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DEPARTMENT OF HEALTH AND HUMAN SERVICES
https://federalregister.gov/d/2024-25382, and on https://govinfo.gov
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.
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
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 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 (§§ 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 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 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 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.
Table 1: New Additions to the Expected Specialty Assignment List
HCPCS Short Descriptor Expected Specialty Assignment
15600 Delay flap trunk Plastic And Reconstructive Surgery
15920 Removal of tail bone ulcer General Surgery
15941 Remove hip pressure sore Plastic And Reconstructive Surgery
21422 Treat mouth roof fracture Maxillofacial Surgery
22505* Manipulation of spine Neurosurgery
22808 Arthrd ant dfrm 2-3 vrt sgm Orthopedic Surgery
23180 Remove collar bone lesion Orthopedic Surgery
23455 Repair shoulder capsule Orthopedic Surgery
23680 Optx sho dislc neck fx fixj Orthopedic Surgery
25670* Treat wrist dislocation Orthopedic Surgery
26508 Release thumb contracture Hand Surgery
27065 Remove hip bone les super Orthopedic Surgery
27170 Repair/graft femur head/neck Orthopedic Surgery
27418 Repair degenerated kneecap Orthopedic Surgery
27420 Revision of unstable kneecap Orthopedic Surgery
27442 Revision of knee joint Orthopedic Surgery
27756 Treatment of tibia fracture Orthopedic Surgery
28116* Revision of foot Podiatry
29837 Elbow arthroscopy/surgery Orthopedic Surgery
29861 Hip arthro w/fb removal Orthopedic Surgery
32036 Thoracostomy w/flap drainage Thoracic Surgery
33231* Insrt pulse gen w/mult leads Cardiology
33240* Insrt pulse gen w/singl lead Cardiology
33366 Trcath replace aortic valve Cardiac Surgery
33415 Revision subvalvular tissue Thoracic Surgery
33900* Perq p-art revsc 1 nm nt uni Cardiology
33901* Perq p-art revsc 1 nm nt bi Cardiology
33902* Perq p-art revsc 1 abnor uni Cardiology
33903* Perq p-art revsc 1 abnor bi Cardiology
33904* Perq p-art revsc each addl Cardiology
34704 Evasc rpr a-unilac ndgft rpt Vascular Surgery
35001 Repair defect of artery Vascular Surgery
35013 Repair artery rupture arm Vascular Surgery
35231* Repair blood vessel lesion Otolaryngology
35331 Rechanneling of artery Vascular Surgery
35400 Angioscopy Vascular Surgery
35525 Art byp grft brachial-brchl Vascular Surgery
35565 Art byp grft iliofemoral Vascular Surgery
35601 Art byp common ipsi carotid Vascular Surgery
35647 Art byp aortofemoral Vascular Surgery
36585* Replace picvad cath General Surgery
36810* Insertion of cannula Pulmonary Disease
39540 Repair of diaphragm hernia General Surgery
43122 Partial removal of esophagus Thoracic Surgery
43194 Esophagoscp rig trnso rem fb Otolaryngology
43257 Egd w/thrml txmnt gerd Gastroenterology
43290 Egd flx trnsorl dplmnt balo Gastroenterology
43291 Egd flx trnsorl rmvl balo Gastroenterology
43520 Incision of pyloric muscle General Surgery
43605 Biopsy of stomach General Surgery
44605 Repair of bowel lesion General Surgery
47480 Incision of gallbladder General Surgery
HCPCS Short Descriptor Expected Specialty Assignment
49215 Excise sacral spine tumor General Surgery
50365 Transplantation of kidney General Surgery
51992 Laparo sling operation Obstetrics/Gynecology
54057 Laser surg penis lesion(s) Urology
55842 Extensive prostate surgery Urology
56633* Extensive vulva surgery Obstetrics/Gynecology
58240* Removal of pelvis contents Obstetrics/Gynecology
59151 Treat ectopic pregnancy Obstetrics/Gynecology
60522* Removal of thymus gland Thoracic Surgery
61619 Repair dura Neurosurgery
61682 Intracranial vessel surgery Neurosurgery
61737 Litt icr mlt trj mlt/cplx ls Neurosurgery
63741 Install spinal shunt Neurosurgery
63744 Revision of spinal shunt Neurosurgery
67225 Eye photodynamic ther add-on Ophthalmology
67413 Explore/treat eye socket Ophthalmology
69728 Rmv ntr oi imp sk tc>=100 Otolaryngology
69729 Impl oi implt sk tc esp>=100 Otolaryngology
69730 Rplc oi implt sk tc esp>=100 Otolaryngology
74263 Ct colonography screening Gastroenterology
78216 Liver & spleen image/flow Diagnostic Radiology
78445 Vascular flow imaging Diagnostic Radiology
93574* Njx cath slct pulm vn angrph Cardiology
93575* Njx cath slct p angrph mapca Cardiology
95863 Muscle test 3 limbs Neurology
G9157 Transesoph doppl cardiac mon Anesthesiology
* Recommended specialty assignment crosswalked; see above.
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 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.
TABLE 2: Specialties Excluded from Ratesetting Calculation
Specialty
Specialty Description
Code
49 Ambulatory surgical center
50 Nurse practitioner
51 Medical supply company with certified orthotist
52 Medical supply company with certified prosthetist
53 Medical supply company with certified prosthetist-orthotist
54 Medical supply company not included in 51, 52, or 53.
55 Individual certified orthotist
56 Individual certified prosthetist
57 Individual certified prosthetist-orthotist
58 Medical supply company with registered pharmacist
59 Ambulance service supplier, e.g., private ambulance companies, funeral homes, etc.
60 Public health or welfare agencies
61 Voluntary health or charitable agencies
73 Mass immunization roster biller
74 Radiation therapy centers
87 All other suppliers (e.g., drug and department stores)
88 Unknown supplier/provider specialty
89 Certified clinical nurse specialist
96 Optician
97 Physician assistant
A0 Hospital
A1 SNF
A2 Intermediate care nursing facility
A3 Nursing facility, other
A4 HHA
A5 Pharmacy
A6 Medical supply company with respiratory therapist
A7 Department store
A8 Grocery store
B1 Supplier of oxygen and/or oxygen related equipment (eff. 10/2/2007)
B2 Pedorthic personnel
B3 Medical supply company with pedorthic personnel
B4 Rehabilitation Agency
B5 Ocularist
C1 Centralized Flu
C2 Indirect Payment Procedure
C5 Dentistry
● 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, 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.
TABLE 3: Application of Payment Modifiers to Utilization Files
Modifier Description Volume Adjustment Time Adjustment
80,81,82 Assistant at Surgery 16% Intraoperative portion
AS Assistant at Surgery – 14% (85% * 16%) Intraoperative portion
Physician Assistant
50 or Bilateral Surgery 150% 150% of work time
LT and RT
51 Multiple Procedure 50% Intraoperative portion
52 Reduced Services 50% 50%
53 Discontinued Procedure 50% 50%
54 Intraoperative Care only Preoperative + Intraoperative Preoperative + Intraoperative
Percentages on the payment files used portion
by Medicare contractors to process
Medicare claims
55 Postoperative Care only Postoperative Percentage on the Postoperative portion
payment files used by Medicare
contractors to process Medicare claims
62 Co-surgeons 62.5% 50%
66 Team Surgeons 33% 33%
CO, CQ Physical and Occupational 88% 88%
Therapy Assistant Services
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)^ life of
equipment)))) + maintenance)
Where:
minutes per year = maximum minutes per year if usage were continuous (that is,
usage=1); generally, 150,000 minutes.
usage = variable, see discussion below in this proposed rule.
price = price of the particular piece of equipment.
life of equipment = useful life of the particular piece of equipment.
maintenance = factor for maintenance; 0.05.
interest rate = variable, see discussion below in this proposed rule.
Usage: We currently use an equipment utilization rate assumption of 50 percent for most
equipment, with the exception of expensive diagnostic imaging equipment, for which we use a
90 percent assumption as required by section 1848(b)(4)(C) of the Act.
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.
TABLE 4: SBA Maximum Interest Rates
Price Useful Life Interest Rate
<$25K <7 Years 7.50%
$25K to $50K <7 Years 6.50%
>$50K <7 Years 5.50%
<$25K 7+ Years 8.00%
$25K to $50K 7+ Years 7.00%
>$50K 7+ Years 6.00%
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, 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 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 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 $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 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.
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 16in x 29in (SB011) supply for CPT codes
19020, 19101, 19110, 19112, 20101, and 20102. We proposed to remove the deleted SA046
supply pack and replace it with two supplies – the drape, sterile, three-quarter sheet (SB014) and
the drape, towel, sterile 18in x 26in (SB019) – for CPT codes 19000 and 60300. We proposed to
remove the deleted SA046 supply pack and replace it with 2 supplies – the drape, towel, sterile
18in x 26in (SB019) and the newly created Abdominal Drape Laparotomy Drape Sterile (100 in
x 72 in x 124 in) (SB056) supply – for CPT codes 22510, 22511, 22513, and 22514. We
proposed to remove the deleted SA046 supply pack without replacing it with anything for CPT
code 22526; the RUC workgroup did not make a recommendation on what to do with CPT code
27278, which also previously contained the SA046 supply pack. Therefore, we also proposed not
to replace the SA046 supply pack with any supplies for this code. The RUC workgroup also
recommended removing the SA046 supply pack from CPT code 64595 with no replacement;
however, this code was recently reviewed at the April 2022 RUC meeting and it no longer
includes the SA046 supply.
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:
TABLE 5: Supply Pack Pricing Transition
CMS_ HCPCS CMS_20 Recommen Year 1 (CY Year 2 (CY Year 3 (CY Final (CY
CODE Codes 24 Price ded Price 2025) Price 2026) Price 2027) Price 2028) Price
SA042 306 $19.43 $31.29 $22.40 $25.36 $28.33 $31.29
SA058 38 $113.70 $37.63 $94.68 $75.67 $56.65 $37.63
SA082 145 $3.91 $2.33 $3.52 $3.12 $2.73 $2.33
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.
TABLE 6: Supply Pack Pricing Requested By Commenters
HCPCS Codes Item Name CMS Code Current Price New Price % Change
111 codes pack, basic injection SA041 $10.45 $17.28 65%
560 codes pack, cleaning, surgical instruments SA043 $12.61 $11.09 -12%
3 codes pack, moderate sedation SA044 $18.55 $19.20 4%
pack, minimum multi-specialty
SA048 $5.02 $1.98 -61%
4568 codes visit
pack, ophthalmology visit (no
SA050 $2.72 $1.35 -50%
168 codes dilation)
239 codes pack, pelvic exam SA051 $20.16 $2.81 -86%
1079 codes pack, post-op incision care (staple) SA052 $4.80 $9.90 106%
pack, post-op incision care (suture
SA053 $5.47 $11.54 111%
469 codes & staple)
1708 codes pack, post-op incision care (suture) SA054 $4.62 $10.34 124%
pack, post-op incision care,
SA055 $7.30 $18.18 149%
12 codes craniotomy
pack, post-op incision care,
SA056 $6.20 $16.05 159%
24 codes neurosurgical
120 codes pack, drapes, ortho, large SA080 $37.30 $25.38 -32%
29 codes pack, drapes, ortho, small SA081 $2.25 $1.88 -16%
119 codes pack, protective, ortho, large SA083 $10.86 $14.75 36%
27 codes pack, protective, ortho, small SA084 $5.99 $8.15 36%
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 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.
TABLE 7: Example of Clinical Labor Pricing Transition
Current Price $1.00
Final Price $2.00
Year 1 (CY 2022) Price $1.25 1/4 difference between $1.00 and $2.00
Year 2 (CY 2023) Price $1.50 1/3 difference between $1.25 and $2.00
Year 3 (CY 2024) Price $1.75 1/2 difference between $1.50 and $2.00
Final (CY 2025) Price $2.00
(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:
TABLE 8: CY 2025 Clinical Labor Pricing
CY 2021 Final Y4
Labor Rate Per Rate Per Total %
Code Labor Description Source Minute Minute Change
L023A Physical Therapy Aide BLS 31-2022 0.23 0.28 22%
L026A Medical/Technical Assistant BLS 31-9092 0.26 0.36 38%
L030A Lab Tech/MTA L033A, L026A 0.30 0.46 53%
L032B EEG Technician BLS 29-2098 0.32 0.44 38%
L033A Lab Technician BLS 29-2010 0.33 0.55 67%
L033B Optician/COMT BLS 29-2081, BLS 29-2057 0.33 0.39 18%
L035A Lab Tech/Histotechnologist L033A, L037B 0.35 0.60 70%
L037A Electrodiagnostic Technologist BLS 29-2098 0.37 0.44 19%
L037B Histotechnologist BLS 29-2010 0.37 0.64 73%
L037C Orthoptist BLS 29-1141 0.37 0.76 105%
L037D RN/LPN/MTA L051A, BLS 29-2061, L026A 0.37 0.54 46%
L037E Child Life Specialist BLS 21-1021 0.37 0.49 32%
COMT/COT/RN/CST BLS 29-2057, BLS 29-2055,
L038A 0.38 0.52 37%
L051A, BLS 19-4010
L038B Cardiovascular Technician BLS 29-2031 0.38 0.60 58%
L038C Medical Photographer BLS 29-2050 0.38 0.38 0%
L039A Certified Retinal Angiographer BLS 29-9000 0.39 0.52 33%
L039B Physical Therapy Assistant BLS 31-2021 0.39 0.61 56%
L039C Psychometrist BLS 21-1029 0.39 0.64 62%
L041A Vascular Interventional Technologist ASRT Wage Data 0.41 0.84 104%
L041B Radiologic Technologist BLS 29-2034 0.41 0.63 54%
Second Radiologic Technologist for
L041C BLS 29-2034 0.41 0.63 54%
Vertebroplasty
L042A RN/LPN L051A, BLS 29-2061 0.42 0.63 50%
L042B Respiratory Therapist BLS 29-1126 0.42 0.64 52%
L043A Mammography Technologist ASRT Wage Data 0.43 0.79 84%
L045A Cytotechnologist BLS 29-9092 0.45 0.85 89%
L045B Electron Microscopy Technologist BLS 29-1124 0.45 0.89 98%
L045C CORF social worker/psychologist BLS 21-1022, BLS 19-3031 0.45 0.70 56%
L046A CT Technologist* ASRT Wage Data 0.46 0.78 70%
L047A MRI Technologist BLS 29-2035 0.47 0.76 62%
REEGT (Electroencephalographic
L047B BLS 29-2035 0.47 0.76 62%
Tech)
L047C RN/Respiratory Therapist L051A, L042B 0.47 0.70 49%
L047D RN/Registered Dietician L051A, BLS 29-1031 0.47 0.70 49%
L049A Nuclear Medicine Technologist BLS 29-2033 0.62 0.81 32%
L050A Cardiac Sonographer BLS 29-2032 0.50 0.77 54%
L050B Diagnostic Medical Sonographer BLS 29-2032 0.50 0.77 54%
L050C Radiation Therapist BLS 29-1124 0.50 0.89 78%
L050D Second Radiation Therapist for IMRT BLS 29-1124 0.50 0.89 78%
L051A RN BLS 29-1141 0.51 0.76 49%
L051B RN/Diagnostic Medical Sonographer L051A, BLS 29-2032 0.51 0.77 51%
L051C RN/CORF L051A 0.51 0.76 49%
L052A Audiologist BLS 29-1181 0.52 0.81 56%
L053A RN/Speech Pathologist L051A, L055A 0.53 0.79 49%
L054A Vascular Technologist BLS 19-1040 0.54 0.91 69%
L055A Speech Pathologist BLS 29-1127 0.55 0.82 49%
L056A RN/OCN BLS 29-2033 0.79 0.81 3%
L057A Genetics Counselor BLS 29-9092 0.57 0.85 50%
L057B Behavioral Health Care Manager BLS 21-1018 0.57 0.57 0%
L063A Medical Dosimetrist BLS 19-1040 0.63 0.91 44%
Medical Dosimetrist/Medical
L107A L063A, L152A 1.08 1.52 41%
Physicist
L152A Medical Physicist AAPM Wage Data 1.52 2.14 41%
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, 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 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 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 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 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 e-mailbox at [email protected], with the phrase “Potentially
Misvalued Codes” and the referencing CPT code number(s) and/or the CPT descriptor(s) in the
subject line. Physical letters for nominations should be sent via the U.S. Postal Service to the
Centers for Medicare & Medicaid Services, Mail Stop: C4-01-26, 7500 Security Blvd,
Baltimore, Maryland 21244. Envelopes containing the nomination letters must be labeled
“Attention: Division of Practitioner Services, Potentially Misvalued Codes.” Nominations for
consideration in our next annual rule cycle should be received by our February 10th deadline.
Since CY 2009, as a part of the annual potentially misvalued code review and Five-Year Review
process, we have reviewed over 1,700 potentially misvalued codes to refine work RVUs and
direct PE inputs. We have assigned appropriate work RVUs and direct PE inputs for these
services as a result of these reviews. A more detailed discussion of the extensive prior reviews
of potentially misvalued codes is included in the CY 2012 PFS final rule with comment period
(76 FR 73052 through 73055). In the same CY 2012 PFS final rule with comment period, we
finalized our policy to consolidate the review of physician work and PE at the same time and
established a process for the annual public nomination of potentially misvalued services.
In the CY 2013 PFS final rule with comment period (77 FR 68892, 68896 through
68897), we built upon the work we began in CY 2009 to review potentially misvalued codes that
have not been reviewed since the implementation of the PFS (so-called “Harvard-valued
codes”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
1The 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.
work and no listed work time and codes with no physician work that have listed work time). We
continue each year to consider and finalize a list of potentially misvalued codes that have or will
be reviewed and revised as appropriate in future rulemaking.
3. CY 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 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
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.
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.
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),2,3,5,6,7 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.
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
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.
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.
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.
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
9Shaheen, 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.
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
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 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).
TABLE 9: Listing of Nominator’s Practice Expense items for addition or deletion to CPT
code 95800
Current Equipment/Supply Equipment/Supply Description Nonfacility/ Office Recommended
Code Equipment/Supply Equipment/
PE Cost Supply Status
EQ335 WatchPAT 200 Unit with strap, $4.71 Delete
cables, charger, booklet and
patient video
EQ336 Oximetry and Airflow Device $4.55 Delete
SD263 WatchPAT pneumo-opt slp $73.32 Delete
probes (reusable)
SD362 WatchPAT ONE device $98.20 Add
(disposable)
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 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 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, 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-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.
TABLE 10: Listing of Maxillofacial Prosthetics
CPT codes Description
21076 Impression and custom preparation; surgical obturator prosthesis
21077 Impression and custom preparation; orbital prosthesis
21079 Impression and custom preparation; interim obturator prosthesis
21080 Impression and custom preparation; definitive obturator prosthesis
21081 Impression and custom preparation; mandibular resection prosthesis
21082 Impression and custom preparation; palatal augmentation prosthesis
21083 Impression and custom preparation; palatal lift prosthesis
21084 Impression and custom preparation; speech aid prosthesis
21085 Impression and custom preparation; oral surgical splint
21086 Impression and custom preparation; auricular prosthesis
21087 Impression and custom preparation; nasal prosthesis
21088 Impression and custom preparation; facial prosthesis
21089 Unlisted maxillofacial prosthetic procedure
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 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 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 § 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
§ 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.
TABLE 11: CY 2025 Requests for Permanent Addition to the Medicare Telehealth
Services List
Category HCPCS Short Descriptor
Radiation
Treatment 77427 Radiation tx management x5
Mgmt
96130 Psycl tst eval phys/qhp 1st
96136 Psycl/nrpsyc tst phy/qhp 1st
Psych Testing 96137 Psycl/nrpsyc tst phy/qhp ea
Intensive G0422 Intens cardiac rehab w/exerc
Cardiac Rehab G0423 Intens cardiac rehab no exer
Developmental 96112 Devel tst phys/qhp 1st hr
Testing 96113 Devel tst phys/qhp ea addl
0591T Hlth&wb coaching indiv 1st
Health and Well
0592T Hlth&wb coaching indiv f-up
Being Coaching
0593T Hlth&wb coaching group
Outpatient 94625 Phy/qhp op pulm rhb w/o mntr
Pulmonary
94626 Phy/qhp op pulm rhb w/mntr
Rehab
93797 Cardiac rehab
Cardiac Rehab
93798 Cardiac rehab/monitor
Caregiver 97550 Caregiver traing 1st 30 min
Training 97551 Caregiver traing ea addl 15
97161 Physical therapy evaluation, low complexity
97162 Physical therapy evaluation, moderate complexity
97163 Physical therapy evaluation, high complexity
97164 Physical therapy re-evaluation
Physical
97110 Therapeutic exercises, each 15 mins
Therapy
97112 Neuromuscular re-education, each 15 mins
97116 Gait training, each 15 mins
97530 Therapeutic activities, each 15 mins
97535 Self-care home management
97165 Ot eval low complex 30 min
97166 Ot eval mod complex 45 min
97167 Ot eval high complex 60 min
OT Evaluation 97168 Ot re-eval est plan care
92507 Speech/hearing therapy
92508 Speech/hearing therapy
92521 Evaluation of speech fluency
92522 Evaluate speech production
92523 Speech sound lang comprehen
92524 Behavral qualit analys voice
96105 Assessment of aphasia
Speech, 92626 Eval aud funcj 1st hour
Language, and 92627 Eval aud funcj ea addl 15
Voice 96125 Cognitive test by hc pro
Evaluation and 97129 Ther ivntj 1st 15 min
Treatment 97130 Ther ivntj ea addl 15 min
92607 Ex for speech device rx 1hr
SGD Evaluation
92608 Ex for speech device rx addl
and Treatment
92609 Use of speech device service
Swallowing 92526 Oral function therapy
Evaluation and
Treatment 92610 Evaluate swallowing function
92550 Tympanometry & reflex thresh
Diagnostic 92552 Pure tone audiometry air
Audiologic 92553 Audiometry air & bone
Testing 92555 Speech threshold audiometry
92556 Speech audiometry complete
Category HCPCS Short Descriptor
92557 Comprehensive hearing test
92563 Tone decay hearing test
92565 Stenger test pure tone
92567 Tympanometry
92568 Acoustic refl threshold tst
92570 Acoustic immitance testing
92587 Evoked auditory test limited
92588 Evoked auditory tst complete
92625 Tinnitus assessment
92626 Eval aud funcj 1st hour
92627 Eval aud funcj ea addl 15
92601 Cochlear implt f/up exam <7
Diagnostic CI 92602 Reprogram cochlear implt <7
Testing 92603 Cochlear implt f/up exam 7/>
92604 Reprogram cochlear implt 7/>
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 § 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 § 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 § 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. 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.
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 § 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 § 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 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 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 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.
TABLE 12: Services Finalized for Addition to the Medicare Telehealth Services List for
CY 2025
Category HCPCS Long Description Finalized Status
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
G0011 minutes Permanent
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
PrEP for risk), HIV risk reduction and
HIV G0013 medication adherence Permanent
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
97550 minutes Provisional
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
97551 service) Provisional
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
Caregiver the patient present), face to face with
Training 97552 multiple sets of caregivers Provisional
Category HCPCS Long Description Finalized Status
Multiple-family group behavior
management/modification training
for
parent(s)/guardian(s)/caregiver(s) of
patients with a mental or physical
health diagnosis, administered by
physician or other qualified health
care professional (without the
patient present), face-to-face with
multiple sets of
parent(s)/guardian(s)/caregiver(s);
96202 initial 60 minutes Provisional
Multiple-family group behavior
management/modification training
for
parent(s)/guardian(s)/caregiver(s) of
patients with a mental or physical
health diagnosis, administered by
physician or other qualified health
care professional (without the
patient present), face-to-face with
multiple sets of
parent(s)/guardian(s)/caregiver(s);
each additional 15 minutes (List
separately in addition to code for
96203 primary service) Provisional
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;
G0541 initial 30 minutes Provisional
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
G0542 conjunction with G0541) Provisional
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
G0543 with multiple sets of caregivers Provisional
Category HCPCS Long Description Finalized Status
Caregiver training in behavior
management/modification for
caregiver(s) of patients with a
mental or physical health diagnosis,
administered by physician or other
qualified health care professional
(without the patient present), face-
G0539 to-face; initial 30 minutes Provisional
Caregiver training in behavior
management/modification for
parent(s)/guardian(s)/caregiver(s) of
patients with a mental or physical
health diagnosis, administered by
physician or other qualified health
care professional (without the
patient present), face-to-face; each
G0540 additional 15 minutes Provisional
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 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;
Safety and making the environment safe;
Planning (List separately in addition to an
Intervention E/M visit or psychotherapy)
s G0560 Permanent
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), 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 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 § 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 § 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 § 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.
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 § 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 §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 § 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 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 § 410.32 and services incident to a physician’s (or other practitioner’s) professional
service described under § 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 § 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 § 410.26, many diagnostic tests under § 410.32, pulmonary rehabilitation services
under § 410.47, cardiac rehabilitation and intensive cardiac rehabilitation services under §
410.49, and certain hospital outpatient services as provided under § 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 § 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 § 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 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 § 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 § 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 § 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 § 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 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.
10For 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 § 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 § 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 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 § 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 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.
TABLE 13: The Medicare Telehealth Originating Site Facility Fee
Time Period MEI (%) Facility Fee for Q3014
Oct. 1, 2001 to Dec. 31, 2002 NA $ 20.00
2003 3.0 $ 20.60
2004 2.9 $ 21.20
2005 3.1 $ 21.86
2006 2.8 $ 22.47
2007 2.1 $ 22.94
2008 1.8 $ 23.35
2009 1.6 $ 23.72
2010 1.2 $ 24.00
2011 0.4 $ 24.10
2012 0.6 $ 24.24
2013 0.8 $ 24.43
2014 0.8 $ 24.63
2015 0.8 $ 24.83
2016 1.1 $ 25.10
2017 1.2 $ 25.40
2018 1.4 $ 25.76
2019 1.5 $ 26.15
2020 1.9 $ 26.65
2021 1.4 $ 27.02
2022 2.1 $ 27.59
2023 3.8 $ 28.64
2024 4.6 $ 29.96
2025* 3.5 $ 31.04
*Reflects the most recent estimate of the CY 2025 MEI percentage based on historical data through the second
quarter of 2024.
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 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 × 0.0224 IWPUT) if we do not believe the overlap
in time had already been accounted for in the work RVU. The RUC has recognized this
valuation policy and, in many cases, now addresses the overlap in time and work when a service
is typically furnished on the same day as an E/M service.
The following paragraphs discuss our approach to reviewing RUC recommendations and
developing proposed values for specific codes. When they exist, we also include a summary of
interested party reactions to our approach. We noted that many commenters and interested
parties have expressed concerns over the years with our ongoing adjustment of work RVUs
based on changes in the best information we had regarding the time resources involved in
furnishing individual services. We have been particularly concerned with the RUC’s and various
specialty societies’ objections to our approach given the significance of their recommendations
to our process for valuing services and since much of the information we used to make the
adjustments is derived from their survey process. We note that we are obligated under the statute
to 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).
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 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 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 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 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® System) used in this service, indicates that a suspension of
Spray-On Skin™ 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)
11 https://avitamedical.com/.
approval of the RECELL® 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 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® System, and does
not require specialized laboratory staff.13 Additionally, a 2007 study aimed at comparing the
results from the RECELL® System and the classic skin grafting for epidermal replacement in
deep partial thickness burns showed a total procedure time of 59±4 minutes for the RECELL®
System group.14
More granularly, the FDA’s Instructions for Use of the RECELL® 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® 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,
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® 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.
15 https://www.fda.gov/media/169630/download.
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.
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
16National 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.
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”), 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®, 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 cm2 with a
range of 45 to 2212 cm2, a mean surface area of the wounds grafted of 435 cm2 with a range of
30 to 1608 cm2, and a mean area of the donor site of 212 cm2 with a range of 15 to 804 cm2. The
study also showed a mean surgical time of 71 minutes and total operating room time of 124
minutes using the RECELL® System.18 Additionally, an interview of a physician about their
clinical experience using RECELL® was recently published in the Wound Care Learning
Network19 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.
(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
17 https://avitamedical.com/instructions-for-use/
18 Hultman, C. Scott MD, MBA*; Adams, Ursula C. MD, MBA†; Rogers, Corianne D. MD*; Pillai, Minakshi MS†;
Brown, Samantha T. PA-C*; McGroarty, Carrie Ann PA-C*; McMoon, Michelle PA-C, PhD*; Uberti, M. Georgina
MD‡. 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. | DOI:
10.1097/SLA.0000000000006387
19 https://www.hmpgloballearningnetwork.com/site/woundcare/videos/recellr-spray-ontm-skin-cells-innovation-
closure-full-thickness-wounds.
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 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 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 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 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 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 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 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 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.
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 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.
(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.
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 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-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 (eg, 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).
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.
TABLE 14: Comparison of Elements and Work RVU between Telemedicine E/M
Codes (98000 through 98015) and Office/Outpatient E/M Codes (99202 through 99215)
A B C D E F G H
Telemedicine RUC- Modality Level of Medical Time New or Analogous Current
E/M HCPCS recommended Decision- Threshold Established Current Work
Work RVU Making (minutes) Patient? Office/Out RVU
patient
E/M Code
1 98000 0.93 Audio/Vi Straightforward 15 new 99202 0.93
deo (A/V)
2 98001 1.60 A/V Low 30 new 99203 1.60
3 98002 2.60 A/V Moderate 45 new 99204 2.60
4 98003 3.50 A/V High 60 new 99205 3.50
5 98004 0.70 A/V Straightforward 10 established 99212 0.70
6 98005 1.30 A/V Low 20 established 99213 1.30
7 98006 1.92 A/V Moderate 30 established 99214 1.92
8 98007 2.60 A/V High 40 established 99215 2.80
9 98008 0.90 Audio- Straightforward 15 new 99202 0.93
only
10 98009 1.60 Audio- Low 30 new 99203 1.60
only
11 98010 2.42 Audio- Moderate 45 new 99204 2.60
only
12 98011 3.20 Audio- High 60 new 99205 3.50
only
13 98012 0.65 Audio- Straightforward 10 established 99212 0.70
only
14 98013 1.20 Audio- Low 20 established 99213 1.30
only
15 98014 1.75 Audio- Moderate 30 established 99214 1.92
only
16 98015 2.60 Audio- High 40 established 99215 2.80
only
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 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 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 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
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 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.
TABLE 15: Physician Time and RVUs for CPT Codes 96920, 96921, and 96922
RUC
Intraservice
CPT Code Total Time Recommended Work
Time
RVU
2002 17 27 1.15
96920 Current (from 2012) 23 35 1.15
Recommended 10 23 1.00
2002 20 30 1.17
96921 Current (from 2012) 30 42 1.30
Recommended 12 25 1.07
2002 30 40 2.10
96922 Current (from 2012) 45 57 2.10
Recommended 18 31 1.32
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-
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 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 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 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:
TABLE 16: Direct PE Costs for Physical Medicine and Rehabilitation Codes
HCPCS Current HCPAC APTA/AOTA Utilization
97012 2.62 3.22 3.30 434,921
97014 3.60 4.16 4.33 ProcStat "I"
97016 2.94 3.50 3.67 876,440
97018 2.29 2.92 2.96 146,909
97022 8.04 7.27 7.18 135,480
97032 2.61 3.17 3.34 621,599
97033 6.61 6.74 6.90 33,953
97034 4.08 4.17 4.17 6,964
97035 4.03 4.41 4.65 1,358,936
97110 8.42 8.63 9.11 61,204,041
97112 10.23 9.87 11.08 24,990,205
97113 13.89 14.65 14.61 1,588,852
97116 8.35 8.58 9.03 4,011,592
97140 7.25 8.09 8.21 28,413,744
97530 15.01 14.38 16.40 29,187,934
97533 35.72 36.56 36.69 60,507
97535 11.50 11.64 12.67 3,118,258
97537 9.69 10.09 10.78 15,556
97542 9.26 9.41 10.42 98,989
G0283 3.60 4.16 4.33 5,721,078
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 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 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.
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 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 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
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, Jérôme 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.
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.
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 (eg, high pressure
waterjet with/without suction, sharp selective debridement with scissors, scalpel and forceps),
open wound, (eg, 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 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 inFlow™ 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.
(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
CardioMEMS™ 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 CardioMEMS™ 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 CardioMEMS™ Patient Electronics System), which captures and transmits
readings via safe radio frequency from the patient’s implanted CardioMEMS™ Heart Failure
System. Overall, the CardioMEMS™ 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 CardioMEMS™ 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 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 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 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 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 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 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, 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 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 (eg, 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 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 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 (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), 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 (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)), 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 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 (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), 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 (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)), 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 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 § 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 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.
TABLE 17: CY 2025 Work RVUs for New, Revised, and Potentially Misvalued Codes
HCPCS Descriptor CY Proposed Final CMS
2024 CY 2025 CY Work
Work Work 2025 Time
RVU RVU Work Refinement
RVU
Harvest of skin for skin cell suspension autograft; first
15011 NEW C C Yes
25 sq cm or less
Harvest of skin for skin cell suspension autograft; each
15012 additional 25 sq cm or part thereof (List separately in NEW C C Yes
addition to code for primary procedure)
Preparation of skin cell suspension autograft, requiring
enzymatic processing, manual mechanical
15013 NEW C C Yes
disaggregation of skin cells, and filtration; first 25 sq cm
or less of harvested skin
Preparation of skin cell suspension autograft, requiring
enzymatic processing, manual mechanical
disaggregation of skin cells, and filtration; each
15014 NEW C C Yes
additional 25 sq cm of harvested skin or part thereof
(List separately in addition to code for primary
procedure)
Application of skin cell suspension autograft to wound
15015 and donor sites, including application of primary NEW C C Yes
dressing, trunk, arms, legs; first 480 sq cm or less
Application of skin cell suspension autograft to wound
and donor sites, including application of primary
15016 dressing, trunk, arms, legs; each additional 480 sq cm or NEW C C Yes
part thereof (List separately in addition to code for
primary procedure)
Application of skin cell suspension autograft to wound
and donor sites, including application of primary
15017 dressing, face, scalp, eyelids, mouth, neck, ears, orbits, NEW C C Yes
genitalia, hands, feet, and/or multiple digits; first 480 sq
cm or less
Application of skin cell suspension autograft to wound
and donor sites, including application of primary
dressing, face, scalp, eyelids, mouth, neck, ears, orbits,
15018 NEW C C Yes
genitalia, hands, feet, and/or multiple digits; each
additional 480 sq cm or part thereof (List separately in
addition to code for primary procedure)
Tendon transplantation or transfer, flexor or extensor,
25310 8.08 9.00 9.00 No
forearm and/or wrist, single; each tendon
Arthroplasty, intercarpal or carpometacarpal joints;
25447 11.14 10.50 10.50 No
interposition (eg, tendon)
Arthroplasty, intercarpal or carpometacarpal joints;
25448 suspension, including transfer or transplant of tendon, NEW 11.85 11.85 No
with interposition, when performed
Transfer or transplant of tendon, carpometacarpal area or
26480 dorsum of hand; without free graft, each tendon 6.90 9.00 9.00 No
36514 Therapeutic apheresis; for plasma pheresis 1.81 1.81 1.81 No
Therapeutic apheresis; with extracorporeal
36516 immunoadsorption, selective adsorption or selective 1.56 1.56 1.56 No
filtration and plasma reinfusion
36522 Photopheresis, extracorporeal 1.75 1.75 1.75 No
Chimeric antigen receptor T-cell (CAR-T) therapy;
harvesting of blood-derived T lymphocytes for
38225 NEW 1.94 B No
development of genetically modified autologous CAR-T
cells, per day
HCPCS Descriptor CY Proposed Final CMS
2024 CY 2025 CY Work
Work Work 2025 Time
RVU RVU Work Refinement
RVU
Chimeric antigen receptor T-cell (CAR-T) therapy;
38226 preparation of blood-derived T lymphocytes for NEW 0.79 B No
transportation (eg, cryopreservation, storage)
Chimeric antigen receptor T-cell (CAR-T) therapy;
38227 receipt and preparation of CAR-T cells for NEW 0.80 B No
administration
Chimeric antigen receptor T-cell (CAR-T) therapy;
38228 NEW 3.00 3.00 No
CAR-T cell administration, autologous
Excision or destruction, open, intra-abdominal (ie,
peritoneal, mesenteric, retroperitoneal), primary or
49186 NEW 22.00 22.00 No
secondary tumor(s) or cyst(s), sum of the maximum
length of tumor(s) or cyst(s); 5 cm or less
Excision or destruction, open, intra-abdominal (ie,
peritoneal, mesenteric, retroperitoneal), primary or
49187 NEW 28.65 28.65 No
secondary tumor(s) or cyst(s), sum of the maximum
length of tumor(s) or cyst(s); 5.1 to 10 cm
Excision or destruction, open, intra-abdominal (ie,
peritoneal, mesenteric, retroperitoneal), primary or
49188 NEW 34.00 34.00 No
secondary tumor(s) or cyst(s), sum of the maximum
length of tumor(s) or cyst(s); 10.1 to 20 cm
Excision or destruction, open, intra-abdominal (ie,
peritoneal, mesenteric, retroperitoneal), primary or
49189 NEW 40.00 40.00 No
secondary tumor(s) or cyst(s), sum of the maximum
length of tumor(s) or cyst(s); 20.1 to 30 cm
Excision or destruction, open, intra-abdominal (ie,
peritoneal, mesenteric, retroperitoneal), primary or
49190 NEW 50.00 50.00 No
secondary tumor(s) or cyst(s), sum of the maximum
length of tumor(s) or cyst(s); greater than 30 cm
Insertion of transurethral ablation transducer for delivery
of thermal ultrasound for prostate tissue ablation,
51721 including suprapubic tube placement during the same NEW 4.05 4.05 No
session and placement of an endorectal cooling device,
when performed
Cystourethroscopy with insertion of temporary device
53865 for ischemic remodeling (ie, pressure necrosis) of NEW 3.10 3.10 No
bladder neck and prostate
Catheterization with removal of temporary device for
53866 ischemic remodeling (ie, pressure necrosis) of bladder NEW 1.48 1.48 No
neck and prostate
Ablation of prostate tissue, transurethral, using thermal
55881 ultrasound, including magnetic resonance imaging NEW 9.80 9.80 No
guidance for, and monitoring of, tissue ablation;
Ablation of prostate tissue, transurethral, using thermal
ultrasound, including magnetic resonance imaging
guidance for, and monitoring of, tissue ablation; with
55882 insertion of transurethral ultrasound transducer for NEW 11.50 11.50 No
delivery of thermal ultrasound, including suprapubic
tube placement and placement of an endorectal cooling
device, when performed
Insertion of cervical dilator (eg, laminaria,
59200 0.79 1.20 1.20 No
prostaglandin) (separate procedure)
Ablation of 1 or more thyroid nodule(s), one lobe or the
isthmus, percutaneous, including imaging guidance,
60660 NEW 5.75 5.75 No
radiofrequency
HCPCS Descriptor CY Proposed Final CMS
2024 CY 2025 CY Work
Work Work 2025 Time
RVU RVU Work Refinement
RVU
Ablation of 1 or more thyroid nodule(s), additional lobe,
percutaneous, including imaging guidance,
60661 NEW 4.25 4.25 No
radiofrequency (List separately in addition to code for
primary procedure)
Magnetic resonance image guided high intensity focused
ultrasound (MRgFUS), stereotactic ablation of target,
61715 intracranial, including stereotactic navigation and frame NEW 16.60 18.95 No
placement, when performed
Thoracic fascial plane block, unilateral; by injection(s),
64466 including imaging guidance, when performed NEW 1.50 1.50 No
Thoracic fascial plane block, unilateral; by continuous
64467 infusion(s), including imaging guidance, when NEW 1.74 1.74 No
performed
Thoracic fascial plane block, bilateral; by injection(s),
64468 NEW 1.67 1.67 No
including imaging guidance, when performed
Thoracic fascial plane block, bilateral; by continuous
64469 infusion(s), including imaging guidance, when NEW 1.83 1.83 No
performed
Lower extremity fascial plane block, unilateral; by
64473 injection(s), including imaging guidance, when NEW 1.34 1.34 No
performed
Lower extremity fascial plane block, unilateral; by
64474 continuous infusion(s), including imaging guidance, NEW 1.67 1.67 No
when performed
Transversus abdominis plane (TAP) block (abdominal
plane block, rectus sheath block) unilateral; by
64486 1.27 1.20 1.20 No
injection(s) (includes imaging guidance, when
performed)
Transversus abdominis plane (TAP) block (abdominal
plane block, rectus sheath block) unilateral; by
64487 1.48 1.39 1.39 No
continuous infusion(s) (includes imaging guidance,
when performed)
Transversus abdominis plane (TAP) block (abdominal
64488 plane block, rectus sheath block) bilateral; by injections 1.60 1.40 1.40 No
(includes imaging guidance, when performed)
Transversus abdominis plane (TAP) block (abdominal
64489 plane block, rectus sheath block) bilateral; by continuous 1.80 1.75 1.75 No
infusions (includes imaging guidance, when performed)
Insertion or replacement of peripheral, sacral, or gastric
neurostimulator pulse generator or receiver, requiring
64590 5.10 5.10 5.10 No
pocket creation and connection between electrode array
and pulse generator or receiver
Revision or removal of peripheral, sacral, or gastric
64595 neurostimulator pulse generator or receiver, with 3.79 3.79 3.79 No
detachable connection to electrode array
66680 Repair of iris, ciliary body (as for iridodialysis) 6.39 7.97 7.97 No
Suture of iris, ciliary body (separate procedure) with
66682 retrieval of suture through small incision (eg, McCannel 7.33 8.74 8.74 No
suture)
Implantation of iris prosthesis, including suture fixation
66683 NEW 10.67 10.67 No
and repair or removal of iris, when performed
HCPCS Descriptor CY Proposed Final CMS
2024 CY 2025 CY Work
Work Work 2025 Time
RVU RVU Work Refinement
RVU
MR safety implant and/or foreign body assessment by
trained clinical staff, including identification and
verification of implant components from appropriate
sources (eg, surgical reports, imaging reports, medical
76014 device databases, device vendors, review of prior NEW 0.00 0.00 No
imaging), analyzing current MR conditional status of
individual components and systems, and consulting
published professional guidance with written report;
initial 15 minutes
MR safety implant and/or foreign body assessment by
trained clinical staff, including identification and
verification of implant components from appropriate
sources (eg, surgical reports, imaging reports, medical
device databases, device vendors, review of prior
76015 NEW 0.00 0.00 No
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)
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 examination, analysis
76016 NEW 0.60 0.60 No
of risk vs clinical benefit of performing MR
examination, and determination of MR equipment,
accessory equipment, and expertise required to perform
examination, with written report
MR safety medical physics examination customization,
planning and performance monitoring by medical
physicist or MR safety expert, with review and analysis
by physician or other qualified health care professional
76017 to prioritize and select views and imaging sequences, to NEW 0.76 0.76 No
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
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
76018 NEW 0.75 0.75 No
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
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
76019 NEW 0.60 0.60 No
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
76981 Ultrasound, elastography; parenchyma (eg, organ) 0.59 0.59 0.59 No
76982 Ultrasound, elastography; first target lesion 0.59 0.59 0.59 No
76983 Ultrasound, elastography; each additional target lesion 0.50 0.47 0.47 No
HCPCS Descriptor CY Proposed Final CMS
2024 CY 2025 CY Work
Work Work 2025 Time
RVU RVU Work Refinement
RVU
Computed tomography guidance for needle placement
77012 (eg, biopsy, aspiration, injection, localization device), 1.50 1.50 1.50 No
radiological supervision and interpretation
Immunization administration by intramuscular injection
of severe acute respiratory syndrome coronavirus 2
90480 X 0.25 X Yes
(SARS-CoV-2) (coronavirus disease [COVID-19])
vaccine, single dose
90832 Psychotherapy, 30 minutes with patient 1.78 1.86 1.86 No
Psychotherapy, 30 minutes with patient when performed
90833 1.57 1.64 1.64 No
with an evaluation and management service
90834 Psychotherapy, 45 minutes with patient 2.35 2.45 2.45 No
Psychotherapy, 45 minutes with patient when performed
90836 1.99 2.08 2.08 No
with an evaluation and management service
90837 Psychotherapy, 60 minutes with patient 3.47 3.63 3.63 No
Psychotherapy, 60 minutes with patient when performed
90838 2.62 2.74 2.74 No
with an evaluation and management service
90839 Psychotherapy for crisis; first 60 minutes 3.28 3.43 3.43 No
90840 Psychotherapy for crisis; each additional 30 minutes 1.57 1.64 1.64 No
90845 Psychoanalysis 2.20 2.30 2.30 No
Family psychotherapy (without the patient present), 50
90846 2.51 2.63 2.63 No
minutes
Family psychotherapy (conjoint psychotherapy) (with
90847 2.62 2.74 2.74 No
patient present), 50 minutes
90849 Multiple-family group psychotherapy 0.62 0.65 0.65 No
Group psychotherapy (other than of a multiple-family
90853 0.62 0.65 0.65 No
group)
Computerized ophthalmic diagnostic imaging (eg,
92132 optical coherence tomography [OCT]), anterior segment, 0.30 0.29 0.29 No
with interpretation and report, unilateral or bilateral
Computerized ophthalmic diagnostic imaging (eg,
optical coherence tomography [OCT]), posterior
92133 0.40 0.31 0.31 No
segment, with interpretation and report, unilateral or
bilateral; optic nerve
Computerized ophthalmic diagnostic imaging (eg,
optical coherence tomography [OCT]), posterior
92134 0.45 0.32 0.32 No
segment, with interpretation and report, unilateral or
bilateral; retina
Computerized ophthalmic diagnostic imaging (eg,
optical coherence tomography [OCT]), posterior
92137 NEW 0.64 0.64 No
segment, with interpretation and report, unilateral or
bilateral; retina, including OCT angiography
Transcranial Doppler study of the intracranial arteries;
93886 0.91 0.90 0.90 No
complete study
Transcranial Doppler study of the intracranial arteries;
93888 0.50 0.73 0.73 No
limited study
Transcranial Doppler study of the intracranial arteries;
93892 emboli detection without intravenous microbubble 1.15 1.15 1.15 No
injection
Transcranial Doppler study of the intracranial arteries;
93893 venous-arterial shunt detection with intravenous 1.15 1.15 1.15 No
microbubble injection
Vasoreactivity study performed with transcranial
93896 Doppler study of intracranial arteries, complete (List NEW 0.81 0.81 No
separately in addition to code for primary procedure)
HCPCS Descriptor CY Proposed Final CMS
2024 CY 2025 CY Work
Work Work 2025 Time
RVU RVU Work Refinement
RVU
Emboli detection without intravenous microbubble
injection performed with transcranial Doppler study of
93897 NEW 0.73 0.73 No
intracranial arteries, complete (List separately in addition
to code for primary procedure)
Venous-arterial shunt detection with intravenous
microbubble injection performed with transcranial
93898 NEW 0.85 0.85 No
Doppler study of intracranial arteries, complete (List
separately in addition to code for primary procedure)
Medical genetics and genetic counseling services, each
96041 30 minutes of total time provided by the genetic NEW 0.00 0.00 No
counselor on the date of the encounter
Health behavior assessment, or re-assessment (ie, health-
96156 focused clinical interview, behavioral observations, 2.20 2.30 2.30 No
clinical decision making)
Health behavior intervention, individual, face-to-face;
96158 1.52 1.59 1.59 No
initial 30 minutes
Health behavior intervention, individual, face-to-face;
96159 0.52 0.55 0.55 No
each additional 15 minutes
Health behavior intervention, group (2 or more patients),
96164 0.22 0.23 0.23 No
face-to-face; initial 30 minutes
Health behavior intervention, group (2 or more patients),
96165 0.10 0.11 0.11 No
face-to-face; each additional 15 minutes
Health behavior intervention, family (with the patient
96167 1.62 1.70 1.70 No
present), face-to-face; initial 30 minutes
Health behavior intervention, family (with the patient
96168 0.58 0.60 0.60 No
present), face-to-face; each additional 15 minutes
Administration of respiratory syncytial virus,
monoclonal antibody, seasonal dose by intramuscular
96380 0.24 0.24 0.24 No
injection, with counseling by physician or other qualified
health care professional
Administration of respiratory syncytial virus,
96381 monoclonal antibody, seasonal dose by intramuscular 0.17 0.17 0.17 No
injection
Intraoperative hyperthermic intraperitoneal
chemotherapy (HIPEC) procedure, including separate
96547 incision(s) and closure, when performed; first 60 C 6.53 6.53 No
minutes (List separately in addition to code for primary
procedure)
Intraoperative hyperthermic intraperitoneal
chemotherapy (HIPEC) procedure, including separate
96548 C 3.00 3.00 No
incision(s) and closure, when performed; each additional
30 minutes
Excimer laser treatment for psoriasis; total area less than
96920 1.15 0.83 0.83 No
250 sq cm
Excimer laser treatment for psoriasis; 250 sq cm to 500
96921 1.30 0.90 0.90 No
sq cm
96922 Excimer laser treatment for psoriasis; over 500 sq cm 2.10 1.15 1.15 No
Application of a modality to 1 or more areas; traction,
97012 0.25 0.25 0.25 No
mechanical
Application of a modality to 1 or more areas; electrical
97014 0.18 0.18 0.18 No
stimulation (unattended)
Application of a modality to 1 or more areas;
97016 0.18 0.18 0.18 No
vasopneumatic devices
Application of a modality to 1 or more areas; paraffin
97018 0.06 0.06 0.06 No
bath
HCPCS Descriptor CY Proposed Final CMS
2024 CY 2025 CY Work
Work Work 2025 Time
RVU RVU Work Refinement
RVU
97022 Application of a modality to 1 or more areas; whirlpool 0.17 0.17 0.17 No
Application of a modality to 1 or more areas; electrical
97032 0.25 0.25 0.25 No
stimulation (manual), each 15 minutes
Application of a modality to 1 or more areas;
97033 0.26 0.26 0.26 No
iontophoresis, each 15 minutes
Application of a modality to 1 or more areas; contrast
97034 0.21 0.21 0.21 No
baths, each 15 minutes
Application of a modality to 1 or more areas; ultrasound,
97035 0.21 0.21 0.21 No
each 15 minutes
Therapeutic procedure, 1 or more areas, each 15
97110 minutes; therapeutic exercises to develop strength and 0.45 0.45 0.45 No
endurance, range of motion and flexibility
Therapeutic procedure, 1 or more areas, each 15
minutes; neuromuscular reeducation of movement,
97112 0.50 0.50 0.50 No
balance, coordination, kinesthetic sense, posture, and/or
proprioception for sitting and/or standing activities
Therapeutic procedure, 1 or more areas, each 15
97113 0.48 0.48 0.48 No
minutes; aquatic therapy with therapeutic exercises
Therapeutic procedure, 1 or more areas, each 15
97116 0.45 0.45 0.45 No
minutes; gait training (includes stair climbing)
Manual therapy techniques (eg, mobilization/
97140 manipulation, manual lymphatic drainage, manual 0.43 0.43 0.43 No
traction), 1 or more regions, each 15 minutes
Therapeutic activities, direct (one-on-one) patient
97530 contact (use of dynamic activities to improve functional 0.44 0.44 0.44 No
performance), each 15 minutes
Sensory integrative techniques to enhance sensory
processing and promote adaptive responses to
97533 0.48 0.48 0.48 No
environmental demands, direct (one-on-one) patient
contact, each 15 minutes
Self-care/home management training (eg, activities of
daily living (ADL) and compensatory training, meal
97535 preparation, safety procedures, and instructions in use of 0.45 0.45 0.45 No
assistive technology devices/adaptive equipment) direct
one-on-one contact, each 15 minutes
Community/work reintegration training (eg, shopping,
transportation, money management, avocational
activities and/or work environment/modification
97537 0.48 0.48 0.48 No
analysis, work task analysis, use of assistive technology
device/adaptive equipment), direct one-on-one contact,
each 15 minutes
Wheelchair management (eg, assessment, fitting,
97542 0.48 0.48 0.48 No
training), each 15 minutes
Acupuncture, 1 or more needles; without electrical
97810 stimulation, initial 15 minutes of personal one-on-one 0.60 0.61 0.61 No
contact with the patient
Acupuncture, 1 or more needles; without electrical
stimulation, each additional 15 minutes of personal one-
97811 on-one contact with the patient, with insertion of 0.50 0.46 0.46 No
needle(s) (List separately in addition to code for primary
procedure)
Acupuncture, 1 or more needles; with electrical
97813 stimulation, initial 15 minutes of personal one-on-one 0.65 0.74 0.74 No
contact with the patient
HCPCS Descriptor CY Proposed Final CMS
2024 CY 2025 CY Work
Work Work 2025 Time
RVU RVU Work Refinement
RVU
Acupuncture, 1 or more needles; with electrical
stimulation, each additional 15 minutes of personal one-
97814 on-one contact with the patient, with insertion of 0.55 0.47 0.47 No
needle(s) (List separately in addition to code for primary
procedure)
Synchronous audio-video visit for the evaluation and
management of a new patient, which requires a
medically appropriate history and/or examination and
98000 NEW I I Yes
straightforward medical decision making. When using
total time on the date of the encounter for code selection,
15 minutes must be met or exceeded.
Synchronous audio-video visit for the evaluation and
management of a new patient, which requires a
medically appropriate history and/or examination and
98001 NEW I I Yes
low medical decision making. When using total time on
the date of the encounter for code selection, 30 minutes
must be met or exceeded.
Synchronous audio-video visit for the evaluation and
management of a new patient, which requires a
medically appropriate history and/or examination and
98002 NEW I I Yes
moderate medical decision making. When using total
time on the date of the encounter for code selection, 45
minutes must be met or exceeded.
Synchronous audio-video visit for the evaluation and
management of a new patient, which requires a
medically appropriate history and/or examination and
98003 NEW I I Yes
high medical decision making. When using total time on
the date of the encounter for code selection, 60 minutes
must be met or exceeded.
Synchronous audio-video visit for the evaluation and
management of an established patient, which requires a
medically appropriate history and/or examination and
98004 NEW I I Yes
straightforward medical decision making. When using
total time on the date of the encounter for code selection,
10 minutes must be met or exceeded.
Synchronous audio-video visit for the evaluation and
management of an established patient, which requires a
medically appropriate history and/or examination and
98005 NEW I I Yes
low medical decision making. When using total time on
the date of the encounter for code selection, 20 minutes
must be met or exceeded.
Synchronous audio-video visit for the evaluation and
management of an established patient, which requires a
medically appropriate history and/or examination and
98006 NEW I I Yes
moderate medical decision making. When using total
time on the date of the encounter for code selection, 30
minutes must be met or exceeded.
Synchronous audio-video visit for the evaluation and
management of an established patient, which requires a
medically appropriate history and/or examination and
98007 NEW I I Yes
high medical decision making. When using total time on
the date of the encounter for code selection, 40 minutes
must be met or exceeded.
HCPCS Descriptor CY Proposed Final CMS
2024 CY 2025 CY Work
Work Work 2025 Time
RVU RVU Work Refinement
RVU
Synchronous audio-only visit for the evaluation and
management of a new patient, which requires a
medically appropriate history and/or examination,
98008 straightforward medical decision making, and more than NEW I I Yes
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.
Synchronous audio-only visit for the evaluation and
management of a new patient, which requires a
medically appropriate history and/or examination, low
98009 medical decision making, and more than 10 minutes of NEW I I Yes
medical discussion. When using total time on the date of
the encounter for code selection, 30 minutes must be met
or exceeded.
Synchronous audio-only visit for the evaluation and
management of a new patient, which requires a
medically appropriate history and/or examination,
98010 moderate medical decision making, and more than 10 NEW I I Yes
minutes of medical discussion. When using total time on
the date of the encounter for code selection, 45 minutes
must be met or exceeded.
Synchronous audio-only visit for the evaluation and
management of a new patient, which requires a
medically appropriate history and/or examination, high
98011 medical decision making, and more than 10 minutes of NEW I I Yes
medical discussion. When using total time on the date of
the encounter for code selection, 60 minutes must be met
or exceeded.
Synchronous audio-only visit for the evaluation and
management of an established patient, which requires a
medically appropriate history and/or examination,
98012 straightforward medical decision making, and more than NEW I I Yes
10 minutes of medical discussion. When using total time
on the date of the encounter for code selection, 10
minutes must be exceeded.
Synchronous audio-only visit for the evaluation and
management of an established patient, which requires a
medically appropriate history and/or examination, low
98013 medical decision making, and more than 10 minutes of NEW I I Yes
medical discussion. When using total time on the date of
the encounter for code selection, 20 minutes must be met
or exceeded.
Synchronous audio-only visit for the evaluation and
management of an established patient, which requires a
medically appropriate history and/or examination,
98014 moderate medical decision making, and more than 10 NEW I I Yes
minutes of medical discussion. When using total time on
the date of the encounter for code selection, 30 minutes
must be met or exceeded.
Synchronous audio-only visit for the evaluation and
management of an established patient, which requires a
medically appropriate history and/or examination, high
98015 medical decision making, and more than 10 minutes of NEW I I Yes
medical discussion. When using total time on the date of
the encounter for code selection, 40 minutes must be met
or exceeded.
HCPCS Descriptor CY Proposed Final CMS
2024 CY 2025 CY Work
Work Work 2025 Time
RVU RVU Work Refinement
RVU
Brief communication technology-based service (eg,
virtual check-in) by a physician or other qualified health
care professional who can report evaluation and
management services, provided to an established patient,
98016 not originating from a related evaluation and NEW 0.30 0.30 No
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
Intravenous infusion of cipaglucosidase alfaatga,
including provider/supplier acquisition and clinical
G0138 C 0.21 0.21 Yes
supervision of oral administration of miglustat in
preparation of receipt of cipaglucosidase alfa-atga
G0168 Wound closure utilizing tissue adhesive(s) only 0.31 0.31 0.31 No
Electrical stimulation (unattended), to one or more areas
G0283 for indication(s) other than wound care, as part of a 0.18 0.18 0.18 No
therapy plan of care
G0442 Annual alcohol misuse screening, 5 to 15 minutes 0.18 0.18 0.18 No
Brief face-to-face behavioral counseling for alcohol
G0443 0.45 0.60 0.60 No
misuse, 15 minutes
G0444 Annual depression screening, 5 to 15 minutes 0.18 0.18 0.18 No
High intensity behavioral counseling to prevent sexually
transmitted infection; face-to-face, individual, includes:
G0445 0.45 0.45 0.60 No
education, skills training and guidance on how to change
sexual behavior; performed semi-annually, 30 minutes
Annual, face-to-face intensive behavioral therapy for
G0446 0.45 0.45 0.60 No
cardiovascular disease, individual, 15 minutes
Face-to-face behavioral counseling for obesity, 15
G0447 0.45 0.45 0.60 No
minutes
Autologous platelet rich plasma (prp) or other blood-
derived product for diabetic chronic wounds/ulcers,
using an fda-cleared device for this indication, (includes
G0465 C 1.50 1.83 Yes
as applicable administration, dressings, phlebotomy,
centrifugation or mixing, and all other preparatory
procedures, per treatment)
Insertion of non-biodegradable drug delivery implants, 4
G0516 1.82 1.82 1.82 No
or more (services for subdermal rod implant)
Removal of non-biodegradable drug delivery implants, 4
G0517 2.10 2.10 2.10 No
or more (services for subdermal implants)
Removal with reinsertion, non-biodegradable drug
G0518 delivery implants, 4 or more (services for subdermal 3.55 3.55 3.55 No
implants)
Administration of a standardized, evidence-based
Atherosclerotic Cardiovascular Disease (ASCVD) Risk
G0537 NEW 0.18 0.18 No
Assessment, 5-15 minutes, not more often than every 12
months
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,
G0538 medium, or high risk for CVD as previously determined NEW 0.18 0.18 No
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
HCPCS Descriptor CY Proposed Final CMS
2024 CY 2025 CY Work
Work Work 2025 Time
RVU RVU Work Refinement
RVU
practitioner and the patient; clinical staff time directed
by physician or other qualified health care professional;
per calendar month
Caregiver training in behavior management/modification
for caregiver(s) of patients with a mental or physical
G0539 health diagnosis, administered by physician or other NEW 1.00 1.00 No
qualified health care professional (without the patient
present), face-to-face; initial 30 minutes
Caregiver training in behavior management/modification
for parent(s)/guardian(s)/caregiver(s) of patients with a
mental or physical health diagnosis, administered by
G0540 NEW 0.54 0.54 No
physician or other qualified health care professional
(without the patient present), face-to-face; each
additional 15 minutes
Caregiver training in direct care strategies and
techniques to support care for patients with an ongoing
condition or illness and to reduce complications
G0541 (including, but not limited to, techniques to prevent NEW 1.00 1.00 No
decubitus ulcer formation, wound care, and infection
control) (without the patient present), face-to-face; initial
30 minutes
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
G0542 NEW 0.54 0.54 No
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)
Group caregiver training in direct care strategies and
techniques to support care for patients with an ongoing
condition or illness and to reduce complications
G0543 (including, but not limited to, techniques to prevent NEW 0.23 0.23 No
decubitus ulcer formation, wound care, and infection
control) (without the patient present), face-to-face with
multiple sets of caregivers
Post discharge telephonic follow-up contacts performed
in conjunction with a discharge from the emergency
G0544 NEW 1.00 1.00 No
department for behavioral health or other crisis
encounter, 4 calls per calendar month.
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
G0545 NEW 0.89 0.89 No
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)
Interprofessional telephone/Internet/electronic health
record assessment and management service provided by
a practitioner in a specialty whose covered services are
G0546 NEW 0.35 0.35 No
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
HCPCS Descriptor CY Proposed Final CMS
2024 CY 2025 CY Work
Work Work 2025 Time
RVU RVU Work Refinement
RVU
practitioner; 5-10 minutes of medical consultative
discussion and review
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
G0547 NEW 0.70 0.70 No
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
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
G0548 NEW 1.05 1.05 No
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
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
G0549 NEW 1.40 1.40 No
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
Interprofessional telephone/Internet/electronic health
record assessment and management service provided by
a practitioner in a specialty whose covered services are
G0550 limited by statute to services for the diagnosis and NEW 0.70 0.70 No
treatment of mental illness, including a written report to
the patient’s treating/requesting practitioner, 5 minutes
or more of medical consultative time
Interprofessional telephone/Internet/electronic health
record referral service(s) provided by a
G0551 treating/requesting practitioner in a specialty whose NEW 0.70 0.70 No
covered services are limited by statute to services for the
diagnosis and treatment of mental illness, 30 minutes
Supply of digital mental health treatment device and
G0552 initial education and onboarding, per course of treatment NEW C C No
that augments a behavioral therapy plan
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
G0553 NEW 0.62 0.62 No
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
HCPCS Descriptor CY Proposed Final CMS
2024 CY 2025 CY Work
Work Work 2025 Time
RVU RVU Work Refinement
RVU
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
G0554 time reviewing information related to the use of the NEW 0.61 0.61 No
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)
Provision of replacement patient electronics system (e.g.,
G0555 system pillow, handheld reader) for home pulmonary NEW C C No
artery pressure monitoring
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;
G0556 ● Provide 24/7 access for urgent needs to care NEW 0.17 0.25 Yes
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 with typical care plan elements
when clinically relevant;
HCPCS Descriptor CY Proposed Final CMS
2024 CY 2025 CY Work
Work Work 2025 Time
RVU RVU Work Refinement
RVU
++ 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.
HCPCS Descriptor CY Proposed Final CMS
2024 CY 2025 CY Work
Work Work 2025 Time
RVU RVU Work Refinement
RVU
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 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
G0557 successive routine appointments; NEW 0.77 0.77 No
● 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
HCPCS Descriptor CY Proposed Final CMS
2024 CY 2025 CY Work
Work Work 2025 Time
RVU RVU Work Refinement
RVU
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
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,
G0558 per calendar month, with the following elements, as NEW 1.67 1.67 No
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
HCPCS Descriptor CY Proposed Final CMS
2024 CY 2025 CY Work
Work Work 2025 Time
RVU RVU Work Refinement
RVU
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-
HCPCS Descriptor CY Proposed Final CMS
2024 CY 2025 CY Work
Work Work 2025 Time
RVU RVU Work Refinement
RVU
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
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
G0559 NEW 0.16 0.16 No
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
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
G0560 strategies; utilizing social contacts and social settings as NEW 1.09 1.09 No
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
HCPCS Descriptor CY Proposed Final CMS
2024 CY 2025 CY Work
Work Work 2025 Time
RVU RVU Work Refinement
RVU
Tympanostomy with local or topical anesthesia and
insertion of a ventilating tube when performed with
G0561 NEW - C No
tympanostomy tube delivery device, unilateral (List
separately in addition to 69433)
Therapeutic radiology simulation-aided field setting;
complex, including acquisition of PET and CT imaging
G0562 NEW - C No
data required for radiopharmaceutical-directed radiation
therapy treatment planning (i.e., modeling)
Stereotactic body radiation therapy, treatment delivery,
per fraction to 1 or more lesions, including image
G0563 guidance and real-time positron emissions-based NEW - C No
delivery adjustments to 1 or more lesions, entire course
not to exceed 5 fractions
Creation of subcutaneous pocket with insertion of 365
G0564 day implantable interstitial glucose sensor, including NEW - C No
system activation and patient training
Removal of implantable interstitial glucose sensor with
creation of subcutaneous pocket at different anatomic
G0565 NEW - C No
site and insertion of new 365 day implantable sensor,
including system activation
TABLE 18: CY 2025 Direct PE Refinements
HCPCS HCPCS Input Input code Nonfacility Labor activity RUC recommendation CMS refinement Comment Direct costs
code code Code description (NF) / (where or current value (min or (min or qty) change (in
description Facility (F) applicable) qty) dollars)
Assist
physician or
other qualified L13:
healthcare Refined to
professional--- correct
Thrc fascial
RN/LPN/M directly related rounding
64466 pln blk uni L037D NF 7.5 7 -0.27
TA to physician error in
njx
work time clinical
(67% of labor
physician calculation
intra-service
time)
Assist
physician or
other qualified L13:
healthcare Refined to
professional--- correct
Lwr xtr fscl
RN/LPN/M directly related rounding
64473 pln blk uni L037D NF 7.5 7 -0.27
TA to physician error in
njx
work time clinical
(67% of labor
physician calculation
intra-service
time)
Assist
physician or
other qualified L13:
healthcare Refined to
professional--- correct
Tap block
RN/LPN/M directly related rounding
64486 unil by L037D NF 7.5 7 -0.27
TA to physician error in
injection
work time clinical
(67% of labor
physician calculation
intra-service
time)
E16: No
Mr sfty Technologis
equipment
76015 mplt&/fb ED050 t PACS NF 45 39 -0.13
times were
asmt stf ea workstation
included;
HCPCS HCPCS Input Input code Nonfacility Labor activity RUC recommendation CMS refinement Comment Direct costs
code code Code description (NF) / (where or current value (min or (min or qty) change (in
description Facility (F) applicable) qty) dollars)
aligned
equipment
time with
assist
physician
time
Perform
procedure/serv
Mr sfty MRI G1: See
ice---NOT
76015 mplt&/fb L047A Technologis NF 27 21 preamble -4.56
directly related
asmt stf ea t text
to physician
work time
Mr sfty med Professional G1: See
76017 physics xm ED053 PACS F 13 0 preamble -0.80
cstmz Workstation text
Clean
Mr safety MRI G1: See
room/equipme
76018 implant elec L047A Technologis NF 2 1 preamble -0.76
nt by clinical
prepj t text
staff
Mr safety Clean
MRI G1: See
implt room/equipme
76019 L047A Technologis NF 2 1 preamble -0.76
pos&/immo nt by clinical
t text
blj staff
E11:
Refined
equipment
Ct scan for
time to
77012 needle EL007 room, CT NF 26 9 -51.17
conform
biopsy
with other
codes in the
family
E13:
Equipment
item
Excimer lsr
laser, replaces
96920 psriasis<250 EQ161 NF 0 38 22.40
excimer another
sqcm
item; see
preamble
text
Excimer lsr laser, S7: Supply
96920 psriasis<250 SD363 excimer, pay NF 1 0 item -80.00
sqcm per use replaced by
HCPCS HCPCS Input Input code Nonfacility Labor activity RUC recommendation CMS refinement Comment Direct costs
code code Code description (NF) / (where or current value (min or (min or qty) change (in
description Facility (F) applicable) qty) dollars)
(under 250 another
cm2 ) item; see
preamble
E13:
Equipment
item
Excimer lsr
laser, replaces
96921 psriasis 250- EQ161 NF 0 40 23.58
excimer another
500
item; see
preamble
text
S7: Supply
laser,
item
Excimer lsr excimer, pay
replaced by
96921 psriasis 250- SD364 per use NF 1 0 -83.00
another
500 (250-500
item; see
cm2 )
preamble
E13:
Equipment
item
Excimer lsr
laser, replaces
96922 psriasis>500 EQ161 NF 0 46 27.12
excimer another
sqcm
item; see
preamble
text
S7: Supply
laser, item
Excimer lsr
excimer, pay replaced by
96922 psriasis>500 SD365 NF 1 0 -100.00
per use (> another
sqcm
500cm2) item; see
preamble
Perform
Annual procedure/serv
G1: See
alcohol RN/LPN/M ice---NOT
G0442 L037D NF 5 15 preamble 5.40
screen 15 TA directly related
text
min to physician
work time
Perform
Depression G1: See
RN/LPN/M procedure/serv
G0444 screen L037D NF 5 15 preamble 5.40
TA ice---NOT
annual text
directly related
HCPCS HCPCS Input Input code Nonfacility Labor activity RUC recommendation CMS refinement Comment Direct costs
code code Code description (NF) / (where or current value (min or (min or qty) change (in
description Facility (F) applicable) qty) dollars)
to physician
work time
High inten G1: See
G0445 beh couns EF023 table, exam NF 17 20 preamble 0.03
std 30m text
S7: Supply
item
High inten paper, laser
replaced by
G0445 beh couns SK057 printing NF 10 0 -0.20
another
std 30m (each sheet)
item; see
preamble
S8: Supply
item
High inten patient
replaces
G0445 beh couns SK062 education NF 0 0.5 1.40
another
std 30m booklet
item; see
preamble
Intens G1: See
G0446 behave ther EF023 table, exam NF 12 15 preamble 0.03
cardio dx text
S7: Supply
item
Intens paper, laser
replaced by
G0446 behave ther SK057 printing NF 10 0 -0.20
another
cardio dx (each sheet)
item; see
preamble
S8: Supply
item
Intens patient
replaces
G0446 behave ther SK062 education NF 0 0.5 1.40
another
cardio dx booklet
item; see
preamble
Behavior G1: See
G0447 counsel EF023 table, exam NF 17 15 preamble -0.02
obesity 15m text
S7: Supply
item
Behavior paper, laser
replaced by
G0447 counsel SK057 printing NF 10 0 -0.20
another
obesity 15m (each sheet)
item; see
preamble
HCPCS HCPCS Input Input code Nonfacility Labor activity RUC recommendation CMS refinement Comment Direct costs
code code Code description (NF) / (where or current value (min or (min or qty) change (in
description Facility (F) applicable) qty) dollars)
S8: Supply
item
Behavior patient
replaces
G0447 counsel SK062 education NF 0 0.5 1.40
another
obesity 15m booklet
item; see
preamble
TABLE 19: CY 2025 Direct PE Refinements – Equipment Refinements Conforming to Changes in Clinical Labor Time
HCPC HCPCS code Input Input code Nonfacilit Labor RUC CMS Comment Direct costs
S code description Code description y (NF) / activity recommendatio refinemen change (in
Facility (where n or current t (min or dollars)
(F) applicable value (min or qty)
) qty)
E15: Refined
Thrc fascial equipment time to
64466 pln blk uni EF018 stretcher NF 25.5 25 conform to changes -0.01
njx in clinical labor
time
ECG, 3- E15: Refined
Thrc fascial channel equipment time to
EQ01
64466 pln blk uni (with SpO2, NF 25.5 25 conform to changes -0.01
1
njx NIBP, temp, in clinical labor
resp) time
E15: Refined
Lwr xtr fscl equipment time to
64473 pln blk uni EF018 stretcher NF 25.5 25 conform to changes -0.01
njx in clinical labor
time
ECG, 3- E15: Refined
Lwr xtr fscl channel equipment time to
EQ01
64473 pln blk uni (with SpO2, NF 25.5 25 conform to changes -0.01
1
njx NIBP, temp, in clinical labor
resp) time
E15: Refined
Tap block equipment time to
64486 unil by EF018 stretcher NF 25.5 25 conform to changes -0.01
injection in clinical labor
time
ECG, 3- E15: Refined
Tap block channel equipment time to
EQ01
64486 unil by (with SpO2, NF 25.5 25 conform to changes -0.01
1
injection NIBP, temp, in clinical labor
resp) time
E15: Refined
Mr safety equipment time to
76018 implant elec EL008 room, MR NF 21 20 conform to changes -3.28
prepj in clinical labor
time
Mr safety Vitals E15: Refined
EQ41
76018 implant elec monitoring NF 21 20 equipment time to -0.32
2
prepj system (MR conform to changes
HCPC HCPCS code Input Input code Nonfacilit Labor RUC CMS Comment Direct costs
S code description Code description y (NF) / activity recommendatio refinemen change (in
Facility (where n or current t (min or dollars)
(F) applicable value (min or qty)
) qty)
Conditional in clinical labor
) time
E15: Refined
Mr safety
equipment time to
implt
76019 EL008 room, MR NF 24 23 conform to changes -3.28
pos&/immobl
in clinical labor
j
time
Vitals E15: Refined
Mr safety
monitoring equipment time to
implt EQ41
76019 system (MR NF 24 23 conform to changes -0.32
pos&/immobl 2
Conditional in clinical labor
j
) time
E15: Refined
Annual equipment time to
G0442 alcohol screen EF023 table, exam NF 10 15 conform to changes 0.05
15 min in clinical labor
time
E15: Refined
equipment time to
Depression
G0444 EF023 table, exam NF 10 15 conform to changes 0.05
screen annual
in clinical labor
time
TABLE 20: CY 2025 Invoices Received for Existing Direct PE Inputs
CPT/HCPCS Item Name CMS Current Updated Percent Number Estimated non-
codes code price price change of facility allowed
invoices services for
HCPCS codes
using this item
30140,
30901,
30903,30905,
30906, Atomizer tips
SL464 $0.00 2.66 - 1 625,876
31231, (disposable)
31237,
31238,
43197, 43198
human
amniotic
membrane
allograft
65778 mounted on a SD248 $931.33 $1,149.00 23% 30 52,203
non-
absorbable
self-retaining
ring
Anti CD45
Monoclonal SL495 $5.15 $8.73 70% 3 1,094,158
88341 Antibody
Benchmark
88341, ULTRA
88342, automated
EP112 $125,040.59 $130,000.00 4% 2 2,683,605
88344, slide
88360, 88361 preparation
system
88341, Reaction
88342, buffer 10X
SL478 $0.037 $0.045 22% 3 2,683,605
88344, (Ventana 950-
88360, 88361 300)
88341, Liquid
88342, coverslip
SL479 $0.051 $0.084 65% 3 2,683,605
88344, (Ventana 650-
88360, 88361 010)
88341,
SSC (10X)
88342,
(Ventana 950- SL480 $0.051 $0.069 35% 2 2,683,605
88344,
110)
88360, 88361
88341, Cell
88342, Conditioning 1
SL482 $0.560 $0.937 67% 3 2,683,605
88344, (Ventana 950-
88360, 88361 124)
Confirm anti-
CD15 Mouse
Monoclonal
88342 SL474 $4.90 $9.24 89% 3 1,157,793
Antibody
(Ventana 760-
2504)
indocyanine
green (25ml SL083 $76.94 $125.11 63% 8 36,974
92240, 92242 uou)
93241, extended
93243, external ECG SD339 $260.35 $292.50 12% 20 510,943
93245, 93247 patch, medical
CPT/HCPCS Item Name CMS Current Updated Percent Number Estimated non-
codes code price price change of facility allowed
invoices services for
HCPCS codes
using this item
magnetic tape
recorder
97810,
needle,
97811, SC075 $0.10 $0.199 99% 1 263,591
acupuncture
97813, 97814
pack, cleaning
and
SA042 $19.43 31.29 61% 2 -
disinfecting,
306 codes endoscope
pack, drapes,
SA045 $17.33 $14.99 -14% 2 -
7 codes cystoscopy
pack, drapes,
laparotomy
SA046 $7.26 - - - -
Deleted from (chest-
all codes abdomen)
pack, ocular
photodynamic SA049 $16.35 $26.35 61% 2 1,062
67221 therapy
pack, urology
cystoscopy SA058 $113.70 $37.63 -67% 2 -
38 codes visit
pack,
ophthalmology
SA082 $3.91 $2.33 -40% 1 -
visit (w-
145 codes dilation)
TABLE 21: CY 2025 New Invoices
CPT/HCPCS CMS Average No. of NF Allowed
codes Item Name code price Invoices Services
51721, 55881, EQ41
1,638.60 1 2,300
55882 TULSA-PRO TDC Cart 0
SD36
2,972.50 4 295
53865 iTIND device 6
SA13
8,967.00 2 847
55881, 55882 TULSA-PRO Disposable Kit 6
SD36
1,995.00 3 10
60660 RF Electrodes 18 Gauge 70 mm Length 8
RF Ablation System V1000 and RF EQ41 49,950.0
2 11
60660, 60661 Pump 1 0
Disposable oximeter probe and clip (MR SD36
6.40 1 19,215
76018, 76019 Conditional) 9
Vitals monitoring system (MR EQ41 85,182.6
1 19,215
76018, 76019 Conditional) 2 0
Thermoplastic splint material 6”x9” (MR SG10
21.75 1 76
76019 Safe) 0
tomographic device, optical coherence EQ40 164,500.
2 360,890
92137 angiography (OCTA) 9 00
96920, 96921, Mupirocin 2% Topical Ointment 22
SJ095 0.139 1 108,634
96922 grams
laser, excimer, pay per use (under 250 SD36
80.00 5 73,369
96920 cm2 ) 3
laser, excimer, pay per use (250-500 cm2 SD36
83.00 4 21,696
96921 ) 4
SD36
100.00 3 13,569
96922 laser, excimer, pay per use (> 500cm2) 5
SH11
33.00 0 3,955
G0138 Opfolda (65 mg capsule) 1
SD37
140.00 1 -
No codes inFlow Measuring Device 0
SD37
495.00 1 -
No codes inFlow Valve-Pump Device 1
SD37
1,250.00 1 -
No codes inFlow Activator Kit 2
306 codes
SM03
(component of ortho-phthalaldehyde 0.55% (eg, Cidex 0.554 1 -
0
SA042) OPA)
306 codes
SM03
(component of 1.556 1 -
1
SA042) ortho-phthalaldehyde test strips
7 codes (component SB05
3.284 1 -
of SA045) drape, surgical, legging 7
7 codes (component drape, surgical, split, impervious, SB05
8.424 1 -
of SA045) absorbent 8
22510, 22511, Abdominal Drape Laparotomy Drape SB05
8.049 1 12,721
22513, 22514 Sterile (100 in x 72 in x 124 in) 6
67221 (component SA13
26.00 1 1,062
of SA049) kit, ocular photodynamic therapy (PDT) 7
67221 (component SD36
0.352 1 1,062
of SA049) y-adapter cap 7
145 codes
SB05
(component of 0.328 1 -
9
SA082) post-mydriatic spectacles
TABLE 22: CY 2025 No PE Refinements
HCPCS Description
15011 Hrv skn cll ssp agrft 1st 25
15012 Hrv skn cll ssp agrft ea add
15013 Prepj skn cll ssp agrft 1st
15014 Prepj skn cll ssp agrft ea
15015 App skn cl ssp agrft t/a/l 1
15016 App skn cl ssp agrf t/a/l ea
15017 App skn cll ssp f/n/g/hf 1st
15018 App skn cll ssp f/n/g/hf ea
25310 Transplant forearm tendon
25447 Repair wrist joints
25448 Arthrp ntrcrpl/crp/mtcrp ssp
26480 Transplant hand tendon
36514 Apheresis plasma
36516 Apheresis immunoads slctv
36522 Photopheresis
38225 Car-t hrv bld-drv t lymphcyt
38226 Car-t prep t lymphcyt f/trns
38227 Car-t receipt&prepj admn
38228 Car-t admn autologous
49186 Opn exc/dstr ntra-abd 5 cm/<
49187 Opn exc/dstr ntra-abd 5.1-10
49188 Opn exc/dst ntra-abd 10.1-20
49189 Opn exc/dst ntra-abd 20.1-30
49190 Opn exc/dstr ntra-abd >30 cm
51721 Ins trurl ablt trnsdc thr us
53865 Cysto insj dev ischmc rmdlg
53866 Cathj rmvl dev ischmc rmdlg
55881 Ablt trurl prst8 tis thrm us
55882 Ablt trurl prst8 tis trnsdcr
59200 Insert cervical dilator
60660 Abltj 1/+thyr ndul 1lobe prq
60661 Abltj 1/+thyr ndul addl prq
61715 Mrgfus strtctc ablt trgt icr
64467 Thrc fascial pln blk uni nfs
64468 Thrc fascial pln blk bi njx
64469 Thrc fascial pln blk bi nfs
64474 Lwr xtr fscl pln blk uni nfs
64487 Tap block uni by infusion
64488 Tap block bi injection
64489 Tap block bi by infusion
64590 Ins/rpl prph sac/gstr npg/r
64595 Rev/rmv prph sac/gstr npg/r
66680 Repair iris & ciliary body
66682 Repair iris & ciliary body
66683 Implantation iris prosthesis
76014 Mr sfty implt&/fb asmt stf 1
76016 Mr safety deter phys/qhp
76981 Use parenchyma
76982 Use 1st target lesion
76983 Use ea addl target lesion
92132 Cmptr ophth dx img ant segmt
92133 Cmptr ophth img optic nerve
92134 Cptr ophth dx img post segmt
92137 Cptrz oph img pst sg rta oct
93886 Intracranial complete study
93888 Intracranial limited study
HCPCS Description
93892 Tcd emboli detect w/o inj
93893 Tcd emboli detect w/inj
93896 Vsrctv std tcd icr art compl
93897 Emboli detcj wo iv mbubb njx
93898 Ven-artl shunt det mbubb njx
96041 Genetic counseling svc ea 30
96380 Admn rsv monoc antb im cnsl
96381 Admn rsv monoc antb im njx
97012 Mechanical traction therapy
97014 Electric stimulation therapy
97016 Vasopneumatic device therapy
97018 Paraffin bath therapy
97022 Whirlpool therapy
97032 Appl modality 1+estim ea 15
97033 App mdlty 1+iontphrsis ea 15
97034 App mdlty 1+cntrst bth ea 15
97035 App mdlty 1+ultrasound ea 15
97110 Therapeutic exercises
97112 Neuromuscular reeducation
97113 Aquatic therapy/exercises
97116 Gait training therapy
97140 Manual therapy 1/> regions
97530 Therapeutic activities
97533 Sensory integration
97535 Self care mngment training
97537 Community/work reintegration
97542 Wheelchair mngment training
97810 Acupunct w/o stimul 15 min
97811 Acupunct w/o stimul addl 15m
97813 Acupunct w/stimul 15 min
97814 Acupunct w/stimul addl 15m
98000 Synch audio-video new sf 15
98001 Synch audio-video new low 30
98002 Synch audio-video new mod 45
98003 Synch audio-video new hi 60
98004 Synch audio-video est sf 10
98005 Synch audio-video est low 20
98006 Synch audio-video est mod 30
98007 Synch audio-video est hi 40
98008 Synch audio-only new sf 15
98009 Synch audio-only new low 30
98010 Synch audio-only new mod 45
98011 Synch audio-only new high 60
98012 Synch audio-only est sf 10
98013 Synch audio-only est low 20
98014 Synch audio-only est mod 30
98015 Synch audio-only est high 40
98016 Brief comunicaj tech-bsd svc
G0168 Wound closure by adhesive
G0283 Elec stim other than wound
G0443 Brief alcohol misuse counsel
G0516 Insert drug del implant, >=4
G0517 Remove drug implant
G0518 Remove w insert drug implant
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 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 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
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
24Fowler, PhD, JD, E., Rudolph, MPH, N., Davidson, LCSW, MSW, K., Finke, MD, B., Flood, S., Bernheim, MD,
PhD, S. M., & Rawal, PhD, 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, PhD. 2022.
https://www.cms.gov/priorities/innovation/data-and-reports/2022/wp-eval-synthesis-21models.
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 PFS26 (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
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.
closed-loop follow-up and more real-time management for 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.
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.
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
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.
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
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® model.33 The Million Hearts® 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® model.
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)
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).
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® Cardiovascular Disease Risk Reduction
Model: Fourth Annual Report. Mathematica. February 2022. https://www.cms.gov/priorities/innovation/data-and-
reports/2022/mhcvdrrm-fourthannevalrpt.
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.
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.
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
37 Willemijn L.A. Schäfer 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.
complex chronic care management (CCM) in the CY 2015, 2017, and 2019 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 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 model41 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
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.
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
TABLE 23: Key Care Delivery Methods from Select CMS Innovation Center
Models
Model Key Care Delivery Methods Citation
AIM provided an opportunity for
participants to invest in care
transformation activities.
Specifically, AIM was an
opportunity for independent Evaluation of the Accountable Care
primary care practices in rural Organization Investment Model,
communities to hire population Final Report, September 2020,
ACO Investment Model (AIM) health staff, such as care managers available at:
or outreach coordinators. Care https://www.cms.gov/priorities/in
managers conducted outreach, novation/data-and-
scheduling, and patient education. reports/2020/aim-final-annrpt
Care managers did this through a
variety of mechanisms including
phone, in the physician office, and
via home visits.
CPC practices provided longitudinal
and episodic care management
Evaluation of the Comprehensive
services for patients at high or
Primary Care Initiative, Fourth
rapidly increasing risk whom the
Annual Report, May 2018, available
practices believed were most likely
at:
to benefit from intensive support.
https://downloads.cms.gov/files/c
By 2016, CPC practices risk
mmi/CPC-initiative-fourth-annual-
stratified 95% of their empaneled
report.pdfhttps://downloads.cms.g
patients, and provided care
ov/files/cmmi/CPC-initiative-
management to 20% of those
Comprehensive Primary Care (CPC) fourth-annual-report.pdf
patients. CPC practices also greatly
increased their use of dedicated
Long-Term Effects of the
care managers over time. By 2016,
Comprehensive Primary Care
89% of practices reported that,
Model on Health Care Spending
“care managers who were
and Utilization. May 2022.
members of the [primary care]
Available at:
practice team systematically
https://www.ncbi.nlm.nih.gov/pmc
provided care management
/articles/PMC9130381/.
services to high-risk patients” – an
increase from 20% in 2012.
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.
Model Key Care Delivery Methods Citation
Beneficiaries attributed to CPC
practices had slower growth in
hospitalizations and emergency
department (ED) visits than those
being managed by practices not in
the model.
CPC+ practices used data and
team-based care to proactively
identify the needs of their patients
and efficiently manage their care.
Additionally, by the final year of Evaluation of Comprehensive
the model, about 97% of physicians Primary Care Plus. Final Report,
in CPC+ and comparison practices December 2023, available at:
Comprehensive Primary Care Plus
reported the use of scheduled https://www.cms.gov/priorities/inn
(CPC+)
phone, video, or e-visits for at least ovation/data-and-
some of their patients. Finally, reports/2023/cpc-plus-fifth-annual-
CPC+ had small favorable effects on eval-report.
some claims-based, quality-of-care
measures of planned care and
population health and patient and
caregiver engagement.
All PCF practices provide 24/7
access to a care team practitioner
with real-time access to an
electronic health record (EHR).
Practices also provide risk-stratified
care management for all Evaluation of the Primary Care First
empaneled patients and ensure Model, Second Annual Report,
beneficiaries receive timely follow- February 2024, available at:
Primary Care First (PCF)
up contact from the practice after https://www.cms.gov/priorities/inn
ED visits and hospitalizations. ovation/data-and-
Practices commonly report reports/2024/pcf-second-eval-rpt.
expanding their practice care team
by hiring additional clinical and
non-clinical staff to bolster
longitudinal care management
services.
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
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
45National 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/.
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.
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.
● 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 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 (§ 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 § 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 § 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.
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
§ 410.26. We proposed that APCM services will be considered a “designated care management
service” under § 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 § 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 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 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 § 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).
TABLE 24: Patient-Centered Risk Stratification for Billing APCM Codes
Level 1 [G0556] Level 2 [G0557] Level 3 [G0558]
Patients with two or more chronic
Patients with one or fewer chronic Patients with two or more chronic
conditions and who are Qualified
conditions. conditions.
Medicare Beneficiaries.
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 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
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.
possible future changes to our policy and will take commenters’ suggestions into consideration
as we consider the development of proposals for future rulemaking.
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.
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
48American 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.
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 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.
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
49Centers 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.
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, 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.
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
50Lochner, 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.
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 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 status52 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
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,
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.
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.
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.
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
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
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.
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.
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.
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.
58 World Health Organization. (2018). Health Impact Assessment (HIA): The determinants of health.
http://www.who.int/hia/evidence/doh/en/.
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.
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.
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
60ASPE. 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.
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 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 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.
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.
61See, 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.
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.
TABLE 25: APCM Service Elements* and Practice-Level Capabilities
Consent
• Inform the patient of the availability of APCM services; that only one practitioner can furnish and be paid for
these services during a calendar month; of the right to stop services at any time (effective at the end of the calendar
month); and that cost sharing may apply* (may be covered by supplemental health coverage)
• Document in patient’s medical record that consent was obtained
Initiating Visit for New Patients (separately paid)
• Initiation during a qualifying visit for new patients
• An initiating visit is not needed: (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 (APCM, CCM, or PCM) within the previous year with the practitioner or another practitioner in
the same practice.
24/7 Access to Care and Care Continuity
• 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. In the event of afterhours communication with a beneficiary, whoever is responsive to the patient’s concerns
must document and communicate their interaction with the beneficiary to the primary care team/practitioner.
• 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, as appropriate
Comprehensive Care Management
• Overall comprehensive care management may include, as applicable
• Systematic needs assessment (medical and psychosocial)
• System-based approaches to ensure receipt of preventive services
• Medication reconciliation, management and oversight of self-management
Patient-Centered Comprehensive Care Plan
• Development, implementation, revision, and maintenance of an electronic patient-centered comprehensive care
plan which 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
Management of Care Transitions (for example, discharges, ED visit follow-up, referrals, as applicable)
• Coordination of care transitions between and among health care providers and settings, including transitions
involving referrals to other clinicians, follow-up after an emergency department visit, or follow-up after discharges
from hospitals, skilled nursing facilities or other health care facilities, 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 ED visits and discharges from hospitals, skilled nursing facilities, or other health care facilities, within
7 calendar days of discharge, as clinically indicated
Practitioner, Home-, and Community-Based Care Coordination
• 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), as applicable, 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 Communication Opportunities
• 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)
Patient Population-Level Management
• 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
• A practitioners who is participating in a Shared Savings Program ACO, REACH ACO, Making Care Primary, or
Primary Care First satisfies this requirement
Performance Measurement
Be assessed on primary care quality, total cost of care, and meaningful use of CEHRT, which can be met in several
ways:
• For practitioners who are MIPS eligible clinicians, by registering for and reporting the Value in Primary Care
MVP**
• A practitioner who is part of a TIN participating in a Shared Savings Program ACO satisfies this requirement
through the ACO’s reporting of the APM Performance Pathway***
• A practitioner who is participating in a REACH ACO, a Making Care Primary, or a Primary Care First practice
satisfies this requirement by virtual of meeting requirements under the CMS Innovation Center ACO REACH,
Making Primary Care Primary, or Primary Care First models.
* Medicare beneficiaries who are enrolled in the QMB eligibility group do not have any Medicare cost sharing
responsibility for copays, deductibles, and coinsurance.
** See discussion in section II.G.2.c.(10) of the CY 2025 PFS proposed rule for a description of the timeline of
MIPS reporting, and information for eligible clinicians who are not MIPS eligible or QPs. MIPS eligible clinicians
who furnish APCM services in 2025 who intend to report on for the CY performance year/2027 MIPS payment
year must register to report the Value in Primary Care MVP as described under § 414.1365(b). For more details, see
the 2024 MIPS Quick Start Guide, available at https://qpp.cms.gov/mips/reporting-options-overview.
*** See requirement in section III.G. of the CY 2025 PFS final rule for practitioners in Shared Savings Program
ACOs to report the APP Plus quality measure set.
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 (§ 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 § 414.1305, report on the objectives and associated measures as specified
by us and submit required attestations as specified in § 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 § 414.1415(a)(1)(iii); and are paid under the terms
of those APMs based on MIPS-comparable quality measures as specified in § 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 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
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® 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.
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
62 American Medical Association. CPT Professional 2024. American Medical Association, 2023.
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® 2024 Professional Edition Code Book
on page 4, 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.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.
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
63 American Medical Association. CPT Professional 2024. American Medical Association, 2023.
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
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.
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.
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 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 visits67) 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.
We received public comments on these proposals. The following is a summary of the
comments we received and our responses.
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.
67 https://www.cms.gov/priorities/innovation/innovation-models/comprehensive-primary-care-plus.
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 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
68 https://www.cms.gov/priorities/innovation/innovation-models/comprehensive-primary-care-plus.
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.
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,
e-mail, mail, or home visits (and through visits to skilled nursing facilities or hospitals to support
transitional care).
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,
69Taylor, 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.
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
70Coulter 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.
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.
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 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 discharge71 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
hospitalization72), 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
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,
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.
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
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.
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.,
practice with care needs that require care team prioritization and urgent reply. 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: 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
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.
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
75Medicare 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.
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 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).
76Vimalananda, 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 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.
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.
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.
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 § 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-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
53CPC+ 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.
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.
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 § 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
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.
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.
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
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.
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.
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.
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
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.
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.
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.
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
89 Value in Primary Care. Quality Payment Program. https://qpp.cms.gov/mips/explore-mips-value-
pathways/2024/M0005.
90 https://www.cms.gov/medicare/quality/cms-national-quality-strategy/aligning-quality-measures-across-cms-
universal-foundation.
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
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 § 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
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 § 414.1375(b) (§ 414.1365(c)(4)(i)) (see section IV.
of the CY 2025 PFS proposed rule for details on reporting the objectives, measures, and required
91 https://qpp.cms.gov/docs/cost_specifications/2023-12-13-mif-tpcc.pdf.
92 https://qpp.cms.gov/mips/mvps/learn-about-mvp-reporting-option?option=Group.
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)).
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 § 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
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
94Note 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).
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
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.
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 Program99). 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 (§ 425.507).
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 § 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
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.
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, 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 § 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 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 § 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
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
100Link to recent guidance is at https://www.cms.gov/files/document/frequently-asked-questions-shared-savings-
program-requirement-report-objectives-and-measures-mips.pdf.
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 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.
TABLE 26: Care Management and CTBS which are Substantially Duplicative of
APCM Services
Service Description
Care Management Services (12 CPT Codes)
Chronic Care Management of all care for patients with two or more serious chronic conditions, timed, per
Management month
(CCM) (CPT
Codes 99487,
99489, 99490,
99491, 99439,
99437)
Principal Care Management of all care for patients with one serious chronic condition, timed, per month
Management
(PCM) (CPT
Codes 99424,
99425, 99426,
99427)
Transitional Care Management of transition from acute care or certain outpatient stays to a community setting,
Management with face-to-face visit (bundled into payment for the code), once per patient within 30 days
(TCM) (CPT post-discharge
Codes 99495,
99496)
Communication Technology-Based Services (15 CPT Codes)
Interprofessional Consultations between or among certain kinds of medical practitioners.
Internet
Consultation
(IPC) (CPT Codes
99446, 99447,
99448, 99449,
99451, 99452)
Remote Remote evaluation of recorded video and/or images submitted by patient
Evaluation of
Patient
Videos/Images
(HCPCS code
G2250)
Virtual Check-In Virtual check-in service to decide whether an office visit or other service is needed
(HCPCS codes
G2251, G2252)
Online Digital Communication between patient and their provider through an online patient portal
E/M (e-Visit)
(CPT codes
98970, 98971,
98972, 99421,
99422, 99423)
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, interprofessional
consultation can help promote integration of behavioral health and primary care.102
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
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.
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 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 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.
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.
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
103https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-
notices?DLSort=2&DLEntries=10&DLPage=1&DLSortDir=descending.
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
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
104The 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.
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.
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.
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
105https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-
notices?DLSort=2&DLEntries=10&DLPage=1&DLSortDir=descending.
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.
We received public comments on these proposals. The following is a summary of the
comments we received and our responses.
106https://www.macpac.gov/wp-content/uploads/2024/01/Jan24_MedPAC_MACPAC_DualsDataBook-508.pdf.
107https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-
notices?DLSort=2&DLEntries=10&DLPage=1&DLSortDir=descending.
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.
TABLE 27: Final APCM Bundled Codes and Valuation
CMS Work Approximate National
Code Short Descriptor Reference Codes
RVU Non-Facility Rate
APCM for patients with up to one
G0556 99490 0.25 $15
chronic condition
APCM for patients with multiple
G0557 99490, 99439, 99487, 99489 0.77 $50
(two or more) chronic conditions
APCM for QMBs enrollees with Calculated as a relative increase
G0558 1.67 $110
multiple chronic conditions from G0557
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 longitudinal110 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.
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
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.
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 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
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.
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
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
116 https://www.cms.gov/about-cms/what-we-do/cms-strategic-plan.
● 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 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
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
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.
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
119CMS 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).
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.
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 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
120https://www.cms.gov/pillar/health-equity.
121Centers 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.
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.
Recent models such as ACO REACH122 and Making Care Primary123 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
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?
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.
● 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 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 CVD127 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, PhD, 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® Cardiovascular Disease (CVD) Risk
Reduction model130 (hereafter referred to as Million Hearts® model) was launched in 2017 as
part of the ongoing HHS Million Hearts® 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.
All CMS Innovation Center models are independently evaluated133 and the evaluation of
the Million Hearts® 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
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.
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.
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
During the Million Hearts® (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
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 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
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.
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.
138Leading 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%20CV
D%20prevention.
139 2019 ACC/AHA Primary Prevention of Cardiovascular Disease.
https://www.ahajournals.org/doi/pdf/10.1161/CIR.0000000000000678.
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® 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
In the Million Hearts® 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® 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® 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® 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
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.
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 Estimator142 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.
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.
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%20CV
D%20prevention.
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 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
initiative to CMS in one of two ways. Nominations may be submitted to CMS via email or
through postal mail. Email submissions should be sent to the CMS e-mailbox at
[email protected], with the phrase “Potentially Misvalued Codes”
and the referencing CPT code number(s) and/or the CPT descriptor(s) in the subject line.
Physical letters for nominations should be sent via the U.S. Postal Service to the Centers for
Medicare & Medicaid Services, Mail Stop: C4-01-26, 7500 Security Blvd, Baltimore, Maryland
21244. Envelopes containing the nomination letters must be labeled “Attention: Division of
Practitioner Services, Potentially Misvalued Codes.” Nominations for consideration in our next
annual rule cycle should be received by our February 10th deadline.
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® 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 § 410.26. We proposed that ASCVD risk
management services will be considered a “designated care management service” under
§ 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 (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® 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®
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® 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 §§ 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
§§ 410.59(a) and 410.60(a), respectively, by cross-referencing the 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
§§ 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.
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
OTs145 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
144 Federation of State Boards of Physical Therapy Jurisdiction Licensure Reference Guide
https://www.fsbpt.net/lrg/Home/SupervisionRequirementLevelsBySetting.
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.
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.
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
150See 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.
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.
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 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 §§ 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 §§ 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.
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 §§
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
151See report at:
https://www.dobsondavanzo.com/index.php?src=directory&view=Publications&submenu=_pubs&category=Cost
%20Estimation&srctype=Publications_lister_redesign
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.
In accordance with the statute and § 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 § 424.24(c)(1) or (4). We recognize that it may not be
clear that § 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 § 424.24(c)(4). We note that there are multiple references to § 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 § 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 § 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.
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.
152 42 CFR 400.202.
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 § 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 § 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 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 § 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
§ 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 § 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 § 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 § 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
§ 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 § 424.24(c)(5) that the references to an order or referral in § 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 § 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 § 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 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 § 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 for our proposed exception
to the signature requirement policy, we will continue to use it here and in the regulation text at §
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 § 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 § 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 § 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 the10-day review period restarts from the date the new 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 §
424.24(c)(5) with a minor amendment, that any reference to an order or referral at § 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 § 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
§ 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 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 § 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 § 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 the KX modifier threshold
amounts can be found on the therapy services webpage 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 2022153 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
153 https://www.cdc.gov/suicide/facts/data.html.
154 https://wonder.cdc.gov/.
distinguishing intentional from unintentional death.155
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.
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).157158
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 = 492) to 79.2 percent (n = 1710), with 2 of 6
155 https://www.nih.gov/news-events/news-releases/suicides-drug-overdose-increased-among-young-people-elderly-
people-black-women-despite-overall-downward-tren.
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.
157 https://www.mentalhealth.va.gov/docs/vasafetyplancolor.pdf.
158 https://www.mirecc.va.gov/visn19/research/our-research/implementation.asp.
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
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;
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.
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.
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,” 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.
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
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.
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 study164 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.
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
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.
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 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 § 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 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
(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
166 https://www.imdrf.org/sites/default/files/docs/imdrf/final/technical/imdrf-tech-131209-samd-key-definitions-
140901.pdf.
167https://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.
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
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
169https://store.samhsa.gov/product/advisory-digital-therapeutics-management-and-treatment-behavioral-
health/pep23-06-00-001.
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;
● 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
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).
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 devices
170Cybersecurity 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.
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 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 section1861(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 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 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 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 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
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.
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/.
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 § 411.15(i) similarly excludes payment for dental
services except for inpatient hospital services in connection with dental services when
hospitalization is required because of: (1) the individual’s underlying medical condition and
clinical status; or (2) the severity of the dental procedure.
Fee for service (FFS) Medicare Parts A and B also make payment for certain dental
services in circumstances where the services are not considered to be in connection with dental
services within the meaning of section 1862(a)(12) of the Act. In the CY 2023 PFS final rule
(87 FR 69663 through 69688), we clarified and codified at § 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 § 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 § 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 § 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 § 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 § 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 § 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 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 § 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 § 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 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.
174Kawar 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 § 411.15(i)(3)(i), or under the
exceptions provided by section 1862(a)(12) of the Act and codified at § 411.15(i)(2).
After consideration of public comments, we are not expanding the examples of clinical
scenarios under § 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 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 § 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 § 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 § 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 § 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 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
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
175 https://www.cms.gov/medicare/coordination-benefits-recovery/overview/end-stage-renal-disease-esrd.
176 https://www.ncbi.nlm.nih.gov/books/NBK535404/.
177 https://kdigo.org/wp-content/uploads/2017/02/KDIGO_2012_CKD_GL.pdf.
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
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
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:
178 https://www.ncbi.nlm.nih.gov/books/NBK499861/.
179 https://www.ncbi.nlm.nih.gov/books/NBK499861/.
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.
● 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
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
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
188 https://www.cms.gov/medicare/coordination-benefits-recovery/overview/end-stage-renal-disease-esrd.
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/.
migration of the junctional epithelium, leading to destruction of the connective tissue attachment
and alveolar bone loss.191
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
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
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
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.
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.
193 https://www.perio.org/wp-content/uploads/2019/08/Staging-and-Grading-Periodontitis.pdf.
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.
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
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
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.
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
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 systemic consequences such as
inflammation, infections, protein-energy wasting, and atherosclerotic complications.202
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
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.
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.
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
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
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.
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
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.
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
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.
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.
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
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 medically necessary diagnosis and treatment for only those services that are
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.
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 § 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
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 adults213 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/1.73m2 respectively. CKD
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).
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/1.73m2. For individuals in Stage 5, treatment options include dialysis (for
example, hemodialysis and peritoneal dialysis) or kidney replacement therapy.
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
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.
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.
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 §
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 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 § 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 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
As earlier stated, we also found submitter information compelling. Specifically,
submitters provided a cohort outcomes study of 675 randomly selected individuals receiving
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.
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.
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, 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
223Sirirat 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).
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 § 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.
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 § 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
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.
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 § 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 § 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 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 with diabetes by the American Diabetes Association Clinical Guidelines and is also
promoted by the American Association of Clinical Endocrinologists and others.227
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
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.
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
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
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
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.
232 https://www.ncbi.nlm.nih.gov/books/NBK549816/.
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.
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
https://www.cochranelibrary.com/about/about-cochrane-library.
233
Simpson TC, et al. Treatment of periodontitis for glycaemic control in people with diabetes mellitus. Cochrane
234
Database Syst Rev. 2022;4:CD004714 https://www.ncbi.nlm.nih.gov/pubmed/35420698.
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
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.
● 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.
Simpson TC, et al. Treatment of periodontitis for glycaemic control in people with diabetes mellitus. Cochrane
235
Database Syst Rev. 2022;4:CD004714 https://www.ncbi.nlm.nih.gov/pubmed/35420698.
● 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 § 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 § 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 § 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 § 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, 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
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.
(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.
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
241 https://qpp.cms.gov/docs/QPP_quality_measure_specifications/CQM-
Measures/2023_Measure_001_MIPSCQM.pdf.
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.
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.
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, and distribution while the
grading contemplates primary criteria such as progression and grade modifiers, including risk
factors such as smoking and diabetes.245
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
245Tables 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.
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
§ 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 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
States246 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 β cells in the pancreas, requires life-long insulin
therapy.
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 control250 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
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.
249 Triebl, Z.; Bencze, B.; Bányai, D.; Rózsa, N.; Hermann, P.; Végh, 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 Löe, 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.
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.
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,
252National Institutes of Health. Oral Health Care in America: Advances and Challenges. Bethesda, MD: US
Department of Health and Human Services, National Institutes of Health, National Institute of Dental and
Craniofacial Research.; 2021.
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, 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,
253 https://www.niehs.nih.gov/health/topics/conditions/autoimmune.
and most of these diseases have no cure. Additionally, some autoimmune diseases require
lifelong treatment for system management.254
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
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
254 Ibid.
255 Ibid.
256 https://www.womenshealth.gov/a-z-topics/autoimmune-diseases.
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 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 Sjögren’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, Sjögren’s.
● J7517: Mycophenolate (Cellcept) for Lupus, Sjögren’s.
● J9070: Cyclophosphamide (Cytoxan) for Sjögren’s, Vasculitis.
● J9250: Methotrexate for Sjögren’s, Rheumatoid Arthritis (unresponsive to other
treatment).
● J9302: Ofatumumab (Kesimpta) for Multiple Sclerosis.
● J9312: Rituximab (Rituxan) for Rheumatoid Arthritis, Sjögren’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 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 § 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
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.; Söder, B.; Söder, P.-Ö.; 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 Rodríguez-Lozano, B.; González Febles, J.; Sánchez Alonso, F.; Garnier Rodríguez, J. L.; Dadlani, S.; Barrios,
Y.;
Sanz Alonso, M.; Díaz González, 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.
261de 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-Fürst, 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.
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.
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.
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,
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.
266 CDC. About Tooth Loss. Oral Health. https://www.cdc.gov/oral-health/about/about-tooth-loss.html (accessed
2024-08-29).
13 unique publications—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.
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
267De 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.
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 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 § 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
§ 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 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 § 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 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 § 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 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)
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
268 https://www.fairhealthconsumer.org/#answer2; Accessed May 22, 2024.
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
§ 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 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
269Wilson 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.
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.
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 § 411.15(i)(3), or under the exceptions provided by section
1862(a)(12) of the Act and codified at § 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 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 § 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
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 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 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 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, 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 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.
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 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
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 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 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 (§§ 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) document270 to provide further guidance on
the correct use of these modifiers.
Second, we adopted a definition of “refundable single-dose container or single-use
package drug” at § 414.902, which also specifies exclusions from this definition (87 FR 69724).
270https://www.cms.gov/medicare/medicare-fee-for-service-payment/hospitaloutpatientpps/downloads/jw-modifier-
faqs.pdf.
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 § 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 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 §
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® (sargramostim). Leukine® 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 § 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® 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
271 https://www.cancer.org/cancer/managing-cancer/treatment-types/immunotherapy/cancer-vaccines.html.
2025272 and the latest in March 2029.273 The adjuvant use of Leukine® 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® in clinical trials
are generally much smaller than dosages for indications in the FDA-approved labeling. The
smallest dose of Leukine® 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® 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® would likely not be optimized
for the small doses being studied in these trials.
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® (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 vaccines274 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® had unique circumstances that would
272 https://clinicaltrials.gov/study/NCT04229979.
273 https://clinicaltrials.gov/study/NCT05100641.
274 https://www.cancerresearch.org/treatment-types/cancer-vaccines.
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.
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® agreed
with our rationale, noting that we lacked sufficient information to determine whether Leukine®
has unique circumstances that would prompt an 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®, 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 § 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 § 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 § 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® (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® was subject to the NCD for Monoclonal Antibodies Directed Against Amyloid for the
Treatment of Alzheimer’s Disease under coverage with evidence development (CED),275 and
because Leqembi® was initially marketed and sold under accelerated approval, Leqembi®
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® explained that Leqembi®’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®
received traditional approval on July 6, 2023. The first Part B payments for Leqembi® 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® 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
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.
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.
As stated in the CY 2025 PFS proposed rule (89 FR 61768), we proposed that the 18-
month exclusion for Leqembi® 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 §
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 § 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 § 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 reports (which are
based on available JW modifier data from the first and second quarters of 2023), we learned that
some product labeling278 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
278 “Product labeling” in this document means the container label, carton labeling, or prescribing information.
guidance279 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.
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
279 https://www.fda.gov/media/117883/download.
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 volume280 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.
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
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
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/.
281 40 CFR 273.9.
282 Pharmaceutical Compounding—Sterile Preparations. USP-NF 2023. November 1, 2023.
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 § 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.
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.
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.
283 https://dailymed.nlm.nih.gov/dailymed/drugInfo.cfm?setid=485d9b71-6881-42c5-a620-a4360c7192ab.
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 FAQs284 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.
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
284 https://www.jointcommission.org/standards/standard-faqs/behavioral-health/medication-management-
mm/000001529/#:~:text=If%20a%20multi%2Ddose%20has,date%20for%20that%20opened%20vial.
285 https://www.ecfr.gov/current/title-21/part-610/section-610.15#p-610.15(a).
harm,286 ensuring that safety is prioritized in the face of uncertainty.
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 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 Book287 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
286https://www.cms.gov/blog/first-do-no-harm.
287https://www.fda.gov/drugs/drug-approvals-and-databases/approved-drug-products-therapeutic-equivalence-
evaluations-orange-book.
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.
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 § 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
document288 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.
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 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
288https://www.cms.gov/medicare/medicare-fee-for-service-payment/hospitaloutpatientpps/downloads/jw-modifier-
faqs.pdf.
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 § 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 § 400.202 as a hospital, critical access hospital (CAH), skilled nursing
289 https://www.ecfr.gov/current/title-42/section-400.202.
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.
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.
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 discarded amounts could reflect an inefficiency
290https://aspe.hhs.gov/sites/default/files/documents/fb7f647e32d57ce4672320b61a0a1443/aspe-medicare-part-b-
drug-pricing.pdf.
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 website22 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® 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
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® (teclistamab-
cqyv, HCPCS code J9380) is 480 billing units, which could lead to claims denials if two vials of
Tecvayli®, 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 files292 for both facility outpatient hospital services and practitioner
services, effective July 1, 2024, listed the MUE limit for Tecvayli® 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.
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.
https://www.cms.gov/medicare/payment/part-b-drugs/discarded-drugs.
291
https://www.cms.gov/medicare/coding-billing/national-correct-coding-initiative-ncci-edits/medicare-ncci-
292
medically-unlikely-edits.
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.
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
293 Loper Bright Enters. v. Raimondo, No. 22-1219, 2024 WL 3208360, at *16 (2024)
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 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 (§ 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.
We generally calculate the payment limits for drugs payable under Part B on a quarterly
basis using the manufacturer’s ASP (as defined in § 414.902). Manufacturers are required to
294 https://www.cms.gov/medicare/payment/part-b-drugs/asp-pricing-files.
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 § 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 § 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 ensure more accurate and consistent ASP calculations.
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
295 OEI-BL-21-00330. https://oig.hhs.gov/oei/reports/OEI-BL-21-00330.asp.
(WAC) or invoice pricing, as described in section 20.1.3, Chapter 17 of the Medicare Claims
Processing Manual.296
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 §
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
296 https://www.cms.gov/%E2%80%8BRegulations-and-
Guidance/%E2%80%8BGuidance/%E2%80%8BManuals/%E2%80%8BDownloads/%E2%80%8Bclm104c17.pdf.
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).
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.
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 § 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 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 § 414.904(i). We proposed this policy to apply
to both single source drugs and biologicals, including biosimilar biological products (defined at §
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 §
414.904(i) (which we proposed to move within § 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 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 § 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 § 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 § 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 §
414.902) and multiple source drugs (as defined in section 1847A(c)(6)(C) of the Act and §
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 § 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 § 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 §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 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 § 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 § 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 § 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 § 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 § 414.902, as
appropriate) of the amount determined under section 1847A(b)(4) of the Act for the reference
biological product (as defined in § 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 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
§ 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
299 Section 351(k)(2)(A)(i)(III) of the Public Health Service Act (42 U.S.C. 262)
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.
Under the second alternative, we would calculate payment limits for all 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 §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
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 § 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 §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 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
Once a drug is discontinued, as indicated by the marketing status on the FDA website
(either at Drugs@FDA303 for drugs or the Purple Book304 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.
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
300 https://www.accessdata.fda.gov/scripts/cder/daf/index.cfm.
301 https://purplebooksearch.fda.gov/.
302Medicare Claims Processing Manual Chapter 17, section 20.1.3: https://www.cms.gov/regulations-and-
guidance/guidance/manuals/downloads/clm104c17.pdf.
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.
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 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 document305, 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.
i. Summary
We are finalizing amendments to § 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
305 https://www.cms.gov/files/document/frequently-asked-questions-faqs-asp-data-collection.pdf.
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 §
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
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 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 § 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
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.
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.
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
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.
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 §
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 (§§ 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 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:
(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
314 https://www.govinfo.gov/content/pkg/FR-1995-02-16/pdf/95-3835.pdf.
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 § 410.31 (later redesignated as § 410.30).
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 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
315Since 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.
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 § 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 patients316), 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
316 https://www.fda.gov/drugs/human-drug-compounding/compounding-laws-and-policies.
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
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 patients320,321 covered under Medicare rely on compounded
immunosuppressive drugs for maintenance therapy and believe that 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
§ 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
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.
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.
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).
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
substance326 (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.
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.
326 https://www.fda.gov/drugs/human-drug-compounding/bulk-drug-substances-used-compounding
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.
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 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 § 410.30(a).
c. Immunosuppressive Refill Policy and Supplying Fee
There were a total of 2,662 Medicare Part D prescription drug events (PDEs) for compounded
327
immunosuppressive drugs in CY 2023.
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 instruction328 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.
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
328Section 80.3, Chapter 17 of the Medicare Claims Processing Manual
329Tacrolimus [package insert]. Northbrook, IL: Astellas Pharma, Inc.; 2022.
https://www.accessdata.fda.gov/drugsatfda_docs/label/2023/050708s055,010115s007lbl.pdf.
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.
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 §
330 Cellcept [package insert]. San Francisco, CA: Genentech USA, Inc.; 2022.
https://www.accessdata.fda.gov/drugsatfda_docs/label/2022/050722s050,050723s050,050758s048,050759s055lbl.p
df.
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.
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 § 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 (§ 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.
We received public comments on this proposal. The following is a summary of the
comments we received and our responses.
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.
334https://www.pcmanet.org/rx-research-corner/mandating-pharmacy-reimbursement-increase-
spending/08/31/2021/#:~:text=The%20average%20dispensing%20fee%20in,the%20state's%20Medicaid%20FFS%
20rate.
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 § 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 marrow335,336,337.
Therefore, stem cells are included in the meaning of a “tissue,” as it is used in § 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 benefit338.
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
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.
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, § 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
§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 (§ 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
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 § 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.
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
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.
347 https://www.gao.gov/assets/gao-03-184.pdf.
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.
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 § 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
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 BC, Furie B. The blood coagulation cascade. Curr Opin Hematol. 2004 Jul;11(4):272-7.
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-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.
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 § 410.63(c). Therefore,
they do not constitute “clotting factors” for purposes of Medicare payment.
351Carvalho M, Sepodes B, Martins APPatient access to gene therapy medicinal products: a comprehensive
reviewBMJ 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
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 § 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 § 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 § 410.63(c) that the furnishing fee
352 Section 30.5, Chapter 12 of the Medicare Claims Processing Manual.
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 § 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 § 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 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 § 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
§ 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 § 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 § 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 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 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 webpage and on the CMS RHC and FQHC webpages.353,354,355
b. Regulatory Update (§ 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 § 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 § 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 §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.
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.
Comment: One commenter stated they were encouraged to learn that CMS proposed
revisions to §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 §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
§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 §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 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.
TABLE 28: General Care Management HCPCS Codes and Descriptors
HCPCS code Short Descriptors Long Descriptors
99091 Collj & interpj data ea 30 d Collection and interpretation of physiologic data (e.g. Blood
pressure, glucose monitoring) digitally stored and/or
transmitted by the patient and/or caregiver to the physician or
other qualified health professional, qualified by education,
training, licensure/regulation (when applicable) requiring a
minimum of 30 minutes of time, each 30 days
99424 Prin care mgmt phys 1st 30 Principal care management services, for a single high-risk
disease, with the following required elements: one complex
chronic condition expected to last at least 3 months, and that
places the patient at significant risk of hospitalization, acute
exacerbation/ decompensation, functional decline, or death,
the condition requires development, monitoring, or revision of
disease-specific care plan, the condition requires frequent
adjustments in the medication regimen, and/or the
management of the condition is unusually complex due to
comorbidities, ongoing communication and care coordination
between relevant practitioners furnishing care; first 30
minutes provided personally by a physician or other qualified
health care professional, per calendar month
99425 Prin care mgmt phys ea addl Principal care management services, for a single high-risk
30 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)
99426 Prin care mgmt staff 1st 30 Principal care management services, for a single high-risk
disease, with the following required elements: one complex
chronic condition expected to last at least 3 months, and that
places the patient at significant risk of hospitalization, acute
exacerbation/ decompensation, functional decline, or death,
the condition requires development, monitoring, or revision of
disease-specific care plan, the condition requires frequent
adjustments in the medication regimen and/or the
management of the condition is unusually complex due to
comorbidities, ongoing communication and care coordination
between relevant practitioners furnishing care; first 30
minutes of clinical staff time directed by physician or other
qualified health care professional, per calendar month
99427 Prin care mgmt staff ea addl Principal care management services, for a single high-risk
30 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
HCPCS code Short Descriptors Long Descriptors
comorbidities, ongoing communication and care coordination
between relevant practitioners furnishing care; each additional
30 minutes of clinical staff time directed by a physician or
other qualified health care professional per calendar month
(List separately in addition to code for primary procedure)
99437 Chrnc care mgmt phys ea addl Chronic care management services, provided personally by a
30 physician or other qualified health care professional, with the
following required elements: multiple (two or more) chronic
conditions expected to last at least 12 months, or until the
death of the patient, chronic conditions place the patient at
significant risk of death, acute exacerbation/ decompensation,
or functional decline, comprehensive care plan established,
implemented, revised or monitored; 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)
99439 Chrnc care mgmt staf ea addl Chronic care management services, each additional 20
20 minutes of clinical staff time directed by a physician or other
qualified health care professional, per calendar month
99453 Rem mntr physiol param Remote monitoring of physiologic parameter(s) (e.g. Weight,
setup blood pressure, pulse oximetry, respiratory flow rate) initial
set-up and patient education on use of equipment
99454 Rem mntr physiol param dev Remote monitoring of physiologic parameter(s) (e.g. Weight,
blood pressure, pulse oximetry, respiratory flow rate) initial
device(s) supply with daily recording(s) or programmed alert(s)
transmission, each 30 days
99457 Rem physiol mntr 1st 20 min Remote physiologic monitoring treatment services, clinical
staff/physician/other qualified health care professional time in
a calendar month requiring interactive communication with
the patient/caregiver during the month; first 20 minutes
99458 Rem physiol mntr ea addl 20 Remote physiologic monitoring treatment services, clinical
staff/physician/other qualified health care professional time in
a calendar month requiring interactive communication with
the patient/caregiver during the month; each additional 20
minutes (list separately in addition to code for primary
procedure)
99474 Self-meas bp 2 readg bid 30d Self-measured blood pressure using a device validated for
clinical accuracy; separate self-measurements of two readings
one minute apart, twice daily over a 30-day period (minimum
of 12 readings), collection of data reported by the patient
and/or caregiver to the physician or other qualified health care
professional, with report of average systolic and diastolic
pressures and subsequent communication of a treatment plan
to the patient
99484 Care mgmt svc bhvl hlth cond Care management services for behavioral health conditions, at
least 20 minutes of clinical staff time, directed by a physician
or other qualified health care professional time, per calendar
month, with the following required element: initial assessment
or follow-up monitoring, including using applicable validated
rating scales, behavioral health care planning about behavioral
or psychiatric health problems, including revision for patients
not progressing or whose status changes, facilitating and
coordinating treatment such as psychotherapy,
pharmacotherapy, counseling, or psychiatric consultation,
continuity of care with an appointed member of the care team
99487 Cplx chrnc care 1st 60 min Complex chronic care management services, with the
following required elements: multiple (two or more) chronic
HCPCS code Short Descriptors Long Descriptors
conditions expected to last at least 12 months, or until the
death of the patient, chronic conditions place the patient at
significant risk of death, acute exacerbation/decompensation,
or functional decline, establishment or substantial revision of
comprehensive care plan, moderate or high complexity
medical decision making; first 60 minutes of clinical staff time
directed by a physician or other qualified health care
professional, per calendar month
99489 Cplx chrnc care ea addl 30 Complex chronic care management services, with the
following required elements: multiple (two or more) chronic
conditions expected to last at least 12 months, or until the
death of the patient, chronic conditions place the patient at
significant risk of death, acute exacerbation/decompensation,
or functional decline, establishment or significant revision of
comprehensive care plan, moderate or high complexity
medical decision making; each additional 30 minutes of clinical
staff time directed by a physician or other qualified health care
professional, per calendar month (List separately in addition to
code for primary procedure)
99490 Chrnc care mgmt staff 1st 20 Chronic care management services with the following required
elements: multiple (two or more) chronic conditions expected
to last at least 12 months, or until the death of the patient,
chronic conditions place the patient at significant risk of death,
acute exacerbation/decompensation, or functional decline,
comprehensive care plan established, implemented, revised,
or monitored; first 20 minutes of clinical staff time directed by
a physician or other qualified health care professional, per
calendar month
99491 Chrnc care mgmt phys 1st 30 Chronic care management services, provided personally by a
physician or other qualified healthcare professional, at least 30
minutes of physician or other qualified healthcare professional
time, per calendar month, with the following required
elements: multiple (two or more) chronic conditions expected
to last at least 12 months, or until the death of the patient,
chronic conditions place the patient at significant risk of death,
acute exacerbation/decompensation, or functional decline,
comprehensive care plan established, implemented, revised,
or monitored
98975 Rem ther mntr 1st setup&edu Remote therapeutic monitoring (e.g. therapy adherence,
therapy response); initial set-up and patient education on use
of equipment
98976 Rem ther mntr dev sply resp 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 respiratory system, each 30 days
98977 Rem ther mntr dv sply mscskl 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 musculoskeletal system, each 30 days
98980 Rem ther mntr 1st 20 min Remote therapeutic monitoring treatment management
services, physician or other qualified health care professional
time in a calendar month
requiring at least one interactive communication with the
patient or caregiver during the calendar month; first 20
minutes
98981 Rem ther mntr ea addl 20 min Remote therapeutic monitoring treatment management
services, physician or other qualified health care professional
HCPCS code Short Descriptors Long Descriptors
time in a calendar month requiring at least one interactive
communication with the patient or caregiver during the
calendar month; each additional 20 minutes (list separately in
addition to code for primary procedure)
G0140 Nav srv peer sup 60 min pr m 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:
• Person-centered assessment, performed to better
understand the individual context of the serious, high-risk
condition
++ Conducting a person-centered assessment to understand
the patient's life story, strengths, needs, goals, preferences,
and desired outcomes, including understanding cultural and
linguistic factors.
++ Facilitating patient-driven goal setting and establishing an
action plan.
++ Providing tailored support as needed to accomplish the
person-centered goals in the practitioner's treatment plan.
• Identifying or referring patient (and caregiver or family, if
applicable) to appropriate supportive services.
• Practitioner, Home, and Community-Based Care
Communication
++ Assist the patient in communicating with their
practitioners, home-, and community-based service providers,
hospitals, and skilled nursing facilities ( or other health care
facilities) regarding the patient's psychosocial strengths and
needs, goals, preferences, and desired outcomes, including
cultural and linguistic factors.
++ Facilitating access to community-based social services ( e.g.,
housing, utilities, transportation, food assistance) as needed to
address SDOH need(s). • Health education-Helping the patient
contextualize health education provided by the patient's
treatment team with the patient's individual needs, goals,
preferences, and SDOH need(s), and educating the patient
(and caregiver if applicable) on how to best participate in
medical decision-making.
• Building patient self-advocacy skills, so that the patient
can interact with members of the health care team and
related community-based services (as needed), in ways
that are more likely to promote personalized and effective
treatment of their condition.
• Developing and proposing strategies to help meet person-
centered treatment goals and supporting the patient in
using chosen strategies to reach person-centered
treatment goals.
++ Periodic administration of SDOH survey tools and
monitoring of related SDOH, that is not separately billed. PIN
services may address newly discovered SDOH if the
practitioner determines they are significantly impacting the
practitioner's ability to diagnose or treat the high-risk
condition(s).
• Facilitating and providing social and emotional support to
help the patient cope with the condition, SDOH need(s),
and adjust daily routines to better meet person-centered
diagnosis and treatment goals.
HCPCS code Short Descriptors Long Descriptors
Leverage knowledge of the serious, high-risk condition and/or
lived experience when applicable to provide support,
mentorship, or inspiration to meet treatment goals.
G0146 Nav srv peer sup addl 30 pr m Principal Illness Navigation—Peer Support, additional 30
minutes per calendar month (List separately in addition to
G0140)
G3002 Chronic pain mgmt 30 mins Chronic pain management and treatment, monthly bundle
including, diagnosis; assessment and monitoring;
administration of a validated pain rating scale or tool; the
development, implementation, revision, and maintenance of a
person-centered care plan that includes strengths, goals,
clinical needs, and desired outcomes; overall treatment
management; facilitation and coordination of any necessary
behavioral health treatment; medication management; pain
and health literacy counseling; any necessary chronic pain
related crisis care; and ongoing communication and care
coordination between relevant practitioners furnishing care,
e.g. physical therapy and occupational therapy, and
community-based care, as appropriate. Required initial face-
to- face visit at least 30 minutes provided by a physician or
other qualified health professional; first 30 minutes personally
provided by physician or other qualified health care
professional, per calendar month. (when using G3002, 30
minutes must be met or exceeded)
G3003 Chronic pain mgmt addl 15m Each additional 15 minutes of chronic pain management and
treatment by a physician or other qualified health care
professional, per calenda month. (List separately in addition to
G3002. When using G3003, 15 minutes mut be met or
exceeded).
G0323 Care manage beh svs 20mins Care management services for behavioral health conditions, at
least 20 minutes of clinical psychologist or clinical social
worker time, per calendar month, with the following required
elements: initial assessment or follow-up monitoring, including
the use of applicable validated rating scales; behavioral health
care planning in relation to behavioral/psychiatric health
problems, including revision for patients who are not
progressing or whose status changes; facilitating and
coordinating treatment such as psychotherapy, coordination
with an/or referral to physicians and practitioners who are
authorized by Medicare law to prescribe medications and
furnish E/M services counseling and/or psychiatric
consultation; and continuity of care with a designated member
of the care team)
G0019 Comm hlth intg svs sdoh 60 Community health integration (CHI) services by certified or
mn trained auxiliary personnel under the direction of the
physician/other Qualified Healthcare Professional (QHP),
including a community health worker located in the patient's
community; 60 minutes per calendar month, in the followin
activities:
• Holistic personal assessment, performed in order to better
understand the individualized context of the intersection
between the identified social determinants of health
(SDOH(s)) and problem(s) addressed in the CHI initiating
visit (required only during the first month CHI services are
provided).
HCPCS code Short Descriptors Long Descriptors
• Conducting a holistic personal assessment to understand
patient's life story, needs, goals and preferences, including
understanding cultural and linguistic factors.
• Setting personalized goals and creating action plans.
• Providing tailored support as needed to accomplish the
billing practitioner's treatment plan.
• Periodic administration of SDOH survey tools and
monitoring of related SDOH, that is not separately billed.
As new SDOH that may affect the diagnosis and treatment
of problem(s) in the initiating visit are identified, these
SDOH may be focused on for CHI services.
• Practitioner, Home, and Community-Based Care
Coordination.
• Coordination with practitioner, home, and community-
based services.
• Communication to and from practitioners, home and
community-based services, and hospital, and skilled
nursing facilities ( or other health care facilities) regarding
the patient's psychosocial needs, functional deficits, goals,
and preferences, including cultural and linguistic factors.
• Coordination of care transitions between and among
health care practitioners and settings, including referrals
to other clinicians; follow-up after an emergency
department visit; and follow-up after discharges from
hospitals, skilled nursing facilities or other health care
facilities.
• Facilitating access to community-based social services (
e.g., housing, utilities, transportation, food assistance) to
address SDOH that the billing practitioner identifies as
significantly limiting their ability to diagnose or treat the
problem(s)identified in the CHI initiating visit.
• Health education- Helping patients contextualize health
education provided by the patient's treatment team with
their individual needs, goals, and preferences, and SDOH
that affect problem(s) identified during the initiating visit
and educating the patient on how to best participate in
medical decision-making.
• Building patient self-advocacy skills, so that the patient
can interact with members of the health care team and
related community-based services addressing SDOH, in
ways that are more likely to promote personalized and
effective treatment of their problem(s) identified during
the initiating visit.
• Health care access/health system navigation Helping the
patient arrange access to medical care, including securing
medical or community-based appointments, identifying
appropriate providers for care needs, identifying
appropriate community -based resources for SDOH
related to problem(s) identified during the initiating visit,
and for accessing all clinical care services necessary.
• Facilitating behavioral change necessary for meeting
diagnosis and treatment goals, including promoting
patient motivation to participate in care and reach
treatment goals for the problem(s) addressed in the CHI
initiating visit.
Facilitating and providing social and emotional support for the
patient related to coping with the problem(s) addressing
HCPCS code Short Descriptors Long Descriptors
during the CHI initiating visit, related SDOH, and adjusting daily
routines to better meet diagnosis and treatment goals for
those problems .
G0022 Comm hlth intg svs addl 30 m Community health integration services, each additional 30
minutes per calendar month (List separately in addition to
G0019)
G0023 Pin srv 60 min pr m Principal Illness Navigation services by certified or trained
auxiliary personnel under the direction of a physician or other
practitioner, including a patient navigator or certified peer
specialist; 60 minutes per calendar month, in the following
activities:
• Person-centered assessment, performed to better
understand the individual context of the serious, high-risk
condition.
++ Conducting a person-centered assessment to understand
the patient’s life story, strengths, needs, goals, preferences,
and desired outcomes, including understanding cultural and
linguistic factors.
++ Facilitating patient-driven goal setting and establishing an
action plan.
++ Providing tailored support as needed to accomplish the
practitioner’s treatment plan.
• Identifying or referring patient (and caregiver or family, if
applicable) to appropriate supportive services.
• Practitioner, Home, and Community-Based Care
Coordination
++ Coordinating receipt of needed services from healthcare
practitioners, providers, and facilities; home and community-
based service providers; and caregiver (if applicable).
++ Communication with practitioners, home-, and community-
based service providers, hospitals, and skilled nursing facilities
( or other health care facilities) regarding the patient's
psychosocial strengths and needs, functional deficits,
preferences, and desired outcomes, including cultural and
linguistic factors.
++ Coordination of care transitions between and among health
care practitioners and settings, including transitions involving
referral to other clinicians; follow-up after an emergency
department visit; or follow-up after discharges from hospitals,
skilled nursing facilities or other health care facilities.
++ Facilitating access to community-based social services (e.g.,
housing, utilities, transportation, food assistance) as needed to
address SDOH need(s).
• Health education—Helping the patient contextualize health
education provided by the patient’s treatment team with the
patient’s individual needs, goals, preferences, and SDOH
need(s), and educating the patient (and caregiver if applicable)
on how to best participate in medical decision-making.
• Building patient self-advocacy skills, so that the patient can
interact with members of the health care team and related
community-based services (as needed), in ways that are more
likely to promote personalized and effective treatment of their
condition.
• Health care access/health system navigation.
++ Helping the patient access healthcare, including identifying
appropriate practitioners or providers for clinical care, and
helping secure appointments with them.
HCPCS code Short Descriptors Long Descriptors
++ Providing the patient with information/resources to
consider participation in clinical trials or clinical research as
applicable.
• Facilitating behavioral change as necessary for meeting
diagnosis and treatment goals, including promoting patient
motivation to participate in care and reach person-centered
diagnosis or treatment goals.
• Facilitating behavioral change as necessary for meeting
diagnosis and treatment goals, including promoting patient
motivation to participate in care and reach person-centered
diagnosis or treatment goals.
• Leverage knowledge of the serious, high-risk condition
and/or lived experience when applicable to provide support,
mentorship, or inspiration to meet treatment goals.
G0024 Pin srv addl 30 min pr m Principal Illness Navigation services, additional 30 minutes per
calendar month (List separately in addition to G0023).
We proposed revisions at § 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 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; 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 webpages including the RHC and FQHC
webpages and CMS’ Care Management webpage.
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
356 Care Management | CMS (https://www.cms.gov/medicare/payment/fee-schedules/physician/care-management).
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 § 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 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.
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
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. Schäfer 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.
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
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 webpages.
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 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 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 § 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 § 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 §§ 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 §§ 405.2463 and 405.2469 again to reflect these provisions (88 FR 79066
through 79067).
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 §§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
361 https://www.hhs.gov/coronavirus/covid-19-public-health-emergency/index.html.
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 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 § 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 § 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 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 § 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 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 (P.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 § 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)
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 §§ 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 (§§ 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 §§ 405.2410, 405.2462, and 405.2464 in the regulations to reflect the payment
amount for IOP services and 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 §405.2410, “Application of Part B deductible and coinsurance”
and §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 §§ 405.2410(c) and 405.2462(j), we noticed
that both sections had errors. That is, § 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 § 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 § 405.2410 to reflect the correct policy applicable for beneficiary coinsurance as described
above in the previous paragraph. We also proposed revisions to § 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
§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 §405.4662(j).
Response: We thank commenters for their support of our proposal to revise §405.2410(c)
to reflect the correct policy applicable for beneficiary coinsurance.
As we did not receive public comments on our proposed revisions to § 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
§405.2410 to reflect the correct policy applicable for beneficiary coinsurance and to revise
§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 § 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 § 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 CY2022, 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 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 § 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.
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
RHCs CY 2022 PFS final rule Fact Sheet: https://www.cms.gov/files/document/rhcs-pfs-faqs.pdf; FQHCs CY
362
2022 PFS Final Rule Fact Sheet: https://www.cms.gov/files/document/fqhcs-pfs-faqs.pdf.
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 § 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.
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
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.
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 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 populations365. 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.
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
365 https://www.cdc.gov/mmwr/volumes/71/wr/mm7104a1.htm?s_cid=mm7104a1_w.
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 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 § 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.
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
366 https://www.cms.gov/files/document/03092020-covid-19-faqs-508.pdf.
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 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 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 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 S3 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 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 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.
TABLE 29: Major Cost Categories as Derived from Medicare Cost Reports
2022-Based 2017-Based
FQHC Cost Report FQHC Cost Report
Weights Weights
Major Cost Categories (Percent) (Percent)
FQHC Practitioner Compensation 24.8 28.4
FQHC Practitioner Wages and Salaries 17.1 19.4
FQHC Practitioner Employee Benefits 3.6 4.5
FQHC Practitioner Contract Labor 4.1 4.6
Clinical Staff Compensation 15.3 16.8
Clinical Staff Wages and Salaries 11.8 12.9
Clinical Staff Employee Benefits 2.8 3.1
Clinical Staff Contract Labor 0.6 0.9
Non-Health Staff Compensation 28.4 27.2
Pharmaceuticals 3.2 2.4
Medical Supplies 2.4 2.2
Fixed Assets 5.0 4.4
Movable Equipment 2.2 2.0
All Other (Residual) 18.7 16.5
Note: Totals may not sum to 100.0 due to rounding
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.
TABLE 30: Wages and Salaries and Employee Benefits Cost Weights After Contract
Labor Allocation
2022-Based 2022-Based 2017-Based 2017-Based
Major Cost Categories FQHC Clinical Staff FQHC Clinical Staff
Practitioner Practitioner
Compensation 24.8 15.3 28.4 16.8
Wages and Salaries 20.5 12.4 23.1 13.6
Employee Benefits 4.3 2.9 5.4 3.3
*Totals may not sum due to rounding
(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 × 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.
TABLE 31: 2022-Based FQHC Market Basket Cost Weights Compared to 2017-Based
FQHC Market Basket Cost Weights
2022-based 2017-based
FQHC Market FQHC
Cost Category Basket Cost Market
Weight Basket Cost
Weight
Total 100.0 100.0
Compensation 68.5 72.6
FQHC Practitioner Compensation 24.8 28.5
FQHC Practitioner Wages and Salaries 20.5 23.1
FQHC Practitioner Employee Benefits 4.3 5.4
Clinical Staff Compensation 15.3 16.9
Clinical Staff Wages and Salaries 12.4 13.6
Clinical Staff Employee Benefits 2.9 3.3
Non-Health Staff Compensation 28.4 27.2
All Other Products 9.8 8.5
Pharmaceuticals 3.2 2.4
Utilities 0.5 0.6
Medical Equipment 1.5 1.2
Medical Supplies 2.4 2.2
Miscellaneous Products 2.3 2.2
All Other Services 14.5 12.6
Professional, Scientific, and Technical Services 8.6 6.4
Administrative and Facilities Support Services 1.5 1.7
All Other Services 4.4 4.5
Capital-Related Costs 7.2 6.4
Fixed Assets 5.0 4.4
Movable Equipment 2.2 2.0
Note: Totals may not sum due to rounding.
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 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).
(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.
TABLE 32: Cost Categories and Price Proxies for the 2022-based FQHC Market Basket
Cost Description Price Proxies
ECI for Wages and Salaries for Private Industry Workers in Professional and
FQHC Practitioner Wages and Salaries Related
ECI for Total Benefits for Private Industry Workers in Professional and
FQHC Practitioner Employee Benefits Related
ECI for Wages and Salaries for All Civilian Workers in Health Care and
Clinical Staff Wages and Salaries Social Assistance
ECI for Total Benefits for All Civilian Workers in Health Care and Social
Clinical Staff Employee Benefits Assistance
ECI for Total Compensation for Private Industry Workers in Office and
Non-Health Staff Compensation Administrative Support
Pharmaceuticals PPI Special Index for Pharmaceuticals for Human Use, Prescription
Utilities CPI-U for Fuels and Utilities
Medical Equipment PPI Commodity Index for Surgical and Medical Instruments
Composite: PPI Commodity Index for Medical and Surgical Appliances and
Medical Supplies Supplies (50%) and CPI for Medical Equipment and Supplies (50%)
Miscellaneous Products CPI-U for All Items Less Food and Energy
ECI for Total compensation for Private industry workers in Professional,
Professional, Scientific, and Technical Services Scientific, and Technical Services
ECI for Total Compensation for Private Industry Workers in Office and
Administrative and Facilities Support Services Administrative Support
ECI for Total Compensation for Private Industry Workers in Service
All Other Services Occupations
Fixed Assets PPI Industry Index for Lessors of Nonresidential Buildings
Movable Equipment PPI Commodity Index for Machinery and Equipment
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 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.
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 § 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 § 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 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 § 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 §§ 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 §§ 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-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, § 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 § 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 § 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.
368Centersfor 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 (§ 491.9(a))
At § 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 § 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 § 485.524(a) “Additional
outpatient medical and health services” and follows the Critical Access Hospital CoPs at §
485.635(b)(1)(i) “Provision of services.” Furthermore, the American Academy of Family
Physicians (AAFP) defines primary care practice as follows: “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.
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
369 Primary care. AAFP. (2019, December 12). https://www.aafp.org/about/policies/all/primary-care.html.
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
National Association of Community Health Centers. (2024). Community Health Centers: Providers, Partners
370
and Employers of Choice. https://www.nachc.org/wp-content/uploads/2024/07/2024-2022-UDS-DATA-Community-
Health-Center-Chartbook.pdf.
behavioral health staff.371
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
371National 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.
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 § 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 (§ 491.9(a)(2)(ii))
To further clarify the requirements and the intent of the RHC program, we proposed at
§ 491.9(a)(2)(ii) to codify the statutory requirement in subparagraph (iv) of the flush material set
out after 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 § 491.2, Definitions – Rural health clinic or clinic, including this requirement the
Provision of services CfC at § 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 §
491.9(a)(3), requiring RHCs to provide primary care services (discussed in the previous section),
372Assistant 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.
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. ..
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 (§ 491.9(c)(2))
We proposed to remove hemoglobin and hematocrit (H&H) (§ 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 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 § 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
373 US Preventive Services Task Force, Bibbins-Domingo, K., Grossman, D. C., Curry, S. J., Davidson, K. W.,
Epling, J. W., Jr, García, 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.
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.
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.
We would like to reiterate that § 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 § 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.
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 Kościelniak-Merak, B., Radosavljević, B., Zając, 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/
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 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
In the CY 2018 PFS proposed rule (82 FR 34089 through 34090), we solicited public
comments from applicable laboratories and reporting entities to better understand the applicable
laboratories’ experiences with data reporting, data collection, and other compliance requirements
for the first data collection and reporting periods. We discussed these comments in the CY 2018
PFS final rule (82 FR 53181 through 53182) and stated that we would consider the comments for
potential future rulemaking or guidance.
As part of the CY 2019 Medicare PFS rulemaking, we finalized two changes to the
definition of “applicable laboratory” at § 414.502 (see 83 FR 59667 through 59681, 60074; 83
FR 35849 through 35850, 35855 through 35862). First, we excluded Medicare Advantage 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
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ClinicalLabFeeSched/Downloads/2017-
377
March-Announcement.pdf.
any other adjustment, such as geographic, budget neutrality, or annual update, as required by
section 1834A(b)(4)(B) of the Act. Additionally, section 1834A(b)(3) of the Act, implemented
at § 414.507(d), provides for a phase-in of payment reductions, limiting the amounts the CLFS
rates for each CDLT (that is not a new advanced diagnostic laboratory test (ADLT) or new
CDLT) can be reduced as compared to the payment rates for the preceding year. Under the
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
§ 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
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 of
January 1, 2021, through March 30, 2021, would be the period of January 1, 2019, through June
30, 2019, which was the same data collection period that would have applied absent the
amendments. In addition, section 105(a)(2) of the FCAA amended section 1834A(b)(3) of the
Act regarding the phase-in of payment reductions to provide that payments may not be reduced
by more than 10 percent as compared to the amount established for the preceding year through
CY 2020, and for CYs 2021 through 2023, payment may not be reduced by more than 15 percent
as compared to the amount established for the preceding year. These statutory changes were
consistent with our regulations implementing the private payor rate-based CLFS at § 414.507(d)
(81 FR 41036).
378https://www.cms.gov/medicare/payment/fee-schedules/clinical-laboratory-fee-schedule-clfs/pama-educational-
resources.
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 § 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 §
414.502.
Section 4114(a) of the CAA, 2023 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 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
§ 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 § 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 § 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 § 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 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 § 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 video379 on how to determine if a laboratory is an applicable
379 https://youtu.be/c3eiPYeRA_U.
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.
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 §
414.504(e). As we previously stated in the CLFS final rule, 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 § 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 § 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 § 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.
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).
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.
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 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.
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
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.
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 Standards389 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.
1. Changes to § 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
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.
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).
CY 2017 PFS (81 FR 80459 through 80483) and CY 2018 PFS final rules (82 FR 53234 through
53339).
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 § 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.
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
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.
(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
§ 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 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
To further align with 2024 CDC DPRP Standards, we also proposed to add a new term at
§ 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 § 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
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.
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
§ 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. E-mails 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.
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.
397Centers 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.
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 § 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 § 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.”
We proposed to amend § 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
398Centers 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.
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 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 § 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 § 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 (§ 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 § 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 § 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 § 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 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
§ 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.
3. Changes to § 414.84(a), (c), (d), and (e)
We further proposed to amend § 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.
399Centers 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 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 § 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 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 § 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 § 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
400Centers 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.
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).
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 §
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 § 414.84(d), we proposed to amend the current § 414.84(e) to
be the new § 414.84(d). We also removed from the new § 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 § 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 § 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 §§ 410.79, 424.205, and 414.84
We proposed minor edits throughout §§ 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
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 § 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 § 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 § 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 § 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
§ 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 § 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.
At § 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 § 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 § 414.84(b), and also to remove the
reference to the ongoing maintenance sessions from § 424.205(f)(5)(iv).
401https://www.cms.gov/training-education/partner-outreach-resources/new-medicare-card/medical-beneficiary-
identifiers-mbis.
At § 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 § 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 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 § 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 § 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 § 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 service” at § 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 § 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 § 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-
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.
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 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.
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 § 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
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 AW, 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.
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 §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
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.
407Federal 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, D.C.), 73(4), 411–417.
https://doi.org/10.1176/appi.ps.202100191;
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.
Accordingly, we proposed to revise paragraph (vii) of the definition of “Opioid treatment
services” at § 410.67(b) of the regulations to remove the references to the “Public Health
Emergency, as defined in § 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
410Hughes, 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.
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 § 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-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 § 410.67(b) of the regulations to remove the references to the “Public Health
Emergency, as defined in § 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 § 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
412https://www.deadiversion.usdoj.gov/GDP/(DEA-DC-
022)(DEA068)%20DEA%20SAMHSA%20buprenorphine%20telemedicine%20%20(Final)%20+Esign.pdf;
https://www.samhsa.gov/medications-substance-use-disorders/statutes-regulations-guidelines/buprenorphine-at-opioid-
treatment-programs.
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 § 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.
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 § 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
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.
41389 FR 7528, February 2, 2024 (https://www.federalregister.gov/documents/2024/02/02/2024-01693/medications-
for-the-treatment-of-opioid-use-disorder).
414Chan, 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.
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).”415However, SAMHSA did finalize
specific exceptions that would facilitate audio-only initiation of methadone via telehealth.
Pursuant to § 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
415 https://www.govinfo.gov/content/pkg/FR-2024-02-02/pdf/2024-01693.pdf.
416American 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.
417National 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.
418Wakeman, 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.
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
419Mattick, 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.
420Pasman, 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.
421Calcaterra, 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.
422Thomas, 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.
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.
To be consistent with SAMHSA’s reforms to telehealth flexibilities for initiation of
treatment with methadone at § 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 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 §
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 § 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
423 https://www.dea.gov/drug-information/drug-scheduling.
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 § 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 § 8.12(f)(2)(v)(A).
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
424Whelan, 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.
425Jones, 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
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
retention in opioid use disorder treatment for Medicaid enrollees.” JAMA Network Open, 6(10), e2336914.
https://doi.org/10.1001/jamanetworkopen.2023.36914.
427Barsky, 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.
428Acevedo, 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.
429Palzes, 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 § 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” at § 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.
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
432Barsky, 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.
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 methadone pursuant to § 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 § 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.
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
433 4https://www.dea.gov/drug-information/drug- scheduling.
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 §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
§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 § 410.67(b) and
incorporated payment for these services as part of the non-drug component at § 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 § 410.67(b); at
paragraph (vi), we stated that intake activities include initial medical examination services
required under § 8.12(f)(2), and initial assessment services required under § 8.12(f)(4); at
paragraph (vii) we stated that periodic assessment services include those required under §
8.12(f)(4). Services under § 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 § 410.67(b) as an entity that is an OTP as defined in § 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 services, among other
services.434 Consequently, SAMHSA redefined comprehensive treatment at § 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 § 8.2 to specify that harm reduction “refers to practical and legal
43489 FR 7528, February 2, 2024 (https://www.federalregister.gov/documents/2024/02/02/2024-01693/medications-for-the-
treatment-of-opioid-use-disorder).
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 § 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
435https://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.
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
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 § 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
§ 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 § 8.12(f)(4),
which initially informed the definitions of intake activities and periodic assessments in the
definition of “OUD treatment services” at § 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
437Stanojlović, 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.
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 § 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,
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
439https://health.gov/healthypeople/about#:~:text=What%20is%20Healthy%20People%202030,over%20the%20first%204%20de
cades.
440 https://health.gov/healthypeople/priority-areas/social-determinants-health.
441Whitman, 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.
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
442National 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/.
443Whitman, 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.
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.
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), 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 § 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 § 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
445Table 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.
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.
a. Payment for Social Determinants of Health Risk Assessments
The recent refinements to initial assessments under § 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 § 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.
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 § 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
446https://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
who did not have an HRSN.447 For example, one 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
447Chukmaitov, 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.
448Zanis, 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.
449Albright, 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.
450Men, 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.
451Cesare, 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.
452Sulley, 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.
454Rangachari, 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.
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.
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,
455Parish, 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.
456Mennis, 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.
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.
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 §
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 § 410.67,
including those listed in the definition of intake activities at paragraph (vi) within the definition
of “OUD treatment service” at § 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 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
457SAMHSA. (2012). Medication-assisted treatment for opioid addiction in opioid treatment programs.
https://www.ncbi.nlm.nih.gov/books/NBK64164/pdf/Bookshelf_NBK64164.pdf.
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.
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 § 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
458
https://innovation.cms.gov/files/worksheets/ahcm-screeningtool.pdf.; https://www.nachc.org/research-and-data/prapare/;
CMS–10825.
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 § 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 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 § 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 § 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 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
459https://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.
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 § 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 § 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
§8.12(f)(4)(ii).
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 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 § 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 § 8.12(f)(4). In addition, we expect that any unmet
460 https://www.cms.gov/medicare/payment/opioid-treatment-program/billing-payment.
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.
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
461McCarthy, 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.
463Hagan, 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.
464Brennan, 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.
465Reif, 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.
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 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.
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 § 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.
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
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.
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
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 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
468https://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.
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
469Table 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.
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.
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 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 § 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 §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 § 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 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 § 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
§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 §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 § 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
§ 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 § 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
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®), 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® 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® 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
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.
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.
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 §
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 § 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
472Harris, E. (2023). “FDA approves nalmefene, a longer-lasting opioid reversal nasal spray.” JAMA, 329(23), 2012.
https://doi.org/10.1001/jama.2023.9608.
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 § 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 § 410.67(d)(4)(i)(D).
In light of a novel nalmefene product, Opvee®, 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
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 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
473 Ahmad FB, Cisewski JA, Rossen LM, Sutton P. Provisional drug overdose death counts. National Center for Health Statistics.
2024.
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 § 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 § 410.67(b) that recognizes opioid antagonist medications which
treat known or suspected opioid overdose as an OUD treatment service.
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 § 410.67(d)(4)(i)(E). This adjustment would include both a drug component and a
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.
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 § 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®, 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
484 https://www.accessdata.fda.gov/drugsatfda_docs/label/2023/217470Orig1s000.pdf.
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® 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.
Additionally, consistent with the methodology established in § 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, 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
485https://www.fda.gov/media/140360/download#.
486Razaghizad, 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.
reflect the MEI updates that have been applied since that time. This is consistent with the
payment methodology for naloxone and the language in § 410.67(d)(4)(i)(E). In addition, the
language at § 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 § 414.26. Separately, § 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
§ 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.
Furthermore, consistent with our established criteria for opioid antagonist medications at
§ 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 § 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
§ 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®) 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®, 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.
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.
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
487 https://www.frontiersin.org/journals/psychiatry/articles/10.3389/fpsyt.2024.1399803/full.
Part D for items and services furnished by an OTP. Consistent with Medicare OTP regulations at
§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 §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
§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 §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 §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 §
410.67(d)(2)(i)(A), which applied to the bundled payment for injectable buprenorphine (G2069).
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
488https://www.dea.gov/drug-information/drug-scheduling.
489National 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/.
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®;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).
In May of 2023, the FDA approved a new drug application (NDA) under section 505(b)(2)
of the FFDCA for another extended-release buprenorphine injection (Brixadi®) for subcutaneous
use to treat moderate to severe OUD.491 Clinical data suggest that Brixadi® likely contributes to
490https://www.accessdata.fda.gov/drugsatfda_docs/label/2018/209819s001lbl.pdf.
491https://www.fda.gov/news-events/press-announcements/fda-approves-new-buprenorphine-treatment-option-opioid-use-
disorder.
high rates of treatment retention, reductions in opioid withdrawal and cravings, and fewer levels
of illicit opioid use.492 Brixadi® 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
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
492Frost, 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‐term safety of a weekly and monthly subcutaneous buprenorphine depot in the
treatment of adult out‐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.
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.
496Shulman, 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, D.C.), 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.
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.
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 § 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
497Maremmani, 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., Hjelmström, 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.
https://doi.org/10.1016/j.jsat.2022.108776.
498 https://oig.hhs.gov/oei/reports/OEI-02-23-00250.pdf.
499Parish, 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.
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 limits500 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 price concessions reflected in the
manufacturer’s determination of ASP.
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
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.
501 https://www.cms.gov/Medicare/Coding/MedHCPCSGenInfo/Downloads/051807_coding_annoucement.pdf.
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.
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®. 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® [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® 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®, 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®), 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®, Brixadi® 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.
502https://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® (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® and ASP+0 of monthly Brixadi® 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® and
Brixadi® 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® and Brixadi® 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® into the existing HCPCS code (G2069) for injectable
buprenorphine will be appropriate and no more administratively complex for OTPs since G2069
is already billed on a monthly basis; Sublocade®, 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®, so OTPs could continue to bill G2069 once each month when
either monthly Brixadi® or Sublocade® 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® can range from 64 mg, to 96 mg, to 128 mg. The median of these
different doses for the monthly formulation of Brixadi® (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® 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® 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® that patients receive on average.
In all, we believe that bundling the monthly formulation of Brixadi® 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® (J0578) and the two HCPCS codes for Sublocade® (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® (100 mg) is comparable to the median
monthly dosage for Brixadi ® (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 § 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
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 § 410.67(d)(2)(i)(A) for implantable and injectable medications,
504 https://www.cms.gov/files/document/chapter-39-opioid-treatment-programs-otps.pdf.
consistent with the existing monthly injectable buprenorphine bundle. We believe that
establishing a separate weekly bundled payment reflecting the weekly formulation of Brixadi®
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® 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®. 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® must be injected at least once every 7
days compared to once a month for Sublocade® and monthly Brixadi®). 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® 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 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
§ 410.67(d)(4)(ii), and by the MEI as described in § 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®, and to update the existing bundled payment for monthly injectable
buprenorphine to account for the monthly formulation of Brixadi®.
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®, 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.
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®) and injectable buprenorphine (Brixadi®) 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® was also utilized in the payment methodology in order to distinguish this drug
from another type of injectable buprenorphine: Sublocade®. The code descriptors for these
aforementioned codes include the generic name instead of the brand name for these medications,
505 https://www.accessdata.fda.gov/drugsatfda_docs/label/2023/210136Orig1s000lbl.pdf.
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® of adding the payment limits of Brixadi® and Sublocade® 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® and Brixadi® 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® 100mg versus 2.0 ng/mL for Brixadi® 96mg),
differences in minimum time between monthly dosing (26 days for Sublocade® versus 28 days
for monthly Brixadi®), and differences in buprenorphine half-lives (19-26 days for Sublocade®
versus 43-60 days for Brixadi®). 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® and Sublocade® are significantly clinically
different from each other to support creating a separate bundled payment for monthly Brixadi®.
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® and
Sublocade® specifies the same monthly interval for maintenance doses, and both can convert
patients who require a 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 use507—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® and Sublocade®
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
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.
508Wesson, 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 B
ulletin, 18, 98-99.
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.
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®
and Sublocade® 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 § 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®
or Sublocade® 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 § 410.67(d)(4)(ii), and MEI
as described in § 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 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 § 410.67(a) we reflect
that those statutory provisions provide for coverage and payment to OTPs for OUD treatment
services, which we define at § 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
509 https://oig.hhs.gov/oas/reports/region9/92203005.asp.
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.
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 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
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.
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
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.
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 at https://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.
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 communities518 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 § 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 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.
518As 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 Commission519) 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.
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.)
519Refer 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.
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 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 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
§ 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).
++ Establish a calculation methodology to account for the impact of improper payments
in recalculating expenditures and payment amounts used in Shared Savings Program financial
520The 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.
calculations upon reopening a payment determination pursuant to § 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 § 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 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
§ 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 § 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 §§ 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 § 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 § 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 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 § 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 § 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
§ 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 § 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 § 425.110(b),
which states that an ACO may be subject to actions under §§ 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 § 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 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.
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 § 425.202(a)(3), and
also in § 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 § 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 § 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
521U.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.
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 § 425.202(a)(3) and § 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 § 425.402 in § 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 § 425.400(c)(1)(ix) to include
the list of HCPCS and CPT codes specified in § 425.400(c)(1)(viii), as well as the 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 § 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 § 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, 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 §
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 §
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 § 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
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 § 425.20) and OB/GYN or a
cardiologist are two of the specialty designations (as described in § 425.402(c)) used for
purposes of assignment we stated that we believe it would be appropriate to include HCPCS
codes GPCM1, GPCM2, 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.
● 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
522Refer 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.
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® 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 § 410.26.
We proposed that ASCVD risk management services would be considered a “designated care
management service” under § 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 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 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 § 425.402, we proposed to incorporate a provision in § 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 § 425.400(c)(1)(ix)(A) or a
HCPCS code specified in § 425.400(c)(1)(ix)(B), when the assignment window or expanded
assignment window (as defined in § 425.20) for a benchmark or performance year includes any
day on or after the effective date of the replacement code for payment purposes under FFS
Medicare.
We solicited comments on these proposed changes to the definition of primary care
services used for assigning beneficiaries under § 425.400(c)(1)(ix) to Shared Savings Program
ACOs for the performance year starting on January 1, 2025, and subsequent performance 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 (§ 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 § 425.20 or who
has one of the primary specialty designations specified in § 425.402(c). See § 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 § 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 §
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
§ 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 §
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
§ 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 § 425.20 or who
has one of the primary specialty designations included in § 425.402(c) during the applicable 24-
month expanded window for assignment. See § 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 “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 § 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 § 425.400(a), CMS employs the step-wise assignment methodology described in §
425.402 and § 425.404 a Medicare FFS beneficiary is assigned to an ACO if the— (A)
beneficiary meets the eligibility criteria under § 425.401(a); and (B) beneficiary’s utilization of
primary care services meets the criteria established under the assignment methodology described
in § 425.402 and § 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 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 § 425.400(c)(1)(ix) to include the list of HCPCS and CPT
codes specified in § 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 § 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
§ 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 § 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 § 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 § 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 § 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 § 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 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.
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
523 Refer to Innovation Models website:
https://www.cms.gov/priorities/innovation/models#views=models&cat=disease-specific%20&%20episode-
based%20models.
524 Refer to https://www.cms.gov/priorities/innovation/innovation-models/kidney-care-choices-kcc-model.
for patients with late-stage chronic kidney disease and ESRD. The KCC model builds on the
previous CEC model525 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.
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 § 425.400(c) by ACO professionals who
525 Refer to https://www.cms.gov/priorities/innovation/innovation-models/comprehensive-esrd-care.
are primary care physicians, physicians with one of the primary specialty designations in §
425.402(c), NPs, PAs, and/or CNSs. In the proposed rule, we noted that outpatient/office E/M
services are included in § 425.400(c) and that nephrology is one of the primary specialty
designations under § 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 § 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 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 §
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 § 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 § 425.401(a). Overall, this represents an
exceedingly small share of the overall Shared Savings Program assigned beneficiary population,
currently 10.8 million526 beneficiaries. Additionally, simulating our proposed §
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.
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
526 Refer to https://www.cms.gov/files/document/2024-shared-savings-program-fast-facts.pdf.
new requirements into new regulations at § 425.402(e)(2)(iii). We solicited comments on this
proposal.
Accordingly, since the new proposed provisions § 425.402(e)(2)(iii) would supersede the
existing provisions at § 425.402(e)(2)(ii) for performance year 2025 and subsequent performance
years, we proposed to revise the introductory text at § 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 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 § 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 § 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 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 §
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 § 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 § 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 § 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 § 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 § 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 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.pd
f. 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
527 Counts based on internal analysis of ACOs’ quality reporting in performance years 2021 and 2022.
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.
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
§ 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
528Centers 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.
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).
(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 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
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.
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.
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 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 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.pd
f, 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 §§ 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 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
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
Centers for Medicare & Medicaid Services (2023). Electronic Clinical Quality Measure Basics (eCQM 101).
531
Accessed June 24, 2024. https://ecqi.healthit.gov/sites/default/files/eCQM-Basics-508.pdf.
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
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.
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?
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 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 § 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
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 ACOs
additional time to work through these challenges.
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
536Assistant Secretary for Technology Policy/Office of the National Coordinator for Health IT (2024). Information
Blocking. https://www.healthit.gov/topic/information-blocking.
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 § 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 § 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 § 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 (§ 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 and an APM Entity will receive one measure achievement point for
each submitted eCQM that meets the case minimum requirement at § 414.1380(b)(1)(iii) and the
data completeness requirement at § 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 §
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 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 § 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 § 414.1367.
● We proposed to add a new paragraph (c) at § 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 § 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 § 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 §
425.510(b). We proposed to add a new paragraph (b)(1) at § 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 § 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 § 414.1367, according to the submission method
established by CMS.
● We proposed to revise § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 414.1380(b)(1)(vii)(B)).
● We proposed to revise § 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 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 § 414.1380(b)(1)(vii)(A).
++ At least one of the eCQMs/MIPS CQMs/Medicare CQMs does not have a benchmark
as described at § 414.1380(b)(1)(i)(A).
● We proposed to revise § 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 § 414.1380(b)(1)(vii)(A).
++ At least one of the eCQMs/Medicare CQMs does not have a benchmark as described
at § 414.1380(b)(1)(i)(A).
● We proposed to revise § 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 § 425.512(b)(1) to update a renumbered cross reference.
● We proposed to revise the heading for § 425.512(b)(2) by removing the phrase “and
subsequent performance years.”
● We proposed to renumber the current paragraph (b)(3) of § 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 § 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 § 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 § 425.512 to paragraph
(b)(5) and revise the cross references therein to reflect this renumbering.
● We proposed to revise renumbered § 415.512(b)(5)(iv) to add reference to new
paragraph (c)(3)(iv).
● We proposed to revise § 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 § 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 § 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 § 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 § 414.1367.
● We are finalizing as proposed to add a new paragraph (c) at § 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 § 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 § 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 § 425.510(b). We added a new paragraph (b)(1) at § 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 § 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 § 414.1367, according to the submission
method established by CMS.
● We are finalizing with modifications revisions to § 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 § 414.1380(b)(1)(vii)(B)), and receives a MIPS Quality performance
category score for the applicable performance year.
● Due to the modifications to § 425.512(a)(2)(iii) above, we are also finalizing to add a
new paragraph (iv) at § 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 § 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 §
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 § 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 § 414.1367 of this
subchapter, according to the method of submission established by CMS and –”.
● Due to the modifications to § 425.512(a)(5)(i)(B) above, we are adding new paragraph
(a)(5)(i)(C) to § 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 § 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 § 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 § 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 §
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 § 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 § 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 § 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 § 414.1380(b)(1)(vii)(B)).
● Due to the modifications to § 425.512(a)(5)(iii)(B) above, we are also finalizing to add
a new paragraph (a)(5)(iii)(C) to § 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 § 414.1380(b)(1)(vii)(B) of this subchapter).
● We are finalizing to add a descriptive heading (“Facility-based scoring”) to §
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 § 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 § 414.1380(b)(1)(vii)(A).
++ At least one of the eCQMs/MIPS CQMs/Medicare CQMs does not have a benchmark
as described at § 414.1380(b)(1)(i)(A).
● We are finalizing with minor wording modifications to revise § 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 § 414.1380(b)(1)(vii)(A).
++ At least one of the required measures in the APP Plus quality measure set does not
have a benchmark as described at § 414.1380(b)(1)(i)(A).
● We are finalizing as proposed to revise § 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 § 425.512(b)(1) to update a renumbered
cross reference.
● We are finalizing as proposed to revise the heading for § 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 § 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 § 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 § 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 § 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 § 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 § 415.512(b)(5)(iv) to add
reference to new paragraph (c)(3)(iv).
● We are finalizing to add descriptive headings to redesignated paragraphs §
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 § 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 § 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 § 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 § 414.1367. The MIPS Quality performance category score is calculated according
to the APP scoring methodology at § 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 § 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 § 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
§ 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 § 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 § 414.1367(d)(2), if CMS determines, in accordance
with § 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 § 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 § 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 § 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 § 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 § 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
The MIPS Quality performance category score is calculated according to the APP scoring
methodology at § 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 § 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 §
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 § 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 § 414.1367(c)(1) for the calculation of the ACO’s
MIPS Quality performance category, § 414.1367(c)(2) for the calculation of an ACO’s MIPS
Cost performance category, § 414.1367(c)(3) for the calculation of an ACO’s MIPS
Improvement activities performance category, and § 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 §
414.1367(d) and methodology used to calculate the final score described in § 414.1367(e) would
537 As described at § 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.
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.
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).
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 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 § 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 § 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 § 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 §
414.1367(c)(1) for the calculation of the ACO’s MIPS Quality performance category, §
414.1367(c)(2) for the calculation of an ACO’s MIPS Cost performance category, §
414.1367(c)(3) for the calculation of an ACO’s MIPS Improvement activities performance
category, and § 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 §
414.1367(d) for the performance category weights and § 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 §
414.1380(b)(1)(iii) and the data completeness requirement at § 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 §
414.1380(b)(1)(iii) and the data completeness requirement at § 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 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 § 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 through79110) 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
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.
61860).
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 §
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 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 §
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 §
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.
TABLE 33: Proposed Medicare CQMs Eligible for Flat Benchmarks in
Performance Year 2025 through 2029
Performance Year Quality #
2025 001, 134, 236, 112, 113
2026 112, 113, 305
2027 305
2028 487, 493
2029 487, 493
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.
TABLE 34: Flat Benchmarks for a Non-Inverse Medicare CQM in its First Two
Performance Periods in MIPS in Performance Year 2025 and Subsequent Years
Decile Performance Rate Range
1 < 10.00
2 10.00 – 19.99
3 20.00 – 29.99
4 30.00 – 39.99
5 40.00 – 49.99
6 50.00 – 59.99
7 60.00 – 69.99
8 70.00 – 79.99
9 80.00 – 89.99
10 >= 90.00
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 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.
TABLE 35: Flat Benchmarks for an Inverse Medicare CQM in its First Two Performance
Periods in MIPS in Performance Year 2025 and Subsequent Years
Decile Performance Rate Range
1 99.00 – 90.01
2 90.00 – 80.01
3 80.00 – 70.01
4 70.00 – 60.01
5 60.00 – 50.01
6 50.00 – 40.01
7 40.00 – 30.01
8 30.00 – 20.01
9 20.00 – 10.01
10 <= 10.00
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 § 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 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 § 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 § 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. 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.
TABLE 36: Medicare CQMs Eligible for Flat Benchmarks in Performance Years
2025 through 2028
Performance Year Quality #
2025 001, 134, 236, 112
2026 112, 113
2027 113, 305
2028 305, 487*, 493*
*Quality #: 487 Screening for Social Drivers of Health and Quality #: 493 Adult Immunization Status will be
eligible for flat benchmarks for 2 years beginning with performance year 2028 or the performance year that is 1 year
after the eCQM specifications become available for these measures, whichever is later.
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 § 414.1340 and the case minimum requirement at § 414.1380 for all three
eCQMs/MIPS CQMs, and:
● Achieves a quality performance score equivalent to or higher than the 10th percentile
of the performance benchmark on at least one of the four outcome measures in the APP measure
set and;
● 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 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).
Specifically, we proposed that for performance year 2025 and subsequent performance
541 Counts based on internal analysis of ACOs’ quality reporting in performance year 2022 and 2021.
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 § 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 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 § 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 § 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.
We proposed to add paragraphs (a)(5)(i)(B)(1) and (2) to § 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 § 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 § 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 § 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 §
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 § 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.
TABLE 37: Final APP Plus Quality Measure Set Reporting Requirements and
Quality Performance Standard for Shared Savings ACOs for Performance Years 2025 and
2026
Performance Year 2025 Performance Year 2026
ACOs are required to report the 4 ACOs are required to report 5
eCQMs/MIPS CQMs/Medicare CQMs in eCQMs/MIPS CQMs/Medicare CQMs in
Shared Savings Program
the APP Plus quality measure set and the APP Plus quality measure set and
ACO Quality Reporting
administer the CAHPS for MIPS survey. administer the CAHPS for MIPS survey.
Requirements
CMS will calculate 1 claims-based CMS will calculate 2 claims-based
measure. measures.
Quality performance standard used to Quality performance standard used to
determine eligibility for maximum determine eligibility for maximum
shared savings and to avoid maximum shared savings and to avoid maximum
Shared Savings Program shared losses, if applicable: shared losses, if applicable:
ACO Quality Performance 1. ACOs that achieve a health equity 1. ACOs that achieve a health equity
Standard and Alternative adjusted quality performance score adjusted quality performance score
Quality Performance that is equivalent to or higher than the that is equivalent to or higher than the
Standard 40th percentile across all MIPS Quality 40th percentile across all MIPS Quality
performance category scores, performance category scores,
excluding entities/providers eligible for excluding entities/providers eligible for
facility-based scoring, or facility-based scoring, or
Performance Year 2025 Performance Year 2026
2. Reporting the 4 eCQMs/MIPS CQMs 2. Reporting the 5 eCQMs/MIPS CQMs
in the APP Plus quality measure set, in the APP Plus quality measure set,
meeting the data completeness meeting the data completeness
requirement at § 414.1340 for all 4 requirement at § 414.1340 for all 5
eCQMs/MIPS CQMs, and achieving a eCQMs/MIPS CQMs, and achieving a
quality performance score equivalent quality performance score equivalent
to or higher than the 10th percentile of to or higher than the 10th percentile of
the performance benchmark on at the performance benchmark on at
least 1 of the 3 outcome measures in least 1 of the 4 outcome measures in
the APP Plus quality measure set and a the APP Plus quality measure set and a
quality performance score equivalent quality performance score equivalent
to or higher than the 40th percentile of to or higher than the 40th percentile of
the performance benchmark on at the performance benchmark on at
least 1 of the remaining 5 measures in least 1 of the remaining 7 measures in
the APP Plus quality measure set. the APP Plus quality measure set.
Alternative quality performance Alternative quality performance
standard used to determine shared standard used to determine shared
savings using the sliding scale savings using the sliding scale
methodology: methodology:
An ACO that fails to meet the criteria An ACO that fails to meet the criteria
above but meets the alternative quality above but meets the alternative quality
performance standard by achieving a performance standard by achieving a
quality performance score equivalent quality performance score equivalent
to or higher than the 10th percentile of to or higher than the 10th percentile of
the performance benchmark on at the performance benchmark on at
least 1of the 3 outcome measures in least 1 of the 4 outcome measures in
the APP Plus quality measure set will the APP Plus quality measure set will
share in savings (if otherwise eligible) share in savings (if otherwise eligible)
at a lower rate that is scaled by the at a lower rate that is scaled by the
ACO’s health equity adjusted quality ACO’s health equity adjusted quality
performance score. performance score.
If an ACO (1) does not report any of the If an ACO (1) does not report any of the
4 eCQMs /MIPS CQMs/Medicare CQMs 5 eCQMs /MIPS CQMs/Medicare CQMs
in the APP Plus quality measure set and in the APP Plus quality measure set and
(2) does not administer a CAHPS for (2) does not administer a CAHPS for
MIPS survey, the ACO will not meet the MIPS survey, the ACO will not meet the
quality performance standard or the quality performance standard or the
alternative quality performance alternative quality performance
standard. This ACO will be ineligible to standard. This ACO will be ineligible to
share savings and will owe maximum share savings and will owe maximum
shared losses, if applicable. shared losses, if applicable.
TABLE 38: Final APP Plus Quality Measure Set Reporting Requirements and
Quality Performance Standard for Shared Savings ACOs for Performance Year 2027 and
Performance Year 2028 and Subsequent Performance Years
Beginning with Performance Year 2028
or the performance year that is one
Performance Year 2027 year after the eCQM specifications
become available for Quality IDs: 487
and 493, whichever is later
ACOs are required to report 6 ACOs are required to report 8
Shared Savings eCQMs/Medicare CQMs in the APP eCQMs/Medicare CQMs in the APP
Program ACO Quality Plus quality measure set and Plus quality measure set and
Reporting administer the CAHPS for MIPS administer the CAHPS for MIPS survey.
Requirements survey. CMS will calculate 2 claims- CMS will calculate 2 claims-based
based measures. measures.
Quality performance standard used Quality performance standard used to
to determine eligibility for determine eligibility for maximum
maximum shared savings and to shared savings and to avoid maximum
avoid maximum shared losses, if shared losses, if applicable:
applicable: 1 ACOs that achieve a health equity
1. ACOs that achieve a health equity adjusted quality performance score
adjusted quality performance score that is equivalent to or higher than the
that is equivalent to or higher than 40th percentile across all MIPS Quality
the 40th percentile across all MIPS performance category scores,
Quality performance category excluding entities/providers eligible for
scores, excluding entities/providers facility-based scoring, or
eligible for facility-based scoring, or
2. Reporting the 8 eCQMs in the APP
2. Reporting the 6 eCQMs in the APP Plus quality measure set, meeting the
Plus quality measure set, meeting data completeness requirement at §
the data completeness requirement 414.1340 for all 8 eCQMs, and
at § 414.1340 for all 6 eCQMs, and achieving a quality performance score
achieving a quality performance equivalent to or higher than the 10th
score equivalent to or higher than percentile of the performance
Shared Savings
the 10th percentile of the benchmark on at least 1 of the 4
Program ACO Quality
performance benchmark on at least outcome measures in the APP Plus
Performance
1 of the 4 outcome measures in the quality measure set and a quality
Standard and
APP Plus quality measure set and a performance score equivalent to or
Alternative Quality
quality performance score higher than the 40th percentile of the
Performance
equivalent to or higher than the performance benchmark on at least 1
Standard
40th percentile of the performance of the remaining 10 measures in the
benchmark on at least 1 of the APP Plus quality measure set.
remaining 8 measures in the APP
Plus quality measure set. Alternative quality performance
standard used to determine shared
Alternative quality performance savings using the sliding scale
standard used to determine shared methodology:
savings using the sliding scale An ACO that fails to meet the criteria
methodology: above but meets the alternative quality
An ACO that fails to meet the criteria performance standard by achieving a
above but meets the alternative quality performance score equivalent
quality performance standard by to or higher than the 10th percentile of
achieving a quality performance the performance benchmark on at least
score equivalent to or higher than 1 of the 4 outcome measures in the
the 10th percentile of the APP Plus quality measure set will share
performance benchmark on at least in savings (if otherwise eligible) at a
1 of the 4 outcome measures in the lower rate that is scaled by the ACO’s
APP Plus quality measure set will health equity adjusted quality
share in savings (if otherwise performance score.
Beginning with Performance Year 2028
or the performance year that is one
Performance Year 2027 year after the eCQM specifications
become available for Quality IDs: 487
and 493, whichever is later
eligible) at a lower rate that is scaled
by the ACO’s health equity adjusted If an ACO (1) does not report any of the
quality performance score. 8 eCQMs /Medicare CQMs in the APP
Plus quality measure set and (2) does
If an ACO (1) does not report any of not administer a CAHPS for MIPS
the 6 eCQMs /Medicare CQMs in the survey, the ACO will not meet the
APP Plus quality measure set and (2) quality performance standard or the
does not administer a CAHPS for alternative quality performance
MIPS survey, the ACO will not meet standard. This ACO will be ineligible to
the quality performance standard or share savings and will owe maximum
the alternative quality performance shared losses, if applicable.
standard. This ACO will be ineligible
to share savings and will owe
maximum shared losses, if
applicable.
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 § 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.
TABLE 39: Measures Included in the APP Plus Quality Measure Set for Shared
Savings Program ACOs for Performance Year 2025
Meaningful Measure Type
Collection
Quality # Measure Title Submitter Type Measures 2.0
Type
Area
321 CAHPS for MIPS CAHPS for Third Party Person-Centered Patient
MIPS Survey Intermediary Care Engagement/Experience
479 Hospital-Wide, 30-day, All- Administrative N/A Affordability Outcome^
Cause Unplanned Claims and Efficiency
Readmission (HWR) Rate
for MIPS Eligible Clinician
Groups
001 Diabetes: Hemoglobin A1c eCQM/MIPS APM Entity/Third Chronic Intermediate Outcome^
(HbA1c) Poor Control CQM/Medicare Party Intermediary Conditions
(>9%) CQM
134 Preventive Care and eCQM/MIPS APM Entity/Third Behavioral Process
Screening: Screening for CQM/Medicare Party Intermediary Health
Depression and Follow-up CQM
Plan
236 Controlling High Blood eCQM/MIPS APM Entity/Third Chronic Intermediate Outcome^
Pressure CQM/Medicare Party Intermediary Conditions
CQM
112 Breast Cancer Screening eCQM/MIPS APM Entity/Third Wellness and Process
CQM/Medicare Party Intermediary Prevention
CQM
^ Indicates this is an outcome measure for purposes of qualifying for the eCQM/MIPS CQM reporting incentive and
the alternative quality performance standard.
TABLE 40: Measures Included in the APP Plus Quality Measure Set for Shared Savings
Program ACOs for Performance Year 2026
Quality # Measure Title Collection Type Submitter Meaningful Measure Type
Type Measures 2.0
Area
321 CAHPS for MIPS CAHPS for MIPS Third Party Person- Patient
Survey Intermediary Centered Care Engagement/E
xperience
479 Hospital-Wide, 30- Administrative N/A Affordability Outcome^
day, All-Cause Claims and Efficiency
Unplanned
Readmission
(HWR) Rate for
MIPS Eligible
Clinician Groups
484 Clinician and Administrative N/A Affordability Outcome^
Clinician Group Claims and Efficiency
Risk-standardized
Hospital Admission
Rates for Patients
with Multiple
Chronic Conditions
001 Diabetes: eCQM/MIPS APM Chronic Intermediate
Hemoglobin A1c CQM/Medicare Entity/Third Conditions Outcome^
(HbA1c) Poor CQM Party
Control (>9%) Intermediary
134 Preventive Care eCQM/MIPS APM Behavioral Process
and Screening: CQM/Medicare Entity/Third Health
Screening for CQM Party
Depression and Intermediary
Follow-up Plan
236 Controlling High eCQM/MIPS APM Chronic Intermediate
Blood Pressure CQM/Medicare Entity/Third Conditions Outcome^
CQM Party
Intermediary
112 Breast Cancer eCQM/MIPS APM Wellness and Process
Screening CQM/Medicare Entity/Third Prevention
CQM Party
Intermediary
113 Colorectal Cancer eCQM/MIPS APM Wellness and Process
Screening CQM/Medicare Entity/Third Prevention
CQM Party
Intermediary
^ Indicates this is an outcome measure for purposes of qualifying for the eCQM/MIPS CQM reporting incentive and
the alternative quality performance standard.
TABLE 41: Measures Included in the APP Plus Quality Measure Set for Shared Savings
Program ACOs for Performance Year 2027
Quality # Measure Title Collection Type Submitter Meaningful Measure Type
Type Measures
2.0 Area
321 CAHPS for MIPS CAHPS for MIPS Third Party Person- Patient
Survey Intermediary Centered Engagement/Experience
Care
479 Hospital-Wide, 30- Administrative N/A Affordability Outcome^
day, All-Cause Claims and
Unplanned Efficiency
Readmission
(HWR) Rate for
MIPS Eligible
Clinician Groups
484 Clinician and Administrative N/A Affordability Outcome^
Clinician Group Claims and
Risk-standardized Efficiency
Hospital
Admission Rates
for Patients with
Multiple Chronic
Conditions
001 Diabetes: eCQM/Medicare APM Chronic Intermediate Outcome^
Hemoglobin A1c CQM Entity/Third Conditions
(HbA1c) Poor Party
Control (>9%) Intermediary
134 Preventive Care eCQM/Medicare APM Behavioral Process
and Screening: CQM Entity/Third Health
Screening for Party
Depression and Intermediary
Follow-up Plan
236 Controlling High eCQM/Medicare APM Chronic Intermediate Outcome^
Blood Pressure CQM Entity/Third Conditions
Party
Intermediary
112 Breast Cancer eCQM/Medicare APM Wellness Process
Screening CQM Entity/Third and
Party Prevention
Intermediary
113 Colorectal Cancer eCQM/Medicare APM Wellness Process
Screening CQM Entity/Third and
Party Prevention
Intermediary
305 Initiation and eCQM/Medicare APM Behavioral Process
Engagement of CQM Entity/Third health
Substance Use Party
Disorder Intermediary
Treatment
^ Indicates this is an outcome measure for purposes of qualifying for the eCQM reporting incentive and the
alternative quality performance standard.
TABLE 42: Measures Included in the APP Plus Quality Measure Set for Shared
Savings Program ACOs Beginning with Performance Year 2028 or the Performance Year
that is one year after the eCQM Specifications become available for Quality IDs: 487 and
493, whichever is later
Quality Measure Title Collection Type Submitter Meaningful Measure Type
# Type Measures 2.0
Area
321 CAHPS for CAHPS for MIPS Third Party Person-Centered Patient
MIPS Survey Intermediary Care Engagement/Experience
479 Hospital- Administrative N/A Affordability and Outcome^
Wide, 30-day, Claims Efficiency
All-Cause
Unplanned
Readmission
(HWR) Rate
for MIPS
Eligible
Clinician
Groups
484 Clinician and Administrative N/A Affordability and Outcome^
Clinician Claims Efficiency
Group Risk-
standardized
Hospital
Admission
Rates for
Patients with
Multiple
Chronic
Conditions
001 Diabetes: eCQM/Medicare APM Chronic Intermediate Outcome^
Hemoglobin CQM Entity/Third Conditions
A1c (HbA1c) Party
Poor Control Intermediary
(>9%)
134 Preventive eCQM/Medicare APM Behavioral Process
Care and CQM Entity/Third Health
Screening: Party
Screening for Intermediary
Depression
and Follow-
up Plan
236 Controlling eCQM/Medicare APM Chronic Intermediate Outcome^
High Blood CQM Entity/Third Conditions
Pressure Party
Intermediary
112 Breast eCQM/Medicare APM Wellness and Process
Cancer CQM Entity/Third Prevention
Screening Party
Intermediary
113 Colorectal eCQM/Medicare APM Wellness and Process
Cancer CQM Entity/Third Prevention
Screening Party
Intermediary
305 Initiation and eCQM/Medicare APM Behavioral Process
Engagement CQM Entity/Third health
of Substance Party
Use Disorder Intermediary
Quality Measure Title Collection Type Submitter Meaningful Measure Type
# Type Measures 2.0
Area
Treatment
487 Screening for eCQM/Medicare APM Equity Process
Social Drivers CQM Entity/Third
of Health Party
Intermediary
493 Adult eCQM/Medicare APM Wellness and Process
Immunization CQM Entity/Third Prevention
Status Party
Intermediary
^ Indicates this is an outcome measure for purposes of qualifying for the eCQM reporting incentive and the
alternative quality performance standard.
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.
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.
542https://qpp-cm-prod-
content.s3.amazonaws.com/uploads/2893/2023_CAHPS_for_MIPS_WebMode_Field_Test.pdf.
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 (§ 425.630(e)(1)).
Advance investment payments are only available to ACOs newly entering the Shared
Savings Program in their first agreement period (§ 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
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.
investment in services not currently covered by Medicare may improve beneficiary health and
reduce avoidable health care utilization costs over time, including coverage of dental,547,548,549
hearing,550,551 and vision552 care.
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
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.
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
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.
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
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
555NORC 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.
practice changes made their day-to-day work 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
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
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.
criteria described in section III.G.5.b of this final rule (§ 425.640(b)). Such payments would be
made under the standards we proposed to establish in new § 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 §
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
§ 425.640(b). CMS must determine that an ACO meets all of the following criteria for the ACO
to be eligible to receive prepaid shared savings during an agreement period:
● The ACO is a renewing ACO as defined under § 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 § 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
§ 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 § 425.512; and
(B) Has not been determined by CMS to have avoided at-risk beneficiaries as specified
under § 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
§ 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 § 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 § 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 shared savings. We proposed to create a new paragraph in
§ 425.100(e) to establish that an ACO may receive prepaid shared savings if it meets the criteria
under § 425.640(b). We proposed in § 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 § 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 § 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 § 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 § 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 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
§ 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 § 425.640 with provisions on the option to receive prepaid shared
savings payments. We are also finalizing paragraph (a) of § 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
§ 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 § 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 § 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 § 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 § 425.640(b)(2) through (8). We are also finalizing our proposal,
without modification, to specify in a new paragraph in § 425.100(e) that an ACO may receive
prepaid shared savings if it meets the criteria under § 425.640(b).
c. Application Procedure & Contents
We proposed to establish the process for an ACO to apply for prepaid shared savings in §
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 §
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 § 425.658 at application disposition.
We proposed at § 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 § 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 § 425.640(h)(1)(i). In addition, by certifying the application under
§ 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 § 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 § 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 § 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 § 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 webpage 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 § 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 § 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 § 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 § 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 § 425.640 includes a modification to correctly
reference the application procedures for renewing ACOs at § 425.224 instead of referencing
§ 425.202 (as proposed). Within § 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 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 (§ 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 § 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 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 § 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 § 425.605(e)(2) or
§ 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 § 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 § 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 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 §
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 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 § 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 § 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 § 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.
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 § 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 § 425.640(f)(2) (as further explained elsewhere in this section),
unless the ACO elects to receive a lesser amount as described in § 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 §
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 § 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 § 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 § 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 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 § 425.118(b), a change to the ACO's
beneficiary assignment methodology selection under § 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 § 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 § 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 § 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 § 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 § 425.658), the
positive regional adjustment (refer to § 425.656), and the proposed health equity benchmark
adjustment (refer to section III.G.7.b of this final rule), we proposed under new §
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 § 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 § 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 § 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 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 (§
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 §§ 425.402 and 425.404 (§
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 §§ 425.402 and 425.404 (§ 425.400(a)(3)(i)). Each
quarter, CMS excludes any prospectively assigned beneficiaries that meet the exclusion criteria
under § 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 §
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 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 § 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 § 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 §
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 § 425.118(b), for a change to the ACO's beneficiary
assignment methodology selection under § 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 § 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 §
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 §§ 425.402
and 425.404 (§ 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 § 425.401(b) (§ 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.
TABLE 43: Calculation of Maximum Quarterly Prepaid Shared Savings Payment
Step 1: Calculate Per capita savings generated in the 2 performance years that constitute BY1 and BY2 for
prepaid shared the ACO’s current agreement period beginning January 1, 2022
savings multiplier PY 2019: $350
PY 2020: $400
Multiplier: Simple average of the per capita savings across BY1 and BY2
($350 + $400) / 2 = $375
Step 2: Pro-rate the Assigned person years from the performance years that constitute BY1 and BY2 for the
prepaid shared ACO’s current agreement period beginning January 1, 2022:
savings multiplier PY 2019: 6,000
PY 2020: 7,000
Assigned person years for BY1 and BY2 of current agreement period (determined using
certified ACO participant list for the current performance year of PY 2022):
BY 2019: 8,000
BY 2020: 7,500
Proration factor: Ratio between the ACO’s average person years in the performance
years that constitute BY1 and BY2 and the average person years in BY1 and BY2,
excluding years for which the ACO was not reconciled, capped at 1.
Apply the proration factor to the prepaid shared savings multiplier: [(6,000 + 7,000)/2] /
[(8,000 + 7,500)/2] x $375 = $314.52
Step 3: Adjust the Shared savings scaling factor: (0.5)
pro-rated prepaid Financial risk scaling factor: (2/3)
shared savings
multiplier for Apply the shared savings scaling factor and the financial risk scaling factor to the pro-
financial risk and rated prepaid shared savings multiplier: $314.52 x (0.5) x (2/3) = $104.84
sharing rate
Step 4: Cap the National assignable per capita FFS expenditures for assignable beneficiaries in BY2:
pro-rated, adjusted $10,000
prepaid shared
savings multiplier Cap: 5 percent of national assignable per capita FFS expenditures for assignable
beneficiaries in BY2
0.05 * $10,000 = $500
Step 5: Determine Assigned beneficiary person years derived from the ACO’s latest available assignment
the maximum list: 8,500.
prepaid shared
savings payments Total prepaid shared savings payments for the applicable quarter: Product of one-fourth
for the applicable of the pro-rated, adjusted, capped prepaid shared savings multiplier and the assigned
quarter beneficiary person years derived from the ACO’s latest available assignment list.
($104.84/4) x 8,500 = $222,785
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 § 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 § 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 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
§ 425.640(f)(6), we proposed to offer ACOs flexibility to request a smaller quarterly payment
amount from CMS. Under § 425.640(h)(1)(vii), CMS may withhold an ACO’s prepaid shared
savings during an agreement period upon request of the ACO. Under § 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 § 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
§ 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 § 425.640(h). Under § 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 § 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 § 425.640(f)(1)(iii),
in accordance with our proposal, that if an ACO’s quarterly payment is withheld or terminated
pursuant to paragraph § 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 § 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 § 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 § 425.640(h). We proposed at § 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 § 425.640(h). However, we also proposed
at § 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 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 §
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 § 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
§ 425.640(e)(3).
Accordingly, we proposed at § 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 §
425.640;
● The ACO meets any of the grounds for ACO termination set forth at § 425.218(b);559
● 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 § 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 §
425.204(f); or
559Under §§ 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 meet the quality performance standard as specified under § 425.512
or is subject to a pre-termination action after CMS determined the ACO avoided at-risk
beneficiaries as specified under § 425.316(b)(2).
We further proposed under § 425.640(h)(4) that CMS may immediately terminate an
ACO’s prepaid shared savings under § 425.640(h)(1) and (2) without taking any of the pre-
termination actions set forth in § 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 § 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 § 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.
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 §
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 § 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 § 425.640(g)(3). Under § 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 § 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 § 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 § 425.640(e)(2) or failed to spend the funding in accordance with §
425.640(e)(1)(i) and (ii), CMS may immediately terminate prepaid shared savings during an
agreement period (§ 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 § 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 § 425.640(e), we proposed at § 425.316(f)(1) to monitor ACOs receiving
prepaid shared savings for compliance with § 425.640(e) and to determine whether it would be
appropriate to withhold or terminate an ACO’s prepaid shared savings under § 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 webpage as noted in §§ 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 savings on items not identified in the spend plan. In the event that
an ACO uses prepaid shared savings for uses not permitted by § 425.640(e), we would require
them to reallocate the funding to a permitted use and may take compliance action as specified at
§§ 425.216, 425.218 or withhold or terminate payments as specified at § 425.640(h)(1) and (2).
Similar to the policy for advance investment payments (§ 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 § 425.308 to require that an ACO publicly report
information annually regarding prepaid shared savings on its public reporting Web page.
Specifically, under new § 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 § 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 § 425.640(i)
that ACOs also be required to report this information directly to CMS.
Under this proposal, if CMS determined that an ACO used prepaid shared savings for a
prohibited use under § 425.640(e)(2), allocated over 50 percent of their annual maximum prepaid
shared savings on staffing and healthcare infrastructure as at § 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 § 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 §
425.640(h)(1). CMS could also take compliance action as specified at §§ 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 §§ 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 § 425.314, ACOs would be required to retain
560We 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 § 425.308(b)(10), which we have corrected
within this description in this final rule.
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 §§ 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 §§ 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 § 425.640(g)(1) to recoup prepaid shared savings from earned
shared savings, as defined at § 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 performance year(s) in which the ACO achieves shared savings.
Under new § 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 § 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 § 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 § 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 § 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 § 425.204(f). We also
proposed edits to § 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.
In the event the ACO enters into proceedings relating to bankruptcy, whether voluntary
or involuntary, we proposed at § 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
561In the CY 2025 PFS proposed rule, refer to the proposed amendments to the text of the regulations for
§ 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.
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 § 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 §
425.630(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, 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 § 425.204(f). Also,
under § 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 (§ 425.640(g)(4)),
unless the ACO terminates its current participation agreement under § 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 (§ 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 § 425.640(g). We are also
finalizing without modification our proposed amendments to § 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
(§ 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 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 § 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 § 425.316(e)(3) and with the repayment requirements at
§ 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 425.218(b).
Specifically, we proposed to add § 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 § 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 § 425.630(g).
Therefore, we proposed a conforming change to redesignate § 425.630(g)(5) as § 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 amend § 425.630(g) to specify under § 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 § 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 § 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 § 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 communities562 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
562As 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.
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 § 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).
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 § 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 § 425.656 (refer to 87 FR 69915 through 69923) and to reinstate a prior savings
adjustment under § 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 § 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 § 425.656) and a prior savings adjustment (refer to § 425.658). We
determine which adjustment is applied to the benchmark, either the regional adjustment, prior
savings adjustment, or no adjustment (refer to § 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 § 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 § 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 § 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 § 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 § 425.656(d)(1), CMS expresses the regional adjustment as a single value by
taking a person year563 weighted average of the Medicare enrollment type-specific regional
adjustment values.
● Step 2: For eligible ACOs, calculate the capped prior savings adjustment as specified
in § 425.658. Under § 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
§ 425.652(a)(8). Compare the regional adjustment in accordance with § 425.656 and the prior
savings adjustment in accordance with § 425.658.
++ Under § 425.652(a)(8)(ii), if an ACO is not eligible to receive a prior savings
adjustment under § 425.658(b)(3)(i), and the regional adjustment, expressed as a single value as
described in § 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 § 425.656(c) and applied separately to the following populations of beneficiaries: ESRD,
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).
disabled, aged/dual eligible Medicare and Medicaid beneficiaries, and aged/non-dual eligible
Medicare and Medicaid beneficiaries. Under § 425.652(a)(8)(iii), if an ACO is not eligible to
receive a prior savings adjustment under § 425.658(b)(3)(i), and the regional adjustment,
expressed as a single value as described in § 425.656(d), is negative or zero, the ACO will not
receive an adjustment to its benchmark.
++ Under § 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 § 425.656(d), is positive,
the ACO will receive an adjustment to its benchmark equal to the higher of the following:
-- Under § 425.652(a)(8)(iv)(A), the positive regional adjustment amount. The
adjustment will be calculated as described in § 425.656(c) and applied separately to the
following populations of beneficiaries: ESRD, disabled, aged/dual eligible Medicare and
Medicaid beneficiaries, and aged/non-dual eligible Medicare and Medicaid beneficiaries.
-- Under § 425.652(a)(8)(iv)(B), the prior savings adjustment. The adjustment will be
calculated as described in § 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 § 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 § 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 § 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 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.
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
564Congressional 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.
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.
(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
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.
upward adjustment to the historical benchmark is designed to benefit ACOs serving larger
proportions of beneficiaries from underserved communities and receiving lower regional
adjustments (§ 425.656) or lower prior savings adjustments (§ 425.658), or receiving neither
adjustment. Under proposed § 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 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 § 425.656(c)(3) and the cap applied to the prior savings adjustment under §
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
The health equity adjustment to an ACO’s MIPS quality performance category score (87 FR 69838 through
567
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 (§ 425.512(b)).
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.
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.
TABLE 44: ACO with a HEBA Greater Than the Regional Adjustment and Prior Savings
Adjustment
Calculation Step Description of Calculation and Example
Step 1: Calculate Proportion of Proportion of PY-assigned beneficiaries enrolled in Medicare Part D LIS or
Assigned Beneficiaries Who Are dually eligible for Medicare and Medicaid: 0.60
Enrolled in Medicare Part D LIS
or Dually Eligible for Medicare
and Medicaid
Step 2: Calculate HEBA Scaler 5 percent of the national per capita expenditures for assignable beneficiaries
in BY3 expressed as a single value: $600
Prior savings adjustment: $200
Regional adjustment expressed as single value: $100
Difference between 5 percent of the national per capita expenditures for
assignable beneficiaries in BY3 expressed as a single value and the higher of
prior savings adjustment and regional adjustment expressed as a single
value:
$600 – higher of $200 or $100 = $400
Step 3: Calculate HEBA Product of the proportion of assigned beneficiaries who are enrolled in the
Medicare Part D LIS or dually eligible for Medicare and Medicaid and the
HEBA Scaler:
0.60 x $400 = $240
Step 4: Determine Final Highest of regional adjustment expressed as a single value, prior savings
Adjustment to Benchmark adjustment, or HEBA:
Highest of $200, $100, or $240 = $240
Per capita historical benchmark expenditures by enrollment type after
adjustment:
ESRD: $92,000 + $240 = $92,240
Disabled: $13,000 + $240 = $13,240
Aged/dual: $19,000 + $240 = $19,240
Aged/non-dual: $10,000 + $240 = $10,240
TABLE 45: ACO with a HEBA Less Than the Regional Adjustment and Prior Savings
Adjustment
Calculation Step Description of Calculation and Example
Step 1: Calculate Proportion of PY-assigned beneficiaries enrolled in Medicare Part D LIS or dually
Proportion of Assigned eligible for Medicare and Medicaid: 0.25
Beneficiaries Who Are
Enrolled in Medicare
Part D LIS or Dually
Eligible for Medicare
and Medicaid
Step 2: Calculate HEBA 5 percent of the national per capita expenditures for assignable beneficiaries in BY3
Scaler expressed as a single value: $600
Prior savings adjustment: $200
Regional adjustment expressed as single value: $300
Difference between 5 percent of the national per capita expenditures for assignable
beneficiaries in BY3 expressed as a single value and the higher of prior savings
adjustment and regional adjustment expressed as a single value:
$600 – higher of $200 or $300 = $300
Step 3: Calculate HEBA Product of the proportion of assigned beneficiaries who are enrolled in the Medicare
Part D LIS or dually eligible for Medicare and Medicaid and the HEBA Scaler:
0.25 x $300 = $75
Step 4: Determine Highest of regional adjustment expressed as a single value, prior savings adjustment,
Final Adjustment to or HEBA:
Benchmark Highest of $200, $300, or $75 = $300
Per capita historical benchmark expenditures by enrollment type after adjustment:
ESRD: $92,000 + $300 = $92,300
Disabled: $13,000 + $300 = $13,300
Aged/dual: $19,000 + $300 = $19,300
Aged/non-dual: $10,000 + $300 = $10,300
TABLE 46: ACO Ineligible for the HEBA
Calculation Step Description of Calculation and Example
Step 1: Calculate Proportion Proportion of PY-assigned beneficiaries enrolled in Medicare Part D LIS or
of Assigned Beneficiaries dually eligible for Medicare and Medicaid: 0.10
Who Are Enrolled in the
Medicare Part D LIS or Dually
Eligible for Medicare and
Medicaid
Step 2: Calculate HEBA Scaler 5 percent of the national per capita expenditures for assignable beneficiaries in
BY3 expressed as a single value: $600
Prior savings adjustment: $200
Regional adjustment expressed as single value: $300
Difference between 5 percent of the national per capita expenditures for
assignable beneficiaries in BY3 expressed as a single value and the higher of
prior savings adjustment and regional adjustment expressed as a single value:
$600 – higher of $200 or $300 = $300
Step 3: Calculate HEBA Step not applicable as ACO has a proportion of assigned beneficiaries who are
enrolled in the Medicare Part D LIS or dually eligible for Medicare and
Medicaid less than 0.20 and is ineligible for a HEBA as a result.
Step 4: Determine Final Higher of regional adjustment expressed as a single value or prior savings
Adjustment to Benchmark adjustment:
Higher of $200 or $300 = $300
Per capita historical benchmark expenditures by enrollment type after
adjustment:
ESRD: $92,000 + $300 = $92,300
Disabled: $13,000 + $300 = $13,300
Aged/dual: $19,000 + $300 = $19,300
Aged/non-dual: $10,000 + $300 = $10,300
We proposed to implement the changes described in this section through revisions to
§ 425.652 and the addition of § 425.662. Specifically, within § 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
§ 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 § 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 § 425.652(a)(9)(vi),
specifying that CMS redetermines the adjustment to benchmark in accordance with
§ 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 § 425.662, we describe the
calculation of the HEBA. We also proposed to make conforming changes to § 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 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.
The following is a summary of the public comments we received on the proposal to
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.
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 “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
571See 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.
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 (§ 425.656), lower prior savings adjustments (§
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.
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
§ 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 § 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
572Based 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.
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.
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 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 (§ 425.656) or lower prior savings adjustments (§ 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 § 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.
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 webpage,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.
573https://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 § 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 Index574 or the new standardized area-level measure of socioeconomic deprivation
under the ACO REACH Model575 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 Measures576 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.
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.
Response: We appreciate the commenter’s feedback and will consider for future
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.
577 See https://www.vizientinc.com/what-we-do/health-equity/vizient-vulnerability-index-public-access.
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 § 425.662 describing the
calculation of the HEBA. We are finalizing as proposed the provisions of § 425.662, with the
exception of § 425.662(b)(3). We are finalizing with modification the provision in
§ 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.
Further, within § 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 § 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 § 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 § 425.652(a)(9)(vi), specifying that CMS redetermines the
adjustment to benchmark in accordance with § 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 § 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 § 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 § 425.650(a), appropriately includes the new section of
the regulations at § 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 § 425.662 describing the calculation of the HEBA. We received no comments addressing the
proposed change in the regulations at § 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 §§ 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 benchmark578 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 shared losses owed by ACOs affected by extreme and
uncontrollable circumstances during PY 2017 and subsequent performance years.582
(b) Background on Shared Savings Program Reopening Policy and Financial Calculation
Methodology
Under § 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
§ 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.
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 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).
583 As defined in § 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 § 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 (§ 425.315(a)(4)).
We first adopted a reopening policy in the November 2011 final rule, where we finalized
at § 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 § 425.314(a)(4), and further specify the reopening policy in a new section of the
regulation at § 425.315 (81 FR 37997 through 38002, and 38013 through 38014). We
subsequently revised § 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 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
584The 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.
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
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
585See 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).
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 § 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 § 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 § 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.
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 § 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 § 425.315(a).
The following is a summary of general comments we received on our discussion and
proposals regarding reopening ACO payment determinations 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
586We refer readers to section III.G.7.c.(2).(d) of this final rule, in which we clarify the applicability of the
benchmark adjustment.
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
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
587We 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.
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 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 § 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
§ 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 § 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
§ 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 § 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 § 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 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
§ 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 § 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 § 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 § 425.315(a)(4),
as described in this section of this final rule. We are finalizing without modification our proposal
to revise § 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 § 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 reviewing
information provided in such requests.
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 § 425.315(a)(1)(i), or for good cause in
accordance with § 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
588For 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.
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.
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 § 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 § 425.315(a)(1)(i).590 For instance, we
may consider whether there is “reliable evidence” (as defined according to § 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
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.
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 § 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
§ 405.902 that the initial determination was procured by fraud or similar fault as defined in § 405.902.
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).
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 § 425.605(h), and would not
be held liable for shared losses.
We noted that the existing reopening authority at § 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 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 § 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
592 See, for example, 81 FR 38000 and 38001.
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.
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.
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
593This 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.
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
§ 425.604(f), § 425.605(e), § 425.606(h), § 425.609(e), or § 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 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
594Refer to § 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 §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).
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.
Third, we specified that we are considering limiting the instances in which we reopen an
initial determination to account for improper payments, pursuant to § 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 §§ 425.601(a)(9) and 425.652(a)(9).595 In section III.G.7.c.(2).(d) of
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.
the CY 2025 PFS proposed rule we discussed our proposals related to modifying these
provisions.
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 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 § 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 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 § 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
§ 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 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 §§ 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 webpage, 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 § 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.
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 § 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.
Referring to a comment letter submitted in response to the proposed rule entitled “Medicare Program; Hospital
596
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).
(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 § 425.315(a). We proposed to add to
subpart G a new section of the Shared Savings Program regulation at § 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 § 425.674, that upon the
reopening of an initial determination pursuant to § 425.315(a)(4), CMS will use the methodology
set forth in § 425.674 to account for the impact of improper payments when: (1) determining
savings or losses for the relevant performance year in accordance with § 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 § 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 § 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 § 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
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 code597 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.
We proposed to specify in paragraphs (c) and (d) of § 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 § 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 § 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.
597See, 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)).
++ 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 § 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 § 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 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 § 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
§ 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 § 425.601(d)(1), § 425.603(f)(1), or § 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 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.
TABLE 47: Hypothetical Example of Steps for Recalculating ACO Assigned Beneficiary
Expenditures Using Proposed Methodology to Account for Improper Payments
Amount
Steps 1 and 2: Identify calculation and relevant population for adjustment
ACO PY assigned beneficiary expenditures by enrollment type (per capita) [A]
ESRD $80,000
Disabled $11,000
Aged/dual $15,000
Aged/non-dual $12,000
ACO PY total assigned beneficiary person years [B] 20,000
Step 3: Determine per capita amount of improper payments attributable to the relevant population
Aggregate improper payments attributable to the ACO’s assigned beneficiaries for
NPI 1 (identified at the claim or line item level)
Total aggregate improper payments for NPI 1 [C] $8,000,000
Aggregate improper payments for NPI 1 attributable to the ACO’s assigned $200,000
beneficiaries [D]
Aggregate improper payments attributable to the ACO’s assigned beneficiaries for
NPI 2 (identified at the NPI level)
Total aggregate improper payments for NPI 2 [E] $30,000,000
Total Medicare Parts A and B claim or line item payment amounts to NPI 2 for the $4,800,000
ACO’s assigned beneficiaries for PY (a portion of row [G]) [F]
Total Medicare Parts A and B claim or line item payment amounts to NPI 2 for all $80,000,000
Medicare FFS beneficiaries, on claims of specified claim types for the time
period associated with improper payment amount, made before the end of the
3-month claims run out period for PY [G]
Proration factor [H] = [F] / [G] 0.06
Aggregate improper payments attributable to the ACO’s assigned beneficiaries [I] $1,800,000
= [E] x [H]
Sum of improper payments attributable to the ACO’s assigned beneficiaries for NPI 1 $2,000,000
and NP1 2 [J] = [D] + [I]
Total Medicare Parts A and B claim or line item payment amounts to NPI 1 and NPI 2 $5,200,000
for the ACO’s assigned beneficiaries made before the end of the 3-month claims run
out period for PY [K]
Total aggregate improper payments attributable to the ACO’s assigned beneficiaries $2,000,000
[L] = Lesser of [J] and [K]
Per capita improper payments attributable to the ACO’s assigned beneficiaries [M] = $100
[L] / [B]
Step 4: Subtract per capita improper payment amount from original expenditures
Adjusted ACO PY assigned beneficiary expenditures by enrollment type (per capita)
[N] = [A] – [M]
ESRD $79,900
Disabled $10,900
Aged/dual $14,900
Aged/non-dual $11,900
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 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.
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
§ 425.605 (for ACOs participating in the BASIC track) or § 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 § 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
598For 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).
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.
TABLE 48: Hypothetical Example of How the Blended National-Regional Benchmark
Update Factor for the Aged/Non-Dual Eligible Enrollment Type May Be Recalculated
After Accounting for Improper Payments
BY3 PY (Original) PY (Adjusted)
National per capita expenditures [A] $10,977 $11,610 $11,609
National update factor [B] = [A]PY / [A]BY3 1.058 1.058
Regional per capita expenditures [C] $10,900 $11,300 $11,210
Regional update factor [D] = [C]PY / [C]BY3 1.037 1.028
National weight [E] 0.250 0.250
Regional weight [F] 0.750 0.750
National-regional blended update factor [G] = [B] x [E] +
[D] x [F] 1.042 1.036
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.
TABLE 49: Hypothetical Example of How an ACO’s Financial Performance May Be
Recalculated After Accounting for Improper Payments
Original Adjusted Adjusted
Minus
Original
Historical benchmark by enrollment type (risk adjusted, per
capita) [A]
ESRD $89,200
Disabled $12,700
Aged/dual $17,700
Aged/non-dual $12,200
National-regional blended update factor by enrollment type
[B]
ESRD 1.007 1.006 -0.001
Disabled 1.028 1.022 -0.006
Aged/dual 1.043 1.039 -0.004
Aged/non-dual 1.042 1.036 -0.006
Updated benchmark by enrollment type (per capita) [C] =
[A] x [B]
ESRD $89,824 $89,735 -$89
Disabled $13,056 $12,979 -$77
Aged/dual $18,461 $18,390 -$71
Aged/non-dual $12,712 $12,639 -$73
ACO PY assigned beneficiary expenditures by enrollment
type (per capita) [D]
ESRD $80,000 $79,900 -$100
Disabled $11,000 $10,900 -$100
Aged/dual $15,000 $14,900 -$100
Aged/non-dual $12,000 $11,900 -$100
ACO PY assigned beneficiary proportions by enrollment type
[E]
ESRD 0.010
Disabled 0.100
Aged/dual 0.070
Aged/non-dual 0.820
Updated benchmark (per capita) [F] = Sum of [C] x [E] $13,920 $13,847 -$73
ACO PY assigned beneficiary expenditures (per capita) [G] =
Sum of [D] x [E] $12,790 $12,690 -$100
ACO PY total assigned beneficiary person years [H] 20,000
Total updated benchmark [I] = [F] x [H] $278,400,000 $276,940,000 -$1,460,000
Total ACO PY assigned beneficiary expenditures [J] = [G] x
[H] $255,800,000 $253,800,000 -$2,000,000
Total updated benchmark expenditures minus Total ACO PY
assigned beneficiary expenditures [K] = [I] – [J] (example
showing gross savings) $22,600,000 $23,140,000 $540,000
Minimum savings rate / Minimum loss rate in dollars [L] =
0.02 x [I] $5,568,000 $5,538,800 -$29,200
Sharing rate [M] 75%
Shared savings [N] = [K] x [M] $16,950,000 $17,355,000 $405,000
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 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 § 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 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 § 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 § 425.674 specifies that upon the reopening of an initial determination pursuant
to § 425.315(a)(4), CMS will use the methodology set forth in § 425.674 to account for the
impact of improper payments when: (1) determining savings or losses for the relevant
performance year in accordance with § 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 § 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 § 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 § 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
§ 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), § 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 § 425.315 (among other factors). Similar
language is not currently included in § 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 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 §§ 425.601(a)(9) and 425.652(a)(9) to specify the proposed
adjustment to the historical benchmark. We proposed to revise § 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 § 425.315.
We also proposed to add a new paragraph (a)(9)(iii) to § 425.601 and to add a new paragraph
(a)(9)(viii) to § 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 § 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 § 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).
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.
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
599ACOs have the option to “early renew”, meaning to terminate their current participation agreement under
§ 425.220 and immediately enter a new agreement period to continue participation in the Shared Savings Program.
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 §§ 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 § 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 § 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 § 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 § 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 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
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 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 § 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
§ 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 § 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 § 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 (§ 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 (§ 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 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
§ 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 § 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 §§ 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 § 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
Generally, a level of billing for a given HCPCS or CPT code is considered SAHS billing
activity when a given HCPCS or 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
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.
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 (§ 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 § 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 § 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 § 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 § 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 § 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 § 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 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
601Refer 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.
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.
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
602Refer 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.
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 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
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
603For 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.
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:
++ 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.
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,
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.
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 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 § 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 a 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 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
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
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
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.
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.
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 § 425.226(a)(1), and
assignment methodology under subpart E of Part 425 of the regulations as used in 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
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:
609 This assumes these same codes were not identified as having SAHS billing activity in CY 2024 or CY 2026 or
later years.
● 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 §§ 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 §§ 425.601(a)(4) and 425.652(a)(4), and performance year expenditures
under §§ 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 §§ 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 § 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 § 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 §§ 425.601(a)(8)(ii)(C) and
425.656(c)(3), capping the prior savings adjustment according to § 425.658(c)(1)(ii), capping the
prepaid shared savings multiplier according to § 425.640(f)(2)(v), and calculating the proposed
HEBA scaler according to § 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 §§ 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 §§ 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 §
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 § 425.20, determining an ACO's eligibility to receive advance investment payments according
to § 425.630, and determining whether an a ACO qualifies for a shared savings payment at §
425.605(h).
● Calculation or recalculation of the amount of the ACO’s repayment mechanism
arrangement according to § 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 § 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, § 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 § 425.660(b)(3) that are not included at § 425.611(c),611 as well as
references to other new or 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
(§ 425.640(f)(2)(v)), calculating the proposed HEBA scaler (§ 425.662(b)(2)), and determining
whether an ACO that does not meet its minimum savings requirement qualifies for a shared
savings payment (§ 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 §
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.
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
610 This includes provisions under §§ 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 § 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 § 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.
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 § 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
§ 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 § 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 § 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 individual ACOs that happen to
have over-representation or under-representation of SAHS billing activity for the selected codes
among their assigned beneficiary populations.
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
612 Refer to § 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 § 425.630(b).
614 Refer to § 425.605(h).
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.
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.
See, for example, 76 FR 67948 through 67950. Such approaches were more focused on policies to support
615
monitoring of ACO performance and ensuring program integrity.
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 § 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 § 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 § 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 §
425.672(b) when an adjustment to the calculation is appropriate in light of the SAHS billing
activity. The calculations specified at § 425.672(c) include all potentially relevant financial
calculation provisions, including those covering the financial benchmarking methodologies
(including the proposed HEBA scaler at § 425.662(b)(2)) and those covering calculation of
shared savings and losses. We proposed at § 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 § 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 for a performance year adjusted for SAHS billing activity. We proposed to
specify at § 425.672(e) that we would also make adjustments for any calendar year
616We 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 § 425.611 is tied to the related public health emergency.
corresponding to BY3 in projecting per capita growth in Medicare Parts A and B FFS
expenditures according to § 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 §§ 425.601(a)(9) and 425.652(a)(9), as well as paragraphs at §§
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.
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. 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
§ 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 § 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 § 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 § 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 §§ 425.601(a)(9) and
425.652(a)(9), as well as paragraphs at §§ 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.
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 report617 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.
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
617For 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.
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 § 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 § 425.512,
and otherwise maintain its eligibility to participate in the Shared Savings Program under 42 CFR
part 425, subpart B (§§ 425.100 through 425.118). For ACOs meeting the applicable quality
performance standard established under § 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 §
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 (§ 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 (§ 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)
(§ 425.605(d); § 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 § 425.512(a)(2) or (a)(5)(i) or the alternative quality performance
standard at § 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 § 425.512 or the alternative quality performance standard, the ACO is subject to
1st dollar losses at a rate of 75 percent (§ 425.610(f)(4)(ii)). Shared losses are subject to a cap
that is equal to 15 percent of updated benchmark (§ 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”) (§ 425.652(a)(8)). The weights used in the regional adjustment
calculation are determined in accordance with § 425.656(e) and are dependent on whether the
ACO has lower or higher spending compared to the ACO's regional service area and the
agreement period for which the ACO is subject to the regional adjustment. 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 (§ 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 (§
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 (§ 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 (§ 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 (§ 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 (§ 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 (§
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 (§ 425.605(b)(2); § 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 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.
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
618For 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).
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 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) (§ 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) (§ 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.
TABLE 50: Hypothetical Marginal Shared Savings Bands
Gross savings as % of benchmark Shared Savings/Loss Rate1
0-10% 100%
10-15% 60%
15-20% 40%
>20% 0%
Losses 50% - 100%2
¹ Percentage of savings or losses retained by the ACO.
2 Shared Loss Rate would depend on an ACO’s quality performance, similar to § 425.610(f)(4).
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 §
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 § 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 § 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.
(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 Model619 tests two capitation payment options--
Primary Care Capitation and Total Care Capitation.
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
619Refer 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.
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, 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 § 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 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
§§ 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 § 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 § 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 §
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 §§
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, § 425.655, we inadvertently introduced a discrepancy.
In §§ 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 § 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 §§ 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 § 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 § 425.655(d)(2) is inconsistent with the language
used at §§ 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 § 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 § 425.118(a) and the beneficiary assignment methodology selected by the ACO for the
first performance year of the agreement period as required under § 425.400(a)(4)(ii). An ACO’s
historical benchmark may then be subject to a regional adjustment (refer to § 425.656), a prior
savings adjustment (refer to § 425.658), or no adjustment (refer to § 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 § 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 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 §§
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 § 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 § 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 §§ 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 §§ 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 §
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 § 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 § 425.312(a)(2)(v), which requires an additional follow-up
with a beneficiary who has received the beneficiary notification. 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 § 425.20), the organizational operations of the ACO, and
how data is used to improve care and report quality outcomes.
Currently, at § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 425.312(a)(2)(iii). Please note that this was not a proposal to 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 § 425.312(a)(2)(iii). At § 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 § 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 § 425.20)
from a physician who is an ACO professional in the ACO and who is a primary care physician as
defined at § 425.20 or who has one of the primary specialty designations included at §
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 § 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 § 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 § 425.20) from a physician who is an ACO professional in
the ACO and who is a primary care physician as defined at § 425.20 or who has one of the
primary specialty designations included at § 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 § 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 §§ 425.402 and 425.404. See §
425.400(a)(3)(i). Beneficiaries that are prospectively assigned to an ACO at § 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 § 425.401(b). See § 425.400(a)(3)(ii). We note that ACOs that
select prospective assignment are subject to § 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 beneficiary notification to beneficiaries likely to be assigned for ACOs under
preliminary prospective assignment with retrospective reconciliation as proposed, as specified in
revisions to § 425.312(a)(2)(iii).
H. Medicare Part B Payment for Preventive Services (§§ 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 § 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
622https://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.”
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.
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 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
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.
We solicited comments on these proposed rates. The following is a summary of the
comments we received and our responses.
544 https://www.fda.gov/news-events/press-announcements/fda-takes-action-updated-mrna-covid-19-vaccines-better-
protect-against-currently-circulating.
624 CPT® Assistant Special Edition: August Update / Volume 33 / 2023. https://www.ama-assn.org/system/files/cpt-
assistant-guide-coronavirus-august-2023-updated.pdf.
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".
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 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 § 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 § 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.
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.
626https://www.cms.gov/medicare/payment/fee-for-service-providers/part-b-drugs/average-drug-sales-
price/vaccine-pricing, under “COVID-19 Vaccines & Monoclonal Antibodies”.
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 §§ 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
548 https://www.fda.gov/media/177068/download?attachment.
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:
● 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.
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
628https://www.cms.gov/medicare/payment/fee-for-service-providers/part-b-drugs/average-drug-sales-
price/vaccine-pricing, under “COVID-19 Vaccines & Monoclonal Antibodies”.
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 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
TABLE 51: CY 2025 Part B Payments for Preventive Vaccine Administration
if the EUA Declaration for Drugs and Biologicals with Respect to COVID-19 Continues
into CY 2025
Category of Part B Product Part B Payment Amount Annual Update6 Geographic
Administration (Unadjusted) Adjustment
Influenza, $33.71 MEI GAF
Pneumococcal,
Hepatitis B Vaccines1,4
COVID-19 Vaccine2,4 $44.95 MEI GAF
In-Home Additional Payment for Part $39.90 MEI GAF
B Vaccine Administration (M0201)4
COVID-19 Monoclonal Antibodies N/A N/A N/A
(for Treatment or Post-Exposure
Prophylaxis) 3,4,5
COVID-19 Monoclonal Antibodies N/A N/A N/A
(for Pre-Exposure Prophylaxis)3,4
Intravenous Infusion: Health Care $450 N/A GAF
Setting
1 HCPCS Codes G0008, G0009, G0010.
2 CPT code 90480.
3 https://www.cms.gov/monoclonal.
4 Beneficiary coinsurance and deductible are not applicable.
5 As of the issuance of the CY 2025 PFS final rule, there are no monoclonal antibodies approved or authorized for
the treatment or for post-exposure prophylaxis of COVID-19.
6 The CY 2025 percentage increase of the 2017-based MEI is 3.5 percent, based on historical data through the 2nd
quarter of 2024.
TABLE 52: Part B Payments for Preventive Vaccine Administration Beginning January 1,
2025, if the EUA Declaration for Drugs and Biologicals with Respect to COVID 19 is
Terminated on or Before December 31, 2024
Category of Part B Product Part B Payment Amount Annual Geographic
Administration (Unadjusted) Update6 Adjustment
Influenza, $33.71 MEI GAF
Pneumococcal,
Hepatitis B Vaccines1,4
COVID-19 Vaccine2,4 $33.71 MEI GAF
In-Home Additional Payment for Part $39.90 MEI GAF
B Vaccine Administration (M0201)4
COVID-19 Monoclonal Antibodies
(for Treatment or Post-Exposure Medicare payment under the applicable payment system
Prophylaxis)3
COVID-19 TBD5 N/A GAF
Monoclonal Antibodies (for Pre-
Exposure Prophylaxis)4,5
1 HCPCS Codes G0008, G0009, G0010.
2 CPT code 90480
3 Payment is in accordance with the applicable payment system of the setting in which the product is administered.
Beneficiary coinsurance and deductible are applicable.
4 Beneficiary coinsurance and deductible are not applicable.
5 Please see section III.H.1.e. of this proposed rule.
6 The CY 2025 percentage increase of the 2017-based MEI is 3.5 percent, based on historical data through the 2nd
quarter of 2024.
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 §
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 § 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 §
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
§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 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 § 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 § 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 webpage 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).
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
629https://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.”
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 § 405.2449. In the CY 2014
FQHC PPS final rule (79 FR 25474), at § 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 § 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.
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 from the FQHCs PPS and the RHC AIR methodology, for all
populations identified for coverage at § 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.
Updates were made to Chapter 13, section 220.1 of Medicare Benefit Policy Manual via Change Request 9864,
630
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.
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 §
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 § 410.63(a) for a definition of hepatitis B vaccine coverage. Since we proposed to
revise § 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 §
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 § 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 webpage 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.
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.
[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.
3. Payment for Drugs Covered as Additional Preventive Services (§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 “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 § 410.2, and coverage for “additional
preventive services” is delineated at § 410.64. At § 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 § 410.152(l)(11), we include “additional preventive services
identified for coverage through the national coverage determination (NCD) process”. At §
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 §
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.
(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.
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
552 https://www.medicaid.gov/medicaid/prescription-drugs/retail-price-survey/index.html.
632 42 CFR 414.804(a)(5).
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.
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.
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 pricing would likely only be necessary for new drugs before
pricing data is available.
633 42 CFR 414.804(a)(5).
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 § 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 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 webpage 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 webpage 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” 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 § 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 (§§ 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.
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 (§ 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
634https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c17.pdf.
14https://www.pcmanet.org/rx-research-corner/mandating-pharmacy-reimbursement-increase-
spending/08/31/2021/#:~:text=The%20average%20dispensing%20fee%20in,the%20state's%20Medicaid%20FFS%
20rate.
to use the same approach for payment limits that are paid to pharmacies that supply DCAPS
prescriptions.
For drugs that are administered by a physician or a non-physician practitioner, we
proposed that the fee schedule include a payment limit for 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 § 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.
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
636Medicare 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.
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 webpage 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 § 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 § 405.2410(b), we codified
regulations regarding coinsurance in RHCs and FQHCs, “[E]xcept for preventive services for
which Medicare pays 100 percent under § 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.
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 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 §§ 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 § 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 § 410.152(o)(1). We proposed to
codify this RHC/FQHC DCAPS policy in regulation as well, at a new § 405.2464(h).
The following is a summary of the comments we received and our responses.
637Change 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.
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 §§ 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 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 § 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 Program638 (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.
In addition, we proposed new policies for the Medicare Part B Drug Inflation Rebate
Program as follows:
● Proposed § 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 § 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 § 427.302(c)(4) further provided
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).
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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 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 § 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.
FIGURE B-I1: Summary of Proposed Data Timelines for Part B Drug Inflation Rebate
Provisions for Calendar Year 2025a
aThis graphic is an illustrative example of how rebates for quarters in calendar year 2025 will be calculated.
Note: In the case of subsequently approved drugs, a Part B rebatable drug’s first applicable calendar quarter will
begin the sixth full calendar quarter (denoted with the numbers in the figure) after the day the drug was first
marketed or the first quarter of 2023, whichever is later. The Rebate Period CPI-U is the greater of the benchmark
period CPI-U or the CPI-U of the first month of the quarter two quarters prior to the rebate period.
FIGURE B-I2: Summary of Proposed Data Timelines for Part D Drug Inflation Rebate
Provisions for Calendar Year 2025a
aThis graphic is an illustrative example of how rebates for one applicable period including months in calendar year
2025 will be calculated.
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.
TABLE 53: Summary of Proposed Part B and D Drug Inflation Rebate Amount Reports
and Deadlinesa
Milestone Timing/Deadline
Part B Rebate – CMS must invoice manufacturers not later than 6 months after the end of each calendar quarter
Preliminary Rebate Report sent to Manufacturers Not later than 5 months after the end of the calendar quarter
Manufacturer Reviews Manufacturer Suggestion of Error must be submitted to CMS
not later than 10 calendar days following receipt of the
Preliminary Rebate Report
Rebate Report sent to Manufacturers Not later than 6 months after the end of the calendar quarter
Manufacturer Rebate Amount Due (if applicable) Not later than 30 calendar days after receipt of the Rebate
Report
Preliminary Reconciliation Rebate Report sent to Not later than 11 months after receipt of the Rebate Report
Manufacturers
Manufacturer Reviews Manufacturer Suggestion of Error must be submitted to CMS
not later than 10 calendar days following receipt of the
Preliminary Reconciliation Rebate Report
Reconciliation Rebate Report sent to Not later than 12 months after receipt of the Rebate Report
Manufacturers
Manufacturer Reconciled Rebate Amount Due (if Not later than 30 calendar days after receipt of the
any) Reconciliation Rebate Report
Part D Rebate – CMS must invoice manufacturers not later than 9 months after the end of each applicable period
Preliminary Rebate Report sent to Manufacturers Not later than 8 months after the end of the applicable period
Manufacturer Reviews Manufacturer Suggestion of Error must be submitted to CMS
not later than 10 calendar days following receipt of the
Preliminary Rebate Report
Rebate Report sent to Manufacturers Not later than 9 months after the end of the applicable period
Manufacturer Rebate Amount Due (if applicable) Not later than 30 calendar days after receipt of the Rebate
Report
First Reconciliation Preliminary Rebate Report sent Not later than 11 months after the receipt of the Rebate Report
to Manufacturers
Manufacturer Reviews Manufacturer Suggestion of Error must be submitted to CMS
not later than 10 calendar days following receipt of the First
Reconciliation Preliminary Rebate Report
First Reconciliation Rebate Report sent to Not later than 12 months after the receipt of the Rebate Report
Manufacturers
Manufacturer Reconciled Rebate Amount Due (if Not later than 30 calendar days after receipt of the First
any) Reconciliation Rebate Report
Second Reconciliation Preliminary Rebate Report Not later than 35 months after the receipt of the Rebate Report
sent to Manufacturers
Manufacturer Reviews Manufacturer Suggestion of Error should be submitted to CMS
not later than 10 calendar days following receipt of the Second
Reconciliation Preliminary Rebate Report
Second Reconciliation Rebate Report sent to Not later than 36 months after the receipt of the Rebate Report
Manufacturers
Manufacturer Reconciled Rebate Amount Due (if Not later than 30 calendar days after receipt of the Second
any) Reconciliation Rebate Report
a The months referred to in these timelines represent calendar months. This means, for example, that if a
Preliminary Rebate Report is issued on August 15, 2027, the Rebate Report could be issued up until
September 30, 2027.
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, 2021 and assigned to a unique billing and payment code on April 1, 2024.
FIGURE B-I3: Provisions for Calendar Year 2025a
a This graphic is an illustrative example of how rebates for quarters in calendar year 2025 will be calculated.
Note: In the case of subsequently approved drugs, a Part B rebatable drug’s first applicable calendar quarter will
begin the sixth full calendar quarter (denoted with the numbers in the figure) after the day the drug was first
marketed or the first quarter of 2023, whichever is later. For a drug 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 drug will be included on the first
applicable calendar quarter the earliest applicable calendar quarter that follows the payment amount benchmark
quarter. The Rebate Period CPI-U is the greater of the benchmark period CPI-U or the CPI-U of the first month of
the quarter 2 quarters prior to the rebate period.
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 (§ 427.20)
At § 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 § 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
● “FDA application”.
● “Final action claim”.
● “First marketed date”.
● “Grouped billing and payment code”.
639These 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.
● “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 § 427.20.
b. Determination of Part B Rebatable Drugs (§§ 427.100 through 427.101)
i. Definitions
In proposed § 427.100, we proposed to define the following terms applicable to subpart B
(§§ 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 § 427.100.
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 § 414.902.
At § 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 § 427.101(b) and (c), respectively.640
We did not receive public comments on this proposed provision, and we are finalizing as
proposed at § 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 § 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 § 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.
640The 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.
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 § 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 §§ 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
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 § 427.101(b)(4) we proposed to codify the revised Medicare Part B
641 See: https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c17.pdf.
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 § 427.201(c) as described further in the
following section of this rule.642
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 § 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 § 427.201(c).
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 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 § 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
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.
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).
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
§ 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 § 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
§ 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 § 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 § 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 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 § 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
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
CMS will round down any amount less than $5 over a multiple of $10 to that multiple of $10, and round up any
644
amount $5 or more over a multiple of $10 to the next multiple of $10.
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 § 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 § 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 § 427.101(c).
c. Inflation-Adjusted Beneficiary Coinsurance Adjustment and Adjusted Medicare Payment for
Part B Rebatable Drugs with Price Increases Faster than Inflation (§§ 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
§§ 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/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 § 410.152.
In the CY 2025 PFS proposed rule (89 FR 61942), we proposed to adopt new provisions
at §§ 427.200 and 427.201 to codify the policies regarding the computation of the
inflation-adjusted beneficiary coinsurance, defined at § 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 §§ 410.152(m), 419.41(e), and 489.30(b)(6). We further proposed at
§ 427.201(c) that any category of products that is excluded from the identification of Part B
rebatable drugs at § 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 § 427.201(b) that CMS will use the published payment
amount in quarterly pricing files645,646,647 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
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.
deviates from the rebate calculation approach proposed at § 427.302, which relies on the
specified amount defined at § 427.20 even when the specified amount and the published payment
amount in quarterly pricing files differ. The approach proposed at § 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.
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
§ 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 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
§ 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.
After consideration of public comments, we are finalizing our proposal as proposed at
§§ 427.200 and 427.201.
d. Determination of the Rebate Amount for Part B Rebatable Drugs (§§ 427.300 through
427.304)
i. Definitions
In proposed § 427.300, we proposed to define the following terms applicable to subpart D
(§§ 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 § 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
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.
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 § 427.303) and the amount (if any) by which the
specified amount (proposed at § 427.302(b)) exceeds the inflation-adjusted payment amount
determined in accordance with section 1847A(i)(3)(C) of the Act (proposed at § 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.
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)
650 See: https://www.cms.gov/files/document/medicare-part-b-inflation-rebate-program-revised-guidance.pdf.
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 Guidance651 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
651 See: https://www.cms.gov/files/document/medicare-part-b-inflation-rebate-program-revised-guidance.pdf.
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.
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 § 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 § 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 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
§ 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 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 § 427.20. In this final rule, we have defined “sold or
marketed” at § 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 § 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 § 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 § 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 § 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
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 § 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 § 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 § 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 § 427.302(b). We are making a technical correction to § 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 § 427.302(c)(1)
through (5) or the calendar quarter beginning January 1, 2023. We also are making a technical
correction by adding § 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 § 427.302(c)(1) through (5).
Finally, with the addition of § 427.302(b)(2) as previously described, we are revising a paragraph
reference to be § 427.302(b)(3).
(2) Identification of the Payment Amount Benchmark Quarter
At § 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 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 § 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 § 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.
TABLE 54: Example of Application of First Marketed Date at the FDA Approval Level
Date of
HCPCS
Date of First Sale
Calendar HCPCS FDA Application Code First Marketed
NDC First Sale for Any
Quarter Code Number Effective Date
for NDC NDC in
Date
NDA/BLA
2023 Q2 X0000 NDC1 000000 1/15/2022 4/1/2023 1/15/2022 1/15/2022
2023 Q3 X0000 NDC1 000000 1/15/2022 4/1/2023 1/15/2022 1/15/2022
NDC2 000000 10/15/2023 4/1/2023 1/15/2022
2023 Q4 X0000 NDC1 000000 1/15/2022 4/1/2023 1/15/2022 1/15/2022
NDC2 000000 10/15/2023 4/1/2023 1/15/2022
2024 Q1 X0000 NDC2 000000 10/15/2023 4/1/2023 1/15/2022 1/15/2022
2024 Q2 X0000 NDC2 000000 10/15/2023 4/1/2023 1/15/2022 1/15/2022
2024 Q3 Y0000 NDC2 000000 10/15/2023 7/1/2024 1/15/2022 1/15/2022
2024 Q4 Y0000 NDC2 000000 10/15/2023 7/1/2024 1/15/2022 1/15/2022
NDC3 111111 11/1/2024 7/1/2024 11/1/2024
2025 Q1 Y0000 NDC2 000000 10/15/2023 7/1/2024 1/15/2022 1/15/2022
Z0000 NDC3 111111 11/1/2024 1/1/2025 11/1/2024 11/1/2024
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 § 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 § 427.20 and been subject to the
payment amount benchmark quarter identification method at § 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 § 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 § 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.
TABLE 55: Comparison of Specified Amount and Payment Amount in the Payment
Amount Benchmark Quarter
Specified Amount Payment Amount in the Payment Amount
Benchmark Quarter
Purpose in Rebate Pricing Methodology Purpose in Rebate Pricing Methodology
Calculation Under Calculation Under 1847A(i)(3)(C)(i)
1847A(i)(3)(A)(ii)(I)
Part B amount described • Lesser of ASP+6% or Part B published payment • Various Part B pricing
under 1847A(i)(3)(A)(ii)(I) WAC+6% limit for the payment provisions consistent with
for the calendar quarter • In the case of a amount benchmark section 1847A of the Act
in which a rebate may be biosimilar biological quarter, which is
assessed product, 100% of ASP for generally the quarter
the biosimilar biological beginning July 1, 2021
product + 6% of the
lesser of ASP or WAC for
the reference biological
product
FIGURE B-I4: Use of the Specified Amount and the Payment Amount in the Benchmark
Quarter in Rebate Calculations
Inflation-
Rebatable
Billing Units Units
in the Specifie Inflation
Specified
Rebate Adjusted
Rebate Amount
Amount Applicable Calendar
in the Rebate d
Amount -
Payment
Quarter
Quarter Amount Adjusted
Amount
Inflation- Payment Amount
Payment Amount in the Payment
Rebate Period CPI-U divided
Inflation-Adjusted Rebate Period CPI-U divided by
Payment Amount Amount
Adjusted
Payment Amount*
in the Benchmark by Benchmark Period
Benchmark Period CPI-U
CPI-U
Benchmark Quarter
Payment Quarter
Amount*
* See the section Determination of the Inflation Adjusted Payment Amount for information about identification and
calculation of the inflation-adjusted payment amount.
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 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 § 427.101(b)(2).
After consideration of public comments on this proposed provision, we are finalizing our
proposal as proposed at § 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 § 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.
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
652 CMS retrieved the January 2021 CPI-U from bls.gov on March 22, 2024.
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
(§ 427.302(e)(1)) and for subsequently approved drugs (§ 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 § 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 § 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
§ 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, 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
procedures654 also is available on the CMS’ HCPCS Quarterly Update website.
After consideration of public comments, we are finalizing the provision at § 427.302(d)
as proposed and are finalizing, with modifications, an amendment to § 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 § 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 § 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.
653See: https://www.cms.gov/medicare/coding-billing/healthcare-common-procedure-system/quarterly-update.
654CMS, 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.
We did not receive public comments on this proposed provision, and we are finalizing as
proposed at § 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 § 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
§ 427.302(d)), benchmark period CPI-U (per § 427.302(e)), and rebate period CPI-U (per
§ 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 § 427.302(g).
iv. Determination of Total Number of Billing Units
For calendar quarters starting on or after January 1, 2023, we proposed at § 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
§ 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 §§ 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 § 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 § 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
§ 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 § 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 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 § 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 § 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.
(1) Units of Drugs Acquired Through the 340B Program
655 See: https://www.cms.gov/medicare-coverage-database/view/article.aspx?articleId=59576&ver=7.
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 § 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
We proposed at § 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
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.
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 § 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 § 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 § 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 § 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 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 Modifier658 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 Modifier659 program guidance, which maintains the modifier
requirement but aligns it to policy in the CY 2024 OPPS final rule (88 FR 81791 through 81792).
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 § 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
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.
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.
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.
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
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.
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.
Response: We believe that requiring a claims modifier, as described in the
December 20, 2022 Part B Inflation Rebate Guidance: 340B Modifier663 program guidance and
revised in the December 14, 2023 Revised Part B Inflation Rebate Guidance: 340B Modifier664
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.
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.
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.
Response: All providers and suppliers are required to report an NPI on a Medicare claim
as required under § 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 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
See: https://www.cms.gov/medicare-coverage-database/view/ncacal-decision-
665
memo.aspx?proposed=N&ncaid=310&fromTracking=Y&doctype=all&timeframe=30&sortBy=updated&bc=20.
address whether Drugs Covered as Additional Preventive Services (DCAPS) would be Part B
rebatable drugs in future policymaking.
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 § 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 § 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 § 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 § 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
§ 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
§ 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 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 § 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 § 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 § 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 § 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 § 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 § 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 Book666) and determine whether the drug is no longer a Part B rebatable drug. At
§ 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
§ 427.303(b)(4)(iii).
We did not receive public comments on this proposed provision, and we are finalizing as
proposed at § 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; however, we received public comments on this topic from interested parties.
The following is a summary of the comments we received and our responses.
666Accessible via https://www.fda.gov/drugs/drug-approvals-and-databases/approved-drug-products-therapeutic-
equivalence-evaluations-orange-book.
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 § 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.
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
667 See 87 FR 2512, November 18, 2022 (https://www.federalregister.gov/d/2022-23873/p-2512).
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 § 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 § 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 § 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 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 § 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 § 414.806(b)), and it provides
sufficient time to capture the majority of updates to the data specified at § 427.301 while closing
out (except for the proposed circumstances at § 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 § 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 § 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 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 § 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 § 414.940 (87 FR 69731).
After consideration of public comments, we are finalizing the policy proposed at
§ 427.303(b)(5) with a modification to align the policy described at § 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 § 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
§ 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
§ 427.304(a) and (b).
To apply the provisions in section 1847A(i) of the Act appropriately, we also proposed at
§ 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 § 427.304.
e. Reducing the Rebate Amount for Part B Rebatable Drugs in Shortage and When There Is a
Severe Supply Chain Disruption (§§ 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.
TABLE 56: Determination of Rebate Reduction Amount for Part B Rebatable
Drugs
Drug Shortage Severe Supply Chain Disruption
Duration of Reduction Indefinite for as long as drug is “currently in shortage” Four calendar quarters;
manufacturer may request an
extension for four additional
quarters for up to eight calendar
quarters total
Percent Reduction Part B rebatable drug Part B rebatable plasma- Part B rebatable biosimilar biological
other than a plasma- derived product product
derived product
First four consecutive 25% 75% 75%
calendar quarters
Second four consecutive 10% 50% 75%
calendar quarters
Subsequent calendar 2% 25% Not applicable
quarters
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.
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.
668See: https://www.iqvia.com/insights/the-iqvia-institute/reports-and-publications/reports/drug-shortages-in-the-
us2023.
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 §§ 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 §§ 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 § 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.
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
669See: 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.
Part D rebatable drug or biosimilar when CMS determines there is a severe supply 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 § 427.400 to define the following terms applicable to proposed subpart E
(§§ 427.400 through 427.402)—
● “Drug shortage” or “shortage”.
● “Plasma-derived product”.
We also proposed at § 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 §§ 427.400 and 428.300.
ii. Reducing the Rebate Amount for Part B Rebatable Drugs Currently in Shortage
At § 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 shortage670 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.
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
670For 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.
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
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 § 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 § 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 § 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
671 See: https://www.fda.gov/media/131130/download?attachment#page=33.
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
§ 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 proposed at § 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 § 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 § 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.
TABLE 57: Application of Shortage Reduction
4Q2022 1Q2023 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 3Q2024 4Q2024
In shortage on FDA Yes Yes Yes Yes Yes Yes Yes Yes Yes
shortage list
Meets definition of No No Yes Yes Yes Yes No Yes Yes
Part B rebatable
drug
Owes a >$0 rebate No No No Yes Yes No No Yes Yes
Applicable percent 0% 25% 25% 25% 25% 10% 10% 10% 10%
reduction applied
for a Part B
rebatable drug other
than a plasma-
derived product
Applicable percent 0% 75% 75% 75% 75% 50% 50% 50% 50%
reduction for a Part
B rebatable plasma-
derived product
Note: CMS would “start the clock” for rebate reductions with 1Q2023. The highest percent reduction would thus
apply beginning with 1Q2023, regardless of how many days the Part B rebatable drug is in shortage during the
calendar quarter. In this example, the 25 percent reduction (for a non-plasma derived product) or 75 percent
reduction (for a plasma-derived product) would apply to 1Q2023-4Q2023, even though there would be no rebate
amount in 1Q2023 and 2Q2023 to which it applies.
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 § 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
§ 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 § 427.402(b)(1), the manufacturer will have to submit to CMS a rebate
reduction request that meets the eligibility requirements at § 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 § 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 § 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 § 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.
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 § 427.402(a) to codify the policy
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.
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 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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
674We 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.
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.
At § 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 § 427.402(c)(4) or if the rebate reduction request is
incomplete or untimely based on the requirements at § 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 § 427.402(c)(5), is incomplete or untimely based on the
requirements at § 427.402(c)(5), or if a reduction under proposed § 427.402(b)(1) was not
provided for such Part B rebatable biosimilar biological product, CMS will deny the rebate
reduction extension request. At § 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 § 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 the criteria that must be satisfied for CMS to
grant a rebate reduction request. For example, as set forth in §§ 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 §§ 427.402(c)(3) and
428.302(c)(3), and specifies the timing for submission of a rebate reduction request at
§§ 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 § 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 § 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
§ 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 § 427.402(c)(7) and
§ 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 § 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
§ 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.
TABLE 58: Application of Severe Supply Chain Disruption Reduction
Applicable Applicable Applicable Applicable Applicable
calendar calendar calendar calendar quarter calendar
quarter 1 quarter 2 quarter 3 4 quarter 5
Meets definition No Yes Yes Yes Yes
of Part B
rebatable drug
Owes a > $0 No No Yes Yes Yes
rebate
Applicable 75% 75% 75% 75% 0%
percent reduction
applied
Note: CMS would “start the clock” with applicable calendar quarter 1 if the request was granted for applicable
calendar quarters1 through 4. In this example, the 75 percent reduction would apply to applicable calendar
quarters 1-4, even though there would be no rebate amount in applicable calendar quarters 1 and 2 to which the
reduction applies.
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 § 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 § 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.
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
§ 427.401) with the applicable calendar quarter to which the shortage reduction first applies, as
set forth in § 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 § 427.401.
TABLE 59: Application of Severe Supply Chain Disruption Reduction for a Part B
Rebatable Biosimilar Biological Product other than a Plasma-Derived Product that is
Currently in Shortage on an FDA Shortage List
Example 1 Example 2 Example 3
1Q2024 Not applicable 25% (shortage reduction) 75% (severe supply chain
disruption reduction)
2Q2024 75% (severe supply chain 75% (severe supply chain 75% (severe supply chain
disruption reduction) disruption reduction) disruption reduction)
3Q2024 75% (severe supply chain 75% (severe supply chain 75% (severe supply chain
disruption reduction) disruption reduction) disruption reduction)
4Q2024 75% (severe supply chain 75% (severe supply chain 75% (severe supply chain
disruption reduction) disruption reduction) disruption reduction)
1Q2025 75% (severe supply chain 75% (severe supply chain 25% (shortage reduction)
disruption reduction) disruption reduction)
2Q2025 25% (shortage reduction) 10% (shortage reduction) 25% (shortage reduction)
Note: This table illustrates the application of the initial severe supply chain disruption reduction. A manufacturer
may still apply for a rebate reduction extension request. Example 1 illustrates the application of the rebate reduction
when a severe supply chain disruption precedes a shortage, and the severe supply chain disruption rebate reduction
request is submitted less than 60 days before the end of a calendar quarter. Example 2 illustrates the application of
the rebate reduction when a severe supply chain disruption rebate reduction request is submitted less than 60 days
before the end of a calendar quarter for a non-plasma-derived Part B rebatable biosimilar biological product that is
currently in shortage during the same calendar quarter. Example 3 illustrates the application of the rebate reduction
when a severe supply chain disruption rebate reduction request is submitted at least 60 days before the end of a
calendar quarter for a non-plasma-derived Part B rebatable biosimilar biological product that is currently in shortage
during the same calendar quarter.
We believe this clarification is consistent with the policy set forth in §§ 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 § 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 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 § 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 (§§ 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 § 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 § 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 § 427.501(d). As proposed at § 427.501(d)(4), we will not perform a
reconciliation for manufacturers of drugs that are not considered rebatable as set forth in
§ 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 § 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 § 427.500, we proposed the following term applicable to proposed subpart F
(§§ 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 §§ 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
§ 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 § 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 § 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 § 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 § 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 § 427.501(d)(1), to conduct a reconciliation
12 months after issuance of the subsequent Rebate Report as set forth in § 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 § 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 § 427.501(b) and (2) a second report, which we
proposed to entitle the “Rebate Report” as set forth in § 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 § 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 § 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 § 427.501(c).
As the first step in the reporting process, as set forth in § 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 § 427.501(c) for an
applicable calendar quarter (that is, not more than 5 months after the end of the applicable
calendar quarter). To facilitate manufacturer understanding of the Preliminary Rebate Report, we
proposed at § 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 § 427.20, the total number of billing units as determined under § 427.303; the payment
amount in the payment amount benchmark quarter as set forth in § 427.302(d); the applicable
calendar quarter specified amount as set forth in § 427.302(b); the applicable benchmark period
and rebate period CPI-Us as set forth in § 427.302(e) and (f); the inflation-adjusted payment
amount as determined under § 427.302(g); the amount, if any, by which the specified amount as
set forth in § 427.302(b) exceeds the inflation-adjusted payment amount as determined under
§ 427.302(g) for the Part B rebatable drug for the applicable calendar quarter as determined
under § 427.302; any applied reduction as determined under §§ 427.401 and 427.402; and the
rebate amount due as set forth in § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 427.501(c)(1), the Rebate Report will
include the same data elements as the Preliminary Rebate Report (as set forth in § 427.501(b)(1))
and include any recalculations based on CMS acceptance of a manufacturer’s Suggestion of
Error as determined under § 427.503, or any CMS-determined recalculations as determined
under § 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 § 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 §§ 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 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 § 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 § 427.503 for the Medicare Part B Inflation Rebate Program and
§ 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 §§ 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 § 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 §§ 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 § 427.501 for Part B and § 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 §§ 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 § 427.501(c) (and a reconciled
Rebate Report as set forth in § 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 § 428.401(c) (and a
reconciliation of the Rebate Report as determined under § 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 §§ 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 §§ 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 § 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 § 427.501(d)(1)(i) include: total units; the payment amount in the payment amount
quarter; and any applied reductions as determined under §§ 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 § 427.501(d)(1) or a discretionary
reconciliation as set forth in § 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
§ 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 § 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 § 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 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.
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 § 414.806(b))
encourage timely submission of ASP data with the submission timeline in accordance with
§ 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 § 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 § 414.806(b)), and it provides sufficient time
to capture the majority of updates to the data as set forth in § 427.301 while closing out (except
for the proposed circumstances as set forth in § 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
675See the CCW White Paper: Medicare Claims Maturity,
https://www2.ccwdata.org/documents/10280/19002256/medicare-claims-maturity.pdf.
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 § 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 § 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 § 427.501(d) to reconcile the
rebate amount provided in the Rebate Report as set forth in § 427.501(c) and drugs acquired
through the 340B Program as set forth in § 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 § 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 § 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 § 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
§ 427.501(d)(1)(ii). We also proposed to apply the Suggestion of Error process as set forth in
§ 427.503 to the preliminary reconciliation.
In detail, first, as set forth in § 427.501(d)(1) and similar to the Preliminary Rebate
Report process as set forth in proposed § 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 § 427.501(d)(1)) to each
manufacturer of a Part B rebatable drug for an applicable calendar quarter. We proposed at
§ 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 § 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 § 427.302(d); applicable calendar quarter specified amount (as set forth in
§ 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 § 427.302; the
reconciled total rebate amount calculated as set forth in § 427.301; and the difference between
the total rebate amount due as specified on the Rebate Report set forth in § 427.501(d)(1)(i)).
As set forth in § 427.503(a), similar to the Suggestion of Error process proposed for the
Preliminary Rebate Report at § 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 § 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 § 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 § 427.501(d)(1)) and include any recalculations based on CMS acceptance
of a manufacturer’s Suggestion of Error from § 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 § 427.501(d)(3)) or amount
described in a previous reconciliation (as determined under § 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 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 § 427.501(d)(1). Specifically, we proposed at § 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
§ 427.501(c) or report of a reconciled rebate amount set forth in § 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 § 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 § 427.501(d)(1), CMS may
choose to include a correction based on the circumstances proposed at § 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 § 427.501(c)) or
the report of the reconciled rebate amount (as set forth in § 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
§ 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
§ 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 § 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 § 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 § 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 § 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 § 427.501(d), is
available for the manufacturer’s Part B rebatable drugs. We proposed at § 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 § 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 § 427.301(g)) for an
applicable calendar quarter; and (3) the rebate amount for 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 § 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 §§ 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.
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
676The 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.
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 § 427.501(d)(1), also enables CMS to majority of updates to the
data specified set forth in § 427.301. Reconciliation 12 months after the Rebate Report is issued,
after the Rebate Report as set forth in § 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 § 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 § 427.501(d)(1)
would allow sufficient time for ASP restatement and claims run-out before the reconciliation as
set forth in § 427.501(d)(1) would occur. We will monitor the data specified at § 427.301 and
consider changing the timing of reconciliation in the Medicare Part B Drug Inflation Rebate
Program in the future if necessary.
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
677 https://www.federalregister.gov/d/2023-24184/p-2172.
misleading (for example, inaccurate ASP data as specified at § 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 § 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 § 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 § 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 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 § 427.501(c), and for reconciliation related to CMS technical errors,
within the reconciliation specified at § 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 § 427.501(d)(1) and/or at § 457.501(d)(2). We proposed to provide a
preliminary report for a reconciled rebate amount set forth at § 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 § 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
§ 427.501, with modification. In this final rule, we are revising § 427.501(b)(iii) and
§ 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 § 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 § 427.501(d)(1) to clarify that a reconciliation will include any changes
incorporated in the Rebate Report specified at § 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 § 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
§ 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 § 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 § 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 (§ 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 § 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 § 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 § 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 § 427.505(a)(1) and (2)
for: (1) a Rebate Report as set forth at § 427.501(c); (2) a reconciled rebate amount greater than
the rebate amount reflected in the Rebate Report as set forth at § 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
§ 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
§ 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 § 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 § 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 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 § 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 section 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
§ 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 § 427.600(f). In alignment with the procedure outlined
in section 1128A of the Act, we proposed at § 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 § 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 §§ 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 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 § 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,
§§ 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 § 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 §§ 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 §§ 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 § 427.600(e) for Part B Drug Inflation
Rebates and § 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 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
§§ 427.600 and 428.500.
h. Severability (§ 427.10)
At § 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 (§§ 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
(§ 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 (§ 427.201(b))
would be distinct and severable from the proposals to use the specified amount for purposes of
the Part B rebate calculation (§ 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 § 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 (§ 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. § 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 § 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.
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
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).
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 (§§ 427.401 and
427.402) are distinct and severable from the proposals related to the determination of Part B
rebatable drugs subject to rebates (§ 427.101), and (2) the proposed policy for using the payment
limit for purposes of calculating the beneficiary coinsurance adjustment (§ 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
§ 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 (§ 428.20)
At § 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:
● “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 § 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
● “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 § 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”.
681These 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.
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.
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
682See https://www.federalregister.gov/documents/2024/09/26/2024-21254/medicaid-program-misclassification-of-
drugs-program-administration-and-program-integrity-updates.
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
§ 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 (§§ 428.100 through 428.101)
i. Definitions
At § 428.100, we proposed to define the following terms applicable to subpart B
(§§ 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 § 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 § 428.101(a), we proposed to identify a Part D rebatable drug683 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.
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 § 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 specified FDA resources such as the “Approved Drug Products with
Therapeutic Equivalence Evaluations” (commonly known as the Orange Book)684 and NDC
Directory685 to determine whether a generic drug meets the definition of a Part D rebatable drug.
At § 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 § 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 § 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
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.
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.
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.
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 § 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 § 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 § 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 § 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 § 428.101(b)
with a modification at § 428.101(b)(1). Specifically, we note below that, for operational reasons
at this time, we are finalizing at § 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 §
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 (§§ 428.200 through
428.204)
i. Definitions
At § 428.200, we proposed to define the following terms applicable to subpart C
(§§ 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
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 rulemaking686 for the MDRP,
which can be found at § 447.502.
After consideration of public comments, we are finalizing these definitions as proposed
at § 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 § 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
686Medicaid Program Final Rule (0938-AU96), 85 Fed. Reg. 87,000, 87,039 (Dec. 31, 2020):
https://www.govinfo.gov/content/pkg/FR-2020-12-31/pdf/2020-28567.pdf.
equal to the per unit Part D drug inflation rebate amount, as determined under § 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 § 428.203. We proposed at
§ 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 § 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 § 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 § 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 § 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
§ 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 § 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 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 §§ 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.
After consideration of public comments, CMS is finalizing this policy as proposed at
§ 428.201(b).
iii. Calculation of the Per Unit Part D Drug Rebate Amount
To calculate the total rebate amount in accordance with § 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 § 428.202. Consistent with the revised Medicare Part D Drug Inflation Rebate
Guidance, we proposed at § 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 § 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
687 FD&C Act Section 736(d).
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
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 § 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 § 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
6885i 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 § 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.
identified at § 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
§ 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 § 428.202(c)(3), or a
subsequently approved drug with a payment amount benchmark period identified at
§ 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 § 428.202(c)(2) through (4).
In the case of a Part D rebatable drug that was previously a selected drug as described at
§ 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, 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 § 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 § 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
§ 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
§ 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 § 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 § 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 § 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 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 § 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
§ 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 § 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 § 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 § 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
§ 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 § 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 § 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 § 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 drug, if such base date AMP was reported for a calendar quarter that
overlaps with the time period described at § 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
§ 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 §§ 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 § 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 § 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 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 §§ 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 § 428.202(d)(3), with modifications to
§§ 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
§§ 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 §§ 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,
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 § 428.202(d)(3), with modifications to
§§ 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
§ 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 § 428.202(c)(1) or (2) and as such, we are also finalizing at §§ 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
§ 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 §§ 428.202(c)(1) or (2). That is, if CMS establishes the payment amount benchmark
period for a drug as described at § 428.202(c)(3) or (4), as applicable, and CMS later obtains
AMP data for the period described at § 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 § 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 § 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 § 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 § 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 § 428.202(d)(3), CMS will apply the payment amount benchmark
period identification policies finalized at § 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 §§ 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 § 428.202(d)(3), with modifications to §§ 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 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 § 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 § 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 §§ 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 § 428.202(d)(3), with modifications to §§ 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 § 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
§ 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 § 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 § 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 § 428.202(c)(5).
(3) Calculation of the Benchmark Period Manufacturer Price
We proposed at § 428.202(d) that, subject to § 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 § 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 § 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
§ 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
§ 428.202(c)(2) through (5), we proposed the following formula at § 428.202(d)(2) to illustrate
how CMS will calculate the benchmark period 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 § 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 § 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 § 428.202(c)(1) or (2), as applicable. Base date AMP has the
meaning set forth at § 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 § 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
§ 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 § 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 § 428.202(c)(3), we further proposed at § 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 § 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 § 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 § 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 § 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 § 428.202(c)(1) or
(2), as applicable. Therefore, in this final rule, we have modified proposed § 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
§ 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 § 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. We proposed the following formula at § 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 § 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 § 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 § 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
§ 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 § 428.202(g). Nevertheless, as described in more detail in section III.I.3.c.iii.2. of
this final rule, we have revised § 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 § 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 § 428.202(c)(1) or (2), as
available. Therefore, in this final rule, we have modified proposed § 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 § 428.202(d)(3) applies, CMS will
use the information determined under § 428.202(d)(3) to calculate the benchmark period
manufacturer price.
iv. Determination of the Total Number of Units Dispensed Under Part D
At § 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 § 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 § 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 § 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 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
689 See https://www.hhs.gov/guidance/document/pde-analysis-process-withheld-and-invoiced-outlier-pdes.
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.
As we proposed at § 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 § 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 § 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 § 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 § 428.203(b) as proposed,
with an additional provision at § 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 § 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 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 § 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 § 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 § 428.203(a), minus the units
determined at § 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 § 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 level690 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
NDC-9 and NDC-11 numbers are identical except for two numbers in NDC-11s that indicate package size.
690
Because of this, NDC-11 is more granular than NDC-9, and multiple NDC-11 numbers can aggregate under a single
NDC-9 number.
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.
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 § 428.202(b) and the benchmark period
manufacturer price at § 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 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
§ 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 § 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 § 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, 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.
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
691 See: https://www.cms.gov/files/document/medicare-part-d-inflation-rebate-program-initial-guidance.pdf.
that covered entities submit certain data elements from 340B-identified Part D claims to 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 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.
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
692Covered 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.
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 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 §§ 428.401(b) and (c), respectively.
In accordance with the proposed § 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
§ 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 § 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 model693 and would be
unworkable for most 340B pharmacies.
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 indicator to identify 340B
units and stated that the use of such an indicator would be operationally feasible, accurate, and
693Covered 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.
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.
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
694 See: https://www.cms.gov/files/document/medicare-part-d-inflation-rebate-program-initial-guidance.pdf.
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” transaction696 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.
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.
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.
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
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 rulemaking698 and can be found at § 447.502. In alignment
with CMS’ policy in section 40.4 of the revised Medicare Part D Drug Inflation Rebate
Guidance, we proposed at § 428.200 to adopt the definitions of “line extension” and “new
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.
698 See: 85 FR 87000, 87101 (December 31, 2020).
formulation” at § 447.502 of this title for the purposes of identifying new formulations of Part D
rebatable drugs.
At § 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 calculated at § 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
§ 428.204, we proposed that CMS will compare the total rebate amount calculated in at
§ 428.201(a) to the alternative total rebate amount, which we believe is consistent with the
existing regulations for new formulations at § 447.509(a)(4), as explained in the CY 2025 PFS
proposed rule (89 FR 61972). We further proposed at § 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 § 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 § 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 § 428.200 and responded to these comments above. We did not receive
comments specific to the proposed provision at § 428.204, and we are finalizing as proposed at
§ 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 (§§ 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.
TABLE 60: Determination of Rebate Reduction Amount for Part D Rebatable
Drugs
Drug Shortage Severe Supply Chain Likely to be in
Disruption Shortage
Duration of Reduction Indefinite for as long as drug is “currently in One applicable period; manufacturer
shortage” may request an extension for an
additional applicable period for up to
two applicable periods total
Percent Reduction Part D rebatable Part D rebatable Part D rebatable Generic Part D
drug other than a plasma-derived biosimilar or generic rebatable drug
plasma-derived product or generic Part D rebatable drug
product or generic Part D rebatable drug
Part D rebatable
drug
First applicable period 25% 75% 75% 75%
Second applicable 10% 50% 75% 75%
period
Subsequent applicable 2% 25% Not applicable Not applicable
periods
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.
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
699See: https://www.iqvia.com/insights/the-iqvia-institute/reports-and-publications/reports/drug-shortages-in-the-
us2023.
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 § 428.300 to define the following terms applicable to subpart D
(§§ 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 § 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 §§ 428.300 and 427.400.
ii. Reducing the Rebate Amount for Part D Rebatable Drugs Currently in Shortage
At § 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 shortage700 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.
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
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.
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.
701 See: https://www.fda.gov/media/131130/download?attachment#page=33.
To calculate the reduced total rebate amount for a Part D rebatable drug, at
§ 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 § 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 § 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
§ 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 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 § 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 § 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.
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
702See: https://www.iqvia.com/insights/the-iqvia-institute/reports-and-publications/reports/drug-shortages-in-the-
us2023.
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 § 428.301 with an additional provision at § 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.
TABLE 61: Application of Shortage Reduction
Applicable period 1 Applicable period 2 Applicable period 3
In shortage on FDA shortage list Yes Yes Yes
Meets definition of Part D rebatable No Yes Yes
drug
Owes a >$0 rebate No No Yes
Applicable percent reduction applied 25% 10% 2%
for a Part D rebatable drug other than
a plasma-derived product or generic
Applicable percent reduction for a Part 75% 50% 25%
D rebatable plasma-derived product or
generic Part D rebatable drug
Note: CMS would “start the clock” for rebate reductions with applicable period 1. The highest percent reduction
would thus apply to applicable period 1, regardless of how many days the Part D rebatable drug is in shortage during
this applicable period. In this example, the 25 percent reduction (for a drug other than a generic or plasma derived
product) or 75 percent reduction (for a generic drug or plasma-derived product) would apply to applicable period 1,
even though there would be no rebate amount to which it applies.
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 § 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
§ 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 § 428.302(b)(1), the manufacturer would have to submit to CMS a rebate reduction request
that meets the eligibility requirements at § 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 § 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 § 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
703A 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.
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
§ 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.
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 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
704Consistent 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.
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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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)..
At § 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 § 428.302(c)(4) or if the rebate reduction request is
incomplete or untimely based on the requirements at § 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 § 428.302(c)(5), is incomplete or untimely based on the
requirements at § 428.302(c)(5), or if a reduction under § 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 § 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 § 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
§ 428.302, with a modification. For alignment with language in the preamble of the CY 2025
PFS proposed rule (89 FR 61975) and § 427.402(b)(1), we clarified at § 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
§ 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.
TABLE 62: Application of Severe Supply Chain Disruption Reduction
Applicable period 1 Applicable period 2 Applicable period 3
Meets definition of Part No Yes Yes
D rebatable drug
Owes a > $0 rebate No No Yes
Applicable percent 75% 0% 0%
reduction applied
Note: CMS would “start the clock” with applicable period 1 if the request was granted for applicable period 1. In
this example, the 75% reduction would apply to applicable period 1, even though there would be no rebate amount
in the applicable period to which the reduction applies.
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 § 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 § 428.300. We proposed at
§ 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 reduction in
accordance with § 428.303(b)(1), the manufacturer will have to submit to CMS a rebate
reduction request that meets the eligibility requirements at § 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
§ 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 § 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 § 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 § 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
§ 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
§ 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 § 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 § 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
§ 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 § 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 § 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 § 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 § 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 § 428.303(c)(4) or if the rebate reduction request is
incomplete or untimely based on the requirements at § 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 § 428.303(c)(5), is incomplete or untimely based on the
requirements at § 428.303(c)(5), or if a reduction under § 428.303(b)(1) was not provided for
such generic Part D rebatable drug, CMS will deny the rebate reduction extension request. At
§ 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 § 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
§ 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 § 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 § 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.
TABLE 63: Shortage Reductions Continuing after a Likely to be in Shortage or
Severe Supply Chain Disruption Reduction for a Generic Part D Rebatable Drug
Example 1 Example 2
Applicable period beginning Not applicable 75% (shortage reduction)
October 1, 2023
Applicable period beginning 75% (likely to be in shortage or severe 75% (likely to be in shortage or severe
October 1, 2024 supply chain disruption reduction) supply chain disruption reduction)
Applicable period beginning 75% (shortage reduction) 25% (shortage reduction)
October 1, 2025
Applicable period beginning 50% (shortage reduction) 25% (shortage reduction)
October 1, 2026
Applicable period beginning 25% (shortage reduction) 25% (shortage reduction)
October 1, 2027
Note: This table illustrates the application of the initial likely to be in shortage and severe supply chain disruption
rebate reductions. A manufacturer may still apply for a rebate reduction extension request. Example 1 illustrates the
application of the rebate reduction for a generic drug when a likely shortage or severe supply chain disruption
precedes a shortage, and the likely to be in shortage or severe supply chain disruption rebate reduction request is
submitted less than 60 days before the end of an applicable period. Example 2 illustrates the application of the rebate
reduction for a generic drug when the likely to be in shortage or severe supply chain disruption rebate reduction
request is submitted less than 60 days before the end of an applicable period for a generic drug that is currently in
shortage during the same applicable period as in which the request is submitted.
We believe this clarification is consistent with the policy set forth in §§ 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 § 428.301 and the likely to be in shortage reduction at
§ 428.303 or the severe supply chain disruption reduction at § 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 § 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 §
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
§ 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 § 428.302(b)(1) as described
above, we have clarified in this final rule at § 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.
TABLE 64: Application of Likely to be in Shortage Reduction
Applicable period 1 Applicable period 2 Applicable period 3
Meets definition of Part D No Yes Yes
rebatable drug
Owes a > $0 rebate No No Yes
Applicable percent reduction 75% 0% 0%
applied
Note: CMS would “start the clock” with applicable period 1 if the request was granted for applicable period 1. In
this example, the 75 percent reduction would apply to applicable period 1, even though there would be no rebate
amount in applicable period 1 to which it applies.
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 (§§ 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 § 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 § 428.401(d). As proposed at § 428.401(b), CMS do will not send
notice to manufacturers for drugs that are not considered rebatable under proposed § 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 § 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 § 428.400, we proposed to define the following term applicable to
subpart E (§§ 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 §§ 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 § 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 § 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 § 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 § 428.401 the use of an initial Preliminary Rebate Report and a
subsequent Rebate Report, with an opportunity for manufacturers to identify certain
mathematical errors (see § 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 § 428.401(d).
We proposed at § 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 § 428.401(b) and (2) a second report, which we
proposed to entitle the “Rebate Report” as set forth in § 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 § 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
§ 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 § 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 § 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 § 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 § 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 § 428.20; the total
number of units for the Part D rebatable drug for the applicable period as determined under
§ 428.203 (which will remove units when a generic drug is no longer a Part D rebatable drug as
determined under § 428.203(b)(1) and will exclude units acquired through the 340B Program as
determined under § 428.203(b)(2)); the benchmark period manufacturer price as determined
under § 428.202(d); the AnMP for the Part D rebatable drug for the applicable period as
determined under § 428.202(b); the applicable benchmark period and applicable period CPI-Us
as determined under §§ 428.202(e) and 428.20; the inflation-adjusted payment amount as
determined under § 428.202(f); the amount, if any, of the excess AnMP for the Part D rebatable
drug for the applicable period as determined under § 428.202(a); any applied reductions as
determined under §§ 428.301, 428.302, and 428.303; and the rebate amount due as determined
under § 428.201(a). As proposed under § 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 § 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 § 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 § 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 § 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
§ 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 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 § 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 § 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 § 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 § 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 § 428.401(c)(1), the Rebate Report would include
the same data elements as the Preliminary Rebate Report (as set forth in § 428.401(b)(1)) and
include any recalculations based on CMS acceptance of a manufacturer’s Suggestion of Error as
set forth in § 428.403, or any CMS-determined recalculations as set forth in § 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 § 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 §§ 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 § 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 § 428.401 as proposed, with
modification. In this final rule, we are revising § 428.401(b)(iii) and § 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 § 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 § 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 § 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. 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 § 428.401(d)(1) or a discretionary
reconciliation as set forth in § 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 § 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
§ 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 § 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 § 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 § 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 § 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 § 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 § 428.401(d)(1)(i)(A) through (F). We believe that a restatement of each data element
determined under § 428.401(d)(1) to reconcile the rebate amount provided in the Rebate Report
set forth in § 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 § 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 § 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 § 428.401(d)(1)(ii). We also proposed to apply the Suggestion of Error process as
set forth in § 428.403 to each preliminary reconciliation.
In detail, first, as set forth in § 428.401(d) and similar to the Preliminary Rebate Report
process set forth in § 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 § 428.401(d)) to each
manufacturer of a Part D rebatable drug for an applicable period. We proposed at
§ 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 § 428.203(b)(2)(i)(A) and (B)), or units otherwise excluded as determined
under § 428.203(b); the benchmark period manufacturer price if any inputs are restated within
the reconciliation run-out period as determined under § 428.202(d); the AnMP if any inputs are
restated within the reconciliation run-out period as determined under § 428.202(b); the excess
amount by which the AnMP exceeds the inflation-adjusted payment amount for the applicable
period as determined under § 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 § 447.509(a)(4)(iii)(B), the inflation rebate amount
ratio, and the alternative total rebate amount as set forth at § 428.204 if any inputs are restated
within the reconciliation run-out period; the reconciled rebate amount as set forth at
§ 428.201(a); and the difference between the total rebate amount due as specified on the Rebate
Report set forth at § 428.201(a) and the reconciled rebate amount as set forth at § 428.201(a). We
also noted that changes to status of 5i drugs (defined at § 447.507) are captured through AMP
restatements.
As set forth in § 428.403(a), similar to the Suggestion of Error process proposed for the
Preliminary Rebate Report set forth in § 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 § 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 § 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 § 428.401(d)(1)(i)) and will include any recalculations based on
CMS acceptance of a manufacturer’s Suggestion of Error set forth in § 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 § 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 § 428.401(d)(1). Specifically, we proposed at § 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 § 428.401(c) or report of a reconciled rebate amount as determined under
§ 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 § 428.401(d)(1), CMS may choose to include a
correction based on the circumstances set forth in § 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 § 428.401(c)) or the report of the
reconciled rebate amount (set forth in § 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
§ 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
§ 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
§ 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-months as set forth in § 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 § 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 § 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 § 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 § 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 § 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 § 428.401(b)(1), and as
set forth in § 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 § 428.401 as proposed, with
modification. In this final rule, we are revising § 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 § 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
§ 428.401(b)(iii) and § 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 §§ 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 §§ 428.202(c)(3) and (4). The revisions at § 428.401(b)(iii) and § 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 §§ 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
§§ 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 § 428.401(d). The revisions set forth in §§ 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 § 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
§ 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 § 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 § 428.402(c)(1)(ii)). As set forth in
§ 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 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
§ 428.402 as proposed.
f. Enforcement of Manufacturer Payment of Rebate Amounts (§ 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
§ 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 § 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 § 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 § 428.405(a)(1), for: (1) a Rebate Report set
forth in § 428.401(c); (2) a reconciled rebate amount greater than the amount reflected in the
Rebate Report set forth in at § 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 § 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 § 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 § 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 § 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 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 § 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 section 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
§ 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 § 428.500(f). In alignment with the procedure outlined
in section 1128A of the Act, we proposed at § 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 § 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 § 428.500 as proposed.
g. Severability (§ 428.10)
At § 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 (§ 428.203(b)(2)) to be distinct and severable from the proposals related to
determination of Part D Rebatable drugs (§§ 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 (§§ 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 intent,705 and if parts of the action are
705 Davis Cnty. Solid Waste Mgmt. v. U.S. E.P.A., 108 F.3d 1454, 1459 (D.C. Cir. 1997).
“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 § 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.
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 (§§ 428.202(c)(3) and (c)(4)).
After consideration of public comments, CMS is finalizing this policy as proposed at
§ 428.10.
706 Wilmina Shipping AS v. United States Dep't of Homeland Sec., 75 F. Supp. 3d 163, 171 (D.D.C. 2014).
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; § 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 § 410.37,
● Adding coverage for the computed tomography colonography (CTC) procedure in
regulations at § 410.37, and
● Expanding a “complete colorectal cancer screening” in § 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
707CDC Website: https://www.cdc.gov/colorectal-
cancer/about/?CDC_AAref_Val=https://www.cdc.gov/cancer/colorectal/basic_info/what-is-colorectal-cancer.htm.
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
At § 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
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
708 NCI Website: https://seer.cancer.gov/statfacts/html/colorect.html.
709 CDC Website: https://www.cdc.gov/colorectal-
cancer/screening/?CDC_AAref_Val=https://www.cdc.gov/cancer/colorectal/basic_info/screening/tests.htm.
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.
USPSTF again included CTC as a CRC screening method in the most recent May 2021 revised
Final Recommendation Statement, which 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.
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
§ 410.37. Barium enema screening examinations have to be ordered by the beneficiary’s
712USPSTF January 2021 Revised Final Recommendation Statement
https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/colorectal-cancer-screening.
attending physician (§ 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 § 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
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)+f
or+Colorectal+Cancer)).
714 USPSTF October 2008 Final Recommendation Statement:
https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/colorectal-cancer-screening-2008.
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
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 (§ 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
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)+f
or+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)+f
or+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)+f
or+Colorectal+Cancer)).
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 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 § 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 §
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 § 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
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.
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
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.
721The 2018 American Cancer Society (ACS) Colorectal Cancer Screening for Average-Risk Adults Guideline
Update, doi: 10.3322/caac.21457. Available online at cacancerjournal.com.
722 CY 2023 PFS Public Comment CMS-2022-0113-21851_attachment_1.
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
In light of the new evidence and our consultations with appropriate organizations, we
proposed to remove barium enema as a colorectal screening test under § 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 § 410.37.
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 § 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
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.
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.
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
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
726USPSTF January 2021 Revised Final Recommendation Statement,
https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/colorectal-cancer-screening.
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.
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.
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 recommendations729, 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.
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.
728 2018 ACS Colorectal Cancer Screening for Average-Risk Adults Guideline Update, doi: 10.3322/caac.21457.
Available online at cacancerjournal.com.
729 Am J Gastroenterol 2017; 112:1016–1030; doi: 10.1038/ajg.2017.174; published online 6 June 2017.
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.”
We also considered the online resource RadiologyInfo™,730 which is an online public
information resource 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
730 RadiologyInfo Website: https://www.radiologyinfo.org/.
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
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 § 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.
731 https://www.radiologyinfo.org/en/info/safety-xray.
● 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, §
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 § 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.
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
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
732Kolata, 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.
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 §
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 § 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
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
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.
733https://www.whitehouse.gov/cancermoonshot/.
734https://www.whitehouse.gov/briefing-room/presidential-actions/2024/02/29/proclamation-on-national-
colorectal-cancer-awareness-month-2024/.
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 § 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 § 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 § 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 § 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.
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 §
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 §
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 § 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 § 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 §
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 §410.37(k) with
editorial modification of the regulatory text at § 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 § 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 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 § 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 § 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 §
410.37 and adding coverage for the CTC procedure to the definition of CRC screening in the
regulations at § 410.37. We are finalizing the associated regulatory language as proposed, with
one minor modification for grammatical clarity regarding frequency limitations in paragraph §
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 § 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 § 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 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 § 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
§ 423.160(a)(5) to “the applicable standards in paragraph (b) of this section,” which refers to the
standards in § 423.160(b), the CMS EPCS Program will automatically adopt the electronic
prescribing standards at § 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 § 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 § 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 § 423.160(b) subject to the exemption in § 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 § 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 § 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 § 423.160(a)(5), the CMS EPCS Program will automatically adopt the
electronic prescribing standards at § 423.160(b) as they are updated. We noted that in the
“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” 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 § 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 § 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), § 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 §
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.
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.
735On 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).
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).
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
736According 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.
it was not realistic in that version of the 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.
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).
https://standards.ncpdp.org/Standards/media/pdf/Correspondence/2024/NCPDP-Letter-to-CMS-regarding-
737
CMS-4205-P.pdf.
National Council for Prescription Drug Programs (NCPDP) SCRIPT Standard, Implementation Guide,
738
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.
In the CY 2025 PFS proposed (89 FR 61999) rule, we proposed to revise § 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 § 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 § 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 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.
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.
739CMS 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.
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 § 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 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 § 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
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 § 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 § 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 §
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
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 §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;
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.
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.
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 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.
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
744CDC. 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.
745Conners 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.
748 Weng, M., et al. 2022. Universal hepatitis B vaccination.
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.
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
TABLE 65: Rates of Reported Acute Hepatitis B Virus Infection, by Age Group – United
States
Age (years) 2015 2016 2017 2018 2019
0–19 0.0 0.0 0.0 0.0 0.0
20–29 0.8 0.6 0.6 0.6 0.5
CDC. 2023. Vaccination Coverage among Adults in the United States, National Health Interview Survey, 2021.
749
Retrieved from https://www.cdc.gov/adultvaxview/publications-resources/vaccination-coverage-adults-2021.html.
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.
30–39 2.6 2.4 2.3 2.0 1.8
40–49 2.4 2.2 2.5 2.6 2.7
50–59 1.4 1.5 1.6 1.6 1.6
≥60 0.5 0.5 0.6 0.6 0.6
Source: CDC, National Notifiable Diseases Surveillance System.
* Rates per 100,000 population. Beginning in 2021, single-race population estimates are used
for rate calculations. For prior years, bridged-race population estimates are used.
† Reported confirmed cases. For the case definition, see
https://ndc.services.cdc.gov/conditions/hepatitis-b-acute/.
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 § 410.63(a), which
describes individuals who are at high or intermediate risk of contracting hepatitis and eligible for
coverage of 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
755CDC. 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(recommendation%20category%20A).
756 Weng, M., et al. 2022. Universal hepatitis B vaccination.
physicians assessing barriers to adult hepatitis B vaccination and found that 68% cited patients’
non-disclosure of risk factors.757
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.
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 § 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
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.
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.
760 CDC, 2023. Hepatitis B surveillance 2021. Retrieved from
https://www.cdc.gov/hepatitis/statistics/2021surveillance/hepatitis-b.htm.
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.
We noted that § 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, § 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
5. Proposal Summary
As noted previously, we proposed to revise § 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
761CDC. 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.
.
762CDC. 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.
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
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
§ 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 § 414.610 of the regulations. In
accordance with section 1834(l)(3) of the Act and § 414.610(f), the AFS rates are adjusted
annually based on an inflation factor. The AFS also incorporates two permanent add-on
payments in § 414.610(c)(5)(i) and three temporary add-on payments in § 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 (§410.40(c)). Definitions for the levels of service can be found at § 414.605 and in the
Medicare Benefit Policy Manual, Chapter 10, Ambulance Services, section 30.1.1, Definition of
Ground Ambulance Services.
At § 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 (§ 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.
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
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.
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.
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
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-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
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
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.
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.
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.
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
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
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
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.
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.
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.
on the time needed to transport and clinical need, patients generally receive 1-2 units of WBT
during ground transport.779
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
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
779 Krohmer J. Chairman, steering committee of the Prehospital Blood Transfusion Initiative Coalition. Virtual
Meeting April 23, 2024.
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.
782 Prehospital Hemorrhage Control and Treatment by Clinicians: A Joint Position Statement. Ann Emerg Med.
2023;82:e1-e8.
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).
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 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 § 410.41(b) include
compliance with state and local laws; those laws would establish appropriate training
requirements with respect to WBT administration.
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.
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. E-mail 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.
E-mail correspondence and phone conversation, May 10, 2024.
We proposed in the CY 2025 PFS proposed rule (89 FR 62002 through 62004) to modify
the definition of ALS2 at § 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
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
785Apelseth 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.
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
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
Transfusion. 2021 Jun;61(6):1966-1971. doi: 10.1111/trf.16380. Epub 2021 Mar 29. PMID: 33780020; PMCID:
786
PMC8251973.
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 § 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 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
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.
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
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
789Duschesne 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
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.
mortality. 793
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 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
793 Ibid.
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 § 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 § 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 §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 §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
(§ 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).
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 § 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 § 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.
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 (§ 401.305(a)(2))
Proposals from the December 2022 proposed rule sought to amend § 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 § 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
§ 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 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
§ 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 §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 § 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
§ 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 §
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 § 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.
With respect to quantification of the overpayment, once a person has identified an
overpayment, as the term is defined at § 401.305(a)(2), the person has 60 days to report and
return the overpayment under § 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 § 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 § 401.305(b)(3)(ii)(A), the investigatory timeframe under
§ 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 § 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 § 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
(§§ 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 § 401.305(b) regarding the deadline for
reporting and returning overpayments.
Existing § 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
§ 401.305(b)(2), as well as to reference newly-proposed § 401.305(b)(3).
Existing § 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 § 401.603. We proposed a technical modification to the
introductory language in § 401.305(b)(2) to acknowledge that this section may be applicable
after the suspension described in new § 401.305(b)(3) is complete.
Proposed § 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 § 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 § 401.305(b)(3)(ii) provides that, if the
conditions for proposed § 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 § 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
§ 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
§ 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 returned within 50 days
after either (1) completion of the investigation or (2) day 180, whichever is earlier. However, the
suspension described in § 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 §
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 § 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 § 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 § 401.305(b)(1) for reporting and returning an
overpayment begins once an overpayment is identified, as the term is defined at § 401.305(a)(2),
even if the person has not yet calculated the precise amount of the overpayment at the time of
identification. Under § 401.305(b)(3), the 60-day deadline at § 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 § 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 § 401.305(b)(3)(ii) to
provide that the deadline is suspended for the entirety of a timely, good-faith investigation to
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
§ 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 § 401.305(b)(1), coupled with the definition of “identified” at § 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 § 401.305(b)(3) is available after a person has identified an overpayment,
as the term is defined at § 401.305(a)(2). As explained in final § 401.305(b)(3)(i)(A), the
suspension for reporting and returning overpayments under § 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 § 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
§ 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 § 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, § 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 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 § 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
§ 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 (§§ 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
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).
proposed to amend the final Parts C & D Overpayment Rule at §§ 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.
3. Provisions of Final Regulations: Medicare Advantage Program and Part D - Amending the
Standard for When an Overpayment Is Identified (§§ 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 §§ 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
797See 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).
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
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
798UnitedHealthcare, 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).
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 § 422.310(d)). Pursuant to § 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 § 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-related overpayments through the global reopening process described at
§ 423.346(a)(2), which is consistent with the 6-year overpayment look-back period described at
§ 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 § 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.
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
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 §§ 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).
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 (§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
§§ 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 § 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
802 We note that the term MIPS eligible clinician is defined at § 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 § 414.1310(e).
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 § 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 § 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.
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.
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 delivery804
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 § 414.1305) will not have to
report the MVP in order to furnish and bill for APCM services.
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
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.
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 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 § 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 § 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 § 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 §
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 § 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 § 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 § 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 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 § 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 §
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 (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 § 414.1425 meets or exceeds the threshold percentages specified
at § 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 § 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 § 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 § 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 § 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.
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
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 | 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.
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 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 § 414.1350(c)(4)) to receive a score on this cost measure as set forth in §
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 § 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)%20Develo
pment%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.
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 § 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
§ 414.1365(d)(2) that, unless otherwise indicated in § 414.1365(d), the performance standards
described at § 414.1380(a)(1)(i) through (iv) apply to the measures and activities included in the
MVP (86 FR 65419 through 65421). We noted that in general, we 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 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 § 414.1365(c)(4)(ii) that an
MVP Participant is scored on one population health measure in accordance with
§ 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 § 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 § 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 § 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 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
§ 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
§ 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
§ 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
§ 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
§ 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 § 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.
(2) Cost Performance Category in MVPs
In the CY 2022 PFS final rule, we finalized at § 414.1365(d)(3)(ii) to use the
methodology established at § 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 § 414.1380(b)(2) score cost measures based on achievement
and improvement when the case minimum specified under § 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 § 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 § 414.1380(b)(2). Currently, § 414.1365(d)(3)(ii) provides
that the cost performance category score is calculated for an MVP Participant using the
methodology at § 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 § 414.1365(d)(3)(ii) to replace the reference to
§ 414.1380(b)(2)(i) through (v) with a broader reference to the cost performance category
scoring policies at § 414.1380(b)(2).
We also proposed in the CY 2025 PFS proposed rule (89 FR 62020) to similarly revise
§ 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, § 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 § 414.1380(b)(2)(i) through (v). We proposed in the CY 2025 PFS proposed rule
(89 FR 62020) to modify § 414.1365(d)(3)(ii)(A) to replace the reference to § 414.1380(b)(2)(i)
through (v) with a broader reference to the cost performance category scoring policies at
§ 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 § 414.1365(d)(3)(ii) and §
414.1365(d)(3)(ii)(A). Specifically, we are finalizing replacing references to § 414.1380(b)(2)(i)
through (v) in each provision with a broader reference to the cost performance category’s scoring
policies at § 414.1380(b)(2). We are finalizing our proposed modification at § 414.1365(d)(3)(ii)
to state the cost performance category is calculated for an MVP Participant using the
methodology at § 414.1380(b)(2). We also are finalizing our proposed modification to
§ 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 § 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
§ 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 § 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
§ 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
§ 414.1360 on which data is submitted in accordance with § 414.1325 or for participation in a
certified or recognized PCMH or comparable specialty practice, as described at
§ 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 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
§ 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 § 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 § 414.1380(b)(3)(ii). Additionally, we proposed in
the CY 2025 PFS proposed rule (89 FR 62020 and 62021) at § 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 § 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
§ 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
§ 414.1380(b)(3)(ii). We are also finalizing as proposed to update § 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 § 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 § 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 § 414.1360 on which data is submitted in accordance with
§ 414.1325 or for participation in a certified or recognized PCMH or comparable specialty
practice, as described at § 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, 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
§ 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 § 414.1360 on which data is
submitted in accordance with § 414.1325 or for participation in a certified or recognized PCMH
or comparable specialty practice, as described at § 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 § 414.1380(b)(3)(ii).
(4) Promoting Interoperability Performance Category in MVPs
In the CY 2022 PFS final rule, we finalized at § 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 § 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 § 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 § 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.
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
§ 414.1365(c)(4)(i)(A). Specifically, we proposed in the CY 2025 PFS proposed rule (89 FR
62021) to modify § 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
809In the CY 2025 PFS proposed rule (89 FR 62021), we inadvertently stated in error that the existing language
under § 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.
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
§ 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, § 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 § 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/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
§ 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.
TABLE 66: Existing APM Performance Pathway Quality Measure Set
Meaningful Universal
Quality Measure
Measure Title Collection Type Submitter Type Measures 2.0 Foundation
ID # Type
Area Measure
eCQM/MIPS Yes
Diabetes: CQM (all APP
APM Entity/
Hemoglobin reporters) Chronic Intermediate
001 Third Party
A1c (HbA1c) Poor Web Interface/ Conditions Outcome
Intermediary
Control Medicare CQM
(SSP ACOs only)
eCQM/MIPS Yes
Preventive Care
CQM (all APP
and Screening: APM Entity/
reporters) Behavioral
134 Screening for Third Party Process
Web Interface/ Health
Depression and Intermediary
Medicare CQM
Follow-up Plan
(SSP ACOs only)
eCQM/MIPS Yes
CQM (all APP
APM Entity/
Controlling High reporters) Chronic Intermediate
236 Third Party
Blood Pressure Web Interface/ Conditions Outcome
Intermediary
Medicare CQM
(SSP ACOs only)
Patient
CAHPS for MIPS Third Party Person-
321 CAHPS for MIPS Engagement/ Yes
Survey Intermediary Centered Care
Experience
Hospital-Wide, 30- Yes
day, All-Cause
Unplanned
Administrative Affordability
479 Readmission N/A Outcome
Claims and Efficiency
(HWR) Rate for
MIPS
Clinician Groups
Clinician and No
Clinician Group
Risk-Standardized
Administrative Affordability
484 Hospital Admission N/A Outcome
Claims and Efficiency
Rates for Patients
with Multiple
Chronic Conditions
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 § 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
810 https://www.cms.gov/medicare/quality/meaningful-measures-initiative/cms-quality-strategy.
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
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
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.
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
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 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 § 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
That said, we note that the Shared Savings Program proposed to require that ACOs report the APP Plus quality
815
measure set starting with PY 2025 (89 FR 61853).
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.
For the reasons specified previously, we proposed to amend § 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 § 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 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 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.
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
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)
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.
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.
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
820American 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.
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
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 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,
821Quality 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.
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 § 414.1367 beginning in CY 2021 performance period/2023 MIPS payment year as an
optional streamlined reporting and 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
§ 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 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
(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
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.
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/.
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
(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
827Bahorik, 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.
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
831Porterfield, 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.
interpersonal safety832—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.
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.
In addition, many of these drivers of health are not only linked to poorer health, but
disproportionately impact 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
832https://qpp.cms.gov/docs/QPP_quality_measure_specifications/CQM-
Measures/2023_Measure_487_MIPSCQM.pdf.
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.
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)
(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
834American 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.
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).
(f) The APP and APP Plus Quality Measure Sets Beginning with the CY 2025 Performance
Period/2027 MIPS Payment Year
835Centers 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%20
Specifications.zip.
836Jencks, 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.
837Abernathy, 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.
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.
TABLE 67: Alignment of the APP Plus Measure Set with the Adult Universal Foundation
Measure Set a
Performance
Identification Number Period Measure
Quality # Measure Title Domain c
and Name b Added to the APP
Plus Measure Set
204: Hemoglobin A1c Diabetes: Hemoglobin A1c (HbA1c)
001 Chronic Conditions 2025
poor control (>9%) Poor Control
672: Screening for Preventive Care and Screening:
134 depression and follow- Screening for Depression and Follow- Behavioral Health 2025
up plan up Plan
167: Controlling high
236 Controlling High Blood Pressure Chronic Conditions 2025
blood pressure
(# varies by program)
Consumer Assessment
Person-Centered
321 of Healthcare Providers CAHPS for MIPS 2025
Care
and Systems overall
rating measures
44 or 561: All-cause
Hospital-Wide, 30-day, All-Cause
hospital readmissions or Affordability and
479 Unplanned Readmission (HWR) Rate
readmissions plan all- Efficiency
for MIPS Clinician Groups
cause readmissions
93: Breast cancer Wellness and
112 Breast Cancer Screening 2025
screening Prevention
139: Colorectal cancer Wellness and
113 Colorectal Cancer Screening 2026
screening Prevention
394: Initiation and
Initiation and Engagement of Substance
305 engagement of substance Behavioral Health 2027
Use Disorder Treatment
use disorder treatment
2028, or the
performance period
Identification number
that is one year
undetermined: Screening
487 Screening for Social Drivers of Health Equity after the
for social drivers of
eCQM specification
health
becomes available,
whichever is later
2028, or the
performance period
that is one year
26: Adult immunization Wellness and
493 Adult Immunization Status after the
status Prevention
eCQM specification
becomes available,
whichever is later
a 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.
b Identification numbers are CMS Measures Inventory Tool measure family identification numbers; names reflect
the descriptions associated with those numbers.
c Domains are from Meaningful Measures 2.0.
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.
TABLE 68: APP Plus Quality Measure Set for the CY 2025 Performance Period
Meaningful
Quality # Measure Title Collection Type Submitter Type Measures 2.0 Measure Type
Area
eCQM/MIPS CQM/Part MIPS Eligible Clinician
Diabetes:
B Claims (all APP Representative of a
Hemoglobin Chronic Intermediate
001 reporters) Practice
A1c (HbA1c) Poor Conditions Outcome
Medicare CQM (SSP APM Entity
Control
ACOs only) Third Party Intermediary
Preventive Care eCQM/MIPS CQM/Part MIPS Eligible Clinician
and Screening: B Claims (all APP Representative of a
Behavioral
134 Screening for reporters) Practice Process
Health
Depression and Medicare CQM (SSP APM Entity
Follow-up Plan ACOs only) Third Party Intermediary
eCQM/MIPS CQM/Part MIPS Eligible Clinician
B Claims (all APP Representative of a
Controlling High Chronic Intermediate
236 reporters) Practice
Blood Pressure Conditions Outcome
Medicare CQM (SSP APM Entity
ACOs only) Third Party Intermediary
Patient
CAHPS for MIPS Person-Centered
321 CAHPS for MIPS Third Party Intermediary Engagement/
Survey Care
Experience
Hospital-Wide, 30-
day, All-Cause
Unplanned
Readmission Admissions &
479 Administrative Claims N/A Outcome
(HWR) Rate for Readmissions
MIPS Eligible
MIPS
Clinician Groups
eCQM/MIPS CQM/Part MIPS Eligible Clinician
B Claims (all APP Representative of a
Breast Cancer Wellness and
112 reporters) Practice Process
Screening Prevention
Medicare CQM (SSP APM Entity
ACOs only) Third Party Intermediary
TABLE 69: APP Plus Quality Measure Set for the CY 2026 Performance Period
Meaningful Measure
Quality # Measure Title Collection Type Submitter Type
Measures 2.0 Area Type
MIPS Eligible
eCQM/MIPS Clinician
Diabetes:
CQM/Part B Claims Representative of a
Hemoglobin Intermediate
001 (all APP reporters) Practice Chronic Conditions
A1c (HbA1c) Poor Outcome
Medicare CQM (SSP APM Entity
Control
ACOs only) Third Party
Intermediary
MIPS Eligible
Preventive Care eCQM/MIPS Clinician
and Screening: CQM/Part B Claims Representative of a
134 Screening for (all APP reporters) Practice Behavioral Health Process
Depression and Medicare CQM (SSP APM Entity
Follow-up Plan ACOs only) Third Party
Intermediary
MIPS Eligible
eCQM/MIPS Clinician
CQM/Part B Claims Representative of a
Controlling High Intermediate
236 (all APP reporters) Practice Chronic Conditions
Blood Pressure Outcome
Medicare CQM (SSP APM Entity
ACOs only) Third Party
Intermediary
Patient
CAHPS for MIPS Third Party Person-Centered
321 CAHPS for MIPS Engagement/E
Survey Intermediary Care
xperience
Hospital-Wide,
30-day, All-Cause
Unplanned
Readmission Administrative Affordability and
479 N/A Outcome
(HWR) Rate for Claims Efficiency
MIPS Eligible
MIPS
Clinician Groups
Clinician and
Clinician Group
Risk-standardized
Hospital Administrative Affordability and
484 N/A Outcome
Admission Rates Claims Efficiency
for Patients with
Multiple Chronic
Conditions
eCQM/MIPS MIPS Eligible
CQM/Part B Claims Clinician
Breast Cancer Wellness and
112 (all APP reporters) APM Entity Process
Screening Prevention
Medicare CQM (SSP Third Party
ACOs only) Intermediary
MIPS Eligible
eCQM/MIPS Clinician
CQM/Part B Claims Representative of a
Colorectal Cancer Wellness and
113 (all APP reporters) Practice Process
Screening Prevention
Medicare CQM (SSP APM Entity
ACOs only) Third Party
Intermediary
TABLE 70: APP Plus Quality Measure Set for the CY 2027 Performance Period
Meaningful
Quality # Measure Title Collection Type Submitter Type Measures Measure Type
2.0 Area
eCQM/MIPS MIPS Eligible Clinician
Diabetes:
CQM/Part B Claims Representative of a
Hemoglobin Chronic
001 (all APP reporters) Practice Intermediate Outcome
A1c (HbA1c) Conditions
Medicare CQM (SSP APM Entity
Poor Control
ACOs only) Third Party Intermediary
Preventive Care eCQM/MIPS MIPS Eligible Clinician
and Screening: CQM/Part B Claims Representative of a
Behavioral
134 Screening for (all APP reporters) Practice Process
Health
Depression and Medicare CQM (SSP APM Entity
Follow-up Plan ACOs only) Third Party Intermediary
eCQM/MIPS MIPS Eligible Clinician
CQM/Part B Claims Representative of a
Controlling High Chronic
236 (all APP reporters) Practice Intermediate Outcome
Blood Pressure Conditions
Medicare CQM (SSP APM Entity
ACOs only) Third Party Intermediary
Person-
CAHPS for MIPS Patient
321 CAHPS for MIPS Third Party Intermediary Centered
Survey Engagement/Experience
Care
Hospital-Wide,
30-day, All-Cause
Unplanned
Affordability
Readmission Administrative
479 N/A and Outcome
(HWR) Rate for Claims
Efficiency
MIPS Eligible
MIPS
Clinician Groups
Clinician and
Clinician Group
Risk-standardized
Affordability
Hospital Administrative
484 N/A and Outcome
Admission Rates Claims
Efficiency
for Patients with
Multiple Chronic
Conditions
eCQM/MIPS MIPS Eligible Clinician
CQM/Part B Claims Representative of a
Breast Cancer Wellness and
112 (all APP reporters) Practice Process
Screening Prevention
Medicare CQM (SSP APM Entity
ACOs only) Third Party Intermediary
eCQM/MIPS MIPS Eligible Clinician
CQM/Part B Claims Representative of a
Colorectal Cancer Wellness and
113 (all APP reporters) Practice Process
Screening Prevention
Medicare CQM (SSP APM Entity
ACOs only) Third Party Intermediary
Initiation and MIPS Eligible Clinician
eCQM (all APP
Engagement of Representative of a
reporters) Behavioral
305 Substance Use Practice Process
Medicare CQM (SSP Health
Disorder APM Entity
ACOs only)
Treatment Third Party Intermediary
TABLE 71: APP Plus Quality Measure Set for the CY 2028 Performance Period and
Subsequent Performance Periods
Meaningful
Quality # Measure Title Collection Type Submitter Type Measures 2.0 Measure Type
Area
MIPS Eligible
eCQM/MIPS Clinician
Diabetes:
CQM/Part B Claims Representative of a
Hemoglobin Chronic
001 (all APP reporters) Practice Intermediate Outcome
A1c (HbA1c) Conditions
Medicare CQM (SSP APM Entity
Poor Control
ACOs only) Third Party
Intermediary
MIPS Eligible
Preventive Care eCQM/MIPS Clinician
and Screening: CQM/Part B Claims Representative of a
Behavioral
134 Screening for (all APP reporters) Practice Process
Health
Depression and Medicare CQM (SSP APM Entity
Follow-up Plan ACOs only) Third Party
Intermediary
MIPS Eligible
eCQM/MIPS Clinician
CQM/Part B Claims Representative of a
Controlling High Chronic
236 (all APP reporters) Practice Intermediate Outcome
Blood Pressure Conditions
Medicare CQM (SSP APM Entity
ACOs only) Third Party
Intermediary
CAHPS for MIPS Third Party Patient- Patient
321 CAHPS for MIPS
Survey Intermediary Centered Care Engagement/Experience
Hospital-Wide,
30-day, All-Cause
Unplanned
Readmission Administrative Affordability
479 N/A Outcome
(HWR) Rate for Claims and Efficiency
MIPS Eligible
MIPS
Clinician Groups
Clinician and
Clinician Group
Risk-standardized
Hospital Administrative Affordability
484 N/A Outcome
Admission Rates Claims and Efficiency
for Patients with
Multiple Chronic
Conditions
MIPS Eligible
eCQM/MIPS Clinician
CQM/Part B Claims Representative of a
Breast Cancer Wellness and
112 (all APP reporters) Practice Process
Screening Prevention
Medicare CQM (SSP APM Entity
ACOs only) Third Party
Intermediary
MIPS Eligible
eCQM/MIPS Clinician
CQM/Part B Claims Representative of a
Colorectal Cancer Wellness and
113 (all APP reporters) Practice Process
Screening Prevention
Medicare CQM (SSP APM Entity
ACOs only) Third Party
Intermediary
MIPS Eligible
Initiation and
eCQM (all APP Clinician
Engagement of
reporters) Representative of a Behavioral
305 Substance Use Process
Medicare CQM (SSP Practice Health
Disorder
ACOs only) APM Entity
Treatment
Third Party
Meaningful
Quality # Measure Title Collection Type Submitter Type Measures 2.0 Measure Type
Area
Intermediary
MIPS Eligible
Clinician
eCQM/MIPS CQM
Screening for Representative of a
(all APP reporters)
487* Social Drivers of Practice Equity Process
Medicare CQM (SSP
Health APM Entity
ACOs only)
Third Party
Intermediary
MIPS Eligible
Clinician
eCQM/MIPS CQM
Adult Representative of a
(all APP reporters) Wellness and
493* Immunization Practice Process
Medicare CQM (SSP Prevention
Status APM Entity
ACOs only)
Third Party
Intermediary
* Indicates this measure will be incorporated into 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, whichever is later.
Scoring for the APP quality performance category scoring methodology at
§ 414.1367(c)(1) will continue to be performed in accordance with § 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 § 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 § 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 § 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 § 414.1325.
We note, that under the current policies described at § 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
§ 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 § 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 § 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.
(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 § 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 § 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 § 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 § 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
§ 414.1380(c).
Similarly, for the Promoting Interoperability performance category, under the current
reweighting policies at § 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
§ 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 § 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
§ 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 § 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
§ 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 § 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 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 § 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.
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 § 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 §§ 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.
838Attestation 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 §
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.
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 § 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 changes to the
current scoring policies described under § 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 § 414.1380(c)(2).
We proposed to specify what we consider to be a data submission at § 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 §§ 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 § 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 § 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 §§ 414.1355 and 414.1360 and the CY 2017 Quality Payment
Program final rule (81 FR 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 § 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
§ 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
§ 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
FR62033 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 §§ 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 § 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 §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 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 § 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 § 414.1375 for our previously established policies regarding reporting
for the Promoting Interoperability performance category. We also refer readers to § 414.1305
for the definition of attestation, § 414.1325 for data submission requirements, and
§ 414.1380(b)(4) for Promoting Interoperability performance category scoring. We refer readers
to § 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 § 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 § 414.1305)
as required, we score the data submission under our established scoring policies for the
performance category.
We previously finalized at § 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 § 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 § 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 § 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
Furthermore, to earn a performance category score for the Promoting Interoperability
performance category, we established at § 414.1375 that, for the performance period established
at § 414.1320, individual MIPS eligible clinicians, groups, virtual groups, subgroups, or APM
Entities must use CEHRT as defined at § 414.1305, report on objectives and associated measures
as specified by CMS, and submit attestations as specified by CMS. Under § 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 § 414.1305) for the continuous 180-day performance period
(§ 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
839We note that this automatic reweighting policy for clinical social workers only applies through the CY 2024
performance period/2026 MIPS payment year.
incomplete data submissions. Currently, an incomplete data submission would void an approved
reweighting of the Promoting Interoperability performance category in accordance with
§ 414.1380(c)(2)(i)(C), except as provided in § 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 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 § 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
§ 414.1320.
As discussed previously, we did not propose any changes to the existing scoring or
reweighting policies described under § 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 § 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 §
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
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 § 414.1380(c)(2)(i).
For example, as described in § 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 § 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 § 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 § 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 § 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
§ 414.1320.
(3) Treatment of Multiple Data Submissions
(a) Background
Under the current policies described at § 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
§ 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 § 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 § 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 the Promoting Interoperability performance category, which we also
proposed to codify at § 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 § 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.
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
840In 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.
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 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 § 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 § 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 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 § 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 § 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 §
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 § 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 §§ 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
§ 414.1367 as an available reporting option starting with the CY 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.
For the APP Plus quality measure set, we proposed in § 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
Update On The Medicare Value-Based Care Strategy: Alignment, Growth, Equity", Health Affairs Forefront,
841
March 14, 2024. DOI: 10.1377/forefront.20240311.141546.
quality performance standard as outlined in section IV.A.4.c.(2) of this final rule. Under the
proposal in § 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 § 414.1335(a).
Lastly, we note that the existing reporting requirements and scoring policies established
in § 414.1367(c)(1) would continue to be applicable to the APP quality measure set. Similarly,
the existing scoring policies established in § 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
§ 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 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 § 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).
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
(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
842As 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.
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 § 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 § 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 § 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 § 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 § 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 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 period843,
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.
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
843As 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.
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 § 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 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 2030 MIPS payment years. Specifically, we are finalizing, as
proposed, the proposals in § 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 § 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 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
§ 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
844Message 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).”
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.
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 § 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 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 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
● 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.
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 §
414.1350(e).
For a description of the statutory authority for and existing policies pertaining to the cost
performance category, we refer readers to § 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
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.
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.
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 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 § 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).
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.
TABLE 72: Episode-Based Measures Beginning with CY 2025 Performance Period/2027
MIPS Payment Year
Measure Name Episode Type
Chronic Kidney Disease (CKD) Chronic condition
End-Stage Renal Disease (ESRD) Chronic condition
Kidney Transplant Management Chronic condition
Prostate Cancer Chronic condition
Rheumatoid Arthritis Chronic condition
Respiratory Infection Hospitalization Acute inpatient medical condition
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 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
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/.
during the measure maintenance process.
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 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.
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
849Mauro, 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.
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 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
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.
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
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
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.
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 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 List856 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.
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,
such as substantial variation in performance scores. We calculated the distribution of the measure
856Overview of the List of Measures Under Consideration for December 1, 2023,
https://mmshub.cms.gov/sites/default/files/2023-MUC-List-Overview.pdf.
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
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).
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.
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
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.
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 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 (§ 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 § 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-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 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.
TABLE 73: Reevaluated Episode-Based Measure Modifications Beginning with CY 2025
Performance Period/2027 MIPS Payment Year
Original Measure Name Proposed Modified Measure Episode Type
Name
Routine Cataract Removal with Cataract Removal with Procedural
Intraocular Lens (IOL) Implantation Intraocular Lens (IOL)
Implantation
ST-Elevation Myocardial Infarction Inpatient (IP) Percutaneous Acute inpatient medical
(STEMI) Percutaneous Coronary Coronary Intervention (PCI) condition
Intervention (PCI)
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 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 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
862National Quality Forum, Cost and Efficiency, Spring 2019 Cycle: CDP Report
https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=92292.
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.
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 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 § 414.1350(c)(5) a case minimum of 20 episodes for acute
inpatient medical condition episode-based measures and at § 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 § 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.
TABLE 74: Percent of TINs and TIN/NPIs that Meet 0.4 Reliability Threshold and TIN
and TIN/NPI Mean Reliability
Measure % TINs meeting Mean reliability % TIN/NPIs Mean reliability
name 0.4 reliability for TINs meeting 0.4 for TIN/NPIs
threshold reliability
threshold
Prostate Cancer 87.4% 0.68 84.1% 0.62
Rheumatoid Arthritis 95.0% 0.74 97.3% 0.76
Chronic Kidney Disease 88.8% 0.63 82.3% 0.57
End-Stage Renal Disease 92.5% 0.65 90.0% 0.59
Kidney Transplant
91.2% 0.64 95.8% 0.68
Management
Respiratory Infection
100.0% 0.74 100.0% 0.53
Hospitalization
Cataract Removal with
Intraocular Lens (IOL) 100.0% 0.97 100.0% 0.96
Implantation
Inpatient (IP) Percutaneous
100.0% 0.63 100.0% 0.52
Coronary Intervention (PCI)
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 § 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.
(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
§ 414.1350 by adding the cost removal criteria in paragraph (e). Specifically, we proposed at
§ 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
§ 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.
TABLE 75: Summary Table of Previously Established and Finalized Cost Measures for the
CY 2025 Performance Period/2027 MIPS Payment Year and Future Performance Periods
Measure Topic Measure Type Case Minima Measure Status
Acute Kidney Injury Requiring New Procedural episode-based 10 episodes Currently in use for the CY
Inpatient Dialysis 2025 Performance Period
and beyond
Cataract Removal with Intraocular Lens Procedural episode-based 10 episodes As modified in this rule for
(IOL) Implantation use for the CY 2025
Performance Period and
beyond
Colon and Rectal Resection Procedural episode-based 20 episodes Currently in use for the CY
2025 Performance Period
and beyond
Elective Outpatient Percutaneous Procedural episode-based 10 episodes Currently in use for the CY
Coronary Intervention (PCI) 2025 Performance Period
and beyond
Elective Primary Hip Arthroplasty Procedural episode-based 10 episodes Currently in use for the CY
2025 Performance Period
and beyond
Femoral or Inguinal Hernia Repair Procedural episode-based 10 episodes Currently in use for the CY
2025 Performance Period
and
Hemodialysis Access Creation Procedural episode-based 10 episodes Currently in use for the CY
2025 Performance Period
and beyond
Knee Arthroplasty Procedural episode-based 10 episodes Currently in use for the CY
2025 Performance Period
and beyond
Lumbar Spine Fusion for Degenerative Procedural episode-based 10 episodes Currently in use for the CY
Disease, 1-3 Levels 2025 Performance Period
and beyond
Lumpectomy, Partial Mastectomy, Procedural episode-based 10 episodes Currently in use for the CY
Simple Mastectomy 2025 Performance Period
and beyond
Melanoma Resection Procedural episode-based 10 episodes Currently in use for the CY
2025 Performance Period
and beyond
Non-Emergent Coronary Artery Bypass Procedural episode-based 10 episodes Currently in use for the CY
Graft (CABG) 2025 Performance Period
and beyond
Renal or Ureteral Stone Surgical Procedural episode-based 10 episodes Currently in use for the CY
Treatment 2025 Performance Period
and beyond
Revascularization for Lower Extremity 10 episodes Currently in use for the CY
Chronic Critical Limb Ischemia Procedural episode-based 2025 Performance Period
and beyond
Screening/Surveillance Colonoscopy 10 episodes Currently in use for the CY
Procedural episode-based 2025 Performance Period
and beyond
Inpatient Chronic Obstructive Pulmonary Acute inpatient medical 20 episodes Currently in use for the CY
Disease (COPD) Exacerbation condition episode-based 2025 Performance Period
and beyond
Inpatient (IP) Percutaneous Coronary Acute inpatient medical 20 episodes As modified in this rule for
Intervention (PCI) condition episode-based use for the CY 2025
Performance Period and
beyond
Measure Topic Measure Type Case Minima Measure Status
Intracranial Hemorrhage or Cerebral Acute inpatient medical 20 episodes Currently in use for the CY
Infarction condition episode-based 2025 Performance Period
and beyond
Lower Gastrointestinal Hemorrhage (at Acute inpatient medical 20 episodes Currently in use for the CY
group level only) condition episode-based 2025 Performance Period
and beyond
Psychoses and Related Conditions Acute inpatient medical 20 episodes Currently in use for the CY
condition episode-based 2025 Performance Period
and beyond
Respiratory Infection Hospitalization Acute inpatient medical 20 episodes As finalized in this rule for
condition episode-based use for the CY 2025
Performance Period and
beyond
Sepsis Acute inpatient medical 20 episodes Currently in use for the CY
condition episode-based 2025 Performance Period
and beyond
Asthma/Chronic Obstructive Pulmonary Chronic condition episode- 20 episodes Currently in use for the CY
Disease (COPD) based 2025 Performance Period
and beyond
Chronic Kidney Disease (CKD) Chronic condition episode- 20 episodes As finalized in this rule for
based use for the CY 2025
Performance Period and
beyond
Depression Chronic condition episode- 20 episodes Currently in use for the CY
based 2025 Performance Period
and beyond
Diabetes Chronic condition episode- 20 episodes Currently in use for the CY
based 2025 Performance Period
and beyond
End-Stage Renal Disease (ESRD) Chronic condition episode- 20 episodes As finalized in this rule for
based use for the CY 2025
Performance Period and
beyond
Heart Failure Chronic condition episode- 20 episodes Currently in use for the CY
based 2025 Performance Period
and beyond
Kidney Transplant Management Chronic condition episode- 20 episodes As finalized in this rule for
based use for the CY 2025
Performance Period and
beyond
Low Back Pain Chronic condition episode- 20 episodes Currently in use for the CY
based 2025 Performance Period
and beyond
Prostate Cancer Chronic condition episode- 20 episodes As finalized in this rule for
based use for the CY 2025
Performance Period and
beyond
Rheumatoid Arthritis Chronic condition episode- 20 episodes As finalized in this rule for
based use for the CY 2025
Performance Period and
beyond
Emergency Medicine Care Setting episode- 20 episodes Currently in use for the CY
based 2025 Performance Period
and beyond
Medicare Spending Per Beneficiary Population-based 35 episodes Currently in use for the CY
Clinician 2025 Performance Period
and beyond
Measure Topic Measure Type Case Minima Measure Status
Total Per Capita Cost Population-based 20 beneficiary Currently in use for the CY
months 2025 Performance Period
and beyond
(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 §414.1305 for the definitions of improvement activities and
attestation, § 414.1320 for standards establishing the performance period, § 414.1325 for the data
submission requirements, § 414.1355 for standards related to the improvement activity
performance category generally, § 414.1360 for data submission criteria for the improvement
activity performance category, and § 414.1380(b)(3) for improvement activities performance
category scoring.
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 § 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 § 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 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 at§ 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 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
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.
contribute to improved identification and treatment of patients at risk for ASCVD867; 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.
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.
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
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.
868 Centers for Disease Control and Prevention (2024). Vaccines & Immunizations. Last Updated April 2024.
https://www.cdc.gov/vaccines/index.html
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:
TABLE 76: Improvement Activities Inventory: Proposed Removals
Proposed Removals Titles Removal Criteria (Factor)
EPA_1 Provide 24/7 Access to MIPS Eligible Factor 7, activity is obsolete
Clinicians or Groups Who Have Real-Time Access
to Patient's Medical Record
PM_12 Population empanelment Factor 7, activity is obsolete
CC_1 Implementation of use of specialist reports Factor 1, activity is duplicative; Factor
back to referring clinician or group to close referral 5, activity does not align with quality,
loop cost, or promoting interoperability
performance categories
CC_2 Implementation of improvements that Factor 7, activity is obsolete
contribute to more timely communication of test
results
ERP_4 Implementation of a Personal Protective Factor 7, activity is obsolete
Equipment (PPE) Plan
ERP_5 Implementation of a Laboratory Factor 7, activity is obsolete
Preparedness Plan
BMH_8 Electronic Health Record Enhancements Factor 2, there is an alternative activity
for BH data capture with a stronger relationship to quality
care or improvements in clinical
practice
PSPA_27 Invasive Procedure or Surgery Factor 1, activity is duplicative
Anticoagulation Medication Management
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 CY2025 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/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 §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 § 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 § 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 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 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 § 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
869On 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).
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).
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 § 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 § 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 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 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
(c) Potential Future Update of the SAFER Guides Measure
For more information, see https://www.healthit.gov/topic/laws-regulation-and-policy/health-data-technology-
870
and-interoperability-certification-program.
(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
Guide872 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.
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.
871 https://www.healthit.gov/topic/safety/safer-guides.
872 https://www.healthit.gov/sites/default/files/safer/guides/safer_high_priority_practices.pdf.
(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 § 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 §
171.103, during the calendar year of the performance period (89 FR 54699). We also finalized
amending the requirements at § 414.1375(b) to specify that a MIPS eligible clinician must be a
meaningful EHR user for MIPS (as defined at § 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 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 §
414.1305 and the revisions to § 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® (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® (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 3873 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).
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
873 https://www.healthit.gov/isa/united-states-core-data-interoperability-uscdi#uscdi-v3.
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.
(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
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.
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
(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.
TABLE 77: Objectives and Measures for the Promoting Interoperability
Performance Category for the CY 2025 Performance Period/2027 MIPS Payment Year
Objective Measure Numerator Denominator Exclusion
Electronic Prescribing: e-Prescribing: At least Number of Number of Any MIPS eligible clinician
Generate and transmit one permissible prescriptions in the prescriptions written who writes fewer than 100
permissible prescription written denominator for drugs requiring a permissible prescriptions
prescriptions by the MIPS eligible generated and prescription in order during the performance
electronically clinician is transmitted transmitted to be dispensed period.
electronically using electronically using other than controlled
CEHRT. CEHRT. substances during
the performance
period; or number of
prescriptions written
for drugs requiring a
prescription in order
to be dispensed
during the
performance period.
Electronic Prescribing Query of PDMP: For N/A (measure is N/A (measure is Any MIPS eligible clinician
at least one Schedule Yes/No and requires Yes/No and requires who: 1. is unable to
II opioid or Schedule an affirmative an affirmative electronically prescribe
III or IV drug attestation to fulfill) attestation to fulfill) Schedule II opioids and
electronically Schedule III and IV drugs in
prescribed using accordance with applicable
CEHRT during the law during the performance
performance period, period; or 2. Any MIPS
the MIPS eligible eligible clinician who does
clinician uses data not electronically prescribe
from CEHRT to any Schedule II opioids or
conduct a query of a Schedule III or IV drugs
PDMP for prescription during the performance
drug history. period.
Health Information Support Electronic Number of Number of Any MIPS eligible clinician
Exchange: The MIPS Referral Loops by transitions of care transitions of care who transfers a patient to
Objective Measure Numerator Denominator Exclusion
eligible clinician Sending Health and referrals in the and referrals during another setting or refers a
provides a summary Information: For at denominator where the performance patient fewer than 100
of care record when least one transition of the summary of period for which the times during the
transitioning or care or referral, the care record was MIPS eligible clinician performance period.
referring their patient MIPS eligible clinician created using was the transferring
to another setting of that transitions or CEHRT and or referring clinician
care, receives or refers their patient to exchanged
retrieves a summary another setting of electronically
of care record upon care or healthcare
the receipt of a provider (1) creates a
transition or referral summary of care using
or upon the first CEHRT; and (2)
patient encounter electronically
with a new patient, exchanges the
and reconciles summary of care
summary of care record.
information from
other healthcare
providers into their
EHR using the
functions of CEHRT
Health Information Support Electronic Number of Number of electronic Any MIPS eligible clinician
Exchange Referral Loops by electronic summary summary of care who receives transitions of
Receiving and of care records in records received care or referrals or has
Reconciling Health the denominator for using CEHRT for patient encounters in which
Information: For at which clinical patient encounters the MIPS eligible clinician
least one electronic information during the has never before
summary of care reconciliation is performance period encountered the patient
record received for completed using for which a MIPS fewer than 100 times
patient encounters CEHRT for the eligible clinician was during the performance
during the following three the receiving party of period.
performance period clinical information a transition of care or
for which a MIPS sets: (1) Medication referral, and for
eligible clinician was – Review of the patient encounters
the receiving party of patient's during the
a transition of care or medication, performance period
referral, or for patient including the name, in which the MIPS
encounters during the dosage, frequency, eligible clinician has
performance period in and route of each never before
which the MIPS medication; (2) encountered the
eligible clinician has Medication allergy – patient.
never before Review of the
encountered the patient's known
patient, the MIPS medication
eligible clinician allergies; and (3)
conducts clinical Current Problem
information List – Review of the
reconciliation for patient’s current
medication, mediation and active
allergy, and current diagnoses.
problem list.
Health Information HIE Bi-Directional N/A (measure is N/A (measure is N/A
Exchange Exchange: Yes/No and requires Yes/No and requires
Statement 1: an affirmative an affirmative
I participate in an HIE attestation to fulfill) attestation to fulfill)
to enable secure, bi-
directional exchange
Objective Measure Numerator Denominator Exclusion
to occur for every
patient encounter,
transition or referral
and record stored or
maintained in the EHR
during the
performance period in
accordance with
applicable law and
policy.
Statement 2: The HIE
that I participate in is
capable of exchanging
information across a
broad network of
unaffiliated exchange
partners including
those using disparate
EHRs, and not
engaging in
exclusionary behavior
when determining
exchange partners.
Statement 3: I use the
functions of CEHRT to
support bi-directional
exchange with an HIE.
Health Information Enabling Exchange N/A (measure is N/A (measure is N/A
Exchange Under TEFCA MIPS Yes/No and requires Yes/No and requires
eligible clinicians an affirmative an affirmative
would attest to the attestation to fulfill) attestation to fulfill)
following:
● Participating as a
signatory to a
Framework
Agreement (as that
term is defined by the
Common Agreement
for Nationwide Health
Information
Interoperability as
published in the
Federal Register and
on ONC’s website) in
good standing (i.e. not
suspended) and
enabling secure, bi-
directional exchange
of information to
occur, in production,
for every patient
encounter, transition
or referral, and record
stored or maintained
in the EHR during the
performance period,
in accordance with
Objective Measure Numerator Denominator Exclusion
applicable law and
policy.
● Using the functions
of CEHRT to support
bi-directional
exchange of patient
information, in
production, under this
Framework
Agreement.
Provider to Patient Provide Patients Number of patients Number of unique N/A
Exchange: The MIPS Electronic Access to in the denominator patients seen by the
eligible clinician Their Health (or patient MIPS eligible clinician
provides patients (or Information: For at authorized during the
patient-authorized least one unique representative) who performance period.
representative) with patient seen by the are provided timely
timely electronic MIPS eligible clinician: access to health
access to their health 1. The patient (or the information to view
information. patient-authorized online, download,
representative) is and transmit to a
provided timely access third party and to
to view online, access using an
download, and application of their
transmit his or her choice that is
health information; configured meet the
and 2. The MIPS technical
eligible clinician specifications of the
ensures the patient’s API in the MIPS
health information is eligible clinician’s
available for the CEHRT.
patient (or patient-
authorized
representative) to
access using any
application of their
choice that is
configured to meet
the technical
specifications of the
Application
Programming
Interface (API) in the
MIPS eligible
clinician’s CEHRT.
Public Health and Immunization Registry N/A (measure is N/A (measure is The MIPS eligible clinician:
Clinical Data Reporting: The MIPS Yes/No and requires Yes/No and requires 1. Does not administer any
Exchange: The MIPS eligible clinician is in an affirmative an affirmative immunizations to any of the
eligible clinician is in active engagement attestation to fulfill) attestation to fulfill) populations for which data
active engagement with a public health is collected by its
with a public health agency to submit jurisdiction’s immunization
agency or clinical data immunization data registry or immunization
registry to submit and receive information system during
electronic public immunization the performance period; OR
health data in a forecasts and histories 2. Operates in a jurisdiction
meaningful way using from the public health for which no immunization
CEHRT, except where immunization registry or immunization
prohibited, and in registry/immunization information system is
Objective Measure Numerator Denominator Exclusion
accordance with information system capable of accepting the
applicable law and (IIS). specific standards required
practice. to meet the CEHRT
definition at the start of the
performance period; OR 3.
Operates in a jurisdiction
where no immunization
registry or immunization
information system has
declared readiness to
receive immunization data
as of 6 months prior to the
start of the performance
period.
Public Health and Electronic Case N/A (measure is N/A (measure is The MIPS eligible clinician:
Clinical Data Exchange Reporting: The MIPS Yes/No and requires Yes/No and requires 1. Does not treat or
eligible clinician is in an affirmative an affirmative diagnose any reportable
active engagement attestation to fulfill) attestation to fulfill) diseases for which data is
with a public health collected by their
agency to jurisdiction’s reportable
electronically submit disease system during the
case reporting of performance period; OR 2.
reportable conditions. Operates in a jurisdiction
for which no public health
agency is capable of
receiving electronic case
reporting data in the
specific standards required
to meet the CEHRT
definition at the start of the
performance period; OR 3.
Operates in a jurisdiction
where no public health
agency has declared
readiness to receive
electronic case reporting
data as of 6 months prior to
the start of the
performance period:
Public Health and Public Health Registry N/A (measure is N/A (measure is None
Clinical Data Exchange Reporting: (bonus) Yes/No and requires Yes/No and requires
The MIPS eligible an affirmative an affirmative
clinician is in active attestation to fulfill) attestation to fulfill)
engagement with a
public health agency
to submit data to
public health
registries.
Public Health and Clinical Data Registry N/A (measure is N/A (measure is None
Clinical Data Exchange Reporting: (bonus) Yes/No and requires Yes/No and requires
The MIPS eligible an affirmative an affirmative
clinician is in active attestation to fulfill) attestation to fulfill)
engagement to submit
data to a clinical data
registry.
Public Health and Syndromic N/A (measure is N/A (measure is None
Clinical Data Exchange Surveillance Yes/No and requires Yes/No and requires
Objective Measure Numerator Denominator Exclusion
Reporting: (bonus) an affirmative an affirmative
The MIPS eligible attestation to fulfill) attestation to fulfill)
clinician is in active
engagement with a
public health agency
to submit syndromic
surveillance data from
an urgent care setting
Protect Patient Health Security Risk N/A (measure is N/A (measure is None
Information: Protect Assessment: Yes/No and requires Yes/No and requires
electronic protected Conduct or review a an affirmative an affirmative
health information security risk analysis in attestation to fulfill) attestation to fulfill)
(ePHI) created or accordance with the
maintained by the requirements in 45
CEHRT through the CFR 164.308(a)(1),
implementation of including addressing
appropriate technical, the security (to
administrative, and include encryption) of
physical safeguards. ePHI data created or
maintained by
certified electronic
health record
technology (CEHRT) in
accordance with
requirements in 45
CFR 164.312(a)(2)(iv)
and 45 CFR
164.306(d)(3),
implement security
updates as necessary,
and correct identified
security deficiencies
as part of the MIPS
eligible clinician’s risk
management process.
Protect Patient Health SAFER Guides N/A (measure is N/A (measure is None
Information High Priority Practices Yes/No and requires Yes/No and requires
Guide: Conduct an an affirmative an affirmative
annual assessment of attestation to fulfill) attestation to fulfill)
the High Priority
Practices Guide SAFER
Guides
(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.
TABLE 78: Scoring Methodology for the CY 2025 Performance Period/2027 MIPS
Payment Year
Maximum Required/Optional
Objective Measure
Points
Electronic e-Prescribing 10 points Required
Prescribing Query of PDMP 10 points Required
Support Electronic Referral Loops by Sending Health
15 points
Information
Support Electronic Referral Loops by Receiving and 15 points
Health Information Required (MIPS
Reconciling Health Information
Exchange eligible clinician’s
-OR-
Health Information Exchange Bi-Directional Exchange 30 points choice of one of the
-OR- three reporting
Enabling Exchange under TEFCA 30 points options)
Provider to Patient Provide Patients Electronic Access to Their Health Required
25 points
Exchange Information
Report the following two measures: Required
• Immunization Registry Reporting 25 points
• Electronic Case Reporting
Public Health and Report one of the following measures: Optional
Clinical Data • Public Health Registry Reporting
Exchange 5 points (bonus)
• Clinical Data Registry Reporting
• Syndromic Surveillance Reporting
Notes: The Security Risk Analysis measure and the SAFER Guides measure are required but will not be assigned
points. Failure to submit an affirmative (“yes”) attestation for these two measures will result in a zero score for the
Promoting Interoperability performance category.
In addition, MIPS eligible clinicians must submit an affirmative (“yes”) attestation regarding ONC direct review,
and an affirmative (“yes”) attestation that they did not knowingly and willfully take action to limit or restrict the
compatibility or interoperability of CEHRT, as required by § 414.1375(b)(3). Failure to submit an affirmative
(“yes”) attestation to fulfill these requirements will result in a zero score for the Promoting Interoperability
performance category.
(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.
TABLE 79: Exclusion Redistribution for CY 2025 Performance Period/2027 MIPS
Payment Year
Redistribution if exclusion is
Objective Measure
claimed
e-Prescribing 10 points to HIE objective
Electronic Prescribing Query of PDMP 10 points to e-Prescribing
measure
Support Electronic Referral Loops by Sending Health 15 points to Provide Patients
Information Electronic Access to Their
Health Information measure
Support Electronic Referral Loops by Receiving and 15 points to the Support
Reconciling Health Information Electronic Referral Loops by
Health Information
Sending Health Information
Exchange
measure
-OR-
Health Information Exchange Bi-Directional Exchange No exclusion
-OR-
Enabling Exchange under TEFCA No exclusion
Provider to Patient Provide Patients Electronic Access to Their Health Information
No exclusion
Exchange
Report the following two measures: If an exclusion is claimed for
• Electronic Case Reporting both measures, 25 points are
• Immunization Registry Reporting redistributed to the Provide
Public Health and Patients Electronic Access to
Clinical Data Exchange their Health Information
measure
Notes: The Security Risk Analysis measure and the SAFER Guides measure are required but will not be assigned points.
Failure to submit an affirmative (“yes”) attestation for these two measures will result in a zero score for the Promoting
Interoperability performance category.
In addition, MIPS eligible clinicians must submit an affirmative (“yes”) attestation regarding ONC direct review, and an
affirmative (“yes”) attestation that they did not knowingly and willfully take action to limit or restrict the compatibility or
interoperability of CEHRT, as required by § 414.1375(b)(3). Failure to submit an affirmative (“yes”) attestation to fulfill
these requirements will result in a zero score for the Promoting Interoperability performance category.
(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 § 414.1305.
TABLE 80: Promoting Interoperability Performance Category Objectives and
Measures and ONC Health IT Certification Criteria
Objective Measure Certification Criteria (CY 2025 Performance
Period/2027 MIPS Payment Year) in Title 45 of the
CFR
Electronic e-Prescribing § 170.315(b)(3) Electronic prescribing
Prescribing Query of PDMP § 170.315(b)(3) Electronic prescribing
Health Information Support electronic referral loops by sending § 170.315(b)(1) Transitions of care
Exchange health information
Support electronic referral loops by receiving § 170.315(b)(1) Transitions of care
and reconciling health information § 170.315(b)(2) Clinical information reconciliation and
incorporation
Health Information Health Information Exchange (HIE Bi-Directional Examples of certified health IT capabilities to support
Exchange Exchange the actions of this measure may include but are not
(alternative) limited to technology certified to the following criteria:
§ 170.315(b)(1) Transitions of care
§ 170.315(b)(2) Clinical information reconciliation and
incorporation
§ 170.315(g)(7) Application access — patient selection
§ 170.315(g)(9) Application access — all data request
§ 170.315(g)(10) Application access — standardized
API for patient and population services
Health Information Enabling Exchange under TEFCA Examples of certified health IT capabilities to support
Exchange the actions of this measure may include but are not
(alternative) limited to technology certified to the following criteria:
§ 170.315(b)(1) Transitions of care
§ 170.315(b)(2) Clinical information reconciliation and
incorporation
§ 170.315(g)(7) Application access — patient selection
§ 170.315(g)(9) Application access — all data request
§ 170.315(g)(10) Application access — standardized
API for patient and population services
Provider to Patient Provide patients electronic access to their § 170.315(e)(1) View, download, and transmit to 3rd
Exchange health information party
§ 170.315(g)(7) Application access — patient selection
§ 170.315(g)(9) Application access — all data request
§ 170.315(g)(10) Application access — standardized
API for patient and population services
Public Health and Immunization registry reporting § 170.315(f)(1) Transmission to immunization
Clinical Data registries
Exchange Syndromic surveillance reporting § 170.315(f)(2) Transmission to public health agencies
— syndromic surveillance
Electronic case reporting § 170.315(f)(5) Transmission to public health agencies
— electronic case reporting
Public health registry reporting § 170.315(f)(6) Transmission to public health agencies
— antimicrobial use and resistance reporting
§ 170.315(f)(7) Transmission to public health agencies
— health care surveys
Clinical data registry reporting No 2015 health IT certification criteria at this time.
Protect Patient Security Risk Assessment The requirements are a part of CEHRT specific to each
Health Information certification criterion.
Safety Assurance Factors for EHR Resilience No 2015 health IT certification criteria at this time.
Guides (SAFER Guides)
(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
§ 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 2021, CY 2022, and CY 2023 PFS final rules, and § 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 §
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 § 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 § 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 § 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 § 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 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.
TABLE 81: Example Proposed Defined Topped Out Measure Benchmark
Measure Achievement Points Performance Rate
1-1.9 84-85.9%
2- 2.9 86-87.9%
3-3.9 88-89.9%
4-4.9 90-91.9%
5-5.9 92-93.9%
6-6.9 94-95.9%
7-7.9 96-97.9%
8-8.9 98-99.9%
10 100%
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 § 414.1380(b)(1)(i).
Measures that are identified as topped out for 3 consecutive performance periods may
still be proposed for 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 §
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 §
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 § 414.1380(b)(1)(iv)(B).
We also proposed to add § 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 § 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 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 § 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 §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 § 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 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 § 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 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.
TABLE 82: Proposed topped out measures impacted by limited measure choice and subject
to defined topped out measure benchmark for the CY 2025 performance period/2027 MIPS
Payment Year
Measure ID Collection Type Measure Title
Oncology: Medical and Radiation – Pain
143 eCQM, MIPS CQM Intensity Quantified
Barret’s Esophagus
249 Medicare Part B Claims, MIPS CQM
Radical Prostatectomy Pathology
250 Medicare Part B, MIPS CQM
Reporting
Optimizing Patient Exposure to Ionizing
Radiation: Count of Potential High Dose
360 MIPS CQM Radiation Imaging Studies: Computed
Tomography (CT) and Cardiac Nuclear
Medical Studies
Optimized Patient Exposure to Ionizing
Radiation: Appropriateness: Follow-up
364 MIPS CQM CT imaging for Incidentally Detected
Pulmonary Nodules According to
Recommended Guidelines
Lung Cancer Reporting
395 Medicare Part B, MIPS CQM
(Biopsy/Cytology Specimens)
Lung Cancer Reporting (Resection
396 MIPS CQM
Specimens
397 Medicare Part B, MIPS CQM Melanoma Reporting
Appropriate Follow-up Imaging for
405 MIPS CQM
Incidental Abdominal Lesions
Appropriate Follow-up Imaging for
406 MIPS CQM
Incidental Thyroid Nodules in Patients
424 MIPS CQM Perioperative Temperature Management
Prevention of Post-Operative Nausea
430 MIPS CQM and Vomiting (PONV) – Combination
Therapy
Radiation Consideration for Adult CT:
436 MIPS CQM Utilization of Dose Lowering
Techniques
Skin Cancer: Biopsy Reporting Time –
440 MIPS CQM
Pathologist to Clinician
Prevention of Post-Operative (POV) –
463 MIPS CQM
Combination Therapy (Pediatrics)
477 MIPS CQM Multimodal Pain Management
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
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
§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 §
414.1380(b)(1)(v)(B) for our previously finalized policies regarding measure bonus points for
end-to-end electronic reporting.
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,
877Section 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.
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).
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 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 § 414.1380(b)(1)(iii) and case minimum
requirements at § 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 § 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 § 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
§ 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 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 §
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 § 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
§ 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 §
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 §
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 § 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 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 § 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 §
414.1380(b)(2), we score each MIPS eligible clinician878 on each cost measure attributed to them
in accordance with § 414.1350(b) so long as the MIPS eligible clinician meets the minimum case
volume specified under § 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 (§ 414.1325(a)). We have codified our cost performance category scoring policies at §
414.1380(b)(2).
Specifically, we finalized at § 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 § 414.1380(b)(2)(iv) (§ 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 § 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 (§ 414.1380(b)(2)(v)).
878 The term MIPS eligible clinician is defined in § 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 §
414.1310(e).
As set forth at § 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 § 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 (§ 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 § 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
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:
879 https://qpp.cms.gov/resources/document/fac61617-20ef-4d31-9f0f-4a0e76620ca3.
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
TABLE 83: Example of Using Benchmark Deciles and Partial Points to Assign
Achievement Points for Performance on the Screening/Surveillance Colonoscopy Cost
Measure
Benchmark Decile Cost per Episode Percentile Possible Points
Benchmark Decile 1 $1330.65-$1126.35 99th 1.0–1.9
Benchmark Decile 2 $1126.34-$1062.93 90th 2.0-2.9
Benchmark Decile 3 $1062.92-$1025.75 80th 3.0-3.9
Benchmark Decile 4 $1025.74-$997.78 70th 4.0-4.9
Benchmark Decile 5 $997.77-$969.73 60th 5.0-5.9
Benchmark Decile 6 $969.72-$940.03 50th 6.0-6.9
Benchmark Decile 7 $940.02-$904.83 40th 7.0-7.9
Benchmark Decile 8 $904.82-$860.44 30th 8.0-8.9
Benchmark Decile 9 $860.43-$779.69 20th 9.0-9.9
Benchmark Decile 10 $779.68 and lower 10th 10
In the CY 2021 PFS final rule (85 FR 84877 through 84880), we finalized at
§ 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 § 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
880 Ibid.
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 § 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 § 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.
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.
881https://qpp-cm-prod-content.s3.amazonaws.com/uploads/816/2020%20Cost%20Quick%20Start%20Guide.pdf.
882https://qpp-cm-prod-
content.s3.amazonaws.com/uploads/1298/2021%20MIPS%20Cost%20Quick%20Start%20Guide.pdf.
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 (§ 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 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
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 § 414.1380(b)(2)(iii)(A). Based on the final score
calculation under § 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,
883 https://qpp.cms.gov/resources/document/fac61617-20ef-4d31-9f0f-4a0e76620ca3.
based on the final score calculation under § 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 × 30 percent for quality) + (2.3/10 × 30 percent for cost) +
(40/40 × 15 percent for improvement activities) + (100/100 × 25 percent for Promoting
Interoperability)] × 100 = 76.9.884
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
In simplified terms, the MIPS Final score = (30 points for quality) + (6.9 points for cost) + (15 points for
884
improvement activities) + (25 points for Promoting Interoperability) = 76.9 final score points.
value of 7.5, based on a performance threshold of 75 as finalized at § 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.
TABLE 84: Example of Implementation of the Proposed Cost Scoring Methodology for
Assignment of Achievement Points for Performance on the Screening/Surveillance
Colonoscopy cost measure
Benchmark Range Proposed Methodology for Bottom of Benchmark Example Benchmark Ranges
Points
Range ($)
Benchmark Range 1 1 - 1.9 Median cost + (2.75 x standard deviation) $1341.93 - $1308.10
Benchmark Range 2 2 - 2.9 Median cost + (2.5 x standard deviation) $1308.09 - $1.274.26
Benchmark Range 3 3 - 3.9 Median cost + (2.25 x standard deviation) $1274.25 - $1240.43
Benchmark Range 4 4 - 4.9 Median cost + (2 x standard deviation) $1240.42 - $1172.75
Benchmark Range 5 5 - 5.9 Median cost + (1.5 x standard deviation) $1172.74 - $1105.08
Benchmark Range 6 6 – 6.9 Median cost + (1 standard deviation) $1105.07 - $1037.40
Benchmark Range 7 7 - 7.9 Median cost + (0.5 x standard deviation) $1037.39 - $902.05
Benchmark Range 8 8 - 8.9 Median cost - (0.5 x standard deviation) $902.04 - $834.38
Benchmark Range 9 9 - 9.9 Median cost - (1 x standard deviation) $834.37 - $766.70
Benchmark Range 10 10 Median cost - (1.5 x standard deviation) $766.69 and below
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 §
414.1380(b)(2)(iii)(A). Based on the final score calculation at § 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 § 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 × 30 percent for quality) + (6.02/10 × 30 percent for cost) +
(40/40 × 15 percent for improvement activities) + (100/100 × 25 percent for Promoting
Interoperability)] × 100 = 88.06.885
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 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.
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.
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 § 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 § 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 § 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 § 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 §
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 §
414.1380(b)(2)(i)(A). We proposed to specify at § 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 § 414.1380(b)(2)(i)(B)
(89 FR 62087). We proposed to specify at § 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 §
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 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 (§ 414.1380(c)(2)(i)(A)(2) and §
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 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 § 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
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 § 414.1380(b)(2) and
414.1380(b)(2)(i)(B). We are also finalizing our proposed amendment to the regulation text at §
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 § 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 § 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 § 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 §
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 § 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 § 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 § 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 § 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
§ 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
§ 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
§ 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 § 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 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 §
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 § 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
§ 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 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 § 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 § 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 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 § 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
§ 414.1405(b)(4) through (9). These performance thresholds are shown in Table 85.
TABLE 85: Performance Thresholds for the CY 2017 Performance Period/2019 MIPS
Payment Year through the CY 2024 Performance Period/ 2026 MIPS Payment Years
MIPS 2017 2018 2019 2020 2021 2022 2024 MIPS
2023 MIPS
Performance MIPS MIPS MIPS MIPS MIPS MIPS Performan
Performan
Period Performa Performa Performa Performa Performa Performa ce Period
ce Period
nce Period nce Period nce Period nce Period nce Period nce Period
Year of Year 6 Year 7 Year 8
Year 1 Year 2 Year 3 Year 4 Year 5
MIPS
Performanc 75 points 75 Points 75 Points
3 points 15 points 30 points 45 points 60 points
e Threshold
Change 0 points
from prior N/A 12 points 15 points 15 points 15 points 15 points 0 points
year
(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 § 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 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.
TABLE 86: Possible Values for the 2027 MIPS Payment Year Performance Threshold
MIPS 2019 MIPS 2020 MIPS 2021 MIPS 2022 MIPS 2023 MIPS 2024 MIPS
Payment Payment Payment Payment Payment Payment Payment
Years Year Year Year Year Year Year
Mean 74.65 87.00 85.65 89.47 89.22 82.71
Median 89.71 99.63 92.32 96.82 97.22 85.17
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 § 414.1405. We
proposed to amend § 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 § 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 § 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 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 § 414.1405, as
proposed. We amend § 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 § 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 § 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 §
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 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
887https://www.cms.gov/newsroom/press-releases/cms-announces-relief-clinicians-providers-hospitals-and-
facilities-participating-quality-reporting.
year and the CY 2021 performance period/2023 MIPS payment year, we extensively applied our
reweighting policies, described under § 414.1380(c)(2)(i), to MIPS eligible clinicians nationwide
due to the COVID-19 PHE. Inherently, these 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.
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 § 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).
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
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.
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 § 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. 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 § 414.1380. For example, under
§ 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 § 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 § 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
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.
FIGURE 4: Illustrative Example of MIPS Payment Adjustment Factors Based on Final
Scores and Performance Threshold for the CY 2025 performance period/2027 MIPS
Payment Year
Note: The adjustment factor for final score values above the performance threshold is illustrative. For MIPS eligible
clinicians with a final score of 100, the adjustment factor will be 9 percent times a scaling factor greater than zero
and less than or equal to 3.0. The scaling factor is intended to ensure budget neutrality (BN) but cannot be higher
than 3.0. This example is illustrative as the actual payment adjustments may vary based on the distribution of final
scores for MIPS eligible clinicians.
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.
TABLE 87: Illustration of Point System and Associated Adjustments Comparison between
the CY 2024 Performance Period/2026 MIPS Payment Year and the CY 2025 Performance
Period/2027 MIPS Payment Year
2024 Performance MIPS Adjustment for 2024 2025 Performance Period
MIPS Adjustment for
Period Performance Period Final Score
2025 Performance
Final Score Points
Period
Points
0.0-18.75 Negative 9% 0.0-18.75 Negative 9%
18.76-74.99 Negative MIPS payment 18.76-74.99 Negative MIPS payment
adjustment greater than adjustment greater than
negative 9% and less than 0% negative 9% and less than
on a linear sliding scale 0% on a linear sliding
scale
75.00 0% adjustment 75.00 0% adjustment
75.01-100 Positive MIPS payment 75.01-100 Positive MIPS payment
adjustment greater than 0% on adjustment greater than
a linear sliding scale. The 0% on a linear sliding
linear sliding scale ranges from scale. The linear sliding
greater than 0% to 9% for scale ranges from greater
scores from 75.01 to 100.00. than 0% to 9% for scores
This sliding scale is multiplied from 75.01 to 100.00.
by a scaling factor greater than This sliding scale is
zero but not exceeding 3.0 to multiplied by a scaling
preserve budget neutrality. factor greater than zero
but not exceeding 3.0 to
preserve budget
neutrality.
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 § 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 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 § 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 § 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 § 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 § 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
§ 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 § 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.
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
890As set forth in § 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 § 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 §
414.1325.
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 § 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
docum
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