP Plus 
quality measure set is new and optional for individual MIPS eligible 
clinicians, groups, and APM Entities (excluding Shared Savings Program 
ACOs), we are unable to estimate how many MIPS eligible clinicians, 
groups, and APM Entities (excluding Shared Savings Program ACOs) will 
submit quality measures via the APP Plus at this time via individual, 
group, or APM Entity (excluding a Shared Savings Program ACO) 
reporting. We continue to assume that MIPS eligible clinicians will 
report MIPS via traditional MIPS or MVPs. We will update these 
estimates as additional data are available. We refer readers to section 
VII.E.18.e.(2)(h) of this final rule for additional discussion.
b. ICRs Regarding Survey Vendor Requirements
    The following changes (associated with CAHPS survey vendors to 
submit data for eligible clinicians) will be submitted to OMB for 
approval under control number 0938-1222 (CMS-10450). We will make the 
revised files available for public review under the standard non-rule 
PRA process which includes the publication of 60- and 30-day Federal 
Register notices which are expected to publish in the CY 2025 
performance period/2027 MIPS payment year.
    We refer readers to Sec.  414.1400(d) for the requirements for CMS-
approved survey vendors that may submit data on the CAHPS for MIPS 
Survey.
    As discussed in section IV.A.4.j.(1)(b) of this final rule, we are 
finalizing our proposal that beginning with the CY 2026 performance 
period/2028 MIPS payment year, a survey vendor must include on its 
application the range of cost of its third party intermediary services 
(cost estimates would vary based on the level of services provided). 
With respect to a third party intermediary that is solely a CMS-
approved survey vendor, the publishable costs will be limited to the 
cost of services related to the CAHPS for MIPS survey. We refer readers 
to section IV.A.4.j.(1)(b) of this final rule for additional detail on 
this policy.
    In the CY 2025 PFS proposed rule (89 FR 62122 and 62123), we 
anticipated that the fields for cost information will request cost 
information that is readily available to survey vendors. Therefore, we 
did not propose any adjustments in burden because we assumed the 
additional cost requirement will not add significant burden to the 
currently approved 10 hour per application burden estimate. We also 
assumed this change will not affect survey vendor participation. We did 
not receive any public comment on our proposed burden assumptions and 
are finalizing as proposed.
    This finalized policy will require CMS updates to the CAHPS for 
MIPS survey vendor application and the CAHPS for MIPS Survey Minimum 
Business Requirements as a requirement for CAHPS for MIPS survey 
vendors beginning in the CY 2026 performance year/2028 MIPS payment 
year. As mentioned, the updated files will be made available for public 
review through the stand-alone non-rule PRA process.
c. ICRs Regarding Quality Data Submission (Sec. Sec.  414.1318, 
414.1325, 414.1335, and 414.1365)
(1) Changes and Adjustments to Quality Performance Category Respondents
    To estimate QPs that are excluded from MIPS, we used the Advanced 
APM payment and patient percentages from the APM Participant List for 
the final snapshot for the 2022 QP Performance period and the QP 
thresholds applied to the regulatory impact analysis, as detailed in 
section VII.E.18.a.(1) of this final rule. As presented in the CY 2025 
PFS proposed rule (89 FR 62123 through 62126), we used updated 
submissions data from the CY 2022 performance period/2024 MIPS payment 
year to estimate the number of respondents that will submit data for 
the CY 2025 performance period/2027 MIPS payment year. These estimates 
are for MIPS eligible clinicians for reporting at the individual, 
group, virtual group, or subgroup level (as applicable for MVP 
reporting).
    We assumed 100 percent of ACO APM Entities will submit quality data 
to CMS as required under their models. While we do not believe there is 
additional quality reporting for ACO APM entities, consistent with 
assumptions used in the CY 2021, CY 2022, CY 2023, and CY 2024 PFS 
final rules (85 FR 84972, 86 FR 65567, 87 FR 70145, and 88 FR 79434, 
respectively), we included all quality data voluntarily submitted by 
MIPS APM participants at the individual or TIN-level in our respondent 
estimates. As stated in section V.B.6.a.(4) of this final rule, we 
assumed non-Shared Savings Program ACO APM Entities will participate 
through traditional MIPS or MVPs and submit as an individual or group 
rather than as an entity. Our burden estimates for the quality 
performance category did not include the burden for the quality data 
that Shared Savings Program APM Entities submit to fulfill the 
requirements of their APMs. The associated burden is excluded from this 
Collection of Information section of this final rule because sections 
1899(e) and 1115A(d)(3) of the Act (42 U.S.C.

[[Page 98476]]

1395jjj(e) and 1315a(d)(3), respectively) state that the Shared Savings 
Program and the testing, evaluation, and expansion of Innovation Center 
models tested under section 1115A of the Act (or section 3021 of the 
Affordable Care Act) are not subject to the PRA. The regulatory impact 
analysis discusses impacts to the Shared Savings Program from 
provisions finalized in this final rule.
    For the CY 2025 performance period/2027 MIPS payment year, 
respondents will have the option to submit quality performance category 
data via Medicare Part B claims, direct, and log in and upload 
submission types. We estimated the burden for collecting data via 
collection type: Medicare Part B claims, QCDR and MIPS CQMs, and eCQMs. 
We did not estimate burden for administrative claims quality measures; 
similar to cost measures, we automatically calculate scores for 
individuals, groups, virtual groups, or APM Entities that meet 
requirements to be scored on individual measures due to their 
administrative claims reporting. Additionally, we captured the burden 
for clinicians who choose to submit via these collection types for the 
quality performance category of MVPs. Because MIPS eligible clinicians 
may submit data for multiple collection types for a single performance 
category, the estimated numbers of individual clinicians and groups to 
collect via the various collection types are not mutually exclusive and 
reflect the occurrence of individual clinicians or groups that 
collected and submitted data via multiple collection types during the 
CY 2022 performance period/2024 MIPS payment year.
    There are no changes to the estimated quality performance category 
submission burden per response due to the policies finalized in section 
IV.A.4. of this final rule. We discuss in this section these policies 
and our reasons for not changing the currently approved per response 
burden for the ICRs related to submitting quality performance category 
data.
    In section IV.A.4.d.(2)(b) of this final rule, we are finalizing 
our proposal to update Sec.  414.1325(a)(1)(i) to state that a data 
submission for the quality performance category must include numerator 
and denominator data for at least one MIPS quality measure from the 
final list of MIPS quality measures. Additionally, we are finalizing 
our proposal to codify our existing policies governing our treatment of 
multiple data submissions received for the quality performance category 
at Sec.  414.1325(f)(1) in section IV.A.4.d.(3)(b) of this final rule. 
We refer readers to these sections for details. The finalized policies 
intend to eliminate certain issues with the scoring of an unintended 
data submission affecting MIPS payment adjustments. We do not expect 
that these policies will affect the number of quality submissions or 
the time to complete a submission, and there are no changes to our 
currently approved estimated burden for this ICR.
    In section IV.A.4.e.(1)(c)(i) of this final rule, we are 
finalizing, as proposed, the proposal to maintain the data completeness 
criteria threshold of at least 75 percent for the CY 2027 and CY 2028 
performance periods/2029 and 2030 MIPS payment years. As the data 
completeness criteria threshold policy extends the data completeness 
criteria previously established in rulemaking for the CY 2024, CY 2025, 
and CY 2026 performance periods/2026, 2027, 2028 MIPS payment years (87 
FR 70049 through 70052; and 88 FR 79334 through 79337), this policy 
will not increase burden for the applicable interested parties. We 
refer readers to section IV.A.4.e.(1)(c)(i) of this final rule for 
additional information on this policy.
    Several factors drove our proposed updates to the number of 
responses for the Medicare Part B claims data, QCDR and MIPS CQMs, and 
eCQMs in the CY 2025 PFS proposed rule (89 FR 62123 through 62134). 
First, we incorporated updated submission data available for the CY 
2022 performance period/2024 MIPS payment year as outlined in section 
V.B.6.c.(1) of this final rule. These changes reflect updated 
submission counts to traditional MIPS per collection type, which create 
a new baseline to which we apply our estimates our MVP participation 
estimates. Second, our updated estimates for MVP participation impact 
the number of estimated clinicians submitting quality data using each 
collection type. We adjusted our estimates for the number of 
participants in previously finalized MVPs to account for both the 
availability of updated data and updated assumptions for MVP 
participation (from 14 percent to 6 percent). Changes due to updated 
data and assumptions are identified as non-policy adjustments. We also 
updated our estimates to account for our expected increase in MVP 
participation of 4 percentage points due to the addition of six new 
MVPs; we associate this incremental effect, all else equal, with policy 
provisions. With this approach, any increase to our expected MVP 
participation rate reduces the number of estimated submissions for each 
quality performance category collection type via traditional MIPS, all 
else equal. Similarly, any decrease to our estimated MVP participation 
rate will increase the number of estimated submissions for each quality 
performance category collection type via traditional MIPS, all else 
equal.
    Medicare Part B claims, MIPS CQM/QCDR, eCQM Collection Type: 
Individuals. Table 94 of this final rule identifies our methods to 
estimate the number of MIPS eligible clinicians that will submit data 
as individual clinicians via each collection type in the CY 2025 
performance period/2027 MIPS payment year. We continue our estimates 
for the total number of clinicians from the CY 2025 PFS proposed rule 
(89 FR 62125) and have added additional rows to this table to 
distinguish the impact of policies vs adjustments. We identify 
estimated individual-clinician submissions per collection type from CY 
2022 performance period/2024 MIPS payment year data (row a). We first 
estimated that 10 percent of clinicians who reported MIPS as 
individuals in CY 2022 performance period/2024 MIPS payment year may 
move to MVP reporting for the CY 2025 performance period/2027 MIPS 
payment year (row b). This 10 percent encompasses our estimate that 6 
percent of clinicians will report the MVPs previously finalized in the 
CY 2024 rulemaking (row c), and that 4 percent of clinicians will 
submit MVPs due to the six new MVPs finalized in this rule (row d). The 
basis for these estimates is discussed in section V.B.6.c.(5).(a) of 
this final rule. The following paragraphs provide our estimates for the 
number of clinicians submitting traditional MIPS as individuals, per 
Medicare Part B claims, CQM/QCDR, and eCQM collection types. In this 
section, we estimate the number of individual and group respondents per 
collection type. We estimate the impact of the six newly finalized 
MVPs. We also aggregate the impact of both the updated submission data 
and our updated assumption that only 6 percent of MIPS submissions from 
CY 2022 performance period/2024 MIPS payment year will move to MVP 
submissions due to the MVPs finalized in the CY 2024 PFS final rule (88 
FR 79981 through 80047), rather than 14 percent as established in the 
CY 2024 PFS final rule (88 FR 79443) and applied in our currently 
approved estimates.
    Medicare Part B Claims Collection Type: Individual Clinicians. We 
estimate that approximately 12,197 clinicians will submit data as 
individuals using the Medicare Part B claims collection type for the CY 
2025 performance period/2027 MIPS

[[Page 98477]]

payment year. This estimate of 12,197 clinicians equates to 12,197 
respondents, as we assume each clinician per collection type completes 
one submission. From our currently approved estimate of 13,413 
respondents, we estimate that updated submission data and assumptions 
will result in 674 fewer clinicians reporting traditional MIPS for this 
collection type. Additionally, we estimate that the six new MVPs 
finalized in section IV.A.4.a(1) of this final rule will result in 542 
fewer clinicians reporting traditional MIPS. Together, we estimate a 
total decrease of 1,216 individual clinicians reporting this collection 
type (674 clinicians + 542 clinicians or 13,413 current estimate - 
12,197 revised estimate) (see Table 94).
    MIPS CQM and QCDR Collection Type: Individual Clinicians: We 
estimate that approximately 10,850 clinicians will submit data as 
individuals using the MIPS CQM and QCDR collection types for the CY 
2025 performance period/2027 MIPS payment year. This estimate of 10,850 
clinicians equates to 10,850 respondents, as we assume each clinician 
per collection type completes one submission. Our currently approved 
estimate of 16,632 combined individual, group, and virtual group 
respondents (reflected in Table 100) for this collection type via 
traditional MIPS included 10,682 individual submissions. For individual 
clinician submitters, we estimate that the updated submission data and 
assumptions will result in an increase of 651 clinicians reporting 
traditional MIPS as individuals. Additionally, we estimate that the six 
new MVPs finalized in section IV.A.4.a(1) of this final rule will 
result in 483 fewer clinicians reporting traditional MIPS as 
individuals. Together, we estimate a total increase of 168 individual 
clinicians reporting this collection type (651 clinicians-483 
clinicians or 10,850 revised estimate-10,682 current estimate) (see 
Table 94).
    eCQM Collection Type: Individual Clinicians: We estimate that 
approximately 21,240 clinicians will submit data as individuals using 
the eCQM collection type for the CY 2025 performance period/2027 MIPS 
payment year. This estimate of 21,240 clinicians equates to 21,240 
respondents, as we assume each clinician per collection type completes 
one submission. Our currently approved estimate of 28,714 combined 
individual, group, and virtual group respondents (reflected in Table 
102) includes 22,897 individual submissions. We estimate that the 
updated submission data and assumptions will result in 713 fewer 
clinicians reporting traditional MIPS as individuals. Additionally, we 
estimate that the six new MVPs finalized in section IV.A.4.a(1) of this 
final rule will result in 944 fewer clinicians reporting traditional 
MIPS as individuals. Together, we estimate a total decrease of 1,657 
individual clinicians reporting this collection type (713 clinicians + 
944 clinicians or 21,240 revised estimate-22,897 current estimate) (see 
Table 94).
[GRAPHIC] [TIFF OMITTED] TR09DE24.151

    Medicare Part B claims, MIPS CQM/QCDR, eCQM Collection Type: 
Groups. Table 95 of this final rule provides our estimates for the 
number of groups or virtual groups that will submit quality data on 
behalf of clinicians for each collection type in the CY 2025 
performance periods/2027 MIPS payment year. We identify estimated group 
and virtual group level submissions from CY 2022 performance period/
2024 MIPS payment year submissions (row (a)). We assume clinicians who 
submitted quality data as groups or virtual groups in the CY 2022 
performance period/2024 MIPS payment year will continue to submit data 
for the quality performance category using the same participation and 
collection types for the CY 2025 performance period/2027 MIPS payment 
years. We applied the same methodology described in the CY 2022 PFS 
final rule (86 FR 65577) on our

[[Page 98478]]

assumptions related to the use of an alternate collection type for 
groups that submitted data via the CMS Web Interface collection type 
for the CY 2022 performance period/2024 MIPS payment year. The 
following paragraphs provide our estimates for the number of group and 
virtual group submissions for traditional MIPS, per Medicare Part B 
claims, MIPS CQM/QCDR, and eCQM collection types. We continue our 
estimates for the total number of groups from the CY 2025 PFS proposed 
rule (89 FR 62125 and 62126) and have added additional rows to this 
table to distinguish the impact of policies vs adjustments, as 
described under Medicare Part B claims, MIPS CQM/QCDR, eCQM Collection 
Type: Individuals in section V.B.6.c.(1) of this final rule.
    Medicare Part B Claims Collection Type: Groups and Virtual Groups: 
Not applicable (see Table 95).
    QCDR and MIPS CQM Collection Types: Groups and Virtual Groups: We 
estimate that approximately 6,158 groups and virtual groups will submit 
data for the MIPS CQM and QCDR collection types for the CY 2025 
performance period/2027 MIPS payment year. This estimate of 6,158 
groups and virtual groups equates to 6,158 respondents, as we assume 
each group or virtual group per collection type completes one 
submission. Our currently approved estimate of 16,632 combined 
individual, group, and virtual group respondents (reflected in Table 
100) includes 5,950 groups and virtual groups. We estimate that the 
updated submission data and assumptions on reporting will result in 481 
more groups and virtual groups reporting traditional MIPS. 
Additionally, we estimate that the six new MVPs finalized in this rule 
will result in 273 fewer groups and virtual groups reporting 
traditional MIPS. Together, we estimate a total increase of 208 groups 
and virtual groups reporting this collection type (481 groups-273 
groups or 6,158 revised estimate-5,950 current estimate) (see Table 
95).
    eCQM Collection Type: Groups and Virtual Groups: We estimate that 
approximately 5,939 groups and virtual groups will submit data for the 
eCQM collection type for the CY 2025 performance period/2027 MIPS 
payment year. This estimate of 5,939 groups and virtual groups equates 
to 5,939 respondents, as we assume each group or virtual group per 
collection type completes one submission. Our currently approved 
estimate of 28,714 combined individual, group, and virtual group 
respondents (reflected in Table 102) includes 5,817 groups and virtual 
groups. We estimate that the updated submission data and assumptions 
will result in 386 more groups and virtual groups reporting traditional 
MIPS. Additionally, we estimate that the six new MVPs finalized in this 
rule will result in 264 fewer groups and virtual groups reporting 
traditional MIPS. Together, we estimate a total increase of 122 groups 
and virtual groups reporting this collection type (386 groups-264 
groups or 5,939 revised estimate-5,817 current estimate) (see Table 
95).
[GRAPHIC] [TIFF OMITTED] TR09DE24.152

    The burden associated with the submission of quality performance 
category data has some limitations. We believe it is difficult to 
quantify the burden accurately because clinicians and groups may have 
different processes for integrating quality data submission into their 
practices' workflows. Moreover, the time needed for a clinician to 
review quality measures and other information, select measures 
applicable to their patients and the services they furnish, and 
incorporate the use of quality measures into the practice workflows is 
expected to vary along with the number of measures that are potentially 
applicable to a given clinician's practice and by the collection type.
    We also believe that the burden associated with submitting quality 
measures data will vary depending on the collection type selected by 
the clinician, group, or third party. As such,

[[Page 98479]]

we separately estimate the burden for clinicians, groups, and third 
parties to submit quality measures data by the collection type used. 
For the purposes of our burden estimates for the Medicare Part B 
claims, MIPS CQM and QCDR, and eCQM collection types, we assume that, 
on average, each clinician, group, third party or subgroup will submit 
six quality measures to align with the number of required quality 
measures for which traditional MIPS data must be submitted. See Sec.  
414.1315 for definitions for each of these participation and submission 
types.
    As finalized in the CY 2022 PFS final rule (86 FR 65394 through 
65397), group tax identification numbers (TINs) could also choose to 
participate as subgroups for MVP reporting beginning with the CY 2023 
performance period/2025 MIPS payment year. We refer readers to the CY 
2022 PFS final rule for details on MVP quality reporting requirements 
(86 FR 65411 through 65412).
    We proposed a MIPS quality measure inventory of 196 MIPS quality 
measures for the CY 2025 performance period/2027 MIPS payment year (89 
FR 62042). As shown in Table 96, we are finalizing, with modification, 
the MIPS quality measure inventory to include 195 MIPS quality measures 
for the CY 2025 performance period/2027 MIPS payment year.
    As discussed in section IV.A.4.e.(1)(d)(iii) of this final rule, we 
are finalizing, with modification, our proposal to add seven new MIPS 
quality measures (instead of nine MIPS quality measures as proposed). 
Also, we are finalizing, with modification, our proposal to remove 10 
MIPS quality measures (instead of 11 MIPS quality measures as 
proposed). This is a net decrease of one MIPS quality measure from the 
current MIPS quality measure inventory of 197 measures (198 current + 9 
new measures-10 removed measures). Lastly, we are finalizing, as 
proposed, our proposal to make substantive changes to 66 MIPS quality 
measures.
    We do not anticipate that the provision to remove 10 MIPS quality 
measures will increase or decrease the reporting burden on clinicians 
and groups as respondents generally are still required to submit 
quality data for a minimum of six MIPS quality measures in traditional 
MIPS reporting or submit quality data for four MIPS quality measures in 
an MVP. The new MIPS quality measures finalized for inclusion in MIPS 
for the CY 2025 performance period/2027 MIPS payment year and future 
years are found in Table Group A of Appendix 1 of this final rule; the 
MIPS quality measures finalized, with modification, for removal are 
found in Table Group C of Appendix 1 of this final rule; and the MIPS 
quality measures with substantive changes are found in Table Group D of 
Appendix 1 of this final rule.
[GRAPHIC] [TIFF OMITTED] TR09DE24.153

(2) Quality Data Submission by Clinicians: Medicare Part B Claims-Based 
Collection Type
    The following changes will be submitted to OMB for approval under 
control number 0938-1314 (CMS-10621).
    In the CY 2025 PFS proposed rule (89 FR 62128 through 62130), we 
proposed updates to the estimated burden for the Quality Data 
Submission by Individuals and Groups Using Medicare Part B Claims-Based 
Collection Type. As noted in Table 93 of this final rule, the changes 
in burden reflect adjustments for updated data and assumptions, and as 
well as the finalized of six new MVPs as outlined in section 
IV.A.4.a.(1) of this final rule. We refer readers to sections 
V.B.6.c.(1) and V.B.6.c.(5).(a) of this final rule for the factors 
affecting the proposed changes and adjustments for each quality measure 
collection type. We are finalizing our overall burden estimates as 
proposed; however, we have provided additional detail on the impact of 
policy provisions and updated data and adjustments on our burden 
changes.
    We estimated that 12,197 individual clinicians will collect and 
submit quality data via the Medicare Part B claims collection type. 
From our currently approved estimate of 13,413 clinicians, we estimate 
that updated data will result in a decrease of 674 respondents, and 
that the six new MVPs finalized in this rule will result in an 
additional decrease of 542 respondents (see Table 94). Taken together, 
we estimate a total decrease of 1,216 respondents (674 clinicians + 542 
clinicians or 13,413 current estimate-12,197 revised estimate). For 
this collection type, we assume one response (or submission) per 
respondent per year.
    Consistent with our currently approved per response time figures 
and using the wage rates in Tables 89 and 90 of this final rule, we 
continue to estimate the burden of quality data submission using 
Medicare Part B claims will range from 0.15 hours (9 minutes) at a cost 
of $15.98 (0.15 hr x $106.54/hr) to 7.2 hours at a cost of

[[Page 98480]]

$767.09 (7.2 hr x $106.54/hr) for a computer systems analyst.
    We believe that the aggregate start-up cost for a clinician's 
practice to review measure specifications is 7 hours, consisting of: 3 
hours for a medical and health services manager at $129.28/hr, 1 hour 
for a computer systems analyst at $106.54/hr, 1 hour for a Licensed 
Practical Nurse (LPN) at $58.46/hr, 1 hour for a billing and posting 
clerk at $45.32/hr, and 1 hour for a physician at $291.64/hr. 
Consequently, we are finalizing our approach to continue our currently 
approved estimate of time per response.
    Considering both data submission and start-up requirements, the 
estimated time (per clinician using the Medicare Part B claims 
collection type) ranges from a minimum of 7.15 hours (0.15 hr data 
submission + 7 hr start up) to a maximum of 14.2 hours (7.2 hr data 
submission + 7 hr start up) (see Table 97). In aggregate, the estimated 
total annual time for the CY 2025 performance period/2027 MIPS payment 
year ranges from 87,209 hours (7.15 hr/response x 12,197 responses) to 
173,197 hours (14.2 hr/response x 12,197 responses). The associated 
total annual cost ranges from a minimum of $11,047,799 (12,197 
responses x $905.78/response) to a maximum of $20,209,087 (12,197 
responses x $1,656.89/response). These estimates combine changes to the 
number of responses due to policies finalized in this rule and updated 
data to our currently approved figures.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR09DE24.154

BILLING CODE 4120-01-C
    In Table 98, we calculate the net change in estimated burden for 
quality data submissions from clinicians using the Medicare Part B 
Claims-based collection type using the burden currently approved under 
control number 0938-1314 (CMS-10621) and described in the CY 2024 PFS 
final rule

[[Page 98481]]

(88 FR 79438 and 79439). The decrease of 1,216 responses will result in 
a total maximum change of -17,268 hours at a cost of -$2,014,779 for 
the CY 2025 performance period/2027 MIPS payment year. For purposes of 
calculating total burden, only the maximum burden is used. The total 
time and cost estimate includes the burden associated with this rule's 
finalized policies provisions and availability of more up-to-date data 
and assumptions. In Table 128 (section VII.E.18.e.(1) of this final 
rule), we identify the estimated change in burden due to policies 
finalized in this rule.
[GRAPHIC] [TIFF OMITTED] TR09DE24.155

    We did not receive any comments on our proposed requirements and 
burden estimates for the estimated burden on the requirements for the 
Medicare Part B Claims Collection Type. We are finalizing our burden 
estimates as proposed.
(3) Quality Data Submission by Individuals and Groups Using MIPS CQM 
and QCDR Collection Types
    The following changes will be submitted to OMB for approval under 
control number 0938-1314 (CMS-10621).
    In the CY 2025 PFS proposed rule (89 FR 62130 through 62132), we 
proposed to update burden for the Quality Data Submission by 
Individuals and Groups Using MIPS CQM and QCDR Collection Types. As 
noted in Table 93 of this final rule, the change in burden reflects 
adjustments for updated data and assumptions, as well as finalizing our 
proposal for additional MVPs outlined in section IV.A.4.a(1) of this 
final rule. We refer readers to sections V.B.6.c.(1) and 
V.B.6.c.(5).(a) of this final rule for the factors affecting the 
proposed changes and adjustments for each quality measure collection 
type. We are finalizing our overall burden estimates as proposed; 
however, we have provided additional detail on the impact of policy 
provisions and updated data and adjustments on our burden changes.
    As noted in Tables 94 and 95, we estimate that 17,008 clinicians 
(10,850 individuals and 6,158 groups and virtual groups) will submit 
quality data as individuals or groups using MIPS CQM or QCDR collection 
types for the CY 2025 performance period/2027 MIPS payment year. We 
estimate that updated data will result in an increase in 1,132 
respondents (651 individuals and 481 groups), and that the six new MVPs 
finalized in this final rule will result in a decrease of 756 
respondents (-483 individuals and -273 groups). In aggregate, this is 
an increase of 376 respondents from the currently approved estimate of 
16,632 under control number 0938-1314 (CMS-10621) and provided in the 
CY 2024 PFS final rule (88 FR 79439 through 79441). Given the number of 
measures required for clinicians and groups is the same, we expect the 
burden to be the same for each respondent collecting data via MIPS CQM 
or QCDR, whether the clinician is participating in MIPS as an 
individual or group. For this collection type, we assume one response 
(or submission) per respondent per year.
    Under the MIPS CQM and QCDR collection types, the individual 
clinician or group may either submit the quality measures data directly 
to us, log in and upload a file, or utilize a third party intermediary 
to submit the data to us on the clinician's or group's behalf. We 
estimate that the burden associated with the QCDR collection type is 
similar to the burden associated with the MIPS CQM collection type; 
therefore, we discuss the burden for both collection types together. 
For MIPS CQM and QCDR collection types, we estimate an additional time 
for respondents (individual clinicians and groups) to become familiar 
with MIPS quality measure specifications and, in some cases, specialty 
measure sets and QCDR measures. Therefore, we believe the burden for an 
individual clinician or group to review measure specifications and 
submit quality data is a total of 9 hours at a cost of $1,088.98 per 
response. This consists of 3 hours at $106.54/hr for a computer systems 
analyst (or their equivalent) to submit quality data along with 2 hours 
at $129.28/hr for a medical and health services manager, 1 hour at 
$106.54/hr for a computer systems analyst, 1 hour at $58.46/hr for a 
LPN, 1 hour at $45.32/

[[Page 98482]]

hr for a billing clerk, and 1 hour at $291.64/hr for a physician to 
review measure specifications.
    Additionally, clinicians and groups who do not submit data directly 
will need to authorize or instruct the qualified registry or QCDR to 
submit quality measures' results and numerator and denominator data on 
quality measures to us on their behalf. We estimate the time and effort 
associated with authorizing or instructing the quality registry or QCDR 
to submit this data will be approximately 5 minutes (0.083 hr) at 
$106.54/hr for a computer systems analyst at a cost of $8.84 (0.083 hr 
x $106.54/hr).
    Overall, we estimate 9.083 hr/response at a cost of $1,088.98/
response (see Table 99). In aggregate, we estimate a burden of 154,484 
hours (9.083 hr/response x 17,008 responses) at a cost of $18,521,372 
for the CY 2025 performance period/2027 MIPS payment year (17,008 
responses x $1,088.98/response). These estimates combine burden changes 
due to policies finalized in this rule and updated data.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR09DE24.156

BILLING CODE 4120-01-C
    In Table 100, we calculated the net change in estimated burden for 
quality performance category submissions using the MIPS CQM and QCDR 
collection type by using the currently approved burden described in the 
CY 2024 PFS final rule (88 FR 79439 through 79441) and approved under 
control number 0938-1314 (CMS-10621). In aggregate, using the unchanged 
currently approved time per response estimate, the overall increase of 
376 respondents from 16,632 to 17,008 for the CY 2025 performance 
period/2027 MIPS payment year results in an increase of 3,416 hours at 
a cost of +$409,457. The total time and cost estimate includes the 
burden associated with this rule's finalized policies provisions and 
availability of more up-to-date data and assumptions. In Table 128 and 
section VII.E.18.e.(1) of this final rule, we identify the changes in 
burden to this ICR due to policy provisions.

[[Page 98483]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.157

    We did not receive any comments on our proposed requirements and 
burden estimates for the estimated burden on the requirements for MIPS 
CQM and QCDR collection types. We are finalizing our burden estimates 
as proposed.
(4) Quality Data Submission by Clinicians and Groups: eCQM Collection 
Type
    The following changes will be submitted to OMB for approval under 
control number 0938-1314 (CMS-10621). These changes reflect the impact 
of the six MVPs finalized in section IV.A.4.a(1) of this final rule and 
the availability of more up-to-date data and assumptions.
    In the CY 2025 PFS proposed rule (89 FR 62132 and 62133), we 
proposed to update the number of currently approved respondents for the 
eCQM Collection Type. As noted in Table 93 of this final rule, this 
change in burden reflects adjustments for updated data and assumptions, 
as well as the finalizing our proposal for additional MVPs as outlined 
in section IV.A.4.a(1) of this final rule. We refer readers to sections 
V.B.6.c.(1) and V.B.6.c.(5).(a) of this final rule for the factors 
affecting the proposed changes and adjustments for each quality measure 
collection type. We are finalizing our overall burden estimates as 
proposed; however, we have provided additional detail on the impact of 
policy provisions and updated data and adjustments on our burden 
changes.
    We estimated that 27,179 clinicians (21,240 individual clinicians 
and 5,939 groups) will submit quality data using the eCQM collection 
type for the CY 2025 performance period/2027 MIPS payment year. As 
identified in Tables 94 and 95, we estimate that updated data will 
result in a decrease of 327 respondents (-713 individuals and +386 
groups), and that the new MVPs will result in a decrease of 1,208 
respondents (-944 individuals and -264 groups). Taken together, this is 
a decrease of 1,535 respondents from the currently approved estimate of 
28,714 under control number 0938-1314 and described in the CY 2024 PFS 
final rule (88 FR 78818). We assume clinicians incur the same burden 
whether participating in MIPS as an individual or group. For this 
collection type, we assume one response (or submission) per respondent 
per year.
    Under the eCQM collection type, the individual clinician or group 
may either submit the quality measures data directly to us from their 
eCQM, log in and upload a file, or utilize a third party intermediary 
to derive data from their certified electronic health record technology 
(CEHRT) and submit it to us on the clinician's or group's behalf.
    To prepare for the eCQM collection type, the clinician or group 
must review the quality measures on which we will be accepting MIPS 
data extracted from eCQMs, select the appropriate quality measures, 
extract the necessary clinical data from their CEHRT, and submit the 
necessary data to a QCDR/qualified registry to submit the data on 
behalf of the clinician or group. We assume the burden for collecting 
quality measures data via eCQM is similar for clinicians and groups who 
submit their data directly to us from their CEHRT and clinicians and 
groups who use a QCDR or qualified registry to submit the data on their 
behalf. This includes extracting the necessary clinical data from their 
CEHRT and submitting the necessary data to a QCDR/qualified registry. 
We note that the CY 2024 PFS final rule eliminated the category of 
health IT vendors for the Quality Payment Program beginning in the CY 
2025 performance period/2027 MIPS payment year (88 FR 79390 and 79391).
    We estimated that it will take no more than 2 hours at $106.54/hr 
for a computer systems analyst or their equivalent to submit the data 
file. The burden will also involve becoming familiar with MIPS quality 
measure specifications. In this regard, we estimated it will take 6 
hours for a clinician or group to review measure specifications. Of 
that time, we estimated 2 hours at $129.28/hr for a medical and health 
services manager, 1 hour at $291.64/hr for a physician, 1 hour at 
$106.54/hr for a computer systems analyst, 1 hour at $58.46/hr for an 
LPN, and 1 hour at $45.32/hr for a billing clerk. Overall, we estimated 
a cost of $973.60/response (see Table 101). For the CY 2025 performance 
period/2027 MIPS payment year, in aggregate, we estimate a burden of 
217,432 hours (8 hr x 27,179 responses) at a cost of $26,461,474 
(27,179 responses x $973.60/response). These estimates combine burden 
changes due to policies finalized in this rule and updated data.
BILLING CODE 4120-01-P

[[Page 98484]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.158

BILLING CODE 4120-01-C
    In Table 102, we illustrate the net change in burden for 
submissions in the quality performance category using the eCQM 
collection type from the currently approved burden in the CY 2024 PFS 
final rule (88 FR 79441 and 79442). In aggregate, using our currently 
approved time per response burden estimate, the decrease of 1,535 
respondents from 28,714 to 27,179 for the CY 2025 performance period/
2027 MIPS payment year results in a decrease of 12,280 hours (1,535 
responses x 8 hr/response) at a cost of -$1,494,476 (-1,535 responses x 
$973.60/response). The total time and cost estimate includes the burden 
associated with this rule's finalized policies provisions and 
availability of more up-to-date data and assumptions. In Table 128 and 
section VII.E.18.e.(1) of this final rule, we identify the changes in 
burden to this ICR due to policy provisions.

[[Page 98485]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.159

    We did not receive any comments on our burden estimates for the 
eCQM collection type. We are finalizing our burden estimates as 
proposed.
(5) ICRs Regarding Burden for MVP Reporting
    The following changes will be submitted to OMB for approval under 
control number 0938-1314 (CMS-10621). We are finalizing our overall 
burden estimates as proposed; however, we have provided additional 
detail on the impact of policy provisions and updated data and 
adjustments on our burden changes.
(a) Burden for MVP Reporting Requirements
    In the CY 2022 PFS final rule, we finalized an option for 
clinicians choosing to report MVPs to participate through subgroups 
beginning with the CY 2023 performance period/2025 MIPS payment year 
(86 FR 65392 through 65394). We refer readers to the CY 2022, CY 2023, 
and CY 2024 PFS final rules for our previously finalized burden 
assumptions and requirements for submission data for the MVP 
performance category, and for the estimated number of clinicians 
participating as subgroups in the CY 2024 performance period/2026 MIPS 
payment year (86 FR 65590 through 65592, 87 FR 70155, and 88 FR 79443).
    Advanced Primary Care Management (APCM) payment finalized in 
section II.G.2.b. of this final rule incorporates several specific, 
existing care management and communication technology-based services 
into a bundle and includes performance measurement requirements that, 
for MIPS eligible clinicians, could be met by reporting the Value in 
Primary Care MVP beginning in the CY 2025 performance period/2027 MIPS 
payment year. Billing practitioners who are not MIPS eligible 
clinicians (as defined at Sec.  414.1305) will not have to report the 
MVP in order to furnish and bill for APCM services. Billing 
practitioners who are not MIPS eligible clinicians (as defined at Sec.  
414.1305) will not have to report the MVP in order to furnish and bill 
for APCM services. We estimate MVP reporting as a percentage of 
previous traditional MIPS quality submissions, as outlined in section 
V.B.6.c.(5).(a) of this final rule. In line with this approach, we are 
unable to determine how many additional clinicians or practices will 
report the Value in Primary Care MVP above our current MVP submission 
estimates due to the finalized APCM requirements. Similarly, we cannot 
assess what participation levels clinicians or practices who may use 
these APCM codes have reported MIPS in the past (for example, 
eligibility requirements and special statuses, participation at the 
individual, group, virtual group, or APM Entity level, or reporting via 
traditional MIPS, the APP, or MVPs), or if they will be MIPS eligible 
clinicians in future years. We refer readers to section II.G.2.b. of 
this final rule for details on this policy, and section 
VII.E.18.e.(2)(f) for additional discussion on burden impacts to the 
Quality Payment Program.
    In the CY 2024 PFS final rule (88 FR 79442), we calculated the 
average quality measure submission rate for each newly finalized MVP 
for the CY 2024 performance period/2026 MIPS payment year. For this 
analysis, we assessed measures submissions in the CY 2021 performance 
period/2023 MIPS payment year for clinicians with relevant clinical 
specialties for each proposed MVP. The total of these average quality 
measure submissions for each MVP was equivalent to about 2 percent of 
total quality measure submissions in the CY 2021 performance period/
2023 MIPS payment year. We added this incremental increase of 2 
percentage points to the previously approved estimate in the CY 2023 
PFS final rule that 12 percent of clinicians who participated in MIPS 
for the CY 2021 performance period/2023 MIPS payment year will submit 
data for the quality performance category through MVP reporting in the 
CY 2023 performance period/2025 MIPS payment year (88 FR 79443).
    In the CY 2025 PFS proposed rule (89 FR 62134 and 62135), we 
conducted the analysis identified in the preceding paragraph for the 16 
MVPs approved for the CY 2024 performance period/2026 MIPS payment year 
(88 FR 79978 through 80047) using updated submission data available for 
the CY 2022 performance period/2024 MIPs payment year. The total of 
these average quality measure submissions for each approved MVP was 
equivalent to 6 percent of the total quality measure submissions in the 
CY 2022 performance period/2024 MIPS payment year. This is a decrease 
from the 14 percent estimate provided in the CY 2024 PFS final rule (88 
FR 79443).
    As detailed in section IV.A.4.a(3) of this final rule, we are 
finalizing modifications to 16 MVPs approved for the CY 2024 
performance period/2026 MIPS payment year reporting with the addition 
and removal of measures and improvement activities based on the MVP 
development criteria (85 FR 84849 through 84854). We are also 
finalizing our proposals to consolidate the previously finalized 
Optimal Care for Patients with Episodic Neurological Conditions MVP and 
Supportive Care

[[Page 98486]]

for Neurodegenerative Conditions MVP into a consolidated neurological 
MVP titled Quality Care for Patients with Neurological Conditions, and 
to add six new MVPs to the MVP inventory.
    For each new MVP finalized in this rule, we similarly calculated 
the average quality measure submission rate across the measures 
available in each MVP for the CY 2022 performance period/2024 MIPS 
payment year (89 FR 62134 and 62135). The total of these average 
quality measure submissions for each MVP was equivalent to about 4 
percent of total quality measure submissions. We assumed the 
consolidation of the measures in the Optimal Care for Patients with 
Episodic Neurological Conditions MVP and Supportive Care for 
Neurodegenerative Conditions MVP into the Quality Care for Patients 
with Neurological Conditions MVP will not affect the number of MVP 
submissions. We assumed clinicians who may have submitted the Optimal 
Care for Patients with Episodic Neurological Conditions MVP or the 
Supportive Care for Neurodegenerative Conditions MVP will instead 
submit the Quality Care for Patients with Neurological Conditions MVP. 
Therefore, we estimated the changes to the MVP inventory in this final 
rule will result in an additional 4 percent of MIPS clinicians moving 
from traditional MIPS to MVP reporting.
    We estimated that a total of 10 percent of the clinicians will 
participate in MVP reporting in the CY 2025 performance period/2027 
MIPS payment year. This estimate takes together the aforementioned 
analyses where we assessed the MVP participation rate for the 16 
established MVPs at 6 percent using updated quality measure submission 
data from the CY 2022 performance period/2024 MIPS payment year, and 
where we assessed that 4 percent of MIPS clinicians may move to the 6 
proposed MVPs due to quality measure submission trends for the CY 2022 
performance period/2024 MIPS payment year. This is a decrease of 4 
percentage points from the currently approved estimate of 14 percent in 
the CY 2024 PFS final rule (88 FR 79443) and currently approved under 
control number 0938-1314 (CMS-10621).
    Continuing our approach from the CY 2022, CY 2023, and CY 2024 PFS 
final rules (86 FR 65589 and 65590, 87 FR 70155 and 701566, and 88 FR 
79443 and 79444, respectively), we assume that the number of MVP 
registrations will equal our estimated MVP quality submissions.
(i) Burden for MVP Registration: Individuals, Groups, and Subgroups
    In the CY 2022 PFS final rule (86 FR 65417), we finalized at Sec.  
414.1365(b)(2)(i) that MVP Participants are required to select one 
population health measure at the time of MVP registration. Since the 
MVP population health measures are administrative claims-based, they do 
not require data submission from clinicians and do not contribute to 
reporting burden. In section IV.A.4.b.(1) of this final rule, we are 
finalizing our proposal to update the registration process and scoring 
policies for population health measures. These changes include revising 
Sec.  414.1365(d)(3)(i)(A) to state that we would use the highest score 
of all available population health measures beginning in the CY 2025 
performance period/2027 MIPS payment year. We refer readers to section 
IV.A.4.b.(1) of this rulemaking for details on this policy and scoring 
implications. This policy will remove the requirement for MVP 
Participants to select a population health measure during MVP 
registration, which is currently completed via a drop-down selection. 
We assume the associated reduction in burden per application will be 
minimal. Therefore, we did not adjust the burden per MVP registration 
from the currently approved registration time of 15 minutes (0.25 hr) 
under CMS-10621 (OMB 0938-1314) (88 FR 79443 and 79444).
    In the CY 2025 PFS proposed rule (89 FR 62134 through 62136), we 
estimated that approximately 10 percent of the clinicians that 
currently participate in MIPS will submit data for the measures and 
activities in an MVP. For the CY 2025 performance period/2027 MIPS 
payment year, we assumed that the total number of individual 
clinicians, groups, and subgroups that will complete the MVP 
registration process is 6,285 (4,921 individuals (Table 94, sum of row 
b), 1,344 groups (Table 95, sum of row b), and 20 subgroups (as 
currently approved under control number 0938-1314)). We estimate that 
the six new MVPs finalized in this rule will result in an increase of 
2,506 MVP registrants (1,969 individuals (Table 94, sum of row (d) and 
537 groups (Table 95, sum of row (d)). We estimate that updated data 
and assumptions will result in a decrease of 5,806 respondents. Taken 
together, this is a decrease of 3,300 respondents from the currently 
approved estimate of 9,585 under control number 0938-1314 and described 
in the CY 2024 PFS final rule (88 FR 79443 and 79444). In Table 103, we 
estimate that it will take 1,571 hours (6,285 responses x 0.25 hr/
response) at a cost of $167,432 (6,285 registrations x $26.64/
registration) for individual clinicians, groups, and subgroups to 
register for MVP reporting in the CY 2025 performance period/2027 MIPS 
payment year. For this collection type, we assume one response (or 
submission) per respondent per year. There are no changes to the 
estimated submission burden per response due to the policies finalized 
in section IV.A.4. of this final rule.
[GRAPHIC] [TIFF OMITTED] TR09DE24.160

    In Table 104, we illustrate the net change in estimated burden for 
MVP registration using the currently approved burden. The change in 
responses will result in a decrease of 825 hours (-3,300 responses x 
0.25 hr/

[[Page 98487]]

response) at a cost of -$87,912 (-3,300 responses x $26.64/response). 
The total time and cost estimate includes the burden associated with 
this rule's finalized policies provisions and availability of more up-
to-date data and assumptions. In Table 128 and section VII.E.18.e.(1) 
of this final rule, we identify the changes in burden to this ICR due 
to policy provisions.
[GRAPHIC] [TIFF OMITTED] TR09DE24.161

    We did not receive any comments on our proposed requirements and 
burden estimates for the estimated burden on the requirements for MVP 
registration. We are finalizing our burden estimates as proposed.
(ii) Burden for Subgroup Registration
    We did not propose any revised burden for subgroup registration for 
the CY 2025 performance period/2027 MIPS payment year. As identified in 
section V.B.6.a.(2)(b) of this final rule, we note that the subgroup 
policies do not impact the currently approved burden for subgroup 
registration. As discussed later in this section, we discuss the 
policies and our reasons for not changing the currently approved burden 
for subgroup registration. The burden relevant to the subgroup 
registration requirement is currently approved by OMB under control 
number 0938-1314 (CMS-10621). Consequently, we are not making any 
changes pertaining to subgroup registration under that control number.
    As outlined in section IV.A.4.b.(1) of this final rule, we are 
finalizing our proposal to remove the selection of a population health 
measure at the time of registration. As detailed in section 
V.B.6.c.(5).(a) of this final rule, we believe this modification will 
not significantly impact the currently approved burden for MVP 
registration. We continued this assumption to subgroup registration. We 
did not propose any adjustments to our previously finalized estimate in 
the CY 2022 PFS final rule (86 FR 65590) that 20 subgroups will 
participate in MVP reporting per year.
    We previously finalized a mandatory subgroup reporting requirement 
for multispecialty groups choosing to report as an MVP Participant 
beginning in the CY 2026 performance period/2028 MIPS payment year 
(Sec.  414.1305; 86 FR 65394 through 65397). In CY 2025 PFS proposed 
rule, we sought feedback back via Request for Information (RFI on what 
guidance/parameters are needed for multispecialty groups to place 
clinicians into subgroups for reporting an MVP relevant to the scope of 
care provided. Absent available submission data on MVP reporting with 
the available CY 2022 performance period/2024 MIPS payment year data, 
we were unable to estimate the effect of this established policy on 
reporting for the CY 2026 performance period/2028 MIPS payment year at 
this time. Data for MVP and subgroup submissions will be available in 
the CY 2023 performance period/2025 MIPS payment year data that will be 
available for the CY 2026 rulemaking cycle. We refer readers to section 
VII.E.18.e.(2)(g) of this final rule for additional discussion on 
burden impacts of this established policy to the Quality Payment 
Program.
(iii) Burden for MVP Quality Performance Category Submission
    In the CY 2022 PFS final rule (86 FR 65411 through 65415), we 
finalized the reporting requirements for the MVP quality performance 
category at Sec.  414.1365(c)(1)(i).
    In sections IV.A.4.d.(2)(b) and IV.A.4.d.(3)(b) of this final rule, 
we are finalizing our proposals to adopt minimum criteria for a 
qualifying data submission for a MIPS performance period for the 
quality performance category and to codify our existing policies 
governing our treatment of multiple submissions received for the 
quality performance category. In accordance with our discussion of this 
policy relevant to traditional MIPS quality reporting in section 
V.B.6.c.(1) of this final rule, these policies will not introduce new 
requirements to submit data for the quality performance category of 
MVPs. Therefore, we will continue our currently approved per response 
time estimates for submitting the MVP quality performance category data 
per collection type.
    In the CY 2025 PFS proposed rule (89 FR 62136 through 62139), we 
estimated that 10 percent of the clinicians who submitted MIPS quality 
performance data in the CY 2022 performance period/2024 MIPS payment 
year will submit data for the quality performance category through an 
MVP in the CY 2025 performance period/2027 MIPS payment year. We also 
estimated there will be 20 subgroup reporters in the CY 2025 
performance period/2027 MIPS payment year, split across the eCQM and 
CQM collection types. In the following paragraphs, we detail the 
estimated changes from our currently approved estimates. For each 
collection type, we assume one response (or submission) per respondent 
per year. We are finalizing our overall burden

[[Page 98488]]

estimates as proposed; however, we have provided additional detail on 
the impact of policy provisions and updated data and adjustments on our 
burden changes.
    We estimated 3,030 respondents for the eCQM collection type (see 
Table 105, line c). From our currently approved estimate of 4,684 
respondents, we estimate that the six new MVPs finalized in this rule 
will result in approximately 1,208 respondents moving from traditional 
MIPS to MVPs (944 for individuals + 264 for groups; see Tables 94 and 
95, row (d)). We also estimate that updated data and assumptions 
discussed in sections V.B.6.c.(1) and V.B.6.c.(5).(a). of this final 
rule will result in a decrease of 2,862 respondents. Taken together, we 
estimate a net decrease of 1,654 respondents.
    We estimated 1,900 respondents for the MIPS CQM and QCDR collection 
types (see Table 105, line c). From our currently approved estimate of 
2,717 respondents, we estimate that the six new MVPs finalized in this 
rule will result in approximately 756 respondents moving from 
traditional MIPS to MVPs (483 for individuals + 273 for groups; see 
Tables 94 and 95, row (d)). We also estimate that updated data and 
assumptions discussed in sections V.B.6.c.(1) and V.B.6.c.(5).(a). of 
this final rule will result in a decrease of 1,573 respondents. Taken 
together, we estimate a net decrease of 817 respondents.
    We estimated 1,355 respondents for the Medicare Part B collection 
type (see Table 105, line c). From our currently approved estimate of 
2,184 respondents, we estimate that the six new MVPs finalized in this 
rule will result in approximately 542 individual respondents moving 
from traditional MIPS to MVPs (see Table 94, row (d)). We also estimate 
that updated data and assumptions discussed in sections V.B.6.c.(1) and 
V.B.6.c.(5).(a). of this final rule will result in a decrease of 1,371 
respondents. Taken together, we estimate a net decrease of 829 
respondents.
    For the CY 2025 performance period/2027 MIPS payment year, using 
our currently approved per response time estimates for the clinicians 
and subgroups submitting data for the MVP quality performance category, 
we estimated a burden of 16,059 hours [5.3 hr x 3,030 (3,020 +10) 
responses] at a cost of $1,954,138 (3,030 responses x $644.93/response) 
for the eCQM collection type, 11,343 hours [5.97 hr x 1,900 (1,890 +10 
responses)] at a cost of $1,360,989 (1,900 responses x $716.31/
response) for the MIPS CQM and QCDR collection type, and 12,791 hours 
(9.44 hr x 1,355 responses) at a cost of $1,492,180 (1,355 responses x 
$1,101.24/response) for the Medicare Part B claims collection type.

[[Page 98489]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.162


[[Page 98490]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.163

    Table 106 illustrates the changes in estimated burden for 
clinicians who will submit the MVP quality performance category 
utilizing the eCQM, MIPS CQM and QCDR, and Medicare Part B claims 
collection types in the CY 2025 performance period/2027 MIPS payment 
year. We used the currently approved burden under control number 0938-
1314 (CMS-10621), as described in the CY 2024 PFS final rule (88 FR 
79444 through 79446) as the baseline to determine the net change in 
burden. In aggregate, when combined with our currently approved per 
response time estimate, the decrease in 3,300 respondents who will 
submit data for the MVP quality performance category will result in a 
change of -8,766 hours and -$1,066,714 for the eCQM collection type, -
4,877 hours and -$585,225 for the CQM and QCDR collection type, and -
7,826 hours and -$912,928 for the Medicare Part B claims collection 
type. The total time and cost estimate increase combines the burden 
associated with this rule's policy change along with the changes 
associated with having more up-to-date data and assumptions. In Table 
128 (section VII.E.18.e.(1) of this final rule), we identify the 
changes in burden to this ICR due to policy provisions.
[GRAPHIC] [TIFF OMITTED] TR09DE24.164


[[Page 98491]]


d. ICRs Regarding Promoting Interoperability Data (Sec. Sec.  414.1375 
and 414.1380)
(1) Background
    We refer readers to CY 2025 PFS proposed rule (89 FR 62140) for 
requirements for details and assumptions on the methods by which MIPS 
eligible clinicians, groups, subgroups, and APM Entities can submit 
Promoting Interoperability performance category data.
(2) Reweighting Applications for MIPS Performance Categories
    In the CY 2025 PFS proposed rule (89 FR 62140 through 62142), we 
proposed to update our currently approved burden estimates due to 
updated reweighting application data for the CY 2024 performance 
period/2024 MIPS payment year. We proposed to revise the number of 
responses due to this update data. These adjustments will be submitted 
to OMB for approval under control number 0938-1314 (CMS-10621) via the 
standard non-rule PRA process. We are not setting out such burden in 
this collection of information section since the change is unrelated to 
policies finalized in this final rule. In the following paragraphs, we 
outline these policies and our rationale for not changing the currently 
approved burden for reweighting applications due to these policies.
    As detailed in section IV.A.4.i.(2) of this final rule, we are 
finalizing our proposal to adopt a new reweighting performance 
category(ies) policy at Sec.  414.1380(c)(2)(i)(A)(10) and 
(c)(2)(i)(C)(12) for occurrences where we determine that a third party 
intermediary did not submit the data for the performance category(ies) 
on behalf of the MIPS eligible clinician in accordance with applicable 
deadlines. We believe these occurrences will be rare based on our 
experience with related requests for reweighting, and the extent and 
source of documentation provided to us for each event may vary 
considerably. Therefore, we did not propose any changes to our 
currently approved burden estimates. We refer readers to section 
VII.E.18.e.(2)(e) of this final rule for additional discussion on these 
burden assumptions.
    We did not receive any comments on our assumptions for reweighting 
applications for MIPS Performance Categories. We are finalizing our 
changes as proposed.
(3) Submitting Promoting Interoperability Data
    We did not propose to update our currently approved burden for 
submitting Promoting Interoperability data as a result of policies 
finalized in section IV.A.(4) of this final rule. In the following 
paragraphs, we outline these policies and our rationale for not 
changing the currently approved burden for submitting Promoting 
Interoperability data due to these policies. Independent of policies 
finalized in this final rule, we proposed to update our currently 
approved burden estimates due to the availability of updated submission 
data for the CY 2022 performance period/2024 MIPS payment year, which 
reflect updated estimates for the number of respondents. These 
adjustments, detailed in the CY 2025 proposed rule (89 FR 62142 through 
62145), will be submitted to OMB for approval under control number 
0938-1314 (CMS-10621) via the standard non-rule PRA process. We are not 
setting out such burden in this collection of information section since 
the change is unrelated to the provisions that are being finalized in 
this rule.
    We refer readers to Sec.  414.1375 for our previously established 
policies regarding reporting for the Promoting Interoperability 
performance category. We also refer readers to Sec.  414.1305 for the 
definition of attestation, Sec.  414.1325 for data submission 
requirements, and Sec.  414.1380(b)(4) for Promoting Interoperability 
performance category scoring. We refer readers to Sec.  
414.1380(c)(2)(i)(C) for our previously finalized policies regarding 
scoring of data submission in the Promoting Interoperability 
performance category after an approved reweighting for the performance 
category.
    In section IV.A.4.d.(2)(d) of this final rule, we are finalizing 
our proposal to adopt minimum criteria for a qualifying data submission 
for the Promoting Interoperability performance category at Sec.  
414.1325(a)(1)(iii). This policy will clarify what counts as a data 
submission for MIPS eligible clinicians and it would potentially avoid 
partial data submissions from overriding an approved reweighting or a 
previously scored submission for the Promoting Interoperability 
performance category. As described in section IV.A.4.d.(2)(d), we did 
not revise existing scoring or reweighting policies described under 
Sec.  414.1380; therefore, we did not adjust our currently approved per 
response time estimate.
    In section IV.A.4.d.(3)(c) of this final rule, we are finalizing 
our proposal to modify our policy governing our treatment of multiple 
data submissions received for the Promoting Interoperability 
performance category. Specifically, we are finalizing our proposal 
that, in cases where we receive multiple submissions for the Promoting 
Interoperability performance category, we will calculate a score for 
each data submission received and assign the highest of the scores. In 
our analysis of the information collection and reporting burden, we did 
not adjust our estimated number of respondents submitting Promoting 
Interoperability data. These policies intend to reduce certain issues 
with the scoring of unintended data submissions affecting MIPS payment 
adjustments for individual MIPS eligible clinicians, groups, virtual 
groups, subgroups, and APM Entities. Our currently approved per 
response estimate incorporates our historical approach to estimate the 
required measures and attestations and other required data elements 
identified in sections IV.A.4.d.(2)(d) and IV.A.4.d.(3)(c) of this 
final rule.
    In the CY 2022 PFS final rule (86 FR 65413 and 65414), we finalized 
the Promoting Interoperability performance category's reporting 
requirements for a subgroup participating in MVP reporting at Sec.  
414.1365(c)(4)(i)(A). In section IV.A.4.b.(4) of this final rule, we 
are finalizing our proposal to modify Sec.  414.1365(c)(4)(i)(A) to 
allow a subgroup to submit the affiliated group's data for the MVP 
Promoting Interoperability performance category for the CY 2025 
performance period/2027 MIPS payment year and beyond. As this policy 
will not create new reporting requirements, there are no burden 
implications.
    The Department of Health and Human Services (HHS) final rule, 21st 
Century Cures Act: Establishment of Disincentives for Health Care 
Providers That Have Committed Information Blocking (hereafter referred 
to as the Disincentives final rule) was released on June 24, 2024 (89 
FR 54662). Section IV.A.4.e.(4)(d) of this final rule summarizes 
several policies in the Disincentives final rule under which a MIPS 
eligible clinician that the Office of Inspector General determines has 
committed information blocking will not be a meaningful EHR user, and 
therefore will be unable to earn a score (instead earning a score of 
zero) for the Promoting Interoperability performance category. The 
Disincentives final rule described in section IV.A.4.e.(4)(d) of this 
final rule will not create any additional reporting, recordkeeping, or 
third party disclosure requirements (89 FR 54715) or burden. 
Consequently, we did not propose any burden updates for the Quality 
Payment Program.
    In the CY 2025 PFS proposed rule (89 FR 8757 and 8758), we noted 
the CMS Interoperability and Prior Authorization

[[Page 98492]]

final rule (89 FR 8758). In the CMS Interoperability and Prior 
Authorization final rule, we finalized the addition of the ``Electronic 
Prior Authorization'' measure, under the Health Information Exchange 
(HIE) objective for the MIPS Promoting Interoperability performance 
category beginning with the CY 2027 performance period/2029 MIPS 
payment year (89 FR 8909 through 8927). The burden estimate for MIPS 
clinicians to report the ``Electronic Prior Authorization measure'' was 
provided in the CMS Interoperability and Prior Authorization final rule 
(89 FR 8953 through 8956). In the CMS Interoperability and Prior 
Authorization final rule, we identified that this measure will be 
included in a PRA package related to the CMS Interoperability and Prior 
Authorization final rule (89 FR 8946). Consequently, we did not propose 
any burden updates in the CY 2025 PFS proposed rule.
    We did not receive any comments on our proposed assumptions for the 
submission of Promoting Interoperability data. We are finalizing our 
provisions as proposed.
e. ICRs Regarding Improvement Activities Submission (Sec. Sec.  
414.1305, 414.1355, 414.1360, and 414.1365)
    We did not propose to update our currently approved burden for 
improvement activities submissions as a result of policy provisions 
finalized in section IV.A.4.e.(3) of this final rule. In the following 
paragraphs, we outline these policies and our rationale for not 
changing our currently approved burden due to these policies. Separate 
from policy provisions finalized in this rule, we proposed to update 
our currently approved burden estimates due to the availability of 
updated submission data for the CY 2022 performance period/2024 MIPS 
payment year, which reflect updated estimates for the number of 
respondents. These adjustments, detailed in the CY 2025 PFS proposed 
rule (89 FR 62145 through 62147), will be submitted to OMB for approval 
under control number 0938-1314 (CMS-10621) via the standard non-rule 
PRA process. We are not setting out such burden in this collection of 
information section since the change is unrelated to the provisions 
that are being finalized in this rule.
    As detailed in section IV.A.4.e.(3)(b)(iv) of this final rule, we 
are finalizing as proposed two scoring and reporting policy changes for 
the improvement activities performance category beginning in the CY 
2025 performance period/2027 MIPS payment year. First, we are 
finalizing our proposal to eliminate the weighting of improvement 
activities established in the CY 2017 Quality Payment Program final 
rule (81 FR 28210) and codified at Sec.  414.1380(b)(3) (81 FR 77177 
and 77178). Second, we are finalizing our proposal to further simplify 
improvement activity reporting requirements by reducing the number of 
activities to which clinicians are required to attest in order to 
achieve a score for the improvement activities performance category. We 
are finalizing our proposal that MIPS eligible clinicians who 
participate in traditional MIPS will be required to report two 
activities and MVP Participants will be required to report one activity 
to achieve 40 points, or full credit. In addition, we are finalizing 
our proposal that MIPS eligible clinicians who are categorized as small 
practice, rural, in a provider-shortage area, or non-patient facing 
will be required to report one activity (for either traditional MIPS or 
MVPs). We refer readers to section IV.A.4.e.(3)(b)(iv) of this final 
rule for details on these policies.
    In the CY 2019 PFS final rule (83 FR 60016), we established our 
currently approved estimate that it takes five minutes for a computer 
analyst to log in and manually attest that improvement activities were 
completed. We believe the removal of weighting for improvement 
activities will decrease burden for MIPS eligible clinicians who 
previously reported medium-weighted activities. As MIPS eligible 
clinicians who previously only reported high-weighted activities will 
have the same attestation burden under this proposal, we did not 
propose a change to our currently estimated per response burden. We 
refer readers to section VII.E.18.e.(2)(c) of this final rule where we 
outline our burden impact analysis for this policy.
    In section IV.A.4.e.(3)(b)(iii) of this final rule, we are 
finalizing our proposed changes to the improvement activities inventory 
for the CY 2025 performance period/2027 MIPS payment year and future 
years: adding two new improvement activities; modifying one existing 
improvement activity; and removing four previously adopted improvement 
activities. We are also finalizing, with modification, our proposed 
changes to the improvement activities inventory for the CY 2026 
performance period/2028 MIPS payment year: removing four improvement 
activities; and modifying one improvement activity. In the CY 2023 PFS 
final rule (87 FR 70211) and the 2024 PFS final rule (88 FR 79519), we 
anticipated that most clinicians performing improvement activities, to 
comply with existing MIPS policies, will continue to perform the same 
activities because previously finalized improvement activities continue 
to apply for the current and future years unless otherwise modified per 
rulemaking (82 FR 54175). We believe these changes will not 
significantly affect burden because the majority of activities are not 
revised. We refer readers to section VII.E.18.e.(2)(b) of this final 
rule where we outline our burden impact analysis.
    In section IV.A.4.d.(2)(c) of this final rule, we are finalizing 
our proposal to adopt minimum criteria for a qualifying data submission 
for a performance period for the improvement activities performance 
category. We are finalizing our proposal to specify that a data 
submission for the improvement activities performance category must 
include a response of ``yes'' for at least one activity in the MIPS 
improvement activities inventory. Additionally, we are finalizing our 
proposal to codify existing policies governing multiple data 
submissions received for the improvement activities performance 
category at Sec.  414.1325(f)(1) in section IV.A.4.d.(3)(b). We assume 
these policies will not affect the number of improvement activities 
submissions, as the intent is to eliminate certain issues with the 
scoring of an unintended data submission affecting payment adjustments 
for individual MIPS eligible clinicians, groups, virtual groups, 
subgroups, and APM Entities. Therefore, we did not propose any updates 
to our currently approved estimated burden due to these policies.
    We did not receive any comments on our proposed requirements and 
assumptions for the submission of improvement activities. We are 
finalizing our burden estimates due to updated data as proposed.
f. ICRs Regarding the Cost Performance Category (Sec.  414.1350)
    The cost performance category relies on administrative claims data. 
The Medicare Parts A and B claims submission process (OMB control 
number 0938-1197; CMS-1500 and CMS-1490S) is used to collect data on 
cost measures from MIPS eligible clinicians. MIPS eligible clinicians 
are not required to provide any documentation by CD or hardcopy. 
Moreover, the following finalized policies in section IV.A.4.e.(2) of 
this final rule will not result in the need to add or revise or delete 
any claims data fields: (1) add six new episode-based measures; (2) 
modify two existing episode-based measures; (3) update the operational 
list of care episode and patient condition groups and codes to

[[Page 98493]]

reflect new and modified measures; (4) and adopt criteria to specify 
objective bases for the removal of any cost measures from the MIPS cost 
performance category. Consequently, we did not propose any changes 
under the aforementioned control number.

C. Summary of Annual Burden Estimates

    Table 107 sets out the burden for this rulemaking's finalized 
provisions that are subject to the PRA. It does not score burden 
adjustments that are strictly based on updated data and are unrelated 
to any of the provisions.
[GRAPHIC] [TIFF OMITTED] TR09DE24.165

VI. Regulatory Impact Analysis

A. Statement of Need

    In this final rule, we finalized payment and policy changes under 
the Medicare PFS and changes to implement amendments made under the 
section 502 of the Further Continuing Appropriations and Other 
Extensions Act, 2024 (Pub. L. 118-22) (FCAOEA, 2024). Our policies in 
this rulemaking specifically address: changes to the PFS; and other 
changes to Medicare Part B payment policies to ensure that payment 
systems are updated to reflect changes in medical practice, the 
relative value of services, and changes in the statute; updates and 
refinements to Medicare Shared Savings Program (Shared Savings Program) 
requirements; updates to the Quality Payment Program (MIPS and Advanced 
APMs); changes to payment policies for drugs and biologicals products 
paid under Medicare Part B, changes to the Clinical Laboratory Fee 
Schedule requirements, other changes to Medicare Part B payment 
policies for Rural Health Clinics and Federally Qualified Health 
Centers, the Medicare coverage of opioid use disorder services 
furnished by opioid treatment programs and coverage and payment for 
certain preventive services; updates to electronic prescribing for 
controlled substances for a covered Part D drug under a prescription 
drug plan or an MA-PD plan (section 2003 of the SUPPORT Act); and 
changes to the regulations associated with the Ambulance Fee Schedule. 
The policies reflect CMS' stewardship of the Medicare program and 
overarching policy objectives for ensuring equitable beneficiary access 
to appropriate and quality medical care.
1. Statutory Provisions
a. Clinical Laboratory Fee Schedule (CLFS)--Revisions Consistent With 
Recent Statutory Changes
    As discussed in section III.D. of this final rule, we proposed 
conforming regulations text changes for CLFS data reporting 
requirements due to the enactment of section 502 of the Further 
Continuing Appropriations and Other Extensions Act, 2024 (Pub. L. 118-
22) (FCAOEA, 2024). For clinical diagnostic laboratory tests (CDLTs) 
that are not advanced diagnostic laboratory tests (ADLTs), section 
502(b) of the FCAOEA, 2024 delayed the next data reporting period by 
one year. Instead of taking place from January 1, 2024, through March 
31, 2024, the FCAOEA, 2024 stated that data reporting would take place 
from January 1, 2025, through March 31, 2025, based on the original 
data collection period of January 1, 2019, through June 30, 2019. 
Additionally, section 502(a) of the FCAOEA, 2024 amended the statutory 
provisions for the phase-in of payment reductions resulting from 
private payor rate implementation to specify that the applicable 
percent for CY 2024 is 0 percent, meaning that the payment amount 
determined for a CDLT for CY 2024 shall not result in any reduction in 
payment as compared to the payment amount for that test for CY 2023. 
Section 502(a) of the FCAOEA, 2024 further amended the statutory phase-
in provisions to provide that for CYs 2025 through 2027, the payment 
amount for a CDLT may not be reduced by more than 15 percent as 
compared to the payment amount for that test established in the 
preceding year. After the publication of the CY 2025 PFS proposed rule 
and the close of the comment period, however, the data reporting period 
and phase in reductions were further delayed. On September 26, 2024, 
section 221 of the Continuing Appropriations and Extensions Act, 2025 
(Pub. L. 118-83) was passed and delayed data reporting requirements for 
CDLTs that are not ADLTs, as well as the phase-in of payment reductions 
under the CLFS from private payor rate implementation under section 
1834A of the Act. Specifically, as amended by section

[[Page 98494]]

221(b), section 1834A(1)(B) of the Act now provides that, in the case 
of reporting with respect to CDLTs that are not ADLTs, the Secretary 
shall revise the reporting period under subparagraph (A) such that: (i) 
no reporting is required during the period beginning January 1, 2020, 
and ending December 31, 2025; (ii) reporting is required during the 
period beginning January 1, 2026, and ending March 31, 2026; and (iii) 
reporting is required every 3 years after the period described in 
subparagraph (ii). Essentially, data reporting will now be required 
during the period of January 1, 2026, through March 31, 2026, instead 
of January 1, 2025, through March 31, 2025. The 3-year data reporting 
cycle for CDLTs that are not ADLTs will resume after that data 
reporting period.
    Section 221 of the Continuing Appropriations and Extensions Act, 
2025 does not modify the data collection period that applies to the 
next data reporting period for these tests. Thus, under section 
1834A(a)(4)(B) of the Act, the next data reporting period for CDLTs 
that are not ADLTs (January 1, 2026, through March 31, 2026) will 
continue to be based on the data collection period of January 1, 2019, 
through June 30, 2019.
    Section 221(a) of the Continuing Appropriations and Extensions Act, 
2025 further amends provisions in section 1834A(b)(3) of the Act 
pertaining to the phase-in of payment reductions under the CLFS. First, 
it extends the statutory phase-in of payment reductions resulting from 
private payor rate implementation by an additional year, that is, 
through CY 2028. It further amends section 1834A(b)(3)(B)(ii) of the 
Act to specify that the applicable percent for CY 2025 is 0 percent, 
meaning that the payment amount determined for a CDLT for CY 2025 shall 
not result in any reduction in payment as compared to the payment 
amount for that test for CY 2024. Finally, section 221(a) further 
amends section 1834A(b)(3)(B)(iii) of the Act to specify that the 
applicable percent of 15 percent will apply for CYs 2026 through 2028.
b. Medicare Prescription Drug Inflation Rebate Program
    Section III.I. of this rule finalizes regulations to implement 
provisions of the Inflation Reduction Act (IRA) that establish the 
Medicare Prescription Drug Inflation Rebate Program. Section 11101 of 
the IRA adds new section 1847A(i) to the Act, which establishes a 
requirement for manufacturers to pay Medicare Part B rebates for 
certain single source drugs and biological products with prices that 
increase faster than the rate of inflation, beginning on January 1, 
2023. Section 11102 of the IRA adds new section 1860D-14B to the Act, 
which established a requirement for manufacturers to pay Medicare Part 
D rebates for certain Part D drugs and biological products with prices 
that increase faster than the rate of inflation, beginning on October 
1, 2022.
c. Requirement for Electronic Prescribing for Controlled Substances for 
a Covered Part D Drug Under a Prescription Drug Plan or an MA-PD Plan
    In section III.L. of this rulemaking, we finalized two changes to 
the electronic prescribing for controlled substances (EPCS) requirement 
specified in Sec.  423.160(a)(5) (referred to as the CMS EPCS Program). 
In section III.L. of this final rule, we finalized revisions to Sec.  
423.160(a)(5) to specify that prescriptions written for a beneficiary 
in a long-term care (LTC) facility will not be included in determining 
CMS EPCS Program compliance until January 1, 2028, and that compliance 
actions against prescribers who do not meet the compliance threshold 
based on prescriptions written for a beneficiary in a LTC facility will 
commence on or after January 1, 2028.
d. Quality Payment Program
    This final rule is also necessary to make changes to the Quality 
Payment Program to move the program forward to focus more on 
measurement efforts, refine how clinicians would be able to participate 
in a more meaningful way through the Merit-based Incentive Payment 
System (MIPS) Value Pathways (MVPs), and highlight the value of 
participating in Advanced Alternative Payment Models (APMs). Authorized 
by MACRA, the Quality Payment Program is an incentive program that 
includes two participation tracks, MIPS and Advanced APMs. MIPS 
eligible clinicians are subject to a MIPS payment adjustment based on 
their performance in four performance categories: cost, quality, 
improvement activities, and Promoting Interoperability. Currently, 
reporting for traditional MIPS is seen as siloed across the performance 
categories. These policy proposals are intended to promote better 
quality reporting to improve patient health outcomes by coordinating 
reporting for MIPS across performance categories and make changes to 
scoring that would provide a better picture of clinicians' performance.
2. Discretionary Provisions
a. Drugs and Biological Products Paid Under Medicare Part B
    In section III.A.1. of this final rule, as part of our continued 
implementation of section 90004 of the Infrastructure Investment and 
Jobs Act (Pub. L. 117-58, November 15, 2021) (IIJA), which amended 
section 1847A of the Act to require manufacturers to provide a refund 
to CMS for certain discarded amounts from a refundable single-dose 
container or single-use package drug (hereinafter, refundable drug), we 
are finalizing a clarification on how we will identify certain drugs 
that are excluded from the definition of refundable drug for those 
which payment has been made under Part B for fewer than 18 months; how 
we identify drugs from a single-dose container; and the requirement to 
use the JW modifier if a billing supplier is not administering a drug, 
but there are discarded amounts during the preparation process before 
supplying the drug to the patient. We also discuss an application 
received for increased applicable percentage.
    In section III.A.2 of this final rule, we finalized how payment 
limits will be calculated when manufacturers report negative or zero 
ASP data to CMS. Generally, we finalized that negative and zero ASP 
data be considered ``not available'' under section 1847A(c)(5)(B) of 
the Act and that positive ASP data be considered available. In 
circumstances in which negative or zero ASP data is reported for some, 
but not all National Drug Codes (NDCs) associated with a billing and 
payment code for a drug, we are finalizing to calculate the payment 
limit using only NDCs with positive ASP data. In certain circumstances, 
we are finalizing to carryover the most recent positive ASP data for 
the drug to calculate a payment limit when the manufacturer's ASP is 
negative or zero. For biosimilars with negative or zero ASP data for 
all NDCs, we are finalizing to use positive ASP data from the most 
recent available positive manufacturer's ASP data from a previous 
quarter.
    In section III.A.3. of this final rule, we finalized a 
clarification to how Medicare Administrative Contractors (MACs) pay for 
radiopharmaceuticals that are furnished in the physician's office. We 
are finalizing to codify in regulations at Sec.  414.904(e)(6) that, 
for radiopharmaceuticals furnished in a setting other than the hospital 
outpatient department, MACs shall determine payment limits for 
radiopharmaceuticals based on any methodology used to determine payment 
limits for radiopharmaceuticals in place on or

[[Page 98495]]

prior to November 2003. Such methodology may include, but is not 
limited to, the use of invoice-based pricing.
    In section III.A.4. of this final rule, we finalized policies to 
reduce barriers faced by beneficiaries receiving immunosuppressive 
drugs under the Medicare Part B immunosuppressive drug benefit. That 
is, we finalized at Sec.  410.30 to include orally and enterally 
administered compounded formulations with active ingredients derived 
only from FDA-approved drugs that have approved immunosuppressive 
indications or FDA-approved drugs that have been determined by a MAC to 
be reasonable and necessary for a specific purpose in immunosuppressive 
treatment included in the immunosuppressive drug benefit. In addition, 
we are finalizing changes regarding supplying fees and refills for 
immunosuppressive drugs. These proposals include allowing payment of a 
supply fee for a prescription of a supply of up to 90 days and allowing 
prescriptions for immunosuppressive drugs to be refillable.
    In section III.A.5. of this final rule, we are finalizing to update 
Sec.  410.63(b) to clarify existing CMS policy that blood clotting 
factors must be self-administered to be considered clotting factors for 
which the furnishing fee applies. We are also clarifying in Sec.  
[thinsp]410.63(b) that therapies that enable the body to produce 
clotting factor and do not directly integrate into the coagulation 
cascade are not themselves clotting factors for which the furnishing 
fee applies. Additionally, we are finalizing to clarify at Sec.  
410.63(c) that the furnishing fee is only available to entities that 
furnish blood clotting factors, unless the costs associated with 
furnishing the clotting factor are paid though another payment system, 
including the PFS. That is, we are finalizing to clarify through 
revisions to Sec.  410.63 that clotting factors (as specified in 
section 1861(s)(2)(I) of the Act) and those eligible to receive the 
clotting factor furnishing fee (as specified in section 1842(o)(5) of 
the Act) are the same subset of products.
b. RHCs and FQHCs
    In section III.B.2. of this final rule, we are finalizing several 
changes to the furnishing of care coordination services in RHCs and 
FQHCs. We are finalizing with a modification that starting in 2025, 
RHCs and FQHCs will report the individual CPT and HCPCS codes that 
describe care coordination services instead of the single HCPCS code 
G0511. We are also allowing for a delayed compliance of 6 months until 
July 1, 2025, to enable RHCs and FQHCs to be able to update their 
billing systems. We are also finalizing to permit billing of the add-on 
codes associated with these services. In addition, beginning in CY 
2025, we are finalizing to adopt the coding and policies regarding 
Advanced Primary Care Management (APCM) services, as discussed in 
section II.G of this final rule.
    For all of the care coordination services, we are finalizing to 
allow separate payment at 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. Payment rates will be updated annually. We 
also solicited comment on how we can improve the transparency and 
predictability regarding which HCPCS codes are considered care 
coordination services to automate processes downstream for RHCs and 
FQHCs and plan to evaluate the comments received for potential future 
rulemaking.
    In section III.B.3. of this final rule, we are finalizing the 
policy to continue to adopt the definition ``immediate availability'' 
as including real-time audio and visual interactive telecommunications 
for the direct supervision of services and supplies furnished incident 
to a physician's service through December 31, 2025, for RHCs and FQHCs. 
We are also finalizing, on a temporary basis, to allow payment for 
medical care non-behavioral health visits furnished via 
telecommunication technology in a manner that is similar to the payment 
mechanisms mandated by statute through December 31, 2024, RHCs and 
FQHCs will continue to bill for RHC and FQHC services furnished using 
telecommunication technology services by reporting HCPCS code G2025 on 
the claim through December 31, 2025. In addition, we are finalizing our 
policy to 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.
    In section III.B.4. of this final rule, we are finalizing a payment 
rate for IOP services in RHCs and FQHCs when there are 4 or more 
services per day in the RHC and FQHC setting.
    In section III.B.5. of this rulemaking, we are finalizing our 
proposal to allow RHCs and FQHCs to bill for Part B preventive vaccines 
and the administration at the time of service. Therefore, payments for 
RHC and FQHC vaccine claims will be made according to Part B preventive 
vaccine payment rates in other settings, to be annually reconciled with 
the facilities' actual vaccine costs on their cost reports. Due to the 
operational systems changes needed to facilitate payment through 
claims, we explain that RHCs and FQHCs can begin billing for preventive 
vaccines and their administration at the time of service effective for 
dates of service on or after July 1, 2025.
    In section III.B.6. of this final rule, we are finalizing our 
proposal to remove productivity standards for RHCs effective for cost 
reporting periods beginning on or after January 1, 2025.
    In section III.B.7. of this final rule, we are finalizing to rebase 
the FQHC PPS market basket from a 2017 base year to a 2022 base year. 
We are finalizing the use of the 2022-based FQHC market basket update 
effective for annual payment updates to the FQHC PPS base rate 
effective beginning with CY 2025.
    In section III.B.8. of this final rule, we clarified that when RHCs 
and FQHCs furnish dental services that align with the inextricably 
linked policies and operational requirements in the physician setting, 
we will consider those services to be a qualifying visit and the RHC 
will be paid at the RHC AIR and the FQHC will be paid under the FQHC 
PPS.
c. Modifications Related to Medicare Coverage for Opioid Use Disorder 
(OUD) Treatment Services Furnished by Opioid Treatment Programs (OTPs)
    In section III.F.2 of this final rule, we finalized 
telecommunication flexibilities related to periodic assessments and 
initiation of treatment with methadone. We finalized to allow periodic 
assessments to be furnished via audio-only communications when two-way 
audio-video communications technology is not available to the 
beneficiary on a permanent basis, to the extent that this flexibility 
is authorized by SAMHSA and DEA at the time the service is furnished, 
and all other applicable requirements are met. We believe that making 
this current flexibility permanent is appropriate, as it will allow a 
beneficiary to decide with their provider the best modality for 
receiving care, and evidence has shown that audio-only visits produce 
many of the same benefits as video-based visits.\896\ Additionally, 
permanently extending the flexibility to allow periodic assessments to 
be furnished via audio-only communications will further contribute 
towards health equity, especially among Medicare beneficiaries who are 
from underserved

[[Page 98496]]

populations.\897\ We also are finalizing to allow OTPs to use audio-
visual telecommunications for initiation of treatment with methadone 
for any new patient who will be treated by the OTP with methadone if 
the OTP determines that an adequate evaluation of the patient can be 
accomplished via an audio-visual telehealth platform. We will allow the 
OTP intake add-on code (HCPCS code G2076) to be paid for two-way audio-
video communications technology when it is billed for the initiation of 
treatment with methadone to the extent that the use of audio-video 
telecommunications technology to initiate treatment with methadone is 
authorized by DEA and SAMHSA at the time the service is furnished, and 
all other applicable requirements are met. We believe this flexibility 
is needed to align with new policy amendments finalized by SAMHSA for 
initiation of treatment with methadone at Sec.  8.12(f)(2)(v)(A), and 
it will help reduce barriers for many individuals beginning treatment 
with methadone who often experience at least one barrier to accessing 
treatment (for example, reliable transportation, work schedule 
conflicts, distance to treatment, etc.).\898\
---------------------------------------------------------------------------

    \896\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9446840.
    \897\ https://pubmed.ncbi.nlm.nih.gov/33471458/; https://www.kff.org/medicare/issue-brief/medicare-and-telehealth-coverage-and-use-during-the-covid-19-pandemic-and-options-for-the-future/; 
https://pubmed.ncbi.nlm.nih.gov/34534186/.
    \898\ https://ascpjournal.biomedcentral.com/articles/10.1186/s13722-022-00316-3.
---------------------------------------------------------------------------

    In section III.F.3 of this final rule, we are finalizing several 
payment updates to the Medicare OTP benefit in response to recent 
regulatory reforms finalized by SAMHSA at 42 CFR part 8 that aim to 
recognize more patient-centered and evidence-based paradigms of care 
for OUD treatment (for example, harm reduction interventions, recovery 
support services, etc.). Specifically, we are finalizing our proposal 
to update the payment for intake activities (HCPCS code G2076) to 
include payment for social determinants of health risk assessments 
(HCPCS code G0136) in order to adequately reflect additional effort for 
OTPs to identify a patient's unmet health-related social needs (HRSNs), 
or the need and interest for harm reduction interventions and recovery 
support services that are critical to the treatment of an OUD. These 
will be consistent with new revisions to standards for initial 
assessment service activities required by SAMHSA under Sec.  
8.12(f)(4)(i). In addition, CMS is also finalizing an update in payment 
for periodic assessments (HCPCS code G2077) to include payment for 
social determinants of health risk assessments (HCPCS code G0136) after 
being persuaded by comments in response to the proposed rule. This 
update would reflect additional reassessments of unmet HRSNs, and harm 
reduction intervention and recovery support service needs that OTPs may 
need to conduct throughout the duration of MOUD treatment. We believe 
these refinements are necessary to help OTPs address key issues during 
initial and periodic assessments that may increase the risk of a 
patient leaving OUD treatment prematurely or that pose as barriers to 
treatment engagement. For example, patients with an OUD are more likely 
to have lower educational attainment, be food insecure, encounter 
financial hardship, and housing instability, and they often report 
financial and logistical barriers (for example, lack of access to 
transportation) as reasons for not receiving treatment.\899\ In the 
proposed rule, CMS included a request for information to understand how 
OTPs currently coordinate care and make referrals to community-based 
organizations (CBOs) that address unmet HRSNs, provide harm reduction 
services, and/or offer recovery support services. Providers (including 
SUD treatment facilities) who coordinate care with CBOs, including peer 
support organizations, housing agencies, and educational and employment 
agencies, to address unmet HRSNs (for example, housing, transportation, 
etc.) identified during assessments can positively influence health 
outcomes and better support a patient's engagement in SUD 
treatment.\900\ In response to the proposed rule, commenters 
highlighted these coordinated care and referral activities are 
routinely provided at OTPs and integral to MOUD treatment and recovery. 
Accordingly, CMS finalized to create new add-on codes to describe 
coordinated care and referral services (G0534), patient navigational 
services (G0535), and peer recovery support services (G0536) that can 
be billed in addition to the bundled payments under the OTP benefit. 
Payment for these services would reflect additional efforts required by 
OTPs to link patients with adequate community resources to address 
unmet health-related social needs, including harm reduction 
interventions and recovery support services a patient needs and wishes 
to pursue, along with services to assist Medicare beneficiaries with an 
OUD in navigating multiple settings of care and achieving patient-
driven treatment and recovery goals.
---------------------------------------------------------------------------

    \899\ https://www.sciencedirect.com/science/article/pii/S1544319123000560?via%3Dihub. https://www.sciencedirect.com/science/article/pii/S0749379722001040?via%3Dihub.
    \900\ https://www.commonwealthfund.org/sites/default/files/202209/ROI_calculator_evidence_review_2022_update_Sept_2022.pdf; 
https://aspe.hhs.gov/sites/default/files/private/pdf/260791/BestSUD.pdf.
---------------------------------------------------------------------------

    Furthermore, in section III.F.4 of this final rule, we finalized to 
establish payment for new opioid agonist and antagonist medications 
that were recently approved by the FDA. We will create a new add-on 
code (HCPCS code G0532) to the bundled payment to reflect take-home 
supplies for nalmefene hydrochloride (nalmefene) nasal spray, which is 
indicated for the emergency treatment of known or suspected opioid 
overdose induced by natural or synthetic opioids. The add-on code will 
include payment for a carton of two 2.7 mg nasal sprays of nalmefene 
and overdose education furnished in conjunction with distributing 
nalmefene. We also are finalizing payment for a new extended-release 
injectable buprenorphine product (Brixadi[supreg]), indicated to treat 
moderate to severe OUD and that comes in a weekly (8 mg, 16 mg, 24 mg, 
32 mg) and monthly formulation (64 mg, 96 mg, and 128 mg). We will 
create a new weekly bundled payment code (including both a non-drug and 
drug component) for weekly injectable buprenorphine to reflect the 
weekly formulation of Brixadi[supreg] described by HCPCS code G0533. In 
addition, we will update payment for the drug component of the existing 
bundled payment under the Medicare OTP benefit for monthly injectable 
buprenorphine (HCPCS G2069) in order to reflect payment for the monthly 
formulation of Brixadi[supreg]. We believe these proposals are 
consistent with our statutory authority under sections 1861(jjj)(1)(A) 
and 1834(w) of the Act, which allow the Secretary to establish Medicare 
bundled payment for opioid agonist and antagonist treatment medications 
that are approved by the FDA. These proposals will expand access to new 
opioid agonist and antagonist medications that are important to help 
prevent additional opioid overdose deaths, reduce illicit opioid use, 
and retain more individuals with an OUD in treatment.\901\
---------------------------------------------------------------------------

    \901\ https://www.cdc.gov/drugoverdose/pdf/pubs/2018-evidence-based-strategies.pdf; https://pubmed.ncbi.nlm.nih.gov/24247147/.
---------------------------------------------------------------------------

    Lastly, in section III.F.5 of this final rule, we clarified a 
billing requirement that an OUD diagnosis code is required on claims 
submitted under the Medicare OTP benefit for OUD treatment services. 
This clarification is needed to ensure payments made to OTPs are in

[[Page 98497]]

alignment with statutory requirements under sections 1861(s)(2)(HH), 
1861(jjj)(1), and 1834(w) of the Act, which all specify that services 
paid to OTPs under Medicare Part B must be for the treatment of opioid 
use disorder.
d. Medicare Shared Savings Program
    In section III.G. of this final rule, we are finalizing 
modifications to the Shared Savings Program to further advance 
Medicare's value-based care strategy of growth, alignment, and equity, 
and to allow for timely improvements to program policies and 
operations.
    The changes to the Shared Savings Program include the following:
    Changes to the quality performance standard and other quality 
reporting requirements, including to (1) require Shared Savings Program 
ACOs to report the APP Plus quality measure set that will incrementally 
grow to comprise of 11 measures, consisting of the 6 measures in the 
existing APP quality measure set and 5 new measures from the Adult 
Universal Foundation measure set that will be incrementally 
incorporated into the APP Plus quality measure set over performance 
years 2025 through 2028 or the performance year that is one year after 
eCQM specifications become available for Quality ID: 487 Screening for 
Social Drivers of Health and Quality ID: 493 Adult Immunization Status, 
whichever is later, (2) focus the collection types available to Shared 
Savings Program ACOs for reporting the APP Plus quality measure set to 
all payer/all patient eCQMs and Medicare CQMs by performance year 2027 
and include MIPS CQMs for performance years 2025 and 2026, before they 
are removed in performance year 2027, to provide ACOs with more time 
before the sunsetting of this collection type given that ACOs may have 
already contracted with vendors for this collection type, (3) require 
Shared Savings Program ACOs that report the APP Plus quality measure 
set to report on all measures in the APP Plus quality measure set, as 
applicable, (4) establish a Complex Organization Adjustment for Virtual 
Groups and APM Entities, including Shared Savings Program ACOs, when 
reporting eCQMs, (5) score Medicare CQMs using flat benchmarks in their 
first 2 performance periods in MIPS, and (6) extend the eCQM reporting 
incentive in order to promote the adoption of eCQMs and also extend the 
reporting incentive to ACOs reporting MIPS CQMs in performance years 
2025 and 2026 to support ACOs in meeting the Shared Savings Program 
quality performance standard.
    Changes to establish a new ``prepaid shared savings'' option for 
eligible ACOs with a history of earning shared savings, to assist these 
ACOs with cash flow and encourage investments that will aid 
beneficiaries such as investments in direct beneficiary services, 
staffing, and healthcare infrastructure, and refinements to recently-
established advance investment policies.
    Modifications to the Shared Savings Program's financial methodology 
including to (1) ensure the benchmarking methodology includes 
sufficient incentive for ACOs serving underserved communities to enter 
and remain in the program through the application of a health equity 
benchmark adjustment, (2) specify a calculation methodology to account 
for the impact of improper payments in recalculating expenditures and 
payment amounts used in Shared Savings Program financial calculations, 
upon reopening a payment determination pursuant to Sec.  425.315(a), 
(3) establish a methodology for excluding payment amounts for HCPCS and 
CPT codes exhibiting significant, anomalous, and highly suspect (SAHS) 
billing activity during CY 2024 or subsequent calendar years that 
warrant adjustment, and (4) make technical changes in provisions of the 
Shared Savings Program regulations on financial calculations, to align 
and clarify the language used to describe weights applied to the growth 
in ACO and regional risk scores for each Medicare enrollment type, as 
part of the calculation for capping ACO and regional risk score growth, 
respectively.
    Changes to other programmatic areas, including: to sunset a 
requirement under which CMS would be required to terminate an ACO's 
participation agreement, under certain circumstances, if it failed to 
maintain at least 5,000 assigned beneficiaries during an agreement 
period in connection with the Shared Savings Program compliance 
requirements; updates to provisions of the Shared Savings Program 
regulations on application procedures to reflect the latest approach 
Antitrust Agencies use to evaluate ACOs and enforce the antitrust laws; 
updates to the beneficiary assignment methodology including to (1) 
revise the definition of primary care services to align with payment 
policy changes and include, among other services for the purposes of 
beneficiary assignment, Safety Planning Interventions, Post-Discharge 
Telephonic Follow-up Contacts Intervention, Virtual Check-in Service, 
Advanced Primary Care Management Services, Cardiovascular Risk 
Assessment and Risk Management Services, Interprofessional Consultation 
Service, Direct Care Caregiver Training Services, and Individual 
Behavior Management/Modification Caregiver Training Services, and (2) 
broaden the existing exception to the program's voluntary alignment 
policy to allow for beneficiaries to be claims-based assigned to 
entities participating in certain disease- or condition-specific CMS 
Innovation Center ACO models; notwithstanding their voluntary alignment 
to a Shared Savings Program ACO; and modifications to the beneficiary 
information notification requirements.
e. Medicare Part B Payment for Preventive Services
    Section III.H.1 of this final rule outlines the implementation of 
policies that impact the payment amount for administration of 
preventive vaccines paid under the Part B vaccine benefit, as well 
COVID-19 monoclonal antibodies and the in-home additional payment for 
Part B vaccine administration. These provisions are necessary to 
provide stable payment for preventive vaccine administration and 
related policies, and to allow predictability for providers and 
suppliers to rely on for building and sustaining robust vaccination 
programs.
    Section III.H.2 of this final rule addresses two items related to 
payment for hepatitis B vaccine administration under Part B. In section 
III.M. of this rule, we are finalizing an expansion of hepatitis B 
vaccine coverage by revising existing regulations. In this section of 
the rule, we clarify that a physician's order is no longer required for 
the administration of a hepatitis B vaccine in Part B, which will 
facilitate roster billing by mass immunizers for hepatitis B vaccine 
administration. We are also finalizing a policy to set payment for 
hepatitis B vaccines and their administration at 100 percent of 
reasonable cost in RHCs and FQHCs, separate from the FQHC PPS or the 
RHC All-Inclusive Rate (AIR) methodology, to streamline payment for all 
Part B vaccines in those settings.
    In section III.H.3. of this final rule, we are finalizing a fee 
schedule for Drugs Covered as Additional Preventive Services (DCAPS), 
per section 1833(a)(1)(W)(ii) of the Act. We will determine payment 
limits for DCAPS drugs based on the ASP payment methodology set forth 
under section 1847A of the Act if possible, and we provide alternative 
payment mechanisms for calculating payment limits for DCAPS drugs if 
ASP data is not available. We are also finalizing payment limits for 
supplying and administration fees for DCAPS drugs

[[Page 98498]]

that are similar to those fees for drugs paid under the ASP payment 
methodology set forth under section 1847A of the Act. Finally, we will 
determine payment limits for DCAPS drugs in RHCs and FQHCs, and any 
supply and administration fee, using this same fee schedule, and we 
will pay for DCAPS drugs and their administration on a claim-by-claim 
basis.
f. Modifications to Coverage of Colorectal Cancer Screening
    In section III.K. of this rulemaking, we are finalizing regulatory 
changes, as proposed, that update and expand coverage for CRC screening 
by (1) removing coverage for the barium enema procedure in regulations 
at Sec.  410.37, (2) adding coverage for the computed tomography 
colonography (CTC) procedure in regulations at Sec.  410.37, and (3) 
expanding a ``complete colorectal cancer screening'' in Sec.  410.37(k) 
to include a follow-on screening colonoscopy after a Medicare covered 
blood-based biomarker CRC screening test (described and authorized in 
NCD 210.3) returns a positive result. The U.S. Centers for Disease 
Control and Prevention (CDC) describes CRC as ``a disease in which 
cells in the colon or rectum grow out of control. Sometimes abnormal 
growths, called polyps, form in the colon or rectum. Over time, some 
polyps may turn into cancer. Screening tests can find polyps so they 
can be removed before turning into cancer. Screening also helps find 
colorectal cancer at an early stage, when treatment works best.'' \902\ 
The National Cancer Institute reports that CRC is the fourth most 
common type of cancer and estimates that the United States experienced 
153,020 new cases and 52,550 new deaths from CRC in 2023. In addition, 
the rate of new cases and new deaths from CRC is higher in men than 
women and significantly greater for those of African American and Non-
Hispanic American Indian/Alaska Native descent compared to all 
races.\903\ See the impact analysis later in this section at VII.E.14.
---------------------------------------------------------------------------

    \902\ CDC website: https://www.cdc.gov/colorectal-cancer/about/?CDC_AAref_Val=https://www.cdc.gov/cancer/colorectal/basic_info/what-is-colorectal-cancer.htm.
    \903\ NCI website: https://seer.cancer.gov/statfacts/html/colorect.html.
---------------------------------------------------------------------------

g. Expand Hepatitis B Vaccine Coverage
    In section III.M. of this rulemaking, we are finalizing our 
proposal to expand Hepatitis B vaccine coverage by revising our 
regulatory definition for intermediate risk groups by adding a new 
paragraph to include individuals who have not previously received a 
completed hepatitis B vaccination series or whose vaccination history 
is unknown (Sec.  410.63(a)(2)). Hepatitis B is a vaccine-preventable 
liver disease caused by the hepatitis B virus.\904\ The vaccine 
consists of a series of typically 2-3 doses delivered at various 
intervals.\905\ Hepatitis B virus is transmitted when body fluid 
(blood, semen, or other) from a person infected with the virus enters 
the body of someone who is uninfected.\906\ This can happen through 
sexual contact; sharing needles, syringes, or other drug-injection 
equipment; transmission from the gestational parent to baby during 
pregnancy or at birth; direct contact with blood or open sores; or 
sharing contaminated items such as toothbrushes, razors or medical 
equipment (such as a glucose monitor) of a person who has hepatitis 
B.\907\ Hepatitis B can be an acute, short-term illness and it can 
develop into a long-term, chronic infection. Chronic hepatitis B can 
lead to serious health problems, including cirrhosis, liver cancer, and 
death. Treatments for hepatitis B are available but no cure exists. 
There are currently an estimated 2.4 million individuals in the U.S. 
living with hepatitis B virus and an estimated 20,000 new infections 
every year.\908\ We believe our proposal will help protect Medicare 
beneficiaries from acquiring hepatitis B infection, contribute to 
eliminating viral hepatitis as a public health threat in the United 
States and is in the best interest of the Medicare program and its 
beneficiaries. We are finalizing our proposals to expand access to the 
hepatitis B vaccine. Please see section III.M. of this final rule for 
additional discussion on the policy and regulatory changes and see 
section VII.E.16, below to read the impact analysis related to this 
provision.
---------------------------------------------------------------------------

    \904\ CDC, 2023. Hepatitis B surveillance 2021. Retrieved from 
https://www.cdc.gov/hepatitis/statistics/2021surveillance/hepatitis-b.htm.
    \905\ CDC. Clinical overview of Hepatitis B. Atlanta, GA: U.S. 
HHS, CDC; 2024. Retrieved from https://www.cdc.gov/hepatitis/hbv/hbvfaq.htm">https://www.cdc.gov/hepatitis-b/hcp/clinical-overview/?CDC_AAref_Val=https://www.cdc.gov/hepatitis/hbv/hbvfaq.htm.
    \906\ CDC, 2023. Hepatitis B surveillance 2021. Retrieved from 
https://www.cdc.gov/hepatitis/statistics/2021surveillance/hepatitis-b.htm.
    \907\ CDC. 2024. Hepatitis B basics. Retrieved from https://www.cdc.gov/hepatitis-b/about/?CDC_AAref_Val=https://www.cdc.gov/hepatitis/hbv/bfaq.htm.
    \908\ Conners EE, Panagiotakopoulos L, Hofmeister MG, et al. 
Screening and testing for hepatitis B virus infection: CDC 
recommendations--United States, 2023. MMWR Recomm Rep. 2023;72(1):1-
25. Retrieved from https://www.cdc.gov/mmwr/volumes/72/rr/rr7201a1.htm.
---------------------------------------------------------------------------

h. Medicare Parts A and B Overpayment Provisions of the Affordable Care 
Act ((Sec. Sec.  401.305(a)(2), 401.305(b)(1), (2), and (3))
    Section W of the December 2022 Overpayments Proposed Rule proposed 
amendments to Sec.  401.305(a)(2) to change the standard for an 
``identified overpayment'' for Medicare Parts A and B and adopt by 
reference, the knowledge standard set forth in the False Claims Act at 
31 U.S.C. 3729(b)(1). We do not have a basis for estimating the impact 
associated with this amendment. We solicited comment on the analysis 
and conclusions provided in the RIA.
    Section III.O. of this final rule discusses existing Sec.  
401.305(b)(1), which specifies when a person who has received an 
overpayment must report and return an overpayment. We proposed to amend 
this regulation to reference revised Sec.  401.305(b)(2) and new Sec.  
401.305(b)(3). We proposed a technical modification to the introductory 
language in Sec.  401.305(b)(2) to acknowledge that this paragraph 
might be applicable after the suspension described in new Sec.  
401.305(b)(3) is complete. New Sec.  401.305(b)(3) identifies 
circumstances under which the deadline for reporting and returning 
overpayments will be suspended to allow time for providers to 
investigate and calculate overpayments. We do not have a basis for 
estimating the impact associated with this amendment. We solicited 
comment on the analysis and conclusions provided in the RIA.
    We did not receive public comments on the provisions, and 
therefore, we are finalizing as proposed.

B. Overall Impact

    We have examined the impacts of this final rule as required by 
Executive Order 12866, Regulatory Planning and Review (September 30, 
1993), Executive Order 13563, Improving Regulation and Regulatory 
Review (January 18, 2011), Executive Order 14094, ``Modernizing 
Regulatory Review'' (April 6, 2023), the Regulatory Flexibility Act 
(RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the 
Social Security Act, section 202 of the Unfunded Mandates Reform Act of 
1995 (March 22, 1995; Pub. L. 104-4), and Executive Order 13132, 
Federalism (August 4, 1999).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic,

[[Page 98499]]

environmental, public health and safety effects, distributive impacts, 
and equity).
    A regulatory impact analysis (RIA) must be prepared regulatory 
action that are significant under section 3(f)(1) ($200 million or more 
in any 1 year). Based on our estimates, OMB's Office of Information and 
Regulatory Affairs has determined this rulemaking is significant per 
section 3(f)(1)). Accordingly, we have prepared an RIA that, to the 
best of our ability, presents the costs and benefits of the rulemaking. 
The RFA requires agencies to analyze options for regulatory relief of 
small entities. For purposes of the RFA, small entities include small 
businesses, nonprofit organizations, and small governmental 
jurisdictions. Most hospitals, practitioners, and most other providers 
and suppliers are small entities, either by nonprofit status or by 
having annual revenues that qualify for small business status under the 
Small Business Administration standards. (For details, see the SBA's 
website at https://www.sba.gov/document/support-table-size-standards 
(refer to the 620000 series).) Individuals and States are not included 
in the definition of a small entity.
    The RFA requires that we analyze regulatory options for small 
businesses and other entities. We prepare a regulatory flexibility 
analysis unless we certify that a rule would not have a significant 
economic impact on a substantial number of small entities. The analysis 
must include a justification concerning the reason action is being 
taken, the kinds and number of small entities the rule affects, and an 
explanation of any meaningful options that achieve the objectives with 
less significant adverse economic impact on the small entities.
    Approximately 95 percent of practitioners, other suppliers, and 
providers are considered to be small entities, based upon the SBA 
standards. There are over 1 million physicians, other practitioners, 
and medical suppliers that receive Medicare payment under the PFS. 
Because many of the affected entities are small entities, the analysis 
and discussion provided in this section, as well as elsewhere in this 
final rule is intended to comply with the RFA requirements regarding 
significant impact on a substantial number of small entities.
    In addition, section 1102(b) of the Act requires us to prepare an 
RIA if a rule may have a significant impact on the operations of a 
substantial number of small rural hospitals. This analysis must conform 
to the provisions of section 604 of the RFA. For purposes of section 
1102(b) of the Act, we define a small rural hospital as a hospital that 
is located outside of a Metropolitan Statistical Area for Medicare 
payment regulations and has fewer than 100 beds. Medicare does not pay 
rural hospitals for their services under the PFS; rather, Medicare 
payment is made under the PFS for physicians' services, which can be 
furnished by physicians and NPPs in a variety of settings, including 
rural hospitals. We did not prepare an analysis for section 1102(b) of 
the Act because we determined, and the Secretary certified, that this 
rulemaking will not have a significant impact on the operations of a 
substantial number of small rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits on State, 
local, or tribal governments or on the private sector before issuing 
any rule whose mandates require spending in any 1 year of $100 million 
in 1995 dollars, updated annually for inflation. In 2024, that 
threshold is approximately $183 million. This rule will impose no 
mandates on State, local, or tribal governments or on the private 
sector.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it issues a proposed rule (and subsequent final 
rule) that imposes substantial direct requirement costs on State and 
local governments, preempts State law, or otherwise has federalism 
implications. Since this rulemaking does not impose any costs on State 
or local governments, the requirements of Executive Order 13132 are not 
applicable.
    We prepared the following analysis, which, together with the 
information provided in the rest of this rule, meets all assessment 
requirements. The analysis explains the rationale for and purposes of 
this rule; details the costs and benefits of this rulemaking; analyzes 
alternatives; and presents the measures we will use to minimize the 
burden on small entities. As indicated elsewhere in this rule, we 
discussed various changes to our regulations, payments, or payment 
policies to ensure that our payment systems reflect changes in medical 
practice and the relative value of services and to implement provisions 
of the statute. We provide information for each policy change in the 
relevant sections of this final rule. We are unaware of any relevant 
Federal rules that duplicate, overlap, or conflict with this rule. The 
relevant sections of this rulemaking describe significant alternatives 
we considered, if applicable.

C. Changes in Relative Value Unit (RVU) Impacts

1. Resource-Based Work, PE, and MP RVUs
    Section 1848(c)(2)(B)(ii)(II) of the Act requires that increases or 
decreases in RVUs may not cause the amount of Medicare Part B 
expenditures for the year to differ by more than $20 million from what 
expenditures would have been in the absence of these changes. If this 
threshold is exceeded, we make adjustments to preserve budget 
neutrality.
    Our estimates of changes in Medicare expenditures for PFS services 
compared payment rates for CY 2024 with payment rates for CY 2025 using 
CY 2023 Medicare utilization. The payment impacts described in this 
rule reflect averages by specialty based on Medicare utilization. The 
payment impact for an individual practitioner could vary from the 
average and will depend on the mix of services they furnish. The 
average percentage change in total revenues will be less than the 
impact displayed here because practitioners and other entities 
generally furnish services to both Medicare and non-Medicare patients. 
In addition, practitioners and other entities may receive substantial 
Medicare revenues for services under other Medicare payment systems. 
For instance, independent laboratories receive approximately 83 percent 
of their Medicare revenues from clinical diagnostic laboratory tests 
that are paid under the Clinical Laboratory Fee Schedule (CLFS). The 
PFS update adjustment factor for CY 2025, as specified in section 
1848(d)(19) of the Act, is 0.00 percent before applying other 
adjustments.
    To calculate the estimated CY 2025 PFS conversion factor (CF), we 
took the CY 2024 conversion factor without the payment increase of 1.25 
percent provided by the CAA, 2023 that applied to services furnished 
from January 1, 2024 through March 8, 2024, and the 2.93 percent 
payment increase provided by the CAA, 2024 that replaced the previous 
1.25 percent increase and applies to services furnished from March 9, 
2024 through December 31, 2024 and multiplied it by the budget 
neutrality adjustment required as described in the preceding 
paragraphs. We estimate the CY 2025 PFS CF to be 32.3465 which reflects 
a 0.02 percent positive budget neutrality adjustment required under 
section 1848(c)(2)(B)(ii)(II) of the Act, the 0.00 percent update 
adjustment factor specified under section 1848(d)(19) of the Act, and 
the removal of the temporary 2.93 percent payment

[[Page 98500]]

increase for services furnished from March 9, 2024 through December 31, 
2024, as provided in the CAA, 2024. We estimate the CY 2025 anesthesia 
CF to be 20.3178, reflecting the same overall PFS adjustments with the 
addition of anesthesia-specific PE and MP adjustments.
[GRAPHIC] [TIFF OMITTED] TR09DE24.166

[GRAPHIC] [TIFF OMITTED] TR09DE24.167

    Table 110 shows the impact on PFS payment for physicians' services 
based on the policies included in this rule. To the extent that there 
are year-to-year changes in the volume and mix of services provided by 
practitioners, the actual impact on total Medicare revenues will be 
different from those shown in Table 110 (CY 2025 PFS Estimated Impact 
on Total Allowed Charges by Specialty). The following is an explanation 
of the information represented in Table 110.
     Column A (Specialty): Identifies the specialty for which 
data are shown.
     Column B (Allowed Charges): The aggregate estimated PFS 
allowed charges for the specialty based on CY 2023 utilization and CY 
2024 rates. That is, allowed charges are the PFS amounts for covered 
services and include coinsurance and deductibles (which are the 
financial responsibility of the beneficiary). These amounts have been 
summed across all services furnished by physicians, practitioners, and 
suppliers within a specialty to arrive at the total allowed charges for 
the specialty.
     Column C (Impact of Work RVU Changes): This column shows 
the estimated CY 2025 impact on total allowed charges of the changes in 
the work RVUs, including the impact of changes due to potentially 
misvalued codes.
     Column D (Impact of PE RVU Changes): This column shows the 
estimated CY 2025 impact on total allowed charges of the changes in the 
PE RVUs.
     Column E (Impact of MP RVU Changes): This column shows the 
estimated CY 2025 impact on total allowed charges of the changes in the 
MP RVUs.
     Column F (Combined Impact): This column shows the 
estimated CY 2025 combined impact on total allowed charges of all the 
changes in the previous columns. Column F may not equal the sum of 
columns C, D, and E due to rounding.
BILLING CODE 4120-01-P

[[Page 98501]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.168

BILLING CODE 4120-01-C

[[Page 98502]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.169

    In recent years, we have received requests from interested parties 
to provide more granular information that separates the specialty-
specific impacts by site of service. These interested parties have 
presented us with high-level information suggesting that Medicare 
payment policies are directly responsible for consolidating privately 
owned physician practices and freestanding supplier facilities into 
larger health systems. Their concerns highlight a need to update the 
information under the PFS to account for current trends in healthcare 
delivery, especially concerning independent versus facility-based 
practices. We published an RFI in the CY 2023 PFS proposed rule to 
gather feedback on this issue and refer readers to the discussion in 
the CY 2023 PFS final rule (87 FR 69429 through 69438). As part of our 
holistic review of how best to update our data and offer interested 
parties additional information that addresses some of the concerns 
raised, we have recently improved our current suite of public use files 
(PUFs) by including a new file that shows estimated specialty payment 
impacts at a more granular level, specifically by showing ranges of 
impact for practitioners within a specialty. This file is available on 
the CMS website under downloads for the CY 2025 PFS final rule at 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    We provided an additional impact table for this rulemaking cycle 
that includes a facility/non-facility breakout of payment changes. The 
following is an explanation of the information represented in Table 
111.
     Column A (Specialty): Identifies the specialty for which 
data are shown.
     Column B (Setting): Identifies the facility or nonfacility 
setting for which data are shown.
     Column C (Allowed Charges): The aggregate estimated PFS 
allowed charges for the specialty based on CY 2023 utilization and CY 
2024 rates. That is, allowed charges are the PFS amounts for covered 
services and include coinsurance and deductibles (which are the 
financial responsibility of the beneficiary). These amounts have been 
summed across all services furnished by physicians, practitioners, and 
suppliers within a specialty to arrive at the total allowed charges for 
the specialty.
     Column D (Combined Impact): This column shows the 
estimated CY 2025 combined impact on total allowed charges.
BILLING CODE 4120-01-P

[[Page 98503]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.170


[[Page 98504]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.171


[[Page 98505]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.172


[[Page 98506]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.173


[[Page 98507]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.174

BILLING CODE 4120-01-C
2. CY 2025 PFS Impact Discussion
a. Changes in RVUs
    The most widespread specialty-level impacts of the RVU changes are 
generally related to the changes to RVUs for specific services 
resulting from the misvalued code initiative, including RVUs for new 
and revised codes. The estimated impacts for some specialties, 
including clinical social workers and clinical psychologists, 
anesthesiology and nurse anesthetists, psychiatry, geriatrics, 
chiropractic, and endocrinology, reflect increases relative to other 
specialties. These increases can largely be attributed to the Year 4 
update to clinical labor pricing and/or the proposed adjustments to 
transfer of post-operative care for global surgical procedures. These 
increases are also due to increases in values for particular services 
after considering the recommendations from the American Medical 
Association's (AMA) Relative Value Scale Update Committee (RUC) and CMS 
review, the second year of our 4 year transition of work increases for 
timed behavioral health services, and increased payments resulting from 
supply and equipment pricing updates.
    The estimated impacts for several specialties, including vascular 
surgery, diagnostic testing facilities, interventional radiology, 
ophthalmology and optometry, hand surgery, and orthopedic surgery, 
reflect decreases in payments relative to payment to other specialties, 
largely resulting from the redistributive effects of the implementation 
of the Year 4 update to clinical labor pricing and/or the proposed 
adjustments to transfer of post-operative care for global surgical 
procedures. The services furnished by these specialties were negatively 
affected by the redistributive effects of increases in work RVUs for 
other codes, and/or rely primarily on supply/equipment items for their 
practice expense costs and, therefore, were affected negatively by the 
updated Year 4 clinical labor pricing under budget neutrality. These 
decreases are also due to the revaluation of individual procedures 
based on reviews, including consideration of AMA RUC review and 
recommendations, as well as decreases resulting from the continued 
phase-in implementation of the previously finalized supply and 
equipment pricing updates. The estimated impacts also reflect decreases 
due to the continued implementation of previously finalized code-level 
reductions that are being phased in over several years. For independent 
laboratories, it is important to note that these entities receive 
approximately 83 percent of their Medicare revenues from services that 
are paid under the CLFS.
    We often receive comments regarding the changes in RVUs displayed 
on the specialty impact table (Table 110), including comments received 
in response to the valuations. We remind interested parties that 
although the estimated impacts are displayed at the specialty level, 
typically, the changes are driven by the valuation of a relatively 
small number of new and/or potentially misvalued codes. The percentage 
changes in Table 110 are based upon aggregate estimated PFS allowed 
charges summed across all services furnished by physicians, 
practitioners, and suppliers within a specialty to arrive at the total 
allowed charges for the specialty, and compared to the same summed 
total from the previous calendar year. Therefore, they are averages and 
may not necessarily represent what is happening to the particular 
services furnished by a single practitioner within any given specialty.
    As discussed previously, we have reviewed our suite of public use 
files

[[Page 98508]]

and have worked on new ways to offer interested parties additional 
information that addresses concerns about the lack of granularity in 
our impact tables. To illustrate how impacts can vary within 
specialties, we created a public use file that models the expected 
percentage change in total RVUs per practitioner. Using CY 2023 
utilization data, Total RVUs change between -1 percent and 1 percent 
for more than 80 percent of practitioners, representing approximately 
75 percent of the changes in Total RVUs for all practitioners, with 
variation by specialty. Specialties, such as gastroenterology, exhibit 
little variation in changes in total RVUs per practitioner. Table 110 
(CY 2025 PFS Estimated Impact on Total Allowed Charges by Specialty) 
indicates an overall change of 0 percent for this specialty, and the 
practitioner-level distribution shows that 98 percent of these 
practitioners will experience a change in Total RVUs between -1 percent 
and 1 percent. The specific service mix within a specialty may vary by 
practitioner, so individual practitioners may experience different 
changes in total RVUs. For example, Table 110 indicates a 1 percent 
increase in RVUs for the physical/occupational therapy specialty as a 
whole; however, 24 percent of physical/occupational therapy specialty 
practitioners--representing over 21 percent of Total RVUs for the 
specialty--will experience a 1 percent or more increase in Total RVUs. 
Meanwhile, 13 percent of physical/occupational therapy specialty 
practitioners will experience 1 percent or more decreases in Total 
RVUs, and these practitioners account for 14 percent of Total RVUs for 
this specialty. We also note the code level RVU changes are available 
in the Addendum B public use file that we make available with each rule 
(see https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/addendum-a-b-updates).
    The specialty impacts displayed in Table 110 reflect changes within 
the pool of total RVUs. The specialty impacts table, therefore, 
includes any changes in spending that result from finalized policies 
that are subject to the statutory budget neutrality requirement at 
section 1848(c)(2)(B)(ii)(II) (such as the updated proposals associated 
with the transfer of post-operative care for global surgical procedures 
in CY 2025 or the clinical labor pricing update phase-in that began in 
CY 2022) but does not include any changes in spending which result from 
finalized policies that are not subject to the statutory budget 
neutrality adjustment, and therefore, have a neutral impact across all 
specialties. The 2.50 percent temporary payment increase for CY 2023 
and the 1.25 and 2.93 percent temporary payment increases that applied 
for portions of CY 2024 are statutory changes that take place outside 
of BN, and therefore, are not captured in the specialty impacts 
displayed in Table 110. Section 1848(t)(2)(C) specifies that these 
temporary payment increases are not to be taken into account in 
determining fee schedules for physicians' services furnished in years 
after the respective increases end. As such, these temporary increases 
are not subject to the PFS budget neutrality adjustment.
b. Impact
    Column F of Table 110 displays the estimated CY 2025 impact on 
total allowed charges, by specialty, of all the RVU changes. A table 
showing the estimated impact of all of the changes on total payments 
for selected high volume procedures is available under ``downloads'' on 
the CY 2025 PFS final rule website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/. We selected these 
procedures for the sake of illustration from among the procedures most 
commonly furnished by a broad spectrum of specialties. The change in 
both facility rates and nonfacility rates are shown. For an explanation 
of facility and nonfacility PE, we refer readers to Addendum A on the 
CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/.

D. Impact of Changes Related to Telehealth Services

    We are finalizing the addition of several codes to the Medicare 
Telehealth Services List on a provisional basis, including HCPCS codes 
G0541-G0543, and G0539-G0540, and CPT Codes 97550, 97551, 97552, 96202, 
and 96203. We are also finalizing the addition of several codes to the 
Medicare Telehealth Services List on a permanent basis, including HCPCS 
codes G0011, G0013, and G0560. We are finalizing maintaining certain 
Telecommunications technology-related flexibilities through 2025, 
including that we will continue to use a definition of direct 
supervision that allows ``immediate availability'' of the supervising 
practitioner using real-time audio and video interactive 
telecommunications. We are also finalizing delaying implementation of 
the telehealth frequency limitations for subsequent nursing facility 
and inpatient hospital visits for an additional year, to include two-
way, real-time audio-only communication technology for any telehealth 
service furnished to a beneficiary in their home, and to continue to 
permit the distant site practitioner to use their currently enrolled 
practice location instead of their home address when providing 
telehealth services from their home. While we note that certain other 
Medicare telehealth flexibilities related to the PHE for COVID-19 are 
expiring, including the removal of statutory geographic and location 
limitations for most Medicare telehealth services, the beneficiary's 
home continues to be a permissible originating site for certain types 
of services including those furnished for the diagnosis, evaluation, or 
treatment of a mental health disorder, including a Substance Use 
Disorder (SUD), and for monthly End Stage Renal Disease (ESRD) related 
clinical assessments described in section 1881(b)(3)(B). However, 
expiration of certain flexibilities for Medicare telehealth services is 
not expected to impact broader utilization of these services because 
reasonable and necessary services for the diagnosis or treatment of an 
illness or injury continue to be covered. Despite the fact that some 
services will no longer be furnished under telehealth, we expect that 
they will continue to be furnished in-person. We therefore anticipate 
that our provisions will result in continued utilization of services 
that can be furnished as Medicare telehealth services during CY 2025 at 
levels comparable to observed utilization of these services during CY 
2024.

E. Other Provisions of the Regulation

1. Impact of Provisions for Medicare Parts A and B Payment for Dental 
Services Inextricably Linked to Specific Covered Medical Services
    In section II.J.2. of this final rule, we are adding to the list in 
Sec.  411.15(i)(3)(i) of clinical scenarios under which FFS Medicare 
payment may be made for dental services inextricably linked to covered 
services to now include certain dental services associated with 
dialysis services for beneficiaries with end-stage renal disease 
(ESRD). Specifically, payment is permitted under Medicare Parts A and B 
for dental or oral examination performed as part of a comprehensive 
workup prior to, or contemporaneously with, Medicare-covered dialysis 
services when used in the treatment of ESRD; and medically necessary 
diagnostic and treatment services to eliminate an oral or dental 
infection prior to, or contemporaneously with covered dialysis services 
in the

[[Page 98509]]

treatment of ESRD. We do not anticipate any significant increase in 
utilization or payment impact for additional dental services given the 
historically low utilization of these therapies.
    Based on the Renal Management Information System (REMIS) and 
Enrollment Data Base (EDB) gathered from the Integrated Data Repository 
(IDR) we estimate Fee-For-Service (FFS) Part B ESRD enrollment to have 
averaged roughly 240,000 enrollees during CY 2023. Based on United 
States Renal Data System (USRDS) from the NIH, we estimate that roughly 
40,000 of these enrollees are on the kidney transplant waitlist in any 
given year and that roughly 10,000 of these patients on the waitlist 
would typically receive a transplant. Since we already include dental 
services associated with kidney transplant patients in Sec.  
411.15(i)(3)(i)(A) as an example of services for which payment can be 
made for certain dental services, we removed these patients from the 
estimate, which left roughly 30,000 FFS beneficiaries.
    For a variety of reasons outlined previously, we have historically 
observed low FFS dental utilization in instances when coverage could 
apply (<1 percent of potential users). FFS dental billing patterns have 
shown a cost per covered utilizer of about $525 in recent years. To 
illustrate the potential cost of the payment for dental services 
inextricably linked to dialysis services for beneficiaries with ESRD we 
applied three scenarios of utilization (0.1 percent, 1 percent, 3 
percent) and cost per patient of approximately $525 to the 30,000 
patients. Under all of these scenarios the policy is projected to 
represent a negligible cost to the Medicare program (<$1,000,000) in 
any given year.
    Therefore, we do not anticipate a significant payment impact for 
these provisions. It is important to note that there is some 
uncertainty in these take-up rate assumptions, but they are consistent 
with the current utilization of dental services, including after the 
regulation changes made in the CYs 2023 and 2024 PFS final rules. 
Additionally, given that our addition to the list of clinical scenarios 
under which payment may be made for dental services inextricably linked 
to covered services is not a change in coverage or payment policy, the 
cost impact of this provision is negligible and therefore it is not 
necessary to adjust the conversion factor under the PFS budget 
neutrality requirement.
2. Impact of Changes Related to Supervision of Outpatient Therapy 
Services in Private Practices
    As outlined in section II.H. of this final rule, we proposed to 
change our regulatory requirements for OTs and PTs who are enrolled as 
suppliers in Medicare as OTs and PTs in private practice (OTPPs and 
PTPPs, respectively) to allow for general supervision of their 
occupational therapy assistants (OTAs) and physical therapist 
assistants (PTAs) to the extent permitted under State law. The 
requirement for OTPPs and PTPPs to provide direct supervision of OTAs 
and PTAs, which has been in place since 2005, requires the OTPP/PTPP to 
be present in the office suite or in the patient's home, and 
immediately available to furnish assistance and direction throughout 
the performance of the procedure performed by the OTA/PTA (or by an OT 
or PT they are supervising who is not enrolled in Medicare as a 
supplier). In contrast, the proposal to allow for general supervision 
will mean that the procedure is furnished under the OTPP's/PTPP's 
overall direction and control, but the OTPP/PTPP need not be present in 
the treatment location or immediately available.
    As discussed in section II.H. of this final rule, we are finalizing 
our proposal, as proposed, because we continue to believe that the 
change to allow for general supervision of OTAs/PTAs by OTPPs and PTPPs 
will have a positive impact on patient access to outpatient therapy 
services; and will align with the currently required general 
supervision of PTAs/OTAs by PTs and OTs who work for Medicare 
institutional providers, such as rehabilitation agencies, outpatient 
hospitals, and SNFs. It will also reflect the supervision level 
specified in 44 State physical therapy practice acts \909\ and all but 
one State occupational therapy practice act.
---------------------------------------------------------------------------

    \909\ Federation of State Boards of Physical Therapy 
Jurisdiction Licensure Reference Guide, https://www.fsbpt.net/lrg/Home/SupervisionRequirementLevelsBySetting.
---------------------------------------------------------------------------

    The financial impact of changing the supervision level in private 
practices from direct to general is difficult to estimate. While it is 
generally agreed that direct supervision of support personnel generally 
creates more access issues for patients compared to general 
supervision, the reverse is also true, that general supervision allows 
more access to services since the supervising therapist, in this case, 
does not have to be present onsite when the therapy services occur. We 
heard from several commenters that stated by changing the supervision 
level to from direct to general in private practices of PTs and OTs, 
that Medicare would save up to an estimated $271 million over a 10-year 
period.\910\ The basis for this projected savings, as one commenter 
believes, even if the supervision change resulted in a modest increase 
in therapy service, is that some services of the therapist would shift 
to the therapy assistant. This would result in a greater number of 
claims for services furnished by OTAs/PTAs being paid at 85% of what we 
otherwise make to the therapist under the PFS when those services are 
furnished in whole or in part by a PTA/OTA; and depending on the amount 
of such services, along with the workforce shortage of both therapists 
and assistants, there may be a small percentage of costs or savings 
resulting from our finalized policy.
---------------------------------------------------------------------------

    \910\ September 2022 report by Dobson DaVanzo & Associates 
commissioned by 8 therapy organizations to evaluate the financial 
impact and medical consequences of various provisions included in 
the Stabilizing Medicare Access to Rehabilitation and Therapy or 
SMART Act, (H.R. 5536) at: https://www.dobsondavanzo.com/index.php?src=directory&view=Publications&submenu=_pubs&category=Cost%20Estimation&srctype=Publications_lister_redesign.
---------------------------------------------------------------------------

3. Impacts of Changes Related to Advanced Primary Care Management 
Services
    In section II.G.2 of this final rule, ``Advanced Primary Care 
Management (APCM) Services,'' we proposed to create three HCPCS codes 
to use for reporting the APCM services (HCPCS codes G0556, G0557, and 
G0558) to recognize the resources involved in furnishing services using 
an advanced primary care delivery model under the PFS. As described in 
sections II.G.2.b and II.G.2.c of this final rule, the APCM services 
incorporate elements of existing services with the understanding that 
some patients will require more resources and some fewer based on 
variability in patient complexity and needs. As we ordinarily do, we 
proposed to base the PFS valuation for APCM codes on the resources 
involved in furnishing the typical case of the service which may not 
necessarily reflect the actual resources involved in furnishing every 
individual service. To value APCM, we compared the service elements 
described by the APCM codes to the values we have established for the 
specific care management services and communication technology-based 
services (CTBS) codes on which we modeled the service elements of the 
APCM codes and which we built into the service descriptors for G0556, 
G0557, and G0558 (see also Table 111

[[Page 98510]]

and sections II.G.2.b. through II.G.2.d. of this final rule). 
Specifically, the APCM services incorporate elements of chronic care 
management (CPT codes 99487, 99489, 99490, 99491, 99439, 99437), 
principal care management (CPT codes 99424, 99425, 99426, 99427)), 
transitional care management (CPT codes 99495 and 99496), 
interprofessional internet consultation (CPT code 99446, 99447, 99448, 
99449, 99451, 99452), remote evaluation of patient videos/images (HCPCS 
code G2250), virtual check-ins (HCPCS code G2251 and G2252), and online 
digital E/M or e-visits (CPT codes 98970, 98971, 98972, 99421, 99422, 
99423) into this new bundled PFS payment beginning for CY 2025.
    As outlined throughout section II.G.2 of this final rule, the 
elements of APCM services reflect the comprehensive approach to care 
management involved in care delivery using the advanced primary care 
model. This is a model of primary care that is being integrated into 
current medical practice. As such, we stated that it would be 
appropriate to use the current valuation and uptake of the codes on 
which we modeled the APCM codes to inform our valuation of APCM 
services. Using Medicare FFS claims data and evidence from the CMS 
Innovation Center's testing of a series of advanced primary care models 
(see section II.G.2.a.(1) of this final rule), we sought to understand 
how these different services have been used historically and relate 
that information to the way we think about the service elements for 
APCM and the valuation of the three APCM code levels. We know that for 
Medicare beneficiaries who receive care management services during a 
year, the non-complex CCM base code is billed on average for five 
months and with three add-on codes during those five months. We also 
know that initial information from practitioner interviews conducted as 
part of our CCM evaluation efforts indicates that practitioners 
overwhelmingly meet and exceed the 20-minute threshold time for billing 
the non-complex CCM base code; typically, these practitioners reported 
spending between 45 minutes and an hour per month on CCM services for 
each patient, with times ranging between 20 minutes and several hours 
per month (81 FR 80244). However, this does not account for the care 
management services that are provided beyond one time-based billing 
interval and without reaching the next; nor does it account for the 
resources involved in maintaining certain advanced primary care 
practice capabilities and continuous readiness and monitoring 
activities, including patient population monitoring and care needs 
assessment, to fully furnish and bill APCM services as is medically 
reasonable and necessary for any individual patient during any calendar 
month. Finally, this does not account for changes to utilization of 
APCM that may occur as a result of the billing and documentation 
requirements for APCM services when compared to the current coding and 
payment for care management and CTBS services.
    We are estimating a utilization of approximately 300,000 claims for 
the HCPCS code G0556, 1.3 million claims for the HCPCS code G0557, and 
400,000 claims for the HCPCS code G0558, and solicited comment on our 
assumptions. To estimate utilization for G0556, we first calculated an 
eligible G0556 population by estimating the number of Medicare 
beneficiaries without multiple chronic conditions who have an 
established relationship with a primary care provider using Welcome to 
Medicare and Annual Wellness Visit claims and estimating the uptake of 
APCM Level 1 based on average uptake of CCM/PCM/TCM in CY 2022 claims 
data; then, we adjusted this estimate to account for increased 
frequency of billing (multiplied by 12 to account for 12 months of 
assumed practitioner billing for the APCM service). To estimate 
utilization for G0557, we first calculated estimated ratios to 
represent the average utilization of CCM/PCM/TCM services in the first 
year of policy implementation compared to CY 2022 claims; then, we 
applied a reduced utilization ratio to CY 2022 claims for CPT codes 
99490 and 99487 (10.4 percent) and multiplied by the eligible G0557 
population of Medicare beneficiaries with multiple chronic conditions 
who are non-QMB; finally, as described for G0556, we adjusted this 
estimate to account for increased frequency of billing (increase from 
an average of five months of CCM claims per beneficiary to 12 months of 
assumed practitioner billing for the APCM service, or 237.3 percent). 
To estimate utilization for G0558, we took the estimated number of 
G0557 claims for CPT codes 99490 and 99487 and multiplied by the 
eligible G0558 population of Medicare beneficiaries with multiple 
chronic conditions who are QMB; again, we adjusted this estimate to 
account for increased frequency of billing (same percentage applied to 
G0557).
    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    A few commenters were concerned about an inconsistency between the 
assumptions underlying valuation and those underlying CMS' utilization 
estimates for the services. For purposes of estimating utilization, CMS 
assumed that beneficiaries who receive APCM services will do so for 12 
months each year; however, the valuation methodology assumed 
beneficiaries receive only a fraction of that--for example, CMS' 
proposed inputs for HCPCS code G0557 were based on CPT code 99490 
multiplied by \5/12\, CPT add-on code 99439 multiplied by \1/6\, CPT 
add-on code 99489 multiplied by \1/12\, and CPT code 99487 multiplied 
by \1/12\. From the commenters' perspective, it seemed unreasonable to 
expect practices to maintain APCM capabilities and provide APCM 
services for 12 months per year while setting the value of those 
capabilities and services at a fraction of that time.
    Response: We continue to reiterate that because the APCM codes are 
a bundle of existing care management and other services and the 
estimates of utilization of services are divided across the span of 12 
months, we feel that this valuation reference is one way to estimate 
the work, time, and intensity of HCPCS code G0557. We also reiterate 
our assumption that beneficiaries receiving APCM may not require any 
services one month and may have increased utilization the next month. 
We are attempting to account for the varying care needs of the 
beneficiary, with an understanding that needs often ebb and flow. As 
discussed previously, we appreciate that APCM services require 
different practice capabilities as compared to other care management 
services and may revisit valuation of all APCM services in future 
rulemaking.
    Comment: A few commenters commented on our predicted reduction in 
utilization for existing service codes. One commenter was concerned 
that the reduction in utilization for existing codes will not be 
sufficient to offset the significant cost increase. Another commenter 
asked whether CMS intended that the reduction in utilization of 
communication technology-based services (CTBS) will impact the value 
and payment for CTBS codes when separately reported by nonphysician 
qualified health care professionals. This commenter pointed out that, 
in Addendum B, the non-facility and facility PE RVUs for HCPCS code 
G2251 show a significant reduction from 0.15 to 0.00, and asked CMS to 
clarify whether this is a data entry error or an intentional change 
related to the proposed APCM codes. This commenter believes that the PE

[[Page 98511]]

RVU for HCPCS code G2251 should be restored to the original value of 
0.15, as it should remain separately reportable when a virtual check-in 
is not associated with APCM services.
    Response: We thank commenters for pointing out the error in 
Addendum B. The error has been corrected in this final rule.
    After consideration of public comments, we are finalizing the 
impacts of APCM services as proposed. We look forward to continuing to 
engage with interested parties as these codes are billed.
    We anticipate that these coding and payment policies for APCM 
services will result in slight reductions in utilization of existing 
care management and CTBS services during CY 2025 when compared to 
observed utilization of these services during CY 2024. Specifically, we 
estimated an approximate 11.4 percent reduction in utilization from CY 
2024 across the 20 service codes which are incorporated into the APCM 
services (see previously). The estimated total net increase is 
approximately 700,000 claims, and we do not anticipate a significant 
payment impact for these provisions. We believe that the cost impact of 
this proposal is negligible and therefore it is not necessary to adjust 
the conversion factor under the PFS budget neutrality requirement.
4. Impact of Changes Related to Strategies for Improving Global Surgery 
Payment Accuracy
    As discussed in section II.L. of this final rule, beginning for 
services furnished in 2025, we are finalizing our proposal to broaden 
the applicability of transfer of care modifier -54 for 90-day global 
packages as proposed. Beginning with services furnished in CY 2025, 
modifier -54 is required for all 90-day global surgical packages in any 
case when a practitioner plans to furnish only the surgical procedure 
portion of the global package (including both formal and other 
transfers of care). We are not finalizing any changes regarding the use 
of modifier -55 and modifier -56 for CY 2025. Modifiers -55 and -56 
will continue to be billed exclusively in cases where there is a 
documented formal transfer of care.
    Since we believe that this will result in expanded use of the 
transfer of care modifier -54, which will have a corresponding effect 
on the payment for the affected services, we have reflected this in our 
utilization estimates accordingly (see download file for this final 
rule titled CY 2025 PFS final rule 2023 Utilization Data Crosswalked to 
2025 at https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices?DLSort=2&DLEntries=10&DLPage=1&DLSortDir=descending) and 
anticipate more global surgical packages to be billed separately using 
modifier -54, which could have payment consequences for a selection of 
high-volume global surgery codes. We assume that the same number of 
global surgery codes will be billed; however, we anticipate more codes 
will be billed using transfer of care modifier -54. We do not expect 
that the utilization of separately billable post-operative E/M services 
will change. Rather than modify our utilization estimates for these 
codes, our utilization estimate includes only 90-day high volume and/or 
high-cost procedure codes where reporting post-operative visits with 
CPT code 99024 (Postoperative follow-up visit, normally included in the 
surgical package, to indicate that an evaluation and management service 
was performed during a postoperative period for a reason(s) related to 
the original procedure) is required. This is a relatively small set of 
codes (approximately 180) versus the full range of approximately 4,000 
global surgical codes; however, this subset of codes accounts for about 
73 percent of total Medicare 90-day procedure volume. The full list of 
affected codes is available in the file titled ``CY 2024 Analytic 
Crosswalk to CY 2025'' on the CMS website under downloads for the CY 
2025 PFS final rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    For this select list of global surgical codes, we are estimating 
that the transfer of care modifier, modifier -54, will be employed 20 
percent of the time. We believe that this is a conservative estimate 
given the frequency with which these global surgical services involve a 
transfer of post-operative care. RAND's research has indicated that a 
post-operative transfer of care is common for 90-day global surgical 
procedures but that these transfers of care are almost never reported 
with the appropriate modifier. Then, for the 20 percent of cases where 
we believe the transfer of care modifier will be employed, we proposed 
to apply the payment reduction associated with the modifier -54 for 
post-operative care and apply it to the utilization estimate for the 
associated procedures billed using the transfer of care modifiers. 
These percentages can be found in the PFS Relative Value Files under 
the columns labeled ``pre op, intra op, post op'' at https://www.cms.gov/medicare/payment/fee-schedules/physician/pfs-relative-value-files. For example, CPT code 27447 (Arthroplasty, knee, condyle 
and plateau; medial AND lateral compartments with or without patella 
resurfacing (total knee arthroplasty)) is a high-volume knee 
replacement procedure where the post-operative portion of the total 
payment is 21 percent. We estimated that there will be a post-operative 
transfer of care 20 percent of the time for CPT code 27447, and in 
those 20 percent of cases, there will be a corresponding 21 percent 
decrease in payment. This is reflected in a utilization crosswalk of 
0.958 for CPT code 27447 as a result of this 4.2 percent reduction (20 
percent times 21 percent) to capture this estimated reduction in 
spending associated with our proposal to require the use of the 
transfer of care modifier (modifier -54).
    We note that for purposes of estimating the utilization of the 
transfer of care modifier, our estimates include increased reporting of 
the transfer of care modifier for codes that are subject to the RAND 
data collection exercise, with the exception of cases where the 
modifier is already used 5 percent of the time or more. We recognize 
that this policy will apply more broadly and solicited comment on this.
    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: One commenter said the reference to ``expected'' in the 
CMS proposal should have no impact on the utilization rates of Modifier 
-55 because Modifier -55 should not be appended to a claim unless post-
operative management of patient care has actually occurred. Commenters 
expressed general concern about the ability of CMS to extrapolate any 
meaningful data for purposes of updating global code values based on 
changes in utilization of the transfer-of-care modifiers if this policy 
is finalized.
    Response: We appreciate the commenter noting the appropriate use of 
modifier -55 and agree that our utilization assumptions focused on the 
use of modifier -54. We understand the concerns surrounding the data 
and want to reiterate that modifier -54 and its use is an iterative 
step in the process of accurately valuing the global surgical packages.
    After consideration of public comments, we are finalizing as 
proposed. We note that the impact of this estimated reduction in 
spending associated with this policy is redistributed across the PFS 
via an

[[Page 98512]]

increase in the budget neutrality adjustment to the conversion factor.
    We also proposed and are finalizing a new HCPCS code, G0559, to 
capture the additional practitioner time and resources spent in 
providing follow up post-operative care by a practitioner who did not 
perform the surgical procedure. Additionally, we expect the global 
surgical add-on code, HCPCS code G0559, will be billed during the post-
operative period of 90 days following the procedure. We expect that 
this code will be billed once during the global period when the patient 
is seen for an office/outpatient (O/O) evaluation and management (E/M) 
visit that is related to the recent surgical procedure. We believe that 
this code will be billed by a physician or other practitioner (other 
than the proceduralist or another practitioner in the same practice) 
who is seeing the patient for a visit during the post-operative period 
and did not furnish the surgical procedure. We believe that there is 
additional time, resources, and complexity involved in the first O/O E/
M visit following a procedure that should be captured during the post-
operative period and may be billed in certain instances when a transfer 
of care modifier was not appended to the claim.
    We estimated a utilization of approximately 40,000 total claims in 
the first year for the add-on code, HCPCS code G0559. We calculated 
this utilization estimate based on claims data for procedure codes with 
a post-operative diagnosis code and an observed to expected ratio (that 
is the ratio of visits that are included in the global surgical package 
compared to the number of visits actually furnished) of less than 25 
percent. We anticipate that uptake of HCPCS code G0559 will be low 
initially, consistent with initial uptake of other new services we have 
finalized under the PFS. We solicited comment on these assumptions and 
welcomed input from the public.
    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: One commenter asked about the impact on budget neutrality 
regarding the new proposed add-on code, HCPCS code G0559. Another 
commenter was also concerned about the unbalanced impact this would 
have on budget neutrality, negatively affecting those who have no 
opportunity to bill for this code.
    Response: We appreciate the commenters question on budget 
neutrality and note that HCPCS code G0559, as finalized, does affect 
budget neutrality since we are adding a new service with utilization 
and work RVUs, but that the impact is relatively small.
    Comment: A few commenters stated that they anticipated uptake and 
utilization of the new add-on code will be slow.
    Response: We appreciate commenters noting that uptake and 
utilization of the new add-on code may be slow. We would like to 
reiterate that improving global surgery payment accuracy is an 
iterative process and we believe that use of the add-on code, as well 
as the transfer of care modifiers, are an important first step in that 
process.
    After consideration of public comments, we are finalizing as 
proposed.
5. Drugs and Biological Products Paid Under Medicare Part B
a. Requiring Manufacturers of Certain Single-Dose Container or Single-
Use Package Drugs To Provide Refunds With Respect to Discarded Amounts
    Section 90004 of the Infrastructure Investment and Jobs Act (Pub. 
L. 117-58, November 15, 2021) amended section 1847A of the Act to 
require manufacturers to provide a refund to CMS for certain discarded 
amounts from a refundable single-dose container or single-use package 
drug. The refund amount is either as noted in section 1847A(b)(1)(B) of 
the Act in the case of a single source drug or biological or as noted 
in section 1847A(b)(1)(C) of the Act in the case of a biosimilar 
biological product, multiplied by the amount of discarded drug that 
exceeds an applicable percentage, which is required to be at least 10 
percent, of total charges (subject to certain exclusions) for the drug 
in a given calendar quarter. In the CY 2023 and 2024 final rules, we 
finalized several policies to implement the provision. These policies 
are described in section III.A.1 of this final rule.
    In section III.A.1 of this final rule, we are finalizing additional 
clarifications for implementing the provision, including: a change in 
how we will identify certain drugs that are excluded from the 
definition of refundable drug for those which payment has been made 
under Part B for fewer than 18 months; how we identify drugs from a 
single-dose container; the requirement to use the JW modifier if a 
billing supplier is not administering a drug, but there are discarded 
amounts during the preparation process before supplying the drug to the 
patient. We also discuss an application (CMS 10835, OMB 0938-1435) for 
increased applicable percentage.
    In the CY 2024 PFS final rule (88 FR 79485 through 79490), we 
analyzed JW modifier data from 2021 as if the data represented dates of 
service on or after the effective date of section 90004 of the 
Infrastructure Act (that is, January 1, 2023).\911\ Similar to our 
regulatory impact analysis in the CY 2023 PFS final rule (87 FR 70187 
through 70188), we used the 2021 JW modifier data to estimate refund 
amounts as described in section 1847A(h)(3) of the Act. In this final 
rule, we performed the same analysis on the 2022 JW modifier data. 
First, we subtracted the percent units discarded by 10 percent (the 
applicable percentage for most refundable drugs), except for drugs with 
an increased applicable percentage as described in Sec.  414.940(d). We 
note that since the data indicating which drugs will have an increased 
applicable percentage of 26 percent for the unique circumstances of 
rarely utilized orphan drugs (Sec.  414.940(d)(5)) will not be 
available until the data is analyzed for the initial report, we entered 
26 percent for orphan drugs furnished to fewer than 100 beneficiaries 
in CY 2022 based on data on the CMS website.\912\ Therefore, the drugs 
with increased applicable percentage under Sec.  414.940(d)(5) may 
change each year based on claims data; it is applied in this analysis 
for estimation purposes only. Then, we multiplied that percentage by 
the CY 2022 total allowed amount to estimate the annual refund for a 
given billing and payment code. The quarterly refund was estimated by 
dividing the annual estimate by 4. This analysis remains appropriate 
for this final rule because we are applying the finalized policies from 
the CY 2023 and 2024 PFS final rules to the most recent publicly 
available data for the JW modifier data from CY 2022.
---------------------------------------------------------------------------

    \911\ https://data.cms.gov/summary-statistics-on-use-and-payments/medicare-medicaid-spending-by-drug/medicare-part-b-discarded-drug-units.
    \912\ https://data.cms.gov/summary-statistics-on-use-and-payments/medicare-medicaid-spending-by-drug/medicare-part-b-spending-by-drug.
---------------------------------------------------------------------------

    Overall, according to data on the CMS website \913\ for Medicare 
Part B discarded drug units in the 2022 calendar year, Medicare paid 
over $800 million for discarded amounts of drugs from a single-dose 
container or single-use package paid under Part B. In that year, there 
were 55 billing and payment codes with 10 percent or more discarded 
units based on JW modifier data. Of these, 10 did not meet the 
definition of refundable single-dose container or single-use package 
drug in section 1847A(h)(8) of the Act because they are not single 
source drugs or

[[Page 98513]]

biologicals; 5 were excluded from the definition of refundable single-
dose container or single-use package drug (as specified in section 
1847A(h)(8)(B) of the Act) because they are identified as 
radiopharmaceuticals or imaging agents in FDA-approved labeling; and 3 
are products referred to as skin substitutes, which were removed 
because we anticipate making changes to coding and payment policies 
regarding those products in future rulemaking. After these exclusions, 
there were 35 billing and payment codes that met the definition of 
refundable single-dose container or single-use package drug. Of these, 
29 codes have discarded units above the relevant finalized applicable 
percentage, and 6 codes have discarded units that would fall below 
increased applicable percentages in this final rule.
---------------------------------------------------------------------------

    \913\ https://data.cms.gov/summary-statistics-on-use-and-payments/medicare-medicaid-spending-by-drug/medicare-part-b-discarded-drug-units.
---------------------------------------------------------------------------

    We estimated refund amounts as described in section 1847A(h)(3) of 
the Act based on this data by subtracting the percent units discarded 
by 10 percent (the applicable percentage), except for drugs with higher 
applicable percentages finalized in the CY 2023 or 2024 final rules. 
Then, we multiplied the appropriate percentage by the CY 2022 total 
allowed amount to estimate the annual refund for a given billing and 
payment code. The quarterly refund was estimated by dividing the annual 
estimate by 4. Based on this data, there will be approximately $98.7 
million in refunds due from manufacturers for the calendar year of 2022 
($24.7 million each calendar quarter).
    There are several limitations to this analysis that could 
substantially affect the total quarterly refund. Since new drugs are 
continually being approved, this estimate does not consider newer drugs 
that will meet the definition of refundable single-dose container or 
single-use package drug on or after the effective date of January 1, 
2023. Since section 1847A(h)(8)(B)(iii) of the Act excludes drugs 
approved by FDA on or after November 15, 2021, and for which payment 
has been made under Part B for fewer than 18 months from this 
definition, we expect an impact on refund amounts after the 18-month 
exclusion has ended if the drug otherwise meets the definition. We also 
note that this estimate is based on CY 2022 data for discarded drug 
amounts, which, for reasons discussed in the CY 2023 PFS final rule (87 
FR 69716), we believe to be an underestimate due to the frequent 
omission of the JW modifier. Claims edits for both the JW and JZ 
modifiers will likely increase accurate reporting of discarded drug 
amounts. Other substantial changes to this estimate may occur if a 
billing and payment code no longer meets this definition. For example, 
if a generic version of one of these drugs is marketed, the billing and 
payment code will become a multiple source drug code and will no longer 
meet the definition of refundable single-dose container or single-use 
package drug. Subsequently, the manufacturers will not be responsible 
for refunds under this provision. There may be changes in the percent 
discarded units for a given refundable single-dose container or single-
use package drug if the manufacturer introduces additional vial sizes 
or modifies the vial size to reduce the amount discarded. Lastly, since 
data from the CMS website only includes billing and payment codes on 
the ASP drug pricing file \914\ and implementation of section 90004 of 
the Infrastructure Act is not restricted to billing and payment codes 
included on the file, there may be other applicable data that were not 
assessed as part of this estimate.
---------------------------------------------------------------------------

    \914\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice.
---------------------------------------------------------------------------

b. Impacts Related to the Payment Limit Calculation When Manufacturers 
Report Negative or Zero Average Sales
    In section III.A.2 of this final rule, CMS is finalizing how 
payment limits will be calculated when manufacturers report negative or 
zero ASP data for a drug to CMS, beginning with the payment limits 
included in the January 2025 ASP Drug Pricing file. We are revising 
Sec.  414.904(i) to reflect CMS' approach to setting a payment limit 
for circumstances in which negative or zero ASP data is reported by a 
manufacturer for a drug.
    Specifically, we are codifying that in cases where negative or zero 
ASP data is reported for some, but not all, NDCs of a multiple source 
drug, we will calculate the payment limit using the positive ASP data 
reported for the drug, except for the existing carryover policy for 
multiple source drugs that we will apply when missing data results in a 
significant change in the ASP payment limit. We are finalizing to move 
this carryover policy for multiple source drugs within Sec.  414.904(i) 
to fit within the structure of the new set of payment limit 
methodologies. We are also codifying that in the case of a multiple 
source drug for which negative or zero ASP data is reported for all 
NDCs, we will set the payment limit using the most recently available 
positive ASP data from a previous quarter until at least one NDC for 
the drug has positive ASP data for a quarter.
    We are codifying that in cases where negative or zero ASP data is 
reported for some, but not all, NDCs of a single source drug that is 
not a biosimilar, we will calculate the payment limit using the 
positive ASP data reported for the drug. We are codifying that for 
single source drugs that are not biosimilars with all negative or zero 
ASP data for a given quarter, the payment limit will be, until at least 
one NDC for the drug has positive manufacturer ASP data for a quarter, 
the lesser of 106 percent of the volume-weighted average of the most 
recently available positive manufacturer ASP data for at least one NDC 
from a previous quarter and 106 percent of the WAC, and we will use 106 
percent of the lowest WAC per billing unit if there is more than one 
WAC per billing unit.
    We are also finalizing our proposal to codify that in cases where 
negative or zero manufacturer's ASP data is reported for some, but not 
all, NDCs of a biosimilar, we will calculate the payment limit using 
the positive manufacturer's ASP data reported for the biosimilar. 
Lastly, we are finalizing a modification to our proposal to codify a 
methodology for calculating payment limits when the manufacturer 
reports negative or zero manufacturer's ASP for all NDCs for a 
biosimilar for a given quarter. We are adopting the approach proposed 
for circumstances when no other biosimilars have been approved for the 
same reference product or no other biosimilars with the same reference 
product report positive manufacturer's ASP data for the given quarter 
for all circumstances, regardless of whether positive ASP data is 
reported for other biosimilars that reference the same reference 
product. In other words, we are finalizing for all biosimilars with all 
negative or zero manufacturer's ASP data that we will set the payment 
limit equal to the sum of the volume-weighted average of the most 
recently available positive manufacturer's ASP data from a previous 
quarter plus 6 percent (or 8 percent for a qualifying biosimilar 
biological) of the amount determined under section 1847A(b)(4) of the 
Act for the reference biological product for the given quarter.
    With regard to estimating changes in expenditures for CY 2025, 
because drugs and biologicals that report negative or zero ASP data 
vary by quarter and we cannot predict those that will report such data, 
we used historic claims data to perform an illustrative analysis of how 
program spending would have changed had the proposed policies been in 
place in CY 2023. In the analysis, we identified single source and 
multiple source billing and payment codes associated with negative or 
zero

[[Page 98514]]

ASP data for which we published payment limits based on other 
applicable pricing data (that is, the manufacturer or published 
wholesale acquisition cost) in the four calendar quarters of 2023. For 
each such billing and payment code, we used claims data to identify: 
(1) the number of allowed billing units in a calendar quarter (that is, 
the number of billing units of a drug or biological paid for by 
Medicare); (2) the payment limit per billing unit we applied to that 
drug or biological under our current policies; and (3) the payment 
limit per billing unit our finalized policy would apply to the billing 
and payment code. We then subtracted the product of the allowed billing 
units for the payment limit under current policy by the product of the 
allowed billing units and the payment limit under our finalized policy, 
and the difference between the two is what the difference between what 
Medicare spending on the billing and payment codes would have been if 
our proposed payment limit methodologies were used in that calendar 
quarter of 2023 and what Medicare actually spent. These data and net 
reductions (or increases) in program spending are illustrated in Table 
112.
BILLING CODE 4120-01-P

[[Page 98515]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.175


[[Page 98516]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.176

BILLING CODE 4120-01-C
    As illustrated in Table 112, the application of the payment limit 
calculation approaches will have reduced program spending for all but 
three drugs that reported negative or zero ASP data in calendar 
quarters in 2023 and reduced spending by a total of $10,779,535.60 over 
the year.
    We separately analyzed theoretical changes in program spending for 
one biosimilar product (ZIEXTENZO[supreg], Q5120) that has reported 
negative ASP data for all NDCs for four consecutive quarters beginning 
with the second calendar quarter of 2022, and calculated the payment 
limit under our method for biosimilars with negative or zero ASP data 
and changes in program spending for the four impacted quarters had our 
proposed payment approach been applied, as well as payment limits and 
theoretical changes in program spending under the two alternatives 
considered under the rule. Under the first alternative, we would 
include the ASP data and billing units sold of the reference biological 
for a given quarter along with those of the other biosimilars in the 
volume-weighted average calculation. Under the second alternative, 
which we finalized in section III.A.2 of this rule, we will set the 
payment limit for a given quarter using the biosimilar's most recently 
available positive ASP data and either 6 percent (or 8 percent for 
qualifying biosimilar biologicals) of the amount determined under 
section 1847A(b)(4) of the Act for the reference biological product (as 
defined in Sec.  414.902) for the given quarter. The calculated payment 
limits under the proposal and the two alternatives, as well as the 
estimated reductions in program expenditures, are illustrated in Table 
113.
[GRAPHIC] [TIFF OMITTED] TR09DE24.177

    We note that the spending change estimates reflect preliminary 
claims data. Providers and suppliers have a 12-month period to submit 
Medicare Part B claims, including claims for drugs payable under Part 
B, so a lag exists between the date of service when a drug is 
administered and when the claim is submitted and adjudicated. An 
evaluation of July 2010 Medicare Part B claims in the Physician/
Supplier-Carrier setting showed that 91.68, 96.84, and 98.32, and 99.13 
percent of claims were final at 3, 6, 9, and 12 months, respectively, 
following the date of service. At 24 and 48 months, 99.83 and 100 
percent of the claims, respectively, were considered to be final. 
Therefore, for the allowed billing units and estimated program 
expenditure reduction for the first 3 calendar quarters of CY 2024 are 
significantly lower than we would expect after claims mature for a full 
year. Over the 4

[[Page 98517]]

calendar quarters (4Q2023, 1Q2024, 2Q2024, and 3Q2024), our proposed 
approach for calculating the payment limit for biosimilars with only 
negative or zero manufacture's ASP data, our first alternative 
approach, and our finalized policy would have reduced program 
expenditures by at least $984,693.455, $1,096,260.775, and 
$1,400,031.436, respectively.
    After assessing the effect of applying the proposed alternative 
payment limit calculation approaches to recent Medicare FFS claims 
experience over 2023 and 2024, we estimate an average annual gross Part 
B effect of $12.2 million dollars in reduced program spending for 2025 
and approximately $122 million over 2025 to 2034, as shown in Table 
114. Historically we have observed that negative or zero ASP pricing 
data may occasionally occur for a drug when it is discontinued or 
substituted away for another product and assume this to occur in the 
future. Moreover, given the infrequency of negative or zero ASP data, 
we do not expect in all years that alternative pricing approaches will 
be necessary or to affect payment amounts for drugs with material 
levels of utilization. Therefore, for a low estimate we project the 
policy to have a negligible effect on program spending for the 
projection window. To illustrate a potential high impact estimate 
scenario, the affected utilization from 2023 was doubled relative to 
the observed data. Please note that the actual effect of the policy 
will be specific to the affected drugs in any given year and 
considerations that affect their utilization and pricing, therefore 
actual experience may deviate considerably from these projections.
[GRAPHIC] [TIFF OMITTED] TR09DE24.178

c. Impacts Related to the Payment of Radiopharmaceuticals in the 
Physician Office
    In section III.A.3. of this final rule, we are finalizing to codify 
in regulations at Sec.  414.904(e)(6) that, for radiopharmaceuticals 
furnished in a setting other than the hospital outpatient department, 
MACs shall determine payment limits for radiopharmaceuticals based on 
any methodology used to determine payment limits for 
radiopharmaceuticals in place on or prior to November 2003. Such 
methodology may include, but is not limited to, the use of invoice-
based pricing. The clarification does not necessarily change the 
payment methodology in place for a MAC but rather clarifies that any 
payment methodology that was being used by any MAC prior to the 
enactment of the MMA can continue to be used by any MAC. Therefore, we 
believe that this clarification will have no impact on Medicare 
spending.
d. Impacts Related to Immunosuppressive Therapy
    In section III.A.4 of this final rule, we are finalizing 
modifications to regulations to include orally and enterally 
administered compounded formulations with active ingredients derived 
only from FDA-approved drugs where approved labeling includes an 
indication for preventing or treating the rejection of a transplanted 
organ or tissue, or for use in conjunction with immunosuppressive drugs 
to prevent or treat rejection of a transplanted organ or tissue, or 
that have been determined by a Medicare Administrative Contractor (MAC) 
to be reasonable and necessary for a specific purpose in 
immunosuppressive treatment included in the immunosuppressive drug 
benefit. In addition, we are finalizing two changes regarding supplies 
of immunosuppressive drugs to align with current standards of practice 
and reduce barriers to medication adherence: to allow payment of a 
supply fee for a prescription of a supply of up to 90 days and to allow 
prescriptions for these immunosuppressive drugs to be refillable.
    CMS has limited insight into how many patients who are currently 
prescribed compounded immunosuppressive drugs will have their 
immunosuppressive medication paid for under Part B as a result of the 
finalized changes to the immunosuppressive drug benefit. Medicare Part 
D claims data for CY 2023 indicates there were 2,662 prescriptions 
filled that year for compounded immunosuppressive drugs that could have 
been administered through oral or enteral routes (that is, that would 
likely be paid under Part B if the immunosuppressive drug benefit 
revision is finalized as proposed). We estimate that this number of 
prescriptions correlates to up to 2,000 Part D enrollees that were 
prescribed compounded immunosuppressive drugs that will be covered 
under the finalized policy. However, we do not know how many Part B 
beneficiaries currently have their compounded immunosuppressive drugs 
paid for by means other than a Part D policy. And finally, and perhaps 
most importantly, compounded drugs are priced by each A/B and DME MAC 
and have no estimable payment limit. Thus, we are unable to estimate 
the cost shift from Part D and other plans to Part B that will result 
from the finalization of the immunosuppressive drug benefit policies, 
including allowing payment of supply fees for prescriptions fills for 
supplies of up to 90 days and for immunosuppressive drugs to be 
refillable.
e. Impacts Related to Clotting Factors
    In section III.A.5. of this final rule, we are finalizing to update 
Sec.  410.63(b) to clarify existing CMS policy that blood clotting 
factors must be self-administered to be considered clotting factors for 
which the furnishing fee

[[Page 98518]]

applies. We are also clarifying that therapies that enable the body to 
produce clotting factor and do not directly integrate into the 
coagulation cascade are not themselves clotting factors for which the 
furnishing fee applies. Additionally, we are finalizing to clarify at 
Sec.  410.63(c) that the furnishing fee is only available to entities 
that furnish blood clotting factors, unless the costs associated with 
furnishing the clotting factor are paid though another payment system, 
including the PFS. That is, we are finalizing to clarify through 
revisions to Sec.  410.63 that clotting factors (as specified in 
section 1861(s)(2)(I) of the Act) and those eligible to receive the 
clotting factor furnishing fee (as specified in section 1842(o)(5) of 
the Act) are the same subset of products. Accordingly, the 
clarification will not be adding a furnishing fee to any new products. 
Therefore, we believe that this clarification will have no impact on 
Medicare spending.
6. Impacts Related to Rural Health Clinics (RHCs) and Federally 
Qualified Health Centers (FQHCs)
    In section III.B.2. of this final rule, we are finalizing with a 
modification that starting in 2025, RHCs and FQHCs will report the 
individual CPT and HCPCS that describe care coordination services 
instead of the single HCPCS code G0511. We are also allowing RHCs and 
FQHCs to come into compliance by at least until July 1, 2025, to enable 
those RHCs and FQHCs to be able to update their billing systems. We are 
also finalizing a policy that permits billing of the add-on codes 
associated with these services. In addition, beginning in CY 2025, we 
finalizing the coding and policies regarding Advanced Primary Care 
Management (APCM) services, as outlined in section II.G of this final 
rule. In terms of estimated impacts to the Medicare program, we believe 
that the proposals discussed in section III.B.2 of this final rule will 
have no impact on Medicare spending.
    In section III.B.3. of this final rule, we are finalizing the 
policy to continue to adopt the definition ``immediate availability'' 
as including real-time audio and visual interactive telecommunications 
for the direct supervision of services and supplies furnished incident 
to a physician's service through December 31, 2025, for RHCs and FQHCs. 
We also finalizing, on a temporary basis, a policy allowing payment for 
medical care non-behavioral health visits furnished via 
telecommunication technology in a manner similar to with the payment 
mechanisms mandated by statute through December 31, 2024. RHCs and 
FQHCs will continue to bill for RHC and FQHC services furnished using 
telecommunication technology services by reporting HCPCS code G2025 on 
the claim through December 31, 2025. In addition, we are finalizing a 
policy which extends the 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. We 
believe these RHC/FQHC proposals related to telecommunication 
technology will have a negligible impact on Medicare spending.
    In section III.B.4. of this final rule, we are finalizing a payment 
rate when four or more IOP services per day are provided in the RHC and 
FQHC setting. We are also finalizing to aligning with the four or more 
services per day payment rate for hospital outpatient departments, 
which will be updated annually. In terms of impact, we believe that 
this proposal will have negligible impact on Medicare spending.
    In section III.B.5. of this rulemaking, we are finalizing our 
proposal to allow RHCs and FQHCs to bill for Part B preventive vaccines 
and the administration at the time of service. We state that payments 
for these claims will initially be made according to Part B preventive 
vaccine payment rates in other settings, but that they will be annually 
reconciled with the facilities' actual vaccine costs on their cost 
reports, which is current practice and statutorily mandated. Therefore, 
we believe that this proposal will have no impact on Medicare spending.
    In section III.B.6. of this final rule, we outline our proposal 
relating to RHC productivity standards. We are finalizing our proposal 
to remove productivity standards for RHCs effective for cost reporting 
periods beginning on or after January 1, 2025, and believe that this 
will have no impact on Medicare spending.
    In section III.B.7 of this final rule, we are finalizing the 
rebasing of the FQHC market basket to reflect a 2022-base year. The CY 
2025 FQHC market basket update is 0.1 percentage point lower using the 
2022-based FQHC market basket (3.4 percent) compared to the 2017-based 
FQHC market basket (3.5 percent). Therefore, the economic impact of 
finalizing the FQHC market basket rebasing for CY 2025 is approximately 
$1 million and we consider this impact to be negligible. We determined 
this amount by applying a factor of -0.001 to the FQHC baseline, which 
was approximately $1,000 million in calendar year 2024. Over the next 
10 years the rebasing methodology results in the same estimated market 
basket percentage increase for every year except CY 2034 when it is 
expected to be 0.1 percentage point lower compared to the 2017-based 
FQHC market basket update. Therefore, the estimated impact of the 
rebasing of the FQHC market basket over the next 10 years is 
negligible.
    In section III.B.8. of this final rule, we clarified that when RHCs 
and FQHCs furnish dental services that align with the inextricably 
linked policies and operational requirements in the physician setting, 
we will consider those services to be a qualifying visit and the RHC 
will be paid at the RHC AIR and the FQHC will be paid under the FQHC 
PPS. We believe this clarification related to dental services furnished 
in RHCs and FQHCs will have a negligible impact on Medicare spending. 
Even though this policy expands payment under Medicare Part B, it will 
only cover dental services inextricably linked to specific medical 
services as described in section II.J. of this final rule.
7. Changes in the RHC and FQHC CfCs: Provision of Services (Sec.  
491.9(a)(3) and (c)(2)(ii) and (vi))
Provision of Services (Sec.  491.9)
    At Sec.  491.9(a), we proposed to explicitly require RHCs and FQHCs 
to provide primary care services and to codify the statutory 
requirement that RHCs cannot be a rehabilitation agency or a facility 
primarily for the care and treatment of mental diseases. After 
consideration of public comments, we are finalizing our proposal to 
require RHCs to provide primary care services. However, we are not 
finalizing this requirement for FQHCs. We are also withdrawing the 
proposed requirement at Sec.  491.9(a)(2)(ii) to codify the statutory 
requirement that RHCs cannot be a rehabilitation agency or a facility 
primarily for the care and treatment of mental diseases. We believe 
that finalizing the proposal to require RHCs to provide primary care 
services supports our goal of clarifying the services that RHCs may 
provide and safeguarding access to primary care services while avoiding 
unintended consequences that may create barriers to accessing care. We 
believe the requirement at Sec.  491.9(a)(3) (finalized in this rule) 
to require RHCs to provide primary care services will result in real, 
but difficult to estimate, long-term benefits to patients receiving 
services at RHCs, as well as economic benefits to the clinic. Regarding 
the estimated impacts on the Medicare program, the

[[Page 98519]]

provisions discussed in section III.C.2 of this final rule will have no 
impact on Medicare spending.
    This change will provide RHCs with additional flexibility to 
provide outpatient specialty services on-site or hire additional 
providers with specialized expertise to meet the needs of their 
community, including specialized areas of internal medicine, 
pediatrics, geriatrics, obstetrics and gynecology, dermatology, 
cardiology, neurology, endocrinology, and ear, nose and throat. As a 
result, RHCs will be able to improve access to care by serving more 
patients in communities served by RHCs, including rural communities, 
and not requiring patients to travel longer distances to receive 
specialty services. Patients could have access to specialists within 
their own communities, improving overall access for Medicare 
beneficiaries. Moreover, CMS will no longer determine or enforce the 
standard of RHCs ``being primarily engaged in furnishing primary care 
services.'' \915\ which has been enforced via the sub-regulatory 
guidance contained in the State Operations Manual Appendix G--Guidance 
for Surveyors: Rural Health Clinics (RHCs). Resources that clinics are 
currently using to evaluate if they are meeting this requirement could 
be devoted to other administrative tasks. Therefore, we believe that 
there will be no burden imposed on RHCs related to this proposal.
---------------------------------------------------------------------------

    \915\ Centers for Medicare & Medicaid Services. (2020, February 
21). State Operations Manual Appendix G--Guidance for Surveyors: 
Rural Health Clinics (RHCs) (pp. 63-64). https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/som107ap_g_rhc.pdf.
---------------------------------------------------------------------------

    We also proposed to remove hemoglobin and hematocrit (H&H) lab 
tests from the list of specific tests RHCs must provide, as well as 
update the language regarding the primary culturing requirement to 
reflect current standards of practice at Sec.  491.9(c)(2)(ii) and 
newly designated (vi), respectively. We are finalizing these provisions 
as proposed. Additionally, based on a comment citing that 82 percent of 
RHCs indicate that the lab requirement for the ``Examination of stool 
specimens for occult blood'' at Sec.  491.9(c)(2)(iv) is no longer 
frequently ordered or considered the best clinical practice. Therefore, 
we are finalizing the removal of this requirement from the list of 
laboratory services RHCs must provide.
    As stated in section III.C.2.b of this final rule, RHCs report that 
the H&H lab requirement and the examination of stool specimens for 
occult blood (these specific tests) are particularly burdensome and 
costly for clinics due to purchasing and maintaining the equipment that 
is seldom or never used.
    This change will reduce the overall burden for RHCs by reducing the 
number of diagnostic tests they must provide. RHCs will no longer be 
required to purchase or maintain H&H lab tests or stool examination 
equipment or supplies, freeing up resources for other essential 
services. H&H lab tests are most often ordered as part of a larger 
panel of labs that is not provided at the RHC. When this is the case, 
patients will receive the H&H as part of that larger panel at an 
outside lab that offers the larger panel of labs. These patients may be 
inconvenienced by having to travel to another laboratory, but this 
limits the number of specimens they must provide for the laboratory 
tests, reducing the number of times a patient's veins must be accessed 
for blood draws. RHCs report that when laboratory tests are ordered 
that are not provided by the RHC, such as a comprehensive blood count 
(CBC), their patients are often sent to the nearest hospital that would 
have a full-service laboratory available to perform the test. A CBC 
test looks at a patient's overall health and can detect a wide range of 
conditions that the hemoglobin and hematocrit tests cannot. This 
ensures comprehensive patient care and may result in a decreased need 
for follow-up testing and decreased patient turnaround time.\916\
---------------------------------------------------------------------------

    \916\ Mayo Foundation for Medical Education and Research. (2023, 
January 14). Complete blood count (CBC). Mayo Clinic. https://www.mayoclinic.org/tests-procedures/complete-blood-count/about/pac-20384919.
---------------------------------------------------------------------------

    Examination of stool specimens for occult blood, frequently 
referred to as fecal occult blood tests (FOBTs), are used to detect 
gastrointestinal bleeding as an indicator for colorectal cancer. FOBTs 
that are performed in the outpatient setting are typically self-
administered at home and submitted to a laboratory.\917\ The national 
guidelines, including those of the US Preventive Services Task Force 
and American Cancer Society, explicitly specify that colorectal cancer 
(CRC) screening using FOBT should be done at home.918 919 
The patient may be inconvenienced by having to mail the test 
themselves, but at-home tests provide the patient the ability to 
collect more samples, which may limit the chances of false test 
results.\920\
---------------------------------------------------------------------------

    \917\ Wielandt, A.M., Hurtado, C., Moreno, M., Z[aacute]rate, 
A., & L[oacute]pez-K[ouml]stner, F. (2021). Test de sangre oculta en 
deposiciones para programas de cribado de c[aacute]ncer colorrectal: 
actualizaci[oacute]n [Fecal occult blood test for colorectal cancer 
screening]. Revista medica de Chile, 149(4), 580-590. https://doi.org/10.4067/s0034-98872021000400580.
    \918\ US Preventive Services Task Force, Bibbins-Domingo, K., 
Grossman, D. C., Curry, S.J., Davidson, K.W., Epling, J.W., Jr, 
Garc[iacute]a, F.A.R., Gillman, M.W., Harper, D.M., Kemper, A.R., 
Krist, A. H., Kurth, A.E., Landefeld, C.S., Mangione, C.M., Owens, 
D.K., Phillips, W.R., Phipps, M.G., Pignone, M.P., & Siu, A.L. 
(2016). Screening for Colorectal Cancer: US Preventive Services Task 
Force Recommendation Statement. JAMA, 315(23), 2564-2575. https://doi.org/10.1001/jama.2016.5989.
    \919\ Smith, R.A., Andrews, K.S., Brooks, D., Fedewa, S.A., 
Manassaram-Baptiste, D., Saslow, D., Brawley, O.W., & Wender, R.C. 
(2018). Cancer screening in the United States, 2018: A review of 
current American Cancer Society guidelines and current issues in 
cancer screening. CA: a cancer journal for clinicians, 68(4), 297-
316. https://doi.org/10.3322/caac.21446.
    \920\ Collins JF, Lieberman DA, Durbin TE, Weiss DG. Accuracy of 
screening for fecal occult blood on a single stool sample obtained 
by digital rectal examination: a comparison with recommended 
sampling practice. Ann Intern Med. 2005;142(2):81[hyphen]85.
---------------------------------------------------------------------------

    Currently, there are approximately 5,462 Medicare-certified RHCs. 
Applying the most recent data from 2021, 66 percent (3,605) of RHCs are 
designated as ``provider-based,'' which are owned and operated as an 
integral part of a hospital, nursing home, or home health agency. The 
remaining 34 percent (1,857) of RHCs are ``independent clinics'' and, 
though uncommon, may be owned and/or operated by a healthcare system. 
Therefore, we assume that, at most, half of the independent clinics, 
for a total of 929 RHCs, will continue to provide H&H tests because it 
is less likely that they are a part of a healthcare system. As a 
result, we assume that 4,534 (3,605 provider-based RHCs + 929 
independent clinics) RHCs will continue to refer patients to a fully 
certified laboratory rather than directly provide the H&H test or 
examine stool specimens for occult blood on site. Because the 
regulatory requirements at Sec.  491.9 states that RHCs must provide 
these tests on-site, RHCs must have and maintain the appropriate 
equipment to perform these tests, even if the equipment is not 
utilized. There are variations in the H&H testing equipment RHCs may 
use; however, we note that the average cost of an H&H meter or analyzer 
costs approximately $1,200 for the system and is replaced on average 
every 3 years. The systems also have an approximate $100 annual 
maintenance fee. We estimate that over the next 3 years, 4,534 RHCs 
will each save approximately $1,500. This would result in a total 
annual savings of $2,267,000 ((4,534 RHCs that typically refer patients 
to a fully certified laboratory x $1,500)/3). After 3 years, the RHC 
program will save a total of $6,801,000 (4,534 x $1,500).
    Likewise, there are various FOBTs used to screen for colorectal 
cancer. One study reviewed a hospital's medical records over a 4-year 
period and found

[[Page 98520]]

that the laboratory cost for an FOBT is approximately $5 per test.\921\ 
We have received the following Medicare statistical information from 
CY2021--CY2023 Medicare claims. The annual average number of Medicare 
beneficiaries who received a colorectal cancer screening using FOBT 
from an RHC is 264. Therefore, the annual savings removing the 
``Examination of stool specimens for occult blood'' requirement will 
save RHCs $1,320 (264 tests x $5).
---------------------------------------------------------------------------

    \921\ Gupta, A., Tang, Z., & Agrawal, D. (2018). Eliminating In-
Hospital Fecal Occult Blood Testing: Our Experience with 
Disinvestment. The American journal of medicine, 131(7), 760-763. 
https://doi.org/10.1016/j.amjmed.2018.03.002.
---------------------------------------------------------------------------

8. Clinical Laboratory Fee Schedule
    In section III.D. of this final rule, we outline statutory 
revisions to the data reporting period and phase-in of payment 
reductions under the CLFS. In accordance with section 502 of the 
FCAOEA, 2024, we proposed certain conforming changes to the data 
reporting and payment requirements in our regulations at 42 CFR part 
414, subpart G. Specifically, for CDLTs that are not ADLTs, we proposed 
to update certain definitions and revise Sec.  414.504(a)(1) to 
indicate that initially, data reporting begins January 1, 2017, and is 
required every 3 years beginning January 2025. Section 502(b) of the 
FCAOEA, 2024 delayed the next data reporting period under the CLFS for 
CDLTs that are not ADLTs by 1 year, that is, it required the next data 
reporting period for these tests to take place during the period of 
January 1, 2025, through March 31, 2025. Subsequently, the next private 
payor rate-based CLFS update for these tests would be effective January 
1, 2026, instead of January 1, 2025. In addition, we proposed 
conforming changes to our requirements for the phase-in of payment 
reductions to reflect section 502(a) of the FCAOEA, 2024. Specifically, 
we proposed to revise Sec.  414.507(d) to indicate that for CY 2024, 
payment may not be reduced by more than 0.0 percent as compared to the 
amount established for CY 2023, and for CYs 2025 through 2027, payment 
may not be reduced by more than 15 percent as compared to the amount 
established for the preceding year.
    However, CAEA, 2025 (Pub. L. 118-83) was passed on September 26, 
2024, after the publication of the proposed rule and close of the 
comment period. Section 221 of that law delayed data reporting 
requirements for CDLTs that are not ADLTs, as well as the phase-in of 
payment reductions under the CLFS from private payor rate 
implementation under section 1834A of the Act. Specifically, as amended 
by section 221(b), section 1834A(1)(B) of the Act now provides that, in 
the case of reporting with respect to CDLTs that are not ADLTs, the 
Secretary shall revise the reporting period under subparagraph (A) such 
that: (i) no reporting is required during the period beginning January 
1, 2020, and ending December 31, 2025; (ii) reporting is required 
during the period beginning January 1, 2026, and ending March 31, 2026; 
and (iii) reporting is required every 3 years after the period 
described in subparagraph (ii). Essentially, data reporting will now be 
required during the period of January 1, 2026, through March 31, 2026, 
instead of January 1, 2025, through March 31, 2025. The 3-year data 
reporting cycle for CDLTs that are not ADLTs will resume after that 
data reporting period.
    Section 221 of the CAEA, 2025 does not modify the data collection 
period that applies to the next data reporting period for these tests. 
Thus, under section 1834A(a)(4)(B) of the Act, the next data reporting 
period for CDLTs that are not ADLTs (January 1, 2026, through March 31, 
2026) will continue to be based on the data collection period of 
January 1, 2019, through June 30, 2019.
    Section 221(a) of the CAEA, 2025 further amends the provisions in 
section 1834A(b)(3) of the Act pertaining to the phase-in of payment 
reductions under the CLFS. First, it extends the statutory phase-in of 
payment reductions resulting from private payor rate implementation by 
an additional year, that is, through CY 2028. It further amends section 
1834A(b)(3)(B)(ii) of the Act to specify that the applicable percent 
for CY 2025 is 0 percent, meaning that the payment amount determined 
for a CDLT for CY 2025 shall not result in any reduction in payment as 
compared to the payment amount for that test for CY 2024. Finally, 
section 221(a) further amends section 1834A(b)(3)(B)(iii) of the Act to 
specify that the applicable percent of 15 percent will apply for CYs 
2026 through 2028.We are finalizing the self-implementing conforming 
changes to the data reporting and phase-in of payment reductions at 42 
CFR part 414, subpart G in accordance with section 221 of the CAEA, 
2025.
    We recognize that private payor rates for CDLTs paid on the CLFS 
and the volumes paid at each rate for each test, which are used to 
determine the weighted medians of private payor rates for the CLFS 
payment rates, have changed since the first data collection period 
(January 1, 2016, through June 30, 2016) and data reporting period 
(January 1, 2017, through March 31, 2017). In addition, as outlined in 
section III.D. of this final rule, in the CY 2019 PFS final rule (83 FR 
59671 through 59676), we amended the definition of applicable 
laboratory to include hospital outreach laboratories that bill Medicare 
Part B using the CMS-1450 14x Type of Bill. As such, the FCAOEA, 2024 
and CAEA, 2025 amendments to the data reporting period will delay using 
updated private payor rate data to set revised CLFS payment rates for 
CDLTs that are not ADLTs.
    Due to unforeseen changes in private payor rates due to shifts in 
market-based pricing for laboratory tests and the unpredictable nature 
of test volumes and their impact on calculating updated CLFS payment 
rates based on the weighted median of private payor rates, it is 
uncertain whether the delay in data reporting will result in a 
measurable budgetary impact. In other words, to assess the impact of 
delayed reporting and subsequent implementation of updated CLFS rates, 
we will need to calculate weighted medians of private payor rates based 
on new data and compare the revised rates to the current rates. As 
such, we believe that we will only know the impact of the delays in 
data reporting after collecting actual updated applicable information 
from applicable laboratories and calculating the updated CLFS rates.
    Regarding the conforming changes to our requirements for the phase-
in of payment reductions, we note that for CYs 2026 through 2028, 
payment may not be reduced by more than 15 percent as compared to the 
amount established for the preceding year. Based on data reported in 
the 2017 data collection period, we estimated 14.8 percent (191) of 
tests on the CLFS may be subject to the full 15 percent phase-in 
reduction in CY 2026.
9. Effects of Proposals Being Finalized Relating to the Medicare 
Diabetes Prevention Program Expanded Model
a. Effects on Beneficiaries
    We proposed to modify certain Medicare Diabetes Prevention Program 
(MDPP) expanded model policies to: (1) align MDPP terminology and 
definitions with the proposed 2024 Centers for Disease Control and 
Prevention (CDC) Diabetes Prevention Recognition Program (DPRP) 
Standard \922\ definitions

[[Page 98521]]

for ``in-person with a distance learning component,'' ``combination 
with an online component,'' and ``online''; (2) remove the MDPP bridge 
payment; (3) provide a more effective option for a beneficiary to self-
report their weight in an MDPP distance learning session, by submitting 
2 photos; (4) facilitate Medicare Administrative Contractors (MACs) in 
processing claims for a MDPP make-up session held on the same day as a 
regularly scheduled session by requiring use of an existing HCPCS 
modifier; and (5) align current rule language with previous rulemaking.
---------------------------------------------------------------------------

    \922\ Centers for Disease Control and Prevention Diabetes 
Prevention Recognition Program. Standards and Operating Procedures. 
Requirements for CDC Recognition. June 2024. https://nationaldppcsc.cdc.gov/s/article/DPRP-Standards-and-Operating-Procedures.
---------------------------------------------------------------------------

    MDPP is a non-pharmacological behavioral intervention consisting of 
up to 22 sessions using a CDC approved National Diabetes Prevention 
Program (National DPP) curriculum.\923\ CDC administers a national 
quality assurance program recognizing eligible organizations that 
furnish the National DPP through its evidence based DPRP Standards, 
which are updated every three years. The 2024 CDC DPRP Standards 
replace the 2021 CDC DPRP Standards in June 2024.\924\
---------------------------------------------------------------------------

    \923\ https://www.cdc.gov/diabetes/prevention/resources/curriculum.html.
    \924\ Centers for Disease Control and Prevention Diabetes 
Prevention Recognition Program. Standards and Operating Procedures. 
Requirements for CDC Recognition. June 2024. https://nationaldppcsc.cdc.gov/s/article/DPRP-Standards-and-Operating-Procedures.
---------------------------------------------------------------------------

    The Calendar Year (CY) 2021 PFS final rule allowed virtual delivery 
of MDPP during the COVID-19 Public Health Emergency (PHE) (85 FR 
84830). Improvements to MDPP in the Calendar Year 2024 final rule 
included a simplified payment structure to allow for fee-for-service 
(FFS) payments for beneficiary attendance, while retaining the 
performance-based payments for diabetes risk reduction (that is, weight 
loss) (88 FR 79241). This policy also extended certain PHE 
flexibilities including the option to deliver some or all MDPP sessions 
via distance learning, until December 31, 2027 (88 FR 79241). Another 
PHE flexibility extended through December 31, 2027, at 42 CFR 
410.79(e)(3)(iii), is for MDPP suppliers to obtain weight measurements 
for beneficiaries using one of the following options: (1) via digital 
technology, such as scales that transmit weights securely via wireless 
or cellular transmission; or (2) via self-reported weight measurements 
from the at-home digital scale of the MDPP beneficiary.
    The 2024 CDC DPRP Standards were proposed after the CY 2024 PFS was 
finalized. To align with 2024 CDC DPRP Standards, we proposed to update 
the MDPP definition for ``online'' delivery to align with the proposed 
2024 CDC DPRP definition. We also proposed to add terms and definitions 
for CDC's new modalities including ``in-person with a distance learning 
component'' and ``combination with an online component'' and to remove 
the existing ``combination'' term and definition. Lastly, we specified 
that MDPP make-up sessions must be provided in-person or via distance 
learning delivery, as required by the CY 2024 PFS final 
rule.4
    Furthermore, the MDPP bridge payment (G9880), which is a payment 
made to the subsequent supplier for the first session when a 
beneficiary switches MDPP suppliers, is no longer necessary in MDPP's 
CY 2024 FFS payment structure and may increase risk for fraud, waste, 
or abuse. We proposed to remove the bridge payment from the MDPP CY 
2025 Fee Schedule. In addition, we have identified a more effective 
option for a beneficiary to self-report their weight in an MDPP 
distance learning session. We have also identified the need to require 
suppliers to use Current Procedural Terminology (CPT) Modifier 76 to 
allow Medicare Administrative Contractors (MACs) to identify a claim 
for an MDPP make-up session held on the same day as a regularly 
scheduled session. Finally, we proposed to align current rule language 
with previous rulemaking pertaining to MDPP terminology, requirements, 
and payment structure.
    All the changes finalized for MDPP in CY 2025 are conforming or 
administrative and expected to have a modest impact on beneficiaries' 
access to MDPP services. Aligning with 2024 CDC DPRP Standards for MDPP 
delivery modes may help expand beneficiary access by streamlining data 
submission for MDPP suppliers and increasing the number of MDPP 
eligible organizations that enroll in Medicare as MDPP suppliers. 
Additionally, allowing for MDPP make-up sessions to be scheduled on the 
same day as regularly scheduled sessions will increase flexibility for 
both MDPP suppliers and beneficiaries and may help expand access for 
beneficiaries with transportation and other scheduling issues that 
prevent scheduling sessions more than one day a week or month. 
Increased flexibility in scheduling MDPP sessions may help to address a 
lack of MDPP suppliers in certain communities and challenges related to 
beneficiary logistics concerning course attendance.
    Additionally, we proposed to provide a more effective option to 
beneficiaries to self-report weight for a MDPP distance learning 
session, by allowing beneficiaries to submit two (2) photos to capture 
both the beneficiary weight on the digital scale and the beneficiary 
visible in their home. Current MDPP supplier standards at Sec.  424.205 
require beneficiary weight to be reported at each MDPP session 
attended. This change will help to address concerns voiced by MDPP 
suppliers who have reported that many of their beneficiaries are unable 
to take a picture while standing on their home scales due to risk of 
injury and physical health limitations. This new flexibility may 
promote more consistent collection of weight for MDPP sessions.
    Lastly, we do not expect removing the MDPP bridge payment to have 
an impact on beneficiary access. This payment for the first session 
attended with a new supplier when a beneficiary switches MDPP suppliers 
is not necessary in MDPP's CY 2024 FFS payment structure that includes 
payment for every session attended and historically has been submitted 
by few MDPP suppliers.
    Overall, these modifications address MDPP supplier and beneficiary 
needs based upon available monitoring and evaluation data received to 
date, feedback from Medicare Advantage plans and existing MDPP 
suppliers, and feedback from beneficiary focus groups. The changes are 
also in response to comments from interested parties made through 
public comments in response to prior rulemaking.
b. Effects on the Market
    We anticipate that the conforming and administrative changes 
proposed in this rulemaking are likely to result in modest increases of 
MDPP suppliers and beneficiary access to the set of MDPP services. We 
anticipate that this will assist in contributing to a reduction of the 
incidence of diabetes among eligible Medicare beneficiaries. As of 
April 2024, there are approximately 810 in-person organizations 
nationally that are eligible to become MDPP suppliers based on their 
preliminary or full CDC Diabetes DPRP status. However, only 36 percent 
of these eligible in-person organizations are participating in 
MDPP.\925\ Aligning with CDC DPRP delivery modes, particularly adding 
the new ``in-person with a distance learning component'' mode, is 
expected to help increase recruitment of new DPRP organization as MDPP 
suppliers, who currently would need to obtain both in-person and 
distance learning CDC DPRP recognition to deliver sessions via both 
modalities. Furthermore, only about one-third of MDPP suppliers have

[[Page 98522]]

submitted MDPP-related claims.\926\ Our proposed change to remove the 
MDPP bridge payment will help to further simplify the payment 
structure, which is expected to have a positive impact on supplier 
claim submissions. While requiring MDPP suppliers to add a modifier to 
indicate that a claim is for a MDPP same day make-up session does add 
complexity because we proposed to use an existing CPT modifier in use 
and recognized by the MACs, we expect this addition to require minimal 
changes in claim processing systems. Additionally, this modifier is 
only to be used for same day make-up sessions, which are only allowed 
once per week, and, while an important tool to increase access for 
beneficiaries with barriers to participation in MDPP, are not expected 
to be used for most session attendance claims. In summary, we believe 
that having more flexibility in how the set of MDPP services are 
delivered will make MDPP more accessible to beneficiaries, particularly 
those who live in rural areas or in communities with gaps in MDPP 
supplier locations.
---------------------------------------------------------------------------

    \925\ Centers for Disease Control and Prevention. Diabetes 
Prevention Recognition Program Application. Registry of All 
Recognized Organizations. https://dprp.cdc.gov/Registry.
    \926\ Unpublished MDPP monitoring data. 2023.
---------------------------------------------------------------------------

c. Payment for MDPP Services
    Regulations at Sec.  414.84 specify that MDPP suppliers may be 
eligible to receive payments for furnishing MDPP services and meeting 
performance targets related to beneficiary weight loss and attendance. 
We anticipate that the change to the MDPP payment structure will have 
minimal impact on total payment for MDPP services. A smaller proportion 
of MDPP suppliers, only 9.8 percent since the start of the program 
through April 2024, have submitted claims for the MDPP bridge payment, 
with an even smaller proportion of 2.7 percent having received payment 
for a bridge payment claim. According to CDC DPRP data, less than 1 
percent of MDPP sessions are same day make-up sessions.\927\ The total 
maximum payment per beneficiary for MDPP of $768 will remain unchanged 
by our finalized proposals.
---------------------------------------------------------------------------

    \927\ Diabetes Prevention Recognition Program. Unpublished data. 
April 2024.
---------------------------------------------------------------------------

d. Effects on the Medicare Program
(a) Estimated 10-Year Impact of MDPP
    The changes this year for implementation in the CY PFS 2025 are 
expected to have no impact on Medicare spending.
10. Modifications Related to Medicare Coverage for Opioid Use Disorder 
(OUD) Treatment Services Furnished by Opioid Treatment Programs (OTPs)
    As outlined in section III.F.2 of this final rule, we are 
finalizing to permanently allow periodic assessments to be furnished 
via audio-only communication when two-way audio-video communications 
technology is not available to the beneficiary, to the extent that it 
is authorized by SAMHSA and DEA at the time the service is furnished 
and all other applicable requirements are met. We also are finalizing 
to allow the OTP intake add-on code to be furnished via two-way audio-
video communications technology when billed for the initiation of 
treatment with methadone to the extent that the use of audio-video 
telecommunications technology to initiate treatment with methadone is 
authorized by DEA and SAMHSA at the time the service is furnished, an 
OTP determines that an adequate evaluation of the patient can be 
accomplished via an audio-visual telehealth platform, and all other 
applicable requirements are met. We believe the Part B cost impact of 
these flexibilities for the use of telecommunications will be minimal 
because we do not expect that these flexibilities will significantly 
increase the frequency with which medically necessary intake activities 
and periodic assessments are furnished, and since the payment rate for 
these services will be the same regardless of if an OTP furnishes these 
services via telecommunications or in-person.
    In section III.F.3 of this final rule, CMS finalized to update the 
payment rate for both intake activities (HCPCS code G2076) and periodic 
assessments (HCPCS code G2076) by adding in the value of the non-
facility rate for SDOH risk assessments described by HCPCS code G0136 
(Administration of a standardized, evidence-based Social Determinants 
of Health Risk Assessment, 5-15 minutes, not more often than every 6 
months). We believe updating the payment amount for intake activities 
with an addition of HCPCS code G0136 will serve as a reasonable proxy 
to reflect the value and resources required by new SAMHSA standards for 
initial assessment service activities at Sec.  8.12(f)(4)(i) that OTPs 
are required to provide, including an assessment to identify a 
patient's unmet HRSNs or the need for harm reduction intervention and 
recovery support services that are critical to the treatment of an OUD. 
Similarly, an update in the payment amount for periodic assessments 
will support OTPs in continuing to assess any changes in unmet HRSN, or 
harm reduction intervention and recovery support services needs 
throughout the duration of MOUD treatment. Currently, the CY 2024 
payment rate for the intake add-on code (G2076) is $201.73 and adding 
the value of a crosswalk to the CY 2024 non-facility rate of $18.97 
will result in a payment rate of approximately $220.70. The CY 2024 
payment rate for periodic assessments (G2077) is $123.96 and adding the 
value of $18.97 will result in a payment rate of approximately of 
$142.93. These payment rates will continue to be updated annually by 
the percentage increase in the Medicare Economic Index (MEI) and the 
Geographic Adjustment Factor (GAF) as codified in Sec.  
410.67(d)(4)(ii) through (iii). According to historical claims data for 
intake activities (HCPCS code G2076) and periodic assessments (HCPCS 
code G2077) furnished by OTPs from the beginning of CY 2020 through the 
end of CY 2023, the number of claims for intake activities and periodic 
assessments are low. Due to low utilization of the intake activities 
and periodic assessments add-on codes, CMS estimates that an increase 
in the add-on payment amount to HCPCS codes G2076 and G2077 by $18.97 
per claim will still result in a negligible cost to the Medicare 
program. Furthermore, we are finalizing new add-on codes for 
coordinated care and referral services (G0534), patient navigational 
services (G0535), and peer recovery support services (G0536). 
Coordinated care and/or referral services are based on a crosswalk to 
the CY 2024 PFS non-facility rate of the community health integration 
base HCPCS code G0019 and divided by two; patient navigational services 
are based on a crosswalk to the CY 2024 PFS non-facility rate of the 
principal illness navigation base HCPCS code G0023 and divided by two; 
and peer recovery support services are based on a crosswalk to the CY 
2024 PFS non-facility rate of the principal illness navigation--peer 
support base code HCPCS code G0140 divided by two. All these codes are 
based on at least 30 minutes of services provided and will be updated 
annually by the percentage increase in the Medicare Economic Index 
(MEI) and the Geographic Adjustment Factor (GAF) as codified in Sec.  
410.67(d)(4)(ii) through (iii). Since there is not yet sufficient 
utilization data available on the frequency of which coordinated care 
and referral services (HCPCS codes G0534), patient navigational 
services (HCPCS codes G0535), and peer recovery support services (HCPCS 
codes G0536) are

[[Page 98523]]

furnished by an OTP, and since CMS is still collecting utilization data 
on the new CHI, PIN, and PIN-PS codes established in CY 2024 which 
HCPCS codes G0534, G0535, and G0536 are based on, we cannot estimate 
the financial impact of these new codes on the Medicare program.
    Lastly, in section III.F.4 of this final rule, we finalized to 
establish payment for new opioid agonist and antagonist medications 
that were recently approved by the FDA. We finalized to include a new 
add-on code to the bundled payment for a new opioid overdose reversal 
product, nalmefene hydrochloride nasal spray product (Opvee[supreg]), 
which includes one carton of two, 2.7 mg nasal sprays of nalmefene. We 
will price the drug component of this add-on code for nalmefene 
according to the ASP payment methodology set forth in section 1847A, 
except that the payment amount shall be ASP+0. The non-drug component 
of this add-on code will also include overdose education furnished in 
conjunction with nalmefene, and it will be updated annually by the 
percentage increase in the MEI and GAFs consistent with other opioid 
antagonist medications in Sec.  410.67(d)(4)(ii) through (iii). We are 
limiting Medicare payment to OTPs for nalmefene to one add-on code 
every 30 days; however, we will allow exceptions to this limit in the 
case where the beneficiary overdoses and uses the initial supply of 
nalmefene dispensed by the OTP, to the extent that it is medically 
reasonable and necessary to furnish additional doses of nalmefene. We 
also finalized payment for the weekly formulation of the new extended-
release injectable buprenorphine product Brixadi[supreg], via a new 
weekly bundled payment code that includes a drug and non-drug 
component. We finalized to price the drug component consistent with our 
payment methodology for implantable and injectable medications codified 
Sec.  410.67(d)(2)(i)(A), and we finalized to limit the payment amount 
to 100-percent of ASP and to use a crosswalk to the weekly 
Brixadi[supreg] formulation described by HCPCS code J0577 (Injection, 
buprenorphine extended release (brixadi), less than or equal to 7 days 
of therapy). The non-drug component (individual and group therapy, SUD 
counseling, toxicology testing) will also include administration of an 
injection based on CPT code 96372 (Therapeutic, prophylactic, or 
diagnostic injection (specify substance or drug); subcutaneous or 
intramuscular); updated annually by the percentage increase in MEI and 
GAFs. CMS further finalized to update the drug-component of the 
existing HCPCS code (G2069) for monthly injectable buprenorphine to 
include the monthly formulation of Brixadi[supreg] based on a crosswalk 
to HCPCS code J0578 (Injection, buprenorphine extended release 
(brixadi), greater than 7 days and up to 28 days of therapy). We are 
finalizing to continue using the existing payment methodology for the 
non-drug component of G2069, but we will instead calculate the drug 
component by volume-weighting the ASP for all the NDCs crosswalked to 
HCPCS codes for monthly Brixadi[supreg] and Sublocade[supreg]. Since 
the payment methodology for the new add-on code for Opvee[supreg] 
(G0532), the weekly bundled payment for weekly Brixadi[supreg] (G0533), 
and the update to the monthly bundled payment for injectable 
buprenorphine (HCPCS code G2069) is based on comparable and existing 
drugs billed under the Medicare OTP benefit, and assuming an OTP may 
provide these new drugs to a Medicare beneficiary in lieu of the 
comparable and existing drugs under the Medicare OTP benefit (e.g, 
Opvee[supreg] instead of Narcan[supreg] or Kloxxado[supreg], or the 
weekly or monthly formulation of Brixadi[supreg] instead of 
Sublocade[supreg]), then CMS estimates the financial impacts of these 
new drugs would be negligible.
11. Medicare Shared Savings Program
a. General Impacts
    As of January 1, 2024, 10.8 million Medicare beneficiaries receive 
care from a health care provider in one of the 480 ACOs participating 
in the Shared Savings Program, one of the largest value-based care 
programs in the country. The modifications to Shared Savings Program 
policies we are finalizing with this final rule advance Medicare's 
value-based care strategy of growth, alignment, and equity, with many 
provisions supporting more than one of these goals. The policies in 
this final rule are designed, in part, to further improve the quality 
of care furnished by ACOs by revising the quality performance standard 
and reporting requirements, broaden program participation, particularly 
by ACOs in and providing care to underserved communities, and promote 
the continued integrity and fairness of Shared Savings Program 
financial calculations.
    As described in section III.G.7.b of this final rule, under the 
benchmarking methodology for agreement periods beginning on January 1, 
2024, and in subsequent years, established in earlier rulemaking, CMS 
calculates two adjustments in establishing the historical benchmark, a 
regional adjustment (refer to Sec.  425.656) and a prior savings 
adjustment (refer to Sec.  425.658). Under this approach, we determine 
which adjustment is applied to the benchmark, either the regional 
adjustment, prior savings adjustment, or no adjustment (refer to Sec.  
425.652(a)(8) and (c)). One of the changes to the Shared Savings 
Program financial methodology finalized with the CY 2024 PFS final rule 
(see 88 FR 79185 through 79195, see also 88 FR 79494 and 79495) was to 
mitigate the impact of the negative regional adjustment on the 
benchmark for ACOs in agreement periods beginning on January 1, 2024, 
and in subsequent years. We explained our belief that this change would 
further encourage continued participation among high-cost ACOs that 
serve medically complex beneficiaries by eliminating the potential of a 
lower benchmark due to an overall negative regional adjustment, and may 
also encourage ACOs serving such populations that may have otherwise 
been discouraged from participating in the Shared Savings Program by 
the prospect of a lower benchmark to join (see 88 FR 79188, see also 88 
FR 79494 and 79495). Under this approach, an ACO with an overall 
negative regional adjustment that was not eligible for a prior savings 
adjustment would ultimately receive no adjustment, upward or downward, 
to its benchmark (see Sec.  425.652(a)(8)(iii) and see also 88 FR 
79190). The Health Equity Benchmark Adjustment (HEBA) we are finalizing 
with modifications, described in section III.G.7.b of this final rule, 
will add a third avenue for ACOs to receive a positive adjustment to 
their historical benchmark, and will be most impactful for new ACOs 
serving medically complex, high-cost populations in underserved 
communities.
    We combined an analysis of the impact of the HEBA on currently 
participating ACOs with the projected impact of HEBA on new ACOs not 
yet participating in the Shared Savings Program, to generate an overall 
impact estimate of the HEBA. The HEBA would likely have a limited 
impact on currently participating ACOs. Only about 34 percent of the 
456 ACOs participating in performance year 2023 were estimated to have 
a proportion of assigned beneficiaries who were enrolled in the 
Medicare Part D LIS or dually eligible for Medicare and Medicaid equal 
to or greater than 15 percent, which is the new HEBA eligibility 
threshold that is being finalized in this final rule. The 15 percent 
threshold will have to be met

[[Page 98524]]

for an ACO to be eligible for the HEBA under the final policies (as 
discussed in section III.G.7.b. of this final rule, and specified in 
Sec.  425.662(b)(3) as finalized by this final rule). Of the 34 percent 
of ACOs participating in performance year 2023 that were estimated to 
have a proportion of assigned beneficiaries who were enrolled in the 
Medicare Part D LIS or dually eligible for Medicare and Medicaid equal 
to or greater than 15 percent, only about one-in-five of such ACOs were 
estimated to not already be eligible for a higher benchmark adjustment 
from either a positive regional adjustment or a prior savings 
adjustment. That is, about 7 percent of ACOs participating in 
performance year 2023 were estimated to benefit from the HEBA policy at 
rebasing (with a median effect of about a 1 percent increase to the 
benchmark), because an ACO would receive the HEBA only if the HEBA were 
higher than the existing ``higher of'' adjustment method (see 
discussion in section III.G.7.b of this final rule, and see Sec.  
425.652(a)(8)(ii)(B)(1) as revised by this final rule, and Sec.  
425.662(c) as added by this final rule). This represents roughly a 60 
percent increase in the number of existing ACOs estimated to benefit 
from the HEBA under an eligibility threshold of 15 percent, compared to 
the 20 percent threshold originally proposed in the CY 2025 PFS 
proposed rule. Although the HEBA is projected to increase program 
spending for existing ACOs by about $140 million over 10 years, an 
overall net savings is projected after also including the impact 
estimated from new ACOs, as detailed in the following discussion.
    The number of ACOs that would be incentivized to participate in the 
Shared Savings Program by the HEBA is uncertain. Changes to the Shared 
Savings Program finalized in the CY 2023 and CY 2024 PFS final rules 
were already projected to increase program participation among ACOs 
with higher spending and provide more opportunities for improving care 
and reducing spending (see 87 FR 70191 through 70196, and 88 FR 79494 
and 79495). Therefore, we can reasonably estimate that at least some 
new ACOs may join and succeed in the Shared Savings Program regardless 
of the benefit afforded to them by the HEBA. Savings to the Shared 
Savings Program are expected to grow to the extent that the HEBA were 
to cause new, high-spending ACOs to participate--that is, ACOs whose 
assigned beneficiary populations have risk-adjusted spending that is 
significantly higher than corresponding regional benchmark spending at 
baseline. We project in the 2034 performance year, the HEBA would 
likely increase program participation by 25 additional ACOs (but our 
estimates of increased program participation range from 0 to 100 
additional ACOs), as compared to program participation today, and on 
net increase Federal Medicare program savings by $400 million over the 
2025-2034 period because of this increased program participation.
    The estimated impact of the HEBA, accounting for both its impact on 
currently participating ACOs that are assumed to renew their 
participation in the Shared Savings Program over the next 5 years and 
new ACOs that are expected to participate in the program for the first 
time over the next 10 years, is shown in Table 115. Mean Shared Savings 
Program spending is expected to be reduced by $260 million over the 
next 10 years as a result of the HEBA. However, uncertainty regarding 
the number of high spending ACOs that will participate in light of a 
HEBA, combined with uncertainty regarding high spending ACOs' savings 
potential, results in a wide range of potential impacts in total over 
that 10 year period, from $2.2 billion in net savings at the 10th 
percentile (that is, only 10 percent of stochastic trials reduced 
Federal spending by a greater magnitude than $2.2 billion) to $1.2 
billion in net spending at the 90th percentile.
[GRAPHIC] [TIFF OMITTED] TR09DE24.179

    For the calculation methodology to account for the impact of 
improper payments in recalculating expenditures and payment amounts 
used in Shared Savings Program financial calculations, upon reopening a 
payment determination pursuant to Sec.  425.315(a) (described in 
section III.G.7.c of this final rule), some ACOs will selectively elect 
to request reopening for a prior performance year. As a result, we 
project at least some degree of higher program spending for increased 
shared savings payments (or reduced loss recoupments) in cases for 
which CMS decides to reopen the payment determination and issue a 
revised initial determination to account for the impact of improper 
payments. However, because reopening will not be limited to adjusting 
performance year and benchmark year expenditures for ACO assigned 
beneficiaries but will also impact other potentially offsetting 
calculations including regional and national expenditure trends used to 
update ACO benchmarks, and because, in addition to the reopening, CMS 
will also adjust the historical benchmark calculated for a potential 
subsequent

[[Page 98525]]

agreement period, the frequency of requests, and the net impact of any 
given request, are likely to be limited. The reopening policy is 
projected to increase program spending by $60 million in total over the 
2025 to 2034 period, ranging from $30 million at the 10th percentile to 
$90 million at the 90th percentile, as shown in Table 116.
[GRAPHIC] [TIFF OMITTED] TR09DE24.180

    The methodology for excluding payment amounts for HCPCS and CPT 
codes exhibiting SAHS billing activity, as described in section 
III.G.7.d of this final rule, is anticipated to be utilized only in 
rare and extreme cases where a number of criteria are satisfied, 
including that the level of billing represents a significant claims 
increase representing a deviation from historical utilization trends 
that is unexpected and not clearly attributable to reasonably explained 
changes in policy or the supply or demand for covered items or services 
during a limited time period. Even in cases where CMS may apply the 
adjustment to Shared Savings Program calculations for SAHS billing 
activity, for CY 2024 or subsequent calendar years, there is no 
expectation that it will necessarily increase or decrease overall 
shared savings or shared losses because the policy will be applied 
systematically across all ACOs in the Shared Savings Program in a 
method that adjusts both performance year and benchmark year 
expenditures for ACO assigned beneficiaries and regional and national 
expenditures used in benchmark calculations. However, this policy would 
have the benefit of reducing potential costs generated by selective 
reopening requests under the reopening policy, because it would prevent 
extreme cases of SAHS billing activity from injecting variation in the 
distribution of ACO shared savings and loss calculations which could 
lead to an elevated number of selective reopening requests from ACOs 
predicting that reopening would improve their financial outcome. For 
this reason, without the policy to adjust Shared Savings Program 
calculations for SAHS billing activity during CY 2024 or subsequent 
calendar years, the estimated impact shown in Table 116 would have 
included between $100 to $300 million in additional projected spending 
from selective reopening requests.
    We estimate that there would be no additional program expenditures 
stemming from the implementation of the prepaid shared savings payment 
option, which will provide eligible ACOs with additional cash flow to 
encourage their investment in activities that could potentially reduce 
costs for the Medicare program and beneficiaries and improve the 
quality of care furnished to their assigned beneficiaries. Any risk of 
higher program spending as a result of finalization of our prepaid 
shared savings policy would be fully mitigated by the fact that 
eligibility will be limited to ACOs that CMS estimates are most likely 
to earn shared savings, and any prepaid shared savings payments an ACO 
receives will have to be repaid to CMS. CMS will be protected by the 
ACOs' repayment mechanisms in the event that an ACO does not earn 
shared savings or cannot otherwise repay the amount owed to CMS. On the 
other hand, there is a high degree of uncertainty regarding whether (a) 
a meaningful number of ACOs will choose this option given the 
requirements for how prepayments must be spent, and (b) the potential 
impact (if any) that participation in this option will have on the cost 
of care.
    As to this uncertainty, our analysis assumed that up to 30 ACOs 
would opt to receive prepaid shared savings per year (with the 
probability distribution skewed toward zero participants), with a 33 
percent chance that ACOs receiving prepaid shared savings would respond 
by reducing spending for assigned beneficiaries by between 0 to 2 
percentage points (with the probability distribution skewed toward zero 
impact) as compared to their current spending on assigned 
beneficiaries.\928\ This projection accounts for annual prepaid shared 
savings (offset by eventual recoupments and/or repayments) of

[[Page 98526]]

roughly $2 million per ACO participating in the payment option. The 
associated impact on ACO spending was projected to be nominal. Both at 
the mean and at the 90th percentile the projected net impacts on 
Medicare spending round to zero. At the 10th percentile (the optimistic 
end of the range), we project small net savings of $20 million in total 
to the Medicare Program over 10 years, as shown in Table 117.
---------------------------------------------------------------------------

    \928\ The assumptions allow for a limited possibility that 
performance by ACOs receiving prepaid shared savings could generate 
shared savings comparable to the savings generated by certain ACOs 
in the ACO Investment Model. Abt Associates, Evaluation of the 
Accountable Care Organization Investment Model, Final Report 
(September 2020), available at https://www.cms.gov/priorities/innovation/data-and-reports/2020/aim-final-annrpt.
[GRAPHIC] [TIFF OMITTED] TR09DE24.181

    The remaining changes to the Shared Savings Program regulations are 
not estimated to have an impact on program spending at the aggregate 
level. These changes include requiring Shared Savings Program ACOs to 
report the APP Plus quality measure set beginning in performance year 
2025, that will incrementally grow to comprise of 11 measures, 
consisting of the 6 measures in the existing APP quality measure set 
and 5 new measures from the Adult Universal Foundation measure set that 
will be incrementally incorporated into the APP Plus quality measure 
set over performance years 2025 through 2028 or the performance year 
that is one year after eCQM specifications become available for Quality 
ID: 487 Screening for Social Drivers of Health and Quality ID: 493 
Adult Immunization Status, whichever is later; focusing the collection 
types available to Shared Savings Program ACOs for reporting the APP 
Plus quality measure set in performance years 2025 and 2026 to include 
eCQM/MIPS CQM/Medicare CQM collection types, and in 2027 and subsequent 
performance years, to include eCQM/Medicare CQM collection types; 
requiring Shared Savings Program ACOs that report the APP Plus quality 
measure set to report on all required measures in the APP Plus quality 
measure set, as applicable; establishing a Complex Organization 
Adjustment for Virtual Groups and APM Entities, including Shared 
Savings Program ACOs, when reporting eCQMs; scoring Medicare CQMs using 
flat benchmarks in their first 2 performance periods in MIPS; and 
extending the eCQM reporting incentive in order to promote the adoption 
of eCQMs and also extending the reporting incentive to ACOs reporting 
MIPS CQMs in performance years 2025 and 2026 to support ACOs in meeting 
the Shared Savings Program quality performance standard. Additional 
changes include permitting continued participation by ACOs whose number 
of assigned beneficiaries falls below 5,000 during their agreement 
period; ensuring clarity of provisions on application procedures; 
revisions to the definition of primary care services under Sec.  
425.400(c) for purposes of beneficiary assignment; refining advance 
investment payment policies; providing clarity and consistency in 
provisions of the Shared Savings Program regulations on calculation of 
the ACO risk score growth cap in risk adjusting the benchmark each 
performance year and the regional risk score growth cap in calculating 
the regional component of the three-way blended benchmark update 
factor; and modifying beneficiary notification requirements.
    The combined impacts for all Shared Savings Program provisions are 
shown in Table 118.

[[Page 98527]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.182

b. Compliance With Requirements of Section 1899(i)(3) of the Act
    Certain policies, including both existing policies and new policies 
adopted in section III.G. of this final rule, rely upon the authority 
granted in section 1899(i)(3) of the Act to use other payment models 
that the Secretary determines will improve the quality and efficiency 
of items and services furnished under the Medicare program, and that do 
not result in program expenditures greater than those that would result 
under the statutory payment model. The following policies require the 
use of our authority under section 1899(i) of the Act: allowing 
eligible ACOs to receive prepaid shared savings, as described in 
section III.G.5 of this final rule; using a calculation methodology to 
account for the impact of improper payments in recalculating 
expenditures and payment amounts for certain Shared Savings Program 
financial calculations, upon reopening an ACO's payment determination 
and issuing a revised initial determination pursuant to Sec.  
425.315(a), as described in section III.G.7.c of this final rule; using 
a methodology for certain Shared Savings Program financial calculations 
to mitigate the impact of SAHS billing activity occurring in CY 2024 or 
subsequent calendar years, as described in section III.G.7.d of this 
final rule; and making technical changes to the provision describing 
how we calculate the weights applied when capping growth in regional 
risk scores as part of the regional component of the three-way blended 
benchmark update factor, as described in section III.G.7.f of this 
final rule. When considered together these changes to the Shared 
Savings Program's payment methodology are expected to improve the 
quality and efficiency of items and services furnished under the 
Medicare program by improving the ability for ACOs to sustain effective 
participation particularly in serving medically complex, high-cost 
populations in underserved communities, and promoting integrity and 
fairness and ensuring the accuracy of Shared Savings Program financial 
calculations. These changes are not expected to result in a situation 
in which the payment methodology under the Shared Savings Program, 
including all policies adopted under the authority of section 1899(i) 
of the Act, results in more spending under the program than would have 
resulted under the statutory payment methodology in section 1899(d) of 
the Act.
    In the CY 2023 PFS final rule, we estimated that the projected 
impact of the payment methodology that incorporates all policies 
finalized by that final rule would result in $4.9 billion in greater 
program savings compared to a hypothetical baseline payment methodology 
that excluded the policies that required section 1899(i)(3) of the Act 
authority (see 87 FR 70195 and 70196). The marginal impact of the 
proposed changes in the CY 2024 PFS final rule were estimated to lower 
net spending by $330 million over the subsequent 10-year period for all 
new policies combined, including the cap an ACO's regional service area 
risk score growth, the addition of a new third step to the beneficiary 
assignment methodology, and the revised approach to identify the 
assignable beneficiary population (88 FR 79496). The marginal impact of 
the changes in this final rule are estimated to lower net spending by 
an additional $200 million in total through 2034. Although the 
provisions in this final rule that require section 1899(i) of the Act 
authority are estimated to increase spending by only $60 million over 
10 years, the cumulative impact of all policies (including those in 
this final rule) are estimated to result in more than $4.9 billion in 
greater program savings compared to a hypothetical baseline payment 
methodology that excludes the policies that require section 1899(i)(3) 
of the Act authority. Therefore, we estimate that program expenditures 
associated with the implementation of the implementation of the 
provisions in this final rule would not be greater than those that 
would result under the statutory payment model, consistent with the 
requirements of section 1899(i)(3)(B) of the Act.
    We will continue to reexamine this projection in the future to 
ensure that the requirement under section 1899(i)(3)(B) of the Act that 
an alternative payment model not result in additional program 
expenditures continues to be satisfied. Additional Shared Savings 
Program data beginning to accumulate after the end of the COVID-19 
public health emergency, along with emerging information on the 
characteristics of new entrants in the Shared Savings Program for 
agreement periods beginning on January 1, 2024 and January 1, 2025, are 
anticipated to gradually improve our ability to reevaluate program 
impacts in a comprehensive fashion. In the event that we later 
determine that the payment model that includes policies established 
under section 1899(i)(3) of the Act no longer meets this requirement, 
we would undertake additional notice and comment rulemaking to make 
adjustments to the payment model to assure continued compliance with 
the statutory requirements.

[[Page 98528]]

12. Medicare Part B Payment for Preventive Services
    In section III.H.2. of this final rule, based on the proposals in 
section III.M of this final rule, we clarify that a physician's order 
is no longer required for the administration of a hepatitis B vaccine 
in Part B, which will facilitate roster billing by mass immunizers for 
hepatitis B vaccine administration. We also finalize a policy that 
payment for hepatitis B vaccines and their administration be made at 
100 percent of reasonable cost in RHCs and FQHCs, separate from the 
FQHC PPS or the RHC All-Inclusive Rate (AIR) methodology, in order to 
streamline payment for all Part B vaccines in those settings. We 
believe that Medicare spending impacts from both of these proposals 
will be negligible, as hepatitis B vaccines are already available to 
all Medicare enrollees under either Part B or Part D. While we believe 
that there will be an uptake of hepatitis B vaccines under Part B as 
shifted from Part D, we believe that this impact on the Part B program 
will be negligible for several reasons, including the fact that a 
portion of current beneficiaries have already received the hepatitis B 
vaccine through either Part B or Part D, and since a significant number 
of individuals will likely receive this vaccine by the time they are 
Medicare age due to current CDC recommendations (please see section 
III.M of this final rule for more information).
    In section III.H.3. of this final rule, we finalize a fee schedule 
for Drugs Covered as Additional Preventive Services (DCAPS), per 
section 1833(a)(1)(W)(ii) of the Act. We also set payment limits for 
supply and administration fees for DCAPS drugs that are similar to 
those fees for drugs paid under the ASP payment methodology set forth 
in section 1847A of the Act, and we set payment limits for DCAPS drugs 
and any supply and administration fees in RHCs and FQHCs according to 
this same fee schedule. We believe impacts from these policies will be 
minimal as well. While no drugs are currently covered as DCAPS, DCAPS 
drugs are likely to be covered under Part D before coverage under the 
Part B additional preventive services benefit would commence.
13. Impact of Provisions for Medicare Prescription Drug Inflation 
Rebate Program
    In this final rule, we are codifying existing policies established 
in program guidance as well as revised and new policies to implement 
the Medicare Part B Drug Inflation Rebate Program, including the 
requirement for manufacturers to pay rebates for certain single source 
drugs and biological products with prices that increase faster than the 
rate of inflation; criteria for the identification of Part B rebatable 
drugs; computation of the beneficiary coinsurance adjustment for Part B 
rebatable drugs; determination of the rebate amount for Part B 
rebatable drugs; reduction of the rebate amount for Part B rebatable 
drugs in shortage and when there is a severe supply chain disruption; 
removal of units subject to discarded drugs; provision of rebate 
reports to each manufacturer of a Part B rebatable drug; 
reconciliation; and establishment of enforcement provisions via civil 
money penalties.
    Additionally, we are codifying existing policies established in 
program guidance as well as revised and new policies to implement the 
Medicare Part D Drug Inflation Rebate Program, including the 
requirement for manufacturers to pay rebates for certain Part D drugs 
and biological products; covered under Part D; criteria for the 
identification of Part D rebatable drugs; determination of the rebate 
amount for Part D rebatable drugs; reduction of the rebate amount for 
shortages and when there is a severe supply chain disruption or likely 
shortage; provision of rebate reports to each manufacturer of a Part D 
rebatable drug; reconciliation; and establishment of enforcement 
provisions via civil money penalties.
    We do not expect these policies to have a material impact on 
inflation rebates, as the majority of these policies codify existing 
guidance. New policies or changes to existing policies in guidance are 
technical provisions that we do not expect to have a material impact on 
the calculation of total rebates in aggregate. Additionally, no data is 
available at this time to estimate the amount of billing units that 
will be subject to discarded drug refunds.
    As outlined in section III.I. of this final rule, for Part D drug 
inflation rebates, we will implement at Sec.  428.203(b)(2) section 
1860D-14B (b)(1)(B) of the Act, which requires the Secretary to exclude 
340B units from the total number of units used to calculate the total 
rebate amount owed by a manufacturer, beginning on January 1, 2026. 
Because this requirement starts after the first quarter of the 
applicable period that begins on October 1, 2025, the exclusion of 340B 
units will only apply for the last three quarters of this applicable 
period. That is, CMS will exclude 340B units starting on January 1, 
2026.
    In the proposed rule (89 FR 61969), we proposed to use an 
estimation methodology to remove a percentage of units from the total 
number of units used to calculate the total rebate amount to remove 
340B units from Part D drug inflation rebate calculations. That 
percentage would be equal to the total number of units purchased under 
the 340B Drug Pricing Program for an NDC-9, divided by the number of 
total units sold of that NDC-9. After further consideration and taking 
into account the comments received on the proposed estimation 
methodology, we did not finalize the estimation policy for the 
applicable period that begins on October 1,2025. Instead, we plan to 
explore the establishment of a Medicare Part D claims data repository 
to use for removal of 340B units from the calculation of Part D 
inflation rebates starting January 1, 2026. We plan to continue 
exploring the development of detailed policies and requirements related 
to any such repository for future rulemaking related to this topic and 
the exclusion of 340B units starting January 1, 2026.
    CMS does not currently have data on 340B claims for the Part D 
program or at the drug level in general, which prevents CMS from 
quantifying the impact of this provision. While we expect that the 
exclusion of 340B units from Part D inflation rebates will reduce the 
amount of rebates collected through this program, the magnitude of this 
reduction is unknown due to the lack of data on 340B claims for the 
Part D program.
14. Modifications to Coverage of Colorectal Cancer Screening
    In section III.K. of this rulemaking we discuss that we are 
finalizing as proposed, provisions to update and expand coverage for 
CRC screening by (1) removing coverage for the barium enema procedure 
in regulations at Sec.  410.37, (2) adding coverage for the computed 
tomography colonography (CTC) procedure in regulations at Sec.  410.37, 
and (3) expanding a ``complete colorectal cancer screening'' in Sec.  
410.37(k) to include a follow-on screening colonoscopy after a Medicare 
covered blood-based biomarker CRC screening test (described and 
authorized in NCD 210.3) returns a positive result.
    We do not anticipate our provision removing coverage for the barium 
enema procedure will result in a significant financial impact on the 
Medicare program. An internal claims analysis found that Medicare Fee 
for Service only paid 62 claims for the screening barium enema 
procedure in calendar year 2021 and only 72 claims for the screening 
barium enema procedure in calendar year 2022.

[[Page 98529]]

    We do not anticipate our provision adding coverage for the CTC 
procedure for CRC screening will result in a significant financial 
impact on the Medicare program. CTC could be an appropriate option for 
patients and clinicians who seek a visualization procedure as a first 
step in CRC screening that is less invasive and less burdensome on the 
patient (including those who are medically fragile or have complex or 
usual anatomy) compared to optical colonoscopy. We expect that patients 
will often choose CTC as an alternative to colonoscopy for CRC 
screening and that future increased utilization of CTC will be 
balanced, in part, by avoided screening colonoscopies. Our goal is that 
the patient and their clinician make the most appropriate choice in CRC 
screening, which includes considerations of the risks, burdens and 
tradeoffs for each covered test or procedure. We expect that 
utilization of CTC for CRC screening will be modest, especially 
considering that CTC requires bowel preparation and travel to an 
outpatient clinical services site (similar to a colonoscopy) and also 
considering the availability of non-invasive stool-based tests that can 
be administered at home and mailed to a lab. A 2015 study titled 
``Medicare cost of colorectal cancer screening: CT colonography vs. 
optical colonoscopy'' concluded that CTC is 29 percent less expensive 
than colonoscopy (accounting for related procedures) for the Medicare 
population in the base scenario. Although the CTC cost advantage is 
increased or reduced under alternative scenarios, it is always 
positive.\929\
---------------------------------------------------------------------------

    \929\ Pyenson, B., Pickhardt, P.J., Sawhney, T.G. et al. 
Medicare cost of colorectal cancer screening: CT colonography vs. 
optical colonoscopy. Abdom Imaging 40, 2966-2976 (2015). https://doi.org/10.1007/s00261-015-0538-1.
---------------------------------------------------------------------------

    We do not anticipate our provision expanding a ``complete 
colorectal cancer screening'' in Sec.  410.37(k) to include a follow-on 
screening colonoscopy after a Medicare covered blood-based biomarker 
CRC screening test returns a positive result will produce a significant 
financial impact on the Medicare program. We expect that patients will 
choose either a stool-based test or a blood-based biomarker test for a 
non-invasive first option in CRC screening and that patients who choose 
a blood-based biomarker test within the context of a complete 
colorectal cancer screening under our proposal will be offset, in part, 
by the avoided utilization of a stool-based test.
    In conclusion, we anticipate that updating and expanding coverage 
for CRC screening will result in some additional utilization, but that 
additional utilization will be balanced, in part or in whole, by 
avoided utilization of alternative types of tests as well as benefits 
and savings resulting from increased prevention and early detection 
(allowing for less invasive and more effective treatment). We did not 
receive public comments on this impact analysis.
15. Requirement for Electronic Prescribing for Controlled Substances 
for a Covered Part D Drug Under a Prescription Drug Plan or an MA-PD 
Plan
    In section III.L of this final rule, we finalized two updates to 
the CMS EPCS Program. We finalized that prescriptions written for a 
beneficiary in a LTC facility will not be included in determining 
compliance under the CMS EPCS Program until January 1, 2028. We also 
finalized that compliance actions against prescribers who do not meet 
the compliance threshold based on prescriptions written for a 
beneficiary in a LTC facility will commence on or after January 1, 
2028. Without these changes, if we keep the existing date of January 1, 
2025, as the beginning date for which these prescriptions will be 
considered for compliance purposes for the CMS EPCS Program and on 
which we would begin to take compliance actions based on these 
prescriptions, we estimate at least 6,800 prescribers would become non-
compliant due to CMS including prescriptions written for beneficiaries 
in LTC in the CMS EPCS Program compliance threshold calculation. This 
estimate is based on data from calendar year 2022 and is prior to 
considering emergency and disaster exceptions and waivers, which could 
reduce these numbers. This policy change allows prescribers additional 
time to adopt the new e-prescribing standard, NCPDP SCRIPT standard 
version 2023011, and utilize EPCS. Additionally, this policy will 
prevent an increased number of prescribers from potentially applying 
for a waiver for circumstances beyond their control due to difficulty 
of reliably conducting EPCS for beneficiaries in LTC facilities by the 
current deadline of January 1, 2025.
    We do not believe this proposal will cause additional costs as we 
are only extending the deadline by which we will include prescriptions 
written for beneficiaries in LTC facilities in the CMS EPCS Program 
compliance threshold calculation and not modifying the requirement to 
become compliant. We also note that beneficiaries in LTC facilities may 
not receive the full benefits of EPCS, which we describe in the CY 2022 
PFS final (86 FR 65362), until a later date, but we believe the delay 
is necessary due to the logistical challenges of prescribers 
electronically prescribing controlled substances prescriptions for 
beneficiaries in LTC facilities.
    We solicited public comments on our impact assumptions.
    We did not receive public comments on our assumptions, and 
therefore, we are finalizing our impact assumptions without 
modification.
16. Expand Hepatitis B Vaccine Coverage
    In section III.M. of this rulemaking, we are finalizing our 
proposal to expand Hepatitis B vaccine coverage by revising our 
regulatory definition for intermediate risk groups by adding a new 
paragraph to include individuals who have not previously received a 
completed hepatitis B vaccination series or whose vaccination history 
is unknown (Sec.  410.63(a)(2)).
    Hepatitis B vaccine is currently covered under Medicare Part B for 
enrollees who are at intermediate or high risk of contracting hepatitis 
B virus, and, for Part D enrollees who do not fall into those 
categories the vaccine may be covered under Medicare Part D.\930\ In 
2021, about 51 million of 65 million Medicare beneficiaries were 
enrolled in Part D and 21,629 received the vaccine. In 2019, Part B 
covered 300,000 doses of hepatitis B vaccine for beneficiaries who were 
at high or intermediate risk for the disease.\931\ Since the vaccine 
has been available for several decades, we are not able to determine 
how many Medicare beneficiaries have already received the vaccine.
---------------------------------------------------------------------------

    \930\ Sayed, BA, Finegold, K, Ashok, K, Schutz, S, De Lew, N, 
Sheingold, S, Sommers, BD. Inflation Reduction Act Research Series: 
Medicare Part D Enrollee Savings from Elimination of Vaccine Cost-
Sharing. (Issue Brief No. HP-2023-05). Office of the Assistant 
Secretary for Planning and Evaluation, U.S. Department of Health and 
Human Services. September 2023. Retrieved from https://aspe.hhs.gov/sites/default/files/documents/407d41b6534e7af6702eb280b3945d00/aspe-ira-vaccine-part-d.pdf.
    \931\ Medpac 2021. Report to the Congress: Medicare and the 
Health Care Delivery System. Chapter 7. Medicare vaccine coverage 
and payment. Retrieved from https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/default-document-library/jun21_ch7_medpac_report_to_congress_sec.pdf.

---------------------------------------------------------------------------

[[Page 98530]]

    Overall vaccination rates among adults, including older adults, are 
generally low.932 933 A Centers for Disease Control and 
Prevention (CDC) analysis of data from the National Health Interview 
Survey found that fewer than half of all adults (less than 45 percent) 
received age-appropriate recommended vaccinations in 2019.\934\ An 
estimated 20 percent of adults aged >=60 years have been vaccinated 
against hepatitis B; and approximately 34 percent of adults aged >=19 
years have been vaccinated against hepatitis B.\935\ We do not 
anticipate our proposal to result in significant economic impact on the 
Medicare program.
---------------------------------------------------------------------------

    \932\ CDC. (2022, February 17). Vaccination Coverage among 
Adults in the United States, National Health Interview Survey, 2019-
2020. Centers for Disease Control and Prevention. Retrieved February 
27, 2023, from https://www.cdc.gov/adultvaxview/publications-resources/vaccination-coverage-adults-2019-2020.html?CDC_AAref_Val=https://www.cdc.gov/vaccines/imz-managers/coverage/adultvaxview/pubs-resources/vaccination-coverage-adults-2019-2020.html.
    \933\ Gellin, B.G., Shen, A.K., Fish, R., Zettle, M.A., Uscher-
Pines, L., & Ringel, J.S. (2016). The National Adult Immunization 
Plan: Strengthening Adult Immunization Through Coordinated Action. 
American journal of preventive medicine, 51(6), 1079-1083. https://doi.org/10.1016/j.amepre.2016.04.014.
    \934\ CDC. (2022, February 17). Vaccination Coverage among 
Adults in the United States, National Health Interview Survey, 2019-
2020. Centers for Disease Control and Prevention. Retrieved February 
27, 2023, from https://www.cdc.gov/adultvaxview/publications-resources/vaccination-coverage-adults-2019-2020.html?CDC_AAref_Val=https://www.cdc.gov/vaccines/imz-managers/coverage/adultvaxview/pubs-resources/vaccination-coverage-adults-2019-2020.html.
    \935\ CDC. 2023. Vaccination Coverage among Adults in the United 
States, National Health Interview Survey, 2021. Retrieved from 
https://www.cdc.gov/adultvaxview/publications-resources/vaccination-coverage-adults-2021.html?CDC_AAref_Val=https://www.cdc.gov/
vaccines/imz-managers/coverage/adultvaxview/pubs-resources/
vaccination-coverage-adults-2021.html.
---------------------------------------------------------------------------

    As of January 1, 2023, the Inflation Reduction Act (IRA) eliminated 
out-of-pocket costs for vaccines covered under Medicare Part D that are 
recommended by the Advisory Committee on Immunization Practices 
(ACIP).\936\ Before the IRA, beneficiaries incurred out of pocket costs 
for Part D vaccines. While we would expect that after the IRA, more 
beneficiaries will receive covered vaccines because of eliminating out 
of pocket costs, existing research shows that cost-sharing is only one 
factor among other determinants. Trust in vaccines, access to health 
care, health literacy, perceived risk, socio-demographic factors and 
awareness of vaccine recommendations, all shape whether individuals 
obtain a recommended vaccine.\937\ If the number of people receiving 
the hepatitis B vaccine under Part D is any indication, we assume that 
even by increasing access, there will not be immediate or significant 
change in the number of covered hepatitis B vaccines paid under 
Medicare Part B. For these reasons, we do not anticipate that expanding 
the definition of intermediate risk for hepatitis B vaccine will result 
in a significant financial impact to the Medicare Program. We did not 
receive any public comments on our impact analysis.
---------------------------------------------------------------------------

    \936\ Sayed, BA, et al. 2023. Inflation Reduction Act Research 
Series.
    \937\ Sayed, BA, et al. 2023. Inflation Reduction Act Research 
Series.
---------------------------------------------------------------------------

17. Low Titer O+ Whole Blood Transfusion Therapy During Ground 
Ambulance Transport
    As outlined in section III.N of this final rule, we are finalizing 
our proposal to modify the definition of ALS2 at Sec.  414.605 by 
adding the administration of low titer O+ whole blood transfusion. In 
addition, we are also modifying the definition of ALS2 at Sec.  414.605 
by adding the administration of low titer O- whole blood transfusion 
therapy, packed red blood cells (PRBCs), plasma, or a combination of 
PRBCs and plasma, collectively termed prehospital blood transfusion 
(PHBT) as a new number 8.
    We would also reflect this change in the Medicare Benefit Policy 
Manual, Chapter 10, Ambulance Services, section 30.1.1, Definition of 
Ground Ambulance Services. Under this proposal, a ground ambulance 
transport that provides one of the PHBT will itself constitute an ALS2-
level transport.
    We believe that many ground ambulance transports providing PHBT 
already qualify for ALS2 payment, given that patients requiring such 
transfusions are generally critically injured or ill and often 
suffering from cardio-respiratory failure and/or shock and are 
therefore likely to receive one or more procedures currently listed as 
ALS procedures in the definition of ALS2, such as endotracheal 
intubation, central venous line, chest decompression, and placement of 
an intraosseous line. For impact analysis, for ground ambulance 
transports that provide PHBT only and currently do not qualify for ALS2 
payment, we assume that these transports are reported as ALS1 (advanced 
life support, level 1) emergencies.
    In order to help identify the number of ground ambulance transports 
that could potentially be affected by this proposal, we analyzed 
inpatient hospital claims related to multiple-trauma that started with 
an ALS1 emergency ambulance transport and also included a blood 
transfusion done in the hospital. The inpatient admissions were 
identified by DRG code ``813'' and diagnosis code of ``24,'' the 
ambulance transport is identified by HCPCS ``A0427,'' and the blood 
transfusion administered to these patients in the hospital setting is 
identified by the presence of covered charges, patient liability 
amounts, and replacement units for blood.
    Since payments vary for urban, rural, and super-rural ground 
ambulance transports, we calculated the average Medicare payment amount 
for ALS2 (HCPCS A0433) and ALS1 (HCPCS A0427) over the last several 
years. The average payment differential over calendar years 2019 and 
2023 is estimated to be roughly $162 per transport. It is difficult to 
make an assumption for the number of transports that will be impacted 
by this proposal, but the potential number over the last several years, 
based on an analysis of actual experience, is very few. Even if all of 
these ALS1 emergency transports shifted to being ALS2 transports, which 
is very unlikely, the impact would be negligible.
    We did not receive any public comment on our impact analysis and 
therefore, we are finalizing our proposal to modify the definition of 
ALS2 at Sec.  414.605 by adding the administration of low titer O+ 
whole blood transfusion. In addition, we are also modifying the 
definition of ALS2 at Sec.  414.605 by adding the administration of low 
titer O- whole blood transfusion therapy, packed red blood cells 
(PRBCs), plasma, or a combination of PRBCs and plasma, collectively 
termed prehospital blood transfusion (PHBT) as a new number 8.
18. Updates to the Quality Payment Program
    In this section of this final rule, we estimated the overall and 
incremental impacts of the Quality Payment Program policies. We 
estimated participation, final scores, and payment adjustment for 
eligible clinicians participating through traditional MIPS, MVPs, and 
the Advanced APMs. We also presented the incremental impacts to the 
number of expected Qualified Participants (QPs) and associated APM 
Incentive Payments that result from our policies relative to a baseline 
model that reflects the status quo in the absence of any modifications 
to the previously finalized policies.

[[Page 98531]]

A. Overall MIPS Modeling Approach and Data Assessment

(1) MIPS Modeling Approach
    For this final rule, we used a similar modeling approach as the CY 
2024 PFS final rule (88 FR 79504 through 79506). We created two MIPS 
RIA models: a baseline and policy model. Our baseline model includes 
previously finalized policies that will be in effect for the CY 2024 
performance period/2026 MIPS payment year in the absence of any of the 
new policies in this final rule. Examples of previously finalized 
policies included in the baseline model include: updated QP and partial 
QP thresholds, and the previously finalized list of MVPs.
    The policies model builds off the baseline model and incorporates 
the MIPS policies for the CY 2025 performance period/2027 MIPS payment 
year included in this final rule. By comparing the baseline model to 
the policies model, we are able to estimate the incremental impact of 
the specific policies in this final rule.
    Our modeling approach utilizes the same scoring engine that is used 
to determine MIPS payment adjustments. This modeling approach enables 
our model to align as much as possible with actual MIPS scoring and 
minimizes differences between our projections and policy 
implementation. These limitations of our model are outlined later in 
this RIA.
(2) Data Used To Estimate Future MIPS Performance
    In the CY 2024 PFS final rule (88 FR 79504), we explained our 
decision to use CY 2022 performance period submissions data. We noted 
that using CY 2022 performance data presents the most current data and 
aligns our participation, final scoring, and payment adjustment 
analysis around the same common data set. CY 2022 performance data were 
the most recently available data in time for us to construct our 
simulation model for this final rule and for the same reasons discussed 
in the CY 2024 PFS final rule (88 FR 79504), we are considering it to 
construct the baseline and policies model in this final rule. As more 
data becomes available, we will assess the feasibility and validity of 
that data for use in RIA simulations.
b. APM Incentive Payments to QPs in Advanced APMs and Other Payer 
Advanced APMs
    Beginning in payment year 2019, through the Medicare, through the 
Medicare Option, eligible clinicians who have a sufficient percentage 
of their Medicare Part B payments for covered professional services or 
Medicare patients through Advanced APMs will be QPs for the applicable 
QP Performance Period for a year and the corresponding payment year. In 
payment years 2019 through 2024 these QPs will receive a lump-sum APM 
Incentive Payment equal to 5 percent of their estimated aggregate paid 
amounts for covered professional services furnished during the calendar 
year immediately preceding the payment year. In payment year 2025, QPs 
will receive a lump-sum APM Incentive Payment equal to 3.5 percent 
payment of their estimated aggregate paid amounts for covered 
professional services furnished during CY 2024. In payment year 2026, 
QPs will receive a lump-sum APM Incentive Payment equal to 1.88 percent 
payment of their estimated aggregate paid amounts for covered 
professional services furnished during CY 2025. Beginning in payment 
year 2021, in addition to the Medicare Option, eligible clinicians may 
become QPs through the All-Payer Combination Option. The All-Payer 
Combination Option allows eligible clinicians to become QPs by meeting 
the QP payment amount or patient count threshold through a pair of 
calculations that assess a combination of both Medicare Part B covered 
professional services furnished or patients through Advanced APMs and 
services furnished or patients through Other Payer Advanced APMs. 
Eligible clinicians who become QPs for a year are not subject to MIPS 
reporting requirements and payment adjustments. Eligible clinicians who 
do not become QPs but meet a lower threshold to become Partial QPs for 
the year may elect to report to MIPS and, if they elect to report, will 
then be scored under MIPS and receive a MIPS payment adjustment. 
Partial QPs are not eligible to receive the APM Incentive Payment.
    If an eligible clinician does not attain either QP or Partial QP 
status, and is not excluded from MIPS on another basis, the eligible 
clinician will be subject to the MIPS reporting requirements and will 
receive the corresponding MIPS payment adjustment.
    Beginning in payment year 2026, there are two separate PFS CFs--one 
for eligible clinicians who are QPs for the year (the qualifying APM 
CF), and the other for all non-QP eligible clinicians and other 
suppliers paid under the PFS (the non-qualifying APM CF). The update to 
the qualifying APM CF for a year is 0.75 percent, while the update to 
the non-qualifying APM CF for a year is 0.25 percent.
    In addition, the thresholds to achieve QP status beginning in the 
2025 QP Performance Period will increase to 75 percent for the payment 
amount method, and 50 percent for the patient count method. Overall, we 
estimated that for the 2025 QP Performance Period between 380,100 and 
488,700 eligible clinicians will become QPs, and therefore be excluded 
from MIPS reporting requirements and payment adjustments.
    In section IV.A.4.m.(2) of the CY2025 PFS proposed rule, we 
proposed to modify the definition of ``attribution-eligible 
beneficiary'' to include any beneficiary who has received a covered 
professional service furnished by the eligible clinician (NPI) for whom 
we are making the QP determination. However, we are not finalizing this 
proposal and therefore no impact of this policy is included in the 
estimated number of QPs provided above.
    We projected the number of eligible clinicians who will be QPs, and 
thus excluded from MIPS, using several sources of information. First, 
the projections are anchored in the most recently available public 
information on Advanced APMs. The projections reflect Advanced APMs 
that will be operating during the 2025 QP Performance Period, as well 
as some Advanced APMs anticipated to be operational during the 2025 QP 
Performance Period. The projections also reflect an estimated number of 
eligible clinicians that will attain QP status through the All-Payer 
Combination Option. The following APMs are expected to be Advanced APMs 
for the 2025 QP Performance Period:
     Bundled Payments for Care Improvement Advanced Model;
     ACO REACH Model (formerly Global and Professional Direct 
Contracting) Model;
     Kidney Care Choices Model (Comprehensive Kidney Care 
Contracting Options, Professional Option and Global Option);
     Maryland Total Cost of Care Model (Care Redesign Program; 
Maryland Primary Care Program);
     Medicare Shared Savings Program (Level E of the BASIC 
Track and the ENHANCED Track); and
     Enhancing Oncology Model (EOM); and
     Primary Care First (PCF) Model.
    We used the Participation Lists and Affiliated Practitioner Lists, 
as applicable, (see Sec.  414.1425(a) for information on the APM 
Participant Lists and QP determinations) for the 2023 QP performance 
period third snapshot QP determination date to estimate the number of 
QPs, total Part B paid amounts for covered professional services, and 
the aggregate total of APM

[[Page 98532]]

Incentive Payments for the 2025 QP Performance Period. We examined the 
extent to which Advanced APM participants will meet the QP Thresholds 
of having at least 75 percent of their Part B covered professional 
services or at least 50 percent of their Medicare beneficiaries were 
attribution eligible through the APM Entity.
c. Estimated Number of MIPS Eligible Clinicians in the CY 2025 
Performance Period/2027 MIPS Payment Year
(1) Initial Population of Clinicians Included in the RIA Baseline and 
Proposed Policies Models
    For this final rule, we applied the same assumptions as in the CY 
2024 PFS final rule (88 FR 79505) to estimate our initial population of 
clinicians based on CY 2022 performance period/2024 MIPS payment year 
data.
    We used the same CY 2022 final reconciled eligibility determination 
file described in the CY 2024 PFS final rule (88 FR 79505). This file 
reconciles eligibility from two determination periods and aligns with 
the CY 2022 performance period submissions data on which we based this 
model. Our analysis included 1,820,899 clinicians with PFS claims in 
this initial population. This initial population of clinicians was used 
to determine eligibility using the methodology described in the 
following sections.
(2) Estimated Number of MIPS Eligible Clinicians After Applying 
Eligibility Assumptions
(a) Methods and Assumptions Used To Estimate Eligibility
    After identifying the clinician population with PFS claims we 
applied the same eligibility assumptions and determination process 
described in the CY 2024 PFS final rule (88 FR 79505). We did not 
propose any modifications to MIPS eligibility requirements and the same 
eligibility assumptions apply to both the baseline and final policies 
model.
    For our RIA model, we established the ``required eligibility'' 
category, which means the clinician exceeds the low-volume threshold in 
all 3 criteria and is subject to a MIPS payment adjustment. We based 
this estimate on the CY 2022 performance period data described in this 
section of this final rule, which includes the three low volume 
criteria. Within this category we divide clinicians into two groups- 
clinicians who report data and clinicians who do not report data.
    Our next two eligibility assumptions concern clinicians and groups 
who may participate in MIPS but are not required to participate. First, 
we estimate group eligibility. These are the clinicians who have a 
group submission, and their group exceeds the low-volume threshold in 
all 3 criteria. Next, we apply our opt-in eligibility assumptions. 
Individuals or groups who exceed the low-volume threshold in 1 
criterion but not all 3 may elect to opt-in. Based on the CY2022 data 
we determine which individuals opted-in to MIPS and for the purposes of 
our model estimate that these clinicians will continue to opt-in to 
MIPS.
    After applying the process outlined in this section of this final 
rule, we next estimated the number of ``Potentially MIPS Eligible'' 
clinicians. These clinicians are not included in our total number of 
MIPS eligible clinicians. These are clinicians who are not MIPS 
eligible individually but who may either opt-in because they exceed the 
low volume threshold in at least one criterion but not all three or who 
could report as part of a group which exceeds all three low volume 
criteria.
    Finally, we estimated the number of clinicians who are neither MIPS 
eligible nor potentially MIPS eligible. First, we estimated the number 
of MIPS eligible clinicians who are below all three low-volume criteria 
(both as an individual and as a group) again using the CY 2022 
performance period data as outlined in this section of this final rule.
    Next, we estimated the number of QPs (not MIPS eligible). In 
section VII.E.17.b. of this final rule, we estimated a range of QPs. 
For the purposes of our RIA population, we estimated a specific number 
of QPs. This is because it is necessary to establish a specific 
population of clinicians to use to simulate the impacts of our final 
policies on participation, final scores, and payment adjustments. 
Finally, we estimated the number of clinicians who are excluded for 
other reasons including that they are a non-eligible clinician type or 
newly enrolled in Medicare.
    After applying these assumptions to our initial population, we 
estimated 686,645 MIPS eligible clinicians with $5.5 billion in allowed 
charges. However, this number may be as high as 1,270,806 MIPS eligible 
clinicians and $7 billion allowed charges if all potentially MIPS 
eligible \938\ clinicians either opt-in or report as a group. This is 
an unlikely scenario, but it establishes the full range of possible 
MIPS eligible clinicians in our initial population.
---------------------------------------------------------------------------

    \938\ We define potentially MIPS eligible clinicians as those 
clinicians who are not required to participate in 13MIPS but may 
either opt-in or join a group that exceeds the low-volume threshold 
in all three criteria.
---------------------------------------------------------------------------

(b) MIPS Eligibility Estimates
    Eligibility among many clinicians is contingent on submission to 
MIPS as a group or election to opt-in: therefore, we will not know the 
number of MIPS eligible clinicians who submit until the submission 
period for the CY 2023 performance period is closed. For the remaining 
analysis, we used the estimated population of 686,645 MIPS eligible 
clinicians described previously in this section of this final rule. 
Table 119 summarizes our eligibility estimates for the policies model 
after applying our assumptions outlined in this section of this final 
rule.

[[Page 98533]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.183

d. Modeling Approach and Methods for MIPs Value Pathways (MVPs) and 
Traditional MIPS
(1) Summary of Approach
    In this final rule, we present several proposals which impact the 
measures and activities, the performance category scores, final score 
calculation, and the MIPS payment adjustment of MIPS eligible 
clinicians. We outlined these changes in more detail in section 
VII.E.17.d.(3). of this final rule as we described our methodology to 
estimate MIPS payment adjustments for the CY 2025 performance period/
2027 MIPS payment year. We then presented the impact of the policies in 
the CY 2025 performance period/2027 MIPS payment year and compared 
select metrics to the baseline model. By comparing the baseline model 
to the policies model, we are able to estimate the incremental impact 
of the policies

[[Page 98534]]

for the CY 2025 performance period/2027 MIPS payment year.
    MIPS eligible clinician's final scores are calculated based on the 
clinician's performance on measures and activities under the four MIPS 
performance categories: quality, cost, improvement activities, and 
Promoting Interoperability. MIPS eligible clinicians can participate in 
the four MIPS performance categories as an individual, group, virtual 
group, APM Entity, clinicians participating in MIPS through the APM 
Performance Pathway (APP), or through an MVP. MIPS APM participants can 
participate in the APP as an individual, group, virtual group, APM 
Entity and are only scored on three MIPS performance categories: 
quality, improvement activities, and Promoting Interoperability. Our 
simulation applies the proposed and previously finalized policies to 
the existing MIPS scoring engine.
    In the CY 2022 PFS final rule (86 FR 65394 through 65397), we 
finalized policies at Sec.  414.1365 for implementing MIPS Value 
Pathways beginning in the CY 2023 performance period/2025 MIPS payment 
year. We incorporated MVP participation and scoring rules in this RIA 
where applicable as described in the following section.
(2) Methodology To Assess Impact for MIPS Value Pathways
(a) MVP Participant Assumptions
    At Sec.  414.1365(b), we required MVP Participants (which can be a 
group, individual, subgroup, or APM entity) to register prior to 
submitting an MVP. We assessed whether to use CY 2024 MVP registration 
data to estimate MVP participation but elected to again use the 
approach described in the CY 2024 PFS final rule (88 FR 79507) for two 
reasons. First, we do not presently have MVP scoring data, thus do not 
know the information of MVP registrants that may submit MVP data to 
MIPS. Secondly, our model is based on CY 2022 performance data. This 
data does not contain MVP scores and reconciliation between multiple 
years introduces uncertainty and complexity into our model. As MVP 
scoring data becomes available in the future, we will reassess our 
methodology for estimating MVP participation and final scores.
    We assumed for purposes of this model, that MVP Participants are 
MIPS eligible individual clinicians or groups that submit the required 
MVP measures. For the baseline model, we used the measures from the 16 
MVPs finalized in the CY 2024 PFS final rule Appendix 3 (88 FR 79978 
through 80047).
    In section IV.A.4.a. and Appendix 3 of this final rule, we proposed 
modifications to all 16 existing MVPs and 6 new MVPs. The 6 new MVPs 
are:

 Complete Ophthalmologic Care
 Dermatological Care
 Gastroenterology Care
 Optimal Care for Patients with Urologic Conditions
 Pulmonology Care
 Surgical Care

    For the policies model, we incorporated the measure revisions for 
the existing MVPs described in Appendix 3 of this final rule. Due to 
data availability, we are unable to simulate scores for the following 
measures and improvement activity: ABG44, PIMSH13, UREQA10, 485, 486, 
487, 488, 489, 490, 492, 493, 495, 496, 497, 499, 500, 501, 502, 503, 
504, 505, AAD16, AAD17, AAD18, ABG44, GIQIC26, IA_PM_XX, IRIS61, MSK6, 
MSK7,MSK8,MSK9,MUC2023-141, MUC2023-161, MUC2023-162, MUC2023-190, 
MUC2023-211.
    For these MVP Participants, we calculated both an MVP and a 
traditional MIPS score and took the highest score consistent with the 
existing scoring hierarchy which was finalized in the CY 2023 PFS final 
rule (86 FR 65537).
    Our MVP Participant assumptions have limitations: the measure list 
used to simulate MVP participation does not align completely with what 
is finalized in section IV.A.4.a. of this final rule, we are not 
incorporating subgroups due to a lack of data, not all of the assumed 
participants may elect to register for an MVP, and we may have 
additional clinicians or groups register for an MVP. However, we 
believe this is a reasonable approach to simulate the impact of MVPs 
and we sought comment on this assumption but did not receive any 
feedback.
(b) MVP Scoring Methods and Assumptions
    We simulate an MVP score using the same data sources as we did for 
traditional MIPS. We scored according to Sec.  414.1365(d) and (e) 
using the MVP reporting requirements listed in Sec.  414.1365(c) with 
one exception. We did not restrict the improvement activities to the 
activities listed in the MVP inventory. We believed this would lower 
our estimated MVP score as clinicians and groups were not required to 
select from a limited inventory in the CY 2022 performance period (upon 
which our model is based). Therefore, we scored any improvement 
activities the MVP Participants submitted in 2022 as if those 
improvement activities are in the MVP inventory. Additionally, in 
section IV.A.4.b.(1)(b) of this final rule, we are finalizing to score 
all available population health measures for a clinician participating 
in an MVP and select the highest scoring of those measures for use in 
determining their category score. We incorporated this policy into our 
simulation.
(3) Methodology To Assess Impact for Traditional MIPS
    To estimate the impact of the policies on MIPS eligible clinicians, 
we generally used the CY 2022 performance period's data, including data 
submitted or calculated for the quality, cost, improvement activities, 
and Promoting Interoperability performance categories.
    We supplemented this information with the most recent data 
available for CAHPS for MIPS and CAHPS for ACOs, administrative claims 
data for the new quality performance category measures, and other data 
sets. We calculated a hypothetical final score for the CY 2025 
performance period/2027 MIPS payment year for the baseline and policies 
scoring models for each MIPS eligible clinician using score estimates 
for quality, cost, Promoting Interoperability, and improvement 
activities performance categories, and the application of our final 
scoring policies.
(a) Methodology To Estimate the Quality Performance Category Score
    We used the CY 2024 PFS final rule final policies model as the 
starting point of our baseline model. Since there are no previously 
finalized policies impacting the quality performance category that were 
not already included in the CY 2024 PFS final rule policies model, we 
did not make any modifications to the quality performance category and 
the baseline model is identical to the CY 2024 PFS final rules policies 
model with respect to the quality category.
    Our policies model incorporates the following policies from this 
final rule as outlined in section IV.A.4.e.(1) of this final rule:
    In section IV.A.4.f.(1)(b)(i) of this final rule, to facilitate 
fairer scoring, we are finalizing to remove the scoring cap and change 
the benchmarking approach for certain topped out measures applicable to 
clinicians facing both limited measure choice and limited scoring 
opportunities. We did not simulate the addition of quality measures 
described in section IV.A.4.e.(1)(d)(i) since we use existing quality 
measure data from the CY 2022 performance period which does not include 
new measures. We did not simulate the removal of quality

[[Page 98535]]

measures described in section IV.A.4.e.(1)(d)(ii) since we cannot 
predict how clinician behavior and measure selection will change in 
response.
(b) Methodology To Estimate the Cost Performance Category Score
    We estimated the cost performance category score using a 
methodology similar to the methodology described in the CY 2024 PFS 
final rule (88 FR 79508) for the baseline and the proposed policies RIA 
models with the modifications described below.
    For this final rule, the baseline policies RIA model used the same 
methodology as the final policies RIA model in the CY 2024 PFS final 
rule (88 FR 79508). The policies RIA model incorporated and implemented 
the following changes:
     In section IV.A.4.e.(2)(a) of this final rule, we are 
adopting 6 new episode-based cost measures and modify 2 existing 
episode-based cost measures. We incorporated measure test data with the 
specifications for the new and modified measures.
     In section IV.A.4.f.(1)(d) of this final rule, we are 
modifying our cost scoring methodology. The median cost for a measure 
will be assigned achievement points equal to 10 percent of the 
performance threshold (7.5 in the CY 2024 performance period/CY 2026 
payment year). The cut-offs for benchmark ranges will be calculated as 
standard deviations from the median. This policy is incorporated into 
our model based on the specifications explained in section 
IV.A.4.f.(1)(d)(ii)(B) of this final rule.
(c) Methodology To Estimate the Promoting Interoperability Performance 
Category Score
    We estimated Promoting Interoperability performance category score 
by using the same methodology that we used in the CY 2024 PFS final 
rule (88 FR 79508). We did not incorporate any changes to this category 
in our model. In section IV.A.4.e.(4)(f) of this final rule, we are 
finalizing minimum criteria for a qualifying data submission for the 
Promoting Interoperability performance category. We conducted an 
analysis of this policy and determined that the impact on final scores 
and payment adjustments was negligible and therefore did not 
incorporate it into our model.
(d) Methodology To Estimate the Improvement Activities Performance 
Category Score
    For the baseline and policies model we used the same method to 
estimate the improvement activities performance category score as 
described in the CY 2024 PFS final rule (88 FR 79508) including 
alignment with the clarification provided regarding IA automatic 
weighting for APM participants (88 FR 79366).
    In section IV.A.4.e.(3)(b)(IV) of this final rule, we are removing 
weighting of improvement activities. We conducted an analysis of this 
policy and determined that the impact on final scores and payment 
adjustments was negligible and therefore did not incorporate it into 
our model.
(e) Methodology To Estimate the Complex Patient Bonus Points
    For the baseline and policies RIA model, we used the previously 
established method to calculate the complex patient bonus as described 
in the CY 2022 PFS final rule (86 FR 64996).
(f) Methodology To Estimate the Final Score
    We did not make any changes for how we calculated the MIPS final 
score. Our baseline and policies RIA models assigned a final score for 
each TIN/NPI by multiplying each estimated performance category score 
by the corresponding performance category weight, adding the products 
together, multiplying the sum by 100 points, adding the complex patient 
bonus, and capping at 100 points.
    For both models, after adding any applicable bonus for complex 
patients, we reset any final scores that exceeded 100 points to equal 
100 points. For MIPS eligible clinicians who were assigned a weight of 
zero percent for any performance category, we redistributed the weights 
according to Sec.  414.1380(c).
    For the purposes of this model, if a MIPS eligible clinician was 
approved for reweighting of one or more performance category to zero 
percent of their final score, and the category's weight redistributed 
to other performance category(ies), for the CY 2022 performance period/
2024 MIPS payment year (which was the data source used in our model) in 
accordance with our reweighting policies under Sec.  414.1380(c)(2), 
then we continue to apply that reweighting in our model by assigning 
them a neutral score equal to the performance threshold if all 
categories were reweighted or assigning the applicable weights to the 
categories which were reweighted. Although it is unlikely (but 
possible) that the exact same clinicians will apply for and receive 
reweighting in both the CY 2022 performance period/2024 MIPS payment 
year (which our data is based on) and the CY 2025 performance period/
2027 MIPS payment year (which we are simulating), we believe that this 
assumption accurately reflects future clinician behavior for two 
reasons. First, while the exact same clinicians may not receive 
reweighting 2 years in a row, we believe that this assumption allows us 
to quantify the impact of the reweighting on a population level. In 
other words, even if the same clinicians do not apply for and receive 
reweighting 2 years in a row, the absolute number of reweighting and 
the characteristic of practices who receive reweighting is likely to 
remain similar. Secondly, if we were to not assign reweighting to those 
clinicians, many of them will receive a very low final score because 
they did not submit data for one or more performance categories during 
the year in which they received reweighting. We do not believe that it 
is realistic to assume that, in the absence of reweighting, those 
clinicians will continue to not submit data. For these reasons, 
clinicians who received reweighting in the CY 2022 performance period/
2024 MIPS payment year also are approved for reweighting in the CY 2025 
performance period/2027 MIPS payment year. These clinicians are 
assigned a score of the performance threshold (75) in our model because 
this corresponds with a neutral (0 percent) payment adjustment.
(g) Methodology To Estimate the MIPS Payment Adjustment
    For the baseline and final policies RIA models, we applied the 
hierarchy as finalized in the CY 2022 PFS final rule (86 FR 65536 
through 65537) to determine which final score should be used for the 
payment adjustment for each MIPS eligible clinician when more than one 
final score is available. We then calculated the parameters of an 
exchange function in accordance with the statutory requirements related 
to the linear sliding scale, budget neutrality, and minimum and maximum 
adjustment percentages.
    For the baseline model, we applied the performance threshold of 75 
points finalized in the CY 2024 PFS final rule (88 FR 79373). In 
section IV.A.4.g.(2)(c) of this final rule, we are finalizing to again 
set the performance threshold at 75. Therefore, for both the baseline 
and final policies models we used a performance threshold of 75 to 
calculate the exchange function used for MIPS payment adjustments. We 
note that the results of this exchange are not identical between the 
baseline and final policies model. This is due to the scaling factor 
used to determine positive adjustments

[[Page 98536]]

is dependent on the total dollar amount of negative payment adjustments 
and those adjustments differ as final scores are not identical between 
both models.
    For both the baseline and policies models, we used these resulting 
parameters to estimate the positive or negative MIPS payment adjustment 
based on the estimated final score and the allowed charges for covered 
professional services furnished by the MIPS eligible clinician.
(4) Simulation Results and Projected Impact to MIPS Eligible Clinicians
    Based on the methodology described in this section of the final 
rule, we created a baseline and policies simulation. Using this 
simulation, we estimated the impact of the policies of this final rule.
(a) Impact to Clinician Eligibility
    In section VII.E.17.c.(2) of this final rule, we noted that we did 
not modify clinician eligibility and therefore there is no difference 
in the total number of MIPS eligible clinicians between our models.
(b) Impact to Clinician's Final Scores
[GRAPHIC] [TIFF OMITTED] TR09DE24.184

    The median final score is 82.20 in our baseline model and 86.42 in 
our policies model. There is an increase in the number of clinicians 
receiving a positive payment adjustment for all practice sizes and an 
increase in the median final score for all practice sizes except for 
solo practitioners.\939\ We project that 69.93 percent of MIPS eligible 
clinicians will receive a positive adjustment in our baseline model and 
77.51 percent of MIPS eligible clinicians will receive a positive 
adjustment in our policies model. This increase is largely due to our 
change to the cost scoring methodology discussed in section 
IV.A.4.f.(1)(d)(ii)(B) of this final rule. Table 121 shows the median 
cost score for MIPS eligible clinicians who are scored on the cost 
performance category for our baseline and final policies model. There 
is a substantial difference in median cost scores between our two 
models. This is true across all practice sizes. The median cost 
category score is 59.16 in our baseline model and 73.85 in our policies 
model.
---------------------------------------------------------------------------

    \939\ See section VII.E.17.d.(b)(b)(i) of this final rule for a 
discussion of the performance of solo practitioners specifically.

---------------------------------------------------------------------------

[[Page 98537]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.185

    Figure D-B1 shows the distribution of final scores for all MIPS 
eligible clinicians. Note that there are a relatively large number of 
MIPS eligible clinicians with a final score of 75. As stated in section 
VII.E.17.d.(3)(f) of this final rule MIPS eligible clinicians whom we 
approved for reweighting of all MIPS performance categories in 
accordance with our reweighting policies at Sec.  414.1380(c)(2) are 
assigned a final score of exactly the performance threshold (75). 
Overall, the distribution is skewed to the right indicating that 
clinicians tend to receive final scores on the higher end of the 
distribution with many final scores clustered near the performance 
threshold of 75. Our policies have the effect of shifting final scores 
to the right. Many clinicians with final scores just below the 
performance threshold in the baseline model see their scores increased 
to a value just above the performance threshold in the policies model.
[GRAPHIC] [TIFF OMITTED] TR09DE24.186

(i) Impact to Small and Solo Practices
    18,867 MIPS eligible clinicians or 2.7 percent of all MIPS eligible 
clinicians are solo practitioners in both the baseline and final 
policies models. The median final score for solo practitioners is 
exactly equal to the performance threshold in both the baseline and 
final policies model although the portion of solo practitioners 
receiving a positive adjustment is higher in the final policies model 
than in the baseline model. As stated in section VII.E.17.d.(3)(f) of 
this final rule, clinicians receiving reweighting under our current 
policies at Sec.  414.1380(c)(2) are assigned a final score exactly 
equal to the performance threshold if we approved for reweighting of 
all MIPS performance categories.
    As discussed in section VII.E.17.d.(3)(f) of this final rule, 
clinicians receiving reweighting under our current policies at Sec.  
414.1380(c)(2) are assigned a final score exactly equal to the 
performance threshold if we

[[Page 98538]]

approved for reweighting of all MIPS performance categories.
    These practitioners have a lower median final score than other 
practice sizes. This is largely due to the fact that many of these solo 
practitioners do not submit data to MIPS despite being MIPS eligible 
clinicians. Our analysis indicates that 49.45 percent of solo 
practitioners submit data to MIPS compared to 93.68 percent of all 
clinicians. The median final score in our baseline and final policies 
model is 75.00 for all solo practitioners, but for solo practitioners 
who submit data the median final score is 84.35 in the baseline and 
87.03 in the final policies model. These findings indicate that the 
lower final scores among solo practitioners is likely due to not 
reporting data to MIPS. Figure D-B2 shows the distribution of final 
scores for solo practitioners as a box plot. While the median final 
score is 75 in both models, the bottom quartile increases from 17.52 to 
22.33 between the baseline and proposed policies model. Figure D-B3 
shows the final score distribution for all practice sizes. The first 
quartile of final scores is 75 in the baseline model and 77.45 in the 
final policies model. The range between Q1 and Q3 is significantly 
narrower for all practice sizes than it is for solo practitioners. 
Figure D-B4 shows the distribution of final scores for solo 
practitioners who submit data to MIPS. This distribution is much closer 
to the distribution of final scores in the overall population with the 
first quartile at 73.45 in the baseline and 75.00 in the final policies 
model. This is similar to the median final score for all practice sizes 
which is 86.42. This indicates that, while many solo practitioners do 
not submit data to MIPS, those who do submit data perform similarly or 
better than the overall population of MIPS eligible clinicians. This is 
further evidence that the main factor causing low final scores among 
solo practitioners is the high proportion who do not submit data.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR09DE24.187


[[Page 98539]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.188


[[Page 98540]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.189


[[Page 98541]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.190

BILLING CODE 4120-01-C
    Small practices, defined as groups with a range between 2 and 15 
clinicians, have a median final score of 81.79 in the baseline and 
86.02 in the policies model. This is similar but slightly lower than 
the median final score for all practice sizes of 86.42. Among small 
practices who submit data the median final score is 89.81 in the 
policies model (and 86.83 in the baseline). This is significantly 
higher than the median final score for all clinicians who submit data 
which is 87.53. This indicates that small practices perform similarly 
to other practice sizes although a slightly larger proportion of small 
practices do not submit data. Table 124 shows the percentage of 
clinicians by practice size who either do or do not submit data to MIPS 
and the corresponding median final score. Note that the median final 
score for clinicians who do not submit data is 75 for all practice 
sizes except for solo practitioners. This indicates that many 
clinicians belonging to small, medium, or large practices (but not solo 
practitioners) who do not submit data to MIPS have been approved for 
reweighting of all of their MIPS performance categories under our 
policies at Sec.  414.1380(c)(2). In contrast, many solo practitioners 
who do not submit data do so despite not being eligible for application 
of our reweighting policies or not applying for reweighting under those 
policies.
    A large majority of all practice sizes except solo practitioners 
submit data to MIPS. It is possible that the small percentage of MIPS 
eligible clinicians in those practice sizes who do not submit data to 
MIPS are primarily MIPS eligible clinicians who have received 
reweighting under our policies at Sec.  414.1380(c)(2). It should be 
noted that median final scores increase for solo and small 
practitioners between our baseline and policies model indicating that 
the net effect of our policies is an increase in their final scores.

[[Page 98542]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.191

(ii) Impact to Rural Providers
    In our data we assign rural practitioners a special status. 
Analysis of this group of clinicians indicates that their final scores 
are similar to the overall population of MIPS Eligible Clinicians 
across all practice sizes. Table 123 shows the median final score and 
the percentage of eligible clinicians with a positive or neutral or 
negative adjustment by practice size.
[GRAPHIC] [TIFF OMITTED] TR09DE24.192

    The median final score for all rural practitioners is 81.29 in our 
baseline model and 85.41 in our policies model. This is slightly lower 
than the median final score for all practitioners which is 82.20 in our 
baseline model and 86.42 in our policies model. However, the median 
final score is identical for solo practitioners and higher for small 
and medium practices. Large rural providers have a slightly lower 
median final score compared to large practices generally. The lower 
overall median final scores for rural practitioners are driven by large 
rural practices who perform slightly worse than other practice sizes 
and when compared to large practices generally. It should be noted that 
median final scores increase for rural providers of all practice sizes 
between our baseline and proposed policies model indicating that the 
net effect of our proposed policies is an increase in their final 
scores.

[[Page 98543]]

(iii) Impact to Safety Net Providers
(a) Updated Definition of Safety Net Providers
    In the CY 2023 PFS final rule (87 FR 70094), we finalized our 
complex patient bonus methodology. This bonus is composed of two 
distinct calculations which are added together: Medical Complexity and 
Social Risk. Medical Complexity is determined based on a MIPS eligible 
clinicians Hierarchical Conditions Categories risk score and social 
risk is determined based on the proportion of a MIPS eligible 
clinicians Medicare patient population who are dually eligible for both 
Medicare and Medicaid.
    In the CY 2024 PFS final rule (88 FR 79513), we compared the 
performance of clinicians who received the complex patient bonus with 
our overall population. As we further developed our model, we decided 
to adopt a more precise definition of safety net providers. We believe 
that by narrowing our definition of safety net providers to the top 20 
percent (80th percentile) of social risk we can identify the providers 
who are caring for the largest proportion of low-income or otherwise 
socially vulnerable individuals.
    Table 126 shows the final score estimates for safety net providers 
under this new definition. Safety net provers have higher median final 
scores than the overall population of MIPS eligible clinicians across 
all practice sizes with the exception of small and solo practitioners. 
When our analysis is restricted to providers who submit data to MIPS 
this discrepancy disappears and small and solo safety net providers who 
submit data have higher median final scores than the overall population 
of small and solo MIPS eligible clinicians who submit data. However, 
only 43.65 percent of solo and 72.90 percent of small safety net 
providers submit data compared to 49.45 percent and 79.46 percent of 
the overall population of solo and small MIPS eligible clinicians 
respectively. These results are shown in Table 124. This indicates that 
the lower scores among small and solo safety net practitioners is 
likely due to a larger number of these practitioners not submitting 
data. It should be noted that median final scores increase for solo and 
small safety net providers between our baseline and policies model 
indicating that the net effect of our policies is an increase in their 
final scores.
[GRAPHIC] [TIFF OMITTED] TR09DE24.193


[[Page 98544]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.194

(c) Impact to MIPS Eligible Clinicians' Payment Adjustments
    We did not increase in the performance threshold in this final 
rule. However, payment adjustments differ between the baseline and 
final policies model. This is because our policies increase final 
scores of MIPS eligible clinicians \940\ and therefore a larger 
proportion of MIPS eligible clinicians receive a final score greater 
than the performance threshold and thus a positive payment adjustment. 
The parameters of the exchange function used to determine payment 
adjustments depends on the final score distribution of MIPS eligible 
clinicians. As the proportion of MIPS eligible clinicians receiving a 
negative payment adjustment decreases the budget neutral funds 
available for redistribution also decrease. In the baseline model we 
project redistributing $517 million and in the policies model we 
project redistributing $458 million. This decrease means that the 
scaling factor for positive adjustments is reduced.
---------------------------------------------------------------------------

    \940\ This increase is largely due to the change in our cost 
performance category scoring policies discussed in section 
IV.A.4.f.(1)(d)(ii)(B) of this final rule.
[GRAPHIC] [TIFF OMITTED] TR09DE24.195

    We also report the median positive and negative payment adjustments 
by practice size in Table 126.

[[Page 98545]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.196

    For all practices sizes except for solo practitioners the median 
negative payment adjustment increases in magnitude. This is because 
many MIPS eligible clinician's final scores are clustered near the 
performance threshold. An increase in median final scores will cause 
many of those clinicians who have a minor negative adjustment to meet 
or exceed the performance threshold and therefore be removed from the 
population of clinicians with a negative adjustment. The remaining 
population of MIPS eligible clinicians with negative adjustments are 
more likely to have negative payment adjustments higher in magnitude. 
In contrast to other practice sizes. fewer solo practitioners with 
negative payment adjustments have a final score near the performance 
threshold and an increase in the final score of these MIPS eligible 
clinicians will reduce the size of their negative payment adjustment 
but is less likely to shift their final scores above the performance 
threshold in the manner described earlier. As discussed in section 
VII.E.17.d.(4)(b)(i) of this final rule, this is largely because many 
of these solo practitioners do not submit data to MIPS despite being 
MIPS eligible clinicians. Our analysis indicates that 49.45 percent of 
solo practitioners submit data to MIPS in our policies model compared 
to 93.70 percent of all MIPS eligible clinicians. In Table 127, we 
report the proportion of MIPS eligible clinicians who either did or did 
not submit data with the maximum negative adjustment (-9 percent).

[[Page 98546]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.197

    Across all practice sizes the proportion of clinicians who do not 
submit data who receive the max negative payment adjustment decreased 
between the baseline and proposed policies model. A larger proportion 
of solo practitioners (2.26 percent) who submit data receive the 
maximum negative adjustment.
    The median positive adjustment for solo practitioners is 1.55 
percent which is higher than the median positive adjustment for all 
practice sizes overall. This indicates that, while many solo 
practitioners do not submit data to MIPS, those solo practitioners who 
do report data to MIPS and receive a positive adjustment receive a 
similar median adjustment to other practice sizes.
e. Additional Impacts From Outside Payment Adjustments
(1) Burden Overall
    In addition to policies affecting payment adjustments, we are 
finalizing several policies that impact burden for the CY 2025 
performance period/2027 MIPS payment year. In section V.B.6. of this 
final rule, we outline estimated costs to MIPS eligible clinicians for 
Quality Payment Program ICRs that have updated estimates due to policy 
provisions in section IV.A. of this final rule. In section V.B.6. of 
this final rule, we applied the impacts of both policy provisions and 
updated data sources when estimating burden. In Table 128, we summarize 
the incremental burden of the policy provisions for these ICRs.
BILLING CODE 4120-01-P

[[Page 98547]]

[GRAPHIC] [TIFF OMITTED] TR09DE24.198


[[Page 98548]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.199

BILLING CODE 4120-01-C
(2) Additional Impacts to Clinicians
    We provide additional burden discussions for policy provisions that 
we are not able to quantify.
(a) Impact on Third Party Intermediaries
    In section IV.A.4.j.(1)(b) of this rulemaking, we are finalizing 
our proposal that Consumer Assessment of Healthcare Providers & Systems 
(CAHPS) vendors will provide information on the range of costs for 
their services as part of CAHPS vendor registration process, beginning 
with the CY 2026 performance period/2028 MIPS payment year. This policy 
is in addition to the previously established registration requirements. 
We recognize that there may be additional minimal burden associated 
with the cost information requirement for the CAHPS vendor 
registration. However, we assume that this information is brief and 
readily available to vendors completing the registration process. We 
are unable to quantify the additional impact for the CAHPS vendor cost 
requirement.
(b) Modifications to the Improvement Activities Inventory
    As outlined in section IV.A.4.e.(3)(b)(iii) of this final rule, we 
are finalizing our proposed changes to the improvement activities 
inventory for the CY 2025 performance period/2027 MIPS payment year and 
future years as follows: adding two new improvement activities; 
modifying one existing improvement activity; and removing four 
previously adopted improvement activities. We are also finalizing, with 
modification, our proposed changes to the improvement activities 
inventory for the CY 2026 performance period/2028 MIPS payment year: 
removing four improvement activities; and modifying one improvement 
activity. We do not expect these changes to the improvement activities 
inventory to affect our currently approved information collection 
burden for the number of estimated respondents or response time. Most 
of the improvement activities in the Inventory remain unchanged for the 
CY 2025 performance period/2027 MIPS payment year. We refer readers to 
section IV.A.4.e.(3)(b)(iii). of this final rule for additional 
information on changes to the improvement activities inventory.
(c) Modifications to Improvement Activities Scoring and Reporting 
Policies
    As discussed in section IV.A.4.e.(3)(b)(iv), we are finalizing two 
scoring and reporting policy changes for the improvement activities 
performance category effective for the CY 2025 performance period/2027 
MIPS payment year and subsequent years. As noted in section V.B.6.e. of 
this final rule, we established our currently approved estimate that it 
will take a computer analyst 5 minutes to log in and manually attest 
that improvement activities were completed in the CY 2019 PFS final 
rule (83 FR 60016). In the CY 2024 PFS final rule (88 FR 79454 and 
79455), this estimate included scenarios where MIPS eligible clinicians 
might submit 1, 2, 3, or 4 activities for the improvement activities 
category, based on medium- or high-weighted activities and any 
additional scoring scenarios such as for MIPs Value Pathways (MVP) 
participants. We believe this policy will decrease burden for MIPS 
eligible clinicians who previously reported medium-weighted activities. 
As MIPS eligible clinicians who previously only reported high-weighted 
activities will have the same attestation requirements under this 
policy, we will continue our currently approve estimates of 5 minutes 
per response. We expect reduced reporting burden for clinicians who 
previously reported at least one medium-weighted activity; however, we 
are unable to estimate the aggregated impact of this policy given the 
current weighting and scoring rules that affect the number of 
activities each clinician submits to receive full credit for the 
improvement activities performance category.
(d) MVP Maintenance Process
    In section IV.A.4.a of this final rule, we are finalizing a 
modification to the public-facing MVP maintenance webinar process 
previously established in the CY 2022 PFS final rule (86 FR 65410) and 
modified in the CY 2023 PFS final rule (87 FR 70037). We had 
communicated in the CY 2023 PFS final rule that if we identified any 
potentially feasible and appropriate submitted maintenance 
recommendations that we would host a public facing webinar open to 
interested parties and the general public through which they could 
offer their feedback on the potential maintenance updates we have 
identified.
    Due to the low volume of submitted maintenance recommendations in 
past years, we are finalizing changes to provide us more flexibility in 
how we communicate maintenance recommendations prior to proposing them 
in rulemaking. Allowing flexibility in communicating recommendations 
through alternative webinar formats or other public communication 
channels will offer similar opportunities for public review and 
feedback as a live public webinar. For example, in lieu of a live 
webinar, we may choose to communicate submitted maintenance 
recommendations via a pre-recorded webinar, which will encourage 
interested parties to submit their feedback on the submitted 
recommendations in writing by email before maintenance updates are 
formally proposed in rulemaking.
    As with the CY 2023 PFS final rule (87 FR 70210 through 70211), we 
acknowledge that there is administrative burden associated with the 
monitoring and review of the candidate MVPs. We are uncertain on the 
number of interested parties and members of the general public that 
will submit their recommendations for potential revisions to 
established MVPs for an applicable performance period. We are also 
uncertain if we will host a public webinar, webinar alternative, or 
other communications based on the review of the recommendations. In 
summary, we are unable to quantify the impact associated with these 
finalized changes.
(e) Reweighting Performance Categories When Data Is Not Submitted Due 
to Reasons Outside the Clinician's Control
    As detailed in section IV.A.4.i.(2) of this final rule, we are 
finalizing our proposal to adopt a new reweighting performance 
category(ies) policy at

[[Page 98549]]

Sec.  414.1380(c)(2)(i)(A)(10) and (c)(2)(i)(C)(12) for occurrences 
where we determine that a third party intermediary did not submit the 
data for the performance category(ies) on behalf of the MIPS eligible 
clinician in accordance with applicable deadlines. For more details on 
this proposal and the considerations when determining whether to apply 
reweighting to the affected performance category(ies), please see 
section IV.A.4.i.(2) of this final rule.
    Because this is a new policy and we believe these occurrences will 
be rare based on our experience, we are unable to estimate the number 
of clinicians, groups, or third party intermediaries that may apply for 
reweighting based on this policy. Similarly, the extent and source of 
documentation provided to us for each event may vary considerably. 
Therefore, we did not make any changes to our currently approved burden 
estimates as a result of this policy.
(f) Advanced Primary Care Management
    Advanced Primary Care Management (APCM) payment finalized in 
section II.G.2 of this final rule incorporates several specific, 
existing care management and communication technology-based services 
into a bundle and includes performance measurement requirements that, 
for MIPS eligible clinicians, could be met by reporting the Value in 
Primary Care MVP beginning in the CY 2025 performance period/2027 MIPS 
payment year. Billing practitioners who are not MIPS eligible 
clinicians (as defined at Sec.  414.1305) will not have to report the 
MVP in order to furnish and bill for APCM services. Billing 
practitioners who are not MIPS eligible clinicians (as defined at Sec.  
414.1305) will not have to report the MVP in order to furnish and bill 
for APCM services. For details on this policy, we refer readers to 
section II.G.2. of this final rule.
    Absent data on these codes, we are unable to estimate the effect of 
this policy on MVP submissions and registrations for the CY 2025 
performance period/2027 MIPS payment year. As outlined in section 
V.B.6.c.5.(a) of this final rule, we are unable to determine how many 
additional clinicians or practices will submit the Value in Primary 
Care MVP measures for the CY 2025 performance period/2027 MIPS payment 
year above our current estimates. Similarly, we cannot assess what 
participation levels clinicians or practices who might use these APCM 
codes have reported MIPS in the past (for example, eligibility 
requirements and special statuses, participation at the individual, 
group, virtual group, or Alternative Payment Model (APM) Entity level, 
or reporting via traditional MIPS, the APM Performance Pathway (APP), 
or MVPs), or if they will be MIPS eligible clinicians in future years. 
For MIPS eligible clinicians who move from reporting traditional MIPS 
to MVPs, we expect a decrease in overall program burden due to the 
reduced number of measures required for reporting the quality 
performance category. We will update these assumptions for MVP quality 
performance category reporting and MVP registration as more information 
is available.
(g) Mandatory Subgroup Registration
    As summarized in section IV.A.3. of this final rule, we previously 
established a voluntary subgroup participation option for clinicians 
choosing to report an MVP beginning in the CY 2023 performance period/
2025 MIPS payment year. We finalized a mandatory subgroup reporting 
requirement for multispecialty groups choosing to report as an MVP 
Participant beginning in the CY 2026 performance period/2028 MIPS 
payment year (Sec.  414.1305; 86 FR 65394 through 65397). The CY 2025 
PFS proposed rule (89 FR 62016) included a Request for Information 
(RFI) to obtain feedback on what guidance/parameters are needed for 
multispecialty groups to place clinicians into subgroups for reporting 
an MVP relevant to the scope of care provided. Absent available 
submission data on MVP and subgroup reporting as outlined in section 
V.B.6.c.(5)(a)(ii), we are unable to estimate the effect of this 
established policy on reporting for the CY 2026 performance period/2028 
MIPS payment year.
(h) APM Performance Pathway Plus Quality Measure Set
    In section IV.A.4.c.(2) of this final rule, we are finalizing, with 
modification, the proposal to establish the quality measures included 
in APP Plus quality measure set beginning in the CY 2025 performance 
period/2027 MIPS payment year. MIPS eligible clinicians, groups, and 
APM Entities reporting the APP Plus quality measure set will report via 
one of the available collection types per measure: six quality measures 
for the CY 2025 performance period/2027 MIPS payment year; eight 
quality measures for the CY 2026 performance period/2028 MIPS payment 
year; and nine quality measures for the CY 2027 performance period/2029 
MIPS payment year. Two additional measures will be added for the CY 
2028 performance period/2030 MIPS payment year or the next performance 
period following the availability of the eCQM specifications, whichever 
is later. For the available collection types per measure, please see 
section IV.A.4.c.(3)(f) of this final rule.
    In section V.B.6.a.(4) of this final rule, we compared the quality 
performance category burden for MIPS eligible clinicians who elect to 
report the APP Plus quality measure set compared to the APP quality 
measure set, traditional MIPS, and MVPs. We focused these analyses on 
quality measures required for MIPS eligible clinicians, groups, and APM 
Entities under the eCQM, MIPS CQMQCDR, and Medicare Part B claims 
collection types, as available for each participation option. We note 
these assumptions for actively submitting to assess clinician burden 
may differ from MIPS scoring policy. In this comparison, we assumed 
MIPS eligible clinicians incur no burden for administrative claims 
quality measures, specifically the two administrative claims quality 
measures required under the APP quality measure set (Quality #479 and 
#484), and that will be incrementally added to the APP Plus quality 
measure set (Quality #479 in CY 2025 performance period/2027 MIPS 
payment year and Quality #484 in CY 2026 performance period/2028 MIPS 
payment year). Additionally, burden estimates for the CAHPS for MIPS 
registration and patient reporting are provided in the CAHPS for MIPS 
PRA package under OMB control number 0938-1222 (CMS-10450); we do not 
assume that MIPS eligible clinicians, groups, and APM Entities incur 
additional reporting burden for reporting the CAHPS for MIPS quality 
measure under the APP quality measure set or as required under the APP 
Plus quality measure set beginning in the CY 2025 performance period/
2027 MIPS payment year. Therefore, MIPS eligible clinicians, groups, 
and APM Entities reporting the APP Plus quality measure set, beginning 
in the CY 2025 performance period/2027 MIPS payment year, will need to 
actively submit performance data for more MIPS quality measures than 
MIPS eligible clinicians, groups, and APM Entities reporting via the 
APP quality measure set. Compared to MVP reporting, MIPS eligible 
clinicians, groups, and APM Entities reporting the APP Plus quality 
measure set will need to actively submit performance data for the same 
number of quality measures for the CY 2025 performance period/2027 MIPS 
payment year, and more quality measures beginning with the CY 2026 
performance period/2028 MIPS

[[Page 98550]]

payment year. Compared to traditional MIPS reporting, MIPS eligible 
clinicians, groups, and APM Entities reporting the APP Plus quality 
measure set will need to actively submit performance data for fewer 
quality measures for the CY 2025 and the 2026 performance periods/2027 
and 2028 MIPS payment years, and the same number of quality measures 
for the CY 2027 performance period/2029 MIPS payment year. Once the 
final two quality measures are added to the APP Plus, for the CY 2028 
performance period/2030 MIPS payment year or the next performance 
period following the availability of the eCQM specifications, whichever 
is later, MIPS eligible clinicians, groups, and APM Entities reporting 
the APP Plus will actively submit performance data for more quality 
measures than MIPS eligible clinicians, groups, and APM Entities 
reporting traditional MIPS.
    As noted in the CY 2021 PFS final rule, one goal of the APP quality 
measure set was to reduce the burden of reporting quality measures 
twice: once to MIPS and once to their APMs. Therefore, clinicians 
reporting the APP quality measure set and APP Plus quality measure set 
who are required by their APMs to submit the same measure sets incur 
limited additional burden (88 FR 84862). We assume that all Shared 
Savings Program ACOs will report the APP via the APP Plus measure set 
for the CY 2025 performance period/2027 MIPS payment year. Per section 
1899(e) of the Act, submissions received from eligible clinicians in 
ACOs are not included in burden estimates for this final rule because 
quality data submissions to fulfill requirements of the Shared Savings 
Program are not subject to the PRA. As the APP Plus is a new and 
optional quality measure set for MIPS eligible clinicians, groups, and 
APM Entities (excluding Shared Savings Program ACOs) with greater 
reporting burden than the APP quality measure set and APM specific 
requirements may vary, we are unable to estimate how many individual 
MIPS eligible clinicians, groups, or APM Entities will submit quality 
measures via the APP Plus at this time. Our burden estimates currently 
assume MIPS eligible clinicians in APM Entities (excluding Shared 
Savings Program ACOs) will participate through traditional MIPS or 
MVPs, submitting as an individual or group rather than as an APM 
Entity. We will update these estimates and assumptions as additional 
data are available.
i. Assumptions & Limitations
    In our MIPS eligible clinician assumptions, we assumed that 
clinicians who elected to opt-in for the CY 2022 Quality Payment 
Program and submitted data will continue to elect to opt-in for the CY 
2025 performance period/2027 MIPS payment year.
    As discussed in section V.B.8. of this final rule, we are unable to 
predict which specific MIPS eligible clinicians will receive 
reweighting for one or more performance categories under policies at 
Sec.  414.1380(c)(2) in the CY 2025 performance period/2027 MIPS 
payment rear. On this basis, we assumed that those MIPS eligible 
clinicians for whom we approved reweighting of one or more performance 
categories under our policies are representative of the number and 
attributes of MIPS eligible clinicians who will receive reweighting 
under these policies in the future.
    In addition to the limitations described throughout the methodology 
sections, to the extent that there are year-to-year changes in the data 
submission, volume, and mix of services provided by MIPS eligible 
clinicians, the actual impact on total Medicare revenues will be 
different from those shown in Table 120.

F. Alternatives Considered

    This final rule contains a range of policies, including some 
provisions related to specific statutory provisions. The preceding 
preamble provides descriptions of the statutory provisions that are 
addressed, identifies those policies when we exercise agency 
discretion, presents rationale for our policies, and, where relevant, 
alternatives that were considered. For purposes of the payment impact 
on PFS services of the policies contained in this final rule, we 
presented above the estimated impact on total allowed charges by 
specialty.
1. Alternatives Considered Related to Strategies for Improving Global 
Surgery Payment Accuracy
    As discussed previously and in section II.L. of this final rule, 
beginning for services furnished in 2025, we are finalizing our 
proposal to broaden the applicability of transfer of care modifier -54 
for 90-day global packages as proposed. Beginning with services 
furnished in CY 2025, modifier -54 is required for all 90-day global 
surgical packages in any case when a practitioner plans to furnish only 
the surgical procedure portion of the global package (including both 
formal and other transfers of care). We are not finalizing any changes 
regarding the use of modifier -55 and modifier -56 for CY 2025. 
Modifiers -55 and -56 will continue to be billed exclusively in cases 
where there is a documented formal transfer of care.
    Practitioners billing for a global package procedure code with 
modifier -54 and other practitioners in the same group practice as that 
practitioner will still be able to bill during the global period for 
any separately identifiable E/M services they furnish to the patient 
that are unrelated to the global package procedure. Additionally, we 
are finalizing a global surgical add-on code, HCPCS code G0559, which 
we expect will be billed during the post-operative period of 90 days 
following the procedure. We expect that this code will be billed once 
during that timeframe when the patient is seen for an office/outpatient 
(O/O) evaluation and management (E/M) visit that is related to the 
recent surgical procedure. We believe that this code will be billed by 
a physician or practitioner who is seeing the patient for a visit 
during the post-operative period and did not furnish the surgical 
procedure.
    As we were developing this proposal, we analyzed a few different 
policy options to best achieve our goal of improving the payment 
accuracy of the global packages. We considered whether to propose to 
revalue the 10 and 90-day global packages on the PFS utilizing our 
findings and data under the MACRA requirement to improve payment 
accuracy on the fee schedule, however we are precluded from doing so 
under MACRA. We also considered revaluing services specifically 
included in the RAND study,\941\ which looked at claims for which 
reporting of follow up visits was requested. We also considered 
proposing requiring separate billing, which would result in separate 
payments for the procedures and post operative visits in global 
packages, based on our current research and analysis of how 
practitioners may be furnishing care described by global packages. We 
considered this alternative policy as an initial step towards more 
accurately paying for global packages, specifically for services 
including high utilization global packages discussed in the RAND study. 
We also considered proposing revisions to all global surgical packages 
in a phased approach starting with the subset of packages described 
above and gradually revising other global packages over time, to manage

[[Page 98551]]

payment predictability and stability within the PFS, rec.
---------------------------------------------------------------------------

    \941\ Using Claims-Based Estimates of Post-Operative Visits to 
Revalue Procedures with 10- and 90-Day Global Periods; Updated 
Results Using Calendar Year 2019 Data.
---------------------------------------------------------------------------

2. Alternatives Considered Related to the Supervision of Outpatient 
Therapy Services in Private Practices
    As discussed in section II.H of this final rule, we proposed to 
allow for the general supervision of occupational therapy assistants 
(OTAs) and physical therapist assistants (PTAs), by OT's and PT's in 
private practice (OTPPs and PTPPs, respectively) who are enrolled as 
suppliers in Medicare. Currently, and since 2005, OTPPs and PTPPs are 
required to provide direct supervision of their OTAs and PTAs which 
requires the OTPP/PTPP to be immediately available to furnish 
assistance and direction throughout the performance of the procedure in 
the office suite or in the patient's home when Medicare patients are 
treated in order to bill for therapy services furnished by their 
supervised OTAs and PTAs.
    In developing our proposal to allow for general supervision in 
these private practice settings, we considered the possibility of 
allowing for virtual direct supervision by the OTPP/PTPP instead, as we 
have included OTPPs/PTPPs as ``supervising practitioners'' in the 
application of our virtual direct supervision policy since October 6, 
2021, which is now extended through CY 2024. Due to the private 
practice direct supervision regulatory requirement, when using virtual 
direct supervision, this means (per our clarification in the CY 2021 
PFS final rule (85 FR 84539)) that the OTPP or PTPP could meet the 
virtual direct supervision requirement by being immediately available 
to engage via audio/video technology (excluding audio-only), and would 
not require real-time presence or observation of the service via 
interactive audio and video technology throughout the performance of 
the service.
    However, if this alternative policy were selected, it will leave 
the direct supervision requirement in place for OTPPs and PTPPs and 
they will still have to be immediately available to engage via audio/
video technology and ensure their availability to do so. On the other 
hand, with general supervision, the OTPP's/PTPP's physical or virtual 
presence is not required when the OTA/PTA furnishes services, although 
the services continue to be furnished under their overall direction and 
control allowing the OTPP/PTPP, for example, to provide an evaluative 
service in the office while the OTA/PTA is off-site furnishing therapy 
services in a patient's home.
3. Alternatives Considered for the Quality Payment Program
    For purposes of the payment impact on the Quality Payment Program, 
we view the performance threshold as a critical factor affecting the 
distribution of payment adjustments. In section IV.A.4.g.(2)(c) of this 
final rule, we propose to set the performance threshold to 75 points 
for the CY 2025 MIPS performance period/CY 2027 MIPS payment year. 
Eighty-six (86) is a possible alternative value (mean of the CY 2019 
performance period/2021 MIPS payment year) which we did not propose. To 
assess this alternative value, we ran a separate RIA model with a 
performance threshold of 86. This model has the same mean and median 
final score as our policies RIA model since the alternative performance 
threshold which we are assessing in this model does not change the 
final score. In our analysis of the alternative performance threshold 
of 86, which we considered but did not propose, 55.98 percent of MIPS 
eligible clinicians who submitted data will receive a negative payment 
adjustment in the baseline and 45.08 percent of MIPS eligible 
clinicians who submit data will receive a negative adjustment in the 
policies model.
    We also reported the findings for the baseline RIA model which 
describes the impact for the CY 2025 performance period/2027 MIPS 
payment year if this proposal is not finalized. The baseline RIA model 
has a median final score of 82.20. We estimated that $517 million will 
be redistributed based on the budget neutrality requirement in the 
baseline model. The baseline includes a maximum payment adjustment of 
2.98 percent and 22.84 percent of MIPS eligible clinicians will receive 
a negative payment adjustment.

G. Impact on Beneficiaries

1. Medicare Shared Savings Program Provisions
    As noted previously in this final rule, the HEBA will mainly 
provide upwards adjustments to benchmarks for--and likely draw 
increased participation from--new ACOs with particular focus on 
coordinating care for beneficiaries in underserved communities. New 
ACOs of this type are therefore projected to ultimately increase 
assignment to the Shared Savings Program by roughly 500,000 
beneficiaries per year, ranging from 50,000 to 1.0 million at the low 
and high ends of this projection range.
    ACOs have been found to perform better on certain patient-
experience and performance measures than physician groups participating 
in the MIPS. In performance year 2023, ACOs scored better than 
comparable MIPS groups on all 3 eCQMs, and the difference was 
statistically significant for the Controlling High Blood Pressure 
measure (p <.001). ACOs also performed better than comparable MIPS 
groups on 8 of 10 patient experience survey measures that contribute to 
the Consumer Assessment of Healthcare Providers and Systems (CAHPS) for 
MIPS measure, and for 3 measures the difference was statistically 
significant (p <.05): Getting Timely Care, Appointments, and 
Information; How Well Providers Communicate; and Patient's Rating of 
Provider. ACOs showed statistically significant improvement relative to 
PY 2022 for 7 of 10 CMS Web Interface measures. We anticipate that ACOs 
will continue to improve the quality of care for their Medicare fee-
for-service beneficiaries through the reporting of Medicare CQMs, and 
that ACOs will continue to improve the quality of care for their all 
payer/all patient population through the reporting of eCQMs.
    Increased participation in the Shared Savings Program will extend 
ACO care coordination and quality improvement to segments of the 
beneficiary population that potentially have more to benefit from care 
management.
2. Quality Payment Program
    There are several changes in this final rule that are expected to 
have a positive effect on beneficiaries. In general, we believe that 
many of these changes, including the MVP and subgroup provisions, if 
finalized, will lead to meaningful feedback to beneficiaries on the 
type and scope of care provided by clinicians. Additionally, 
beneficiaries could use the publicly reported information on clinician 
performance in subgroups to identify and choose clinicians in 
multispecialty groups relevant to their care needs. Consequently, we 
anticipate the policies in this final rule will improve the quality and 
value of care provided to Medicare beneficiaries. For example, several 
of the new quality measures include patient-reported outcome-based 
measures, which could be used to help patients make more informed 
decisions about treatment options. Patient-reported outcome-based 
measures provide information on a patient's health status from the 
patient's point of view and could also provide valuable insights on 
factors such as quality of life, functional status, and overall disease 
experience, which would not otherwise be available through routine 
clinical data collection. Patient-reported outcome-based measured are 
factors

[[Page 98552]]

frequently of interest to patients when making decisions about 
treatment.

H. Estimating Regulatory Familiarization Costs

    If regulations impose administrative costs on private entities, 
such as the time needed to read and interpret this rulemaking, we 
should estimate the cost associated with regulatory review. Due to the 
uncertainty involved with accurately quantifying the number of entities 
that will review the rule, we assume that the total number of unique 
commenters on this year's rule will be the number of reviewers of this 
year's proposed rule. We acknowledged that this assumption may 
understate or overstate the costs of reviewing this rulemaking. It is 
possible that not all commenters will review this year's rule in 
detail, and it is also possible that some reviewers will choose not to 
comment on the final rule. For these reasons, we believe that the 
number of commenters will be a fair estimate of the number of reviewers 
of this year's final rule.
    We also recognized that different types of entities are in many 
cases affected by mutually exclusive sections of this final rule, and 
therefore for the purposes of our estimate we assume that each reviewer 
reads approximately 50 percent of the rulemaking.
    Using the wage information from the BLS for medical and health 
service managers (Code 11-9111), we estimated that the cost of 
reviewing this rulemaking is $129.28, including overhead and fringe 
benefits https://www.bls.gov/oes/current/oes_nat.htm. Assuming an 
average reading speed, we estimate that it would take approximately 8.0 
hours for the staff to review half of this final rule. For each 
facility that reviews the rule, the estimated cost is $1,034.24 (8.0 
hours x $129.28). Therefore, we estimated that the total cost of 
reviewing this regulation is $7,218,995 ($1,034.24 x 6,980 reviewers on 
this year's final rule).
    As for the Medicare Diabetes Prevention Program, given that we 
tried to align this rulemaking as much as possible with the CDC DPRP 
Standards, there should be minimal regulatory familiarization costs. 
This rulemaking impacts only enrolled MDPP suppliers and eligible 
beneficiaries who have started MDPP or are interested in enrolling in 
MDPP.

I. Accounting Statement

    As required by OMB Circular A-4 (available at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf), in Tables 129 through 131 (Accounting 
Statements), we have prepared an accounting statement. This estimate 
includes growth in incurred benefits from CY 2024 to CY 2025 based on 
the FY 2025 President's Budget baseline.
[GRAPHIC] [TIFF OMITTED] TR09DE24.200

[GRAPHIC] [TIFF OMITTED] TR09DE24.201

[GRAPHIC] [TIFF OMITTED] TR09DE24.202


[[Page 98553]]



J. Conclusion

    The analysis in the previous sections, together with the remainder 
of this preamble, provided an initial Regulatory Flexibility Analysis. 
The previous analysis, together with the preceding portion of this 
preamble, provides an RIA. In accordance with the provisions of 
Executive Order 12866, this regulation was reviewed by the Office of 
Management and Budget.
    Chiquita Brooks-LaSure, Administrator of the Centers for Medicare & 
Medicaid Services, approved this document on October 28, 2024.

List of Subjects

42 CFR Part 401

    Claims, Freedom of information, Health facilities, Medicare, 
Privacy.

42 CFR Part 405

    Administrative practice and procedure, Diseases, Health facilities, 
Health professions, Medical devices, Medicare, Reporting and 
recordkeeping requirements, Rural areas, and X-rays.

42 CFR Part 410

    Diseases, Health facilities, Health professions, Laboratories, 
Medicare, Reporting and recordkeeping requirements, Rural areas, X-
rays.

42 CFR Part 411

    Diseases, Medicare, Reporting and recordkeeping requirements.

42 CFR Part 414

    Administrative practice and procedure, Biologics, Diseases, Drugs, 
Health facilities, Health professions, Medicare, Reporting and 
recordkeeping requirements.

42 CFR Part 422

    Administrative practice and procedure, Health facilities, Health 
maintenance organizations (HMO), Medicare, Penalties, Privacy, 
Reporting and recordkeeping requirements.

42 CFR Part 423

    Administrative practice and procedure, Emergency medical services, 
Health facilities, Health maintenance organizations (HMO), Health 
professionals, Medicare, Penalties, Privacy, Reporting and 
recordkeeping requirements.

42 CFR Part 424

    Emergency medical services, Health facilities, Health professions, 
Medicare, Reporting and recordkeeping requirements.

42 CFR Part 425

    Administrative practice and procedure, Health facilities, Health 
professions, Medicare, Reporting and recordkeeping requirements.

42 CFR Part 427

    Administrative practice and procedure, Biologics, Inflation 
rebates, Medicare, Prescription drugs.

42 CFR Part 428

    Administrative practice and procedure, Biologics, Inflation 
rebates, Medicare, Prescription drugs.

42 CFR Part 491

    Grant programs-health, Health facilities, Medicaid, Medicare, 
Reporting and recordkeeping requirements, Rural areas.

    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services amends 42 CFR chapter IV as set forth below:

PART 401--GENERAL ADMINISTRATIVE REQUIREMENTS

0
1. The authority citation for part 401 is revised to read as follows:

    Authority: 42 U.S.C. 1302, 1395hh, 1395w-5, and 1395kk-2.

0
2. Section 401.305 is amended by revising paragraphs (a)(2), (b)(1) 
introductory text and (b)(2) introductory text and adding paragraph 
(b)(3) to read as follows:


Sec.  401.305  Requirements for reporting and returning of 
overpayments.

    (a) * * *
    (2) A person has identified an overpayment when the person 
knowingly receives or retains an overpayment. The term ``knowingly'' 
has the meaning set forth in 31 U.S.C. 3729(b)(1)(A).
    (b) * * *
    (1) Except as provided in paragraphs (b)(2) and (3) of this 
section, a person who has received an overpayment must report and 
return the overpayment by the later of either of the following:
* * * * *
    (2) The deadline for returning overpayments will be suspended (or 
will continue to be suspended following the completion of a timely, 
good faith investigation in accordance with paragraph (b)(3) of this 
section) when any of the following occurs:
* * * * *
    (3)(i) The deadline for reporting and returning overpayments will 
be suspended when both of the following occurs:
    (A) A person has identified an overpayment but has not yet 
completed a good-faith investigation to determine the existence of 
related overpayments that may arise from the same or similar cause or 
reason as the initially identified overpayment; and
    (B) The person conducts a timely, good-faith investigation to 
determine whether related overpayments exist.
    (ii) If the conditions of paragraph (b)(3)(i) of this section are 
satisfied, the deadline for reporting and returning the initially 
identified overpayment and related overpayments that arise from the 
same or similar cause or reason as the initially identified overpayment 
will remain suspended until the earlier of:
    (A) The date that the investigation of related overpayments has 
concluded and the aggregate amount of the initially identified 
overpayments and related overpayments is calculated; or
    (B) The date that is 180 days after the date on which the initial 
identified overpayment was identified.
* * * * *

PART 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED

0
3. The authority citation for part 405 continues to read as follows:

    Authority: 42 U.S.C. 263a, 405(a), 1302, 1320b-12, 1395x, 
1395y(a), 1395ff, 1395hh, 1395kk, 1395rr, and 1395ww(k).

0
4. Section 405.2410 is amended by revising paragraphs (c)(1) and (2) to 
read as follows:


Sec.  405.2410  Application of Part B deductible and coinsurance.

* * * * *
    (c) * * *
    (1) For RHCs, the coinsurance amount is determined as described in 
paragraph (b)(1) of this section; or
    (2) For FQHCs, the coinsurance amount is 20 percent of the lesser 
of--
    (i) The FQHC's actual charge; or
    (ii) The payment determined under Sec.  405.2462(j)(2).

0
5. Section 405.2462 is amended by--
0
a. In paragraphs (f) heading, (f)(1) introductory text, (f)(2), and 
(g)(1)(ii), removing ``grandfathered'' and adding in its place 
``historically excepted''; and
0
b. Revising and republishing paragraph (j).
    The revisions and republications read as follows:


Sec.  405.2462  Payment for RHC and FQHC services.

* * * * *
    (j) Payment amount for intensive outpatient services. (1) An RHC is 
paid the payment rate determined under Sec.  419.21(a) of this chapter 
for services described under Sec.  410.44 of this chapter. There are no 
adjustments to this rate.

[[Page 98554]]

    (i) If the deductible has been fully met by the beneficiary prior 
to the RHC service, Medicare pays eighty (80) percent of the payment 
amount determined under this paragraph (j)(1).
    (ii) If the deductible has not been fully met by the beneficiary 
prior to the RHC service, Medicare pays eighty (80) percent of the 
difference between the remaining deductible and the payment amount 
determined under this paragraph (j)(1); or
    (iii) If the deductible has not been fully met by the beneficiary 
prior to the RHC service, no payment is made to the RHC if the 
deductible is equal to or exceeds the payment amount determined under 
this paragraph (j)(1).
    (2) FQHCs are paid the payment rate determined under Sec.  
419.21(a) of this chapter for services described under Sec.  410.44 of 
this chapter. There are no adjustments to this rate, except that 
historically excepted tribal FQHCs are paid pursuant to paragraph 
(j)(2)(ii) of this section.
    (i) Medicare pays eighty (80) percent of the lesser of the FQHC's 
actual charge or the payment rate determined under paragraph (j)(1)(ii) 
of this section; or
    (ii) Medicare pays eighty (80) percent of the lesser of a 
historically excepted tribal FQHC's actual charge or the amount 
described under paragraphs (f)(2) and (3) of this section.
    (iii) No deductible is applicable to FQHC services.

0
6. Section 405.2463 is amended by revising paragraphs (b)(3) 
introductory text and paragraph (c)(4) introductory text to read as 
follows:


Sec.  405.2463  What constitutes a visit.

* * * * *
    (b) * * *
    (3) Visit-Mental health. A mental health visit is a face-to-face 
encounter or an encounter furnished using interactive, real-time, audio 
and video telecommunications technology or audio-only interactions in 
cases where the patient is not capable of, or does not consent to, the 
use of video technology for the purposes of diagnosis, evaluation or 
treatment of a mental health disorder, including an in-person mental 
health service, beginning January 1, 2026, furnished within 6 months 
prior to the furnishing of the telecommunications service and that an 
in-person mental health service (without the use of telecommunications 
technology) must be provided at least every 12 months while the 
beneficiary is receiving services furnished via telecommunications 
technology for diagnosis, evaluation, or treatment of mental health 
disorders, unless, for a particular 12-month period, the physician or 
practitioner and patient agree that the risks and burdens outweigh the 
benefits associated with furnishing the in-person item or service, and 
the practitioner documents the reasons for this decision in the 
patient's medical record, between an RHC or FQHC patient and one of the 
following:
* * * * *
    (c) * * *
    (4) For FQHCs billing under PPS, and historically excepted tribal 
FQHCs that are authorized to bill as a FQHC at the outpatient per visit 
rate for Medicare as set annually by the Indian Health Service--
* * * * *

0
7. Section 405.2464 is amended by revising paragraphs (c) and (d) and 
adding paragraphs (g) and (h) to read as follows:


Sec.  405.2464  Payment rate.

* * * * *
    (c) Payment for care coordination services. RHCs and FQHCs are paid 
for the non-face-to-face care management work involved in coordinating 
care.
    (1) For Chronic Care Management (CCM) services furnished between 
January 1, 2016, and December 31, 2017, payment to RHCs and FQHCs is 
based on the physician fee schedule national non-facility payment rate.
    (2) For psychiatric collaborative care model (CoCM) services 
furnished on or after January 1, 2018, payment is based on the average 
of the national non-facility PFS payment rate set for each psychiatric 
CoCM service and updated annually based on the PFS amounts.
    (3) For CCM and general Behavioral Health Integration (BHI) 
services furnished between January 1, 2018, and December 31, 2020, 
payment is based on the average of the national non-facility PFS 
payment rate set for each CCM and general BHI service and updated 
annually based on the PFS amounts.
    (4) For CCM, general BHI, and Principal Care Management (PCM) 
services furnished between January 1, 2021, and December 31, 2022, 
payment is based on the average of the national non-facility PFS 
payment rate set for each CCM, general BHI, and PCM service and updated 
annually based on the PFS amounts.
    (5) For CCM, general BHI, PCM, Chronic Pain Management (CPM) 
services furnished between January 1, 2023, and December 31, 2023, 
payment is based on the average of the national non-facility PFS 
payment rate set for each CCM, general BHI, PCM and CPM service and 
updated annually based on the PFS amounts.
    (6) For CCM, general BHI, PCM, CPM, Remote Physiologic Monitoring 
(RPM), Remote Therapeutic Monitoring (RTM), Community Health 
Integration (CHI), Principal Illness Navigation (PIN), and PIN--Peer 
Support services furnished between January 1, 2024, and December 31, 
2024, the payment amount is based on a weighted average of each CCM, 
general BHI, PCM, CPM, RPM, RTM, CHI, PIN, and PIN--Peer Support 
service using the most recently available PFS utilization data.
    (7) For CCM, general BHI, PCM, CPM, RPM, RTM, CHI, PIN, PIN--Peer 
Support, and Advance Primary Care Management services furnished on or 
after January 1, 2025, payment is based on the PFS national non-
facility payment rate.
    (d) Payment for FQHCs that are authorized to bill as historically 
excepted tribal FQHCs. Historically excepted tribal FQHCs are paid at 
the outpatient per visit rate for Medicare as set annually by the 
Indian Health Service for each beneficiary visit for covered services. 
There are no adjustments to this rate.
* * * * *
    (g) Payment for non-behavioral health telecommunication technology 
services. For an encounter furnished using interactive, real-time, 
audio and video telecommunications technology or for certain audio-only 
interactions in cases where the patient is not capable of, or does not 
consent to, the use of video technology services that are not described 
in Sec.  405.2463(b)(3), payment to RHCs and FQHCs are subject to the 
national average payment rates for comparable services under the 
physician fee schedule (PFS) and costs associated with these services 
shall not be used in determining payments under the RHC all-inclusive 
rate or the FQHC prospective payment system.
    (h) Payment for drugs covered as additional preventive services 
(DCAPS). For drugs covered as additional preventive services, as 
defined at Sec.  410.64 of this subchapter, and for the administration 
and supplying fees for those drugs, payment to RHCs or FQHCs is 100 
percent of the Medicare payment amount per Sec.  405.2410(b) and Sec.  
410.152(l)(11) of this chapter, subject to the payment limitations 
described at Sec.  410.152(o) of this chapter.

0
8. Section 405.2466 is amended by revising paragraph (b)(1)(iv) to read 
as follows:


Sec.  405.2466  Annual reconciliation.

* * * * *
    (b) * * *
    (1) * * *
    (iv) For RHCs and FQHCs, payment for pneumococcal, influenza, 
hepatitis B

[[Page 98555]]

and COVID-19 vaccine and their administration is 100 percent of 
Medicare reasonable cost.
* * * * *


Sec.  405.2469  [Amended]

0
9. Section 405.2469 is amended in paragraph (a)(2) by removing 
``grandfathered'' and adding in its place ``historically excepted''.

PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS

0
10. The authority citation for part 410 continues to read as follows:

    Authority:  42 U.S.C. 1302, 1395m, 1395hh, 1395rr, and 1395ddd.


0
11. Section 410.26 is amended by revising paragraph (a)(2) to read as 
follows:


Sec.  410.26  Services and supplies incident to a physician's 
professional services: Conditions.

    (a) * * *
    (2) Direct supervision means, except as provided in paragraphs 
(a)(2)(i) and (ii) of this section, the level of supervision by the 
physician (or other practitioner) of auxiliary personnel as defined in 
Sec.  410.32(b)(3)(ii). For the following services furnished after 
December 31, 2025, 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):
    (i) Services furnished incident to the services of a physician or 
other practitioner when provided by auxiliary personnel employed by the 
billing practitioner and working under their direct supervision and for 
which the underlying Healthcare Common Procedure Coding System (HCPCS) 
code has been assigned a PC/TC indicator of `5'.
    (ii) Office or other outpatient visits for the evaluation and 
management of an established patient that may not require the presence 
of a physician or other qualified health care practitioner.
* * * * *

0
12. Section 410.30 is amended by revising paragraph (a) to read as 
follows:


Sec.  410.30  Prescription drugs used in immunosuppressive therapy.

    (a) Scope. Payment may be made for prescription drugs used in 
immunosuppressive therapy that meet one of the following conditions:
    (1) The drug has been approved for marketing by the FDA and--
    (i) The approved labeling includes an indication for preventing or 
treating the rejection of a transplanted organ or tissue; or
    (ii) The approved labeling includes the indication for use in 
conjunction with immunosuppressive drugs to prevent or treat rejection 
of a transplanted organ or tissue.
    (2) The drug has been approved for marketing by FDA and determined 
by a Medicare Administrative Contractor (MAC) (in accordance with part 
421, subpart C, of this chapter), in processing a Medicare claim, to be 
reasonable and necessary for the specific purpose of preventing or 
treating the rejection of a patient's transplanted organ or tissue, or 
for use in conjunction with immunosuppressive drugs for the purpose of 
preventing or treating the rejection of a patient's transplanted organ 
or tissue. (In making these determinations, the MACs may consider 
factors such as authoritative drug compendia, current medical 
literature, recognized standards of medical practice, and professional 
medical publications.)
    (3) The drug is a compounded formulation with active ingredients 
derived only from a drug described in paragraph (a)(1) or (2) of this 
section and is orally or enterally administered.
* * * * *

0
13. Section 410.32 is amended by revising paragraph (b)(3)(ii) to read 
as follows:


Sec.  410.32  Diagnostic x-ray tests, diagnostic laboratory tests, and 
other diagnostic tests: Conditions.

* * * * *
    (b) * * *
    (3) * * *
    (ii) Direct supervision in the office setting means that the 
physician (or other supervising practitioner) must be present in the 
office suite 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. Through December 31, 2025, 
the presence of the physician (or other practitioner) includes virtual 
presence through audio/video real-time communications technology 
(excluding audio-only).
* * * * *

0
14. Section 410.37 is amended by--
0
a. In paragraph (a)(1)(iv), removing the text ``barium enemas'' and 
adding in its place ``computed tomography colonography'';
0
b. Revising paragraph (a)(4);
0
c. In paragraph (e)(2), removing the text ``barium enema'' and adding 
in its place ``computed tomography colonography'';
0
d. In paragraph (g)(2), removing the text ``barium enema'' and adding 
in its place ``computed tomography colonography'';
0
e. Revising paragraphs (h), (i), and (k).
    The revisions read as follows:


Sec.  410.37  Colorectal cancer screening tests: Conditions for and 
limitations on coverage.

* * * * *
    (a) * * *
    (4) Screening computed tomography colonography means a test that 
uses X-rays and computers to produce images of the entire colon 
(including image processing and a physician's interpretation of the 
results of the procedure).
* * * * *
    (h) Conditions for coverage of screening computed tomography 
colonography. Medicare Part B pays for a screening computed tomography 
colonography if it is ordered in writing by the beneficiary's attending 
physician who is a doctor of medicine or osteopathy (as defined in 
section 1861(r)(1) of the Act); or by a physician assistant, nurse 
practitioner, or clinical nurse specialist (as defined in section 
1861(aa)(5) of the Act).
    (i) Limitations on coverage of screening computed tomography 
colonography. (1) In the case of an individual age 45 or over who is 
not at high risk of colorectal cancer, payment may be made for a 
screening computed tomography colonography performed after at least 59 
months have passed following the month in which the last screening 
computed tomography colonography was performed or 47 months have passed 
following the month in which the last screening flexible sigmoidoscopy 
or screening colonoscopy was performed.
    (2) In the case of an individual who is at high risk for colorectal 
cancer, payment may be made for a screening computed tomography 
colonography performed after at least 23 months have passed following 
the month in which the last screening computed tomography colonography 
or the last screening colonoscopy was performed.
* * * * *
    (k) A complete colorectal cancer screening. Effective January 1, 
2025, colorectal cancer screening tests include a follow-on screening 
colonoscopy after a Medicare covered non-invasive stool-based 
colorectal cancer screening test or blood-based biomarker colorectal 
cancer screening test returns a positive result. A follow-on screening 
colonoscopy in the context of a complete colorectal

[[Page 98556]]

cancer screening is not subject to the frequency limitations for 
colorectal cancer screening in paragraphs (g)(2) or (3) of this 
section.

0
15. Section 410.59 is amended by revising paragraphs (a)(3)(ii) and 
(c)(2) to read as follows:


Sec.  410.59  Outpatient occupational therapy services: Conditions.

    (a) * * *
    (3) * * *
    (ii) By, or under the general supervision (or as specified 
otherwise) of, an occupational therapist in private practice as 
described in paragraph (c) of this section; or
* * * * *
    (c) * * *
    (2) Supervision of occupational therapy services. Except as 
otherwise provided in this paragraph (c)(2), occupational therapy 
services are performed by, or under the general supervision of, an 
occupational therapist in private practice. All services not performed 
personally by the therapist must be performed by employees of the 
practice, generally supervised by the therapist, and included in the 
fee for the therapist's services. Occupational therapy services may be 
performed by an occupational therapy assistant under the general 
supervision of the occupational therapist in private practice; services 
performed by an unenrolled occupational therapist must be under the 
direct supervision of the occupational therapist.
* * * * *

0
16. Section 410.60 is amended by revising paragraphs (a)(3)(ii) and 
(c)(2) to read as follows:


Sec.  410.60  Outpatient physical therapy services: Conditions.

    (a) * * *
    (3) * * *
    (ii) By, or under the general supervision (or as specified 
otherwise) of, a physical therapist in private practice as described in 
paragraph (c) of this section; or
* * * * *
    (c) * * *
    (2) Supervision of physical therapy services. Except as otherwise 
provided in this paragraph (c)(2), physical therapy services are 
performed by, or under the general supervision of, a physical therapist 
in private practice. All services not performed personally by the 
therapist must be performed by employees of the practice, generally 
supervised by the therapist, and included in the fee for the 
therapist's services. Physical therapy services may be performed by a 
physical therapist assistant under the general supervision of the 
physical therapist in private practice; services performed by an 
unenrolled physical therapist must be under the direct supervision of 
the physical therapist.
* * * * *

0
17. Section 410.63 is amended by--
0
a. Revising paragraph (a) introductory text;
0
b. Removing the word ``and'' at the end of paragraph (a)(2)(ii);
0
c. Removing the period at the end of paragraph (a)(2)(iii) and adding 
in its place ``; and'';
0
d. Adding paragraph (a)(2)(iv); and
0
e. Revising paragraphs (b) and (c)(1).
    The revisions and addition read as follows:


Sec.  410.63  Hepatitis B vaccine and blood clotting factors: 
Conditions.

* * * * *
    (a) Hepatitis B vaccine: Conditions. Effective January 1, 2025, 
hepatitis B vaccinations are reasonable and necessary for the 
prevention of illness for those individuals who are at high or 
intermediate risk of contracting hepatitis B as listed in paragraphs 
(a)(1) through (3) of this section:
* * * * *
    (2) * * *
    (iv) Individuals who have not previously received a completed 
hepatitis B vaccination series or whose previous vaccination history is 
unknown.
* * * * *
    (b) Blood clotting factors: Conditions. Effective July 18, 1984, 
blood clotting factors that are self-administered and control bleeding 
for hemophilia patients competent to use these factors without medical 
or other supervision, and items related to the administration of those 
factors. Therapies that enable the body to produce clotting factor and 
do not directly integrate into the coagulation cascade are not 
themselves clotting factors. The amount of clotting factors covered 
under this provision is determined by the carrier based on the 
historical utilization pattern or profile developed by the carrier for 
each patient, and based on consideration of the need for a reasonable 
reserve supply to be kept in the home in the event of emergency or 
unforeseen circumstance.
    (c) * * *
    (1) Effective January 1, 2005, a furnishing fee of $0.14 per unit 
of clotting factor is paid to entities that furnish blood clotting 
factors, as described in paragraph (b) of this section, unless the 
costs associated with furnishing the clotting factor are paid through 
another payment system, for example, hospitals that furnish clotting 
factor to patients during a Part A covered inpatient hospital stay, or 
practitioners that furnish clotting factor to patients in an outpatient 
setting and are paid for under the Physician Fee Schedule.
* * * * *

0
18. Section 410.67 is amended by--
0
a. In paragraph (b), in the definition of ``Opioid use disorder 
treatment service,'' by:
0
(i) Revising paragraphs (vi) and (vii); and
0
(ii) Adding paragraphs (x) and (xi);
0
b. Adding paragraphs (d)(4)(i)(G) and (H); and
0
c. Revising paragraphs (d)(4)(ii) and (iii).
    The revisions and additions read as follows:


Sec.  410.67  Medicare coverage and payment of Opioid use disorder 
treatment services furnished by Opioid treatment programs.

* * * * *
    (b) * * *
    Opioid use disorder treatment service * * *
    (vi) Intake activities, including initial medical examination 
services required under Sec.  8.12(f)(2) of this title and initial 
assessment services required under Sec.  8.12(f)(4) of this title.
    (A) For intake activities furnished via communications technology, 
the following flexibilities apply:
    (1) Services to initiate treatment with buprenorphine may be 
furnished via two-way interactive audio-video communication technology, 
as clinically appropriate, and in compliance with all applicable 
requirements. In cases where audio-video communications technology is 
not available to the beneficiary, services to initiate treatment with 
buprenorphine may be furnished using audio-only telephone calls if all 
other applicable requirements are met.
    (2) Services to initiate treatment with methadone may be furnished 
via two-way interactive audio-video communication technology, as 
clinically appropriate, and in compliance with all applicable 
requirements, if the OTP practitioner determines that an adequate 
evaluation of the patient can be accomplished through audio-video 
communication technology.
    (B) [Reserved]
    (vii) Periodic assessment services required under Sec.  8.12(f)(4) 
of this title, that are furnished during a face-to-face encounter, 
including services furnished via two-way interactive audio-video 
communication technology, as clinically appropriate, and in compliance 
with all

[[Page 98557]]

applicable requirements. In cases where a beneficiary does not have 
access to two-way audio-video communications technology, periodic 
assessments can be furnished using audio-only telephone calls if all 
other applicable requirements are met.
* * * * *
    (x) Coordinated care and/or referral services, provided by an OTP 
to link a beneficiary with community resources to address unmet health-
related social needs or the need and interest for harm reduction 
interventions and recovery support services that significantly limit 
the ability to diagnose or treat a patient's opioid use disorder.
    (xi) Patient navigational services and/or peer recovery support 
services, when provided directly by an OTP or through referral, in 
order to assist patients with an OUD in navigating the health system 
and accessing supportive services, and/or to provide support in meeting 
patient-driven OUD treatment and recovery goals.
* * * * *
    (d) * * *
    (4) * * *
    (i) * * *
    (G) Coordinated care and/or referral services described in 
paragraph (x) of the definition of opioid use disorder treatment 
service in paragraph (b) of this section, an adjustment will be made 
when each additional 30 minutes of these services are furnished.
    (H) Patient navigational services and/or peer recovery support 
services described in paragraph (xi) of the definition of opioid use 
disorder treatment service in paragraph (b) of this section, an 
adjustment will be made when each additional 30 minutes of these 
services are furnished.
    (ii) The payment amounts for the non-drug component of the bundled 
payment for an episode of care, the adjustments for counseling or 
therapy, intake activities, periodic assessments, OTP intensive 
outpatient services, coordinated care and/or referral services, patient 
navigational services and/or peer recovery support services, and the 
non-drug component of the adjustment for take-home supplies of opioid 
antagonist medications will be geographically adjusted using the 
Geographic Adjustment Factor described in Sec.  414.26 of this 
subchapter. For purposes of this adjustment, OUD treatment services 
that are furnished via an OTP mobile unit will be treated as if they 
were furnished at the physical location of the OTP registered with the 
Drug Enforcement Administration (DEA) and certified by SAMHSA.
    (iii) The payment amounts for the non-drug component of the bundled 
payment for an episode of care, the adjustments for counseling or 
therapy, intake activities, periodic assessments, OTP intensive 
outpatient services, coordinated care and/or referral services, patient 
navigational services and/or peer recovery support services, and the 
non-drug component of the adjustment for take-home supplies of opioid 
antagonist medications will be updated annually using the Medicare 
Economic Index described in Sec.  405.504(d) of this subchapter.
* * * * *

0
19. Section 410.78 is amended by revising paragraph (a)(3) read as 
follows:


Sec.  410.78  Telehealth services.

    (a) * * *
    (3) Interactive telecommunications system means, except as 
otherwise provided in this paragraph (a)(3), multimedia communications 
equipment that includes, at a minimum, audio and video equipment 
permitting two-way, real-time interactive communication between the 
patient and distant site physician or practitioner. Interactive 
telecommunications system may also include two-way, real-time audio-
only communication technology for any telehealth service furnished to a 
patient in their home if the distant site physician or practitioner is 
technically capable of using an interactive telecommunications system 
as defined in the previous sentence, but the patient is not capable of, 
or does not consent to, the use of video technology. The following 
modifiers must be appended to a claim for telehealth services furnished 
using two-way, real-time audio-only communication technology to verify 
that the conditions set forth in the prior sentence have been met:
    (i) Current Procedural Terminology (CPT) modifier ``93''; and
    (ii) For rural health clinics (RHCs) and federally qualified health 
centers (FQHCs), Medicare modifier ``FQ''.
* * * * *

0
20. Section 410.79 is amended by--
0
a. In paragraph (b):
0
i. Removing the definition of ``Combination delivery'';
0
ii. Adding the definitions of ``Combination with an online component,'' 
``In-person with a distance learning component,'' and ``Online'' in 
alphabetical order;
0
iii. Removing the definition of ``Online delivery''; and
0
iv. Revising the definition of ``Set of MDPP services''; and
0
b. Revising paragraphs (d)(1) introductory text, (e)(3)(iii)(C), 
(e)(3)(iv)(F)(3), and (e)(3)(v)(F)(2).
    The additions and revisions read as follows:


Sec.  410.79  Medicare Diabetes Prevention Program expanded model: 
Conditions of coverage.

* * * * *
    (b) * * *
    Combination with an online component refers to sessions that are 
delivered as a combination of online (non-live) with in-person or 
distance learning.
* * * * *
    In-person with a distance learning component refers to DPP sessions 
that are delivered in person by trained Coaches where participants have 
the option of attending sessions via MDPP distance learning.
* * * * *
    Online means sessions that are delivered 100 percent through the 
internet via phone, tablet, or laptop in an asynchronous (non-live) 
classroom where participants are experiencing the content on their own 
time without a live (including non-artificial intelligence (AI)) Coach 
teaching the content. These sessions must be furnished in a manner 
consistent with the DPRP Standards for online sessions. Live Coach 
interaction must be offered to each participant during weeks when the 
participant has engaged with content. Emails and text messages can 
count toward the requirement for live Coach interaction if there is bi-
directional communication between the Coach and participant. Chat bots 
and AI forums do not count as live Coach interaction.
* * * * *
    Set of MDPP services means the series of MDPP sessions, composed of 
core sessions and core maintenance sessions, and subject to paragraph 
(c)(3) of this section offered over the course of the MDPP services 
period.
* * * * *
    (d) * * *
    (1) An MDPP supplier may offer a make-up session to an MDPP 
beneficiary who missed a regularly scheduled session. MDPP make-up 
sessions may only use in-person or distance learning delivery. If an 
MDPP supplier offers one or more make-up sessions to an MDPP 
beneficiary, each such session must be furnished in accordance with the 
following requirements:
* * * * *
    (e) * * *
    (3) * * *
    (iii) * * *
    (C) Self-reported weight measurements from the at-home digital 
scale of the MDPP beneficiary. Self-reported weights must be obtained 
during live, synchronous online video technology, such as video 
chatting or

[[Page 98558]]

video conferencing, where in the MDPP Coach observes the beneficiary 
weighing themselves and views the weight indicated on the at-home 
digital scale, or the MDPP supplier receives one (1) or two (2) date-
stamped photo(s) or a video recording of the beneficiary's weight, with 
the beneficiary visible on the scale, submitted by the MDPP beneficiary 
to the MDPP supplier. Photo or video must clearly document the weight 
of the MDPP beneficiary as it appears on their digital scale on the 
date associated with the billable MDPP session. If choosing to submit 
one photo, this photo must show the beneficiary's weight on the scale 
with the beneficiary visible in their home. If choosing to submit 2 
photos, one photo must show the beneficiary's weight on the digital 
scale, and a second photo must show the beneficiary visible in their 
home. All photos must be date-stamped.
* * * * *
    (iv) * * *
    (F) * * *
    (3) No more than 12 virtual sessions offered monthly during the 
ongoing maintenance session intervals, months 13 through 24 for 
beneficiaries enrolled before January 1, 2022.
* * * * *
    (v) * * *
    (F) * * *
    (2) For an MDPP beneficiary who began receiving the Set of MDPP 
services on or after January 1, 2021, has suspended services during an 
applicable 1135 waiver event, the MDPP supplier must use the baseline 
weight recorded at the beneficiary's first core session.
* * * * *

0
21. Section 410.152 is amended by adding paragraph (o) to read as 
follows:


Sec.  [thinsp]410.152  Amounts of payment.

* * * * *
    (o) Amount of payment: Drugs covered as additional preventive 
services (DCAPS). For a drug covered as an additional preventive 
service, as defined at Sec.  410.64, payment must be made as follows:
    (1) Payment for a drug covered as an additional preventive service, 
per section 1861(a)(1)(W)(ii) of the Act and paragraphs (l)(11) of this 
section and Sec.  410.160(b)(13), is 100 percent of the lesser of--
    (i) The actual charge on the claim for program benefits; or
    (ii) The amount determined under the fee schedule as described in 
paragraph (o)(3) of this section.
    (2) Payment for the supplying or administration of a drug covered 
as an additional preventive service per section 1861(a)(1)(W)(ii) of 
the Act and paragraphs (l)(11) of this section and Sec.  
410.160(b)(13), is 100 percent of the lesser of--
    (i) The actual charge on the claim for program benefits; or
    (ii) The amount determined under the fee schedule as described in 
paragraph (o)(4) of this section.
    (3) The payment limit for a drug covered as an additional 
preventive service, as defined at Sec.  410.64, appears on the DCAPS 
fee schedule and is determined as follows:
    (i) If Average Sales Price (ASP) data is available for the drug, 
consistent with part 414, subpart J, of this chapter, then the payment 
limit is determined using the methodology set forth in section 1847A of 
the Act and according to the provisions in part 414, subpart K, of this 
chapter.
    (ii) If ASP data is not available, then the payment limit is 
determined according to the most recently published National Average 
Drug Acquisition Cost (NADAC) prices for the drug and is the lesser of 
the median NADAC price of all generic forms of the drug or the lowest 
NADAC price brand name product.
    (iii) If ASP data and NADAC prices are not available, then the 
payment limit is determined according to the most recently published 
pharmaceutical pricing data for the drug as included in the Federal 
Supply Schedule (FSS), as managed by the Department of Veterans Affairs 
per 48 CFR part 38, and is the lesser of the median FSS price of all 
generic forms of the drug or the lowest FSS price brand name product.
    (iv) If ASP data, NADAC prices, and FSS pharmaceutical prices are 
not available, then the payment limit is the invoice price determined 
by the MAC.
    (4) The payment limits for supplying and administering a drug 
covered as an additional preventive service, as defined at Sec.  
410.64, appear on the DCAPS fee schedule and are determined as follows:
    (i) For a drug that is supplied by a pharmacy, the payment limit 
for a supplying fee is as follows:
    (A) For the first prescription that the pharmacy provides to a 
beneficiary in a 30-day period for a drug covered as an additional 
preventive service, $24.
    (B) For all subsequent prescriptions that the pharmacy provides to 
a beneficiary in a 30-day period for a drug covered as an additional 
preventive service, $16.
    (ii) For a drug that is administered by a physician or a non-
physician practitioner, the payment limit for administration is set in 
accordance with part 414, subpart B, of this chapter. This fee is not 
subject to the Part B deductible, per Sec.  410.160(b)(13). This fee is 
equal to 100 percent of the Medicare payment amount established under 
the applicable payment methodology, per paragraph (l)(11) of this 
section.

PART 411--EXCLUSIONS FROM MEDICARE AND LIMITATIONS ON MEDICARE 
PAYMENT

0
22. The authority citation for part 411 continues to read as follows:

    Authority: 42 U.S.C. 1302, 1395w-101 through 1395w-152, 1395hh, 
and 1395nn.

0
23. Section 411.15 is amended by adding paragraph (i)(3)(i)(F) to read 
as follows:


Sec.  411.15  Particular services excluded from coverage.

* * * * *
    (i) * * *
    (3) * * *
    (i) * * *
    (F) Dental or oral examination performed as part of a comprehensive 
workup prior to, or contemporaneously with, Medicare-covered dialysis 
services when used in the treatment of end stage renal disease (ESRD); 
and medically necessary diagnostic and treatment services to eliminate 
an oral or dental infection prior to, or contemporaneously with, 
Medicare-covered dialysis services when used in the treatment of ESRD.
* * * * *

PART 414--PAYMENT FOR PART B MEDICAL AND OTHER HEALTH SERVICES

0
24. The authority citation for part 414 continues to read as follows:

    Authority:  42 U.S.C. 1302, 1395hh, and 1395rr(b)(l).

0
25. Section 414.84 is amended by--
0
a. In paragraph (a), removing the definition of ``Bridge payment'';
0
b. Revising paragraphs (b)(1) introductory text and (b)(2) introductory 
text;
0
c. Adding paragraph (c)(4);
0
d. Revising paragraph (d); and
0
e. Removing paragraph (e).
    The revisions and addition read as follows:


Sec.  414.84  Payment for MDPP services.

* * * * *
    (b) * * *
    (1) Performance Goal 1: Achieves the required minimum 5-percent 
weight loss. CMS makes a performance payment to an MDPP supplier for an 
MDPP beneficiary who achieves the required minimum weight loss as 
measured in-person or during a distance learning session during a core 
session or

[[Page 98559]]

core maintenance session furnished by that supplier. The amount of this 
performance payment is determined as follows:
* * * * *
    (2) Performance Goal 2: Achieves 9-percent weight loss. CMS makes a 
performance payment to an MDPP supplier for an MDPP beneficiary who 
achieves at least a 9-percent weight loss as measured in-person or in a 
distance learning session during a core session or core maintenance 
session furnished by that supplier. The amount of this performance 
payment is determined as follows:
* * * * *
    (c) * * *
    (4) Current Procedural Terminology (CPT) Modifier 76 (repeat 
services by same physician) must be appended to any claim for G9886 or 
G9887 to identify a MDPP make-up session that was held on the same day 
as a regularly scheduled MDPP session.
    (d) Updating performance payments and attendance payments. The 
performance payments and attendance payments will be adjusted each 
calendar year by the percent change in the Consumer Price Index for All 
Urban Consumers (CPI-U) (U.S. city average) for the 12-month period 
ending June 30th of the year preceding the update year. The percent 
change update will be calculated based on the level of precision of the 
index as published by the Bureau of Labor Statistics (BLS) and applied 
based on one decimal place of precision. The annual MDPP services 
payment update will be published by CMS transmittal.

0
26. Section 414.502 is amended by revising the definitions of ``Data 
collection period'' and ``Data reporting period'' to read as follows:


Sec.  414.502  Definitions.

* * * * *
    Data collection period is the 6 months from January 1 through June 
30, during which applicable information is collected and that precedes 
the data reporting period, except that for the data reporting period of 
January 1, 2026, through March 31, 2026, the data collection period is 
January 1, 2019, through June 30, 2019.
    Data reporting period is the 3-month period, January 1 through 
March 31, during which a reporting entity reports applicable 
information to CMS and that follows the preceding data collection 
period, except that for the data collection period of January 1, 2019, 
through June 30, 2019, the data reporting period is January 1, 2026, 
through March 31, 2026.
* * * * *


Sec.  414.504  [Amended]

0
27. Section 414.504 is amended in paragraph (a)(1) by removing the 
reference ``January 1, 2024'' and adding in its place the reference 
``January 1, 2026''.

0
28. Section 414.507 is amended by revising paragraphs (d) introductory 
text and paragraphs (d)(7) and (8), and adding paragraphs (d)(10) and 
(11) to read as follows:


Sec.  414.507  Payment for clinical diagnostic laboratory tests.

* * * * *
    (d) Phase-in of payment reductions. For years 2018 through 2028, 
the payment rates established under this section for each CDLT that is 
not a new ADLT or new CDLT, may not be reduced by more than the 
following amounts for--
* * * * *
    (7) 2024--0.0 percent of the payment rate established in 2023.
    (8) 2025--0.0 percent of the payment rate established in 2024.
* * * * *
    (10) 2027--15 percent of the payment rate established in 2026.
    (11) 2028--15 percent of the payment rate established in 2027.
* * * * *

0
29. In Sec.  414.605 amend the definition of ``Advanced life support, 
level 2 (ALS2)'' by adding paragraph (8) to read as follows:


Sec.  414.605  Definitions.

* * * * *
    Advanced life support, level 2 (ALS2) * * *
    (8) Prehospital blood transfusion which includes:
    (i) Administration of low titer O+ and O- whole blood (WBT);
    (ii) Administration of packed red blood cells (PRBCs);
    (iii) Administration of plasma; or
    (iv) Administration of a combination of PRBCs and plasma.
* * * * *

0
30. Section 414.902 is amended by revising the definition ``Refundable 
single-dose container or single-use package drug'' to read as follows:


Sec.  414.902  Definitions.

* * * * *
    Refundable single-dose container or single-use package drug means:
    (1) A single source drug or biological or a biosimilar biological 
product for which payment is made under this part and that is--
    (i) Furnished from a single-dose container or single-use package 
based on FDA-approved labeling or product information; or
    (ii) Furnished from an ampule for which product labeling does not 
have discard statement or language indicating if the container is 
single-dose container, single-use package, multiple-dose container, or 
single-patient-use container; or
    (iii) Furnished from a container with a total labeled volume of 2 
mL or less for which product labeling does not have language indicating 
if the container is single-dose container, single-use package, 
multiple-dose container, or single-patient-use container.
    (2) Excludes--
    (i) A drug that is a therapeutic radiopharmaceutical, a diagnostic 
radiopharmaceutical, or an imaging agent as identified in the drug's 
FDA-approved labeling.
    (ii) A drug for which the FDA-approved labeling for any National 
Drug Code assigned to a billing and payment code of such drug requires 
filtration during the drug preparation process, prior to dilution and 
administration and that any unused portion of such drug after the 
filtration process be discarded after the completion of such filtration 
process.
    (iii) A drug approved or licensed by the FDA on or after November 
15, 2021, until the last day of the sixth full quarter for which the 
drug has been marketed (as reported to CMS) for the first National Drug 
Code assigned to the billing and payment code of such drug.
    (iv) A drug approved or licensed by FDA on or after November 15, 
2021 and for which the date the drug was first marketed (as reported to 
CMS) does not adequately approximate the date of first payment under 
Part B due to an applicable national coverage determination, until the 
last day of the sixth full quarter for which the drug has been covered 
and paid under Medicare Part B for the first National Drug Code 
assigned to the billing and payment code of such drug.
* * * * *

0
31. Section 414.904 is amended by adding paragraph (e)(6) and revising 
paragraph (i) to read as follows:


Sec.  414.904  Average sales price as the basis for payment.

* * * * *
    (e) * * *
    (6) Radiopharmaceuticals furnished in settings other than the 
hospital outpatient department. Medicare administrative contractors 
must determine payment limits for

[[Page 98560]]

radiopharmaceuticals based on any methodology used to determine payment 
limits for radiopharmaceuticals in place on or prior to November 2003. 
Such methodology may include, but is not limited to, the use of 
invoice-based pricing.
* * * * *
    (i) Manufacturer's average sales price (ASP) data not available 
prior to the publication deadline for quarterly payment limits. For 
circumstances in which manufacturer's ASP data is not available prior 
to the publication deadline for quarterly payment limits as described 
in this section, payment limit must be determined as follows:
    (1) For a multiple source drug (as defined in Sec.  414.902)--
    (i) In circumstances in which negative or zero manufacturer's ASP 
data is reported for one or more, but not all, NDCs associated with a 
billing and payment code for that drug for a given quarter, the payment 
limit for the given quarter is calculated using only NDCs for that drug 
with positive manufacturer's ASP data, except in circumstances 
described in paragraph (i)(1)(iii) of this section.
    (ii) In circumstances in which negative or zero manufacturer's ASP 
data is reported for all NDCs associated with a billing and payment 
code for that drug for a given quarter, the payment limit for the given 
quarter is calculated by carrying over all positive manufacturer's ASP 
data from the most recently available previous quarter with positive 
manufacturer's ASP data for at least one NDC until at least one NDC for 
the drug has positive manufacturer's ASP data for a quarter.
    (iii) In circumstances in which manufacturer's ASP data is not 
available and the unavailability of the manufacturer's ASP data results 
in a significant change in the ASP payment limit compared to the 
previous quarter, the payment limit is calculated by carrying over the 
most recently available ASP data for the individual NDC(s), adjusted by 
the weighted average of the change in the manufacturer's ASP data for 
the NDCs that were reported for both the most recently available 
previous quarter and the current quarter.
    (2) For a single source drug, excluding biosimilar biological 
products (both as defined in Sec.  414.902)--
    (i) In circumstances in which negative or zero manufacturer's ASP 
data is reported for one or more, but not all, NDCs associated with a 
billing and payment code for that drug for a given quarter, the payment 
limit for the given quarter is calculated using only NDCs for that drug 
with positive manufacturer's ASP data.
    (ii) In circumstances in which negative or zero manufacturer's ASP 
data is reported for all NDCs associated with a billing and payment 
code for that drug for a given quarter, the payment limit for the given 
quarter is the lesser of the following until at least one NDC for the 
drug has positive manufacturer's ASP data for a quarter:
    (A) 106 percent of the volume-weighted average of the most recently 
available positive manufacturer's ASP data from a previous quarter in 
which at least one NDC for the drug has positive manufacturer's ASP 
data for the quarter. If the payment limit from such quarter was based 
on 106 percent of the wholesale acquisition cost because of the 
application of paragraph (d)(1) of this section, that payment limit is 
carried over; or
    (B) 106 percent of the wholesale acquisition cost. If there is more 
than one WAC per billing unit for the drug, the payment limit is set 
using the lowest WAC per billing unit.
    (3) For a biosimilar biological product (as defined in Sec.  
414.902)--
    (i) In circumstances in which negative or zero manufacturer's ASP 
data is reported for one or more, but not all, NDCs for a given 
quarter, the payment limit for the given quarter is calculated using 
only NDCs with positive manufacturer's ASP data.
    (ii) In circumstances in which negative or zero manufacturer's ASP 
data is reported for all NDCs for a given quarter, the payment limit 
for the given quarter is the sum of the following until at least one 
NDC for the drug has positive manufacturer's ASP data for a quarter:
    (A) The volume-weighted average of the most recently available 
positive manufacturer's ASP data from a previous quarter; and
    (B) Either:
    (1) If the biosimilar is not a qualifying biosimilar (as both are 
defined at Sec.  414.902), 6 percent of the amount determined under 
section 1847A(b)(4) of the Act for the reference biological product (as 
defined in Sec.  414.902) for the given quarter; or
    (2) If the biosimilar is a qualifying biosimilar (as both are 
defined at Sec.  414.902), 8 percent of the amount determined under 
section 1847A(b)(4) of the Act for the reference biological product (as 
defined in Sec.  414.902) for the given quarter.
* * * * *

0
32. Section 414.1001 is amended by--
0
a. Revising paragraph (a);
0
b. Removing paragraph (b);
0
c. Redesignating paragraphs (c) and (d) as paragraphs (b) and (c), 
respectively;
0
d. In newly redesignated paragraph (b)(2), removing ``(c)(1)'' and 
adding in its place ``(b)(1)''.
    The revision reads as follows:


Sec.  414.1001  Basis of payment.

    (a) Supplying fees. Beginning in CY 2006--
    (1) A supplying fee of $24 is paid to a pharmacy (no more often 
than once every 30 days) for the first prescription of drugs and 
biologicals described in sections 1861(s)(2)(J), 1861(s)(2)(Q), and 
1861(s)(2)(T) of the Act, that the pharmacy provided to a beneficiary, 
except as provided in paragraph (a)(2) of this section.
    (2) A supplying fee of $50 is paid to pharmacy for the initial 
supplied prescription of drugs and biologicals described in section 
1861(s)(2)(J) of the Act, that the pharmacy provided to a patient 
during the first 30-day period following a transplant.
    (3) A supplying fee of $16 is paid to a pharmacy (no more often 
than once every 30 days) for each prescription following the first 
prescription (as specified in paragraphs (a)(1) and (2) of this 
section) of drugs and biologicals described in sections 1861(s)(2)(J), 
1861(s)(2)(Q), and 1861(s)(2)(T) of the Act, that the pharmacy provided 
to a beneficiary.
    (4) A separate supplying fee is paid to a pharmacy for each 
prescription of drugs and biologicals described in sections 
1861(s)(2)(J), 1861(s)(2)(Q), and 1861(s)(2)(T) of the Act.
* * * * *

0
33. Section[thinsp]414.1325 is amended by adding paragraphs (a)(1)(i) 
through (iii) and (f) to read as follows:


Sec.  414.1325  Data submission requirements.

    (a) * * *
    (1) * * *
    (i) For the quality performance category, a data submission must 
include numerator and denominator data for at least one MIPS quality 
measure from the final list of MIPS quality measures.
    (ii) For the improvement activities performance category, a data 
submission must include a response of ``yes'' for at least one activity 
in the MIPS improvement activities inventory.
    (iii) For the Promoting Interoperability performance category, a 
data submission must include all of the following elements:
    (A) Performance data, including any claim of an applicable 
exclusion, for the measures in each objective, as specified by CMS;

[[Page 98561]]

    (B) Required attestation statements, as specified by CMS;
    (C) CMS EHR Certification ID (CEHRT ID) from the Certified Health 
IT Product List (CHPL); and
    (D) The start date and end date for the applicable performance 
period as set forth in Sec.  414.1320.
* * * * *
    (f) Treatment of multiple data submissions. (1) For multiple data 
submissions received in the quality and improvement activities 
performance categories in accordance with paragraphs (a)(1)(i) and (ii) 
of this section for an individual MIPS eligible clinician, group, 
subgroup, or virtual group from submitters in multiple organizations 
(for example, qualified registry, practice administrator, or EHR 
vendor), CMS will calculate and score each submission received and 
assign the highest of the scores. For multiple data submissions 
received for an individual MIPS eligible clinician, group, subgroup, or 
virtual group from one or multiple submitters in the same organization, 
CMS will score the most recent submission.
    (2) For multiple data submissions received for the Promoting 
Interoperability performance category, CMS will calculate a score for 
each data submission received and assign the highest of the scores.

0
34. Section 414.1330 is amended by adding paragraph (c) to read as 
follows.


Sec.  414.1330  Quality performance category.

* * * * *
    (c)(1) CMS uses the following criteria to determine the removal of 
a quality measure:
    (i) If the Secretary determines that the quality measure is no 
longer meaningful, such as measures that are topped out.
    (ii) If a measure steward is no longer able to maintain the quality 
measure.
    (iii) If the quality measure reached extremely topped out status.
    (iv) If the quality measure does not meet case minimum and 
reporting volumes required for benchmarking after being in the program 
for 2 consecutive CY performance periods.
    (v) If the quality measure is duplicative.
    (vi) If the quality measure is not updated to reflect current 
clinical guidelines, which are not reflective of a clinician's scope of 
practice.
    (vii) If the quality measure is a process measure.
    (viii) If the quality measure addresses a measurement gap.
    (ix) If the quality measure is a patient-reported outcome.
    (x) If the quality measure is not available for MIPS quality 
reporting by or on behalf of all MIPS eligible clinicians.
    (xi) The robustness of the quality measure.
    (xii) Consideration of the quality measure in developing MIPS Value 
Pathways (MVPs).
    (2) A quality measure that otherwise meets the criteria for removal 
in paragraph (c)(1) of this section may nonetheless be retained based 
on the following considerations:
    (i) Whether the removal of the process measure impacts the number 
of measures available for a specific specialty.
    (ii) Whether the quality measure addresses a priority area.
    (iii) Whether the quality measure promotes positive outcomes in 
patients.
    (iv) Whether the quality measure is designated as high priority or 
not.
    (v) Whether the quality measure has reached extremely topped out 
status.
    (vi) Evaluation of the quality measure's performance data.

0
35. Section 414.1335 is amended by revising paragraph (a) introductory 
text and adding paragraph (b) to read as follows.


Sec.  414.1335  Data submission criteria for the quality performance 
category.

    (a) Criteria. Except as provided in paragraph (b) of this section, 
a MIPS eligible clinician, group, virtual group, subgroup, or APM 
Entity must submit data on MIPS quality measures in one of the 
following manners, as applicable:
* * * * *
    (b) Special rule for the APM Performance Pathway (APP) Plus measure 
set. A MIPS eligible clinician, group, or APM Entity that reports the 
APP Plus measure set via the APP must report on all measures included 
in the APP Plus measure set, except for administrative claims-based 
quality measures as provided in Sec.  414.1325(a)(2)(i).

0
36. Section 414.1340 is amended by revising paragraphs (a)(4), (b)(4), 
(d) introductory text, and (d)(1) to read as follows:


Sec.  414.1340  Data completeness criteria for the quality performance 
category.

    (a) * * *
    (4) At least 75 percent of the MIPS eligible clinician, group, 
virtual group, subgroup, and APM Entity's patients that meet the 
measure's denominator criteria, regardless of payer for MIPS payment 
years 2026, 2027, 2028, 2029, and 2030.
    (b) * * *
    (4) At least 75 percent of the applicable Medicare Part B patients 
seen during the performance period to which the measure applies for 
MIPS payment years 2026, 2027, 2028, 2029, and 2030.
* * * * *
    (d) APM Entities, specifically Medicare Shared Savings Program 
Accountable Care Organizations that meet reporting requirements under 
the APP, submitting quality measure data on Medicare CQMs must submit 
data on:
    (1) At least 75 percent of the applicable beneficiaries eligible 
for the Medicare CQM, as defined at Sec.  425.20 of this chapter, who 
meet the measure's denominator criteria for MIPS payment years 2026, 
2027, 2028, 2029, and 2030.
* * * * *

0
37. Section[thinsp]414.1350 is amended by adding paragraph (e) to read 
as follows:


Sec.  414.1350  Cost performance category.

* * * * *
    (e) Cost measure removal criteria. CMS may remove a cost measure 
from MIPS based on one or more of the following factors, provided 
however CMS may retain a cost measure that meets one or more of the 
following factors if CMS determines the benefit of retaining the 
measure outweighs the benefit of removing it.
    (1) It is not feasible to implement the measure specifications.
    (2) A measure steward is no longer able to maintain the cost 
measure.
    (3) The implementation costs or negative unintended consequences 
associated with a cost measure outweigh the benefit of its continued 
use in the MIPS cost performance category.
    (4) The measure specifications do not reflect current clinical 
practice or guidelines.
    (5) The availability of a more applicable measure, including a 
measure that applies across settings, applies across populations, or is 
more proximal in time to desired patient outcomes for the particular 
topic.

0
38. Section[thinsp]414.1355 is amended by adding paragraph (d) to read 
as follows:


Sec.  414.1355  Improvement activities performance category.

* * * * *
    (d) CMS may remove an improvement activity from MIPS based on one 
or more of the following factors, provided however CMS may retain an 
improvement activity that meets one or more of the following factors if 
CMS determines the benefit of retaining the activity outweighs the 
benefit of removing it:
    (1) Factor 1: Activity is duplicative of another activity.
    (2) Factor 2: There is an alternative activity with a stronger 
relationship to

[[Page 98562]]

quality care or improvements in clinical practice.
    (3) Factor 3: Activity does not align with current clinical 
guidelines or practice.
    (4) Factor 4: Activity does not align with at least one meaningful 
measures area.
    (5) Factor 5: Activity does not align with the quality, cost, or 
Promoting Interoperability performance categories.
    (6) Factor 6: There have been no attestations of the activity for 3 
consecutive years.
    (7) Factor 7: Activity is obsolete.

0
39. Section[thinsp]414.1365 is amended by revising paragraphs 
(b)(2)(i), (c)(3)(i) and (ii), (c)(4)(i)(A), (d)(3)(i)(A) introductory 
text, (d)(3)(i)(A)(1), (d)(3)(ii) introductory text, (d)(3)(ii)(A), and 
(d)(3)(iii) to read as follows:


Sec.  414.1365  MIPS Value Pathways.

* * * * *
    (b) * * *
    (2) * * *
    (i) For the CY 2023 through 2024 performance periods/2025 through 
2026 MIPS payment years, each MVP Participant must select an MVP, one 
population health measure included in the MVP, and any outcomes-based 
administrative claims measure on which the MVP Participant intends to 
be scored. Beginning in the CY 2025 performance period/2027 MIPS 
payment year, each MVP Participant must select an MVP and any outcomes-
based administrative claims measure on which the MVP Participant 
intends to be scored.
* * * * *
    (c) * * *
    (3) * * *
    (i) For the CY 2023 and 2024 performance periods/2025 through 2026 
MIPS payment years:
    (A) Two medium-weighted improvement activities.
    (B) One high-weighted improvement activity.
    (C) Participation in a certified or recognized patient-centered 
medical home (PCMH) or comparable specialty practice, as described at 
Sec.  414.1380(b)(3)(ii).
    (ii) Beginning in the CY 2025 performance period/2027 MIPS payment 
year:
    (A) One improvement activity.
    (B) Participation in a certified or recognized patient-centered 
medical home (PCMH) or comparable specialty practice, as described at 
Sec.  414.1380(b)(3)(ii).
* * * * *
    (4) * * *
    (i) * * *
    (A) An MVP Participant that is a subgroup is required to submit its 
affiliated group's data for the Promoting Interoperability performance 
category.
* * * * *
    (d) * * *
    (3) * * *
    (i) * * *
    (A) Population health measures. Except as provided in paragraph 
(d)(3)(i)(A)(1) of this section, for the CY 2023 through 2024 
performance periods/2025 through 2026 MIPS payment years, each selected 
population health measure that does not have a benchmark or meet the 
case minimum requirement is excluded from the MVP participant's total 
measure achievement points and total available measure achievement 
points. Beginning in the CY 2025 performance period/2027 MIPS payment 
year, except as provided in paragraph (d)(3)(i)(A)(1) of this section, 
the highest score of all applicable and available population health 
measures will be used. If no population health measure has a benchmark 
or meets the case minimum requirement, each such measure is excluded 
from the MVP participant's total measure achievement points and total 
available measure achievement points.
    (1) For the CY 2023 through 2024 performance periods/2025 through 
2026 MIPS payment years, a subgroup is scored on each selected 
population health measure based on its affiliated group score, if 
available. Beginning in the CY 2025 performance period/2027 MIPS 
payment year, a subgroup is scored on the highest scoring of all 
available population health measures based on its affiliated group 
score, if available. If the subgroup's affiliated group score is not 
available, each such measure is excluded from the subgroup's total 
measure achievement points and total available measure achievement 
points.
* * * * *
    (ii) Cost performance category. The cost performance category score 
is calculated for an MVP Participant using the methodology at Sec.  
414.1380(b)(2) and the cost measures included in the MVP that they 
select and report.
    (A) A subgroup is scored on each cost measure included in the MVP 
that it selects and reports based on its affiliated group score for 
each such measure, if available. If the subgroup's affiliated group 
score is not available for a measure, the measure is excluded from the 
subgroup's total measure achievement points and total available measure 
achievement points, as described under Sec.  414.1380(b)(2).
* * * * *
    (iii) Improvement activities performance category. In the CY 2023 
through 2024 performance periods/2025 through 2026 MIPS payment years, 
the improvement activities performance category score is calculated 
based on the submission of high- and medium-weighted improvement 
activities. MVP Participants will receive 20 points for each medium-
weighted improvement activity and 40 points for each high-weighted 
improvement activity required under Sec.  414.1360 on which data is 
submitted in accordance with Sec.  414.1325 or for participation in a 
certified or recognized patient-centered medical home (PCMH) or 
comparable specialty practice, as described at Sec.  
414.1380(b)(3)(ii). Beginning in the CY 2025 performance period/2027 
MIPS payment year, MVP Participants will receive 40 points for each 
improvement activity required under Sec.  414.1360 on which data is 
submitted in accordance with Sec.  414.1325 or for participation in a 
certified or recognized PCMH or comparable specialty practice, as 
described at Sec.  414.1380(b)(3)(ii).
* * * * *

0
40. Section 414.1367 is amended by revising paragraph (c)(1) 
introductory text and adding paragraph (c)(1)(iii) to read as follows:


Sec.  414.1367  APM performance pathway.

* * * * *
    (c) * * *
    (1) Quality. Except as provided in paragraphs (c)(1)(i) and (ii) of 
this section, the quality performance category score is calculated for 
a MIPS eligible clinician, group, or APM Entity group in accordance 
with Sec.  414.1380(b)(1) based on the quality measure set applicable 
to the MIPS eligible clinician, group, or APM Entity group under 
paragraph (c)(1)(iii) of this section and established by CMS through 
rulemaking for a MIPS payment year.
* * * * *
    (iii)(A) For performance periods beginning prior to CY 2025 and 
MIPS payment years beginning prior to 2027, a MIPS eligible clinician, 
group, or APM Entity group must report the APM Performance Pathway 
quality measure set.
    (B) Beginning with the CY 2025 performance period/2027 MIPS payment 
year, a MIPS eligible clinician, group, or APM Entity group may choose 
to report either the APM Performance Pathway quality measure set or the 
APP Plus quality measure set.
* * * * *

0
41. Section[thinsp]414.1380 is amended by--
0
a. Revising paragraph (b)(1)(ii) introductory text;

[[Page 98563]]

0
b. Adding paragraphs (b)(1)(ii)(E) and (F);
0
c. Revising paragraph (b)(1)(iv)(B);
0
d. Adding paragraph (b)(1)(iv)(C);
0
e. Revising paragraph (b)(1)(vii) introductory text;
0
f. Adding paragraph (b)(1)(vii)(C);
0
g. Revising paragraph (b)(2) introductory text;
0
h. Adding paragraphs (b)(2)(i)(A) and (B) and (b)(2)(v)(B);
0
i. Revising paragraph (b)(3) introductory text; and
0
j. Adding paragraphs (c)(2)(i)(A)(10) and (c)(2)(i)(C)(12).
    The revisions and additions read as follows:


Sec.  414.1380  Scoring.

* * * * *
    (b) * * *
    (1) * * *
    (ii) Benchmarks. Except as provided in paragraphs (b)(1)(ii)(B) 
through (F) of this section, benchmarks will be based on performance by 
collection type, from all available sources, including MIPS eligible 
clinicians and APMs, to the extent feasible, during the applicable 
baseline or performance period.
* * * * *
    (E) Beginning with the CY 2025 performance period/2027 MIPS payment 
year, CMS will publish a list in the Federal Register of topped out 
measures determined to be impacted by limited measure choice on a 
yearly basis. Measures included in the list are scored from 1 to 10 
measure achievement points according to defined topped out measure 
benchmarks calculated from performance data in the baseline period in 
which a performance rate of 97 percent corresponds to 10 percent of the 
performance threshold for the corresponding performance year.
    (F) Beginning in the CY 2025 performance period/2027 MIPS payment 
year, measures of the Medicare CQM collection type use flat benchmarks 
for their first two performance periods in MIPS.
* * * * *
    (iv) * * *
    (B) Beginning with the 2021 MIPS payment year, except as provided 
for in paragraph (b)(1)(iv)(C) of this section, each measure (except 
for measures in the CMS Web Interface) for which the benchmark for the 
applicable collection type is identified as topped out for 2 or more 
consecutive years receives no more than 7 measure achievement points in 
the second consecutive year it is identified as topped out, and beyond.
    (C) Beginning with the CY 2025 performance period/2027 MIPS payment 
year, measures impacted by limited measure choice as specified in 
paragraph (b)(1)(ii)(E) of this section are not subject to the 7 
measure achievement point cap specified in paragraph (b)(1)(iv)(B) of 
this section.
* * * * *
    (vii) Quality performance category score. A MIPS eligible 
clinician's quality performance category score is the sum of all the 
measure achievement points assigned for the measures required for the 
quality performance category criteria plus the measure bonus points in 
paragraph (b)(1)(v) of this section and Complex Organization Adjustment 
in paragraph (b)(1)(vii)(C) of this section. The sum is divided by the 
sum of total available measure achievement points. The improvement 
percent score in paragraph (b)(1)(vi) of this section is added to that 
result. The quality performance category score cannot exceed 100 
percentage points.
* * * * *
    (C) Beginning in the CY 2025 performance period/2027 MIPS payment 
year, a Virtual Group and an APM Entity receives one measure 
achievement point for each eCQM submitted that meets the case minimum 
requirement at paragraph (b)(1)(iii) of this section and the data 
completeness requirement at Sec.  414.1340. Each measure may not exceed 
10 measure achievement points. The total adjustment to the Virtual 
Group or APM Entity's quality performance category score under this 
paragraph (b)(1)(vii)(C) may not exceed 10 percent of the total 
available measure achievement points.
    (2) Cost performance category. For each cost measure attributed to 
a MIPS eligible clinician, the clinician receives one to ten 
achievement points based on the clinician's performance on the measure 
during the performance period compared to the measure's benchmark. 
Achievement points are awarded based on which benchmark range the MIPS 
eligible clinician's performance on the measure is in. CMS assigns 
partial points based on where the MIPS eligible clinician's performance 
falls between the top and bottom of the benchmark ranges.
    (i) * * *
    (A) For the 2019 through 2025 MIPS payment years, CMS determines 
cost measure benchmark ranges based on linear percentile distributions.
    (B) Beginning with the 2026 MIPS payment year, for each cost 
measure, CMS determines 10 benchmark ranges based on the median cost of 
all MIPS eligible clinicians attributed the measure, plus or minus 
standard deviations. CMS awards achievement points based on which 
benchmark range a MIPS eligible clinician's average cost for a cost 
measure corresponds. Additionally, CMS awards achievement points 
equivalent to 10 percent of the performance threshold for a MIPS 
eligible clinician whose average cost attributed under a cost measure 
is equal to the median cost for all MIPS eligible clinicians attributed 
the measure.
* * * * *
    (v) * * *
    (B) Beginning with the 2026 MIPS payment year, if data used to 
calculate a score for a cost measure are impacted by significant 
changes or errors affecting the performance period, such that 
calculating the cost measure score would lead to misleading or 
inaccurate results, then the affected cost measure is excluded from the 
MIPS eligible clinician's or group's cost performance category score. 
For purposes of this paragraph (b)(2)(v)(B), ``significant changes or 
errors'' are 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. 
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. CMS will 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.
    (3) Improvement activities performance category. Subject to 
paragraphs (b)(3)(i) and (ii) of this section, the improvement 
activities performance category score equals the total points for all 
submitted improvement activities divided by 40 points, multiplied by 
100 percent. In the CY 2023 through 2024 performance periods/2025 
through 2026 MIPS payment years, MIPS eligible clinicians (except for 
non-patient facing MIPS eligible clinicians, small practices, and 
practices located in rural areas and geographic HPSAs) receive 10 
points for each medium-weighted improvement activity and 20 points for 
each high-weighted improvement activity required under Sec.  414.1360 
on which data is submitted in accordance with Sec.  414.1325. Non-
patient facing MIPS eligible clinicians, small practices, and practices 
located in rural areas and

[[Page 98564]]

geographic HPSAs receive 20 points for each medium-weighted improvement 
activity and 40 points for each high-weighted improvement activity 
required under Sec.  414.1360 on which data is submitted in accordance 
with Sec.  414.1325. Beginning in the CY 2025 performance period/2027 
MIPS payment year, MIPS eligible clinicians (except for non-patient 
facing MIPS eligible clinicians, small practices, and practices located 
in rural areas and geographic HPSAs) receive 20 points for each 
improvement activity required under Sec.  414.1360 on which data is 
submitted in accordance with Sec.  414.1325. Non-patient facing MIPS 
eligible clinicians, small practices, and practices located in rural 
areas and geographic HPSAs receive 40 points for each improvement 
activity required under Sec.  414.1360 on which data is submitted in 
accordance with Sec.  414.1325.
* * * * *
    (c) * * *
    (2) * * *
    (i) * * *
    (A) * * *
    (10) Beginning with the 2026 MIPS payment year, for the quality and 
improvement activities performance categories, CMS determines, based on 
documentation provided to the agency on or before November 1st of the 
year preceding the relevant MIPS payment year, that data for a MIPS 
eligible clinician are inaccessible or unable to be submitted due to 
circumstances outside of the control of the clinician because the MIPS 
eligible clinician delegated submission of the data to their third 
party intermediary, evidenced by a written agreement between the MIPS 
eligible clinician and third party intermediary, and the third party 
intermediary did not submit the data for the performance category(ies) 
on behalf of the MIPS eligible clinician in accordance with applicable 
deadlines. To determine whether to apply reweighting to the affected 
performance category(ies), CMS will consider: whether the MIPS eligible 
clinician knew or had reason to know of the issue with its third party 
intermediary's submission of the clinician's data for the performance 
category(ies); whether the MIPS eligible clinician took reasonable 
efforts to correct the issue; and whether the issue between the MIPS 
eligible clinician and their third party intermediary caused no data to 
be submitted for the performance category(ies) in accordance with 
applicable deadlines.
* * * * *
    (C) * * *
    (12) Beginning with the 2026 MIPS payment year, CMS determines, 
based on documentation provided to the agency on or before November 1st 
of the year preceding the relevant MIPS payment year, that data for a 
MIPS eligible clinician are inaccessible or unable to be submitted due 
to circumstances outside of the control of the clinician because the 
MIPS eligible clinician delegated submission of the data to their third 
party intermediary, evidenced by a written agreement between the MIPS 
eligible clinician and third party intermediary, and the third party 
intermediary did not submit the data for the performance category on 
behalf of the MIPS eligible clinician in accordance with applicable 
deadlines. To determine whether to apply reweighting to the Promoting 
Interoperability performance category, CMS will consider: whether the 
MIPS eligible clinician knew or had reason to know of the issue with 
its third party intermediary's submission of the clinician's data for 
the performance category; whether the MIPS eligible clinician took 
reasonable efforts to correct the issue; and whether the issue between 
the MIPS eligible clinician and their third party intermediary caused 
no data to be submitted for the performance category in accordance with 
applicable deadlines.
* * * * *

0
42. Section 414.1405 is amended by adding paragraph (b)(10) and 
revising paragraph (g) to read as follows:


Sec.  414.1405  Payment.

* * * * *
    (b) * * *
    (10) Pursuant to the methodology established at paragraph (g)(2) of 
this section:
    (i) The performance threshold for the 2027 MIPS payment year is 75 
points. The prior period used to determine the performance threshold is 
the 2019 MIPS payment year.
    (ii) [Reserved]
* * * * *
    (g) Performance threshold methodology. (1) For each of the 2024, 
2025, and 2026 MIPS payment years, the performance threshold is the 
mean of the final scores for all MIPS eligible clinicians from a prior 
period as specified under paragraph (b)(9) of this section.
    (2) For each of the 2027, 2028, and 2029 MIPS payment years, the 
performance threshold is the mean of the final scores for all MIPS 
eligible clinicians from a prior period as specified under paragraph 
(b)(10) of this section.

0
43. Section 414.1430 is amended by--
0
a. Revising paragraph (a)(1)(v);
0
b. Adding paragraph (a)(1)(vi);
0
c. Revising paragraph (a)(2)(v);
0
d. Adding paragraph (a)(2)(vi);
0
e. Revising paragraph (a)(3)(v);
0
f. Adding paragraph (a)(3)(vi);
0
g. Revising paragraph (a)(4)(v);
0
h. Adding paragraph (a)(4)(vi); and
0
i. Revising paragraphs (b)(1)(i)(A) and (B), (b)(2)(i)(A) and (B), 
(b)(3)(i)(A) and (B), and (b)(4)(i)(A) and (B).
    The revisions and additions read as follows:


Sec.  414.1430  Qualifying APM participant determination: QP and 
partial QP thresholds.

    (a) * * *
    (1) * * *
    (v) 2026: 50 percent.
    (vi) 2027 and later: 75 percent.
    (2) * * *
    (v) 2026: 40 percent.
    (vi) 2027 and later: 50 percent.
    (3) * * *
    (v) 2026: 35 percent.
    (vi) 2027 and later: 50 percent.
    (4) * * *
    (v) 2026: 25 percent.
    (vi) 2027 and later: 35 percent.
    (b) * * *
    (1) * * *
    (i) * * *
    (A) 2021 through 2026: 50 percent.
    (B) 2027 and later: 75 percent.
* * * * *
    (2) * * *
    (i) * * *
    (A) 2021 through 2026: 40 percent.
    (B) 2027 and later: 50 percent.
* * * * *
    (3) * * *
    (i) * * *
    (A) 2021 through 2026: 35 percent.
    (B) 2027 and later: 50 percent.
* * * * *
    (4) * * *
    (i) * * *
    (A) 2021 through 2026: 25 percent.
    (B) 2027 and later: 35 percent.
* * * * *

0
44. Section 414.1450 is amended by revising paragraph (a)(1)(i) and the 
first sentence of paragraph (b)(1) to read as follows:


Sec.  414.1450  APM incentive payment.

    (a) * * *
    (1) * * *
    (i) For payment years 2019 through 2026, CMS makes a lump sum 
payment to QPs in the amount described in paragraph (b) of this section 
in the manner described in paragraphs (d) and (e) of this section.
* * * * *
    (b) * * *

[[Page 98565]]

    (1) For payment years 2019 through 2024, the amount of the APM 
Incentive Payment is equal to 5 percent, with respect to payment year 
2025, 3.5 percent, or with respect to payment year 2026, 1.88 percent 
of the estimated aggregate payments for covered professional services 
as defined in section 1848(k)(3)(A) of the Act furnished during the 
calendar year immediately preceding the payment year. * * *
* * * * *

PART 422--MEDICARE ADVANTAGE PROGRAM

0
45. The authority citation for part 422 continues to read as follows:

    Authority:  42 U.S.C. 1302, 1306, 1395w-21 through 1395w-28, and 
1395hh.


0
46. Section 422.326 is amended by revising paragraph (c) to read as 
follows:


Sec.  422.326  Reporting and returning of overpayments.

* * * * *
    (c) Identified overpayment. The MA organization has identified an 
overpayment when the MA organization knowingly receives or retains an 
overpayment. The term ``knowingly'' has the meaning set forth in 31 
U.S.C. 3729(b)(1)(A).
* * * * *

PART 423--VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFIT

0
47. The authority citation for part 423 continues to read as follows:

    Authority:  42 U.S.C. 1302, 1306, 1395w-101 through 1395w-152, 
and 1395hh.


0
48. Section 423.160 is amended by revising paragraph (a)(5) 
introductory text to read as follows:


Sec.  [thinsp]423.160  Standards for electronic prescribing.

    (a) * * *
    (5) Beginning on January 1, 2021, prescribers must, except in the 
circumstances described in paragraphs (a)(5)(i) through (iii) of this 
section, conduct prescribing for at least 70 percent of their Schedule 
II, III, IV, and V controlled substances that are Part D drugs 
electronically using the applicable standards in paragraph (b) of this 
section, subject to the exemption in paragraph (a)(3)(iii) of this 
section. Prescriptions written for a beneficiary in a long-term care 
facility will not be included in determining compliance until January 
1, 2028. Compliance actions against prescribers who do not meet the 
compliance threshold based on prescriptions written for a beneficiary 
in a long-term care facility will commence on or after January 1, 2028. 
Compliance actions against prescribers who do not meet the compliance 
threshold based on other prescriptions will commence on or after 
January 1, 2023. Prescribers will be exempt from this requirement in 
the following situations:
* * * * *

0
49. Section 423.360 is amended by revising paragraph (c) to read as 
follows:


Sec.  423.360  Reporting and returning of overpayments.

* * * * *
    (c) Identified overpayment. The Part D sponsor has identified an 
overpayment when the Part D sponsor knowingly receives or retains an 
overpayment. The term ``knowingly'' has the meaning set forth in 31 
U.S.C. 3729(b)(1)(A).
* * * * *

PART 424--CONDITIONS FOR MEDICARE PAYMENT

0
50. The authority citation for part 424 continues to read as follows:

    Authority: 42 U.S.C. 1302 and 1395hh.


0
51. Section 424.24 is amended by revising paragraphs (c) heading, 
(c)(1)(i), and (c)(3)(ii) and adding paragraph (c)(5) to read as 
follows:


Sec.  424.24  Requirements for medical and other health services 
furnished by providers under Medicare Part B.

* * * * *
    (c) Outpatient physical therapy, occupational therapy, and speech-
language pathology services--
    (1) * * *
    (i) The individual needs, or needed, physical therapy, occupational 
therapy, or speech-language pathology services.
* * * * *
    (3) * * *
    (ii) If the plan of treatment is established by a physical 
therapist, occupational therapist, or speech-language pathologist, the 
certification must be signed by a physician or by a nurse practitioner, 
clinical nurse specialist, or physician assistant who has knowledge of 
the case, except as specified in paragraph (c)(5) of this section.
* * * * *
    (5) Treatment plan. If the plan of treatment is established by a 
physical therapist, occupational therapist, or speech-language 
pathologist, and there is a written order or referral from the 
individual's physician, nurse practitioner (NP), physician assistant 
(PA), or clinical nurse specialist (CNS) in the patient's record and 
the therapist has documented evidence that the plan of treatment has 
been delivered to the physician, NP, PA, or CNS within 30 days of 
completion of the initial evaluation, the certification does not need 
to be signed by a physician, NP, CNS, or PA who has knowledge of the 
case. If there is no written order or referral from the individual's 
physician, NP, CNS, or PA, in the patient's record, the therapist must 
obtain the signature of the physician, NP, PA, or CNS on the plan of 
treatment in accordance with paragraph (c)(3) of this section. No 
references to an order or referral in this subsection shall be 
construed to require an order or referral for outpatient physical 
therapy, occupational therapy, or speech-language pathology services.
* * * * *

0
52. Section 424.205 is amended by revising paragraphs (c)(10), 
(f)(1)(ii), (f)(2)(i), and (f)(5) to read as follows:


Sec.  424.205  Requirements for Medicare Diabetes Prevention Program 
suppliers.

* * * * *
    (c) * * *
    (10) Except as allowed under paragraph (d)(8) of this section, the 
MDPP supplier must offer an MDPP beneficiary no fewer than all of the 
following:
    (i) 16 in-person or distance learning core sessions no more 
frequently than weekly for the first 6 months of the MDPP services 
period, which begins on the date of attendance at the first such core 
session.
    (ii) 1 in-person or distance learning core maintenance session each 
month during months 7 through 12 (6 months total) of the MDPP services 
period.
* * * * *
    (f) * * *
    (1) * * *
    (ii) Basic beneficiary information for each MDPP beneficiary in 
attendance, including but not limited to beneficiary name, Medicare 
Beneficiary Identifier (MBI), and age.
* * * * *
    (2) * * *
    (i) Documentation of the type of session (in-person or distance 
learning).
* * * * *
    (5) The MDPP supplier's records must include an attestation from 
the MDPP supplier that, as applicable, the MDPP beneficiary for which 
it is submitting a claim--
    (i) Has achieved the required minimum 5-percent weight loss as 
measured in accordance with Sec.  410.79(e)(3)(iii) of this chapter 
during a core session or core maintenance session furnished by that 
supplier, if the claim submitted is for a performance payment under 
Sec.  414.84(b)(1) of this chapter.

[[Page 98566]]

    (ii) Has achieved the required minimum 5-percent weight loss as 
measured in-person during a core session or core maintenance session 
furnished by that supplier, if the claim submitted is for a performance 
payment under Sec.  414.84(b)(1) of this chapter.
    (iii) Has achieved at least a 9-percent weight loss percentage as 
measured in accordance with Sec.  410.79(e)(3)(iii) of this chapter 
during a core session or core maintenance session furnished by that 
supplier, if the claim submitted is for a performance payment under 
Sec.  414.84(b)(2) of this chapter.
    (iv) Has achieved at least a 9-percent weight loss percentage as 
measured in-person during a core session or core maintenance session 
furnished by that supplier, if the claim submitted is for a performance 
payment under Sec.  414.84(b)(2) of this chapter.
* * * * *

PART 425--MEDICARE SHARED SAVINGS PROGRAM

0
53. The authority citation for part 425 continues to read as follows:

    Authority:  42 U.S.C. 1302, 1306, 1395hh, and 1395jjj.


0
54. Section 425.100 is amended by adding paragraph (e) to read as 
follows:


Sec.  425.100  General.

* * * * *
    (e) An ACO is eligible to receive prepaid shared savings if it 
meets the criteria under Sec.  425.640(b).

0
55. Section 425.110 is amended by revising paragraph (b)(2) to read as 
follows:


Sec.  425.110  Number of ACO professionals and beneficiaries.

* * * * *
    (b) * * *
    (2) For performance years starting before January 1, 2025, if the 
ACO's assigned population is not at least 5,000 by the end of the 
performance year specified by CMS in its request for a corrective 
action plan (CAP), CMS terminates the participation agreement and the 
ACO is not eligible to share in savings for that performance year.
* * * * *

0
56. Section 425.202 is amended by revising paragraph (a)(3) to read as 
follows:


Sec.  425.202  Application procedures.

    (a) * * *
    (3) An ACO that seeks to participate in the Shared Savings Program 
must agree that CMS can share a copy of their application with the 
Antitrust Agencies.
* * * * *

0
57. Section 425.204 is amended by--
0
a. Revising paragraphs (f)(1) and (f)(3) introductory text;
0
b. In paragraphs (f)(3)(iv), (f)(4)(iv)(A), and (f)(6)(ii) introductory 
text, removing the phrase ``any shared losses incurred'' and adding in 
its place the phrase ``any shared losses incurred and prepaid shared 
savings determined to be owed'';
0
c. In paragraphs (f)(5) and (f)(6)(iv)(A), removing the phrase ``shared 
losses owed'' and adding in its place the phrase ``shared losses owed 
or prepaid shared savings determined to be owed'';
0
d. In paragraph (f)(6)(iii), removing the phrase ``shared losses'' and 
adding in its place the phrase ``shared losses or prepaid shared 
savings determined to be owed''; and
0
e. In paragraph (f)(6)(iv)(C), removing the phrase ``owe any shared 
losses'' and adding in its place the phrase ``owe any shared losses or 
prepaid shared savings''.
    The revisions read as follows:


Sec.  425.204  Content of the application.

* * * * *
    (f) * * *
    (1) An ACO must have the ability to repay all shared losses for 
which it may be liable under a two-sided model and any prepaid shared 
savings determined to be owed.
* * * * *
    (3) An ACO that will participate under a two-sided model of the 
Shared Savings Program must submit for CMS approval documentation that 
it is capable of repaying shared losses that it may incur during its 
agreement period, including details supporting the adequacy of the 
repayment mechanism. If the ACO will receive prepaid shared savings, 
the repayment mechanism must also support repayment of prepaid shared 
savings in accordance with Sec.  425.640.
* * * * *

0
58. Section 425.224 is amended by revising paragraph (a)(3) to read as 
follows:


Sec.  425.224  Application procedures for renewing ACOs and re-entering 
ACOs.

    (a) * * *
    (3) An ACO that seeks to enter a new participation agreement under 
the Shared Savings Program must agree that CMS can share a copy of its 
application with the Antitrust Agencies.
* * * * *

0
59. Section 425.304 is amended by adding paragraph (d) to read as 
follows:


Sec.  425.304  Beneficiary incentives.

* * * * *
    (d) Application of the CMS-sponsored model patient incentives safe 
harbor. CMS has determined that the Federal anti-kickback statute safe 
harbor for CMS-sponsored model patient incentives (Sec.  
1001.952(ii)(2) of this title) is available to protect remuneration 
furnished in the prepaid shared savings option of the Shared Savings 
Program in the form of direct beneficiary services that meets all safe 
harbor requirements set forth in Sec.  1001.952(ii) of this title.

0
60. Section 425.308 is amended by adding paragraph (b)(10) to read as 
follows:


Sec.  425.308  Public reporting and transparency.

* * * * *
    (b) * * *
    (10) Information updated annually about the ACO's use of prepaid 
shared savings under Sec.  425.640, for each performance year, 
including the following:
    (i) Total amount of any prepaid shared savings received from CMS.
    (ii) The ACO's spend plan.
    (iii) An itemization of how prepaid shared savings were spent 
during the year, including expenditure categories, the dollar amounts 
spent on the various categories, information about which groups of 
beneficiaries received direct beneficiary services that were purchased 
with prepaid shared savings and investments that were made in the ACO 
with prepaid shared savings, how these direct beneficiary services were 
provided to beneficiaries and how the direct beneficiary services and 
investments supported the care of beneficiaries, any changes to the 
spend plan as submitted under Sec.  425.640(d)(2) (if applicable), and 
such other information as may be specified by CMS.
* * * * *

0
61. Section 425.312 is amended by revising paragraphs (a)(2)(iii) and 
(a)(2)(v)(A) to read as follows:


Sec.  425.312  Beneficiary notifications.

    (a) * * *
    (2) * * *
    (iii) In the case of an ACO that has selected preliminary 
prospective assignment with retrospective reconciliation, by the ACO or 
ACO participant providing each beneficiary who received at least one 
primary care service during the assignment window or applicable 
expanded window for assignment (as defined in Sec.  425.20) from a 
physician who is an ACO professional in the ACO and who is a primary 
care physician as defined under Sec.  425.20 or who has one of the 
primary specialty designations included in Sec.  425.402(c), a FQHC or 
RHC that is part of the ACO, or an ACO professional in the ACO

[[Page 98567]]

whom the beneficiary designated as responsible for coordinating their 
overall care under Sec.  425.402(e) with a standardized written notice 
at least once during an agreement period in the form and manner 
specified by CMS. The standardized written notice must be furnished to 
all of these beneficiaries prior to or at the first primary care 
service visit during the first performance year in which the 
beneficiary receives a primary care service from an ACO participant.
* * * * *
    (v) * * *
    (A) The follow-up communication must occur no later than 180 days 
from the date the standardized written notice was provided.
* * * * *

0
62. Section 425.315 is amended by revising paragraph (a)(4) and adding 
paragraph (b) to read as follows:


Sec.  425.315  Reopening determinations of ACO shared savings or shared 
losses to correct financial reconciliation calculations.

    (a) * * *
    (4) CMS has the sole discretion to determine whether to reopen a 
payment determination under this section.
    (b) Reopening requests. An ACO may request a reopening in a form 
and manner specified by CMS and consistent with the timeframes for a 
reopening specified in paragraphs (a)(1)(i) and (ii) of this section.

0
63. Section 425.316 is amended by adding paragraph (f) to read as 
follows:


Sec.  425.316  Monitoring of ACOs.

* * * * *
    (f) Monitoring ACO eligibility for and use of prepaid shared 
savings. (1) CMS monitors an ACO that receives prepaid shared savings 
pursuant to Sec.  425.640 to ensure ACO compliance with Sec.  
425.640(e) and to determine whether it would be appropriate to withhold 
or terminate an ACO's prepaid shared savings under Sec.  425.640(h).
    (2) If CMS determines that an ACO receiving prepaid shared savings 
is using the funds for a prohibited use under Sec.  425.640(e)(2), 
fails to spend the funding in accordance with Sec.  425.640(e)(1)(i) 
and (ii), or spends more than 50 percent of the estimated annual 
payment amount on staffing and healthcare infrastructure CMS:
    (i) Will require the ACO to reallocate the funding as permitted by 
Sec.  425.640(e) and submit an updated spend plan demonstrating the 
reallocation by a deadline specified by CMS.
    (ii) May take compliance action as specified in Sec. Sec.  425.216, 
425.218, and 425.640(h)(1).
    (3) If an ACO fails to reallocate prepaid shared savings it 
received as described in paragraph (f)(2)(i) of this section by a 
deadline specified by CMS, the ACO must repay all prepaid shared 
savings it received and may be subject to compliance action as 
specified in Sec. Sec.  425.216 and 425.218. CMS will provide written 
notification to the ACO of the amount due and the ACO must pay such 
amount no later than 90 days after the receipt of such notification.

0
64. Section 425.400 is amended by revising paragraph (c)(1)(viii) 
introductory text and adding paragraph (c)(1)(ix) to read as follows:


Sec.  425.400  General.

* * * * *
    (c) * * *
    (1) * * *
    (viii) For the performance year starting on January 1, 2024, as 
follows:
* * * * *
    (ix) For the performance year starting on January 1, 2025, and 
subsequent performance years as follows:
    (A) CPT codes:
    (1) 96160 and 96161 (codes for administration of health risk 
assessment).
    (2) 96202 and 96203 (codes for caregiver behavior management 
training).
    (3) 97550, 97551, and 97552 (codes for caregiver training 
services).
    (4) 98016 (code for virtual check-in).
    (5) 99201 through 99215 (codes for office or other outpatient visit 
for the evaluation and management of a patient).
    (6) 99304 through 99318 (codes for professional services furnished 
in a nursing facility; professional services or services reported on an 
FQHC or RHC claim identified by these codes are excluded when furnished 
in a skilled nursing facility (SNF)).
    (7) 99319 through 99340 (codes for patient domiciliary, rest home, 
or custodial care visit).
    (8) 99341 through 99350 (codes for evaluation and management 
services furnished in a patient's home).
    (9) 99354 and 99355 (add-on codes, for prolonged evaluation and 
management or psychotherapy services beyond the typical service time of 
the primary procedure; when the base code is also a primary care 
service code under this paragraph (c)(1)(ix)).
    (10) 99406 and 99407 (codes for smoking and tobacco-use cessation 
counseling services).
    (11) 99421, 99422, and 99423 (codes for online digital evaluation 
and management).
    (12) 99424, 99425, 99426, and 99427 (codes for principal care 
management services).
    (13) 99437, 99487, 99489, 99490 and 99491 (codes for chronic care 
management).
    (14) 99439 (code for non-complex chronic care management).
    (15) 99452 (code for interprofessional consultation service).
    (16) 99483 (code for assessment of and care planning for patients 
with cognitive impairment).
    (17) 99484, 99492, 99493 and 99494 (codes for behavioral health 
integration services).
    (18) 99495 and 99496 (codes for transitional care management 
services).
    (19) 99497 and 99498 (codes for advance care planning; services 
identified by these codes furnished in an inpatient setting are 
excluded).
    (B) HCPCS codes:
    (1) G0019 and G0022 (codes for community health integration 
services).
    (2) G0023 and G0024 (codes for principal illness navigation 
services).
    (3) G0101 (code for cervical or vaginal cancer screening).
    (4) G0136 (code for social determinants of health risk assessment 
services).
    (5) G0317, G0318, and G2212 (codes for prolonged office or other 
outpatient visit for the evaluation and management of a patient).
    (6) G0402 (code for the Welcome to Medicare visit).
    (7) G0438 and G0439 (codes for the annual wellness visits).
    (8) G0442 (code for alcohol misuse screening service).
    (9) G0443 (code for alcohol misuse counseling service).
    (10) G0444 (code for annual depression screening service).
    (11) G0463 (code for services furnished in electing teaching 
amendment (ETA) hospitals).
    (12) G0506 (code for chronic care management).
    (13) G0537 and G0538 (codes for cardiovascular risk assessment and 
risk management services).
    (14) G0539 and G0540 (codes for individual behavior management/
modification caregiver training services).
    (15) G0541, G0542, and G0543 (codes for direct care caregiver 
training services).
    (16) G0544 (code for post-discharge telephonic follow-up contacts 
intervention).
    (17) G0556, G0557, and G0558 (codes for advanced primary care 
management services).
    (18) G0560 (code for safety planning interventions).

[[Page 98568]]

    (19) G2010 (code for the remote evaluation of patient video/
images).
    (20) G2012 and G2252 (codes for virtual check-in).
    (21) G2058 (code for non-complex chronic care management).
    (22) G2064 and G2065 (codes for principal care management 
services).
    (23) G2086, G2087, and G2088 (codes for office-based opioid use 
disorder services).
    (24) G2211 (code for visit complexity inherent to evaluation and 
management services add-on).
    (25) G2214 (code for psychiatric collaborative care model).
    (26) G3002 and G3003 (codes for chronic pain management).
    (C) Primary care service codes include any CPT code identified by 
CMS that directly replaces a CPT code specified in paragraph 
(c)(1)(ix)(A) of this section or a HCPCS code specified in paragraph 
(c)(1)(ix)(B) of this section, when the assignment window or expanded 
window for assignment (as defined in Sec.  425.20) for a benchmark or 
performance year includes any day on or after the effective date of the 
replacement code for payment purposes under FFS Medicare.
* * * * *

0
65. Section 425.402 is amended by revising paragraph (e)(2)(ii) 
introductory text and adding paragraph (e)(2)(iii) to read as follows:


Sec.  425.402  Basic assignment methodology.

* * * * *
    (e) * * *
    (2) * * *
    (ii) For performance years starting on January 1, 2019, through 
2024:
* * * * *
    (iii) For performance year 2025 and subsequent performance years:
    (A) The beneficiary meets the eligibility criteria established at 
Sec.  425.401(a) and must not be excluded by the criteria at Sec.  
425.401(b). The exclusion criteria at Sec.  425.401(b) apply for 
purposes of determining beneficiary eligibility for alignment to an ACO 
based on the beneficiary's designation of an ACO professional as 
responsible for coordinating their overall care under paragraph (e) of 
this section, regardless of the ACO's assignment methodology selection 
under Sec.  425.226(a)(1).
    (B) The beneficiary must have designated an ACO professional as 
responsible for coordinating their overall care.
    (C) If a beneficiary has designated a provider or supplier outside 
the ACO as responsible for coordinating their overall care, the 
beneficiary is not added under the assignment methodology in paragraph 
(b) of this section to the ACO's list of assigned beneficiaries for a 
12-month performance year.
    (D) The beneficiary is not assigned to an entity participating in a 
model tested or expanded under section 1115A of the Act that meets the 
following conditions--
    (1) Claims-based assignment for the model is based solely on 
either--
    (i) Claims for primary care and/or other services related to 
treatment of one or more specific diseases or conditions targeted by 
the model; or
    (ii) Claims for services other than primary care services; and
    (2) There has been a determination by the Secretary that waiver of 
the requirement in section 1899(c)(2)(B) of the Act is necessary solely 
for purposes of testing the model.
* * * * *

0
66. Section 425.508 is amended by revising paragraph (b) and adding 
paragraph (c) to read as follows:


Sec.  425.508  Incorporating quality reporting requirements related to 
the Quality Payment Program.

* * * * *
    (b) For performance years beginning in 2021-2024. ACOs must submit 
the quality data via the APM Performance Pathway (APP) established 
under Sec.  414.1367 of this chapter to satisfactorily report on behalf 
of the eligible clinicians who bill under the TIN of an ACO participant 
for purposes of the MIPS Quality performance category of the Quality 
Payment Program.
    (c) For performance years beginning on or after January 1, 2025. 
ACOs must submit the quality data via the APM Performance Pathway (APP) 
on the quality measures contained in the APP Plus quality measure set 
established under Sec.  414.1367 of this chapter to satisfactorily 
report on behalf of the eligible clinicians who bill under the TIN of 
an ACO participant for purposes of the MIPS Quality performance 
category of the Quality Payment Program.

0
67. Section 425.510 is amended by revising the section heading and 
paragraph (b) to read as follows:


Sec.  425.510  Application of the APM Performance Pathway (APP) quality 
measure set or the APP Plus quality measure set (as applicable) to 
Shared Savings Program ACOs for performance years beginning on or after 
January 1, 2021.

* * * * *
    (b) Quality reporting. (1) For performance years beginning in 2021-
2024, ACOs must report quality data on the APP quality measure set 
established under Sec.  414.1367 of this chapter, according to the 
method of submission established by CMS.
    (2) For performance years beginning on or after January 1, 2025, 
ACOs must report quality data on the APP Plus quality measure set 
established under Sec.  414.1367 of this chapter, according to the 
method of submission established by CMS.
* * * * *

0
68. Section 425.512 is amended by--
0
a. Revising paragraph (a)(2)(iii);
0
b. Adding paragraph (a)(2)(iv);
0
c. Revising paragraphs (a)(5)(i) introductory text, (a)(5)(i)(A) 
introductory text, (a)(5)(i)(B);
0
d. Adding paragraph (a)(5)(i)(C);
0
e. Revising paragraphs (a)(5)(ii) and (a)(5)(iii)(B);
0
f. Adding paragraph (a)(5)(iii)(C);
0
g. Revising paragraph (a)(7);
0
h. Revising and republishing paragraph (b);
0
 i. In paragraph (c)(3) introductory text, removing the phrase ``via 
the APP'' and adding in its place the phrase ``on the APP quality 
measure set or the APP Plus quality measure set (as applicable)'';
0
j. In paragraph (c)(3)(iii), removing the phrase ``and subsequent 
performance years'' after ``For performance year 2024''; and
0
k. Adding paragraph (c)(3)(iv).
    The revisions, republication, and additions read as follows:


Sec.  425.512  Determining the ACO quality performance standard for 
performance years beginning on or after January 1, 2021.

    (a) * * *
    (2) * * *
    (iii) For performance years 2025 and 2026. If the ACO reports the 
APP Plus quality measure set and meets the data completeness 
requirement at Sec.  414.1340 of this subchapter on all eCQMs/MIPS 
CQMs/Medicare CQMs, and the CAHPS for MIPS survey (except as specified 
in Sec.  414.1380(b)(1)(vii)(B) of this subchapter), and receives a 
MIPS Quality performance category score under Sec.  414.1380(b)(1) of 
this subchapter, for the applicable performance year.
    (iv) For performance year 2027 and subsequent performance years. If 
the ACO reports the APP Plus quality measure set and meets the data 
completeness requirement at Sec.  414.1340 of this subchapter on all 
eCQMs/Medicare CQMs, and the CAHPS for MIPS survey (except as specified 
in Sec.  414.1380(b)(1)(vii)(B) of this subchapter), and receives a 
MIPS Quality performance category score under Sec.  414.1380(b)(1) of 
this

[[Page 98569]]

subchapter, for the applicable performance year.
* * * * *
    (5) * * *
    (i) Except as specified in paragraphs (a)(2) and (7) of this 
section, CMS designates the quality performance standard as:
    (A) For performance year 2024, the ACO reporting quality data on 
the APP quality measure set established under Sec.  414.1367 of this 
subchapter, according to the method of submission established by CMS 
and--
* * * * *
    (B) For performance years 2025 and 2026, the ACO reporting quality 
data on the APP Plus quality measure set established under Sec.  
414.1367 of this subchapter, according to the method of submission 
established by CMS and--
    (1) Achieving a health equity adjusted quality performance score 
that is equivalent to or higher than the 40th percentile across all 
MIPS Quality performance category scores, excluding entities/providers 
eligible for facility-based scoring; or
    (2) If the ACO reports all of the eCQMs/MIPS CQMs in the APP Plus 
quality measure set applicable for a performance year, meeting the data 
completeness requirement at Sec.  414.1340 of this subchapter for all 
eCQMs/MIPS CQMs, and achieving a quality performance score equivalent 
to or higher than the 10th percentile of the performance benchmark on 
at least one of the outcome measures in the APP Plus quality measure 
set and a quality performance score equivalent to or higher than the 
40th percentile of the performance benchmark on at least one of the 
remaining measures in the APP Plus quality measure set.
    (C) For performance year 2027 and subsequent performance years, the 
ACO reporting quality data on the APP Plus quality measure set 
established under Sec.  414.1367 of this subchapter, according to the 
method of submission established by CMS and--
    (1) Achieving a health equity adjusted quality performance score 
that is equivalent to or higher than the 40th percentile across all 
MIPS Quality performance category scores, excluding entities/providers 
eligible for facility-based scoring; or
    (2) If the ACO reports all of the eCQMs in the APP Plus quality 
measure set applicable for a performance year, meeting the data 
completeness requirement at Sec.  414.1340 of this subchapter for all 
eCQMs, and achieving a quality performance score equivalent to or 
higher than the 10th percentile of the performance benchmark on at 
least one of the four outcome measures in the APP Plus quality measure 
set and a quality performance score equivalent to or higher than the 
40th percentile of the performance benchmark on at least one of the 
remaining measures in the APP Plus quality measure set.
    (ii) CMS designates an alternative quality performance standard for 
an ACO that does not meet the criteria described in paragraph (a)(2) or 
(a)(5)(i) of this section as the following:
    (A) For performance year 2024, the ACO reports quality data on the 
APP quality measure set established under Sec.  414.1367 of this 
subchapter according to the method of submission established by CMS and 
achieves a quality performance score equivalent to or higher than the 
10th percentile of the performance benchmark on at least one of the 
four outcome measures in the APP quality measure set.
    (B) For performance year 2025 and subsequent performance years, the 
ACO reports quality data on the APP Plus quality measure set 
established under Sec.  414.1367 of this subchapter according to the 
method of submission established by CMS and achieves a quality 
performance score equivalent to or higher than the 10th percentile of 
the performance benchmark on at least one of the outcome measures in 
the APP Plus quality measure set.
    (iii) * * *
    (B) For performance years 2025 and 2026, the ACO does not report 
any of the eCQMs/MIPS CQMs/Medicare CQMs in the APP Plus quality 
measure set and does not administer a CAHPS for MIPS survey (except as 
specified in Sec.  414.1380(b)(1)(vii)(B) of this subchapter).
    (C) For performance year 2027 and subsequent performance years, the 
ACO does not report any of the eCQMs/Medicare CQMs in the APP Plus 
quality measure set and does not administer a CAHPS for MIPS survey 
(except as specified in Sec.  414.1380(b)(1)(vii)(B) of this 
subchapter).
* * * * *
    (7) CMS will use the higher of the ACO's health equity adjusted 
quality performance score or the equivalent of the 40th percentile MIPS 
Quality performance category score across all MIPS Quality performance 
category scores, excluding entities/providers eligible for facility-
based scoring, for the relevant performance year when--
    (i) For performance year 2024, if an ACO reports all of the 
required measures, meeting the data completeness requirement at Sec.  
414.1340 of this subchapter for each measure in the APP quality measure 
set and receiving a MIPS Quality performance category score as 
described at Sec.  414.1380(b)(1) of this subchapter and the ACO meets 
either of the following:
    (A) The ACO's total available measure achievement points used to 
calculate the ACO's MIPS Quality performance category score are reduced 
under Sec.  414.1380(b)(1)(vii)(A) of this subchapter.
    (B) At least one of the eCQMs/MIPS CQMs/Medicare CQMs does not have 
a benchmark as described at Sec.  414.1380(b)(1)(i)(A) of this 
subchapter.
    (ii) For performance year 2025 and subsequent performance years, if 
an ACO reports all of the required measures in the APP Plus quality 
measure set, meeting the data completeness requirement at Sec.  
414.1340 of this subchapter for each measure in the APP Plus quality 
measure set, and receiving a MIPS Quality performance category score as 
described at Sec.  414.1380(b)(1) of this subchapter, for the relevant 
performance year, and the ACO meets either of the following:
    (A) The ACO's total available measure achievement points used to 
calculate the ACO's MIPS Quality performance category score are reduced 
under Sec.  414.1380(b)(1)(vii)(A) of this subchapter.
    (B) At least one of the required measures in the APP Plus quality 
measure set does not have a benchmark as described at Sec.  
414.1380(b)(1)(i)(A) of this subchapter.
    (b) Calculation of ACO's health equity adjusted quality performance 
score for performance year 2023 and subsequent performance years--(1) 
For performance year 2023. For an ACO that reports the three eCQMs/MIPS 
CQMs in the APP quality measure set, meeting the data completeness 
requirement at Sec.  414.1340 of this subchapter for all three eCQMs/
MIPS CQMs, and administers the CAHPS for MIPS survey, CMS calculates 
the ACO's health equity adjusted quality performance score as the sum 
of the ACO's MIPS Quality performance category score for all measures 
in the APP quality measure set and the ACO's health equity adjustment 
bonus points calculated in accordance with paragraph (b)(4) of this 
section. The sum of these values may not exceed 100 percent.
    (2) For performance year 2024. For an ACO that reports the three 
eCQMs/MIPS CQMs/Medicare CQMs in the APP quality measure set, meeting 
the data completeness requirement at Sec.  414.1340 of this subchapter 
for all three eCQMs/MIPS CQMs/Medicare CQMs, and administers the CAHPS 
for MIPS survey (except as specified in Sec.  414.1380(b)(1)(vii)(B) of 
this

[[Page 98570]]

subchapter), CMS calculates the ACO's health equity adjusted quality 
performance score as the sum of the ACO's MIPS Quality performance 
category score for all measures in the APP quality measure set and the 
ACO's health equity adjustment bonus points calculated in accordance 
with paragraph (b)(4) of this section. The sum of these values may not 
exceed 100 percent.
    (3) For performance year 2025 and subsequent performance years. For 
an ACO that reports all of the required measures in the APP Plus 
quality measure set, meeting the data completeness requirement at Sec.  
414.1340 of this subchapter for all of the required measures in the APP 
Plus quality measure set, and administers the CAHPS for MIPS survey 
(except as specified in Sec.  414.1380(b)(1)(vii)(B) of this 
subchapter), CMS calculates the ACO's health equity adjusted quality 
performance score as the sum of the ACO's MIPS Quality performance 
category score for all measures in the APP Plus quality measure set and 
the ACO's health equity adjustment bonus points calculated in 
accordance with paragraph (b)(4) of this section. The sum of these 
values may not exceed 100 percent.
    (4) Calculation of ACO's health equity adjustment bonus points. CMS 
calculates the ACO's health equity adjustment bonus points as follows:
    (i) For each measure that an ACO is required to report for the 
applicable performance year, CMS groups an ACO's performance into the 
top, middle, or bottom third of ACO measure performers by reporting 
mechanism.
    (ii) CMS assigns values to the ACO for its performance on each 
measure as follows:
    (A) Values of four, two, or zero for each measure for which the 
ACO's performance places it in the top, middle, or bottom third of ACO 
measure performers, respectively.
    (B) Values of zero for each measure that CMS does not evaluate 
because the measure is unscored or the ACO does not meet the case 
minimum or the minimum sample size for the measure.
    (iii) CMS sums the values assigned to the ACO according to 
paragraph (b)(4)(ii) of this section, to calculate the ACO's measure 
performance scaler.
    (iv) CMS calculates an underserved multiplier for the ACO.
    (A)(1) CMS determines the proportion ranging from zero to one of 
the ACO's assigned beneficiary population for the performance year that 
is considered underserved based on the highest of either of the 
following:
    (i) The proportion of the ACO's assigned beneficiaries residing in 
a census block group with an Area Deprivation Index (ADI) national 
percentile rank of at least 85. An ACO's assigned beneficiaries without 
an available numeric ADI national percentile rank are excluded from the 
calculation of the proportion of the ACO's assigned beneficiaries 
residing in a census block group with an ADI national percentile rank 
of at least 85.
    (ii) The proportion of the ACO's assigned beneficiaries who are 
enrolled in the Medicare Part D low-income subsidy (LIS); or are dually 
eligible for Medicare and Medicaid.
    (2) CMS calculates the proportions specified in paragraph 
(b)(4)(iv)(A)(1)(ii) of this section as follows:
    (i) For performance year 2023, the proportion of the ACO's assigned 
beneficiaries who are enrolled in the Medicare Part D LIS or are dually 
eligible for Medicare and Medicaid divided by the total number of the 
ACO's assigned beneficiaries' person years.
    (ii) For performance year 2024 and subsequent performance years, 
the proportion of the ACO's assigned beneficiaries with any months 
enrolled in LIS or dually eligible for Medicare and Medicaid divided by 
the total number of the ACO's assigned beneficiaries.
    (B) If the proportion determined in accordance with paragraph 
(b)(4)(iv)(A) of this section is lower than 20 percent, the ACO is 
ineligible for health equity adjustment bonus points.
    (v) Except as specified in paragraph (b)(4)(iv)(B) of this section, 
CMS calculates the ACO's health equity adjustment bonus points as the 
product of the measure performance scaler determined under paragraph 
(b)(4)(iii) of this section and the underserved multiplier determined 
under paragraph (b)(4)(iv) of this section. If the product of these 
values is greater than 10, the value of the ACO's health equity 
adjustment bonus points is set equal to 10.
    (5) Use of ACO's health equity adjusted quality performance score. 
The ACO's health equity adjusted quality performance score, determined 
in accordance with paragraphs (b)(1) through (4) of this section, is 
used as follows:
    (i) In determining whether the ACO meets the quality performance 
standard as specified under paragraphs (a)(4)(i)(A), (a)(5)(i)(A)(1), 
(a)(5)(i)(B), and (a)(7) of this section.
    (ii) In determining the final sharing rate for calculating shared 
savings payments under the BASIC track in accordance with Sec.  
425.605(d), and under the ENHANCED track in accordance with Sec.  
425.610(d), for an ACO that meets the alternative quality performance 
standard by meeting the criteria specified in paragraph (a)(4)(ii) or 
(a)(5)(ii) of this section.
    (iii) In determining the shared loss rate for calculating shared 
losses under the ENHANCED track in accordance with Sec.  425.610(f), 
for an ACO that meets the quality performance standard established in 
paragraphs (a)(2), (a)(4)(i), and (a)(5)(i) of this section or the 
alternative quality performance standard established in paragraph 
(a)(4)(ii) or (a)(5)(ii) of this section.
    (iv) In determining the quality performance score for an ACO 
affected by extreme and uncontrollable circumstances as described in 
paragraphs (c)(3)(ii) through (iv) of this section.
    (c) * * *
    (3) * * *
    (iv) For performance year 2025 and subsequent performance years, if 
the ACO reports the APP Plus quality measure set and meets the data 
completeness requirement at Sec.  414.1340 of this subchapter and 
receives a MIPS Quality performance category score under Sec.  
414.1380(b)(1) of this subchapter, CMS will use the higher of the ACO's 
health equity adjusted quality performance score or the equivalent of 
the 40th percentile MIPS Quality performance category score across all 
MIPS Quality performance category scores, excluding entities/providers 
eligible for facility-based scoring, for the relevant performance year.
* * * * *

0
69. Section 425.601 is amended by revising paragraph (a)(9) 
introductory text and adding paragraphs (a)(9)(iii) and (iv) to read as 
follows:


Sec.  425.601  Establishing, adjusting, and updating the benchmark for 
agreement periods beginning on or after July 1, 2019, and before 
January 1, 2024.

    (a) * * *
    (9) For the second and each subsequent performance year during the 
term of the agreement period, the ACO's benchmark is adjusted for the 
following, as applicable: For the addition and removal of ACO 
participants or ACO providers/suppliers in accordance with Sec.  
425.118(b), for a change to the ACO's beneficiary assignment 
methodology selection under Sec.  425.226(a)(1), for a change to the 
beneficiary assignment methodology specified in subpart E of this part, 
for changes in values used in benchmark calculations as a result of 
issuance of a revised initial determination under Sec.  425.315, and 
for changes in values used in benchmark calculations as a result of the

[[Page 98571]]

performance year being affected by significant, anomalous, and highly 
suspect billing under Sec.  425.672. To adjust the benchmark, CMS does 
the following:
* * * * *
    (iii) Recalculates benchmark year expenditures to account for the 
impact of improper payments, for the benchmark year corresponding to a 
performance year for which CMS issued a revised initial determination 
under Sec.  425.315. In recalculating expenditures for the benchmark 
year, CMS applies the calculation methodology applied in recalculating 
expenditures for the corresponding performance year in accordance with 
Sec.  425.674.
    (iv) Recalculates expenditures used in Shared Savings Program 
benchmark calculations under this section, to exclude the same HCPCS or 
CPT codes identified as displaying significant, anomalous, and highly 
suspect billing patterns in calculation of performance year 
expenditures, in accordance with Sec.  425.672.
* * * * *

0
70. Section 425.605 is amended by revising paragraph (a)(1)(ii)(C) to 
read as follows:


Sec.  425.605  Calculation of shared savings and losses under the BASIC 
track.

    (a) * * *
    (1) * * *
    (ii) * * *
    (C) The aggregate growth in demographic risk scores for purposes of 
paragraph (a)(1)(ii)(A) of this section and the aggregate growth in 
prospective hierarchical condition category (HCC) risk scores for 
purposes of paragraph (a)(1)(ii)(B) of this section is calculated by 
taking a weighted average of the growth in demographic risk scores or 
prospective HCC risk scores, as applicable, across the populations 
described in paragraph (a)(2) of this section. When calculating the 
weighted average growth in demographic risk scores or prospective HCC 
risk scores, as applicable, the weight applied to the growth in risk 
scores (expressed as a ratio of the ACO's performance year risk score 
to the ACO's BY3 risk score) for each Medicare enrollment type is equal 
to the product of the ACO's historical benchmark expenditures, adjusted 
in accordance with Sec.  425.652(a)(8), for that enrollment type and 
the ACO's performance year assigned beneficiary person years for that 
enrollment type.
* * * * *

0
71. Section 425.610 is amended by revising paragraph (a)(2)(ii)(C) to 
read as follows:


Sec.  425.610  Calculation of shared savings and losses under the 
ENHANCED track.

    (a) * * *
    (2) * * *
    (ii) * * *
    (C) The aggregate growth in demographic risk scores for purposes of 
paragraph (a)(2)(ii)(A) of this section and the aggregate growth in 
prospective HCC risk scores for purposes of paragraph (a)(2)(ii)(B) of 
this section is calculated by taking a weighted average of the growth 
in demographic risk scores or prospective HCC risk scores, as 
applicable, across the populations described in paragraph (a)(3) of 
this section. When calculating the weighted average growth in 
demographic risk scores or prospective HCC risk scores, as applicable, 
the weight applied to the growth in risk scores (expressed as a ratio 
of the ACO's performance year risk score to the ACO's BY3 risk score) 
for each Medicare enrollment type is equal to the product of the ACO's 
historical benchmark expenditures, adjusted in accordance with Sec.  
425.652(a)(8), for that enrollment type and the ACO's performance year 
assigned beneficiary person years for that enrollment type.
* * * * *

0
72. Section 425.630 is amended by--
0
a. In paragraph (g)(3), removing the phrase ``paragraphs (g)(4) of this 
section'' and adding in its place the phrase ``paragraphs (g)(4) 
through (6) of this section'';
0
b. Redesignating paragraph (g)(5) as paragraph (g)(7);
0
c. Adding new paragraphs (g)(5) and (6);
0
d. In paragraph (h)(1)(ii), removing ``or'' at the end of the 
paragraph;
0
e. In paragraph (h)(1)(iii), removing the period at the end of 
paragraph and adding ``; or'' in its place; and
0
f. Adding paragraph (h)(1)(iv).
    The additions read as follows:


Sec.  425.630  Option to receive advance investment payments.

* * * * *
    (g) * * *
    (5) If an ACO notifies CMS that it no longer wants to participate 
in the advance investment payment option but does want to continue its 
participation in the Shared Savings Program, the ACO must repay all 
outstanding advance investment payments it received. CMS will provide 
written notice to the ACO of the amount due and the ACO must pay such 
amount no later than 90 days after the receipt of such notification.
    (6) If CMS terminates the participation agreement of an ACO that 
has an outstanding balance of advance investment payments owed to CMS, 
the ACO must repay any outstanding advance investment payments it 
received. CMS will provide written notification to the ACO of the 
amount due and the ACO must pay such amount no later than 90 days after 
the receipt of such notification.
* * * * *
    (h) * * *
    (1) * * *
    (iv) Voluntarily terminates payments of advance investment payments 
but continues its participation in the Shared Savings Program.
* * * * *

0
73. Section 425.640 is added to read as follows:


Sec.  425.640  Option to receive prepaid shared savings.

    (a) Purpose. Prepaid shared savings provide an additional cash flow 
option to ACOs with a history of earning shared savings that will 
encourage their investment in activities that reduce costs for the 
Medicare program and beneficiaries and improve the quality of care 
provided to their assigned beneficiaries.
    (b) Eligibility. An ACO is eligible to receive prepaid shared 
savings in an agreement period as specified in this section if CMS 
determines that all of the following criteria are met:
    (1) The ACO meets either of the following conditions:
    (i) The ACO is a renewing ACO as defined under Sec.  425.20 
entering an agreement period beginning on January 1, 2026, or in 
subsequent years.
    (ii) The ACO was a renewing ACO as defined under Sec.  425.20 
entering an agreement period beginning on January 1, 2025, and applied 
to receive prepaid shared savings in accordance with paragraph (c)(2) 
of this section starting with the performance year beginning on January 
1, 2026.
    (2) The ACO must have received a shared savings payment for the 
most recent performance year that:
    (i) Occurred prior to the agreement period for which the ACO has 
applied to receive prepaid shared savings; and
    (ii) CMS has conducted financial reconciliation.
    (3) The ACO must have a positive prior savings adjustment for the 
agreement period for which the ACO has applied to receive prepaid 
shared savings as calculated pursuant to Sec.  425.658.
    (4) The ACO does not have any outstanding shared losses or advance 
investment payments that have not yet been repaid to CMS after 
reconciliation for the most recent performance year for which CMS 
completed financial reconciliation.

[[Page 98572]]

    (5) If the ACO received prepaid shared savings in the current 
agreement period or a prior agreement period, the ACO must have fully 
repaid the amount of prepaid shared savings received through the most 
recent performance year for which CMS has completed financial 
reconciliation.
    (6) The ACO is participating in Levels C through E of the BASIC 
track or the ENHANCED track during the agreement period in which it 
would receive prepaid shared savings.
    (7) The ACO has in place an adequate repayment mechanism in 
accordance with Sec.  425.204(f) that can be used to recoup outstanding 
prepaid shared savings.
    (8) During the agreement period immediately preceding the agreement 
period in which the ACO would receive prepaid shared savings, the ACO:
    (i) Met the quality performance standard as specified under Sec.  
425.512; and
    (ii) Has not been determined by CMS to have avoided at-risk 
beneficiaries as specified under Sec.  425.316(b)(2).
    (c) Application procedure. (1) For an ACO renewing to enter an 
agreement period beginning on January 1, 2026, or in subsequent years, 
to obtain a determination regarding whether the ACO may receive prepaid 
shared savings, the ACO must submit to CMS a complete supplemental 
application with its application to renew for a new agreement period in 
the Shared Savings Program (submitted pursuant to Sec.  425.224) in the 
form and manner and by a deadline specified by CMS.
    (2) For an ACO that renewed to enter an agreement period beginning 
on January 1, 2025, to obtain a determination regarding whether the ACO 
may receive prepaid shared savings, the ACO must submit to CMS a 
complete supplemental application for prepaid shared savings prior to 
the start of the performance year beginning on January 1, 2026, in the 
form and manner and by a deadline specified by CMS.
    (d) Application contents and review--(1) General. An ACO must 
submit to CMS supplemental application information sufficient for CMS 
to determine whether the ACO is eligible to receive prepaid shared 
savings. In addition, the ACO must submit a proposed spend plan as part 
of the supplemental application information.
    (2) Spend plan. The ACO's spend plan must:
    (i) Describe how an ACO receiving prepaid shared savings will spend 
the payments during the first performance year in which it will receive 
prepaid shared savings. The spend plan must be updated annually for 
each performance year of the agreement period during which the ACO 
receives prepaid shared savings.
    (ii) Identify the categories of items and services that will be 
purchased and investments that will be made in the ACO with prepaid 
shared savings (consistent with the allowable uses under paragraph (e) 
of this section), the dollar amounts to be spent on such categories, 
information about which groups of beneficiaries the ACO expects to 
receive direct beneficiary services that will be purchased with prepaid 
shared savings, how direct beneficiary services will be distributed to 
beneficiaries and how such services support the care of beneficiaries, 
descriptions of the investments that will be made in the ACO with 
prepaid shared savings, and such other information as may be specified 
by CMS.
    (iii) Include an attestation that the ACO will not discriminate on 
the basis of race, color, religion, sex, national origin, disability, 
or age with respect to their use of prepaid shared savings.
    (iv) Include the ACO's communication strategy for notifying CMS and 
any impacted beneficiaries if an ACO will no longer be providing any 
direct beneficiary services that had previously been provided by the 
ACO using prepaid shared savings.
    (3) CMS review. CMS will review the supplemental application 
information to determine whether an ACO meets the eligibility criteria 
and other requirements necessary to receive prepaid shared savings and 
will approve or deny the ACO's prepaid shared savings application 
accordingly. CMS may review an ACO's spend plan at any time and require 
the ACO to modify its spend plan to comply with the requirements of 
this paragraph (d) and paragraph (e) of this section.
    (e) Use and management of prepaid shared savings--(1) Allowable 
uses. An ACO must use prepaid shared savings to improve the quality and 
efficiency of items and services furnished to beneficiaries by 
investing in staffing, healthcare infrastructure, and direct 
beneficiary services. Expenditures of prepaid shared savings must 
comply with paragraph (e)(2) of this section, the beneficiary incentive 
provision at Sec.  425.304(a), (b), and (d), and all other applicable 
laws and regulations.
    (i) An ACO may spend up to 50 percent of its estimated annual 
prepaid shared savings on staffing and healthcare infrastructure in 
each performance year.
    (ii) An ACO may spend up to 100 percent, but not less than 50 
percent, of its estimated annual prepaid shared savings on direct 
beneficiary services in each performance year.
    (2) Prohibited uses. An ACO may not use prepaid shared savings for 
any expense other than those allowed under paragraph (e)(1) of this 
section. Prohibited uses include the following--
    (i) Management company or parent company profit;
    (ii) Performance bonuses;
    (iii) Provision of medical services covered by Medicare;
    (iv) Cash or cash equivalent payments to patients;
    (v) Items or activities unrelated to ACO operations or care of 
beneficiaries; and
    (vi) In the case of an ACO participating in Levels C through E of 
the BASIC track or the ENHANCED track, the repayment of any shared 
losses incurred as specified in a written notice in accordance with 
Sec.  425.605(e)(2) or Sec.  425.610(h)(2), respectively.
    (3) Duration for spending payments. An ACO must spend all prepaid 
shared savings in the agreement period in which they are received. An 
ACO must repay to CMS any unspent funds remaining at the end of each 
agreement period. Any unspent funds received for a performance year 
must be reallocated in the spend plan for the ACO's next performance 
year. When reallocated in the spend plan for the next performance year, 
the total unspent funds in each category must be reallocated within 
their originally indicated category specified in accordance with 
paragraph (d)(2) of this section. If an ACO fails to spend a majority 
of the prepaid shared savings they receive in a performance year, CMS 
may withhold future quarterly payments until the ACO spends the funding 
they have already received and reports this spending to CMS through an 
updated spend plan.
    (f) Payment & payment methodology. An ACO determined eligible 
pursuant to paragraph (b) of this section receives quarterly prepaid 
shared savings payments equal to the maximum quarterly payment amount 
calculated pursuant to the methodology specified in paragraphs (f)(2) 
through (4) of this section unless the ACO elects to receive a lesser 
amount pursuant to paragraph (f)(6) of this section. CMS notifies in 
writing each ACO of its determination of the amount of prepaid shared 
savings and the notice will inform the ACO of its right to request 
reconsideration review in accordance with the procedures specified in 
subpart I of this part. If CMS does not make any prepaid shared savings 
payment, the notice will specify the reason(s) why and inform the ACO 
of its right to request

[[Page 98573]]

reconsideration review in accordance with the procedures specified in 
subpart I.
    (1) Frequency of payments. (i) An eligible ACO entering an 
agreement period beginning on January 1, 2026, or in subsequent years 
will receive quarterly prepaid shared savings payments for the entirety 
of the ACO's agreement period unless the payment is withheld or 
terminated pursuant to paragraph (h) of this section.
    (ii) An eligible ACO participating in an agreement period beginning 
on January 1, 2025, will receive quarterly prepaid shared savings 
payments starting with the performance year beginning on January 1, 
2026, and for the remainder of its agreement period, unless the payment 
is withheld or terminated pursuant to paragraph (h) of this section. 
The ACO will not receive additional or catch-up payments for 
performance year 2025.
    (iii) If an ACO's quarterly payment is withheld or terminated 
pursuant to paragraph (h) of this section, the ACO will not receive 
additional or catch-up payments if quarterly prepaid shared savings 
payments are later resumed.
    (2) Calculating the prepaid shared savings multiplier. (i) 
Calculate total per capita savings or losses for each performance year 
that constitutes BY1 and BY2 of the agreement period in which the ACO 
receives prepaid shared savings. Per capita savings or losses will be 
set to zero for a performance year if the ACO was not reconciled for 
the performance year.
    (ii) Take the simple average of the per capita savings or losses 
calculated in paragraph (f)(2)(i) of this section, including values of 
zero, if applicable.
    (iii) Apply a proration factor to account for any upward growth in 
the ACO's assigned population in BY1 and BY2 of the agreement period in 
which the ACO receives prepaid shared savings as compared to the size 
of the assigned population when the ACO was reconciled for the 
corresponding performance years in its prior agreement period.
    (iv) Adjust the pro-rated average per capita amount computed in 
paragraph (f)(2)(iii) of this section by multiplying by 50 percent.
    (v) The prepaid shared savings multiplier is the lesser of the 
following:
    (A) Two-thirds of the pro-rated, adjusted average per capita amount 
computed in paragraph (f)(2)(iv) of this section.
    (B) 5 percent of national per capita expenditures for Parts A and B 
services under the original Medicare fee-for-service program in BY2 for 
assignable beneficiaries identified for the 12-month calendar year 
corresponding to BY2 using data from the CMS Office of the Actuary and 
expressed as a single value by taking a person-year weighted average of 
the Medicare enrollment type-specific values.
    (3) Recalculation of the prepaid shared savings multiplier during 
an agreement period. For the first performance year during the term of 
the agreement period in which the ACO receives prepaid shared savings, 
the ACO's prepaid shared savings multiplier is recalculated for changes 
in per capita shared savings or losses for the performance years used 
in the calculation of the prepaid shared savings multiplier as a result 
of issuance of a revised initial determination under Sec.  425.315. For 
the second and each subsequent performance year during the term of the 
agreement period in which the ACO receives prepaid shared savings, the 
ACO's prepaid shared savings multiplier is recalculated for the 
following, as applicable: For the addition and removal of ACO 
participants or ACO providers/suppliers in accordance with Sec.  
425.118(b), for a change to the ACO's beneficiary assignment 
methodology selection under Sec.  425.226(a)(1), for a change to the 
beneficiary assignment methodology specified in subpart E of this part, 
and for changes in per capita shared savings or losses for the 
performance years used in the calculation of the prepaid shared savings 
multiplier as a result of issuance of a revised initial determination 
under Sec.  425.315. To recalculate the prepaid shared savings 
multiplier, CMS does the following:
    (i) Takes into account changes to the ACO's savings or losses for a 
performance year for either of the 2 years that constitute BY1 and BY2 
of the agreement period for which the ACO receives prepaid shared 
savings under paragraph (f)(2)(i) of this section, including values of 
zero, if applicable, as a result of issuance of a revised initial 
determination under Sec.  425.315, when calculating the simple average 
of the per capita savings or losses calculated in paragraph (f)(2)(ii) 
of this section.
    (ii) Redetermines the proration factor used in calculating the 
prepaid shared savings multiplier under paragraph (f)(2)(iii) of this 
section to account for changes in the ACO's assigned beneficiary 
population in the benchmark years of the ACO's agreement period in 
which the ACO receives prepaid shared savings due to the addition and 
removal of ACO participants or ACO providers/suppliers in accordance 
with Sec.  425.118(b), a change to the ACO's beneficiary assignment 
methodology selection under Sec.  425.226(a)(1), or changes to the 
beneficiary assignment methodology under subpart E of this part.
    (4) Calculating the maximum quarterly payment amount. For each 
quarter for each performance year, the maximum quarterly prepaid shared 
savings amount is equal to the product of one-fourth of the prepaid 
shared savings multiplier calculated in paragraph (f)(2)(v) of this 
section or recalculated according to paragraph (f)(3) of this section 
and the ACO's performance year assigned beneficiary person years 
calculated from the ACO's most recent assignment list.
    (5) Estimated annual payment amount calculation methodology. For 
the purposes of determining the amount of prepaid shared savings 
permitted to be allocated to the uses specified in paragraph (e) of 
this section during each performance year, the estimated annual prepaid 
shared savings amount can be calculated by multiplying the first 
quarterly payment amount the ACO receives in each performance year by 
four. If an ACO's maximum quarterly payments decrease over the 
performance year, the ACO will not be subject to compliance action 
solely because it spent more than 50 percent of the actual annual 
amount of prepaid shared savings it received during that PY on staffing 
and healthcare infrastructure, as long as it did not spend more than 50 
percent of the originally estimated annual maximum prepaid shared 
savings amount on staffing and healthcare infrastructure.
    (6) ACO selection of quarterly payment amount. An ACO may request a 
smaller quarterly payment amount from CMS in a form and manner and by a 
deadline specified by CMS.
    (g) Recoupment and recovery of prepaid shared savings; notice of 
bankruptcy. (1) CMS will recoup prepaid shared savings made to an ACO 
from any shared savings the ACO earns until CMS has recouped in full 
the amount of prepaid shared savings made to the ACO. CMS will carry 
forward any remaining balance owed to subsequent performance year(s) in 
which the ACO achieves shared savings.
    (2) If the amount of shared savings earned by the ACO is revised 
upward by CMS for any reason, CMS will reduce the redetermined amount 
of shared savings by the amount of prepaid shared savings made to the 
ACO as of the date of the redetermination. If the amount of shared 
savings earned by the ACO is revised downward by CMS for any reason, 
the ACO will not receive a refund of any portion of the prepaid shared 
savings previously recouped or otherwise repaid, and any prepaid

[[Page 98574]]

shared savings that are now outstanding due to the revision in earned 
shared savings must be repaid to CMS upon request.
    (3) If an ACO has an outstanding balance of prepaid shared savings 
after the calculation of shared savings or losses for the final 
performance year of an agreement period in which an ACO receives 
prepaid shared savings, the ACO must repay any outstanding amount of 
prepaid shared savings it received in full upon request from CMS. CMS 
will provide written notification to the ACO of the amount due and the 
ACO must pay such amount no later than 90 days after the receipt of 
notification. If the ACO fails to repay any outstanding amount of 
prepaid shared savings within 90 days of that written notification, CMS 
will recoup any outstanding balance of prepaid shared savings from the 
ACO's repayment mechanism established under Sec.  425.204(f). CMS may 
also recover any outstanding amount of prepaid shared savings owed by 
recouping from any future shared savings the ACO may be eligible to 
receive in a subsequent agreement period.
    (4) Except as provided in paragraph (g)(4)(ii) of this section, if 
an ACO or CMS terminates the ACOs participation agreement during the 
agreement period in which it received prepaid shared savings, the ACO 
must repay all outstanding prepaid shared savings it received in full 
upon request from CMS.
    (i) CMS will provide written notification to the ACO of the amount 
due and the ACO must pay such amount no later than 90 days after the 
receipt of notification. If the ACO fails to repay within 90 days, CMS 
will recoup any outstanding balance from the ACO's repayment mechanism 
established under Sec.  425.204(f).
    (ii) If the ACO terminates its current participation agreement 
under Sec.  425.220 and immediately enters a new agreement period to 
continue its participation in the program, CMS may recover the amount 
owed by recouping from any future shared savings the ACO may be 
eligible to receive in subsequent agreement periods.
    (5)(i) If an ACO has filed a bankruptcy petition, whether voluntary 
or involuntary, the ACO must provide written notice of the bankruptcy 
to CMS and to the U.S. Attorney's Office in the district where the 
bankruptcy was filed, unless final payment for the agreement period has 
been made by either CMS or the ACO and all administrative or judicial 
review proceedings relating to any payments under the Shared Savings 
Program have been fully and finally resolved.
    (ii) The notice of bankruptcy must be sent by certified mail no 
later than 5 days after the petition has been filed and must contain a 
copy of the filed bankruptcy petition (including its docket number). 
The notice to CMS must be addressed to the CMS Office of Financial 
Management at 7500 Security Boulevard, Mailstop C3-01-24, Baltimore, MD 
21244 or such other address as may be specified on the CMS website for 
purposes of receiving such notices.
    (h) Withholding or termination of prepaid shared savings--(1) 
General. Except as provided in paragraph (h)(2) of this section, CMS 
may withhold or terminate an ACO's prepaid shared savings during an 
agreement period if--
    (i) The ACO fails to comply with the requirements of this section;
    (ii) The ACO meets any of the grounds for ACO termination set forth 
in Sec.  425.218(b);
    (iii) The ACO fails to earn sufficient shared savings in a 
performance year to repay the prepaid shared savings they received 
during that performance year;
    (iv) CMS determines that the ACO is not expected to earn shared 
savings in a performance year during the agreement period in which the 
ACO received prepaid shared savings based on a rolling 12-month window 
of beneficiary claims data or year to date beneficiary claims data;
    (v) The ACO falls below 5,000 assigned beneficiaries;
    (vi) The ACO fails to spend the majority of prepaid shared savings 
they receive in a performance year; or
    (vii) The ACO requests that CMS withhold a future quarterly prepaid 
shared savings payment.
    (2) Eligibility sanction. CMS must terminate an ACO's prepaid 
shared savings if--
    (i) The ACO fails to maintain an adequate repayment mechanism in 
accordance with Sec.  425.204(f); or
    (ii) The ACO fails to meet the quality performance standard as 
specified under Sec.  425.512 or is subject to a pre-termination action 
after CMS determined the ACO avoided at-risk beneficiaries as specified 
under Sec.  [thinsp]425.316(b)(2).
    (3) No additional payments. If CMS withholds or terminates a 
quarterly payment pursuant to this paragraph (h), the ACO will not 
receive additional or catch-up payments if quarterly payments of 
prepaid shared savings are later resumed.
    (4) No pre-termination actions. CMS may immediately terminate an 
ACO's prepaid shared savings under paragraphs (h)(1) and (2) of this 
section without taking any of the pre-termination actions set forth in 
Sec.  425.216.
    (i) Reporting information on prepaid shared savings. The ACO must 
report information on its receipt of and use of prepaid shared savings, 
as follows:
    (1) The ACO must publicly report information about the ACO's use of 
prepaid shared savings for each performance year, in accordance with 
Sec.  425.308(b)(10).
    (2) In a form and manner and by a deadline specified by CMS, the 
ACO must report to CMS the same information it is required to publicly 
report under Sec.  425.308(b)(10).


Sec.  425.650  [Amended]

0
74. Section 425.650 is amended in paragraph (a) by removing the 
reference ``425.660'' and adding in its place the reference 
``425.662''.

0
75. Section 425.652 is amended by revising paragraph (a)(8) and 
revising and republishing paragraph (a)(9) to read as follows:


Sec.  425.652  Establishing, adjusting, and updating the benchmark for 
agreement periods beginning on January 1, 2024, and in subsequent 
years.

    (a) * * *
    (8) Adjusts the historical benchmark, if applicable:
    (i) For agreement periods beginning on January 1, 2024, except as 
provided in paragraph (a)(8)(i)(C) of this section, CMS adjusts the 
historical benchmark based on the ACO's regional service area 
expenditures (as specified under Sec.  425.656), or for savings 
generated by the ACO, if any, in the 3 most recent years prior to the 
start of the agreement period (as specified under Sec.  425.658). CMS 
does all of the following to determine the adjustment, if any, applied 
to the historical benchmark:
    (A) Computes the regional adjustment in accordance with Sec.  
425.656 and the prior savings adjustment in accordance with Sec.  
425.658.
    (B) If an ACO is not eligible to receive a prior savings adjustment 
under Sec.  425.658(b)(3)(i), and the regional adjustment, expressed as 
a single value as described in Sec.  425.656(d), is positive, the ACO 
will receive an adjustment to its benchmark equal to the positive 
regional adjustment amount. The adjustment will be calculated as 
described in Sec.  425.656(c) and applied separately to the following 
populations of beneficiaries: ESRD, disabled, aged/dual eligible 
Medicare and Medicaid beneficiaries, and aged/non-dual eligible 
Medicare and Medicaid beneficiaries.

[[Page 98575]]

    (C) If an ACO is not eligible to receive a prior savings adjustment 
under Sec.  425.658(b)(3)(i), and the regional adjustment, expressed as 
a single value as described in Sec.  425.656(d), is negative or zero, 
the ACO will not receive an adjustment to its benchmark.
    (D) If an ACO is eligible to receive a prior savings adjustment and 
the regional adjustment, expressed as a single value as described in 
Sec.  425.656(d), is positive, the ACO will receive an adjustment to 
its benchmark equal to the higher of the following:
    (1) The positive regional adjustment amount. The adjustment will be 
calculated as described in Sec.  425.656(c) and applied separately to 
the following populations of beneficiaries: ESRD, disabled, aged/dual 
eligible Medicare and Medicaid beneficiaries, and aged/non-dual 
eligible Medicare and Medicaid beneficiaries.
    (2) The prior savings adjustment. The adjustment will be calculated 
as described in Sec.  425.658(c) and applied as a flat dollar amount to 
the following populations of beneficiaries: ESRD, disabled, aged/dual 
eligible Medicare and Medicaid beneficiaries, and aged/non-dual 
eligible Medicare and Medicaid beneficiaries.
    (E) If an ACO is eligible to receive a prior savings adjustment and 
the regional adjustment, expressed as a single value as described in 
Sec.  425.656(d), is negative or zero, the ACO will receive an 
adjustment to its benchmark equal to the prior savings adjustment. The 
adjustment will be calculated as described in Sec.  425.658(c) and 
applied as a flat dollar amount to the following populations of 
beneficiaries: ESRD, disabled, aged/dual eligible Medicare and Medicaid 
beneficiaries, and aged/non-dual eligible Medicare and Medicaid 
beneficiaries.
    (ii) For agreement periods beginning on January 1, 2025, and in 
subsequent years, except as provided in paragraph (a)(8)(ii)(B)(2) of 
this section, CMS adjusts the historical benchmark based on the ACO's 
regional service area expenditures (as specified under Sec.  425.656), 
for savings generated by the ACO, if any, in the 3 most recent years 
prior to the start of the agreement period (as specified under Sec.  
425.658), or to account for the ACO serving higher proportions of 
underserved beneficiaries (as specified in Sec.  425.662). CMS does all 
of the following to determine the adjustment, if any, applied to the 
historical benchmark:
    (A) Computes the regional adjustment in accordance with Sec.  
425.656, the prior savings adjustment in accordance with Sec.  425.658, 
and the health equity benchmark adjustment (HEBA) in accordance with 
Sec.  425.662.
    (B) Compares the regional adjustment, expressed as a single value 
as described in Sec.  425.656(d), the per capita prior savings 
adjustment determined in Sec.  425.658(c), if any, and the HEBA 
determined in Sec.  425.662(b), if any, to determine the adjustment 
applied to the historical benchmark.
    (1) The ACO will receive the highest of the positive adjustments 
for which it is eligible. The adjustment will be calculated as 
described in Sec.  425.656(c), Sec.  425.658(c), or Sec.  425.662(b), 
respectively, and applied separately to the following populations of 
beneficiaries: ESRD, disabled, aged/dual eligible Medicare and Medicaid 
beneficiaries, and aged/non-dual eligible Medicare and Medicaid 
beneficiaries.
    (2) If an ACO is not eligible to receive a prior savings adjustment 
under Sec.  425.658(b)(3)(i) or the HEBA under Sec.  425.662(b)(3), and 
the regional adjustment, expressed as a single value as described in 
Sec.  425.656(d), is negative or zero, the ACO will not receive an 
adjustment to its benchmark.
    (9) For the first performance year during the term of the agreement 
period, the ACO's benchmark is adjusted for the following, as 
applicable: For changes in values used in benchmark calculations in 
accordance with Sec.  425.316(b)(2)(ii)(B) or (C) due to compliance 
action to address avoidance of at-risk beneficiaries or as a result of 
issuance of a revised initial determination under Sec.  425.315, and 
for changes in values used in benchmark calculations as a result of the 
performance year being affected by significant, anomalous, and highly 
suspect billing under Sec.  425.672. For the second and each subsequent 
performance year during the term of the agreement period, the ACO's 
benchmark is adjusted for the following, as applicable: For the 
addition and removal of ACO participants or ACO providers/suppliers in 
accordance with Sec.  425.118(b), for a change to the ACO's beneficiary 
assignment methodology selection under Sec.  425.226(a)(1), for a 
change to the beneficiary assignment methodology specified in subpart E 
of this part, for a change in the CMS-HCC risk adjustment methodology 
used to calculate prospective HCC risk scores under Sec.  425.659, for 
changes in values used in benchmark calculations in accordance with 
Sec.  425.316(b)(2)(ii)(B) or (C) due to compliance action to address 
avoidance of at-risk beneficiaries or as a result of issuance of a 
revised initial determination under Sec.  425.315, and for changes in 
values used in benchmark calculations as a result of the performance 
year being affected by significant, anomalous, and highly suspect 
billing under Sec.  425.672. To adjust the benchmark, CMS does the 
following:
    (i) Takes into account the expenditures of beneficiaries who would 
have been assigned to the ACO in any of the 3 most recent years prior 
to the start of the agreement period.
    (ii) Redetermines the regional adjustment amount under Sec.  
425.656 according to the ACO's assigned beneficiaries for BY3, and 
based on the assignable population of beneficiaries identified for BY3 
using the assignment window or expanded window for assignment that is 
consistent with the beneficiary assignment methodology selected by the 
ACO for the performance year according to Sec.  425.400(a)(4)(ii).
    (iii) Redetermines the offset factor used in determining the 
negative regional adjustment amount under Sec.  425.656(c)(4) and (5).
    (iv) Redetermines the proration factor used in calculating the 
prior savings adjustment under Sec.  425.658(b)(3)(ii) to account for 
changes in the ACO's assigned beneficiary population in the benchmark 
years of the ACO's current agreement period due to the addition and 
removal of ACO participants or ACO providers/suppliers in accordance 
with Sec.  425.118(b), a change to the ACO's beneficiary assignment 
methodology selection under Sec.  425.226(a)(1), or changes to the 
beneficiary assignment methodology under subpart E of this part.
    (v) Redetermines the HEBA scaler used in calculating the HEBA under 
Sec.  425.662(b)(2) to account for changes in the ACO's regional 
adjustment or prior savings adjustment in accordance with paragraphs 
(a)(9)(ii) through (iv) of this section.
    (vi) In accordance with paragraph (a)(8) of this section, CMS 
redetermines the adjustment to the historical benchmark based on the 
redetermined regional adjustment (as specified under Sec.  425.656), 
the prior savings adjustment (as specified under Sec.  425.658), or the 
HEBA (as specified under Sec.  425.662) if applicable.
    (vii) Redetermines factors based on prospective HCC risk scores 
calculated for benchmark years by calculating the prospective HCC risk 
scores using the CMS-HCC risk adjustment methodology that applies for 
the calendar year corresponding to the applicable performance year in 
accordance with Sec.  425.659(b)(1).
    (viii) Recalculates benchmark year expenditures to account for the 
impact of improper payments, for the benchmark year corresponding to a

[[Page 98576]]

performance year for which CMS issued a revised initial determination 
under Sec.  425.315. In recalculating expenditures for the benchmark 
year, CMS applies the calculation methodology applied in recalculating 
expenditures for the corresponding performance year in accordance with 
Sec.  425.674.
    (ix) Recalculates expenditures used in Shared Savings Program 
benchmark calculations under this section, and as applicable under 
Sec. Sec.  425.654 through 425.662, to exclude the same HCPCS or CPT 
codes identified as displaying significant, anomalous, and highly 
suspect billing patterns in calculation of performance year 
expenditures, in accordance with Sec.  425.672.
* * * * *

0
76. Section 425.655 is amended by revising paragraph (d)(2) to read as 
follows:


Sec.  425.655  Calculating the regional risk score growth cap 
adjustment factor.

* * * * *
    (d) * * *
    (2) Determines the aggregate growth in regional risk scores by 
calculating a weighted average of the growth in regional prospective 
HCC risk scores or demographic risk scores, as applicable, across the 
populations described in paragraph (d)(1) of this section. When 
calculating the weighted average growth in prospective HCC risk scores 
or demographic risk scores, as applicable, the weight applied to the 
growth in risk scores for each Medicare enrollment type is equal to the 
product of the ACO's historical benchmark expenditures, adjusted in 
accordance with Sec.  425.652(a)(8), for that enrollment type and the 
ACO's performance year assigned beneficiary person years for that 
enrollment type.
* * * * *

0
77. Section 425.658 is amended by revising paragraph (d) to read as 
follows:


Sec.  425.658  Calculating the prior savings adjustment to the 
historical benchmark.

* * * * *
    (d) Applicability of the prior savings adjustment. CMS compares the 
per capita prior savings adjustment determined in paragraph (c)(1) of 
this section with the regional adjustment, expressed as a single value 
as described in Sec.  425.656(d), and the HEBA as determined in Sec.  
425.662(b), if any, to determine the adjustment, if any, that will be 
applied to the ACO's benchmark in accordance with Sec.  425.652(a)(8).
* * * * *

0
78. Section 425.662 is added to read as follows:


Sec.  425.662  Calculating the health equity adjustment to the 
historical benchmark.

    (a) General. For agreement periods beginning on January 1, 2025, 
and in subsequent years, CMS calculates a health equity adjustment to 
the historical benchmark (HEBA) to account for ACOs serving higher 
proportions of underserved beneficiaries.
    (b) Calculation of the health equity benchmark adjustment. To 
calculate the adjustment described in paragraph (a) of this section, 
CMS does all of the following:
    (1) Calculates the weighted average of the ACO's third benchmark 
year (BY3) national per capita expenditure amounts across the following 
populations of beneficiaries, where the weights are the ACO's BY3 
proportion of assigned beneficiaries for that enrollment type:
    (i) ESRD.
    (ii) Disabled.
    (iii) Aged/dual eligible Medicare and Medicaid beneficiaries.
    (iv) Aged/non-dual eligible Medicare and Medicaid beneficiaries.
    (2) Calculates the HEBA scaler as the difference between 5 percent 
of the national per capita expenditure amount, expressed as single 
value as calculated in paragraph (b)(1) of this section, and the higher 
of: the regional adjustment, expressed as a single value as described 
in Sec.  425.656(d); the per capita prior savings adjustment determined 
in Sec.  425.658(c); or no adjustment, in the case where the regional 
adjustment is negative and the ACO is not eligible for the prior 
savings adjustment under Sec.  425.658(b)(3)(i).
    (3) Determines the ACO's eligibility for the HEBA based on the 
proportion of the ACO's assigned beneficiaries for the performance year 
who are enrolled in the Medicare Part D low-income subsidy (LIS) or 
dually eligible for Medicare and Medicaid. An ACO is only eligible for 
the HEBA if this proportion is greater than or equal to 15 percent. An 
ACO with a proportion less than 15 percent is ineligible to receive a 
HEBA.
    (4) Calculates the HEBA. If the ACO is eligible for the HEBA as 
determined in paragraph (b)(3) of this section, the HEBA is equal to 
the product of the HEBA scaler calculated in paragraph (b)(2) of this 
section and the proportion of the ACO's assigned beneficiaries for the 
performance year who are enrolled in the Medicare Part D LIS or dually 
eligible for Medicare and Medicaid.
    (c) Applicability of the HEBA. CMS compares the HEBA determined in 
paragraph (b)(4) of this section with the regional adjustment, 
expressed as a single value as described in Sec.  425.656(d), and the 
per capita prior savings adjustment determined in Sec.  425.658(c), if 
any, to determine the adjustment, if any, that will be applied to the 
ACO's benchmark in accordance with Sec.  425.652(a)(8)(ii).

0
79. Section 425.672 is added to read as follows:


Sec.  425.672  Adjustments to mitigate the impact of significant, 
anomalous, and highly suspect billing activity on Shared Savings 
Program financial calculations involving calendar year 2024 or 
subsequent calendar years.

    (a) General. This section describes adjustments CMS may make to 
Shared Savings Program calculations to mitigate the impact of 
significant, anomalous, and highly suspect billing activity occurring 
in calendar year 2024 or subsequent calendar years.
    (b) Significant, anomalous, and highly suspect billing activity for 
a HCPCS or CPT code impacting Shared Savings Program calculations. CMS, 
at its sole discretion, may determine that the billing of one or more 
specified HCPCS or CPT codes represents significant, anomalous, and 
highly suspect billing activity for a calendar year that warrants 
adjustment to calculations made under this part.
    (c) Applicability of adjustments to performance year and benchmark 
year calculations. Notwithstanding any other provision in this part, 
CMS adjusts the following Shared Savings Program calculations, as 
applicable, to exclude all Medicare Parts A and B fee-for-service 
payment amounts on claims for the specified claim types associated with 
a HCPCS or CPT code identified pursuant to paragraph (b) of this 
section for the periods identified in paragraph (d) of this section:
    (1) Calculation of Medicare Parts A and B fee-for-service 
expenditures for an ACO's assigned beneficiaries for all purposes 
including the following: Establishing, adjusting, updating, and 
resetting the ACO's historical benchmark and determining performance 
year expenditures.
    (2) Calculation of fee-for-service expenditures for assignable 
beneficiaries as used in determining county-level fee-for-service 
expenditures and national Medicare fee-for-service expenditures, 
including the following calculations:
    (i) Determining average county fee-for-service expenditures based 
on expenditures for the assignable population of beneficiaries in each 
county in the ACO's regional service area according to Sec. Sec.  
425.601(c) and 425.654(a) for purposes of calculating the ACO's 
regional fee-for-service expenditures.

[[Page 98577]]

    (ii) Determining the 99th percentile of national Medicare fee-for-
service expenditures for assignable beneficiaries for purposes of the 
following:
    (A) Truncating assigned beneficiary expenditures used in 
calculating benchmark expenditures under Sec. Sec.  425.601(a)(4) and 
425.652(a)(4), and performance year expenditures under Sec. Sec.  
425.605(a)(3) and 425.610(a)(4).
    (B) Truncating expenditures for assignable beneficiaries in each 
county for purposes of determining county fee-for-service expenditures 
according to Sec. Sec.  425.601(c)(3) and 425.654(a)(3).
    (C) Truncating expenditures for assignable beneficiaries for 
purposes of determining truncated national per capita fee-for service 
expenditures for purposes of calculating the ACPT according to Sec.  
425.660(b)(3).
    (iii) Determining truncated national per capita fee-for-service 
Medicare expenditures for assignable beneficiaries for purposes of 
calculating the ACPT according to Sec.  425.660(b)(3).
    (iv) Determining national per capita expenditures for Parts A and B 
services under the original Medicare fee-for-service program for 
assignable beneficiaries for purposes of capping the regional 
adjustment to the ACO's historical benchmark according to Sec. Sec.  
425.601(a)(8)(ii)(C) and 425.656(c)(3), capping the prior savings 
adjustment according to Sec.  425.658(c)(1)(ii), capping the prepaid 
shared savings multiplier according to Sec.  425.640(f)(2)(v), and 
calculating the HEBA scaler according to Sec.  425.662(b)(2).
    (v) Determining national growth rates that are used as part of the 
blended growth rates used to trend forward BY1 and BY2 expenditures to 
BY3 according to Sec. Sec.  425.601(a)(5)(ii) and 425.652(a)(5)(ii) and 
as part of the blended growth rates used to update the benchmark 
according to Sec. Sec.  425.601(b)(2) and 425.652(b)(2)(i).
    (3) Calculation of Medicare Parts A and B fee-for-service revenue 
of ACO participants for purposes of calculating the ACO's loss 
recoupment limit under the BASIC track as specified in Sec.  
425.605(d).
    (4) Calculation of total Medicare Parts A and B fee-for-service 
revenue of ACO participants and total Medicare Parts A and B fee-for-
service expenditures for the ACO's assigned beneficiaries for purposes 
of identifying whether an ACO is a high revenue ACO or low revenue ACO, 
as defined under Sec.  425.20, determining an ACO's eligibility to 
receive advance investment payments according to Sec.  425.630, and 
determining whether an ACO qualifies for a shared savings payment under 
Sec.  425.605(h).
    (5) Calculation or recalculation of the amount of the ACO's 
repayment mechanism arrangement according to Sec.  425.204(f)(4).
    (d) Periods of adjustment. CMS adjusts the Shared Savings Program 
calculations identified in paragraph (c) of this section for 
significant, anomalous, and highly suspect billing activity identified 
for calendar year 2024 or subsequent calendar years as follows:
    (1) The calendar year for which the significant, anomalous, and 
highly suspect billing activity was identified pursuant to paragraph 
(b) of this section, when it is either a performance year or a 
benchmark year.
    (2) The 3 most recent years prior to the start of the ACO's 
agreement period used in establishing the historical benchmark, when 
such a benchmark is used to reconcile the ACO for a performance year 
adjusted in accordance with paragraph (d)(1) of this section.
    (e) Adjustments for growth rates used in calculating the ACPT. In 
addition to adjustments described in paragraph (c) of this section, CMS 
makes adjustments for payments associated with a HCPCS or CPT code 
identified pursuant to paragraph (b) of this section for any calendar 
year corresponding to BY3 in projecting per capita growth in Parts A 
and B fee-for-service expenditures, according to Sec.  425.660(b)(1), 
for purposes of calculating the ACPT for agreement periods beginning on 
January 1, 2024, and in subsequent years.

0
80. Section 425.674 is added to read as follows:


Sec.  425.674  Accounting for the impact of improper payments on Shared 
Savings Program financial calculations.

    (a) General rule. Upon the reopening of an initial determination 
pursuant to Sec.  425.315(a)(4), CMS will use the methodology specified 
in this section to account for the impact of improper payments when:
    (1) Determining savings or losses for the relevant performance year 
in accordance with Sec.  425.315 in order to issue a revised initial 
determination.
    (2) Adjusting the benchmark by recalculating benchmark year 
expenditures under Sec. Sec.  425.601(a)(9)(iii) and 
425.652(a)(9)(viii) in the event that CMS recalculates a payment 
determination and issues a revised initial determination for the 
corresponding performance year in a prior agreement period, in 
accordance with paragraph (a)(1) of this section.
    (b) Improper payment. For the purpose of this section, improper 
payment includes:
    (1) An amount associated with a demanded overpayment determination.
    (2) An amount identified in a settlement agreement or judgment, 
pursuant to conduct by individuals or entities performing functions or 
services related to an ACO's activities, less any penalties or damages.
    (c) Accounting for improper payments. To adjust Medicare Parts A 
and B fee-for-service expenditures for improper payments CMS does the 
following:
    (1) Identify each Shared Savings Program expenditure calculation 
for a performance year or benchmark year, as calculated according to 
the standard methodology described in this subpart and expressed as a 
per capita dollar amount, that will be adjusted for the impact of 
improper payments.
    (2) Determine each specific population of Medicare fee-for-service 
beneficiaries used to calculate the expenditure amount identified in 
paragraph (c)(1) of this section. The populations relevant for a 
specific expenditure calculation may include:
    (i) The population of beneficiaries assigned to the ACO for 
calculating the ACO's performance year or benchmark year expenditures.
    (ii) The population of assignable beneficiaries in each county in 
the ACO's regional service area for calculating county-level 
expenditures.
    (iii) The national population of assignable beneficiaries for 
calculating national assignable expenditures.
    (iv) The national population of Medicare fee-for-service 
beneficiaries for calculating national expenditures.
    (3) Determine the per capita amount of improper payments for the 
performance year or benchmark year included in the per capita Medicare 
Parts A and B fee-for-service expenditure amount for a population 
identified in paragraph (c)(2) of this section in accordance with 
paragraph (d) of this section for all providers or suppliers with 
identified improper payments.
    (4) Subtract the per capita amount determined in paragraph (c)(3) 
of this section from the expenditure calculation identified in 
paragraph (c)(1) of this section for the population identified in 
paragraph (c)(2) of this section for each of the following populations 
of beneficiaries:
    (i) ESRD.
    (ii) Disabled.
    (iii) Aged/dual eligible Medicare and Medicaid beneficiaries.
    (iv) Aged/non-dual eligible Medicare and Medicaid beneficiaries.

[[Page 98578]]

    (5) If applicable, CMS will do the following to adjust regional 
expenditures for improper payments:
    (i) Adjust county-level fee-for-service expenditures determined 
under paragraph (c)(4) of this section, for each county in the ACO's 
regional service area, for severity and case mix of assignable 
beneficiaries in the county using prospective HCC risk scores. This 
calculation is made for each of the populations of beneficiaries 
identified in paragraphs (c)(4)(i) through (iv) of this section.
    (ii) Weight the risk adjusted county-level fee-for-service 
expenditures determined under paragraph (c)(5)(i) of this section 
according to the ACO's proportion of assigned beneficiaries in the 
county, determined in accordance with Sec.  425.601(d)(1), Sec.  
425.603(f)(1), or Sec.  425.654(b)(1), as applicable, for each of the 
populations of beneficiaries identified in paragraphs (c)(4)(i) through 
(iv) of this section.
    (iii) Aggregate the values determined in paragraph (c)(5)(ii) of 
this section for each of the populations of beneficiaries identified in 
paragraphs (c)(4)(i) through (iv) of this section across all counties 
within the ACO's regional service area.
    (d) Determining the per capita amount of improper payments. CMS may 
use one or more of the following approaches to determine the per capita 
amount that will be used to adjust expenditure calculations identified 
in paragraph (c)(1) of this section:
    (1) Calculate aggregate improper payments attributable to a 
population identified in paragraph (c)(2) of this section for each 
provider or supplier that had improper payments.
    (i) For improper payments associated with specific claims, CMS will 
do the following:
    (A) For improper payments to a provider or supplier that correspond 
to payment amounts on claims or line items that were used in a Shared 
Savings Program calculation identified in paragraph (c)(1) of this 
section, and subsequently adjusted after the 3-month claims run out 
period, CMS will sum the improper payment amounts across all such 
claims or line items with dates of service during the period used to 
calculate performance year or benchmark year expenditures for the 
population identified in paragraph (c)(2) of this section.
    (B) In the event CMS determines it is necessary to account for the 
impact of improper payments on Shared Savings Program financial 
calculations by adjusting the payment amounts for a specific HCPCS or 
CPT code billed by the provider or supplier for the population 
identified in paragraph (c)(2) of this section, CMS will do the 
following--
    (1) Identify the applicable claims or line items with dates of 
service during the period used to calculate performance year or 
benchmark year expenditures processed before the end of the applicable 
3-month claims run out period;
    (2) Sum the claim or line item payment amounts, on the claims or 
line items identified in paragraph (d)(1)(i)(B)(1) of this section; and
    (3) If applicable, multiply the sum calculated in paragraph 
(d)(1)(i)(B)(2) of this section by a scaling factor to compute the 
payment differential between the HCPCS or CPT code that was improperly 
billed and a CMS-identified alternate code.
    (ii) For aggregate improper payment amounts that are not linked to 
specific claims or line items, CMS will calculate the amount 
attributable to the population identified in paragraph (c)(2) of this 
section by applying a proration factor to the aggregate improper 
payment amount identified for that provider or supplier. CMS calculates 
the proration factor as follows:
    (A) The denominator of the proration factor is total Medicare Parts 
A and B claim or line item payment amounts to the provider or supplier 
for all fee-for-service beneficiaries on claims of specified claim 
types for the time period associated with the aggregate improper 
payment amount identified for the provider or supplier that were made 
before the end of the applicable 3-month claims run out period.
    (B) The numerator of the proration factor is the portion of the 
total from the denominator, in paragraph (d)(1)(ii)(A) of this section, 
that CMS determines is attributable to the population identified in 
paragraph (c)(2) of this section with dates of service during the 
period used to calculate expenditures for the applicable performance 
year or benchmark year.
    (2) Sum the amounts calculated pursuant to paragraph (d)(1) of this 
section attributable to a population identified in paragraph (c)(2) of 
this section across all providers or suppliers that had identified 
improper payments.
    (3) Take the lesser of the following two values--
    (i) The sum from paragraph (d)(2) of this section; or
    (ii) Total Medicare Parts A and B claim or line item payment 
amounts to all providers or suppliers that had improper payments for 
the population identified in paragraph (c)(2) of this section on claims 
of specified claim types with dates of service within the performance 
year or benchmark year made before the end of the applicable 3-month 
claims run out period.
    (4) Express the lesser-of amount from paragraph (d)(3) of this 
section as a per capita value by dividing by the total beneficiary 
person years in the population identified in paragraph (c)(2) of this 
section for the applicable performance year or the benchmark year.

0
81. Part 427 is added to read as follows:

PART 427--MEDICARE PART B DRUG INFLATION REBATE PROGRAM

Sec.
Subpart A--General Provisions
427.10 Basis and scope.
427.20 Definitions.
Subpart B--Determination of Part B Rebatable Drugs
427.100 Definitions.
427.101 Identification of Part B rebatable drugs.
Subpart C--Coinsurance Adjustment and Adjusted Medicare Payment for 
Part B Rebatable Drugs With Price Increases Faster Than Inflation
427.200 Definitions.
427.201 Computation of beneficiary coinsurance and adjusted Medicare 
Payment for Part B rebatable drugs with price increases faster than 
inflation.
Subpart D--Determination of the Rebate Amount for Part B Rebatable 
Drugs
427.300 Definitions.
427.301 Calculation of the total Part B rebate amount to be paid by 
manufacturers.
427.302 Calculation of the per unit Part B drug rebate amount.
427.303 Determination of total number of billing units.
427.304 Adjustments for changes to billing and payment codes.
Subpart E--Reducing the Rebate Amount for Part B Rebatable Drugs in 
Shortage and When There Is a Severe Supply Chain Disruption
427.400 Definitions.
427.401 Reducing the rebate amount for Part B rebatable drugs 
currently in shortage.
427.402 Reducing the rebate amount for certain Part B rebatable 
drugs when there is a severe supply chain disruption.
Subpart F--Reports of Rebate Amounts, Reconciliation, Suggestion of 
Error, and Payments
427.500 Definitions.
427.501 Rebate Reports and reconciliation.
427.502 Rebate Reports for applicable calendar quarters in calendar 
years 2023 and 2024.
427.503 Suggestion of Error.
427.504 Manufacturer access to Rebate Reports.
427.505 Deadline and process for payment of rebate amount.

[[Page 98579]]

Subpart G--Enforcement of Manufacturer Payment of Rebate Amounts 
427.600 Civil money penalty notice and appeals procedures.

    Authority: 42 U.S.C. 1395w-3a(i), 1302, and 1395hh.

Subpart A--General Provisions


Sec.  427.10  Basis and scope.

    (a) Basis. This part implements section 1847A(i) of the Social 
Security Act (``the Act'').
    (b) Scope. This part sets forth the requirements of the Medicare 
Part B Drug Inflation Rebate Program, which requires, for each calendar 
quarter, manufacturers to pay rebates for certain single source drugs 
and biological products with prices that increase faster than the rate 
of inflation.
    (c) Severability. Were any provision of this part to be held 
invalid or unenforceable by its terms, or as applied to any person or 
circumstance, such provisions would be severable from this part and the 
invalidity or unenforceability would not affect the remainder thereof 
or any other part of this subchapter or the application of such 
provision to other persons not similarly situated or to other, 
dissimilar circumstances.


Sec.  427.20  Definitions.

    As used in this part, the following definitions apply:
    Allowed charges means the amount that is inclusive of the 
beneficiary coinsurance and Medicare payment for the covered Part B 
item or service.
    Applicable calendar quarter means a calendar quarter (January 1 to 
March 31, April 1 to June 30, July 1 to September 30, or October 1 to 
December 31), starting with January 1, 2023.
    Applicable threshold means the amount determined under Sec.  
427.101(c)(2).
    Average sales price (ASP) means the manufacturer's price for a 
quarter for a drug represented by a particular 11-digit National Drug 
Code (NDC-11) determined under Sec.  414.804 of this chapter.
    Benchmark period Consumer Price Index for All Urban Consumers (CPI-
U) means the CPI-U as set forth in Sec.  427.302(e).
    Billing and payment code means the specific code used to classify 
and report a drug or biological for purposes of Medicare Part B 
payment. A Healthcare Common Procedure Coding System (HCPCS) code, as 
established by CMS, is an example of a billing and payment code used to 
describe a drug or biological and for which CMS may publish a payment 
amount.
    Billing and payment code FDA approval or licensure date means the 
earliest approval or licensure date for any FDA application number 
associated with any NDC ever assigned to the billing and payment code.
    Billing unit means the identifiable quantity of a drug or 
biological product associated with a billing and payment code (for 
example, a HCPCS code), as established by CMS.
    Biosimilar biological product has the meaning set forth in section 
1847A(c)(6)(H) of the Act.
    CPI-U means the monthly Consumer Price Index for All Urban 
Consumers (United States city average) index level for all items from 
the Bureau of Labor Statistics.
    Food and Drug Administration (FDA) application means, for the 
purposes of calculating the Part B rebate amount, a New Drug 
Application (NDA) or Biologics License Application (BLA) approved by 
the FDA.
    Final action claim means a non-rejected claim for which a Medicare 
payment has been made, and for which all disputes and adjustments have 
been resolved.
    First marketed date means the earliest date of first sale of any 
NDC-11 within a billing and payment code among all products and package 
sizes under the same FDA application. The first marketed date will be 
identified using ASP data reported by NDC-11 to CMS by a manufacturer 
as required under sections 1927(b)(3)(A)(iii)(I) and 1847A(f)(2) of the 
Act, if available.
    Grouped billing and payment code, for the purposes of Part B rebate 
calculations, means a billing and payment code, such as a HCPCS code, 
other than a Not Otherwise Classified (NOC) code, that typically 
contains multiple drug products approved under multiple NDAs or BLAs 
and may be inclusive of, but are not limited to, multiple source 
billing codes.
    Inflation-adjusted payment amount means the amount determined under 
Sec.  427.302(g).
    Manufacturer has the meaning set forth in section 1847A(c)(6)(A) of 
the Act.
    National Drug Code (NDC) means the unique identifying prescription 
drug product number that is listed with FDA identifying the product and 
package size and type.
    Not Otherwise Classified (NOC) code means a billing and payment 
code, including an unclassified, unspecified, or unlisted code, for 
drugs and biological products for which no specific billing and payment 
code is assigned.
    Part B rebatable drug means, subject to the exclusions set forth in 
Sec.  427.101(b), a single source drug or biological product, including 
a biosimilar biological product but excluding a qualifying biosimilar 
biological product, for which payment is made under Part B.
    Payment amount benchmark quarter means the calendar quarter set 
forth in Sec.  427.302(c).
    Payment amount in the payment amount benchmark quarter means the 
amount set forth in Sec.  427.302(d).
    Rebate period CPI-U means the CPI-U set forth in Sec.  427.302(f).
    Single source drug or biological product has the meaning set forth 
in section 1847A(c)(6)(D) of the Act.
    Sold or marketed means, with respect to an NDC, that the NDC has 
either a date of first sale identified using ASP data reported by NDC-
11 to CMS by a manufacturer as required under sections 
1927(b)(3)(A)(iii)(I) and 1847A(f)(2) of the Act, or an NDC Directory 
start marketing date prior to or during the applicable calendar quarter 
and meets any of the following criteria:
    (1) The NDC has units reported for the rebate quarter;
    (2) The end marketing date is during the rebate quarter;
    (3) The end marketing date is after the rebate quarter; or
    (4) The end marketing date is missing.
    Specified amount means the amount set forth in Sec.  427.302(b).
    Subsequently approved drug means a drug first approved or licensed 
by the FDA after December 1, 2020.
    Unit means, with respect to a Part B rebatable drug, with respect 
to each National Drug Code (including package size) associated with a 
drug or biological, the lowest identifiable quantity (such as a capsule 
or tablet, milligram of molecules, or grams) of the drug or biological 
that is dispensed, exclusive of any diluent without reference to volume 
measures pertaining to liquids as reported under section 1847A(b)(2)(B) 
of the Act.

Subpart B--Determination of Part B Rebatable Drugs


Sec.  427.100  Definitions.

    As used in this subpart, the following definitions apply:
    EUA Declaration means the March 27, 2020, Emergency Use 
Authorization (EUA) Declaration for Drugs and Biological Products under 
section 564 of the Food, Drug, and Cosmetic (FD&C) Act.
    Individual who uses such a drug or biological means a unique 
Medicare Part B beneficiary who was furnished the

[[Page 98580]]

Part B drug or biological that was covered under Part B during the 
applicable calendar quarter, identified using final action claims data 
with dates of service during the calendar year set forth in Sec.  
427.101(b)(6) and with allowed charges greater than zero.


Sec.  427.101  Identification of Part B rebatable drugs.

    (a) Determination of Part B rebatable drugs. (1) For each 
applicable calendar quarter, CMS will:
    (i) Identify single source drugs or biological products, including 
biosimilar biological products, covered under Part B; and
    (ii) Identify the applicable billing and payment code for each drug 
or biological product set forth in paragraph (a)(1)(i) of this section.
    (2) For a drug or biological product identified under paragraph 
(a)(1) of this section, CMS will determine whether the drug or 
biological product meets the exclusion criteria set forth in paragraph 
(b) or (c) of this section as of the first day of the applicable 
calendar quarter.
    (3) To determine whether a drug or biological product is a Part B 
rebatable drug under this section, CMS will use the most recent 
available data submitted to CMS by manufacturers pursuant to section 
1927(b)(3)(A)(iii) of the Act or section 1847A(f)(2), as applicable, 
and other available data, including but not limited to information 
available at FDA.gov and information in drug pricing compendia, as 
applicable.
    (b) Excluded product categories. The following categories of 
products are not considered Part B rebatable drugs:
    (1) Qualifying biosimilar biological products. Biological products 
as defined under section 1847A(b)(8)(B)(iii) of the Act.
    (2) Products with historically excepted grouped billing and payment 
codes. Single source drugs or biological products that were within the 
same billing and payment code as of October 1, 2003, and which, as 
required under section 1847A(c)(6)(C)(ii) of the Act, are treated as 
multiple source drugs.
    (3) Products billed under a NOC code. A drug or biological product 
billed under a NOC code.
    (4) Radiopharmaceutical drugs and biological products. A separately 
payable radiopharmaceutical drug or biological product not paid under 
section 1847A of the Act.
    (5) Skin substitutes. A product included within the suite of 
cellular- and tissue-based products that aid wound healing.
    (6) Drugs with average total allowed charges under the applicable 
threshold. Drugs and biological products for which the Medicare Part B 
average total allowed charges for a year per individual that uses such 
drug or biological are below the applicable threshold, as set forth in 
paragraph (c) of this section.
    (7) Certain vaccines and other products. The following products:
    (i) The vaccines as set forth in section 1861(s)(10) of the Act, 
which includes the influenza, pneumococcal, hepatitis B, and COVID-19 
vaccines.
    (ii) Monoclonal antibodies used for treatment or post-exposure 
prophylaxis of COVID-19 that are covered and paid for under section 
1861(s)(10) of the Act. This exclusion will apply to applicable 
quarters until the end of the calendar year in which the EUA 
Declaration ends.
    (iii) Monoclonal antibodies that are used for pre-exposure 
prophylaxis of COVID-19 that are covered and paid for under section 
1861(s)(10) of the Act. This exclusion will apply to applicable 
calendar quarters even after the year in which the EUA Declaration 
ends, as long as after the EUA Declaration is terminated, these 
products have an FDA-approved application or license.
    (8) Generic drugs. Part B drugs approved under an Abbreviated New 
Drug Application (ANDA) submitted under section 505(j) of the Federal 
Food, Drug, and Cosmetic Act (FD&C Act).
    (c) Drugs and biological products with average total allowed 
charges below the applicable threshold. For each applicable calendar 
quarter, CMS will identify drugs and biological products with Part B 
average total allowed charges for a year per individual that uses such 
a drug or biological product that are below the applicable threshold 
determined under the calculations set forth in this section. Such drugs 
and biological products are not considered Part B rebatable drugs and 
will be excluded from the identification of Part B rebatable drugs in 
paragraph (a) of this section.
    (1) Average total allowed charges for a year per individual. For 
each drug or biological that is identified as set forth in paragraph 
(a) of this section, CMS will calculate average total allowed charges 
for a year per individual as follows:
    (i) For single source drugs and biological products assigned to 
only one billing and payment code, CMS will sum the allowed charges 
from final action claims greater than $0 and divide the summed amount 
by the number of individuals who use such a drug or biological with 
allowed charges for this billing and payment code.
    (ii) For single source drugs and biological products assigned to 
more than one billing and payment code, CMS will sum the allowed 
charges from final action claims greater than $0 for all billing and 
payment codes and divide the summed amount by the number of individuals 
who use such a drug or biological with allowed charges for these 
billing and payment codes.
    (iii) For single source drugs and biological products previously 
crosswalked to a grouped billing and payment code:
    (A) If crosswalked to a grouped billing and payment code during the 
full year, CMS will calculate the average total allowed charges per 
individual per year for the drug using allowed charges and the number 
of individuals who used the drug or biological product based on claims 
for the previously grouped billing and payment code during the year.
    (B) If crosswalked to a grouped billing and payment code and later 
assigned to a unique billing and payment code for part of the year, CMS 
will calculate average total allowed charges per individual per year 
by:
    (1) Summing the total allowed charges billed under the unique 
billing and payment code for the drug with dates of service on or after 
the Medicare effective date for this unique billing and payment code 
and identifying the individuals on those claims.
    (2) Summing the total allowed charges on claims billed under the 
previously grouped billing and payment code and identifying individuals 
with claims prior to the unique billing and payment code's effective 
date.
    (3) Summing the total allowed charges as determined in paragraphs 
(c)(1)(iii)(B)(1) and (2) of this section and dividing by the total 
number of individuals, de-duplicated for individuals determined under 
paragraphs (c)(1)(iii)(B)(1) and (2).
    (2) Applicable threshold. CMS will calculate the applicable 
threshold for an applicable calendar quarter as follows:
    (i) For applicable calendar quarters in 2023, the applicable 
threshold is equal to $100.
    (ii) For applicable calendar quarters in 2024, the applicable 
threshold is equal to $100 increased by the percentage increase in the 
CPI-U for the 12-month period ending with June of 2023.
    (iii) For applicable calendar quarters in each subsequent calendar 
year, the applicable threshold is equal to the unrounded applicable 
threshold calculated for the prior calendar year increased by the 
percentage increase in the CPI-U for the 12-month period ending with 
June of the previous year.
    (iv) If the resulting amount under paragraphs (c)(2)(i) through 
(iii) of this

[[Page 98581]]

section is not a multiple of $10, CMS will round that amount to the 
nearest multiple of $10.
    (3) Application of the applicable threshold at the billing and 
payment code level. For each applicable calendar quarter, CMS will 
apply the exclusion of drugs and biological products identified in 
paragraph (c)(1) of this section, with average total allowed charges 
for a year per individual less than the applicable threshold set forth 
in paragraph (c)(2) of this section, to applicable billing and payment 
codes as follows:
    (i) For single source drugs or biological products assigned to a 
unique billing and payment code, CMS will exclude the assigned billing 
and payment code for an applicable calendar quarter if the average 
total allowed charges for a year per individual are less than the 
applicable threshold.
    (ii) For a single source drug or biological product that is 
assigned to more than one billing and payment code during a year, CMS 
will exclude all such assigned billing and payment codes for an 
applicable calendar quarter.
    (4) Definition of year. For purposes of the calculations set forth 
in this section, a year is defined as the 4 consecutive calendar 
quarters beginning 6 calendar quarters before the applicable calendar 
quarter. CMS will use final action claims from the Medicare fee-for-
service claims repository where separate payment was allowed for the 
applicable billing and payment code for dates of service within a year 
to calculate Part B average total allowed charges for that year.

Subpart C--Coinsurance Adjustment and Adjusted Medicare Payment for 
Part B Rebatable Drugs With Price Increases Faster Than Inflation


Sec.  427.200  Definitions.

    As used in this subpart, inflation-adjusted beneficiary coinsurance 
means the coinsurance adjustment as determined under this subpart.


Sec.  427.201  Computation of beneficiary coinsurance and adjusted 
Medicare payment for Part B rebatable drugs with price increases faster 
than inflation.

    (a) Methodology. CMS must use the methodology set forth in this 
section to calculate the inflation-adjusted beneficiary coinsurance and 
associated adjusted Medicare payment percentage for Part B rebatable 
drugs as set forth in Sec. Sec.  410.152(m), 419.41(e), and 
489.30(b)(6) of this chapter.
    (b) Calculation of inflation-adjusted beneficiary coinsurance. To 
calculate the inflation-adjusted beneficiary coinsurance for Part B 
rebatable drugs with respect to a calendar quarter, CMS compares the 
payment amount, as set forth in paragraph (b)(3) of this section, to 
the inflation-adjusted payment amount for the applicable calendar 
quarter.
    (1) If the payment amount exceeds the inflation-adjusted payment 
amount, the inflation-adjusted beneficiary coinsurance is calculated by 
multiplying the inflation-adjusted payment amount by 0.20.
    (2) If the inflation-adjusted payment amount does not exceed the 
payment amount, the adjustment to the beneficiary coinsurance set forth 
in paragraph (b)(1) of this section is not applied.
    (3) CMS will use the published payment amount in quarterly pricing 
files published by CMS as the payment amount in this determination.
    (c) Exclusions. Any drug that is excluded from Part B rebatable 
drugs as set forth in Sec.  427.101(b) is not subject to inflation-
adjusted beneficiary coinsurance.

Subpart D--Determination of the Rebate Amount for Part B Rebatable 
Drugs


Sec.  427.300  Definitions.

    As used in this subpart, the following definitions apply:
    340B Program is the program under section 340B of the Public Health 
Service (PHS) Act.
    Refundable single-dose container or single-use package drug has the 
meaning set forth in Sec.  414.902 of this chapter.


Sec.  427.301  Calculation of the total Part B rebate amount to be paid 
by manufacturers.

    (a) Total rebate. Subject to paragraph (b) of this section, the 
total rebate amount to be paid for a Part B rebatable drug, as 
identified under Sec.  427.101, for an applicable calendar quarter is 
equal to the product of the per unit Part B rebate amount of such drug, 
as determined under Sec.  427.302, and the billing units of the Part B 
rebatable drug furnished during the applicable calendar quarter, as 
identified as set forth in Sec.  427.303. The rebate amount may be 
reduced as set forth in subpart E of this part or adjusted as set forth 
in subpart F of this part.
    (b) Apportionment of the Part B rebate amount. CMS will identify 
billing and payment codes for which multiple manufacturers report ASP, 
as set forth in sections 1927(b)(3) and 1847A(f) of the Act, for NDCs 
assigned to the billing and payment code. CMS will calculate the rebate 
amount owed by each manufacturer by:
    (1) Determining the total billing units sold for each NDC assigned 
to the billing and payment code, by multiplying the number of units 
reported by a manufacturer in ASP data submissions at the NDC-11 
package level by the number of billing units per NDC-11 reporting unit.
    (2) Summing the individual manufacturer's total billing units sold 
during the applicable calendar quarter (for all NDCs of the 
manufacturer assigned to the billing and payment code).
    (3) Summing all manufacturers' total billing units sold during the 
applicable calendar quarter for all NDCs of the Part B rebatable drug 
assigned to the billing and payment code.
    (4) Dividing the resulting amount from paragraph (b)(2) of this 
section by the resulting amount from paragraph (b)(3) of this section.
    (5) Multiplying the resulting amount from paragraph (b)(4) of this 
section by the total rebate amount as determined under paragraph (a) of 
this section.
    (c) Apportionment of the Part B rebate amount when reported units 
for NDCs within a billing and payment code are missing, negative, or 
equal to zero.
    (1) When there are multiple NDCs in a grouped billing and payment 
code and the manufacturer-reported ASP units for all NDCs are either 
missing, negative, or equal to zero but there is a positive rebate 
amount calculated under Sec.  427.302(a), CMS will:
    (i) With respect to NDCs that were sold or marketed during the 
applicable calendar quarter and for which all NDCs assigned to the 
grouped billing and payment code lack manufacturer-reported ASP data 
for the applicable calendar quarter, equally apportion a positive 
rebate amount to NDCs with missing ASP units that were sold or marketed 
during the applicable calendar quarter by dividing the total rebate 
amount for the grouped billing and payment code by the total number of 
NDCs sold or marketed during the applicable calendar quarter within the 
billing and payment code; and
    (ii) With respect to NDCs that were not sold or marketed during the 
applicable calendar quarter and lack manufacturer-reported ASP units 
for the applicable calendar quarter, NDCs with negative manufacturer-
reported ASP units for the applicable calendar quarter, and NDCs with 
manufacturer-reported ASP units equal to zero for the applicable 
calendar quarter, apportion a $0 rebate amount to each respective NDC. 
If all NDCs assigned to the grouped billing and payment code are 
determined under this subparagraph, no rebate will be assessed for that 
billing and payment code.

[[Page 98582]]

    (2) When there are multiple NDCs in a grouped billing and payment 
code and the manufacturer-reported ASP units for some but not all NDCs 
assigned to the grouped billing and payment code are either missing, 
negative, or equal to zero but there is a positive rebate amount 
calculated under Sec.  427.302(a), CMS will:
    (i) With respect to NDCs that were not sold or marketed during the 
applicable calendar quarter and lack manufacturer-reported ASP units 
for the applicable calendar quarter, NDCs with negative manufacturer-
reported ASP units for the applicable calendar quarter, and NDCs with 
manufacturer-reported ASP units equal to zero for the applicable 
calendar quarter, apportion a $0 rebate amount to each respective NDC;
    (ii) With respect to NDCs that were sold or marketed during the 
applicable calendar quarter and lack manufacturer-reported ASP units 
for the applicable calendar quarter, and NDCs that were sold or 
marketed during the applicable calendar quarter and for which 
respective NDCs have positive manufacturer-reported units by, apportion 
rebate amounts as follows:
    (A) Solely for purposes of the calculation determined under this 
paragraph (c)(2)(ii) of this section, assign to NDCs that were sold or 
marketed during the applicable calendar quarter and lack manufacturer-
reported ASP units for the applicable calendar quarter the number of 
ASP units that is equal to the lowest positive number of manufacturer 
reported ASP units for any NDC in the grouped billing and payment code;
    (B) Determine the total billing units sold for each NDC assigned to 
the billing and payment code, by multiplying the number of units 
reported by a manufacturer in ASP data submissions at the NDC-11 
package level by the number of billing units per NDC-11 reporting unit;
    (C) With respect to all NDCs of each individual manufacturer 
assigned to the billing and payment code, sum the total billing units 
for such NDCs sold during the applicable calendar quarter;
    (D) Sum the total billing units sold during the applicable calendar 
quarter for all NDCs of the Part B rebatable drug assigned to the 
billing and payment code, including those assigned a ASP unit value as 
set forth in paragraph (c)(2)(ii)(A) of this section;
    (E) Divide the resulting amount from paragraph (c)(2)(ii)(C) of 
this section by the resulting amount from paragraph (c)(2)(ii)(D) of 
this section; and
    (F) Multiply the resulting amount from paragraph (c)(2)(ii)(E) of 
this section by the total rebate amount as determined under paragraph 
(a) of this section.


Sec.  427.302  Calculation of the per unit Part B drug rebate amount.

    (a) Formula for calculating the per unit Part B rebate amount. CMS 
will calculate the per unit Part B rebate amount for a Part B rebatable 
drug and applicable calendar quarter by determining the amount by which 
the specified amount, as determined under paragraph (b) of this 
section, exceeds the inflation-adjusted payment amount, as determined 
under paragraph (g) of this section.
    (b) Identification of the specified amount for the applicable 
calendar quarter. For each applicable calendar quarter, subject to 
paragraph (b)(3) of this section, the specified amount is equal to the 
amount determined under section 1847A(i)(3)(A)(ii)(I)(aa) or (bb) of 
the Act, as applicable, for the calendar quarter.
    (1) Subject to paragraph (b)(2) of this section, the first 
applicable calendar quarter for a Part B rebatable drug shall be no 
earlier than the calendar quarter beginning January 1, 2023 and shall 
be the later of one of the following:
    (i) The first full calendar quarter that is at least the third 
calendar quarter after the payment amount benchmark quarter identified 
in paragraphs (c)(1) through (5) of this section.
    (ii) The calendar quarter beginning January 1, 2023.
    (2) Notwithstanding paragraph (b)(1) of this section, for a Part B 
rebatable drug that was billed under a NOC code during the calendar 
quarter beginning July 1, 2021, or the third full calendar quarter 
after the effective date of the drug's assigned billing and payment 
code other than a NOC code, whichever is later, the first applicable 
calendar quarter is the first full calendar quarter that follows the 
payment amount benchmark quarter identified in paragraphs (c)(1) 
through (5) of this section.
    (3) If all NDCs in the billing and payment code have neither 
manufacturer-reported ASP nor Wholesale Acquisition Cost (WAC) price 
data available for the applicable calendar quarter, CMS will use WAC 
price data from other public sources, if available, to calculate 106 
percent of WAC, which will serve as the specified amount.
    (c) Identification of the payment amount benchmark quarter. For 
each Part B rebatable drug, CMS will identify the applicable payment 
amount benchmark quarter as set forth in paragraphs (c)(1) through (3) 
of this section, as applicable, subject to paragraphs (c)(4) and (5) of 
this section, using the earliest first marketed date of any NDC ever 
marketed under any FDA application under which any NDCs that have ever 
been assigned to the billing and payment code as of the applicable 
calendar quarter have been marketed, and using the earliest approval or 
licensure date of any FDA application under which any NDCs that have 
ever been assigned to the billing and payment as of the applicable 
calendar quarter have been marketed:
    (1) For a Part B rebatable drug first approved or licensed by the 
FDA on or before December 1, 2020, and with a first marketed date on or 
before December 1, 2020, the payment amount benchmark quarter is the 
calendar quarter beginning July 1, 2021.
    (2) For a Part B rebatable drug first approved or licensed by the 
FDA after December 1, 2020, the payment amount benchmark quarter is the 
third full calendar quarter after a drug's first marketed date.
    (3) For a Part B rebatable drug first approved or licensed by the 
FDA on or before December 1, 2020, but with a first marketed date after 
December 1, 2020, the payment amount benchmark quarter is the third 
full calendar quarter after a drug's first marketed date.
    (4) Notwithstanding paragraph (c)(3) of this section, for a Part B 
rebatable drug that was billed under a NOC code during the calendar 
quarter beginning July 1, 2021, or the third full calendar quarter 
after such drug's first marketed date, whichever is later, the payment 
amount benchmark quarter is the third full calendar quarter after the 
Part B rebatable drug is assigned a billing and payment code other than 
a NOC code.
    (5) For a Part B rebatable drug that is a selected drug (as defined 
in section 1192(c) of the Act) with respect to a price applicability 
period (as defined in section 1191(b)(2) of the Act), in the case such 
Part B rebatable drug is no longer considered to be a selected drug, 
for each applicable quarter beginning after the price applicability 
period with respect to such drug, the payment amount benchmark quarter 
is the calendar quarter beginning January 1 of the last year during 
such price applicability period with respect to such selected drug.
    (d) Identification of the payment amount in the payment amount 
benchmark quarter. CMS will identify the payment amount in the payment 
amount benchmark quarter using the published payment limit for the 
billing and payment code for the applicable payment amount benchmark 
quarter identified as set forth in paragraph (c) of this section.

[[Page 98583]]

    (1) For a Part B rebatable drug, subject to paragraphs (d)(1)(i) 
and (ii) of this section and except as provided in paragraph (d)(2) of 
this section, CMS will identify the payment amount in the payment 
amount benchmark quarter using the published payment limit for the 
billing and payment code for the applicable payment amount benchmark 
quarter determined under section 1847A of the Act.
    (i) If a published payment limit is not available for the 
applicable payment amount benchmark quarter, CMS will use the lower of 
106 percent of manufacturer-reported ASP or 106 percent of 
manufacturer-reported WAC.
    (ii) If neither a published payment limit nor manufacturer-reported 
ASP or WAC data are available, CMS will use WAC data from other public 
sources to calculate 106 percent of WAC, which, solely for the purposes 
of this section, CMS will consider to be the payment amount for the 
payment amount benchmark quarter.
    (2) For a Part B rebatable drug previously billed under a grouped 
billing and payment code during the payment amount benchmark quarter 
and later billed under a unique billing and payment code, CMS will use 
the grouped billing and payment code payment limit as the payment 
amount in the payment amount benchmark quarter.
    (e) Identification of the benchmark period CPI-U. For each Part B 
rebatable drug, CMS will identify the applicable benchmark period CPI-U 
at the billing and payment code level as set forth in paragraphs (e)(1) 
and (2) of this section, subject to paragraphs (e)(3) through (5) of 
this section:
    (1) For a Part B rebatable drug first approved or licensed by the 
FDA on or before December 1, 2020, and with a first marketed date on or 
before December 1, 2020, the benchmark period CPI-U is the CPI-U for 
January 2021.
    (2) For a Part B rebatable drug first approved or licensed by the 
FDA after December 1, 2020, the benchmark period CPI-U is the CPI-U for 
the first month of the first full calendar quarter after a drug's first 
marketed date.
    (3) Notwithstanding paragraph (e)(2) of this section, for a Part B 
rebatable drug first approved or licensed by FDA on or before December 
1, 2020, and with a first marketed date after December 1, 2020, the 
benchmark period CPI-U is the CPI-U for the first month of the first 
full calendar quarter after a drug's first marketed date.
    (4) Notwithstanding paragraph (e)(3) of this section, for a Part B 
rebatable drug that was billed under a NOC code during the calendar 
quarter beginning July 1, 2021, or the third full calendar quarter 
after such drug's first marketed date, whichever is later, the 
benchmark period CPI-U is the CPI-U for the first month of the first 
full calendar quarter after the Part B rebatable drug is assigned a 
billing and payment code other than a NOC code.
    (5) Notwithstanding paragraph (e)(4) of this section, for a Part B 
rebatable drug that is a selected drug (as defined in section 1192(c) 
of the Act) with respect to a price applicability period (as defined in 
section 1191(b)(2) of the Act), in the case such Part B rebatable drug 
is no longer considered to be a selected drug, the benchmark period 
CPI-U is the CPI-U for the July of the year preceding the last year 
during such price applicability period.
    (f) Identification of the rebate period CPI-U. For each Part B 
rebatable drug by billing and payment code, CMS will identify and use 
the greater of the benchmark period CPI-U index level or the CPI-U 
index level for the first month of the calendar quarter that is two 
calendar quarters before the applicable calendar quarter in which the 
Part B rebatable drug is furnished.
    (g) Determination of inflation-adjusted payment amount. For each 
applicable calendar quarter and for each Part B rebatable drug by 
billing and payment code, CMS will calculate the inflation-adjusted 
payment amount by dividing the rebate period CPI-U by the benchmark 
period CPI-U and then multiplying the quotient by the payment amount in 
the payment amount benchmark quarter, determined under paragraph (d) of 
this section.


Sec.  427.303  Determination of total number of billing units.

    (a) General. For each Part B rebatable drug, CMS will determine the 
total number of billing units of the billing and payment code subject 
to a rebate in the applicable calendar quarter using final action 
Medicare fee-for-service claims for which Medicare payment was allowed 
and greater than zero.
    (b) Total billing units. Using final action claims in the Medicare 
fee-for-service claims repository, at least 3 months after the end of 
the applicable calendar quarter, CMS will determine the total number of 
billing units for a Part B rebatable drug in an applicable calendar 
quarter by identifying separately payable claim lines for the billing 
and payment code for dates of service in that applicable calendar 
quarter and excluding the following billing units in claim lines as 
applicable:
    (1) Billing units of drugs acquired through the 340B Program. CMS 
will exclude billing units acquired under the 340B Program as 
identified through--
    (i) Separately payable units in all professional claim lines for 
dates of service during 2023 and 2024 that were billed with the ``JG'' 
or ``TB'' modifiers and separately payable billing units in claim lines 
for professional claims with dates of service during 2023 and 2024 from 
suppliers that are associated with covered entities listed by the 
Health Resources and Services Administration (HRSA) 340B Office of 
Pharmacy Affairs Information System (OPAIS) as participating in the 
340B Program. CMS will use National Provider Identifiers (NPI) and/or 
Medicare Provider Numbers (MPN), or other fields in the OPAIS database 
(such as name and address) if NPI or MPN is not available, to identify 
these suppliers and the claims submitted with such identifiers;
    (ii) Separately payable billing units in claim lines for 
institutional claims that are billed with the ``JG'' or ``TB'' 
modifiers and units in institutional claims from covered entities that 
are critical access hospitals and Maryland waiver hospitals with dates 
of service from January 1, 2023 through December 31, 2023. CMS will use 
NPIs and MPNs, or other fields in the OPAIS database (such as name and 
address) if NPI or MPN are not available, to identify these suppliers 
and the claims submitted with such identifiers;
    (iii) Separately payable billing units in claim lines for 
institutional claims that are billed with the ``JG'' or ``TB'' 
modifiers for claims with dates of service from January 1, 2024 through 
December 31, 2024; and
    (iv) Separately payable billing units in claim lines billed with 
the ``TB'' modifier for claims with dates of service on or after 
January 1, 2025.
    (2) Billing units with a rebate under section 1927 of the Social 
Security Act. Subject to paragraph (b)(2)(i) of this section, CMS will 
exclude billing units from claims with dates of service during a month 
within an applicable calendar quarter if the units are furnished to a 
dually eligible Medicare beneficiary who has Medicaid coverage that may 
provide cost-sharing assistance.
    (i) CMS will not exclude billing units from claims when the 
Medicare beneficiary has Medicaid coverage that does not include cost-
sharing assistance, including Specified Low-Income Medicare 
Beneficiaries (SLMB), Qualified Disabled and Working Individuals 
(QDWI), and Qualifying Individuals (QI) beneficiaries.
    (ii) [Reserved]

[[Page 98584]]

    (3) Billing units that are packaged into the payment amount for an 
item or service and are not separately payable. CMS will exclude 
billing units that are packaged into the payment amount for an item or 
service and are not separately payable.
    (4) Billing units when a drug is no longer a Part B rebatable drug. 
In situations where a Part B rebatable drug that is a single source 
drug becomes a multiple source drug during an applicable calendar 
quarter, CMS will:
    (i) Determine if such drug has become a multiple source drug by 
reviewing FDA's most recent publication of ``Approved Drug Products 
with Therapeutic Equivalence Evaluations'' (commonly known as the 
Orange Book) for a drug that is that is rated as therapeutically 
equivalent to such drug; and,
    (ii) If a therapeutically equivalent drug is identified as set 
forth in paragraph (b)(4)(i) of this section, determine if the 
therapeutically equivalent drug was sold or marketed during the 
applicable calendar quarter; and
    (iii) Exclude billing units of such drug furnished on and after the 
first day of the calendar month in which the therapeutically equivalent 
drug was first sold or marketed during the applicable calendar quarter.
    (5) Billing units subject to discarded drug refunds. CMS will 
exclude billing units of discarded refundable single-dose container or 
single-use package drugs for which a refund is owed as set forth in 
Sec.  414.940 of this chapter from the calculation of rebate amounts. 
For applicable calendar quarters beginning on or after January 1, 2024, 
these billing units will be excluded as part of the reconciliation 
process described at Sec.  427.501(d).


Sec.  427.304  Adjustments for changes to billing and payment codes.

    (a) Changes in billing unit dose description. If there has been a 
change to the dose description for a Part B rebatable drug (causing a 
new billing and payment code to be assigned), CMS will calculate a 
conversion factor based on the ratio of the billing unit dose 
description for the current billing and payment code to the billing 
unit dose description for the prior billing and payment code. CMS will 
apply the conversion factor to the payment amount in the payment amount 
benchmark quarter, as set forth in Sec.  427.302(d), before applying 
the percentage by which the rebate period CPI-U for the calendar 
quarter exceeds the benchmark period CPI-U.
    (b) Instances when a new billing and payment code is assigned. If a 
new billing and payment code is assigned for a Part B rebatable drug, 
CMS will use the payment amount in the payment amount benchmark 
quarter, the payment amount benchmark quarter, and the benchmark 
quarter CPI-U of the prior billing and payment code to calculate the 
per unit Part B rebate amount under Sec.  427.302.
    (c) Documentation. CMS will maintain a crosswalk reflecting the 
changes in billing and payment codes and dose descriptions as 
applicable.

Subpart E--Reducing the Rebate Amount for Part B Rebatable Drugs in 
Shortage and When There Is a Severe Supply Chain Disruption


Sec.  427.400  Definitions.

    As used in this subpart, the following definitions apply:
    Currently in shortage means that at least one NDC-10 assigned to 
the billing and payment code of a Part B rebatable drug with the status 
``currently in shortage'' is on a shortage list maintained by the FDA 
under section 506E of the FD&C Act.
    Drug shortage or shortage means a period of time when the demand or 
projected demand for the drug within the United States exceeds the 
supply of the drug (see section 506C(h)(2) of the FD&C Act).
    Natural disaster means any natural catastrophe, including, but not 
limited to any of the following: hurricane, tornado, storm, high water, 
wind-driven water, tidal wave, tsunami, earthquake, volcanic eruption, 
landslide, mudslide, snowstorm, or drought, or regardless of cause, any 
fire, flood, or explosion.
    Other unique or unexpected event means any exogenous, unpredictable 
event outside of a manufacturer's control, including, but not limited 
to, a geopolitical disruption, pandemic, or act of terror.
    Plasma-derived product means a licensed biological product that is 
derived from human whole blood or plasma, as indicated on the approved 
product labeling.
    Severe supply chain disruption means a change in production or 
distribution that is reasonably likely to lead to a significant 
reduction in the U.S. supply of a Part B rebatable biosimilar 
biological product by a manufacturer and significantly affects the 
ability of the manufacturer of the biosimilar biological product to 
fill orders or meet expected demand for its product in the United 
States for at least 90 days. This definition does not include 
interruptions in manufacturing due to matters such as routine 
maintenance, manufacturing quality issues, or insignificant changes 
made in the manufacturing process for the drug.


Sec.  427.401  Reducing the rebate amount for Part B rebatable drugs 
currently in shortage.

    (a) General. As required under section 1847A(i)(3)(G)(i) of the 
Act, CMS will reduce the total rebate amount determined under Sec.  
427.301(a), if any is owed, for a Part B rebatable drug that is 
currently in shortage, as set forth in Sec.  427.400, at any point 
during the applicable calendar quarter.
    (b) Calculation of the reduced rebate amount. (1) For each 
applicable calendar quarter beginning on or after January 1, 2023, the 
reduced total rebate amount for a Part B rebatable drug currently in 
shortage will be calculated using the following formula:
Equation 1 to Paragraph (b)(1)
    Reduced Total Rebate Amount = the total rebate amount multiplied by 
(1 minus applicable percent reduction) multiplied by (percentage of 
time drug was currently in shortage during the applicable calendar 
quarter) added to the total rebate amount multiplied by (1 minus 
percentage of time drug was currently in shortage during the applicable 
calendar quarter)

    (2) For purposes of paragraph (b)(1) of this section, the 
applicable percent reduction is:
    (i) For a Part B rebatable drug that is a plasma-derived product:
    (A) 75 percent for the first 4 consecutive applicable calendar 
quarters such drug is currently in shortage.
    (B) 50 percent for the second 4 consecutive applicable calendar 
quarters such drug is currently in shortage.
    (C) 25 percent for each subsequent applicable calendar quarter such 
drug is currently in shortage.
    (ii) For a Part B rebatable drug that is not a plasma-derived 
product:
    (A) 25 percent for the first 4 consecutive applicable calendar 
quarters such drug is currently in shortage.
    (B) 10 percent for the second 4 consecutive applicable calendar 
quarters such drug is currently in shortage.
    (C) 2 percent for each subsequent applicable calendar quarter such 
drug is currently in shortage.
    (iii) Except as provided in paragraph (b)(iv) of this section, CMS 
will apply the greatest applicable percent reduction as set forth in 
paragraph (b)(2)(i)(A) or (b)(2)(ii)(A) of this section

[[Page 98585]]

starting with the first applicable calendar quarter that a Part B drug 
or biological product is described as currently in shortage regardless 
of whether the drug or biological product meets the definition of a 
Part B rebatable drug or whether a rebate amount is owed for that 
calendar quarter, starting with the calendar quarter that begins 
January 1, 2023.
    (iv) If any applicable calendar quarter for which a rebate 
reduction determined under Sec.  427.402 has been granted would be the 
first of the four consecutive applicable calendar quarters set forth in 
paragraph (b)(2)(i)(A) or (b)(2)(ii)(A) of this section and the Part B 
rebatable drug or biological product continues to be currently in 
shortage after the rebate reduction period set forth in Sec.  427.402, 
CMS will treat the quarter following the final quarter in which the 
rebate reduction determined under Sec.  427.402 applies as the first of 
the four consecutive applicable calendar quarters so described.
    (3) For purposes of paragraph (b)(1) of this section, the 
percentage of time the drug is currently in shortage during the 
applicable calendar quarter is equal to the number of days such drug is 
currently in shortage in an applicable calendar quarter, divided by the 
total number of days in the applicable calendar quarter.
    (c) Application of reduction. CMS will apply a reduction of the 
rebate amount as determined under paragraph (b) of this section to all 
the NDCs under the relevant billing and payment code.


Sec.  427.402  Reducing the rebate amount for certain Part B rebatable 
drugs when there is a severe supply chain disruption.

    (a) General. As required under section 1847A(i)(3)(G)(ii) of the 
Act, CMS will reduce the total rebate amount determined under Sec.  
427.301(a), if any is owed, for a Part B rebatable biosimilar 
biological product when CMS determines there is a severe supply chain 
disruption during the applicable calendar quarter such as that caused 
by a natural disaster or other unique or unexpected event.
    (b) Calculation of the reduced rebate amount--(1) Initial 
reduction. If CMS determines the criteria set forth in paragraph (c)(4) 
of this section are met, then CMS will reduce the total rebate amount 
determined under Sec.  427.301(a), if any is owed, for a Part B 
rebatable biosimilar biological product by 75 percent for the 
applicable calendar quarter in which the event occurred or began, or 
the following applicable calendar quarter if the request is submitted 
less than 60 calendar days before the end of an applicable calendar 
quarter, and the 3 subsequent applicable calendar quarters.
    (2) Extension of reduction. If CMS determines a severe supply chain 
disruption continues into a fifth applicable calendar quarter as set 
forth in paragraph (c)(5) of this section, then CMS will reduce the 
total rebate amount determined under Sec.  427.301(a), if any is owed, 
for a Part B rebatable biosimilar biological product by 75 percent for 
that fifth applicable calendar quarter and an additional 3 consecutive 
applicable calendar quarters.
    (3) Application of reduction. If CMS determines there is a severe 
supply chain disruption for an NDC-11 assigned to a billing and payment 
code, CMS will apply any reduction of the rebate amount as determined 
under paragraphs (b)(1) and (2) of this section to all the NDCs under 
the relevant billing and payment code.
    (4) Limitation on rebate reductions. CMS will not apply multiple 
rebate reductions for the same Part B rebatable drug and applicable 
calendar quarter.
    (i) If a manufacturer believes there are multiple events causing 
severe supply chain disruptions during the same 4 applicable calendar 
quarters for the same Part B rebatable biosimilar biological product 
and submits multiple rebate reduction requests for the same product, 
CMS will grant no more than 1 rebate reduction determined under 
paragraph (b)(1) or (2) of this section for that product for those 
consecutive applicable calendar quarters.
    (ii) If CMS grants a rebate reduction request under this section, 
and the Part B rebatable biosimilar biological product subject to the 
reduction appears as currently in shortage during any of the 4 
applicable calendar quarters as the ones for which the severe supply 
chain disruption reduction request was granted, CMS will reduce the 
rebate amount as determined under paragraph (b)(1) of this section and 
will not grant a reduction determined under Sec.  427.401 during those 
applicable calendar quarters.
    (iii) If a Part B rebatable biosimilar biological product that is 
currently in shortage experiences a severe supply chain disruption, CMS 
will reduce the rebate amount as determined under paragraph (b)(1) of 
this section and will not grant a reduction determined under Sec.  
427.401 during those applicable calendar quarters.
    (c) Eligibility for a rebate reduction--(1) Eligible drug. Subject 
to paragraph (b)(3) of this section, eligibility for a rebate reduction 
under this section is limited to Part B rebatable biosimilar biological 
products for which a manufacturer submits a rebate reduction request 
under this section.
    (2) Timing. For a natural disaster or other unique or unexpected 
event occurring on or after August 2, 2024, that the manufacturer 
believes caused a severe supply chain disruption, the manufacturer must 
submit the rebate reduction request within 60 calendar days from the 
first day that the natural disaster or other unique or unexpected event 
occurred or began in order to receive consideration for a reduction in 
the rebate amount owed as set forth in paragraph (b)(1) of this 
section.
    (3) Required elements of a rebate reduction request. To receive 
consideration for a reduction in the rebate amount owed determined 
under paragraph (b)(1) of this section, the manufacturer must submit to 
CMS information and supporting documentation to substantiate the 
evaluation criteria set forth in paragraph (c)(4) of this section. Such 
information and supporting documentation include the following:
    (i) Evidence that the severe supply chain disruption directly 
affects the manufacturer itself, a supplier of an ingredient or 
packaging, a contract manufacturer, or a method of shipping or 
distribution that the manufacturer uses to make or distribute the Part 
B rebatable biosimilar biological product(s), such as a change in the 
production or distribution of the Part B rebatable biosimilar 
biological product(s) that is reasonably likely to lead to a 
significant reduction in the U.S. supply of product and significantly 
affects the manufacturer's ability to fill orders or meet expected 
demand for the Part B rebatable biosimilar biological product(s) for at 
least 90 days;
    (ii) Information about when the manufacturer expects supply of the 
Part B rebatable biosimilar biological product(s) to meet expected 
demand;
    (iii) Evidence that the natural disaster or other unique or 
unexpected event caused the severe supply chain disruption, including 
when the natural disaster or other unique or unexpected event occurred 
or began occurring, and the expected or actual duration of the severe 
supply chain disruption; and
    (iv) Evidence of the manufacturer's physical presence related to 
manufacturing the Part B rebatable biosimilar biological product(s) in 
a geographic area where a natural disaster or other unique or 
unexpected event occurred. If the manufacturer is not physically 
present in a geographic area where a natural disaster or other unique 
or unexpected event occurred, but believes there is a severe supply 
chain disruption caused by a natural disaster

[[Page 98586]]

or other unique or unexpected event that affects the manufacturer's 
Part B rebatable biosimilar biological product(s), the information and 
supporting documentation may include evidence of the impact of the 
natural disaster or other unique or unexpected event on the supply 
chain of the Part B rebatable drug or biosimilar, on a supplier of an 
ingredient or packaging, or method of shipping or distribution that the 
manufacturer uses.
    (4) Evaluation criteria. In accordance with paragraph (b)(1) of 
this section, CMS will grant a reduction in the rebate amount 
determined under Sec.  427.301(a), if any is owed, if a manufacturer 
submits to CMS a request in writing for an eligible drug, in accordance 
with the timing set forth in paragraph (c)(2) of this section, 
demonstrating that:
    (i) A severe supply chain disruption has occurred during the 
applicable calendar quarter;
    (ii) The severe supply chain disruption directly affects the 
manufacturer itself, a contract manufacturer, a supplier of an 
ingredient or packaging, or a method of shipping or distribution that 
the manufacturer uses in a significant capacity to make or distribute 
the Part B rebatable biosimilar biological product; and
    (iii) The severe supply chain disruption was caused by a natural 
disaster or other unique or unexpected event.
    (5) Rebate reduction extensions. If CMS determines that a Part B 
rebatable biosimilar biological product that received a reduction of 
the rebate amount as determined under paragraph (b)(1) of this section 
continues to be affected by a severe supply chain disruption, CMS will 
grant a single extension of the reduction for 4 additional consecutive 
applicable calendar quarters and reduce the rebate amount calculated at 
Sec.  427.301(a), if any is owed as determined under paragraph (b)(2) 
of this section.
    (i) To receive consideration for a rebate reduction extension, a 
manufacturer must submit a request with updated or new information and 
supporting documentation on why the Part B rebatable biosimilar 
biological product continues to be affected by the severe supply chain 
disruption during the fifth through eighth applicable calendar 
quarters.
    (ii) A manufacturer must submit the rebate reduction extension 
request at least 60 calendar days before the start of the fifth 
applicable calendar quarter to receive consideration for a reduction in 
the rebate amount owed, if any, as determined under paragraph (b)(2) of 
this section.
    (6) Decision to grant or deny a request. CMS will review rebate 
reduction requests and rebate reduction extension requests within 60 
calendar days of receipt of all documentation, if feasible, beginning 
with the applicable calendar quarter that begins on October 1, 2024.
    (i) CMS will deny a rebate reduction request that does not meet the 
criteria set forth in paragraph (c)(4) of this section or that is 
incomplete or untimely based on the requirements set forth in this 
paragraph (c).
    (ii) CMS will deny a rebate reduction extension request that does 
not meet the criteria set forth in paragraph (c)(5) of this section, 
that is incomplete or untimely based on the requirements set forth in 
paragraph (c)(5), or if a reduction determined under paragraph (b)(1) 
of this section was not granted for such biosimilar biological product.
    (iii) CMS' decisions to deny a request are final and will not be 
subject to an appeals process.
    (7) Public disclosure of information. CMS will keep confidential, 
to the extent allowable under law, any requests for a rebate reduction, 
including supporting documentation. Information provided as part of a 
request for a rebate reduction that the submitter indicates is a trade 
secret or confidential commercial or financial information will be 
protected from disclosure if CMS determines the information meets the 
requirements set forth under Exemptions 3 and/or 4 in 5 U.S.C. 552.

Subpart F--Reports of Rebate Amounts, Reconciliation, Suggestion of 
Error, and Payments


Sec.  427.500  Definitions.

    As used in this subpart, date of receipt is the calendar day 
following the day on which a report of a rebate amount (as set forth in 
Sec. Sec.  427.501(b) through (d) and 427.502(b) and (c) is made 
available to the manufacturer of a Part B rebatable drug by CMS.


Sec.  427.501  Rebate Reports and reconciliation.

    (a) General. This section applies to Part B rebatable drugs for all 
applicable calendar quarters except as otherwise set forth in Sec.  
427.502 regarding the applicable calendar quarters in calendar years 
2023 and 2024.
    (b) Preliminary Rebate Report. A Preliminary Rebate Report will be 
provided to each manufacturer of a Part B rebatable drug at least 1 
month prior to the issuance of the Rebate Report as set forth in 
paragraph (c) of this section for an applicable calendar quarter.
    (1) The Preliminary Rebate Report for each Part B rebatable drug 
will include the following information:
    (i) The NDC(s) and billing and payment codes identified for the 
Part B rebatable drug set forth in Sec.  427.20.
    (ii) Total number of billing units as determined under Sec.  
427.303.
    (iii) Payment amount benchmark quarter and payment amount in the 
payment amount benchmark quarter as determined under Sec.  427.302(c) 
and (d).
    (iv) Applicable calendar quarter specified amount as determined 
under Sec.  427.302(b).
    (v) Applicable benchmark period and rebate period CPI-Us as set 
forth in Sec.  427.302(e) and (f).
    (vi) Inflation-adjusted payment amount as determined under Sec.  
427.302(g).
    (vii) The amount, if any, by which the specified amount as 
determined under Sec.  427.302(b) exceeds the inflation-adjusted 
payment amount as determined under Sec.  427.302(g) for the Part B 
rebatable drug for the applicable calendar quarter as set forth in 
Sec.  427.302.
    (viii) Any applied reductions as determined under Sec. Sec.  
427.401 and 427.402.
    (ix) Rebate amount due as determined under Sec.  427.301(a).
    (2) [Reserved]
    (c) Rebate Report. A Rebate Report will be provided to each 
manufacturer of a Part B rebatable drug no later than 6 months after 
the end of each applicable calendar quarter.
    (1) The Rebate Report will include the information specified in 
paragraph (b)(1) of this section, with the inclusion of any revisions 
to such information resulting from CMS' review of a Suggestion of Error 
as set forth in Sec.  427.503, if applicable, and any CMS-determined 
recalculations from paragraph (d)(2) of this section.
    (2) The Rebate Report is the invoice of a manufacturer's rebate 
amount due as determined under Sec.  427.301, if any, for a Part B 
rebatable drug for an applicable calendar quarter.
    (d) Reconciliation of the rebate amount. CMS will perform 
reconciliation of a rebate amount provided in a Rebate Report specified 
in paragraph (c) of this section for an applicable calendar quarter in 
the following circumstances:
    (1) Regular reconciliation. Except as otherwise set forth in Sec.  
427.502, CMS will perform one regular reconciliation of the rebate 
amount within 12 months of the date of receipt of the Rebate Report for 
each applicable calendar

[[Page 98587]]

quarter to include revisions to the information used to calculate the 
rebate amount set forth in paragraph (c)(1) of this section.
    (i) Preliminary reconciliation. At least 1 month prior to the 
issuance of a report with the reconciled rebate amount determined under 
paragraph (d)(1)(ii) of this section, CMS will conduct a preliminary 
reconciliation of a rebate amount for an applicable calendar quarter 
determined under paragraph (d)(3) of this section based on the 
information set forth in this paragraph (b)(1)(i) and paragraphs 
(d)(1)(ii) through (ix) of this section and provide the information 
specified in this paragraph (b)(1)(i) and paragraphs (d)(1)(ii) through 
(ix) to the manufacturer of a Part B rebatable drug for the applicable 
calendar quarter, if applicable:
    (A) Updated total number of rebatable units, as determined under 
Sec.  427.303.
    (B) Updated payment amount benchmark quarter and payment amount in 
the payment amount benchmark quarter, as determined under Sec.  
427.302(c) and (d) if any inputs are restated within the reconciliation 
run-out period.
    (C) Applicable calendar quarter specified amount as determined 
under Sec.  427.302(b), if any inputs are restated within the 
reconciliation run-out period.
    (D) The excess amount by which the specified amount exceeds the 
inflation-adjusted payment amount as determined under Sec.  427.302, if 
any inputs are restated within the reconciliation run-out period.
    (E) Reconciled total rebate amount as determined under Sec.  
427.301(a).
    (F) The difference between the total rebate amount due as specified 
on the Rebate Report set forth in paragraph (c) of this section and the 
reconciled rebate amount as set forth in this paragraph (d)(1)(i).
    (ii) Report with reconciled rebate amount. With the inclusion of 
any additional revisions to such information resulting from CMS' review 
of a Suggestion of Error as set forth in Sec.  427.503, if applicable, 
a report with the reconciled rebate amount will be provided to each 
manufacturer of a Part B rebatable drug within 12 months after the 
issuance of the Rebate Report described in paragraph (c) of this 
section.
    (2) CMS identification of error and manufacturer misreporting. CMS 
may recalculate a rebate amount and provide the manufacturer of a Part 
B rebatable drug a report with a reconciled rebate amount when:
    (i) CMS identifies an agency error in the information specified in 
paragraphs (c) and (d)(1) of this section, including reporting system 
or coding errors, not later than 3 years from the date of receipt by a 
manufacturer of a reconciled rebate amount for the applicable calendar 
quarter; or
    (ii) CMS determines at any time that the information used by CMS to 
calculate the rebate amount was inaccurate due to manufacturer 
misreporting.
    (3) Impact of reconciliation on rebate amount. A reconciliation as 
set forth in this paragraph (d) could result in an increase, decrease, 
or no change to the rebate amount, as determined under Sec.  427.301, 
owed by a manufacturer for the applicable calendar quarter for the Part 
B rebatable drug compared to the amount described in the Rebate Report 
described in paragraph (c) of this section or an amount described in a 
previous reconciliation.
    (i) A report with a reconciled rebate amount that is an increase to 
the rebate amount is the invoice for such additional amount due on the 
manufacturer's rebate amount as determined under Sec.  427.301 for a 
Part B rebatable drug for an applicable calendar quarter.
    (ii) [Reserved]
    (4) Drugs included in a reconciliation. A drug covered under Part B 
that does not meet the requirements of a rebatable drug specified in 
subpart B for an applicable calendar quarter will not be included in a 
reconciliation under this paragraph (d).


Sec.  427.502  Rebate Reports for applicable calendar quarters in 
calendar years 2023 and 2024.

    (a) Transition rule for reporting. Section 1847A(i)(1)(C) of the 
Act allows CMS to delay the timeframe for reporting the information and 
rebate amount described in Sec.  427.501(c) for applicable calendar 
quarters in calendar years 2023 and 2024 until not later than September 
30, 2025.
    (b) Rebate Report information for applicable calendar quarters in 
calendar years 2023 and 2024. The Rebate Reports for applicable 
calendar quarters in calendar years 2023 and 2024 will include the 
information set forth in Sec.  427.501(b)(1).
    (c) Rebate Report procedures for applicable calendar quarters in 
calendar years 2023 and 2024. Rebate amounts for the applicable 
calendar quarters in calendar year 2023 and 2024 will be reported as 
follows:
    (1) The 4 applicable calendar quarters in calendar year 2023 will 
be consolidated into a single report and manufacturers will receive a 
single Preliminary Rebate Report followed by a single Rebate Report.
    (i) Discarded drug units for which a refund is owed will be removed 
from the total number of billing units in the single Preliminary Rebate 
Report for the applicable calendar quarters in calendar year 2023.
    (ii) For this single Preliminary Rebate Report for the applicable 
calendar quarters in calendar year 2023, the Suggestion of Error period 
as set forth in Sec.  427.503 will be 30 calendar days.
    (iii) No regular reconciliation of the rebate amount as set forth 
in Sec.  427.501(d)(1) will be conducted for the rebate amount in the 
single Rebate Report for the applicable calendar quarters in calendar 
year 2023.
    (2) The four applicable calendar quarters in calendar year 2024 
will be consolidated into a single report and manufacturers will 
receive a single Preliminary Rebate Report followed by a single Rebate 
Report.
    (i) For this single Preliminary Rebate Report for the applicable 
calendar quarters in calendar year 2024, the Suggestion of Error period 
as set forth in Sec.  427.503 will be 30 calendar days.
    (ii) Nine months after issuance of the single Rebate Report, CMS 
will perform one regular reconciliation for the applicable calendar 
quarters in calendar year 2024 in order to include revisions to the 
information used, determined under Sec.  427.501(b)(1), to calculate 
the rebate amount. Such reconciliation will be as determined under 
Sec.  427.501(d) inclusive of a preliminary reconciliation and a report 
with the reconciled rebate amount.
    (iii) The Suggestion of Error period for the preliminary 
reconciliation for the applicable calendar quarters in calendar year 
2024 will be 10 calendar days.


Sec.  427.503  Suggestion of Error.

    (a) General. The manufacturer of a Part B rebatable drug may submit 
a Suggestion of Error about the information in their Preliminary Rebate 
Report and the report detailing the preliminary reconciliation of the 
rebate amount to CMS, for its discretionary consideration, if the 
manufacturer believes that there is a mathematical error or errors to 
be corrected before the Rebate Report or a subsequent reconciliation of 
the rebate amount, as applicable, is finalized.
    (1) Section 1847A(i)(8) of the Act precludes administrative or 
judicial review on the determination of units as set forth in Sec.  
427.303, the determination of whether a drug is a Part B rebatable drug 
as set forth in Sec.  427.101, and the calculation of the rebate amount 
as set

[[Page 98588]]

forth in Sec.  427.301, inclusive of any reconciled rebate amount.
    (2) [Reserved]
    (b) Process of submission. Subject to the scope and timing 
requirements specified in paragraphs (a) and (c) of this section, 
manufacturers may submit the Suggestion of Error and provide supporting 
documentation (if applicable).
    (c) Timing. Except as set forth in Sec.  427.502 for applicable 
calendar quarters in calendar year 2023 and 2024, a manufacturer must 
submit its Suggestion of Error for the applicable calendar quarter 
within 10 calendar days from the date of receipt of a Preliminary 
Rebate Report or a preliminary reconciliation of a rebate amount using 
the method and process established by CMS in paragraph (b) of this 
section.
    (d) Notice. (1) CMS will include any revisions to the calculation 
of the rebate amount, if determined necessary by CMS based on the 
Suggestion of Error submitted under this section prior to issuance of 
the Rebate Report as set forth in Sec.  427.501(c) or Sec.  427.502(c) 
as well as any report of reconciled rebate amount as set forth in Sec.  
427.501(d) or Sec.  427.502(c)(2)(ii).
    (2) CMS will notify the manufacturer whether CMS revised its 
calculation of the rebate amount based on the Suggestion of Error.


Sec.  427.504  Manufacturer access to Rebate Reports.

    (a) General. CMS will establish a method and process for a 
manufacturer of the Part B rebatable drug to:
    (1) Access the manufacturer's Rebate Report as set forth in 
Sec. Sec.  427.501 and 427.502, including any report of reconciled 
rebate amount as set forth in Sec. Sec.  427.501(d) and 
427.502(c)(2)(ii);
    (2) Submit a Suggestion of Error as set forth in Sec. Sec.  
427.502(c)(1)(ii) and (c)(2)(i) and 427.503; and
    (3) Pay a rebate amount as set forth in Sec.  427.505.
    (b) [Reserved]


Sec.  427.505  Deadline and process for payment of rebate amount.

    (a) Rebate amounts owed by a manufacturer. For a rebate amount owed 
by a manufacturer, payment is due no later than 11:59 p.m. Pacific Time 
(PT) on the 30th calendar day after the date of receipt of information 
regarding the rebate amount on--
    (1) A Rebate Report as set forth in Sec.  427.501(c) or Sec.  
427.502(c)(1) or (2); or
    (2) A report of a reconciled rebate amount as set forth in Sec.  
427.501(d) or Sec.  427.502(c)(2)(ii).
    (b) Failure to pay a rebate amount. Failure to pay a rebate amount 
due timely and in full may result in an enforcement action as described 
in subpart G of this part.
    (c) Refund to the manufacturer. If a reconciled rebate amount for 
an applicable calendar quarter as set forth in Sec.  427.501(d) or 
Sec.  427.502(c)(2)(ii) is less than what the manufacturer paid for 
that applicable calendar quarter, CMS will initiate the process to 
provide a refund equal to the excess amount paid within 60 days of the 
date of receipt of the report with such reconciled rebate amount.

Subpart G--Enforcement of Manufacturer Payment of Rebate Amounts


Sec.  427.600  Civil money penalty notice and appeals procedures.

    (a) General. CMS may impose a civil money penalty on a manufacturer 
that fails to pay the rebate amount determined in Sec.  427.301(a) on a 
Part B rebatable drug as set forth in Sec.  427.101, by the payment 
deadline as set forth in Sec.  427.505(a) for such drug for such 
applicable calendar quarter.
    (b) Determination of the civil money penalty amount. CMS may impose 
a civil money penalty for each failure by a manufacturer to provide an 
inflation rebate for an applicable calendar quarter equal to 125 
percent of the rebate amount determined in Sec.  427.301(a).
    (1) The civil money penalty is in addition to the rebate amount 
due.
    (2) If a reconciled rebate amount as determined in Sec.  427.501(d) 
or Sec.  427.502(c)(2)(ii) results in an increase to the rebate amount 
due, a separate civil money penalty may be imposed for the failure by a 
manufacturer to provide an inflation rebate for the applicable quarter 
for the increase to the rebate amount due.
    (c) Notice of imposition of civil money penalties. If CMS makes a 
determination to impose a civil money penalty described in paragraph 
(b) of this section, CMS will send a written notice of its decision to 
impose a civil money penalty that includes the following:
    (1) A description of the basis for the determination.
    (2) The basis for the penalty.
    (3) The amount of the penalty.
    (4) The date the penalty is due.
    (5) The manufacturer's right to a hearing as set forth in paragraph 
(e)(3) of this section.
    (6) Information about where to file the request for a hearing.
    (d) Collection. (1) A manufacturer must pay the civil money penalty 
in full within 60 calendar days after the date of the notice of 
imposition of a civil money penalty from CMS under paragraph (c) of 
this section.
    (2) In the event a manufacturer requests a hearing, pursuant to 42 
CFR part 423, subpart T, the manufacturer must pay the amount in full 
within 60 calendar days after the date of a final decision by the 
Departmental Appeal Board, to uphold, in whole or in part, the civil 
money penalty.
    (3) If the 60th calendar day described in paragraphs (d)(1) and (2) 
of this section is a weekend or a Federal holiday, then the timeframe 
is extended until the end of the next business day.
    (e) Appeal procedures for civil money penalties. Section 
1128A(c)(2) of the Act provides that CMS may not collect a civil money 
penalty until the affected party has had notice and the opportunity for 
a hearing.
    (1) Manufacturers may appeal the following determinations:
    (i) A CMS determination that the rebate amount was not paid by the 
applicable payment deadline as set forth in Sec.  427.505.
    (ii) The calculation of the amount of the civil money penalty.
    (2) If CMS decides to impose a civil money penalty, CMS will 
provide the manufacturer with notice pursuant to the process set forth 
in paragraph (c) of this section.
    (3) A manufacturer has a right to a hearing following a decision by 
CMS to impose a civil money penalty following the administrative appeal 
process and procedures established in 42 CFR part 423, subpart T.
    (f) Other applicable provisions. The provisions of section 1128A of 
the Act (except subsections (a) and (b) of section 1128A of the Act) 
apply to civil money penalties under this section to the same extent 
that they apply to a civil money penalty or procedures under section 
1128A of the Act.
    (g) Bankruptcy. In the event that a manufacturer declares 
bankruptcy, as described in title 11 of the United States Code, and as 
a result of the bankruptcy, fails to pay either the full rebate amount 
owed or the total sum of civil money penalties imposed, the Government 
reserves the right to file a proof of claim with the bankruptcy court 
to recover the unpaid amount of the rebates and civil money penalties 
owed by the manufacturer.

0
82. Part 428 is added to read as follows:

PART 428--MEDICARE PART D DRUG INFLATION REBATE PROGRAM

Subpart A--General Provisions
Sec.
428.10 Basis and scope.
428.20 Definitions.

[[Page 98589]]

Subpart B--Determination of Part D Rebatable Drugs
428.100 Definitions.
428.101 Identification of Part D rebatable drugs.
Subpart C--Determination of the Rebate Amount for Part D Rebatable 
Drugs
428.200 Definitions.
428.201 Calculation of the total rebate amount to be paid by 
manufacturers.
428.202 Calculation of the per unit Part D drug rebate amount.
428.203 Determination of the total number of units dispensed under 
Part D.
428.204 Treatment of new formulations of Part D rebatable drugs.
Subpart D--Reducing the Rebate Amount for Part D Rebatable Drugs in 
Shortage and When There Is a Severe Supply Chain Disruption or Likely 
Shortage
428.300 Definitions.
428.301 Reducing the rebate amount for Part D rebatable drugs 
currently in shortage.
428.302 Reducing the rebate amount for certain Part D rebatable 
drugs when there is a severe supply chain disruption.
428.303 Reducing the rebate amount for generic Part D rebatable 
drugs likely to be in shortage.
Subpart E--Reports of Rebate Amounts, Reconciliation, Suggestion of 
Error, and Payments
428.400 Definitions.
428.401 Rebate Reports and reconciliation.
428.402 Rebate Reports for applicable periods beginning October 1, 
2022, and October 1, 2023.
428.403 Suggestion of Error.
428.404 Manufacturer access to Rebate Reports.
428.405 Deadline and process for payment of rebate amount.
Subpart F--Enforcement of Manufacturer Payment of Rebate Amounts
428.500 Civil money penalty notice and appeals procedures.

    Authority:  42 U.S.C. 1395w-114b, 1302, and 1395hh.

Subpart A--General Provisions


Sec.  428.10  Basis and scope.

    (a) Basis. This part implements section 1860D-14B of the Social 
Security Act (``the Act'').
    (b) Scope. This part sets forth the requirements of the Medicare 
Part D Drug Inflation Rebate Program, which requires, for each 12-month 
applicable period, manufacturers to pay rebates for certain drugs and 
biological products with prices that increase faster than the rate of 
inflation.
    (c) Severability. Were any provision of this part to be held 
invalid or unenforceable by its terms, or as applied to any person or 
circumstance, such provisions would be severable from this part and the 
invalidity or unenforceability would not affect the remainder thereof 
or any other part of this subchapter or the application of such 
provision to other persons not similarly situated or to other, 
dissimilar circumstances.


Sec.  428.20  Definitions.

    As used in this part, the following definitions apply:
    Annual manufacturer price (AnMP) means the amount determined under 
Sec.  428.202(b).
    Applicable period means a 12-month period beginning with October 1 
of a year (beginning with October 1, 2022).
    Applicable period Consumer Price Index for All Urban Consumers 
(CPI-U) means, with respect to an applicable period, the CPI-U for the 
first month of such applicable period (that is, October).
    Applicable threshold means the amount determined under Sec.  
428.101(b)(2).
    Average manufacturer price (AMP) means the average price paid to 
the manufacturer for the drug by wholesalers for drugs distributed to 
retail community pharmacies and retail community pharmacies that 
purchase drugs directly from the manufacturer, determined under Sec.  
447.504 of this chapter.
    Benchmark period CPI-U means the CPI-U identified as set forth in 
Sec.  428.202(e).
    Benchmark period manufacturer price means the amount determined 
under Sec.  428.202(d).
    Covered Part D Drug has the meaning set forth in section 1860D-2(e) 
of the Act and Sec.  423.100 of this chapter.
    CPI-U means the monthly Consumer Price Index for All Urban 
Consumers (United States city average) index level for all items from 
the Bureau of Labor Statistics.
    First marketed date means the date that a manufacturer is required 
to report for a Part D rebatable drug as its ``market date'' under 
section 1927(b)(3)(A)(v) of the Act.
    Inflation-adjusted payment amount means the amount determined under 
Sec.  428.202(f).
    Manufacturer has the meaning set forth in section 1927(k)(5) of the 
Act.
    National Drug Code (NDC) means the unique identifying prescription 
drug product number that is listed with FDA identifying the product.
    Part D rebatable drug means, subject to the exclusion set forth in 
Sec.  428.101(b), a drug or biological that is a covered Part D drug 
that, as of the first day of the applicable period, is:
    (1) A drug approved under a New Drug Application (NDA) under 
section 505(c) of the Federal Food, Drug, and Cosmetic (FD&C) Act;
    (2) A generic drug approved under an Abbreviated New Drug 
Application (ANDA) under section 505(j) of the FD&C Act (``section 
505(j) ANDA''), in the case where:
    (i) The reference listed drug approved under an NDA under section 
505(c) of the FD&C Act, including any authorized generic drug as 
defined in section 505(t)(3) of the FD&C Act, is not being marketed, as 
identified in the Food and Drug Administration's (FDA) NDC Directory;
    (ii) There is no other drug approved under section 505(j) of the 
FD&C Act that is rated as therapeutically equivalent in FDA's most 
recent publication of ``Approved Drug Products with Therapeutic 
Equivalence Evaluations'' (commonly known as the Orange Book), and that 
is being marketed, as identified in FDA's NDC Directory;
    (iii) The manufacturer is not a ``first applicant'' during the 
``180-day exclusivity period,'' as those terms are defined in section 
505(j)(5)(B)(iv) of the FD&C Act; and
    (iv) The manufacturer is not a ``first approved applicant'' for a 
competitive generic therapy, as that term is defined in section 
505(j)(5)(B)(v) of the FD&C Act; or
    (3) A biological licensed under section 351 of the Public Health 
Service (PHS) Act, including a biosimilar.
    Payment amount benchmark period means the period identified as set 
forth in Sec.  428.202(c).
    Subsequently approved drug means a Part D rebatable drug first 
approved or licensed by the FDA after October 1, 2021.
    Unit means, with respect to a Part D rebatable drug, the lowest 
dispensable amount (such as a capsule or tablet, milligram of 
molecules, or grams) of the Part D rebatable drug, as reported under 
section 1927 of the Act.

Subpart B--Determination of Part D Rebatable Drugs


Sec.  428.100  Definitions.

    As used in this subpart, the following definitions apply:
    Individual who uses such a drug or biological means a unique 
Medicare Part D beneficiary who was dispensed the Part D drug or 
biological that was covered by their Part D plan sponsor during the 
applicable period, identified using Prescription Drug Event (PDE) data 
with dates of service during the applicable period and with gross 
covered prescription drug costs greater than zero.

[[Page 98590]]

    Gross covered prescription drug costs has the meaning set forth in 
Sec.  423.308 of this chapter.


Sec.  428.101  Identification of Part D rebatable drugs.

    (a) Determination of Part D rebatable drugs. (1) For each 
applicable period, CMS will use PDE data to identify all covered Part D 
drugs.
    (2) CMS will match the covered Part D drugs identified in the PDE 
data with application numbers using FDA sources to determine whether 
each covered Part D drug is a drug or biological approved under an NDA 
under section 505(c) of the FD&C Act, approved under an ANDA under 
section 505(j) of the FD&C Act, or licensed under a Biologics License 
Application (BLA) under section 351 of the PHS Act, as of the first day 
of the applicable period.
    (3) For a covered Part D drug identified in the PDE that is 
approved under an ANDA under section 505(j) of the FD&C Act, CMS will 
determine whether such drug meets the criteria in section 1860D-
14B(g)(1)(C)(ii) of the Act as of the first day of the applicable 
period as follows:
    (i) To determine whether the reference listed drug or an authorized 
generic of the reference listed drug is being marketed, as required 
under section 1860D-14B(g)(1)(C)(ii)(I) of the Act, CMS will use FDA's 
NDC Directory, including historical information from NDC Directory 
files such as discontinued, delisted, and expired listings, provided by 
the FDA or published on the FDA website.
    (ii) To determine whether another drug has been approved under an 
ANDA that is therapeutically equivalent to the Part D rebatable drug 
identified as set forth in this paragraph (a)(3), CMS will use FDA's 
Orange Book. To determine if this therapeutically equivalent drug is 
being marketed, as required under section 1860D-14B(g)(1)(C)(ii)(II) of 
the Act, CMS will use FDA's NDC Directory, including historical 
information from NDC Directory files, such as discontinued, delisted, 
and expired listings, provided by the FDA or published on the FDA 
website.
    (iii) To determine whether the manufacturer of the drug identified 
as set forth in this paragraph (a)(3) is a first applicant during the 
180-day exclusivity period, or whether the manufacturer of this drug is 
a first approved applicant for a competitive generic drug therapy, CMS 
will refer to publicly available FDA sources such as the Orange Book 
and may consult with FDA for technical assistance as needed.
    (b) Drugs and biologicals with average annual total cost below the 
applicable threshold. For each applicable period, CMS will identify 
drugs and biologicals with average annual total costs under Part D for 
such applicable period, per individual who uses such drug or 
biological, that are below the applicable threshold in accordance with 
the steps described in this paragraph (b). Such drugs and biologicals 
are not considered Part D rebatable drugs and will be excluded from the 
identification of Part D rebatable drugs set forth in paragraph (a) of 
this section.
    (1) Average annual total cost. For each drug or biological that is 
identified as set forth in paragraph (a) of this section, CMS will 
calculate average annual total costs under Part D per individual who 
uses such drug or biological by dividing the gross covered prescription 
drug costs for the drug or biological by the number of individuals who 
use such drug or biological in the applicable period. When calculating 
the gross covered prescription drug costs for the drug or biological, 
CMS will exclude PDE records indicating the drug or biological was 
billed as a compound.
    (2) Applicable threshold. CMS will calculate the applicable 
threshold for an applicable period as follows:
    (i) For the applicable period beginning October 1, 2022, the 
applicable threshold is equal to $100.
    (ii) For the applicable period beginning October 1, 2023, the 
applicable threshold is equal to $100 increased by the percentage 
increase in CPI-U for the 12-month period beginning October 1, 2023.
    (iii) For subsequent applicable periods, the applicable threshold 
is equal to the applicable threshold for the prior applicable period 
increased by the percentage increase in the CPI-U for the 12-month 
period beginning with October of the previous period.
    (iv) If the resulting amount determined under paragraph (b)(2)(ii) 
or (iii) of this section is not a multiple of $10, CMS will round that 
amount to the nearest multiple of $10.

Subpart C--Determination of the Rebate Amount for Part D Rebatable 
Drugs


Sec.  428.200  Definitions.

    As used in this subpart, the following definitions apply:
    340B Program is the program under section 340B of the PHS Act.
    Line extension has the meaning set forth in Sec.  447.502 of this 
chapter.
    New formulation has the meaning set forth in Sec.  447.502 of this 
chapter.
    Oral solid dosage form has the meaning set forth in Sec.  447.502 
of this chapter.


Sec.  428.201  Calculation of the total rebate amount to be paid by 
manufacturers.

    (a) Total rebate. (1) Subject to paragraph (b) of this section, the 
total rebate amount to be paid by a manufacturer for a Part D rebatable 
drug, identified as set forth in Sec.  428.101, for an applicable 
period is equal to:
    (i) The product of the per unit Part D rebate amount of such drug, 
as determined under Sec.  428.202(a), and the total number of units 
dispensed of such drug under Part D, as determined under Sec.  428.203; 
or
    (ii) In the case of a Part D rebatable drug that is a line 
extension of a Part D rebatable drug that is an oral solid dosage form, 
the amount determined under Sec.  428.204.
    (2) The rebate amount may be reduced in accordance with subpart D 
of this part or adjusted in accordance with subpart E of this part.
    (b) Drugs and biologicals excluded from Part D rebate calculations. 
CMS will exclude from the Part D drug inflation rebate calculations 
described in this subpart--
    (1) Drugs and biologicals that meet the definition of a Part D 
rebatable drug but whose manufacturers do not have an agreement in 
effect with the HHS Secretary under section 1927 of the Act at any 
point during the applicable period, as determined by CMS through 
consultation with Medicaid Drug Rebate Program staff and review of the 
Medicaid Drug Programs system.
    (2) Drugs and biologicals that meet the definition of a Part D 
rebatable drug but, for the entire duration of the applicable period, 
are excluded from the definition of covered outpatient drugs as defined 
in section 1927(k)(2)-(4) of the Act and Sec.  447.502 of this chapter, 
as determined by CMS through consultation with Medicaid Drug Rebate 
Program staff and review of the Medicaid Drug Programs system.


Sec.  428.202  Calculation of the per unit Part D drug rebate amount.

    (a) Formula for calculating the per unit Part D rebate amount. CMS 
will calculate the per unit Part D drug inflation rebate amount for a 
Part D rebatable drug and applicable period by determining the amount 
by which the AnMP for the Part D rebatable drug, as calculated in 
accordance with paragraph (b) of this section, exceeds the inflation-
adjusted payment amount, as calculated in accordance with paragraph (f) 
of this section.
    (b) Calculation of the AnMP for the applicable period. Subject to 
paragraph

[[Page 98591]]

(g) of this section, CMS will calculate the AnMP for a Part D rebatable 
drug using the AMP reported by a manufacturer under sections 
1927(b)(3)(A)(i)(I) and (ii) of the Act for each calendar quarter of 
the applicable period and units reported by a manufacturer under 
section 1927(b)(3)(A)(iv) of the Act for each month of the applicable 
period.
    (1) CMS will calculate the AnMP for a Part D rebatable drug as the 
sum of the following:
    (i) The product of--
    (A) The AMP for the Part D rebatable drug reported for the calendar 
quarter beginning October of the applicable period; and
    (B) The sum of the monthly units reported for the calendar quarter 
beginning October of the applicable period divided by the sum of the 
monthly units reported for the 4 calendar quarters in the applicable 
period.
    (ii) The product of--
    (A) The AMP for the Part D rebatable drug reported for the calendar 
quarter beginning January of the applicable period; and
    (B) The sum of the monthly units reported for the calendar quarter 
beginning January of the applicable period divided by the sum of the 
monthly units reported for the 4 calendar quarters in the applicable 
period.
    (iii) The product of--
    (A) The AMP for the Part D rebatable drug reported for the calendar 
quarter beginning April of the applicable period; and
    (B) The sum of the monthly units reported for the calendar quarter 
beginning April of the applicable period divided by the sum of the 
monthly units reported for the 4 calendar quarters in the applicable 
period.
    (iv) The product of--
    (A) The AMP for the Part D rebatable drug reported for the calendar 
quarter beginning July of the applicable period; and
    (B) The sum of the monthly units reported for the calendar quarter 
beginning July of the applicable period divided by the sum of the 
monthly units reported for the 4 calendar quarters in the applicable 
period.
    (2) The first applicable period for a Part D rebatable drug will be 
the earliest applicable period that follows the payment amount 
benchmark period identified as set forth in paragraphs (c)(1) through 
(4) of this section.
    (c) Identification of the payment amount benchmark period. As 
applicable under this paragraph, CMS will use information reported by a 
manufacturer under section 1927(b)(3) of the Act, including without 
limitation the date of FDA approval or licensure and the first marketed 
date, to identify the payment amount benchmark period as set forth in 
paragraphs (c)(1) and (2) of this section, subject to paragraphs (c)(3) 
through (5) of this section:
    (1) For a Part D rebatable drug first approved or licensed by the 
FDA on or before October 1, 2021, the payment amount benchmark period 
is the period beginning on January 1, 2021, and ending on September 30, 
2021;
    (2) For a subsequently approved drug, the payment amount benchmark 
period is the first calendar year beginning after the drug's first 
marketed date;
    (3) Notwithstanding paragraph (c)(1) of this section, for a Part D 
rebatable drug first approved or licensed by the FDA on or before 
October 1, 2021, for which there are no quarters during the period 
beginning on January 1, 2021, and ending on September 30, 2021, for 
which AMP has been reported under section 1927(b)(3) of the Act for the 
NDC-9, including information as set forth in paragraph (d)(3), the 
payment amount benchmark period is the first calendar year no earlier 
than calendar year 2021 in which such NDC-9 has at least 1 quarter of 
AMP reported;
    (4) Notwithstanding paragraph (c)(2) of this section, for a 
subsequently approved drug for which there are no quarters during the 
first calendar year beginning after the drug's first marketed date for 
which AMP has been reported under section 1927(b)(3) of the Act for the 
NDC-9, including information as set forth in paragraph (d)(3) of this 
section, the payment amount benchmark period is the first calendar year 
in which such NDC-9 has at least 1 quarter of AMP reported; and
    (5) Notwithstanding paragraphs (c)(1) through (4) of this section, 
for a Part D rebatable drug that is a selected drug (as defined in 
section 1192(c) of the Act) with respect to a price applicability 
period (as defined in section 1191(b)(2) of the Act), in the case such 
Part D rebatable drug is no longer considered to be a selected drug, 
for each applicable period beginning after the price applicability 
period with respect to such drug, the payment amount benchmark period 
is the last calendar year of such price applicability period with 
respect to such selected drug.
    (d) Calculation of benchmark period manufacturer price. Subject to 
paragraphs (d)(3) and (g) of this section, CMS will calculate the 
benchmark period manufacturer price for a Part D rebatable drug using 
the AMP reported by a manufacturer under sections 1927(b)(3)(A)(i)(I) 
and (ii) of the Act for each calendar quarter of the payment amount 
benchmark period and the monthly units reported by a manufacturer under 
section 1927(b)(3)(A)(iv) of the Act during the payment amount 
benchmark period.
    (1) For a Part D rebatable drug with a payment amount benchmark 
period identified as set forth in paragraph (c)(1) of this section, CMS 
will calculate the benchmark period manufacturer price as the sum of 
the following:
    (i) The product of--
    (A) The AMP reported for the calendar quarter beginning January 
2021; and
    (B) The sum of the monthly units reported for the calendar quarter 
beginning January 2021 divided by the sum of the monthly units reported 
for the 3 quarters of the payment amount benchmark period.
    (ii) The product of--
    (A) The AMP reported for the calendar quarter beginning April 2021; 
and
    (B) The sum of the monthly units reported for the calendar quarter 
beginning April 2021 divided by the sum of the monthly units reported 
for the 3 quarters of the payment amount benchmark period.
    (iii) The product of--
    (A) The AMP reported for the calendar quarter beginning July 2021; 
and
    (B) The sum of the monthly units reported for the calendar quarter 
beginning July 2021 divided by the sum of the units reported for the 3 
quarters of the payment amount benchmark period.
    (2) For a Part D rebatable drug with a payment amount benchmark 
period identified under paragraphs (c)(2) through (5) of this section, 
CMS will calculate the benchmark period manufacturer price as the sum 
of the following:
    (i) The product of--
    (A) The AMP reported for the calendar quarter beginning January of 
the payment amount benchmark period; and
    (B) The sum of the monthly units reported for the calendar quarter 
beginning January of the payment amount benchmark period divided by the 
sum of the monthly units reported for the 4 quarters of the payment 
amount benchmark period.
    (ii) The product of--
    (A) The AMP reported for the calendar quarter beginning April of 
the payment amount benchmark period; and
    (B) The sum of the monthly units reported for the calendar quarter 
beginning April of the payment amount

[[Page 98592]]

benchmark period divided by the sum of the monthly units reported for 
the 4 quarters of the payment amount benchmark period.
    (iii) The product of--
    (A) The AMP reported for the calendar quarter beginning July of the 
payment amount benchmark period; and
    (B) The sum of the monthly units reported for the calendar quarter 
beginning July of the payment amount benchmark period divided by the 
sum of the monthly units reported for the 4 quarters of the payment 
amount benchmark period.
    (iv) The product of--
    (A) The AMP reported for the calendar quarter beginning in October 
of the payment amount benchmark period; and
    (B) The sum of the monthly units reported for the calendar quarter 
beginning October of the payment amount benchmark period divided by the 
sum of the monthly units reported for the 4 quarters of the payment 
amount benchmark period.
    (3) To the extent that a new NDC-9 of a Part D rebatable drug is 
reported under section 1927 of the Act and AMP has not been reported 
for such NDC-9 under section 1927(b)(3)(A)(i)(I) or (ii) of the Act 
during the period set forth in paragraph (c)(1) or (2) of this section, 
as applicable, CMS will identify the payment amount benchmark period 
and calculate the benchmark period manufacturer price for such NDC-9 
using other information reported by a manufacturer under section 
1927(b)(3) of the Act for the Part D rebatable drug, as available, such 
as the base date AMP if such base date AMP is reported for a calendar 
quarter that overlaps with the period set forth in paragraph (c)(1) or 
(2) of this section. Base date AMP has the meaning set forth in Sec.  
447.509(a)(7)(ii)(B) of this title.
    (e) Identification of the benchmark period CPI-U. For each Part D 
rebatable drug, CMS will identify the benchmark period CPI-U as set 
forth in paragraphs (e)(1) and (2) of this section, subject to 
paragraphs (e)(3) through (5) of this section:
    (1) For a Part D rebatable drug first approved or licensed by the 
FDA on or before October 1, 2021, the benchmark period CPI-U is the 
CPI-U for January 2021.
    (2) For a subsequently approved drug, the benchmark period CPI-U is 
the CPI-U for January of the first calendar year beginning after a 
drug's first marketed date.
    (3) Notwithstanding paragraph (e)(1) of this section, for a Part D 
rebatable drug first approved or licensed by the FDA on or before 
October 1, 2021, for which there are no quarters during the period 
beginning on January 1, 2021, and ending on September 30, 2021, for 
which AMP has been reported under section 1927(b)(3) of the Act for the 
NDC-9, including information as set forth in paragraph (d)(3) of this 
section, the benchmark period CPI-U is the CPI-U for January of the 
payment amount benchmark period identified under paragraph (c)(3) of 
this section.
    (4) Notwithstanding paragraph (e)(2) of this section, for a 
subsequently approved drug for which there are no quarters during the 
first calendar year beginning after the drug's first marketed date for 
which AMP has been reported under section 1927(b)(3) of the Act for the 
NDC-9, including information as set forth in paragraph (d)(3) of this 
section, the benchmark period CPI-U is the CPI-U for January of the 
payment amount benchmark period identified as set forth in paragraph 
(c)(4) of this section.
    (5) Notwithstanding paragraphs (e)(1) through (4) of this section, 
for a drug that is a selected drug (as defined in section 1192(c) of 
the Act) with respect to a price applicability period (as defined in 
section 1191(b)(2) of the Act), in the case such Part D rebatable drug 
is no longer considered to be a selected drug, the benchmark period 
CPI-U is the CPI-U for January of the last calendar year of such price 
applicability period.
    (f) Calculation of inflation-adjusted payment amount. For an 
applicable period for each Part D rebatable drug, CMS will calculate 
the inflation-adjusted payment amount by dividing the applicable period 
CPI-U by the benchmark period CPI-U and then multiplying the quotient 
by the benchmark period manufacturer price.
    (g) Situations in which manufacturers do not report units under 
section 1927(b)(3)(A)(iv) of the Act. For the purpose of calculating 
the AnMP as determined under paragraph (b) of this section and the 
benchmark period manufacturer price as determined under paragraph (d) 
of this section--
    (1) If there is 1 or more quarter(s) in the payment amount 
benchmark period or applicable period for which a manufacturer has not 
reported units under section 1927(b)(3)(A)(iv) of the Act but has 
reported AMP under sections 1927(b)(3)(A)(i)(I) and (ii) of the Act, 
CMS will calculate the benchmark period manufacturer price or AnMP, as 
applicable, using data only from quarter(s) with units. Quarter(s) in 
the payment amount benchmark period or applicable period for which a 
manufacturer has not reported units under section 1927(b)(3)(A)(iv) of 
the Act will be excluded from the calculation.
    (2) If there are no quarters of the payment amount benchmark period 
or applicable period for which a manufacturer has reported units under 
section 1927(b)(3)(A)(iv) of the Act, but the manufacturer has reported 
AMP under sections 1927(b)(3)(A)(i)(I) and (ii) of the Act for at least 
1 quarter of such period or, with respect to paragraph (d)(3), there 
exists other information reported by a manufacturer under section 
1927(b)(3) of the Act for the Part D rebatable drug to identify the 
payment amount benchmark period, CMS will use the AMP or other 
information as applicable as set forth in paragraph (d)(3) reported for 
1 quarter to calculate the benchmark period manufacturer price or AnMP, 
respectively. If AMP is reported for more than 1 quarter, CMS will use 
the average of the AMP over the calendar quarters of the payment amount 
benchmark period or applicable period for which AMP is reported to 
calculate the benchmark period manufacturer price or AnMP, 
respectively.


Sec.  428.203  Determination of the total number of units dispensed 
under Part D.

    (a) General. For each Part D rebatable drug, CMS will determine the 
total number of units as follows:
    (1) Use of PDE data to determine total units dispensed. To 
determine the total number of units of each Part D rebatable drug 
dispensed under Part D and covered by Part D plan sponsors during an 
applicable period, CMS will use the quantity dispensed reported on the 
PDE record for each Part D rebatable drug with gross covered 
prescription drug costs greater than zero.
    (2) Crosswalk to AMP units. CMS will crosswalk the information from 
the PDE record to database(s) that includes the unit type (for example, 
each, capsule) for the Part D rebatable drug, matching on the NDC of 
the Part D rebatable drug. If the unit type obtained from such database 
does not match the AMP unit type reported by a manufacturer to the 
Medicaid Drug Programs system, CMS will convert the total units 
reported on the PDE to the AMP units reported.
    (b) Removal of certain units. CMS will exclude certain units from 
the total number of units dispensed of a Part D rebatable drug, with 
respect to an applicable period, as follows:
    (1) Removal of units when a generic drug is no longer a Part D 
rebatable drug. To determine whether a generic drug that meets the 
definition of a Part D rebatable drug on the first day of an applicable 
period ceases to meet such

[[Page 98593]]

definition later in the applicable period, CMS will--
    (i) Review FDA's NDC Directory, including historical information 
from NDC Directory files such as discontinued, delisted, and expired 
listings provided by the FDA or published on the FDA website to 
determine whether the reference listed drug or an authorized generic of 
the reference listed drug is being marketed;
    (ii) Review the most recent version of the downloadable FDA Orange 
Book to determine whether another drug has been approved under a 
section 505(j) ANDA that is therapeutically equivalent to such generic 
drug. If CMS determines that FDA has approved such a therapeutically 
equivalent drug under a section 505(j) ANDA, CMS will then: use the 
FDA's NDC Directory, including historical information from NDC 
Directory files such as discontinued, delisted, and expired listings 
provided by the FDA or published on the FDA website to determine the 
marketing status of such therapeutically equivalent drug and whether, 
during the applicable period, the therapeutically equivalent drug was 
marketed; and
    (iii) Exclude from the total number of units determined under 
paragraph (a) of this section any units dispensed on or after the first 
day of the calendar month that a generic drug no longer meets the 
definition of a Part D rebatable drug.
    (2) Exclusion of units acquired through the 340B Program. (i) For 
the applicable period beginning October 1, 2025, and subsequent 
applicable periods, CMS will exclude from the total number of units 
determined under paragraph (a) of this section units for which a 
manufacturer provided a discount under the 340B Program (``340B 
units'') as follows:
    (A) For the applicable period beginning October 1, 2025, 340B units 
will be excluded from the total number of units dispensed for claims 
with a date of service on or after January 1, 2026.
    (B) For the applicable period beginning October 1, 2026, and 
applicable periods thereafter, 340B units will be excluded from the 
total number of units dispensed.
    (ii) To determine the total number of such units for which a 
manufacturer provided a discount under the 340B Program, CMS will use 
data reflecting the total number of units of a Part D rebatable drug 
for which a discount was provided under the 340B Program and that were 
dispensed during the applicable period.
    (3) Exclusion of compounded drug units. CMS will exclude units from 
the total number of units dispensed of a Part D rebatable drug when 
those units are associated with a Part D rebatable drug that has been 
billed as compounded.


Sec.  428.204  Treatment of new formulations of Part D rebatable drugs.

    In the case of a Part D rebatable drug that is a line extension of 
a Part D rebatable drug that is an oral solid dosage form, the rebate 
amount for an applicable period is equal to the amount determined under 
Sec.  428.201(a) for such new drug or, if greater, the alternative 
total rebate amount. CMS will determine the alternative total rebate 
amount for such new formulations according to the following:
    (a) Identification of the initial drug. The initial drug that CMS 
will use to calculate the inflation rebate amount ratio is the initial 
drug identified in accordance with Sec.  447.509(a)(4)(iii)(B) of this 
chapter for the last quarter of the applicable period or, if an initial 
drug was not identified in the last quarter, the initial drug 
identified for a quarter most recently in that applicable period.
    (b) Calculation of the inflation rebate amount ratio. The inflation 
rebate amount ratio is equal to the per unit Part D drug inflation 
rebate amount for the initial drug, as determined under Sec.  
428.202(a), divided by the AnMP for that initial drug for the 
applicable period.
    (c) Calculation of the alternative total rebate amount. The 
alternative total rebate amount is equal to the product of all of the 
following:
    (1) The AnMP for the applicable period, as determined under Sec.  
428.202(b), of the Part D rebatable drug that is a line extension of a 
Part D rebatable drug that is an oral solid dosage form.
    (2) The inflation rebate amount ratio as determined under paragraph 
(b) of this section.
    (3) The total number of units dispensed under Part D identified as 
set forth in Sec.  428.203.

Subpart D--Reducing the Rebate Amount for Part D Rebatable Drugs in 
Shortage and When There Is a Severe Supply Chain Disruption or 
Likely Shortage


Sec.  428.300  Definitions.

    As used in this subpart, the following definitions apply:
    Biosimilar has the meaning set forth in section 351(i) of the PHS 
Act.
    Currently in shortage means that at least one NDC-10 of a Part D 
rebatable drug with the status ``currently in shortage'' is on a 
shortage list maintained by the FDA under section 506E of the FD&C Act.
    Drug shortage or shortage means a period of time when the demand or 
projected demand for the drug within the United States exceeds the 
supply of the drug (see section 506C(h)(2) of the FD&C Act).
    Generic Part D rebatable drug means a generic drug approved under 
an ANDA under section 505(j) of the FD&C Act that meets the sole source 
criteria specified in Sec.  428.101(a)(3).
    Likely to be in shortage means that a generic Part D rebatable drug 
is likely to be described as currently in shortage during a subsequent 
applicable period without such rebate reduction.
    Natural disaster means any natural catastrophe, including, but not 
limited to any of the following: hurricane, tornado, storm, high water, 
wind-driven water, tidal wave, tsunami, earthquake, volcanic eruption, 
landslide, mudslide, snowstorm, or drought, or regardless of cause, any 
fire, flood, or explosion.
    Other unique or unexpected event means any exogenous, unpredictable 
event outside of a manufacturer's control, including, but not limited 
to, a geopolitical disruption, pandemic, or act of terror.
    Plasma-derived product means a licensed biological product that is 
derived from human whole blood or plasma, as indicated on the approved 
product labeling.
    Severe supply chain disruption means a change in production or 
distribution that is reasonably likely to lead to a significant 
reduction in the U.S. supply of a generic Part D rebatable drug or 
biosimilar by a manufacturer and significantly affects the ability of 
the manufacturer of the generic drug or biosimilar to fill orders or 
meet expected demand for its product in the United States for at least 
90 days. This definition does not include interruptions in 
manufacturing due to matters such as routine maintenance, manufacturing 
quality issues, or insignificant changes made in the manufacturing 
process for the drug.


Sec.  428.301  Reducing the rebate amount for Part D rebatable drugs 
currently in shortage.

    (a) General. As required under section 1860D-14B(b)(1)(C)(i) of the 
Act, CMS will reduce the total rebate amount determined under Sec.  
428.201(a), if any is owed, for a Part D rebatable drug that is 
currently in shortage, as set forth in Sec.  428.300, at any point 
during the applicable period.
    (b) Calculation of the reduced rebate amount. (1) For each 
applicable period beginning on or after October 1, 2022, the reduced 
total rebate amount for a Part D rebatable drug currently in shortage 
will be calculated using the following formula:

[[Page 98594]]

Equation 1 to Paragraph (b)(1)
Reduced Total Rebate Amount = the total rebate amount multiplied by (1 
minus applicable percent reduction) multiplied by (percentage of time 
drug was currently in shortage during the applicable period) added to 
the total rebate amount multiplied by (1 minus percentage of time drug 
was currently in shortage during the applicable period)

    (2) For purposes of paragraph (b)(1) of this section, the 
applicable percent reduction is:
    (i) For a Part D rebatable drug that is a generic drug or plasma-
derived product:
    (A) 75 percent for the first applicable period such drug is 
currently in shortage.
    (B) 50 percent for the second applicable period such drug is 
currently in shortage.
    (C) 25 percent for each subsequent period such drug is currently in 
shortage.
    (ii) For a Part D rebatable drug that is not a generic drug or 
plasma-derived product:
    (A) 25 percent for the first applicable period such drug is 
currently in shortage.
    (B) 10 percent for the second applicable period such drug is 
currently in shortage.
    (C) 2 percent for each subsequent applicable period such drug is 
currently in shortage.
    (iii) Except as provided in paragraph (b)(iv) of this section, CMS 
will apply the greatest applicable percent reduction as set forth in 
paragraph (b)(2)(i)(A) or (b)(2)(ii)(A) of this section starting with 
the first applicable period that a Part D drug or biological is 
described as currently in shortage, regardless of whether the drug or 
biological meets the definition of a Part D rebatable drug or whether a 
rebate amount is owed for that applicable period, starting with the 
applicable period that begins October 1, 2022.
    (iv) If an applicable period for which a rebate reduction 
determined under Sec.  428.302 or 428.303 has been granted would be the 
first applicable period set forth in paragraph (b)(2)(i)(A) or 
(b)(2)(ii)(A) of this section and the Part D rebatable drug or 
biosimilar continues to be in shortage after the rebate reduction 
period set forth in Sec.  428.302 or 428.303, as applicable, CMS will 
treat the applicable period following the applicable period in which 
the rebate reduction determined under Sec.  428.302 or 428.303 applies 
as the first applicable period so described.
    (3) For purposes of paragraph (b)(1) of this section, the 
percentage of time the drug is currently in shortage during the 
applicable period is equal to the number of days such drug is currently 
in shortage in an applicable period, divided by the total number of 
days in the applicable period.
    (c) Application of reduction. CMS will apply a reduction of the 
rebate amount as determined under paragraph (b) of this section to the 
Part D rebatable drug at the NDC-9 level.


Sec.  428.302  Reducing the rebate amount for certain Part D rebatable 
drugs when there is a severe supply chain disruption.

    (a) General. As required under section 1860D-14B(b)(1)(C)(ii) of 
the Act, CMS will reduce the total rebate amount determined under Sec.  
428.201(a), if any is owed, for a generic Part D rebatable drug or 
biosimilar when CMS determines there is a severe supply chain 
disruption during the applicable period such as that caused by a 
natural disaster or other unique or unexpected event.
    (b) Calculation of the reduced rebate amount--(1) Initial 
reduction. If CMS determines the criteria set forth in paragraph (c)(4) 
of this section are met, then CMS will reduce the total rebate amount 
determined under Sec.  428.201(a), if any is owed, for a generic Part D 
rebatable drug or biosimilar by 75 percent for the applicable period in 
which the event occurred or began or, the following applicable period 
if the request is submitted less than 60 calendar days before the end 
of an applicable period.
    (2) Extension of reduction. If CMS determines a severe supply chain 
disruption continues into a second consecutive applicable period as set 
forth in paragraph (c)(5) of this section, then CMS will reduce the 
total rebate amount determined under Sec.  428.201(a), if any is owed, 
for a generic Part D rebatable drug or biosimilar by 75 percent for 
that second applicable period.
    (3) Application of reduction. If CMS determines there is a severe 
supply chain disruption for an NDC-11, CMS will apply any reduction of 
the rebate amount as determined under paragraphs (b)(1) and (2) of this 
section to a Part D rebatable drug at the NDC-9 level.
    (4) Limitation on rebate reductions. CMS will not apply multiple 
rebate reductions for the same Part D rebatable drug and applicable 
period.
    (i) If a manufacturer believes there are multiple events causing 
severe supply chain disruptions during the same applicable period for 
the same generic Part D rebatable drug or biosimilar and submits 
multiple rebate reduction requests for the same drug or biosimilar, CMS 
will grant no more than 1 rebate reduction determined under paragraph 
(b)(1) or (2) of this section for that product for the applicable 
period.
    (ii) If CMS grants a rebate reduction request under this section 
and the generic Part D rebatable drug or biosimilar subject to the 
reduction appears as currently in shortage during the same applicable 
period as the one for which the severe supply chain disruption 
reduction request was granted, CMS will reduce the rebate amount as 
determined under paragraph (b)(1) of this section and will not grant a 
reduction as set forth in Sec.  428.301 during that applicable period.
    (iii) If a generic Part D rebatable drug or biosimilar that is 
currently in shortage experiences a severe supply chain disruption, CMS 
will reduce the rebate amount as determined under paragraph (b)(1) of 
this section, and will not grant a reduction as set forth in Sec.  
428.301 during that applicable period.
    (c) Eligibility for a rebate reduction--(1) Eligible drug. Subject 
to paragraph (b)(3) of this section, eligibility for a rebate reduction 
under this section is limited to generic Part D rebatable drugs and 
biosimilars for which a manufacturer submits a rebate reduction request 
under this section.
    (2) Timing. For a natural disaster or other unique or unexpected 
event occurring on or after August 2, 2024 that the manufacturer 
believes caused a severe supply chain disruption, the manufacturer must 
submit the rebate reduction request within 60 calendar days from the 
first day that the natural disaster or other unique or unexpected event 
occurred or began to receive consideration for a reduction in the 
rebate amount owed determined under paragraph (b)(1) of this section.
    (3) Required elements of a rebate reduction request. To receive 
consideration for a reduction in the rebate amount owed as determined 
under paragraph (b)(1) of this section, the manufacturer must submit to 
CMS information and supporting documentation to substantiate the 
evaluation criteria set forth in paragraph (c)(4) of this section. Such 
information and supporting documentation include the following:
    (i) Evidence that the severe supply chain disruption directly 
affects the manufacturer itself, a supplier of an ingredient or 
packaging, a contract manufacturer, or a method of shipping or 
distribution that the manufacturer uses to make or distribute the 
generic Part D rebatable drug(s) or biosimilar(s), such as a change in 
the production or distribution of the generic Part D

[[Page 98595]]

rebatable drug(s) or biosimilar(s) that is reasonably likely to lead to 
a significant reduction in the U.S. supply of product and significantly 
affects the manufacturer's ability to fill orders or meet expected 
demand for the generic Part D rebatable drug(s) or biosimilar(s) for at 
least 90 days;
    (ii) Information about when the manufacturer expects supply of the 
generic Part D rebatable drug(s) or biosimilar(s) to meet expected 
demand;
    (iii) Evidence that the natural disaster or other unique or 
unexpected event caused the severe supply chain disruption, including 
when the natural disaster or other unique or unexpected event occurred 
or began occurring, and the expected or actual duration of the severe 
supply chain disruption; and
    (iv) Evidence of the manufacturer's physical presence related to 
manufacturing the generic Part D rebatable drug(s) or biosimilar(s) in 
a geographic area where a natural disaster or other unique or 
unexpected event occurred. If the manufacturer is not physically 
present in a geographic area where a natural disaster or other unique 
or unexpected event occurred, but believes there is a severe supply 
chain disruption caused by a natural disaster or other unique or 
unexpected event that affects the manufacturer's generic Part D 
rebatable drug(s) or biosimilar(s), the information and supporting 
documentation may include evidence of the impact of the natural 
disaster or other unique or unexpected event on the supply chain of the 
generic Part D rebatable drug or biosimilar, on a supplier of an 
ingredient or packaging, or method of shipping or distribution that the 
manufacturer uses.
    (4) Evaluation criteria. In accordance with paragraph (b)(1) of 
this section, CMS will grant a reduction in the total rebate amount 
determined under Sec.  428.201, if any is owed, if a manufacturer 
submits to CMS a request in writing for an eligible drug, in accordance 
with the timing set forth in paragraph (c)(2) of this section, 
demonstrating that:
    (i) A severe supply chain disruption has occurred during the 
applicable period;
    (ii) The severe supply chain disruption directly affects the 
manufacturer itself, a contract manufacturer, a supplier of an 
ingredient or packaging, or a method of shipping or distribution that 
the manufacturer uses in a significant capacity to make or distribute 
the generic Part D rebatable drug or biosimilar; and
    (iii) The severe supply chain disruption was caused by a natural 
disaster or other unique or unexpected event.
    (5) Rebate reduction extensions. If CMS determines that a generic 
Part D rebatable drug or biosimilar that received a reduction of the 
rebate amount as determined under paragraph (b)(1) of this section 
continues to be affected by the severe supply chain disruption, CMS 
will grant a single extension of the reduction for 1 additional 
consecutive applicable period and reduce the total rebate amount 
determined under Sec.  428.201, if any is owed, as set forth in 
paragraph (b)(2) of this section.
    (i) To receive consideration for a rebate reduction extension, a 
manufacturer must submit a request with updated or new information and 
supporting documentation on why the generic Part D rebatable drug or 
biosimilar continues to be affected by the severe supply chain 
disruption during the second applicable period.
    (ii) A manufacturer must submit the rebate reduction extension 
request at least 60 calendar days before the start of the second 
consecutive applicable period to receive consideration for a reduction 
in the rebate amount owed, if any, determined under paragraph (b)(2) of 
this section, except for when the initial request is made less than 60 
calendar days before the end of an applicable period such that the 
initial rebate reduction is applied to the next applicable period 
rather than the applicable period in which the event that caused the 
severe supply chain disruption occurred or began. In these cases, the 
rebate reduction extension request must be submitted at least 60 
calendar days prior to the end of the applicable period in which the 
initial reduction determined under paragraph (b)(1) of this section is 
applied.
    (6) Decision to grant or deny a request. CMS will review rebate 
reduction requests and rebate reduction extension requests within 60 
calendar days of receipt of all documentation, if feasible, beginning 
with the applicable period that begins on October 1, 2024.
    (i) CMS will deny a rebate reduction request that does not meet the 
criteria set forth in paragraph (c)(4) of this section or that is 
incomplete or untimely based on the requirements set forth in this 
paragraph (c).
    (ii) CMS will deny a rebate reduction extension request that does 
not meet the criteria set forth in paragraph (c)(5) of this section, 
that is incomplete or untimely based on the requirements set forth in 
paragraph (c)(5) of this section, or if a reduction determined under 
paragraph (b)(1) of this section was not granted for such generic Part 
D rebatable drug or biosimilar.
    (iii) CMS' decisions to deny a request are final and will not be 
subject to an appeals process.
    (7) Public disclosure of information. CMS will keep confidential, 
to the extent allowable under law, any requests for a rebate reduction, 
including supporting documentation. Information provided as part of a 
request for a rebate reduction request that the submitter indicates is 
a trade secret or confidential commercial or financial information will 
be protected from disclosure if CMS determines the information meets 
the requirements set forth under Exemption 3 or Exemption 4 in 5 U.S.C. 
552.


Sec.  428.303  Reducing the rebate amount for generic Part D rebatable 
drugs likely to be in shortage.

    (a) General. As required under section 1860D-14B(b)(1)(C)(iii) of 
the Act, CMS will reduce the total rebate amount determined under Sec.  
428.201, if any is owed, for a generic Part D rebatable drug when CMS 
determines that the generic Part D rebatable drug is likely to be in 
shortage, as set forth in Sec.  428.300.
    (b) Calculation of the reduced rebate amount--(1) Initial 
reduction. If CMS determines the criteria set forth in paragraph (c)(4) 
of this section are met, then CMS will reduce the total rebate amount 
owed by the manufacturer for a generic Part D rebatable drug by 75 
percent for the applicable period in which the request was submitted or 
the following applicable period, depending on the timing of the 
submission of the request.
    (2) Extension of reduction. If CMS determines the generic Part D 
rebatable drug is likely to be in shortage in a second applicable 
period as set forth in paragraph (c)(5) of this section, then CMS will 
reduce the total rebate amount owed by the manufacturer for a generic 
Part D rebatable drug by 75 percent for a second consecutive applicable 
period.
    (3) Application of reduction. If CMS determines that an NDC-11 is 
likely to be in shortage, CMS will apply any reduction of the rebate 
amount as determined under paragraphs (b)(1) and (2) of this section to 
the generic Part D rebatable drug at the NDC-9 level.
    (4) Limitation on rebate reductions. If CMS grants a rebate 
reduction request under this section, and the generic Part D rebatable 
drug subject to the reduction is currently in shortage during the same 
applicable period as the one for which the request was granted, CMS 
will reduce the rebate amount as determined under paragraph (b)(1) of 
this section and will not grant a reduction

[[Page 98596]]

determined under Sec.  428.301 during that applicable period.
    (c) Eligibility for a rebate reduction--(1) Eligible drug. Subject 
to paragraph (b)(3) of this section, eligibility for a rebate reduction 
under this section is limited to generic Part D rebatable drugs for 
which a manufacturer submits a rebate reduction request under this 
section.
    (2) Timing. The manufacturer must submit the rebate reduction 
request before the start of the next applicable period in which the 
manufacturer believes the generic Part D rebatable drug is likely to be 
in shortage to receive consideration for a reduction in the rebate 
amount owed determined under paragraph (b)(1) of this section.
    (3) Required elements of a rebate reduction request. To receive 
consideration for a reduction in the rebate amount owed determined 
under paragraph (b)(1) of this section, the manufacturer must submit to 
CMS information and supporting documentation to substantiate the 
evaluation criteria set forth in paragraph (c)(4) of this section. Such 
information and supporting documentation include the following:
    (i) Evidence that demonstrates a generic Part D rebatable drug is 
likely to be in shortage, including anticipated cause(s) of the 
shortage and information about why the manufacturer believes the 
generic Part D rebatable drug is likely to be in shortage; and
    (ii) Evidence of the anticipated start date and duration of the 
potential drug shortage, the actions the manufacturer is taking to 
avoid the potential drug shortage, and how the reduction of the rebate 
amount would reduce the likelihood of the drug appearing on an FDA 
shortage list.
    (4) Evaluation criteria. In accordance with paragraph (b)(1) of 
this section, CMS will grant a reduction in the rebate amount owed if a 
manufacturer submits to CMS a request in writing for an eligible drug, 
in accordance with the timing set forth in paragraph (c)(2) of this 
section, demonstrating that:
    (i) The generic Part D rebatable drug is likely to be in shortage;
    (ii) The manufacturer is taking actions to avoid the potential drug 
shortage; and
    (iii) The reduction of the rebate amount would reduce the 
likelihood of the drug appearing on an FDA shortage list.
    (5) Rebate reduction extensions. If CMS determines that a generic 
Part D rebatable drug that received a reduction of the rebate amount as 
determined under paragraph (b)(1) of this section continues to be 
affected by the potential drug shortage, CMS will grant a single 
extension of the reduction for 1 additional consecutive applicable 
period and reduce the total rebate amount determined under Sec.  
428.201, if any is owed, as determined under paragraph (b)(2) of this 
section.
    (i) To receive consideration for a rebate reduction extension, a 
manufacturer must submit a request with updated or new information and 
supporting documentation on why the generic Part D rebatable drug 
continues to be affected by the potential drug shortage during the 
second applicable period.
    (ii) A manufacturer must submit the rebate reduction extension 
request at least 60 calendar days before the start of the second 
consecutive applicable period in which the manufacturer believes the 
generic Part D rebatable drug is likely to be in shortage to receive 
consideration for a reduction in the rebate amount owed, if any, in 
accordance with paragraph (b)(2) of this section.
    (6) Decision to grant or deny a request. CMS will review rebate 
reduction requests and rebate reduction extension requests within 60 
calendar days of receipt of all documentation, if feasible, beginning 
with the applicable period that begins on October 1, 2024.
    (i) CMS will deny a rebate reduction request that does not meet the 
criteria set forth in paragraph (c)(4) of this section or that is 
incomplete or untimely based on the requirements set forth in this 
paragraph (c).
    (ii) CMS will deny a rebate reduction extension request that does 
not meet the criteria set forth in paragraph (c)(5) of this section, 
that is incomplete or untimely based on the requirements set forth in 
paragraph (c)(5) of this section, or if a reduction determined under 
paragraph (b)(1) of this section was not granted for such generic Part 
D rebatable drug.
    (iii) CMS' decisions to deny a request are final and will not be 
subject to an appeals process.
    (7) Public disclosure of information. CMS will keep confidential, 
to the extent allowable under law, any requests for a rebate reduction, 
including supporting documentation. Information provided as part of a 
request for a rebate reduction that the submitter indicates is a trade 
secret or confidential commercial or financial information will be 
protected from disclosure if CMS determines the information meets the 
requirements set forth under Exemption 3 or Exemption 4 in 5 U.S.C. 
552.

Subpart E--Reports of Rebate Amounts, Reconciliation, Suggestion of 
Error, and Payments


Sec.  428.400  Definitions.

    For the purposes of this subpart, date of receipt is the calendar 
day following the day in which a report of a rebate amount (as set 
forth in Sec. Sec.  428.401(b), (c), and (d) and 428.402(b) and (c)) is 
made available to the manufacturer of a Part D rebatable drug by CMS.


Sec.  428.401  Rebate Reports and reconciliation.

    (a) General. This section applies to Part D rebatable drugs for all 
applicable periods except as otherwise set forth in Sec.  428.402 for 
the applicable periods beginning October 1, 2022, and October 1, 2023.
    (b) Preliminary Rebate Report. A Preliminary Rebate Report will be 
provided to each manufacturer of a Part D rebatable drug at least 1 
month prior to the issuance of the Rebate Report as set forth in 
paragraph (c) of this section for an applicable period.
    (1) The Preliminary Rebate Report for each Part D rebatable drug 
will include the following information:
    (i) The NDC(s) identified for the Part D rebatable drug as set 
forth in Sec.  428.20;
    (ii) The total number of units dispensed under Part D for the Part 
D rebatable drug for the applicable period as determined under Sec.  
428.203;
    (iii) The payment amount benchmark period and benchmark period 
manufacturer price as set forth in Sec. Sec.  428.202(c) and (d);
    (iv) The AnMP for the Part D rebatable drug for the applicable 
period as determined under Sec.  428.202(b);
    (v) The amount, if any, of the excess AnMP for the Part D rebatable 
drug for the applicable period as set forth in Sec.  428.202(a);
    (vi) The benchmark period and applicable period CPI-Us as set forth 
in Sec. Sec.  428.202(e) and 428.20, respectively;
    (vii) The inflation-adjusted payment amount as set forth in Sec.  
428.202(f);
    (viii) Any applied reductions determined under Sec. Sec.  428.301, 
428.302, and 428.303; and
    (ix) The rebate amount due as set forth in Sec.  428.201(a).
    (2) If the Part D rebatable drug is a line extension, the 
Preliminary Rebate Report will also include the following information 
as set forth in Sec.  428.204:
    (i) The NDC for the initial drug;
    (ii) The inflation rebate amount ratio for the initial drug; and
    (iii) The alternative total rebate amount.
    (c) Rebate Report. A Rebate Report will be provided to each 
manufacturer

[[Page 98597]]

of a Part D rebatable drug no later than 9 months after the end of each 
applicable period.
    (1) The Rebate Report will include the information described in 
paragraphs (b)(1) and (2) of this section, if applicable, with the 
inclusion of any revisions to such information resulting from CMS' 
review of a Suggestion of Error as set forth in Sec.  428.403, if 
applicable, and any CMS-determined recalculations from paragraph (d)(2) 
of this section.
    (2) The Rebate Report is the invoice of a manufacturer's rebate 
amount due as determined in Sec.  428.201(a), if any, for a Part D 
rebatable drug for an applicable period.
    (d) Reconciliation of the rebate amount. CMS will perform 
reconciliation of the rebate amount provided in a Rebate Report as 
determined in paragraph (c) of this section for an applicable period in 
the following circumstances:
    (1) Regular reconciliation. Except as otherwise described in Sec.  
428.402, CMS will perform a reconciliation of the rebate amount within 
12 months of the date of receipt of the Rebate Report for an applicable 
period and a second reconciliation approximately 24 months thereafter 
to include revisions to the information used to calculate the rebate 
amount as set forth in paragraph (c)(1) of this section.
    (i) Preliminary reconciliation. At least 1 month prior to the 
issuance of a report with the reconciled rebate amount for an 
applicable period as set forth in paragraph (d)(1)(ii) of this section, 
CMS will conduct a preliminary reconciliation of the rebate amount for 
an applicable period based on the information specified in paragraphs 
(d)(1)(i)(A) through (G) of this section, and CMS will provide the 
information specified in paragraphs (d)(1)(i)(A) through (G) to the 
manufacturer of a Part D rebatable drug for the applicable period, if 
applicable:
    (A) Updated total number of rebatable units, including updates 
submitted by a prescription drug plan (PDP) or Medicare Advantage 
Prescription Drug (MA-PD) plan sponsor and updates to 340B units (as 
applicable to the dates of service and applicable periods set forth in 
Sec.  428.203(b)(2)(i)(A) and (B)), or units otherwise excluded as 
determined under Sec.  428.203(b);
    (B) The inflation-adjusted payment amount as determined under Sec.  
428.202(f) if any inputs are restated or newly reported within the 
reconciliation run-out period;
    (C) Updated payment amount benchmark period and benchmark period 
manufacturer price as set forth in Sec.  428.202(c) and (d) if any 
inputs are restated or newly reported;
    (D) The excess amount by which the AnMP exceeds the inflation-
adjusted payment amount for the applicable period as determined under 
Sec.  428.202(a), using the most recent AMP (if any inputs are restated 
or newly reported within the reconciliation run-out period);
    (E) Updated data on line extension calculations, including the 
initial drug identified as set forth in Sec.  447.509(a)(4)(iii)(B) of 
this chapter, the inflation rebate amount ratio, and the alternative 
total rebate amount as determined under Sec.  428.204 if any inputs are 
restated or newly reported within the reconciliation run-out period;
    (F) The reconciled rebate amount as determined under Sec.  
428.201(a); and
    (G) The difference between the total rebate amount due as specified 
on the Rebate Report set forth in paragraph (c) of this section and the 
reconciled rebate amount as set forth in this paragraph (d)(1)(i).
    (ii) Report with a reconciled rebate amount. With the inclusion of 
any additional revisions to such information resulting from CMS' review 
of a Suggestion of Error as set forth in Sec.  428.403, if applicable, 
a report with the reconciled rebate amount will be provided to each 
manufacturer of a Part D rebatable drug within 12 months and 36 months 
after the issuance of the Rebate Report set forth in paragraph (c) of 
this section.
    (2) CMS identification of an error or manufacturer misreporting. 
CMS may recalculate a rebate amount and provide the manufacturer of a 
Part D rebatable drug a report with a reconciled rebate amount when:
    (i) CMS identifies an error in the information specified in 
paragraphs (c) and (d)(1) of this section, including reporting system 
or coding errors, not later than 5 years from the date of receipt by a 
manufacturer of a reconciled rebate amount for the applicable period; 
or
    (ii) CMS determines at any time that the information used by CMS to 
calculate the rebate amount was inaccurate due to manufacturer 
misreporting.
    (3) Impact of reconciliation on rebate amount. A reconciliation as 
determined under this paragraph (d) could result in an increase, 
decrease, or no change to the rebate amount as determined under Sec.  
428.201(a) owed by a manufacturer for the applicable period for the 
Part D rebatable drug compared to the amount described in the Rebate 
Report set forth in paragraph (c) of this section or an amount 
described in a previous reconciliation.
    (i) A report with a reconciled rebate amount that is an increase to 
the rebate amount is the invoice for such additional amount due on the 
manufacturer's rebate amount as set forth in Sec.  428.201 for a Part D 
rebatable drug for an applicable period.
    (ii) [Reserved]
    (4) Drugs included in a reconciliation. A drug covered under Part D 
that does not meet the requirements of a rebatable drug set forth in 
Sec.  428.101 for an applicable period will not be included in a 
reconciliation as determined under this paragraph (d).


Sec.  428.402  Rebate Reports for applicable periods beginning October 
1, 2022, and October 1, 2023.

    (a) Transition rule for reporting. Section 1860D-14B(a)(3) of the 
Act allows CMS to delay the timeframe for reporting the information and 
rebate amount set forth in Sec.  428.401 for the applicable periods 
beginning October 1, 2022, and October 1, 2023, until not later than 
December 31, 2025.
    (b) Rebate Report information for applicable periods beginning 
October 1, 2022, and October 1, 2023. The Rebate Reports for the 
applicable periods beginning October 1, 2022, and October 1, 2023, will 
include the information set forth in Sec.  428.401(b)(1).
    (c) Rebate Report procedures for applicable periods beginning 
October 1, 2022, and October 1, 2023. Rebate amounts for the applicable 
periods beginning October 1, 2022, and October 1, 2023, will be 
reported as follows:
    (1) The Rebate Report for the applicable period beginning October 
1, 2022, will be issued no later than December 31, 2025. The 
Preliminary Rebate Report for such applicable period will be issued at 
least 1 month prior to the Rebate Report.
    (i) For this single Preliminary Rebate Report for the applicable 
period, the Suggestion of Error period as set forth in Sec.  428.403 
will be 30 calendar days.
    (ii) The rebate amount will be reconciled 21 months after the 
Rebate Report set forth in paragraph (c)(1) of this section is issued 
to include the information set forth in Sec.  428.401(d)(1)(i)(A) 
through (G).
    (iii) The Suggestion of Error period for the reconciliation set 
forth in paragraph (c)(1)(ii) of this section will be 10 calendar days.
    (2) The Rebate Report for the applicable period beginning October 
1, 2023, will be issued no later than December 31, 2025. The 
Preliminary Rebate Report for such applicable period will be issued at 
least 1 month prior to the Rebate Report.

[[Page 98598]]

    (i) For this single Preliminary Rebate Report for the applicable 
period, the Suggestion of Error period as set forth in Sec.  428.403 
will be 30 calendar days.
    (ii) The rebate amount will be reconciled 9 months after the Rebate 
Report and 33 months after the Rebate Report specified in paragraph 
(b)(2) of this section is issued to include the information determined 
under Sec.  428.401(d)(1)(i)(A) through (G).


Sec.  428.403  Suggestion of Error.

    (a) General. Manufacturers of Part D rebatable drugs may submit a 
Suggestion of Error about the information in their Preliminary Rebate 
Report and the report detailing the preliminary reconciliation of the 
rebate amount to CMS, for its discretionary consideration, if the 
manufacturer believes that there is a mathematical error or errors to 
be corrected before the Rebate Report or a subsequent reconciliation, 
as applicable, is finalized.
    (1) Section 1860D-14B(f) of the Act precludes administrative or 
judicial review on the determination of units as set forth in Sec.  
428.203, the determination of whether a drug is a Part D rebatable drug 
as set forth in Sec.  428.101, and the calculation of the rebate amount 
as set forth in Sec.  428.201(a) inclusive of any reconciled rebate 
amount.
    (2) [Reserved]
    (b) Process of submission. Subject to the scope and timing 
requirements specified in paragraphs (a) and (c) of this section, 
manufacturers may submit the Suggestion of Error and provide supporting 
documentation (if applicable).
    (c) Timing. Except as set forth in Sec.  428.402 for the applicable 
periods beginning on October 1, 2022, and October 1, 2023, a 
manufacturer must submit its Suggestion of Error for the applicable 
period within 10 calendar days from the date of receipt of a 
Preliminary Rebate Report or a preliminary reconciliation of a rebate 
amount using the method and process set forth by CMS in paragraph (b) 
of this section.
    (d) Notice. (1) CMS will include any revisions to the calculation 
of the rebate amount, if determined necessary by CMS based on the 
Suggestion of Error submitted under this section prior to issuance of 
the Rebate Report as set forth in Sec.  428.401(c) or Sec.  428.402(c) 
as well as any report of a reconciled rebate amount as set forth in 
Sec.  428.401(d) or Sec.  428.402(c)(1)(ii) and (c)(2)(ii).
    (2) CMS will notify the manufacturer whether CMS revised its 
calculation of the rebate amount based on the Suggestion of Error.


Sec.  428.404  Manufacturer access to Rebate Reports.

    (a) General. CMS will establish a method and process for a 
manufacturer of the Part D rebatable drug to:
    (1) Access the Rebate Report as set forth in Sec. Sec.  428.401 and 
428.402, including any report of a reconciled rebate amount as set 
forth in Sec. Sec.  428.401 and 428.402;
    (2) Submit a Suggestion of Error as set forth in Sec. Sec.  
428.402(c) and 428.403; and
    (3) Pay a rebate amount as set forth in Sec.  428.405.
    (b) [Reserved]


Sec.  428.405  Deadline and process for payment of rebate amount.

    (a) Rebate amounts owed by a manufacturer. For payment of a rebate 
amount owed by a manufacturer:
    (1) Upon receipt of a rebate amount, payment is due no later than 
11:59 p.m. Pacific Time (PT) on the 30 calendar days after the date of 
receipt of information regarding the rebate amount on--
    (i) A Rebate Report as set forth in Sec.  428.401(c) or Sec.  
428.402; or
    (ii) A report of a reconciled rebate amount as set forth in Sec.  
428.401(d) or Sec.  428.402.
    (2) Failure to pay a rebate amount due timely and in full may 
result in an enforcement action as described in subpart F of this part.
    (b) Refund to the manufacturer. If a reconciled rebate amount for 
an applicable period as set forth in Sec.  428.401(d) or Sec.  428.402 
is less than what the manufacturer paid for that applicable period, CMS 
will initiate the process to provide a refund equal to the excess 
amount paid within 60 days of the date of receipt of the report with 
such reconciled rebate amount.

Subpart F--Enforcement of Manufacturer Payment of Rebate Amounts


Sec.  428.500  Civil money penalty notice and appeals procedures.

    (a) General. CMS may impose a civil money penalty on a manufacturer 
that fails to pay the rebate amount set forth in Sec.  428.201(a) on a 
Part D rebatable drug set forth in Sec.  428.20, by the payment 
deadline as set forth in section Sec.  428.405(a) for such drug for 
such applicable period.
    (b) Determination of the civil money penalty amount. CMS may impose 
a civil money penalty for each failure by a manufacturer to provide an 
applicable inflation rebate equal to 125 percent of the rebate amount 
determined in Sec.  428.201(a).
    (1) The civil money penalty is in addition to the rebate amount 
due.
    (2) If a reconciled rebate amount as determined in Sec.  428.401(d) 
or Sec.  428.402(c)(1)(ii) or (c)(2)(ii) results in an increase to the 
rebate amount due, a separate civil money penalty may be imposed for 
the failure by a manufacturer to provide an inflation rebate for the 
applicable period for the increase to the rebate amount due.
    (c) Notice of imposition of civil money penalties. If CMS makes a 
determination to impose a civil money penalty set forth in paragraph 
(b) of this section, CMS will send a written notice of its decision to 
impose a civil money penalty that includes the following:
    (1) A description of the basis for the determination.
    (2) The basis for the penalty.
    (3) The amount of the penalty.
    (4) The date the penalty is due.
    (5) The manufacturer's right to a hearing as set forth in paragraph 
(e) of this section.
    (6) Information about where to file the request for a hearing.
    (d) Collection. (1) A manufacturer must pay the civil money penalty 
in full within 60 calendar days after the date of the notice of 
imposition of a civil money penalty from CMS as set forth in paragraph 
(c) of this section.
    (2) In the event a manufacturer requests a hearing, pursuant to 42 
CFR part 423, subpart T, the manufacturer must pay the amount in full 
within 60 calendar days after the date of a final decision by the 
Departmental Appeal Board, to uphold, in whole or in part, the civil 
money penalty.
    (3) If the 60th calendar day described in paragraphs (d)(1) and (2) 
of this section is a weekend or a Federal holiday, then the timeframe 
is extended until the end of the next business day.
    (e) Appeal procedures for civil money penalties. Section 
1128A(c)(2) of the Act provides that CMS may not collect a civil money 
penalty until the affected party has had notice and the opportunity for 
a hearing.
    (1) Manufacturers may appeal the following determinations:
    (i) A CMS determination that the rebate amount was not paid by the 
applicable payment deadline as set forth in Sec.  428.405.
    (ii) The calculation of the amount of the civil money penalty.
    (2) If CMS decides to impose a civil money penalty, CMS will 
provide the manufacturer with notice pursuant to the process set forth 
in paragraph (c) of this section.
    (3) A manufacturer has a right to a hearing following a decision by 
CMS to impose a civil money penalty following the administrative appeal 
process and procedures established in 42 CFR part 423, subpart T.

[[Page 98599]]

    (f) Other applicable provisions. The provisions of section 1128A of 
the Act (except subsections (a) and (b) of section 1128A of the Act) 
apply to civil money penalties under this section to the same extent 
that they apply to a civil money penalty or procedures under section 
1128A of the Act.
    (g) Bankruptcy. In the event that a manufacturer declares 
bankruptcy, as described in title 11 of the United States Code, and as 
a result of the bankruptcy, fails to pay either the full rebate amount 
owed or the total sum of civil money penalties imposed, the government 
reserves the right to file a proof of claim with the bankruptcy court 
to recover the unpaid amount of the rebates and civil money penalties 
owed by the manufacturer.

PART 491--CERTIFICATION OF CERTAIN HEALTH FACILITIES

0
83. The authority citation for part 491 continues to read as follows:

    Authority:  42 U.S.C. 263a and 1302.


0
84. Section 491.9 by--
0
a. Redesignating paragraph (a)(3) as paragraph (a)(4);
0
b. Adding new paragraph (a)(3);
0
c. Removing paragraphs (c)(2)(ii) and (iv);
0
d. Redesignating paragraphs (c)(2)(iii), (v), and (vi) as paragraphs 
(c)(2)(ii) through (iv); and
0
e. Revising newly designated paragraph (c)(2)(iv).
    The additions and revisions read as follows:


Sec.  491.9  Provision of services.

    (a) * * *
    (3) The RHC must provide primary care services.
* * * * *
    (c) * * *
    (2) * * *
    (iv) Collection of patient specimens for transmittal to a certified 
laboratory for culturing.
* * * * *

Xavier Becerra,
Secretary, Department of Health and Human Services.

    Note: The following Appendices will not appear in the Code of 
Federal Regulations.

Appendix 1: MIPS Quality Measures

    Note: Except as otherwise noted in this final rule, previously 
finalized measures and specialty measure sets will continue to apply 
for the CY 2025 performance period/2027 MIPS payment year and future 
years. Previously finalized measures and specialty sets are in the 
CY 2017 through CY 2024 PFS final rules: 81 FR 77558 through 77816, 
82 FR 53966 through 54174, 83 FR 60097 through 60285, 84 FR 63205 
through 63513, 85 FR 85045 through 85369, 86 FR 65687 through 65968, 
87 FR 70250 through 70633, and 88 FR 79556 through 79964. In 
addition, electronic clinical quality measures (eCQMs) that are 
endorsed by a Consensus-Based Entity (CBE) are shown in Table A of 
this Appendix as follows: CBE #/eCQM CBE #.

Table Group A: New MIPS Quality Measures Finalized and Not Finalized 
for the CY 2025 Performance Period/2027 MIPS Payment Year and Future 
Years

    Note: In the CY 2024 PFS final rule, measure Q494: Excessive 
Radiation Dose or Inadequate Image Quality for Diagnostic Computed 
Tomography (CT) in Adults (Clinician Level), was finalized with a 1-
year delay to the CY 2025 performance period (88 FR 79556 through 
79560) and does not have a new measure table in this final rule.

BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR09DE24.203


[[Page 98600]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.204


[[Page 98601]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.205


[[Page 98602]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.206


[[Page 98603]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.207


[[Page 98604]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.208

[GRAPHIC] [TIFF OMITTED] TR09DE24.209


[[Page 98605]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.210


[[Page 98606]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.211

[GRAPHIC] [TIFF OMITTED] TR09DE24.212


[[Page 98607]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.213


[[Page 98608]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.214

[GRAPHIC] [TIFF OMITTED] TR09DE24.215


[[Page 98609]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.216


[[Page 98610]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.217


[[Page 98611]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.218


[[Page 98612]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.219


[[Page 98613]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.220

[GRAPHIC] [TIFF OMITTED] TR09DE24.221


[[Page 98614]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.222


[[Page 98615]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.223


[[Page 98616]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.224

[GRAPHIC] [TIFF OMITTED] TR09DE24.225


[[Page 98617]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.226


[[Page 98618]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.227


[[Page 98619]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.228


[[Page 98620]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.229


[[Page 98621]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.230


[[Page 98622]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.231


[[Page 98623]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.232


[[Page 98624]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.233


[[Page 98625]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.234


[[Page 98626]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.235


[[Page 98627]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.236


[[Page 98628]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.237


[[Page 98629]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.238


[[Page 98630]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.239


[[Page 98631]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.240


[[Page 98632]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.241


[[Page 98633]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.242


[[Page 98634]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.243


[[Page 98635]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.244


[[Page 98636]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.245


[[Page 98637]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.246


[[Page 98638]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.247


[[Page 98639]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.248


[[Page 98640]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.249


[[Page 98641]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.250


[[Page 98642]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.251


[[Page 98643]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.252


[[Page 98644]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.253


[[Page 98645]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.254


[[Page 98646]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.255


[[Page 98647]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.256


[[Page 98648]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.257


[[Page 98649]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.258


[[Page 98650]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.259


[[Page 98651]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.260


[[Page 98652]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.261


[[Page 98653]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.262


[[Page 98654]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.263


[[Page 98655]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.264

[GRAPHIC] [TIFF OMITTED] TR09DE24.265


[[Page 98656]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.266


[[Page 98657]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.267


[[Page 98658]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.268


[[Page 98659]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.269


[[Page 98660]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.270


[[Page 98661]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.271


[[Page 98662]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.272


[[Page 98663]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.273


[[Page 98664]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.274


[[Page 98665]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.275


[[Page 98666]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.276


[[Page 98667]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.277


[[Page 98668]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.278


[[Page 98669]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.279


[[Page 98670]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.280


[[Page 98671]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.281


[[Page 98672]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.282


[[Page 98673]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.283


[[Page 98674]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.284


[[Page 98675]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.285


[[Page 98676]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.286


[[Page 98677]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.287


[[Page 98678]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.288


[[Page 98679]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.289


[[Page 98680]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.290


[[Page 98681]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.291


[[Page 98682]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.292


[[Page 98683]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.293


[[Page 98684]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.294


[[Page 98685]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.295


[[Page 98686]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.296


[[Page 98687]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.297


[[Page 98688]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.298


[[Page 98689]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.299


[[Page 98690]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.300


[[Page 98691]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.301


[[Page 98692]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.302

[GRAPHIC] [TIFF OMITTED] TR09DE24.303


[[Page 98693]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.304


[[Page 98694]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.305


[[Page 98695]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.306


[[Page 98696]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.307


[[Page 98697]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.308


[[Page 98698]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.309


[[Page 98699]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.310


[[Page 98700]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.311


[[Page 98701]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.312


[[Page 98702]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.313


[[Page 98703]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.314


[[Page 98704]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.315


[[Page 98705]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.316


[[Page 98706]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.317


[[Page 98707]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.318


[[Page 98708]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.319


[[Page 98709]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.320


[[Page 98710]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.321


[[Page 98711]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.322


[[Page 98712]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.323


[[Page 98713]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.324


[[Page 98714]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.325


[[Page 98715]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.326


[[Page 98716]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.327


[[Page 98717]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.328


[[Page 98718]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.329


[[Page 98719]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.330


[[Page 98720]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.331


[[Page 98721]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.332


[[Page 98722]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.333


[[Page 98723]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.334


[[Page 98724]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.335


[[Page 98725]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.336


[[Page 98726]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.337


[[Page 98727]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.338


[[Page 98728]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.339


[[Page 98729]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.340


[[Page 98730]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.341


[[Page 98731]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.342


[[Page 98732]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.343


[[Page 98733]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.344


[[Page 98734]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.345


[[Page 98735]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.346


[[Page 98736]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.347

[GRAPHIC] [TIFF OMITTED] TR09DE24.348


[[Page 98737]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.349


[[Page 98738]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.350


[[Page 98739]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.351


[[Page 98740]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.352


[[Page 98741]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.353


[[Page 98742]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.354


[[Page 98743]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.355


[[Page 98744]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.356


[[Page 98745]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.357


[[Page 98746]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.358


[[Page 98747]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.359


[[Page 98748]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.360


[[Page 98749]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.361


[[Page 98750]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.362


[[Page 98751]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.363


[[Page 98752]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.364


[[Page 98753]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.365


[[Page 98754]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.366


[[Page 98755]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.367


[[Page 98756]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.368


[[Page 98757]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.369


[[Page 98758]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.370


[[Page 98759]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.371


[[Page 98760]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.372


[[Page 98761]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.373


[[Page 98762]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.374


[[Page 98763]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.375


[[Page 98764]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.376


[[Page 98765]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.377


[[Page 98766]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.378


[[Page 98767]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.379


[[Page 98768]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.380

[GRAPHIC] [TIFF OMITTED] TR09DE24.381


[[Page 98769]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.382


[[Page 98770]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.383


[[Page 98771]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.384


[[Page 98772]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.385


[[Page 98773]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.386


[[Page 98774]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.387


[[Page 98775]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.388


[[Page 98776]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.389


[[Page 98777]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.390


[[Page 98778]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.391


[[Page 98779]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.392


[[Page 98780]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.393


[[Page 98781]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.394


[[Page 98782]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.395


[[Page 98783]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.396


[[Page 98784]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.397


[[Page 98785]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.398


[[Page 98786]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.399


[[Page 98787]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.400


[[Page 98788]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.401


[[Page 98789]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.402


[[Page 98790]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.403


[[Page 98791]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.404


[[Page 98792]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.405


[[Page 98793]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.406


[[Page 98794]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.407


[[Page 98795]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.408


[[Page 98796]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.409


[[Page 98797]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.410


[[Page 98798]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.411


[[Page 98799]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.412


[[Page 98800]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.413


[[Page 98801]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.414


[[Page 98802]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.415


[[Page 98803]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.416


[[Page 98804]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.417


[[Page 98805]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.418


[[Page 98806]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.419


[[Page 98807]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.420

[GRAPHIC] [TIFF OMITTED] TR09DE24.421


[[Page 98808]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.422


[[Page 98809]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.423


[[Page 98810]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.424


[[Page 98811]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.425


[[Page 98812]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.426


[[Page 98813]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.427


[[Page 98814]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.428


[[Page 98815]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.429


[[Page 98816]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.430


[[Page 98817]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.431


[[Page 98818]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.432


[[Page 98819]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.433


[[Page 98820]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.434


[[Page 98821]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.435


[[Page 98822]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.436


[[Page 98823]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.437


[[Page 98824]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.438


[[Page 98825]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.439


[[Page 98826]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.440


[[Page 98827]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.441


[[Page 98828]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.442


[[Page 98829]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.443


[[Page 98830]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.444


[[Page 98831]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.445


[[Page 98832]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.446


[[Page 98833]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.447


[[Page 98834]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.448


[[Page 98835]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.449


[[Page 98836]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.450


[[Page 98837]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.451


[[Page 98838]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.452


[[Page 98839]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.453


[[Page 98840]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.454


[[Page 98841]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.455


[[Page 98842]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.456


[[Page 98843]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.457


[[Page 98844]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.458


[[Page 98845]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.459


[[Page 98846]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.460


[[Page 98847]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.461


[[Page 98848]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.462


[[Page 98849]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.463


[[Page 98850]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.464


[[Page 98851]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.465


[[Page 98852]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.466


[[Page 98853]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.467


[[Page 98854]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.468


[[Page 98855]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.469


[[Page 98856]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.470


[[Page 98857]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.471


[[Page 98858]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.472


[[Page 98859]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.473


[[Page 98860]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.474


[[Page 98861]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.475


[[Page 98862]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.476


[[Page 98863]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.477


[[Page 98864]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.478


[[Page 98865]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.479


[[Page 98866]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.480


[[Page 98867]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.481


[[Page 98868]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.482


[[Page 98869]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.483


[[Page 98870]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.484


[[Page 98871]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.485


[[Page 98872]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.486


[[Page 98873]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.487


[[Page 98874]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.488


[[Page 98875]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.489

[GRAPHIC] [TIFF OMITTED] TR09DE24.490


[[Page 98876]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.491


[[Page 98877]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.492


[[Page 98878]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.493


[[Page 98879]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.494


[[Page 98880]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.495


[[Page 98881]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.496


[[Page 98882]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.497


[[Page 98883]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.498


[[Page 98884]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.499


[[Page 98885]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.500


[[Page 98886]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.501


[[Page 98887]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.502


[[Page 98888]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.503

[GRAPHIC] [TIFF OMITTED] TR09DE24.504


[[Page 98889]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.505


[[Page 98890]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.506


[[Page 98891]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.507

[GRAPHIC] [TIFF OMITTED] TR09DE24.508


[[Page 98892]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.509


[[Page 98893]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.510


[[Page 98894]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.511


[[Page 98895]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.512


[[Page 98896]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.513

[GRAPHIC] [TIFF OMITTED] TR09DE24.514


[[Page 98897]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.515


[[Page 98898]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.516


[[Page 98899]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.517


[[Page 98900]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.518


[[Page 98901]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.519


[[Page 98902]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.520


[[Page 98903]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.521


[[Page 98904]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.522


[[Page 98905]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.523


[[Page 98906]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.524


[[Page 98907]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.525


[[Page 98908]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.526


[[Page 98909]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.527

[GRAPHIC] [TIFF OMITTED] TR09DE24.528


[[Page 98910]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.529


[[Page 98911]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.530


[[Page 98912]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.531


[[Page 98913]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.532


[[Page 98914]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.533

[GRAPHIC] [TIFF OMITTED] TR09DE24.534


[[Page 98915]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.535


[[Page 98916]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.536


[[Page 98917]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.537


[[Page 98918]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.538


[[Page 98919]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.539


[[Page 98920]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.540


[[Page 98921]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.541


[[Page 98922]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.542


[[Page 98923]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.543


[[Page 98924]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.544


[[Page 98925]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.545

[GRAPHIC] [TIFF OMITTED] TR09DE24.546


[[Page 98926]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.547


[[Page 98927]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.548


[[Page 98928]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.549

[GRAPHIC] [TIFF OMITTED] TR09DE24.550

[GRAPHIC] [TIFF OMITTED] TR09DE24.551


[[Page 98929]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.552


[[Page 98930]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.553


[[Page 98931]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.554


[[Page 98932]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.555


[[Page 98933]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.556


[[Page 98934]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.557


[[Page 98935]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.558

[GRAPHIC] [TIFF OMITTED] TR09DE24.559


[[Page 98936]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.560


[[Page 98937]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.561


[[Page 98938]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.562


[[Page 98939]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.563

[GRAPHIC] [TIFF OMITTED] TR09DE24.564


[[Page 98940]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.565


[[Page 98941]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.566


[[Page 98942]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.567


[[Page 98943]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.568


[[Page 98944]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.569


[[Page 98945]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.570


[[Page 98946]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.571


[[Page 98947]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.572


[[Page 98948]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.573


[[Page 98949]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.574


[[Page 98950]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.575


[[Page 98951]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.576


[[Page 98952]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.577


[[Page 98953]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.578


[[Page 98954]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.579


[[Page 98955]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.580


[[Page 98956]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.581


[[Page 98957]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.582


[[Page 98958]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.583


[[Page 98959]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.584


[[Page 98960]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.585


[[Page 98961]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.586


[[Page 98962]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.587


[[Page 98963]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.588


[[Page 98964]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.589


[[Page 98965]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.590


[[Page 98966]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.591


[[Page 98967]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.592


[[Page 98968]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.593


[[Page 98969]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.594


[[Page 98970]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.595


[[Page 98971]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.596


[[Page 98972]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.597


[[Page 98973]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.598


[[Page 98974]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.599


[[Page 98975]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.600


[[Page 98976]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.601


[[Page 98977]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.602


[[Page 98978]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.603


[[Page 98979]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.604


[[Page 98980]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.605


[[Page 98981]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.606


[[Page 98982]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.607


[[Page 98983]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.608


[[Page 98984]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.609


[[Page 98985]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.610


[[Page 98986]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.611


[[Page 98987]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.612


[[Page 98988]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.613


[[Page 98989]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.614


[[Page 98990]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.615


[[Page 98991]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.616


[[Page 98992]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.617


[[Page 98993]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.618


[[Page 98994]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.619


[[Page 98995]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.620


[[Page 98996]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.621

[GRAPHIC] [TIFF OMITTED] TR09DE24.622


[[Page 98997]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.623


[[Page 98998]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.624


[[Page 98999]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.625


[[Page 99000]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.626


[[Page 99001]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.627


[[Page 99002]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.628


[[Page 99003]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.629


[[Page 99004]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.630


[[Page 99005]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.631


[[Page 99006]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.632


[[Page 99007]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.633


[[Page 99008]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.634


[[Page 99009]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.635


[[Page 99010]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.636


[[Page 99011]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.637


[[Page 99012]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.638


[[Page 99013]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.639


[[Page 99014]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.640


[[Page 99015]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.641


[[Page 99016]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.642


[[Page 99017]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.643


[[Page 99018]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.644


[[Page 99019]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.645


[[Page 99020]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.646


[[Page 99021]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.647


[[Page 99022]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.648


[[Page 99023]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.649


[[Page 99024]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.650

[GRAPHIC] [TIFF OMITTED] TR09DE24.651


[[Page 99025]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.652


[[Page 99026]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.653


[[Page 99027]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.654


[[Page 99028]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.655


[[Page 99029]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.656


[[Page 99030]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.657


[[Page 99031]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.658


[[Page 99032]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.659


[[Page 99033]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.660


[[Page 99034]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.661


[[Page 99035]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.662


[[Page 99036]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.663


[[Page 99037]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.664


[[Page 99038]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.665


[[Page 99039]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.666


[[Page 99040]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.667


[[Page 99041]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.668


[[Page 99042]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.669


[[Page 99043]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.670


[[Page 99044]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.671


[[Page 99045]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.672


[[Page 99046]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.673


[[Page 99047]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.674


[[Page 99048]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.675


[[Page 99049]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.676


[[Page 99050]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.677


[[Page 99051]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.678


[[Page 99052]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.679


[[Page 99053]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.680


[[Page 99054]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.681


[[Page 99055]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.682


[[Page 99056]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.683


[[Page 99057]]


[GRAPHIC] [TIFF OMITTED] TR09DE24.684

[FR Doc. 2024-25382 Filed 11-1-24; 4:15 pm]
BILLING CODE 4120-01-C